The New Financial Advice and Mistakes I Did and Didn't Make

Like many people interested in frugality and personal finance, I have been a long-time reader of advice for the middle-class. Of late, advice is in short supply. Where are Jonathan Clements and Andrew Tobias?

Then, I saw "new financial advice" proffered on the CNN website. As far as I can tell, the advice was the opposite of the advice offered by experts in the recent gilded age (for some, not me). So it seems that we middle-class types should do the opposite of whatever is suggested.

All the advice is of the "locking the barn after the horse runs off" genre. How can you amass an emergency fund when you are laid off? Thanks for the great tip! Either you have one (thank heavens!) or you don't (what was I thinking?). I suppose if you're still working, you can get one going. That task would be made easier by the fact that frugality is now "in" and you don't need to apologize for carrying last year's "aspirational handbag."

One of my fave bloggers, Funny About Money, raised the topic: "What is the financial mistake you didn't make."

Here is my answer, related to my musings above:

All my mistakes came from following the advice of the financial press/experts. All the mistakes I didn’t make came from procrastinating or being stubborn.

Emergency Fund:I amassed a large cash emergency fund out of inertia, since I am a frugal girl married to a frugal fellow. At the time, I was told to “get the $$ working for me by investing it.”

House: I was also told to do a cash-out refi; I chose instead to pay off my house.

Here is what I'm doing now (subject to change): I am continuing to put my retirement into equity funds in same percentage as in days of yore. I have TIAA and Vanguard.

I'll probably sell my non-retirement funds that are in other families.

I will amass an even larger emergency fund. I want to have AT LEAST 5 years of base expenses in cash at retirement (10 years hence).

The above plans are possible thanks to two things. One is that I paid off my house, so my base expenses aren't that high. The other is that my children are good test-takers (of the standardized variety) and have chosen good programs at state universities that are willing to fund their tuition AND room and board. As I discussed in an earlier post, Mr. DFS and I will give them the money we saved in a 529 plan post-graduation. Luckily again (another mistake I did not make), the 529 plan is entirely in cash. So when they graduate, they can opt for a year of travel and return to a nice stash of cash for grad school or job search.

And don't forget: it's Thrifty Thursday!

What's a mistake? What's not? It depends on where you are when you need the money.