Buzz
The press release that really pushed me over the edge was the one discussing lattes and how unprepared so many Americans are for a $400 emergency. 'Where’s my bingo card?' I quipped.
Before I knew it, I had filled an entire bingo card with personal finance buzzwords and phrases that drive me crazy whenever I see them in my inbox. I decided that if I could mark off a whole row, I’d treat myself to a beer at my desk in the afternoon. (Though on second thought, that might not be the safest idea.)
It’s not that I don’t appreciate thoughtful PR pitches and expert opinions. For every strange or irritating email I get, I receive two that are genuinely insightful from professionals whose work I admire. But a lot of what pops up in my inbox gets me riled up about the questionable personal finance advice floating around online. If you're not an accountant, financial advisor, or economist, how can you tell which personal finance advice or statistics are actually useful and which are just noise? Can’t we just enjoy our avocado toast in peace?
Let me share a time when I almost fell for a misleading claim
A few years ago, I received an email from a financial comparison website with a few key points about a survey they'd conducted on holiday shopping spending. The results were eye-opening: 57% of those surveyed claimed they'd spend an entire paycheck on holiday expenses. The representative offered me full access to the data and sent over a detailed Excel file.
However, when my editor and I dug deeper into the data, we discovered it had been manipulated. That 57%? It only represented people who said they would spend at least one paycheck on their holiday spending. It wasn’t a proportion of the entire group.
Just as you must critically evaluate findings from medical studies, it’s equally important to approach personal finance advice with a discerning eye.
We ran the numbers ourselves and found that only 22% of the respondents said they would spend an entire paycheck on holiday expenses, while 61% indicated they'd spend less. The percentage of people willing to spend more than a paycheck on holiday fun was quite small.
That's a situation where I got to see the raw data and make my own calculations. Other times, all you get is a press release with a few bullet points. Occasionally, you might receive a glossy, attractive PDF that offers little value. Often, you’re pitched surveys on what people think they'll do, rather than what they've actually done. There's a lot of information out there that gets published and reported without a second glance at the quality or intent behind it.
Just like you need to approach medical study results with caution (Chocolate is good for you! Wine is good for you! Chocolate is bad for you! We’re growing horns from staring at our phones!), it’s just as important to be critical of the personal finance advice you come across.
Examine who is behind the research
Companies conducting surveys aren’t inherently malicious, but their research is often not held to the same strict standards as academic studies. If the study comes from researchers or government sources, look for potential limitations that might impact the relevance of the findings. Many academic studies end up raising more questions than they answer, often lacking clear solutions.
Focus on actions rather than opinions or predictions
Who cares if 500 people said they might spend money on something unnecessary? Until they’ve actually done it, it doesn’t really affect you.
Consider the sample size
A larger group of people doesn't automatically mean more accurate results, but it's hard to make valid conclusions from, say, a group of 300 individuals who took an online survey. Who knows, maybe they only completed that survey because they wanted to read an article from their local paper and had to answer a few questions first. They were probably more interested in finding out what happened to their old friend Bill than in the survey itself. Would you trust those results?
Be cautious of sweeping generalizations
Doesn’t it drive you crazy when all millennials are lumped into one category? What about when all baby boomers are treated the same way? And let’s not forget the sweeping generalizations about Generation X! (Sorry, Gen X.) If a survey starts making you feel bad about being born in a certain generation, take a deep breath and close that tab.
Don’t change your approach to managing your money or improving your financial health just because a survey suggests you should be doing things differently. If what you're doing is working, stick with it.
And if you're unsure, consult my bingo card:
I know some of the squares on the bingo card are a bit niche if you're not someone who regularly receives press releases. But honestly, if you spot two or more of these buzzwords anywhere, it’s probably not the time to overhaul your financial strategy. If you only spot one and it’s 'lattes,' just ignore that advice entirely. Maybe 'lattes' should have been the free space.
