Almost 1 in 5 Americans Have Gotten Bad Financial Advice. Here Are 3 Tips You Really Don't Want to Follow

Many of us have received our fair share of financial advice, whether from well-meaning family members, neighbors, or friends. Unfortunately, a good 17% of Americans say they've been given poor advice that hurt them financially, according to data from Quicken. Here are three financial tips that could lead you astray.

1. There's no such thing as too much money in savings

Many people don't have enough money in savings to cover unplanned expenses. So it's definitely a good idea to build an emergency fund with enough money to cover three to six months of essential living costs. In some situations, it could even pay to go beyond that point and sock away enough cash in the bank to cover a year's worth of bills.

But if you've been told that it pays to keep putting money into savings even once you've reached your emergency fund goal, then sorry, but you've been given some bum advice. You may, over time, earn between 1% and 4% a year on your money by keeping it in savings. But the stock market's annual average return over the past 50 years has been 10%. So once you're done funding your emergency savings, it really pays to put your extra money into the market.

In fact, say you have $10,000 beyond what you need for emergencies. Keep it in savings over 20 years at an average annual 3% return, and it'll grow to about $18,000. Put that $10,000 into a stock portfolio generating an average annual 10% return, and it'll grow to about $67,000.

2. You don't have to worry about retirement savings until your 40s

You'll often hear that in your 20s and 30s, you should focus on building an emergency fund, paying off lingering debt, and saving for a home. But there's another big thing you ought to be saving for: your retirement.

Some people will say there's no need to rush into retirement savings when you're first kicking off your career. Some will even say you don't have to worry about funding an individual retirement account (IRA) or 401(k) until your 40s. But waiting to save for retirement could mean missing out on many years of growth in your IRA or 401(k).

Let's say you begin contributing $200 a month to an IRA at age 40 and continue to do so through age 65. If your portfolio generates an average annual 10% return, you'll end up with about $236,000 in retirement savings. But if you start contributing and investing that monthly $200 10 years earlier, you'll end up with more like $650,000 instead.

Now, it may not be so easy to come up with funds for a retirement account when you're young and have other expenses. But try to at least contribute something, even if it's $50 a month to start out with. Also, if you have a 401(k) plan, try to contribute enough money to claim your full employer match. That'll give you free money to invest.

3. Using credit cards will ruin you financially

You'll commonly hear that using credit cards will cause you to rack up debt and condemn you to financial ruin. Not so.

Credit card usage can indeed result in debt if you don't pay off your balances in full every month or don't make an effort to track your spending on your cards. But if you limit your credit card charges to sums you can repay in full, you won't rack up interest on them. What you probably will do, though, is earn cash back or rewards on your purchases, which can better your financial situation rather than hurt it.

Sometimes, people with the best of intentions end up dishing out bad advice. But if you've been told any of these three things, do yourself a favor and ignore those so-called words of wisdom. They could end up setting you back in a really big way.