4 Common Pieces of Money Advice You Can't Afford to Follow

Few of us feel like financial experts, so when it comes to money matters, we generally welcome advice. The trouble, though, is that not all the financial advice the professionals dish out is sound, despite often seeming so. Below you'll find several examples of bad financial advice. There are plenty of others, though, so carefully assess any guidance you run across.

1. Save 10 Percent for Retirement. It's a common piece of financial advice, and for many people, socking away 10 percent of their income will get them to a comfy retirement. But this guidance isn't one-size-fits-all.

If your needs in retirement will be greater, saving 10 percent may not be enough. Likewise, if you've gotten your retirement planning wake-up call a bit late and no longer have many decades before you stop working, you may need to be stashing away far more than just 10 percent.

Everyone's situation is different. Some of us can expect a little or a lot of pension income. Others can expect small or relatively large benefits from Social Security. Some of us need to try to build up a million dollar portfolio. Others will be fine with much less. And for many people, a million dollars won't be enough. You need to assess your particular circumstances (perhaps with help), make a plan, and then sock away the right percentage of your income –- for you.

2. Don't use credit cards. This bit of advice may sound difficult but reasonable. And for many people it is. If you have trouble with impulse control and tend to rack up debt due to the handiness of plastic in your pocket, perhaps credit cards are not for you.

But for many people, credit cards can be very convenient, with they offer other benefits, too. Many cards offer some kind of reward, for example, for using them. If you use a card responsibly, only charging what you can afford, you may be able to collect hundreds of dollars in cash back each year, or you might rack up other rewards, such as airline miles. By using plastic for much of your spending, you can also avoid carrying around lots of cash.

Some cards also offer end-of-year summaries of your spending, which can deliver some insights on where your money is going and how you might best budget your money.

3. Everybody needs life insurance. Most of us need all kinds of insurance, for our health, our homes, our cars, and even our pets. Life insurance is critical for many people, too -- but not for everyone.

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Remember what life insurance is really for: to protect a vital income stream. It's a must-buy for most parents, for instance, if they provide income on which their family depends. But if you're a single person, or a child, or you just have no one depending on you for support, then someone urging you to buy life insurance is probably offering bad financial advice. Your unexpected demise would be a very sad event, but no one would end up on the street because of it.

Life insurance shouldn't be thought of as an eventual lottery-ticket-like payout if someone dies, and it shouldn't really be thought of as an investment, either. Some policies are sold as investment products (this is typically the case with whole life policies, for example), but there are better ways to invest. For those who need life insurance, a good piece of financial advice is to consider term life policies.

4. Tap your 401(k) to pay off credit card debt. Finally, think twice before raiding your 401(k) account to pay for any frivolous or non-frivolous thing, such as credit card debt. Go ahead and consider a 401(K) loan as a last resort if you must, but there are usually other ways to tackle debt -- ones that won't shortchange your retirement. Remember that when you remove money from your retirement account, it can lose years of growth there, years you can't get back.

What's the Worst Money Advice You've Gotten?

Questioning guidance you're given and spotting bad financial advice can do wonders for your fiscal future. If you have some examples of bad financial advice you've received, share them with others by commenting below.

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