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In this episode, Chelsea walks us through several common pieces of personal finance advice that are total BS. One size never fits all, and we shouldn't treat our money that way! Click here for the financial realities that are making Americans' lives terrible:

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Hey, guys.

It's Chelsea from The Financial Diet. And this week, we are going to be doing one of my favorite things to watch and yet, weirdly, something that I have not really done on the channel before, and that is reaction videos.

Now, I'm not going to be reacting to another YouTube video or talking about another YouTuber or creating drama therein, although Lord knows I do enjoy watching that every now and again. Keep that beauty vlogger drama coming. I live for it.

But I wanted to react to some of these quotes and memes and pieces of advice that I see flying around the personal finance world by all different kinds of self-styled personal finance gurus and girl bosses and every manner of advice giver. It's no surprise to anyone who's familiar with this channel that I am not a fan of a lot of how we talk about money. I think a lot of the way that money is framed is very hyper individualist and ignores a lot of the more systemic issues that put people in certain situations to begin with and make it so that we are not at all starting from a fair and even starting point.

I'm not here to yuck your yum, so if getting inspirational coffee mug style quotes really does a lot for you, have at it. But some of these I think cross the line from being kind of superficial to outright dangerous, and I'm going to focus on the ones that I think are quite harmful to how we perceive money and how we perceive ourselves. So without further ado, here I am reacting to some of the worst personal finance memes slash advice.

Number one is, "pull yourself up by your bootstraps." Number one, what the fuck are bootstraps? I'm sure someone in the commons is going to be like, it's this thing that people used to use to pull boots on. But listen, I don't live in Victorian England.

I don't have bootstraps. In all seriousness, I think this is one of those pieces of advice slash means that comes up over and over again in all different forms. You try to get rid of it, and it comes back like a bad pimple.

Because we're on some level operating under the assumption that people's financial states are a direct result of how hard they work, how much they actually want success, how much they were willing to get themselves out of their circumstances, and how lazy versus not lazy they are. Pulling yourself up by your bootstraps is this mantra that essentially says whatever situation you may be in right now, you and you alone are responsible and capable of getting yourself out of it. And I think there are so many levels on which this is completely untrue, but the most frustrating and clear cut example of why this is bullshit is that in this country, the greatest predictor of whether or not you are going to be wealthy is whether or not you were born into wealth.

The majority of people who are wealthy as adults were wealthy as children or they married into wealth or they acquired wealth in some other means. It's not because they started as poor or working class people who chipped away and slowly worked their way up the ladder. That does occasionally happen, but we actually have a very, very low level of social mobility compared to a lot of other developed countries.

Generally, where you start financially is where you're likely to end up. And one of the biggest reasons for that is that poverty is incredibly expensive. And it's called a cycle of poverty for a reason.

It is very, very difficult to navigate yourself out of it. Little bills or tickets or violations easily can spiral into something very serious, including possibly having to serve jail time if you can't afford to pay for the first violation. You can't afford to buy things in bulk, which allow you to buy them at better prices.

You're often having to buy cheaper items, which wear out more quickly and therefore have a much higher cost per use. Small problems that can't afford to be solved like a car breaking down or a small problem in your home quickly snowball because they cause other problems when you're not able to solve them. For example, you had to buy a crappy car in order to get to work because you couldn't afford a better car, and then the car has a problem, and then you can't get to work, so you lose the job, and so on and so forth.

There are so many studies that show that for a person to truly escape the cycle of poverty, there have to be long interrupted periods in their life where virtually nothing goes wrong. And when you look at how long it would take the average middle class family to save the kind of emergency fund that they would need to be truly financially secure, we're talking in the years, you start to realize that this advice about you and you alone determining your financial future and you and you alone being the thing that can get you out of a bad situation is at best and most charitable incredibly borderline childlike naive. But I don't actually think that people who give this advice are that naive.

I think that they know very well that the idea that poor people are just a matter of being too lazy or incompetent to get themselves out of poverty is absolutely not true. But speaking as if that is the case allows them to feel superior. It allows them to continue cycles and structures which keep them in that poverty, and it allows them to feel that the fact that they are better off is something to do with their character or their strength or how hard they work.

I'm personally someone who did change their social class over the past couple decades going from childhood to adulthood. And the number one single biggest leg up in changing class was having a husband with a stable income and insurance. Period, end of story.

The hard work, the grit, the determination, the bootstraps all come second to the fact that I lived in a household with a stable income and health insurance. Number two, "anyone can be rich." Let's break this one down at its very core here. Let's assume that this is true on its face.

Anyone can be rich. But can everyone be rich? Obviously not.

In order for our current system to work as it stands, it needs by design people who are poor and people who are wealthy. The idea, then, is not that everyone can sort of enjoy the spoils. The idea is that anyone out of a lineup of people can ascend in class enough to become rich.

For the reasons I laid out in the prior point, this is obviously not true for most people. And while in theory, yes, OK, let's give this the most charitable possible reading and say, like, OK, technically it is physically possible for anyone to win the lottery, let's say. The theory behind this and the quote unquote sort of "motivation" one is supposed to take from this is that their individual circumstances, whatever they may be, are not an inhibitor to being rich.

And of course, on a purely economic level and in terms of how life actually works for people who are not currently wealthy, that's basically functionally untrue. But this quote also has the sort of hidden promise that it should be a goal for anyone to become rich. And I personally would rather live in a world where there are very, very few, if not no people who are massively, ridiculously, potentially trillionaire level wealthy and we all had a higher quality of living.

The framing of anyone can be rich sort of imagines that we're playing a kind of board game in which we all start with the same amount of play money and the same amount of die and the same amount of every other component of the game. But that's not how life works. And more importantly, positioning us in a way where we're all individually working toward the goal of becoming ourselves alone wealthy distracts from the bigger picture, which is how can we raise the living standard for everyone?

Number three, "nothing bad happens when women have more money." Amanda Holden, actually friend of TFD, recently told me this one that she had heard the other day, and I'm gobsmacked at that quote. And I feel like the most-- I feel like this one kind of bothers me on a more granular level, because as someone who would describe herself as a feminist and who does believe that a huge part of making a more fair and equitable society is making sure that women are equal beneficiaries of efforts that raise living standards and are not essentially punished for having to be the primary domestic caretaker or even necessarily slotted into that societal role in every individual family. So when I see people kind of misusing the concepts of feminism to push this narrative about women like, what, being just as cutthroat capitalist as men can be, it feels to me like such a betrayal of the concept.

To be clear, lots of bad things can happen when women have more money. There have literally been female dictators in the world. What does that even mean?

And more importantly, there can be women who are responsible for perpetrating bad and, yes, unfeminist power structures. This is why it bothers me so much when we focus on how many Fortune 500 companies have female CEOs. Who gives a shit how many Fortune 500 companies have comprehensive maternity and paternity leave or have equitable hiring practices across the board or don't just put women in lower paid positions?

How many Fortune 500 companies can show that they have practices that are across the board more equitable to the women who work for them? Not to mention all of the other typically subjugated categories that may work for them at any given time. And I think we've learned plenty in the news that women can be at the head of incredibly disastrous and harmful companies.

Do we not all remember what happened when we gave Elizabeth Holmes of Theranos fame a shit ton of money? Because we gave that woman a lot more money and her head of research killed himself and they scammed hundreds of thousands of people and potentially led people to get the wrong medical treatments because they were getting false blood samples. Hella bad thing can happen when women have more money.

But also we've seen in the news time and time again that there can be female led companies who in part because they are helmed by women who have that mentality of, I can do it, so should every other woman, actually have aggressively unfeminist, sexist, and harmful practices within their own companies. I can think of five feminist brands off the top of my head who have come under fire for massively mistreating their employees, often specifically singling out their female employees. But the overall point is that one woman with a lot of money or one woman with power in any kind of structure or organization or even country doesn't mean anything.

You have to look at what's happening from the bottom up to judge how quote unquote "feminist" a company or any kind of system is. And the idea that the world would be inherently more fair if we had a female Jeff Bezos is one of the most naive readings of global civilization that I've ever heard of. Also, let's be clear, ever since Jeff Bezos couldn't stop himself from cheating on his wife with his best friend's wife, there actually sort of is a female Jeff Bezos, because his ex-wife got $130 billion.

I don't really see how that improved my life, but maybe you guys can tell me. Number four, "credit is the enemy." I feel like there is a really weird phenomenon in some circles of the personal finance world that's very sort of puritanical, in a sense, because it's all about you have messed up or you should be ashamed. You have a bunch of student debt or medical debt or you're underwater on your mortgage or any of this kind of stuff, and you need to cleanse yourself of the financial sins.

And it's all about kind of, again, pulling yourself up by your bootstraps but also in living as reduced a life as possible until you can scrape your way out bit by bit, get totally ahead of your financial issues, and then you can start to little by little have tiny moments of joy in your life again. And this is often coupled with a theory that credit is inherently a bad thing, because credit automatically represents spending in a way that's beyond your means or repeating sinful financial behavior. But I think there's a couple of things inherent here.

Number one being that just because you may have financial mistakes in your past or you may be dealing with, for example, a heavy debt burden does not mean you have to put off ever feeling like you can have a moment of indulgence or a moment of not spending perfectly until you are fully and completely out of debt and above water and all of that stuff. Those are the same kind of quotes that'll be like, if you're in debt, you should never see the inside of a restaurant unless you're working there. Like OK, buddy.

Also, for what it's worth, if you have a mortgage, technically you're in debt. A lot of us live every day with debts that we must balance against the living of a life that is meaningful to us. And sometimes, yes, that involves spending on things that can't be totally justified, like a bouquet of fresh flowers or a dinner out with your loved ones or a trip to go see someone.

And a heavy, heavy focus on putting all of those moments to that after portion when you've sufficiently punished yourself enough and lived a shitty enough life to get completely to the other side is, for many people, just a really, really unhealthy way to live. But similarly, the idea that credit is universally negative is built on the assumption that people are dumb and can't be trusted, that people are automatically going to behave irresponsibly with their credit or that credit will automatically represent spending that they can't afford. For many people, using credit in a really intelligent way is kind of a way to game the system and also to get really great levels of control over things like their cash flow.

I personally use credit cards to my benefit every single day. And if I were afraid of them as a concept, just one example among many, but the literally multi-yearly trips that I take totally for free with my hotel and airfare points would never be able to happen. And none of those points were acquired because I was spending money on things I couldn't afford.

I was just filtering purchases through my credit cards that I paid off in full at the end of the month. The intelligent use of credit can be a huge advantage for people, but it requires a certain level of trust that people can make the right decisions for themselves and they can learn better habits, which I believe most of us are capable of doing. And I also don't believe that we need to necessarily put off every bit of enjoyment or quote unquote "imperfect spending" until we are absolutely 100% out of debt, for example, because for many people who might have things like, for example, a lot of student debt, that could literally be until they're in their 50's or beyond.

Life is meant to be lived sustainably, in moderation, and with plenty of joy sprinkled throughout. Number five, "it's not the government's job to take care of you." First of all, yes it is. OK, let's have a little lesson right now.

What is the government? Is the government some big, shadowy organization full of robots who are detached from our day to day lives and are bearing down on us to tell us what to do from their, I don't know, Mount Olympus style buildings on the clouds? Absolutely not.

The government is people, people who live in the country in question and were put into positions of power and influence in order to do things for the people who voted for them to make their lives better, safer, more efficient, work for them, et cetera. The taxes that fund these government activities are your money. The government is responsible for making your life better.

That's entirely what a government exists for. You may not always agree with what the government does. I certainly don't.

But this theory and this sort of framing of it's not the government's job to interfere in our affairs is predicated on the assumption that the government is separate from its citizens. The government is a fundamental foundation of what it means to be a society, and it is made up of people from that society. The government, in many ways, when-- OK, let's take an example of a day.

I leave my house. This is obviously a pre or post quarantine anecdote. I leave my house.

I walk on the sidewalk. Government. I get into a car and drive on the street.

Government. At the end of the street, there is a stoplight and then a bunch of people stop at the same time so they don't careen into each other and everyone dies. That's the government, baby.

On the way, I drop off a package at the post office because it's gotta go get to my grandma who can't come out right now. Government, baby. And then when I get into my building and I plug something into the wall, it's not next to a water line, because there's regulations about how that building can be built so that I won't electrocute myself when I plug it in.

That would be the government, baby. And when I lose my job because of a global pandemic that is completely out of my control and I'm worried about how I'll pay my rent tomorrow and I call up an unemployment office and I'm like, hey, I have no money anymore. Can I please have some money so that I can pay my bills?

That's also called the government. When TFD just received a check to ensure that we could keep payroll going even though, like many businesses, we have seen some revenue loss since COVID happened, that would be, survey says, the government. And one of the most frustrating things about the government haters is that they're often people who are more than happy to take government subsidies for big business or when it suits them or when it might benefit their personal interests.

They're only upset at the government helping people when it comes to someone who might need things like food stamps or unemployment or subsidized housing or any of the many other elements that poor and working class Americans and even many middle class Americans rely on. At the end of the day, a healthy government's only real function is to make the lives of its citizens the best that it can be. And the less we think of government as some shadowy board of figures that has nothing to do with our lives and the more we start to realize that the government is all around us in so many things that we do and see and interact with every day and that the more interest we take in it, generally probably the better those things will be, the more we will have a healthy and productive concept of what a government is.

But all of that to say it is absolutely the government's job to help you, especially for things like what's going on right now with this coronavirus pandemic where none of us could have been prepared for it. Number six, "you have the same number of hours in the day as Beyonce." I always wonder, did a 4-year-old write this? Truly who could ever think that the number of physical hours in the day matters more than the resources that you have to navigate through that day.

Clearly what you are able to accomplish depends on an enormous amount of factors, and Beyonce is incredibly talented, but she also has an army of staffers who work for her catering to her every need and facilitating her life. And just because she has 24 hours in a day does not mean that all of those 24 hours are obligated to be doing something. The number one thing that money buys you is freedom and time.

And of course, that doesn't literally mean that you're buying more hours, although I'm sure that Jeff Bezos is hard at work doing that. I mean that you buy yourself the ability to choose what you do with that time. You can hire domestic workers to help care for your children or take up some of the domestic tasks that you don't want to dedicate your time to.

You can choose your projects. You can choose if you want to take time off or you want to travel or you want to dedicate specific time to one thing or even say, hey, I don't want to work for a while. I just want to spend time with my family.

People who are living paycheck to paycheck, who are single parents, who have tons of dependents or are caring for a sick relative or have any other number of constraints on their time, their most precious resource is that time, because they have so little ability to choose what they do with it. Beyonce, I'm sure, works incredibly hard and long hours. But if she wanted to, she could also say, I'm just not going to work for a year and I'm also not going to do any of the other tasks that are usually required of a person, because I'm going to outsource 100% of them.

And that would be totally within her ability to do. For most of us, that's simply not the case. Remembering that time is the most precious and valuable resource and the thing that people with money are most able to buy and reclaim for themselves really puts into perspective what those 24 hours mean for everyone.

Number seven, "follow your passion, not a paycheck," which is the unspoken anthem of every rich kid in New York who ever took an unpaid internship. This is a complete derailment, but I once worked at a job in New York City where I was working side by side with another employee at the company who was a 24-year-old woman who I knew was getting paid basically the same as I was, which was like $36,000 a year, and she lived in a duplex loft in Williamsburg and every day was wearing Gucci and Louis Vuitton and nothing but that. And it really did a number on my mental health to have to go into work every day and pretend that we were living the same life and had any of the same constraints or were really even existing in the same universe.

And yes, in cities like New York where it's so expensive to live, this dichotomy can be way, way more aggressive and noticeable, but it's true everywhere. Point blank, end of story is that being able to follow your passion and not worry about the paycheck side of it is nothing more than a question of privilege, and for most people, a question of inherited privilege, because it's usually very difficult for people to themselves generate the level of financial freedom that would allow them to follow their passion and not a paycheck. Suffice it to say this method of shaming people for pursuing literally being able to make enough money to eat is just a way to keep that dichotomy even stronger and make it so that the people who are privileged enough to follow their creative passions are also the people who are brave enough to choose it.

Give me a break. You're not brave by choosing to follow your passion if you can afford to. Everyone who had that choice would likely take that, because who wouldn't want to?

Number eight, "life is 10% what happens and 90% how you react to it." I would love to know what a person who got diagnosed with a terminal illness as a child would have to say to a quote like that. Do we really think that we live in a world where most of our lives are dictated entirely by our own reaction to events and not the events themselves? This is one of those quotes that to me just goes way beyond being bad and superfluous and shallow and becomes actively reprehensible on a moral level.

I would actually argue that 99% of your life is pure genetic lottery. Where do you happen to be born? In what era do you happen to be born?

To whom do you happen to be born? Are you born healthy, able-bodied? Are you born in an area where someone of your gender or color or sexuality has the ability to exist in society?

All of these questions are vastly more important than, I don't know, how much chutzpah you happen to have. Our lives are so heavily determined by external factors over which we have no control, and acknowledging that is not saying that you have no ability to impact your life or no agency in your life. It simply exists to remind you that you may be dealt a very bad hand and that has nothing to do with your character or how strong you are.

And you may someday be dealt a hand that you can't overcome, and again, usually will have nothing to do with how strong or courageous or Eat Pray Love you happen to be in your heart. And the very same goes for finances. Happening to be born into abject poverty versus happening to be born as Kylie Jenner is going to have infinitely more impact on where both parties end up than how much internal strength both of those people have.

And yes, this is me still being salty at the concept of Kylie Jenner being referred to as a self-made billionaire. But that's a subject for another video and another day. In the meantime, don't forget to subscribe and to come back every Monday, Tuesday, and Thursday for new and awesome videos.