Personal finance advice is all over the Internet — and it has become especially prevalent on the social media site Reddit.
Reddit allows “Redditors” to share images and posts on forums, grouped into smaller forums called subreddits.
While some of the personal finance advice on the site is relatively harmless, some of it isn’t.
Should You Take Personal Finance Advice From Reddit?
Turning to Reddit for specific personal finance advice probably isn’t the best idea.
“Generally speaking, I would not recommend Reddit for quality personal finance advice,” says Kevin L. Matthews II, former financial advisor and owner of BuildingBread, a website aimed at helping millennials achieve their financial goals.
Using Reddit for personal finance advice is problematic because the website doesn’t have a verification system.
“What makes me slightly more pessimistic about Reddit versus Twitter or LinkedIn, for example, is that it can be much harder to verify someone’s expertise,” Matthews says.
Additionally, personal finance advice is, well, personal. “There is certainly good and bad advice that can be found in these places,” Rakhim Sabree, author, columnist and financial coach, says. “The context of each individual’s experience can skew the effectiveness of such advice, which makes the practice risky.”
There is some advice from Redditors, however, that’s not so involved. Here are some popular subreddits that might come up in your search for personal finance topics:
— r/personalfinance
— r/frugal
— r/financialindependence
— r/investing
— r/Bogleheads
Before you take advice from Reddit, consider the following:
Look For Inspiration Instead of Advice
Reddit is best known for its tips, tricks and hacks, which might be helpful if you use them for inspiration instead of advice.
The forums generally share a lot of information on topics such as coupon hacks, meal prep ideas and expensive product dupes.
If you see a more sophisticated tip you want to try, talk to a financial advisor first to see if it’s a good fit for your financial situation.
[See: 7 Reddit-Esque Stock Market Forums.]
Avoid Getting Involved in Forums That Involve Complicated Topics
You should probably look elsewhere for advice on topics such as investments, taxes and insurance. Instead, talk to an expert about these subjects to get the best advice for your individual situation.
When someone doesn’t have a grasp on your full financial picture, it could end up costing you, Matthews says. “For example, if you take someone’s advice to sell a stock for a gain without knowing what account that stock is held in, it could result in a tax bill,” he says.
[READ: Stock Market Trends for 2023.]
Look For Low-Stakes Advice
Although you shouldn’t take consequential advice from Reddit, there are some tips and tricks that are safe to try.
“I think Reddit is probably best suited for advice that isn’t as personalized and doesn’t have a significant downside in the event that the advice is inaccurate,” Matthews says.
Advice that’s generally safe to take from Reddit includes money-saving recipes, personal finance book recommendations and travel hacks. But if you do want to take serious personal finance advice from Reddit, make sure you research it fully before you put it into practice.
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How to Find the Best Personal Finance Advice on Reddit originally appeared on usnews.com
Update 12/23/22: This story was published at an earlier date and has been updated with new information.
