The Value of Monetary Advice

When getting rid of debt and managing money, look carefully at the value of the monetary advice you receive and the people giving it. Ask these questions first to help ensure you’re getting good advice.

My teenage niece posted a picture of her cool new $300 tattoo on Facebook. Comments were divided into two groups; aunts and uncles telling her how her money could have been better used and her friends telling her that it was fine to spend money on herself.

It struck me that the people giving the advice to save were the ones who had been there and wished they had done that differently. If only she and her friends had taken the time to consider the people giving the advice, I think they might have gotten some valuable information from the comments.

In fact, there’s a lesson in it for all of us. As we go about trying to get rid of our debt and manage our money, we should look carefully at the people giving us advice. Here are some questions to consider about the value of monetary advice:

1. What’s in it for you? Does the person giving the advice have your best interests at heart?
2. What’s in it for them? Why are they giving this advice? Is it aunts and uncles who love you and don’t want you to make the same mistakes they did? Is it their job? Is it someone trying to sell a book or earn a commission?
3. How do they know? Do they have a degree in a relevant subject? Work experience? Life experience? Gotten themselves out of huge amounts of debt?
4. Are they being paid? Even if you aren’t paying them directly, are you buying a book or program that they receive money for? Are they receiving a commission if they sell you something and is the commission higher for certain products? Is someone else paying them like a corporate sponsor, credit card company, or advertisers? How might this be influencing their advice?
5. Does the person giving the advice do what they are advising you to do or have they done it in the past to get to where they are today?
6. How is the advice being given? Are they respectful? Are they talking down to you? Is it presented so you easily understand it?

The answers to these questions don’t necessarily mean that you are getting good advice or bad advice, but they will help you evaluate the value of monetary advice you are being given.

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Reviewed July 2023