Experts give the worst, best advice they've heard

By Marianne Curphey

Many people look for advice on how to manage money effectively, and often, the advice comes from friends, family or contacts on social media. While those sources could have good tips, there's always a chance the advice is misguided. Even if you aren't actively looking for advice, you may subconsciously follow the trends of social media friends or peers.

But what suits someone else might not be appropriate for you, says Jane Cox, wealth psychology expert and motivational speaker and trainer. Rather than compare yourself to your friends or others, it's better to think carefully about how you use your own money. You should set your own priorities and seek out advice from experts if you need it.

"Don't be side-tracked by what you see friends posting about on social media sites," she says. "Really, [much] of what you see on social media is puff and exaggeration."money-advice

Cox and three other financial experts share their opinions on the best and worst advice:

The bad:
1. You have to spend lavishly to enjoy yourself.

Eric Paddock, a retired financial adviser, enjoys travelling the world. He
does so by managing his money carefully and finding the best deals. That involves not getting side tracked by tales of expensive luxuries. "A friend spent in two weeks in Hawaii the equivalent of what I spent in three months," he says.

You shouldn't have to meet a certain number before you can be happy. There are ways to have fun without breaking the bank or ignoring priorities such as bills and debt payments.

2. It's only money.
You don't need to obsess, but having too casual of an attitude about money can be harmful, too. "Be focussed about your finances and keep tabs on what you are paying," says Wilma Allan, money coach and founder of the finance blog The Money Midwife.

A smart money move would be to borrow only if you can do so at a good rate, and only if you can afford to pay it back within a reasonable amount of time.

A person who is too blasé with their finances may just decide to borrow with no plan to pay it back, Allan says. They might buy a new car to keep up with their neighbour with no thoughts about the cost of insurance, gas, maintenance and added interest -- or even about whether or not they needed the car at all.

Yes, in theory, you can always earn more money. But to spend or borrow without a plan as to how and when you'll earn back what you've spent is irresponsible.

3. Money will take care of itself.
Similarly, you shouldn't avoid keeping tabs on your finances just because you might not like what you see. You should be able to give a close estimate of what's in your current account at any given time, and where you're spending your money.

"It's best to be informed about your finances," says Paddock. "Every morning I go online and check my account, just to make sure nothing untoward has happened, and to spot any fraudulent transactions."

He recommends doing the same. You will be less likely to overdraft your accounts if you consistently check them. And though banks work hard to spot and prevent fraud, you shouldn't rely solely on your financial institution to detect suspicious transactions.

Keeping track of savings is also important. Often, banks and building societies offer attractive headline rates that expire after six to 12 months, leaving your savings languishing in a below-average account. Make a note in your diary to transfer your funds when this bonus period ends. And, of course, be sure that you're adding to your savings regularly and factoring it into your budget.

4. Managing money is a chore.
"You should value the power you have in saving and making plans for your financial future," says Allan.

Many people have the wrong mindset because they're focused on having "enough" money. As a result, money becomes a stressful topic, something people put off like a chore. Maybe you even designate a day of the week or time of the day to sit down with your finances because you have to mentally prepare yourself. However, that may be hindering your ability to grow your money.

"If you have a more positive attitude to your finances and decide to take responsibility to manage and grow your money, then you are very likely to accumulate more," Allan says. "It's all about your money mindset and what you believe is possible."

The good:
1. Enjoy spending it (wisely).

It's one thing to feel guilty about swiping your credit card for luxury items or for taking out a new car loan when your old car was running just fine. But if you have enough money and you're managing it well, you shouldn't feel guilty about affordable treats every so often.

"People who work hard and earn a lot of money deserve to enjoy it, but sometimes, when they have a lot of surplus income each month, they feel guilty," says Cox. "They might feel that they have not earned the right to spend it. If you work hard, it's OK to spend some of the income you've earned."

Although he's an advocate of managing money well, Paddock agrees. "If there is a hobby or something you really enjoy, make sure you take the time to do it," he says. "If you can afford it, then make the most of it while you are fit and well."

2. Make the most of compound interest.
"I was brought up in a family where savings were important," says Paul Birch, a former financial adviser, and now a coach and therapist to FTSE 100 companies and executives.

"From a young age, I was conditioned to think about savings, and, in particular, pensions," he says. "I also understood the effect of compound interest -- how interest creates more interest -- and how starting to save in your 20s can make a big difference to your wealth in later life."

3. See money as a tool to reach goals, not an end in itself.
Earning and saving money are the means to reach other life goals. Keep in mind the milestones you're saving for: purchasing a home, starting a business or building a comfortable retirement savings, for instance.

It's OK to have a financial figure in mind, but don't focus so hard on that number that you never meet any other types of goals. It doesn't matter what the goals are, as long as it's not just "accumulate £X" -- you should know what you want to do with it once you're there, whether that be quitting your job to care for your children, traveling during retirement or even putting it toward charity.

"In order to motivate yourself, hold onto the dream that you want to create," says Cox.

See related: Financial capability: Managing money and planning ahead, A guide to debt advice organisations

Updated: 17 April 2017