Our “New Normal” Is Revealing the Rot In Traditional Finance Advice

An old, mush apply with bites out of it and covered in ants sits on a rock.

Like many personal finance writers, I have no idea what to say about money right now. What advice, information, or tips I could offer that would offset the devastating financial hardships so many of us are facing? 

When the bottom drops out of the economy, the usual money strategies and solutions that I might point you to are flung out of reach. 

I’m not going to pretend that there is a lot you or I can do to change our situations. I’m not going to act like I can work well without child care, or that my freelance income hasn’t fallen by 80%. 

I’m not going to ignore the fact that many people are out of a job and that unemployment benefits are running out this month. I can’t turn my back on the fact that many people are months behind on rent and praying that eviction suspensions hold.

I don’t know what to say because, truthfully, I don’t know that there is much to say right now. And I know that many other personal finance writers are feeling this as well. In fact, I believe more should. Because, despite the difficult situations many Americans face today, there are still daily tweets and blog posts that act like nothing in life has changed.

For example, the “money expert” in my Twitter feed claiming people struggling financially while living in a high-cost city are choosing the difficult situation they’re in. This advice disregards the fact that many people have to live in these cities in order to maintain and grow their careers. Or that they may have lived in this high-cost city all their lives — and moving can be prohibitively expensive and cost them their entire support system.

And how about a tweet pushing people to change their ideas of fun from “low-value” pastimes like watching Netflix and playing video games to investing and building businesses? Do people in our incredibly stressful times not deserve to decompress when they can?

Clearly, I’m feeling salty. Actually, I’m Ticked the H*ck Off™. But my anger toward conventional finance advice is nothing new.

What is new is that the pandemic is making it hard for me to keep quiet about how willfully oblivious these money takes are. The truth is that the most popular financial advice (and the affluent experts writing it) has been out of touch for years.

So, before I continue to write on my blog about the realistic things you can do to reach your financial goals, I need to tackle what’s unequal, toxic, and unjust about the foundation that the personal finance advice world is built on. 

Here are the main things wrong with traditional financial advice:

  • It’s based in shame and blame.
  • It doesn’t address psychological and behavioral elements.
  • It’s unhelpful, even openly hostile, to people with few resources or opportunities.
  • It doesn’t evolve to keep up with rapid economic changes of the past few decades.
  • It prioritizes building net worth above well-being and value of life.

These factors not only make traditional finance ineffective for many, it can cause us to internalize a sense of shame about our financial situations. When money advice shames or blames people (or ignores the massively important psychological aspect of money), some might get the message that they’re bound to always be “bad with money.”

In addition, when money advice ignores the realities of underrepresented minorities or people living on low incomes, it tells us they lack the work ethic or merit to earn more and succeed. Finally, when the advice makes the dollar the all-important measure of success and a good life, it pushes people toward overly-restrictive, unhealthy, and misaligned financial and life choices.

This is the core of what enrages me about traditional financial advice: it actively harms people. There are so many of us who read or hear personal finance advice that leaves us feeling ashamed, worthless, hopeless, and filled with despair. And how can we move forward when the solutions we seek all turn into emotional and mental blocks?

In order to get to the bottom of this, I’m going to write separate posts for each of the above bullet points. We’re going to go deep so you can see the ways some advice might be doing you more harm than good — and then we’ll talk about what you can do about it.

If this sounds interesting to you, bookmark this page. I’ll link each post into its respective bullet point when published.

Lastly, I want to be clear: I am by no means painting the entire personal finance community with this broad brush. While the above describes a certain portion of finance experts, it by no means reflects all of us.

So many personal finance creators are doing their work well — discussing systemic issues and offering grounded money solutions and nuanced financial strategies. For examples, check the (non-comprehensive) list below of money media creators who, imo, are offering thoughtful, balanced money advice. If you have your own favorite finance creators who you feel fit this bill (or you are one yourself!), drop a comment linking to their work.

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  • Reply
    July 24, 2020 at 12:32 pm

    I am very surprised you did not mention Michelle Singletary in your list of recommended people to follow. She is a personal finance writer for the Washington Post. Her column is called “Color of Money”. I have been following her for many, many years now. She writes about common sense stuff that most people can relate to, and also gives points of view to issues I hadn’t even considered, given my white, middle class experience. She is the real deal, and I have learned much from her in her columns, weekly chats, and books. Good post today, and I had not read your blog before. I found you through the “Collecting Wisdom” site.

  • Reply
    The $76K Project
    July 24, 2020 at 4:26 pm

    This is a great post!

    Just remembering back to less than a year ago when people were making fun of others for having more than a few thousand in savings… “You should invest! Your savings are only depreciating!”

    And now all of a sudden it’s like, “Wow, you’re an idiot, you should have saved more! Why don’t you have a year’s worth of expenses socked away?!?”

    This pandemic and its effects are totally going to upend the typical financial advice of the last decade or so, but it’s also going to make that advice that much more difficult to follow. People are struggling to buy groceries and pay rent, much less save buckets of money.

  • Reply
    Revanche @ A Gai Shan Life
    July 24, 2020 at 5:39 pm

    I am reflecting on how the delivery of that traditional financial advice was so different many years ago – it wasn’t actually imparting of advice. It was literally the mapping of a journey and people implementing the advice in the ways that suited their journeys. Now the sound bites on Twitter, and the near-total pivot to dispensing advice has turned everyone into a mini Dave Ramsay or Suze Orman and frankly, I ignored both of them in my money journey for a good reason.

  • Reply
    JTE Elms
    July 26, 2020 at 11:34 am

    Great post. I look forward to your follow-up articles.

  • Reply
    Kevin Payne
    July 27, 2020 at 2:23 pm

    Great post, Elyssa. I’ve been having an internal battle over what type of financial advice to share on my site. I believe in many standard financial practices with the PF world, like emergency funds and budgets, but there’s a lot of people hurting financially, mentally, emotionally, spiritually, etc.

    Most blogging advice says to figure out your avatar and write content for them but it’s hard to ignore the fact that there’s so many people outside of that. No matter what I write, it doesn’t address the needs of a ton of people. Regardless of topic, I try to approach it all with grace.

    I appreciate your words and addressing this topic.

  • Reply
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  • Reply
    July 31, 2020 at 2:43 am

    this is a really great post. I am now quite high income by means and medians (not compared to investment bankers though!) and I totally do find good advice for me on, for example, physician finance blogs. But previously I was a poor grad student and spent my teen years definitely lower middle class or even poor moneywise (other advantages meant I wouldn’t say I was low SES though). What I’m able to do and even have mental space to think about has changed DRASTICALLY. Money used to be super stressful… I remember utterly freaking out over a $20 parking ticket. Save for *retirement*? You must be joking! I’ve been fortunate to have frugal tendencies and to have made some good decisions along the way, sometimes quite frankly for all the wrong reasons. I think how much of this was accidental or at least luck… and I can’t understand how people ignore that this country basically has no social safety net…. I haven’t read her book but props to Helaine Olen for calling this stuff out too. Especially now with COVID – it should be so clear that so much of doing well is luck and privilege. It is how our country gets out of doing the hard work on a lot of things: blame the victim. Misogyny, racism, inequality. As the t shirt says, If you’re not angry it’s because you haven’t been paying attention. And it’s the group rage that can motivate social change we need — self blame keeps the status quo entrenched.

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