It’s time to give better advice

CNBC recently shared a tweet with personal financial expert, Suze Orman, stating that buying coffee every day is like “peeing $1 million down the drain,” because, that money, when invested in a Roth IRA for 40 years would equal $1 million.

The responses have been priceless:

Buy nothing which brings you joy. Hoard your money to yourself like a dragon. Beds are expensive: sleep upon your bank statements. Marry only for the tax benefits. Children and pets are for the weak. Shun friendship and its hidden expenses. Money is the only measure of your worth. K.B. Spangler

I reuse my wife’s coffee pods. Cuts our costs in half! Also her bath water! We are so rich! I floss with thousand-dollar bills! Rick G. Rosner

Within the post, Suze states that coffee is a want, not a need, and then trots out the tired piece of advice that those who still “want” coffee should make it at home.

But of course, it’s not that simple, is it? First, let’s address her comment about coffee being a want, not a need. Several years ago, a pediatrician we know mentioned his high school age son had started drinking coffee in the morning to help him focus. That’s because, as a stimulant, coffee can have a similar effect as prescription drugs such as Adderall and Ritalin, which means, for many coffee is, in fact, a need.

Then, there is the idea that making coffee at home comes without a cost. At the beginning of the year, my family implemented some fiscal austerity measures, including making our favorite beverages at home. I have been able to replace my ice latte from Starbucks, but I couldn’t do it without the espresso machine that currently dominates one corner of our kitchen. As with most things, changes always come with unintended consequences and costs. Don’t believe me? Check out this Planet Money piece about the plastic bag ban.

Speaking of unintended consequences – as several commentators pointed out, there is an economic impact when consumers make radical cutbacks in their spending. As part of my own fiscal realignment, I started bringing lunch to work, replacing the meals I would buy five days a week from a local grocer. Do you think they noticed? What if all their customers made that kind of change?

And for those who may be wondering – I didn’t put my lunchtime windfall into a retirement account. We used it for other expenses.

At best, advice such as “make your coffee at home,” “pack a lunch,” and “make handmade gifts,” is overused and useless. At worse, it is insulting, overly simplistic and gives the impression that it just takes a few small changes to become a millionaire, ignoring the very real issues that people are facing including historic student debt, rising medical costs and more.

It’s also potentially damaging to your brand as people push back:

 The comments here are fantastic. So glad people are pushing back against this sadistic bullshit blaming poverty on habits of the poor instead of lack of living wages and massive wealth inequality. Molly Hodgdon

As financial content creators, we have an opportunity, and a responsibility, to do better. To provide real ideas for how to save money, make money, or reduce debt while being realistic about what those changes will actually accomplish.