stern exaction: What Is the Worst Budgeting Tip You've Ever Heard?

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Welcome to the?Personal Finance Roundtable, where we tackle some controversial money questions with the help of our favorite personal finance bloggers, once a month.

In the days of?King Arthur, the?roundtable?signified the place where consequential ideas were discussed ? hopefully over good food and good drinks. While we don?t yet have virtual food and drinks, we can at least create a place to discuss important topics related to your finances and get a wide range of viewpoints.?So, without further ado, this month?s question is?

Elle from Couple Money: ?The worst piece of advice I received was to keep my mortgage as long as I could to get the tax benefits. The person giving me the advice was talking about the mortgage interest credit. The numbers, however, don?t add up. Paying more interest over the life of the loan to get a small fraction is a money-losing strategy.?

Mrs. PoP from Planting Our Pennies: ?Add $10K in non-tax deductible interest payments to your budget (not to mention principal paydowns) each year! Well, that?s not exactly what our ?personal banker? at Wells Fargo said when he offered us a $100K unsecured personal loan at a 10% interest rate, but it may as well have been. Taking a loan or line of credit offer just because it?s offered seems to be some of the worst budgeting advice we?ve ever been given.?

Greg from Club Thrifty: ?My answer isn?t so much of a tip as it is an attitude. I know several people who think that, just because they paid their bills, they stuck to a budget. While paying your bills is great, it is not budgeting. You actually have to sit down each month and write out a paper budget. You have to consciously tell that money where it is going to go. If you don?t, you are bound to mindlessly spend it.?

David Bakke from Money Crashers: ?Several years ago, I had amassed a significant amount of credit card debt. When I finally decided to do something about it, a family member suggested that I cash in my employer-based 401k plan and pay off all my credit card debt in one fell swoop.?I never took the advice, and I?m glad that I didn?t.

Unless there?s a serious emergency and you have no other recourse, you should never touch your?retirement savings, 401k or otherwise. The first reason not to do this is because you?ll pay an early withdrawal penalty, as well as income taxes on the amount you withdraw. Secondly, you may destroy the nest egg you?ve worked on building up for your retirement. The long-term benefits of compounded interest with a?401k plan?far outweigh any upfront interest costs associated with credit card debt.

Miranda from Planting Money Seeds: ?The worst budget tip I heard came from a loan officer while I shopped around for a mortgage. He said I could be approved for three times the amount I wanted to borrow. Then he told me it was worth it to take the loan, since the house would only appreciate, and that it made sense to stretch the budget a little, to make it work.?Since my husband and I decided that we didn?t want to be house poor, we chose a loan from another lender.

Stretching our budget to pay for a home that we didn?t really need seemed ridiculous, especially since then we wouldn?t have the money to do other things that we enjoyed. It doesn?t make a lot of sense to tie up so much money in mortgage payments, and we didn?t want to have problems in the event of a financial setback.?

Ben from Money Smart Life: ?My least favorite budgeting tip is to start with a blank sheet of paper and write down all your expenses. I?ve never tested it but I?d bet that people who start with a list of expenses and fill in the blanks with their spending estimates are much more likely to create a budget than someone who starts with a blank sheet and has to think up all their expenses on their own.

There?s something intimidating about a blank sheet of paper, you feel as though you?re starting from nothing and have to figure it all out on your own. In contrast, if you start with some kind of template you?re more likely to get started and actually end up with a budget.?

What about you? Tell us in the comments: what?s the worst budgeting tip you?ve ever heard?

And check out our first Personal Finance Roundtable topic: How Many Credit Cards is Too Many?

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Ben This post was published by Ben, Writer and Content Strategist for ReadyForZero. ReadyForZero is a company that helps people get out of debt on their own with a simple and free online tool that can automate and track your debt paydown.