This couple that I’m friends with related an interesting story to me the other day. They decided that their current bank no longer suited their needs and it was time to try a new bank. Sometimes, and this is one of those times, switching to a new bank isn’t exactly easy. In the middle of this process, bills came due, so they use money from other other accounts to pay them. This created a little bit of chaos with their budget. One of them figured, “Well, we aren’t spending money haphazardly, once the bank accounts get settled, we’ll be able to transfer money to the right places and right the budget.” The other one was a little more concerned about the budget. However, that argument started with, “Well, Suze Orman says…”
I can’t remember if the ensuing argument made sense or not. I believe I was too busy actually putting my face in my palm, but the details are foggy. (The other half of my brain thought, “There’s definitely a post to be written here.”) Whenever I hear someone bring up a “[personal finance guru] says…” my soul starts to cry. I just gives me the feeling that they are memorizing some points and not really learning them, or thinking for themselves. That can be a dangerous thing because even personal finance gurus make mistakes.
Before I go any further, I want to make something clear. I’m not intending to put these gurus down to make me look better. Their personal finance knowledge far surpasses mine. Any regular reader knows that I do not claim to be an expert. If I tried for the next 80 years I couldn’t be the experts the following people are. In short, they are awesome, and I am scum. :-)
I thought I’d take a few minutes and detail some of the issues that I have with personal finance gurus:
Since she was the first person mentioned, I thought it would make since start with Ms. Orman. I have watched her syndicated show about a dozen times. Often she takes calls where people ask if they can afford to buy some luxury item. It’s extremely rare for Suze to say, “Yeah, go ahead and get it.” I’m waiting for the person who makes $3 million a year to ask to buy a gumball and get rejected as an outlandish request. I’m also fairly convinced that you could make Jack Bauer give up any and all secret information by putting him in a room with Suze Orman and Judge Judy. That is if they aren’t actually the same person in a disguise. Come to think of it, I’ve never seen them in the same place at the same time, have you?
I could write up a paragraph, but Kimberly Palmer of US News has done all the work for me. She makes a point that David Bach’s famous (and copyrighted) Latte Factor… the faulty math and the psychology behind it.
He’s almost exclusively focused on getting out of debt. There’s little for the person who wants to learn how to be wealthy. Also, ago 5 years ago, Five Cent Nickel pointed out that Dave Ramsey is bad at math. It’s true… Dave Ramsey is more about the psychology of getting out of debt than the math about the best way to do it. To further complicate things, Dave Ramsey brings religion into personal finance, which doesn’t necessarily lead to better financial management.
No one can find a downside to Mrs. Chatzky. She’s perfect in just about every way. Well, at least I thought that until I got email from her publicist that she wanted to promote her website. She was willing to answer 5 questions from Lazy Man and Money readers… except that when I presented the questions, the answers never came. I tried to repeated get in touch with her publicist to no available. The egg on my face matched my shirt quite nicely. And I’m not the least bit bitter :-).
There are probalby a few more personal finance gurus, I could throw under the bus, but I hope I conveyed the major point I was hoping to… No personal finance guru is perfect. There’s enough gray area in math, psychology, and other factors that make all information open to some interpretation. They are great for learning the concepts of personal finance, but you should probably adapt them to your own situation.
In the case of the switching of the bank accounts, I went with the friend who said that the budget would be straightened out when the bank accounts are. They still have access to all the money, so I consider it a short hiccup in the personal finance of the couple. It happens… hug it out over a latte.