Clueless friends giving you money advice? Use the STFUDF Technique

How many people in your life lecture you about YOUR finances, but don't have their own finances under control?

Ramit Sethi

How many people in your life lecture you about finances, but don’t have their own finances under control?

Nothing is more infuriating than someone telling me I’m “throwing away money on rent” when they haven’t spend even 2 hours running the numbers.

Or someone who proudly proclaims that they found a higher interest rate on a new bank, which is giving them 2%!!! When you politely say, Wow! How much is that worth? they get very very quiet…because (1) they never thought about it, and (2) you know that an extra 1% is only worth $8/month for a $10,000 balance.

Or people who bragged about their hot tech stock being up 80%…but then don’t mention it 2 years later when they realize it crashed and they are actually not very good at picking individual investments. I’m guessing that on their idiotic penny-stock-picking website, they probably didn’t learn the two most important words for choosing investments: asset allocation.

Introducing the STFUDF Technique

So it’s with great pleasure that I introduce the STFUDF Technique. DF stands for Dumb Friends.

One of my newsletter subscribers, Chris Sundberg, inspired this when he told me how he uses tax refunds strategically.

“I get the lecture from just about everyone I know. However, I purposely have my employer take an additional amount out of my paycheck so that I get a bigger refund each year. I know the government gets to use it interest free for a year, but…. I also get a little “bonus” every year to spend on whatever I want. I’ve automated the rest of my finances so I don’t miss the money a bit. And if the government gets to use it for a year…. we’ll call that patriotism. My paycheck gets split between my “bill paying” checking account and my “spend on whatever the fuck you want” account. That way I don’t have to budget. My bills all get paid automatically out of my bill paying account (including automatic contributions to my Roth IRA), and about $50 per month goes into an Orange Savings.

So…. whenever I get the lecture, I ask the person how much they’ve contributed to their Roth that year and when they can’t answer me honestly I tell them to STFU.

* * *

3 important rules for the STFUDF principle

  1. First of all, when people give you advice on finances, let’s be honest: They’re probably right. That’s because most people are horrible at finances, so just statistically, you probably are, too. You’re not allowed to use this technique until your finances are reasonably automated and optimized.
  2. HOWEVER — since you read this site and have presumably automated your money using my book, chances are you know more than this person. In this case, it’s permissible to implement the STFUDF Technique.
  3. Do not simply shout out “STFUDF STFUDF STFUDF” repeatedly. That would be uncouth. Instead, use subtle questions like this:
    – “That is really interesting advice. So should I think about this first, or my asset allocation?”
    – “Really? Woah…I never thought of that. What do you think should come first? [Their advice] or maxing out my Roth IRA? (Wait while they make something up, then say this): How come?”
    – “Nice! So how do you do this AND hit your 401(k) employer match AND your Roth IRA AND stay debt-free? I just don’t think I could do it.” This one is particularly clever as you’re employing a self-admission of inadequacy, which will make your friend writhe in pain since it’s impossible to counter.

Use the STFUDF Technique with care. It is powerful.

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  1. Rachel

    Good article – although curious about automating finances. Currently my work (tutoring for a uni) is somewhat temperamental (i.e. don’t get paid during holidays, get extra pay when I do marking or supervise exams, etc. Generally I’m not exactly sure how much is coming in until it does come in). So if there a way for me to automate finances at all? My current method is when I get paid, I manually send my money to a variety of saving accounts, and leave myself enough to get through the next two weeks. During periods where I don’t get paid, I pay myself out of one of my saving accounts (designated for that purpose).

    Any suggestions?

    • Ramit Sethi

      Yeah Rachel, I cover this specifically in my book, where I discuss how to handle irregular income and expenses. You can semi-automate a little better than what you’re currently doing.

      Btw, it sounds like you might be in the UK. If so, here’s the UK version of my book.

  2. Rachel

    Not quite the UK – Australia. Out of curiosity how localised is the UK version? The main problem I had with things like the Scrooge Strategy is that some of the help sheets were just too USA centric (most of the time I knew the Australian equivalent, but it did feel like I was losing value admittedly).

    • Ramit Sethi

      UK version is completely localized, specifically for the UK market.

  3. Baker

    I could have sworn the dumb friends was going to be dumb f…… nevermind.

  4. Eric S. Mueller

    I find that during conversation, most people will say almost any dumb thing in order to sound smarter or wiser than they are. In my previous job, any time I told somebody “I’m looking for a new job”, people would just ramble off “Well, you should be happy to have any kind of job in this economy.” Really, how is that helpful? Does it actually add anything to the conversation? Does it provide any useful career advice? Do they think that was something I’m not aware of?

    I notice it when talking finances. People still ramble off dumb advice like that to sound like they’re telling you something.

    Ever since I figured that out, I’ve been watching myself to make sure I don’t ramble off dumb things in conversations just to fill air time.

  5. Jedrzej Jakubowski

    @Eric Exactly. Most people will give advice on any matter because they want to outsmart us. It’s really annoying and I’ve learned that the only way is to stay calm and not get pulled into such a stupid discussion.

    On the other hand some friends actually do want to help, but more often than not they don’t know anything about the matter, which ends up in stupid advice.

    What I do know is take advice only from the people with knowledge and experience in the topic I’m interested in.

  6. Elle

    I also find that friends that have their finances in order tend not to be the unsolicited loud-mouth advice givers. I think it’s due to actually going through the process and realizing that you have to be personally motivated.

    I knew the process to pay off my credit cards and could tell you the pros and cons of it. It took me a couple years after to actually implement the process into my financial life.

  7. Siddhartha

    The best part of the whole post…

    “They’re probably right. That’s because most people are horrible at finances, so just statistically, you probably are, too.”

    Well said.

    I think we need to keep that in mind for most areas of our lives not just finances. But the bigger point is also valid, don’t listen to people who have no idea what they’re saying.

    Most people just want to sound intelligent by repeating what they’ve heard intelligent people say. I know I do.

  8. bumsy

    my favourite advice comes from friends who love to extol the ‘investment gains’ of day trading.

  9. Jessica Bosari

    “On the other hand some friends actually do want to help, but more often than not they don’t know anything about the matter, which ends up in stupid advice.”

    I like to think they are trying to be helpful most of the time…which leads to number 3 being the best strategy for me.

    What I hate the most is someone who really has it together giving advice to someone who only realized they need to get their finances in order yesterday. Don’t start talking about a Roth IRA with someone who only figured out they need to create a budget. Then you’re just being a show-off, not really trying to help the person who needs it…

  10. Richard |

    lol the very first line was funny enough. So many people lecture you about something they don’t know anything about. Sometimes it’s like they say “Those who know, do. Those who don’t, teach”.

  11. Raquel Mangual

    Awesome post. I experience this a lot both personally, and as a real estate agent. I’ve gotten a lot of flack for giving the honest answer, when most others just want to give the “popular” answer. I’ve had to use the STFUDF as well as the STFUDC (DC stands for dumb clients) method. It really does work 🙂

  12. Chris Brown

    I’m gonna go ahead and give a little push back against Chris S. He seems to have found a very good method of separating his “bill paying money” and “spend on whatever you want” money. And he’s also gone through the trouble of asking his employer to take extra money out of his paycheck for taxes. If he finds it so easy to make separate checking accounts, what’s so hard about making a separate account for that extra tax money instead of giving an interest-free loan? He already knows how to do it! UNLESS he gets some particular joy out of loaning the government money, I don’t think I qualify as a DF when asking why he would choose his current option over an equivalent option that gives him more money each year. More money is not the only benefit, either – if you keep the money for yourself, then you also have higher liquidity in the event of an emergency. What’s so dumb about my advice?

  13. AD

    STFU, B! 😉

    I hate unsolicited advice on ANY subject. Marriage, parenting (and I’m not even a parent), finances…STFU! I know someone who says he’ll never be out of debt, so why bother trying, and he told me I should get a construction loan when I said the husband and I had decided to build our home with cash. “It would be better to have it all done more quickly.”

    Now, there’s nothing wrong with a construction loan, but we weighed the pros and cons and decided to remain debt-free, even with our home. I found it funny that someone who is in debt, with no plans to get out of debt, was encouraging me to take on debt.

    @Elle–So true!! People have complained to me about their debt, they’ve complained to me about their weight, they’ve complained about stress. I can tell them what to do, or at least what works for me, but they aren’t asking. They’re complaining. Anything I say will be met with resistance, so I don’t bother. Now if someone said, “How do you do XYZ?” I’d be more than happy to share what I could.

  14. Jonathan

    A guy in my class randomly decided to start telling me how to invest. We weren’t even really talking about money, so it must have just been on his mind. Anyway, he starts talking about IRAs and I mention starting up a Roth IRA. He proceeds to tell me a bunch of false information about Roth IRAs, and I politely correct him. Being the know-it-all that he is, he decided to “show me that I’m wrong” by pulling up Wikipedia on his iPhone.

    Long story short, Wikipedia showed that I was completely right, and the guy didn’t have much else to say after that. Where did I learn so much about Roth IRA, you ask?? Thanks Ramit! 😉

  15. Liz

    This is a good article! great point! I like to take advice from friends but i need to see the results from their labor before i jump in.

  16. Greg Rollett

    Some cases call for shouting “STFUDF STFUDF STFUDF” repeatedly. Adding the DF makes it that much more useful.

  17. mey

    “throwing away money on rent” That was a never-ending refrain from friends in the early 2000s. It seemed like everyone was trying to tell me we should stop renting and buy a house. Even after I explained repeatedly that there was nothing in my price range (3x annual income) that I would be interested in, and that I was hesitant because prices seemed to be rising awful fast in our area (San Diego, CA), and it didn’t make sense to me how all of a sudden everyone could afford half-million dollar homes when I knew the average salary was way lower (there are only so many dotcom millionares, sheesh). All of our friends bought between 2000-2007, even the really “smart” ones. And it wasn’t until around 2007 that I learned about all the shenanigans going on, and that we were in a bubble. Luckily, my being stubborn about the rapid increases in pricing and what we could afford not making sense with what everyone was shouting about (BUY BUY BUY, before you get priced out FOREVER!) kept us on the sidelines (actually had to start investigating actual reasons why NOT to buy when the BF started to mimic some of these friends in late 2007). Now, 2+ years later, not a peep from friends about buying, just lots of “boy, you sure are lucky you’re renting!”.

  18. Kristine

    Hah. It’s like taking weight loss advice from a fat friend. 🙂

    It’s all well intentioned, but of course, we are all responsible for the end results of our own actions. We can’t blame others for our financial situation because we got bad advice from some friends.

  19. Mike

    Hey, I was the original commenter for the quote you used in your book about rate chasing. Well guess what, after your book came out and interest rates tanked, I’ve actually closed most of my savings accounts and have been using 1 bank. All those extra accounts to keep track of was not worth the extra couple hundred bucks I was making in interest each year!

  20. Chris Sundberg

    Thanks for the mention Ramit.

    @Chris Brown – I get where you’re coming from. My financial system is slightly more complicated that what’s mentioned in this post (which is verbatim what I sent Ramit, so he didn’t miss anything). I have enough cash in savings that I’m okay if an emergency pops up (assuming the emergency isn’t catastrophic). The reasoning behind loaning the government money is because I’d rather get money back than owe them money. Sure I get to use the money in the meantime and could conceivably earn interest on it…. but that’s a little to close to stingy. Granted, it would be a different story if my effective tax rate was 5 or 10 times what it is. I’m a college student currently, so having a yearly “bonus” is nice. Allows me to take summer classes (which aren’t covered by my scholarships).

  21. K

    OMG unsolicited avice about parenting when you’re not even a parent is sooooooo annoying. There is an older guy I used to work with who would randomly give anyone under 30 lectures on life. One of his favorites started out… “want a challege? have kids.” He didn’t even care if people weren’t in a relationship! Interestingly this guy also bought a house with 0 down about two years ago and as mey (#19) pointed out San Diego isn’t cheap. The 0 down was especially interesting b/c he was sizing up from another house.

  22. Eric

    It’s funny. I do the exact opposite thing with my withholdings. For the first half of the year, I have too little withheld, leaving me with more money for spending or paying off debt or whatever. Then I adjust my withholdings for the second half of the year so that I pay just enough by the end of the year to owe nothing.

    It is the best of both worlds, and the government is loaning me money!

    In my case, I am secure that I won’t be loosing my job so there isn’t any risk.

  23. Farley G

    Listen, then direct them to Ramit site!!! KISS..mmmmwa.. (keep it simple stupid)) witha a 🙂

  24. Q

    I use to take advice from my friends but I have watched their finances go downhill for the last few years and I have determined they are the last people I should be listening to. I can’t take advice from my parents either because their finances are all jacked up. They don’t have retirement accounts, savings accounts are bare, and credit cards are maxed out. I’m not perfect but I am working to get my finances in order. I am paying 4x the minimim payment on my credit cards so I can pay them off in 3 months. I am looking into getting a parttime job. With my current career I am guaranteed a parttime job that pays $22/hour. I plan on holding this job until my emergency fund reaches $7000-10000. Then I want to begin building my travel fund. I am also working towards maxing out my retirement account. Right now I am good for $200 a month but I know I need $416. This will probably take a while once student loans kick in. Yikes! Overall though I got more out of your book Ramit then I have out of any financial conversation with friends.

  25. AD

    @K–Exactly! Not to hijack this post, but I hear so much “wait till you have kids, you’ll see.” First, that assumes I’m having them. How do these people know? What if I *couldn’t* have kids, and here you are giving me this dumbass advice? That’s why people should STFU!

    It’s so applicable to so many areas…not just personal finance.

  26. Financial Samurai

    Awesome! I love it Ramit! Get your own finances in order before advising others sounds like it makes a lot of sense.

    Cheers, Sam

  27. Datts

    Hey Ramit,

    Is there a version of IWTU2BR specific to the Indian scenario?


  28. Tim Rosanelli

    Hey Ramit,
    Great post!
    This is true with your personal finances and twice as true for a business owner. I own a Martial Arts School and everyone tries to show me how smart they are by giving me unsolicited business advice even though they don’t own a business.

    In two years, I raised my tuition rates from $60 to over $200 per month. Every time, I raised my rates these friends would tell me that “No one will pay that for karate!” “You’re going to go out of business!” “You can do that in this economy!” I did it anyway and concentrated on adding value to our karate program and students.

    Instead of losing students, what I found as I raised the tuition was I got a different type of students ~ the students were more serious to learn, the parents felt it was important for their children to get the additional coaching, etc. I even discovered that tuition delinquencies almost disappeared while charging $60, my delinquencies were out of control.

    For the last two years, I spend over $1000 per month on coaching from Martial Art school owners that are more successful than my school and it’s worth every penny because now, I am the successful school. If I listened to my friends, I’d be out of business instead of thriving in business because there’s a heavy cost for listening to bad advice from friends.

    The funny part is the more successful I become in my business the more resistant people become to your advice. I think this is why most people don’t gain the success they want ~ basically, they listen to the advice of the wrong people… their friends.

    I refuse to provide free advice anymore because people don’t listen and try to tell me all the reasons my advice won’t work.

  29. Ryan Waldron

    How does one avoid being the dumb friend though?

  30. Tom

    Ha! Practical and easy to implement as always!

  31. Manu

    @Tim “I refuse to provide free advice anymore because people don’t listen and try to tell me all the reasons my advice won’t work.”

    lol! Same for me. No one I know listens to me for various reasons (they think they know more than me, they’re hesitant to change, they’re family, etc) so I’ve given up on trying to help them. For the most part. Every now and then I’ll drop a bit of knowledge and then move on – if they want to take my advice, cool, if not, its not my life to live.

  32. Vivek

    for curiousity’s sake, why is renting better then buying?

    • Ramit Sethi

      Vivek: Read the link in the above post. Renting is not “better” per se, but buying a house is certainly not the foolproof investment that people think it is.

  33. Brian

    I thought DF stood for doofus, lol

  34. Guy G.

    I love this technique. Being somewhat of an authority with tips on budgeting, investing, I get so frustrated with people who think they know more than me. There are many of those people out there, but mostly its the financially illiterate who are trying to steer me in the wrong direction.

    I think you’re right and I couldn’t possibly say STFUDF repeatedly, but those questions will truly be useful in politely telling them that they have no idea what they’re talking about.


  35. Ken Siew

    Powerful technique! Now I have something up my sleeves when the situation comes 😉

    P.S. It’s not about being sexy here, it’s about being practical.

  36. Alex

    Ramit, you mentioned a UK version of the book. Is the version available at a Canadian-localized version, or is it the UK version? I’d love to give a Canadian to a number of friends!

    • Ramit Sethi

      There’s no Canadian version. Most of the Canadian people who’ve read it have been able to piece together the differences between US/Canada recommendations.

  37. Muhammad U

    This happens to me a lot. I guess being the person who’s read your book, I’m always prepared!

    Good post, and the photo is hilarious!

  38. Brandon Schmid

    I head a great quote once “Don’t take advice from anybody more screwed up than you!”

    It’s funny that the people that have the most advice are usually the ones that are the most screwed up. Why is that? Are thes people just trying to bring us down to their level?

    Everytime someone gives me advice, I just look at where they are and say to myself “You have to show it to know it!” If they don’t show it, I listen but giggle inside.



  39. Maria Brilaki

    The worst part is that clueless people may try to lecture you for everything, not just finances. And that extends to the web as well. (Online) B.S. everywhere.

  40. bigjobsboard

    very nice article! Thanks for posting this one! It;s really annoying to hear someone lecturing you about something that they don;t have a clue with. LOL.

  41. Nunzio Bruno

    I thought this article was hilarious and spot on!! I’m a huge supporter of yours Ramit and of automation. I was literally laughing out loud when I read this, it was great. Our approaches are a little different (I think yours is more direct, prob more effective, lol) but I feel like we are trying to get people motivated in the same way. Keep it up! When people stop by to read my stuff I will try to gently guide them here too, the more perspectives the better first and secondly everyone needs a slap in the face to keep them in check.

  42. Rob

    Your hot tech stock example reminded me of a colleague who bragged to me about a particular IPO that sky-rocketed after just a few weeks. He was able to buy some, but did not really unload at the price when he was bragging to me about how wise his decision to invest in that stock is (while I missed out on it due to my funds being tied up elsewhere). Years later, he still has that stock in his portfolio, just hovering a ticks above his buying price. While I, on the other hand, have moved on and continued to invest in other stocks and opportunities. I may have missed out on that one particular stock. But surely, I know that stock investing isn’t all about knowing which stocks shall rise. Equally important is knowing when to unload.

  43. Rob

    Forgot to mention that this particular colleague is also one of the people hardly hit by the real estate bubble.

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  45. Craig/FFB

    Nice techniques! I’ve been one of those dumb friends for sure! You find out one little piece of advice that works and you try to sell it to anyone that listens.

    These days I try to keep the advice solicited since as you mention, as much as I’d like to think my finances are perfect there are probably holes in it.

  46. Jose

    Love this article! Do have a question for you Ramit…I’m about to leave the working world and head back to law school. I’ve stashed away quite a bit of cash in online savings, mutual funds, and my 401(k); however, I’m a tad worried about not having a steady income any longer. Can you recommend any books/articles that address how to stay ahead when going back to school?

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  48. Lorne Canada

    Great, you made me laugh! Really, i encounter such situations pretty often. My friends see some advert or read some made-for-adsense blog about some silly financial tool (usually created to harvest fees) and present it like groundbreaking financial strategy. The most popular cases are various online trading platforms (Forex and the rest), where you can use leverage and people think they can make 1000% a day like nothing.

  49. Nick

    Hey Ramit…

    Any plans on putting out an Australian edition?


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  51. Money Reasons

    lol, like Adam, I thought the the Fs were the same word!

    I’m doing a lot better than most of my friends with my financial planning, so they don’t bother me much about it 😉

    In fact, maybe I’m the DF that bothers them!!!

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  53. north9nj

    talking investments is like talking sports any more. even in the media (yes even blogs, sorry). i use to like going to the track on fri. nights, until it was closed down. i’d get a free season pass, and take $20.00 make $2.00 bets have a beer and hotdog (dam i miss those hotdogs)and i always left with a little more money then i came with. always! but the kiss of death was when some well meaning person would tell you they had a hot tip on a horse. i never took it. i can lose my money as easily as some one else. i use the same thought in investments.