Are Personal Finance Bloggers “Pound Foolish”?

credit: freedigitalphotos by Winnond

credit: freedigitalphotos by Winnond

A few weeks ago, in Ryan’s blog, Impersonal Finance, he asked in his post You vs. The Economy, “At what point do we place blame on the person, and not “the economy? If the economy is down, it’s you vs. the economy, right?” He asked this question after listening to an NPR segment where they interviewed a lady who was unemployed and struggling to live on just her husband’s income. I’ve also had these same exact thoughts when I’ve heard or read stories about those struggling to make ends meet. No, no we’re not heartless people who are missing a sympathy gene (I stole that phrase from Ryan). Well, at least I’d like to think we aren’t.

I was reading a few articles on Yahoo Finance recently, and I came across one where the people they interviewed were struggling with making ends meet They decided to take on student loans to pay for rent, groceries, and their daily living expenses. “NO!!!!” What are they doing? I yelled. Another article spoke about a lady in her 50s who was laid off from her job as a legal secretary who decided to take on a 6 figure student loan debt to go back to school for Social Work. These articles seem to be written to elicit sympathy to those who are stuck in a bad predicament, but all I could think was that they made horrible decisions.

It’s kind of unfair to judge someone’s predicament based on the small amount of information the media stories provide us. It seems that many times when we read about the average person struggling with money, many personal finance bloggers, myself included, will suggest the following: cut the cable, brown bag your lunch, stop going out to eat, stop shopping, cut up your credit cards.

“Each time I read about educational and personal finance tips here, I can’t avoid feeling that they were written by privileged folks with textbooks solutions to real life problems” – Yahoo commenter

In an article entitled 35 Things You Can Do Right Away To Start Spending Less Money which was reposted in Yahoo Finance, the list of things include the generic tips most personal finance bloggers often tout. But in the comments section (I know I really shouldn’t read the comments section in Yahoo, but I can’t help it), a commenter wrote: “Each time I read about educational and personal finance tips here, I can’t avoid feeling that they were written by privileged folks with textbooks solutions to real life problems.” I’ve also read comments in similar articles where people seem to shake their head and say, “I already do this, but I am still struggling!”

Pound Foolish: Exposing the Dark Side of the Personal Finance Industry

In Helaine Olen’s book Pound Foolish: Exposing the Dark Side of the Personal Finance Industry, she criticizes personal finance gurus like Dave Ramsey, Suze Orman, Robert Kiyosaki and David Bach. While I’m not a big fan of some of these personal finance gurus, I do probably agree with a lot of things they say. As for Bach, his book The Automatic Millionaire was the first personal finance book I read, and I like his advice.

Here are a few excerpts of what Olen had to say about the advice given by personal finance gurus in an interview on Deseret News:

The point is there is this great myth out there that Americans went on a financial bender. The leading cause of bankruptcy is not buying lattes, it’s health care, followed by the usual fractured families, unemployment, sort of all of the plagues of the 21st century — economic plagues.

It depends on if you think this is a self-help problem or a political problem. I believe it is a political and economic problem.

Self-help gurus are basically saying, “Yeah, the economy (is poor), but you’re in it on your own, and therefore you should be able to solve this on your own.” Realistically, that’s just not true for most people.

Dave Ramsey tells people, “You can choose not to participate in a recession.” That’s not possible.

And here are few more excerpts from The American Prospect:

We idealize the myth of Horatio Alger in this country. Anyone can make it. Anyone. But we forget that Horatio Alger was a writer of fiction. In our nonfiction lives, we are suffering from some of the worst income inequality in our nation’s history, our salaries are stagnant and falling, and our class mobility is significantly worse than supposedly class-bound Europe. Yet, to talk about our financial setbacks and inability to get ahead is to challenge the heart of the American dream. We believe we are failures and, as a result, there is deep shame involved.

It’s almost as if we are living through economic Hurricane Sandy, and they are telling us that if we put up a few sandbags and umbrellas (that they might well be selling us, by the way) we’ll be fine. This stuff starts veering toward blaming the financial victim for greater economic problems.

Olen makes some valid points about some of the advice given by personal finance gurus. There may be circumstances which make it difficult to overcome their financial obstacles. It’s possible the person may be dealing with physical or mental disabilities, he or she may be caring for someone with those conditions, or they may have no access to the opportunities that we may have. You have to walk a mile in the shoes of someone else before you can judge them. No, cutting cable television may not be a panacea for all financial problems. But we have to start somewhere. I understand that there are economic conditions that make it tough, and we cannot attribute the blame solely on the individual. But there is just so much we can do to change political and economic conditions, maybe vote for politicians who’s policies we support or write to our local politicians. While we don’t have much control of economic conditions we live in, we do have control over our spending habits and our ability to acquire skills to get jobs. So for most people, the advice given by personal finance bloggers are indeed valid. While Olen believes that class mobility is just a myth, I’d like to think moving up an economic rung is still possible through hard-work and sacrifice. It’s not easy, but attainable for most.

If you have a minute, check out this Saturday Night Live skit where Kristen Wiig parodies Suze Orman. It’s hilarious. I couldn’t find a link to the video, but here’s the transcript. Josh Brolin plays Dick Dunkendirk, a caller to the Suze Orman show who is in dire economic straits. He tells Orman that he “took a sponge bath this morning in a TJ Maxx bathroom” and slept on “four opened pizza boxes lined with Pampers.” Wiig, playing Orman responds by telling him to tap into his emergency savings account, and to immediately put his money into a Roth IRA.

Do you think personal finance gurus and bloggers give valid advice? Do we sometimes give advice thinking it applies to everyone, no matter their circumstances?

I’d like to thanks J$ for featuring my post Are We Overworked? on Rockstar Finance, and mentioning it on his blog.

Thank you to Jacob from Cash Cow Couple for letting me guest post on his blog. If you haven’t read it, check it out: Don’t Act Rich. Be Rich

And last, but not least, thank you to Kendal from Hassle Free Savings for mentioning Are We Overworked over at her blog.

72 thoughts on “Are Personal Finance Bloggers “Pound Foolish”?

  1. Jacob

    Great article, and thanks for sharing a wonderful guest post.
    With regard to the financial problems of what would seem to be greater America, I can’t quite make sense of it. There are countless sob stories about failing to pay rent and inability to put food on the table. While some of them are in fact sad, and truly break my heart, I can’t help but think that most are simply a result of daily financial decisions. It seems to me that everyone wants to nod in agreement that cutting spending is cookie cutter advice, yet who actually does it?
    Of course frugality works. It always has and always will, across all economic conditions. The only way to accumulate wealth is to spend less than you earn. And it’s still quite possible to spend very little and live a good life here in the good ole’ USA. We’re an example of that truth.
    Jacob recently posted…Discover It Card Review – More Cash BackMy Profile

    1. livingrichcheaply@gmail.com Post author

      I hear you Jacob. A lot of times, the financial problems are indeed a result of poor decision making. I am a big proponent of frugality. Though I do understand that sometimes other issues in play that may cause financial problems.

  2. J. Money

    I think everything we share will be biased towards our own experiences in life, but I think it can never hurt to share ideas and tips no matter how generic or not they are. You can tell the same person something 10 different ways, and on the 11th it’ll finally sink in 🙂 We’re all wired differently, and going through different stages in life, so as long as the advice being thrown out isn’t incorrect in terms of facts/legality/rules/etc, I don’t see a problem with sharing stuff that’s helpful in the general scheme of things. Sure it may be annoying to read the 100th time, but hell – just skip it and move on if it doesn’t apply to ya. (And believe me – now that I skim over 150 blog posts a day, most of it DOES all sound the same ;))
    J. Money recently posted…Everything You Need to Know About Investing on One PageMy Profile

    1. livingrichcheaply@gmail.com Post author

      I agree with you J…sure some advice seems repetitive and generic, but for the most part it still applies and is valid. Wow…150 blog posts…good job on getting through all those posts to find the gems for Rockstarfinance.

  3. Dave @ The New York Budget

    So, I agree that the economy has a significant impact on an individual’s finances. However, the problem with Olen’s arguments is that it can lead to people throwing up their hands, blaming the economy, and not helping their situation. Sure, the economic downturn could be putting you at a great disadvantage, but being savvy with your personal finances will still help. It may not solve everything, but it will set you up for success when economic conditions improve.

    Personally, I think it’s all about helping people without judging them if possible. I am not one of those bloggers who think people are “less than” for having financial struggles. If I can help in any way, that is what I am trying to do, but I realize there are many forces at play.

    And even if they DO completely control their situation, but choose not to change their PF finances, I still try not to judge them. Just because they don’t understand PF, or even if they are just lazy, that doesn’t necessarily mean they deserve the crushing debt and the lower quality of life that they have as people.
    Dave @ The New York Budget recently posted…What’s a “Life List” and How Can It Help You?My Profile

    1. livingrichcheaply@gmail.com Post author

      Great point. I saw that as one of the main problems with Olen’s criticism. If you just blame it on the economy and feel like you don’t have any control of your financial situation…it’ll just lead people to give up. We don’t want that.

  4. Kathy

    I think those who criticize personal finance advice have bought into the theory that no one can take care of themselves and therefore must be taken care of by the government. They strive to swell the government benefits handed out and accomplish this through their income re-distribution goals. After all, people who have money are 1) lucky or 2) evil (take your pick) and must share their wealth with those who don’t have any.

    1. livingrichcheaply@gmail.com Post author

      Yea, much like what I said to Dave, the criticism seems to place too little responsibility on the individual. While there are some things we cannot control, we do control how we spend our money and whether we worked to increase our skills to make more money. I don’t like it when someone shifts blames totally away from the individual.

  5. Tonya@Budget and the Beach

    I just read someone’s post where they said that financial advice is like a garmin gps…it can offer us a guide, but we have to trust our instincts to find our way no matter what the gps says. I responded that my gps wants me to get on LA freeways, but as a driver in this city, I know better to avoid highways when I can, because surface streets sometimes move quicker. Yes, all financial advice doesn’t apply to everyone. You take what you need, and the rest with a grain of salt. It’s just there as a guide. When my bother had cancer and didn’t have health insurance, cutting cable and not drinking coffee from starbucks would NOT have solved that problem, and unless anyone has dealt with a serious illness or had a family member who did, they would know that even people with health insurance take a HUGE financial hit. But, they still have to pay no matter what. I think we all just need to keep searching for ways to make it through. Not two situations will be the same. Great post!
    Tonya@Budget and the Beach recently posted…Life UpdatesMy Profile

    1. livingrichcheaply@gmail.com Post author

      I like that analogy! Financial advice is very much like a gps guide. While it can offer a general roadmap to our destination, you may need advice that is more tailored to your circumstances. You’re absolutely right with your example of your brother…in those circumstances, the generic cutting costs advice is not of any help.

  6. Holly@ClubThrifty

    I have mixed feelings about personal finance gurus. On one hand, they have a lot of good advice….especially for people starting out. On the other hand, some of their advice is ridiculous (like some of the examples you’ve mentioned!). I agree that people don’t go broke over lattes. They really do go broke over the cost of healthcare and the other external factors squeezing middle-class incomes.
    Holly@ClubThrifty recently posted…My Frugal Kitchen RemodelMy Profile

    1. livingrichcheaply@gmail.com Post author

      Good point…the gurus are a good starting point, but we have to take all advice with a grain of salt.

  7. Kim@Eyesonthedollar

    People don’t go broke over lattes, but they do go broke because they don’t ever plan for things to go wrong. I always look back to my in-laws. When they lost jobs, they didn’t really cut much of anything out of their spending, even continuing to go to the casino. When a family member loaned them a good chunk of money, they blew through it in a few months. We need to be hopeful, but always think about planning for bad situations. I can say that because I didn’t for a long time, and really just got lucky that we didn’t have a job loss or health problem. If my in-laws had put away some money when they were doing well, they would not have been going through a foreclosure in their 60’s. You can blame the economy all you want, and I feel really bad for them, but I also think lots of it was because of poor choices. I guess it all plays a role.
    Kim@Eyesonthedollar recently posted…Preparing To Lose a JobMy Profile

    1. livingrichcheaply@gmail.com Post author

      You’re right about that…a lot of people like to disregard the “latte factor” but it’s more than that. It seems as those who don’t pay attention to spending, big or small, won’t plan financially.

    2. Jacob

      I think your comment, and Andrews response are very good. With regard to the lattes, I actually think it’s a huge deal. It’s a reflection of their mindset on money and a good indicator that other issues exist. I mean, unless you’re loaded, it’s probably not wise to blow $5 here, there, and everywhere. Right? That adds up so fast.
      Jacob recently posted…Discover It Card Review – More Cash BackMy Profile

  8. Pauline

    There sure are more efficient ways than others to save money. If you make minimum wage and wonder why you can’t make ends meet in Manhattan, I’d have you move to the MidWest before trying to cut dining out.
    But you need to start low so people get momentum and catch up too. Otherwise you’d be overwhelmed, like if I told you to go run a marathon before having you run 3 minutes a day for the first week.
    Pauline recently posted…10% blog income pledge for education updateMy Profile

    1. livingrichcheaply@gmail.com Post author

      Yea, sometimes you have to focus on the big issues that are costing money: like living in a high cost of living area.

  9. E.M.

    To be honest, I don’t listen to the big finance gurus, and I never have. I’ve never really needed to seek their advice. Like Holly said, I think they’re useful for people just starting out that need motivation. That said, I think the average American could take our average advice about cutting cable, preparing food at home, etc. and find money somewhere. Sure, not all situations are that simple, but I see so many people claiming to be living with the bare minimum that still have cable and are still eating out. For some reason, it doesn’t occur to them to live without these luxuries, because they’re so commonplace.

    For example, when my dad lost his job, my parents didn’t really make many adjustments. They didn’t cut cable, they continued smoking, and they still got pizza and chinese food every so often. If anything my mom tried to lower the grocery bill. My dad’s car was not being driven, we couldn’t afford to fix it, and yet they wouldn’t take it off the insurance plan and sell it until two months before moving. Complete waste of money! It boggled my mind. I understand it’s tough, and cable was basically their only form of entertainment, but when you’re constantly complaining about having no money (AND no efund), something has to give.
    E.M. recently posted…March Goals & Review of FebruaryMy Profile

    1. livingrichcheaply@gmail.com Post author

      I think you’re right…the average American could use this type of advice. And a lot of people who claim to be living on the bare minimum WILL still consider cable t.v as an essential. I watched a news report of a single mother with 2 kids making minimum wage who has cable t.v because that is the only entertainment they have. Well, there is regular over the air television right? When you are in a financial emergency, you have to make sacrifices.

  10. DC @ Young Adult Money

    Really appreciate you bringing this up. I think the biggest problem is when you are writing a personal finance or lifestyle blog post you can’t make them too specific. Maybe if your blog is written for a very (VERY) small demographic you can be more specific about financial realities and situations, but you have to be broad and make your post somewhat applicable to a large number of people. I do think that each person’s situation is unique and we can’t simply cut our cable cord and suddenly have financial prosperity. I definitely don’t have a solution to the issue of generic advice that won’t help everyone, but I think it’s worth discussing (hence why I appreciate you bringing it up on your blog).
    DC @ Young Adult Money recently posted…The Dirty Little Secret of How People Make Money BloggingMy Profile

    1. livingrichcheaply@gmail.com Post author

      Thanks DC. It’s true that you can’t be too specific and not everyone’s situation is the same. But for the most part, even the generic advice is applicable to the majority of the people reading it.

  11. Shannon @ Financially Blonde

    First of all, I love the SNL impersonations of Suze Orman and her jackets, and like any impersonation, I think there is some truth there. It is definitely difficult to give “blanket” financial advice to the masses because every person’s individual money story is unique and different. And I think that anyone who reads, listens or watches personal finance “experts” needs to understand that it is not individual advice and it might not apply to every person’s situation. I make a habit of spending a good amount of time with my clients before I suggest specific tools and exercises to help them with their financial situation. And even after knowing their “quirks” I still have to make adjustments based on changes in their lives or mindsets.
    Shannon @ Financially Blonde recently posted…Music Mondays – Brown Eyed GirlMy Profile

    1. livingrichcheaply@gmail.com Post author

      Yes, I was disappointed I couldn’t find the video of the Suze Orman skit…it was hilarious. It’s great that you as a financial advisor can have a better understanding of someone’s circumstances before offering advice. And it’s good to hear that you don’t just apply the same advice to everyone…like in the Suze Orman skit!

  12. Done by Forty

    That’s a great question, Andrew. I try not to write about financial tips on my blog, but only because other bloggers do it so much better. The main assumption I have with my readers is that they are gainfully employed: say, making $40k a year or more, per adult person in the family. If you’re pulling in that kind of money, you can probably use some cost cutting methods to get ahead. If you’re not (say, if you’re working a part time and/or minimum wage job), then the advice of personal finance bloggers will mitigate the problems you have, but they’re probably not going to really get you towards financial independence. That person needs to generate income: a much, much harder thing to do than cutting costs. Cutting costs is EASY.

    If more personal finance bloggers addressed generating income, I think both sides of the equation would be addressed. The rub is that bloggers have a disincentive to really write about successful strategies for their side hustle income. There are some notable exceptions and some bloggers really are transparent about how they generate income. But, in general, you don’t really have a good reason to create new competitors.
    Done by Forty recently posted…Rashard Mendenhall is My HeroMy Profile

    1. livingrichcheaply@gmail.com Post author

      I agree that in general cutting costs is pretty easy, but many fail to see that. Good point about some not wanting to share your strategies…though there are many who are willing. However, it still is much more difficult to generate more income by pursuing side hustles, then calling the cable company to cancel or to pack a lunch.

  13. Addison @ Cashville Skyline

    Great posts by both you and Ryan! It’s easy to take for granted that things like learning to budget on your own. I recently learned that my parents (early 60s) have never had a budget and are just now learning to create one so they can figure out when they can retire. This was troubling to me for a number of reasons, and I can’t imagine ever being in that situation. It was a reminder that personal finance is a struggle for many many people, and we shouldn’t judge other people’s poor decisions so quickly. We should try to help when and if we can.
    Addison @ Cashville Skyline recently posted…The High Costs of StayingMy Profile

    1. livingrichcheaply@gmail.com Post author

      Thanks Addison. Good point. For most personal finance bloggers, budgeting seems like such a basic and simple step, but many people may not know that. I’ll definitely try not to judge the decisions of other people so quickly. Glad to hear that your parents are learning to create a budget…it’s never too late.

  14. Kathy @ SMART Living 365.com

    Very interesting post! I do agree that some of us start out with more advantages than others, while there are those that have more disadvantages, and certainly effects the playing field. But then the only way to ever improve one’s situation is to take full responsibility for what we either do or don’t do with that advantage or disadvantage. While I’m not specifically a personal finance blog, I instead focus on offering ideas and thoughts about how to create a happier and more peaceful life. I have yet to meet anyone who was deeply in debt and overly stressed who was happy so yes, I offer my perspective on ways to reduce that. I think all of us are throwing out our perspectives in order to be of help. Good thoughts and interesting discussion. ~Kathy
    Kathy @ SMART Living 365.com recently posted…To List Or Not To List…5 Reasons For And Against the List PostMy Profile

    1. livingrichcheaply@gmail.com Post author

      Thanks Kathy. I agree that the only way to improve your situation is to take responsibility. That’s the first step…because if you just shift the blame, then you’ll never take any action to improve.

  15. charles@gettingarichlife

    Personal advice should be general because there are so many different situations. Suzy has some good ideas but she also seems out of of touch. A lot of people’s financial problems is self inflicted created over several years of bad habits. I’ve seen it with family and friends, I don’t want to be the annoying judgemental prick.
    People often have it backwards, in boom times you’re suppose to hunker down and build your net worth as fast as possible. In bad times utilize your assets to grow your wealth faster.
    charles@gettingarichlife recently posted…Get Rich With Real Estate: Invest In Game ChangersMy Profile

    1. livingrichcheaply@gmail.com Post author

      Interesting point. It does seem that people do that. Reminds of the Aseop’s fable with the ants busy working during the summer time storing up food for the summer while the grasshopper lounged and enjoyed the summer. Guess what happened in the winter?

  16. Laurie @thefrugalfarmer

    Another great article, Andrew. But out of all the people I know who’ve declared bankruptcy (and there is probably close to 100), only one of them was a medical bankruptcy. I grew up, largely, in an area of impoverished people, and was one myself for many years. There is this idea – this cycle, this belief, – in so many who are broke that “I am always broke, and i will always be broke, because I just don’t make enough money”. The problem is that they do make enough money. Rick and I were classic examples: we never bought big things, went on vacations, etc., instead we threw our money away on trips to McDonald’s and Target. Lots of them. And I see so many broke people doing the same thing. They have no cash, yet they’ve got smartphones and eagerly stock up on sale items they don’t need at Target. This surely isn’t the case with everyone, but as an astute observer of human behavior for three decades, I’ve seen this is the case with most of them. Also, I see a vast unwillingness of many in this group to accept responsibility for their behavior. I watched one couple spend massive amounts of cash on things they didn’t need for years, then medical problems came, the job had to be quit and they filed bankruptcy and lost their house, but it “wasn’t their fault” because they’d always worked hard and prided themselves for making their payments on time. It has never occurred to them that if they hadn’t gotten into debt in the first place, there would’ve been no payments to make, and a healthy savings account to boot. We’ve become accepting of debt in this country as long as we can make the payments, because that’s how “everybody does it”. Then when a PF person comes along and touts a better way, people immediately “show ’em the hand” and say they’re rich snobs who don’t have a clue. It’s really too bad, because the person they’re hurting the most is themselves. Rick and I have never been to college, and our income is well under the six-figure mark, but thanks to all of the wonderful PF people out there, we are indeed changing our family tree. It’s not easy, but it can and will be done.
    Laurie @thefrugalfarmer recently posted…More Ways to Save Money on GroceriesMy Profile

    1. livingrichcheaply@gmail.com Post author

      Thanks Laurie. Wow, I had to read that twice…100 people! You definitely have a great perspective on this as you’ve seen this first hand and now have completely changed your financial path. Very happy to know that you are changing your family tree. It is very significant as I’m sure this knowledge will be passed on to future generations.

  17. Kevin H @ Growing Family Benefits

    The challenge I see for so many people is they live check to check when things are going well. They borrow money to finance lifestyles, have little or no savings, and then run into trouble if they lose their job, or experience a health event.

    Many have very high lifestyle expectations, and many of us pass over lower paying jobs that are available today for higher paying jobs that may never materialize. I live near a large theme park that provides housing for foreign workers. They can’t find enough locals willing to work. What does that tell you?
    Kevin H @ Growing Family Benefits recently posted…Short Term Disability Before or After Tax DeductionMy Profile

    1. livingrichcheaply@gmail.com Post author

      Great point. It seems like it’s the norm to live pay check to pay check. Any type of hiccup like a loss of a job or health event will derail their financial lives. I also agree that many will refuse to take jobs they think are beneath them, even when they are in a financial emergency.

  18. Anthony @ Thrifty Dad

    Great post! I think it can be easy to point fingers on something like the economy. It’s definitely a factor, but only as much as it’s been a factor in other people’s lives for generations. And it also doesn’t do us any good to continually talk about the bad and spread the negativity. How motivating is that? I’ve been slowly detoxing from reading news the past couple of weeks, and only listening to happy music, it’s amazing what that alone does to one’s psyche. For every David Bach and Suze Orman out there making it sound so easy, there’s no doubt, thousands that number, making it sound so hard. Now, who would you rather listen to?
    Anthony @ Thrifty Dad recently posted…Save money when travelling with childrenMy Profile

    1. livingrichcheaply@gmail.com Post author

      Thanks Anthony. I should try to read the news less too…it is very negative and there isn’t much to gain from it. And it’s true that it’s pointless to continually talk about the bad economy. It’s beyond our control. Living frugally is about taking control of your finances.

  19. John @ Frugal Rules

    Great post Andrew! I regards to the gurus, I sort of take them with a grain of salt. There is some good basic advice by most, if not all of them, but they each seem to have their own agendas or bents that just won’t work for everyone. That said, I think it can be so easy to point fingers (and I know I’ve likely been guilty of doing so) and place the blame on one thing or another when many times we don’t know all of what is going on in the given person’s life. It could either be a behavioral issue where they’re just being foolish, or it could be an education issue where they’re not financially literate. Regardless of which they fall in, my hope is they can see that it’s still possible in many cases to turn things around. Is it always easy – no, but it is possible.
    John @ Frugal Rules recently posted…Should You Date a Guy Who Doesn’t Pay for Dinner?My Profile

    1. livingrichcheaply@gmail.com Post author

      Thanks John! One point that Olen made that was true was that many personal finance gurus have their agendas, which involves selling their books or programs. I’m sure there is a conflict many times where they’ll support something just to make a profit, whether or not it helps those struggling with money. I’m hoping with the amount of personal finance blogs out there…financial literacy will increase.

  20. Shannon @ The Heavy Purse

    Great post, Andrew! I know one thing I struggle with when writing my posts is keeping it broad-based so it will be applicable to most but obviously it’s not fine-tuned to your personal situation the way my advice to my financial planning clients is. That is hard for me and I imagine for everyone. We can only share what we know or have done ourselves. When I see people struggling take on a big student loan in hopes that a new degree will be help them find work, I often think it’s done out of desperation. They feel like they have no alternative and whether or not that is true – I have no idea. And that to me is where the problem truly lies. Most people have no idea what to do. They may turn to financial experts or bloggers but they are overwhelmed, scared and many feel hopeless. They hope and pray for an easy solution but the reality is there is no magic pill. You have to make some hard choices and change your habits/beliefs. When I see people like this struggling it is just another remind why we need personal financial education in our homes and schools so desperately.
    Shannon @ The Heavy Purse recently posted…Debt Does Not Make You a Bad PersonMy Profile

    1. livingrichcheaply@gmail.com Post author

      Thanks Shannon! Thanks for the perspective. As a financial planner, I’m sure you are able to take into account an individual’s circumstances. The thing I enjoy about reading blogs are that people share their experiences from their own perspective. Obviously our advice will not apply to everyone’s situation. You’re right that there’s no magic pill, though most people seek that. They don’t want to make the hard choices and I’m sure it is hard to change your habits and beliefs.

  21. Ryan @ Impersonal Finance

    I don’t think PF bloggers are pound foolish, to be honest. I think that most of us dish out the advice that has been proven to work time and time again, and that is cutting expenses, savings your earnings, and earning more. As for the broad strokes we sometimes paint with, I think it’s necessary in order to help the largest amount of people (if your goal is to help people). We could definitely tailor our advice in order to speak in exact terms, but that wouldn’t do much good unless someone had our same incomes, living situations, family situations, debt situations, etc. So we provide them the advice they can then extrapolate from and apply to their own life. Thanks for sharing the love brother.
    Ryan @ Impersonal Finance recently posted…do money and family mix?My Profile

    1. livingrichcheaply@gmail.com Post author

      You’re right…it’s difficult to tailor our advice and in general the advice applies to most people. Thanks for the inspiration for this post.

  22. 2 Copper Coins

    I think it’s always both and. We want to believe all people are either completely self sufficient or they’re too dependent on the government. The recession is out of our hands or we can decide not to be affected by it. There is no one side for each person! We’re all affected by the recession and we all have a choice about how it affects us. We’re all somewhat dependent on government and you can be a hard worker and still need help. It’s the dividing of the sides that’s really damaging. I think a personal finance guru worth their salt will admit one size fits all is a myth and that we all will operate under our culture and situation as well as our personal choices.
    2 Copper Coins recently posted…How Much Do You Need in Your Emergency Fund?My Profile

    1. livingrichcheaply@gmail.com Post author

      Great point that we’re all affected by the recession, but that we do have a choice about how it affects us!

  23. Income Surfer

    Great discussion Andrew. Here’s my two cents:
    You are totally right that we shouldn’t judge other people, especially when we only get snippets of the facts. On the other hand, I’m sure I’m not the only one that has an annoying family member that complains endlessly about how the government isn’t doing enough to help them……while they refuse to sell the 3rd car or reduce their cable package below the $200 mark.
    Every situation is different and it’s time that people are educated and accountable concerning their financial lives. Again, my two cents…..and this was a really good post.
    -Bryan
    Income Surfer recently posted…How I Find Great InvestmentsMy Profile

    1. livingrichcheaply@gmail.com Post author

      Thanks! Yea, I try not to judge, but I think it’s human nature to do so from time to time. And yes, you are not the only one who knows someone who complains about their financial predicament, but are living way above their means.

  24. David

    Wow, possibly the best article I have seen this year.
    Budgeting is the most important aspect of money. Without budgeting, we would overspend and not spend on thing we actually need.
    I appreciate your insight and hope you can keep these articles up.
    David recently posted…How to save money on GasMy Profile

    1. livingrichcheaply@gmail.com Post author

      Wow David…thank you so much for that compliment. That means a lot.

  25. Anneli @thefrugalweds

    Great food for thought! 🙂
    I definitely recognize that there’s systemic reasons that make it difficult for people to live healthy, sustainable lives. There’s hardworking people who still don’t make the living wage. Women are still paid less than men. Inner-city children still don’t have the resources to compete with children from more affluent areas. We can’t turn our backs on these issues and continue to build towards having an even playing field.
    That being said, I recognize that while there are a lot of challenges, there are still opportunities to work hard for, to strive for, and to dedicate yourself for. I think as PF bloggers, we can only speak from our experiences. Whatever your circumstances are, whatever your truths are – they’re valuable to someone out there looking for advice. 🙂
    Anneli @thefrugalweds recently posted…What to pack for a Vacation: 10 Things that SHOULD be in your Luggage My Profile

    1. livingrichcheaply@gmail.com Post author

      You make great points about the economic inequality we still face nowadays. But even with those challenges, for the most part, we still can control our financial future. I definitely enjoy hearing the different experiences and perspectives of other pf bloggers.

    1. livingrichcheaply@gmail.com Post author

      Yes, I’ve seen that also. I used to work in housing court and many people who couldn’t pay rent had nice phones, clothes, jewelry, etc, yet couldn’t pay rent. For most, I do think that hard work, perseverance and determination will lead to success.

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  27. Grayson @ Debt Roundup

    Awesome post Andrew! When I give advice, I give it based on experiences. The hard part about being a personal finance blogger is that we cannot handle every situation. We can only give advice that can guide someone. Yes, the economy is bad, but we still have to be responsible for how we handle our money. We are in the control of where our money comes from and where it goes. We have to prepare for the unseen things and what our future holds. I don’t agree with some personal finance advice, but it is just there as a guide.
    Grayson @ Debt Roundup recently posted…Hawaiian Airlines World Elite MasterCard Review with Bonus OfferMy Profile

    1. livingrichcheaply@gmail.com Post author

      Thanks Grayson. You’re right that the advice pf bloggers give are just a guide and it can’t be applied to everyone. And while the economy is bad, that doesn’t me we should throw our hands up and give up.

  28. Jenna @ UpstartFinance

    Thanks for the thought provoking post. I definitely believe people can improve their lives with smart money management, despite all the economic pressures.

    My mom went from broke in a trailer park with a disabled dad and mom suffering from cancer to a comfortable middle class lifestyle due to her choices and some government help. And I have grown up middle class and have already improved my life as compared to my parents.

    Every person has their own challenges – but we can all do better. Realizing that you can change your life (having agency & self efficacy) is a huge step to changing anything.
    Jenna @ UpstartFinance recently posted…How Smart Money Management Can Change Your LifeMy Profile

    1. livingrichcheaply@gmail.com Post author

      Thanks Jenna for the compliment and for sharing your story. Your mom had some difficult challenges and obstacles, yet she was still able to make a better life for herself and the family. You’re right that realizing that you can change your life is a huge step, because if you don’t feel that way, there is no motivation to make any changes.

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  30. Mel @ brokeGIRLrich

    I think one of the best benefits to PF blogs – and why so many exist – is because some bigshot like Suze Orman or Dave Ramsey can tell you to brown bag it or give up cable and most people scoff at it. When you’re reading the little guy’s PF blog and they’re telling you how they did those things and the exact benefits they reaped of them… to me, that’s a lot more convincing.

    I do agree though that some people have already exhausted all their options and are just stuck. In which case, I suppose there needs to be a different type of answer that no one’s really found yet.
    Mel @ brokeGIRLrich recently posted…#NYCFail – I Lost My Metrocard. Again.My Profile

    1. livingrichcheaply@gmail.com Post author

      That’s true, I’d have an easier time taking advice from someone who I feel like is more similar to me than someone is well off.

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  33. EL @ Moneywatch101

    I see and hear it too from certain financial bloggers and gurus, the advice is primarily geared on a macro level. Anyone can be judged for their advice, but on a bigger level they are helping out more people get finances in order. They study the stats, and during the recession millions were under a big debt to income ratio problem. I guess we have not learned the lesson as still many people are living paycheck to paycheck. Given the sad state of the economy, I still have hope in a positive turn around for those willing to change.
    EL @ Moneywatch101 recently posted…The Investing RulesMy Profile

  34. Taylor

    This post is spot on. Personal finance isn’t a one size fits all. People living paycheck to paycheck probably won’t get lots of value from another Roth IRA vs traditional IRA post and I don’t believe that’s why they tune in. Have you seen the HBO Documentary Paycheck to Paycheck? It blew my mind. As a person obsessed with managing money during the film I tried unsuccessfully to come up with a solution to her dyer financial situation (single parent, under-employed, denied financial aid, astronomical health bills, etc.). One thing that resonated with me from her story is her optimism in the future. In my opinion that’s the true purpose of the personal finance blog. To show people they aren’t alone, to get guidance, and to get non-intimidating money advice.
    Taylor recently posted…A Day in the Life – The Crazy Journey to Freelance Writing Full-TimeMy Profile

    1. livingrichcheaply@gmail.com Post author

      I’ll have to check it out if it’s on Netflix or somewhere else. There are definitely a lot of people in very difficult predicaments where the normal financial advice just won’t do. Glad that in the story, the person was still optimistic because many are not and just give up.

  35. Scott @ Youthful Investor

    I do have to agree with your feelings. In reality (from personal experience) there’s only so much you can cut and still not be cutting it. I had a period of my life in which I did not have all thata normalizes: iPhone, internet, cable, television, lattes, designer clothes, a car, etc. Even without these things and solid financial decision-making I couldn’t cut it.

    Reading a number of personal finance blogs, they preach from ivory towers. They encourage readers to “leave the corporate world” and take up blogging, internet employment or freelance work. What they fail to realize is that many of their readers are not corporate employees, who are not making anywhere near the blogger once was. These are people working minimum wage and part time. These are people working all day and all week to make a dent in their past bills. It would be incredibly dangerous for them to take some of that advice. Of course, not everyone offers it that way and very few actually listen word-for-word.

    Financial bloggers could do themselves a favor and focus less on the tenets of what has been preached and rehashed for well over a decade now (cut costs, make better choices, etc.) and get a little more creative, based on what Olen has written.

    1. livingrichcheaply@gmail.com Post author

      Thanks for your comment Scott. I have noticed blogs which taut the success of being a freelancer and leaving the corporate world. The ones I read don’t necessarily encourage the readers to do it, but provide information about an alternative career path. I’m not sure if only former corporate employees would be successful making the switch to blogging, actually it would seem those in the corporate world have less of a financial incentive to make the switch. Of course, blogging really isn’t for everyone and it isn’t easy to make money. I don’t make anything and I’ve been at it for almost a year.

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