When it comes to free financial advice it is always wise to consider the source.Q: I’ve recently graduated from college, landed a good job and am planning to move out of home for the first time. My parents support my plans, except when it comes to my finances. They question whether I can really afford it or not. The truth is, for the past three years I’ve been reading and learning all I can about various aspects of personal finances and I think it’s my parents who need the money lessons. They are forever getting free advice from somewhere, and I question whether or not it amounts to anything. Even though I’m just starting out, I managed to graduate without any debt and I have the start of a small nest-egg saved towards a down payment. It’s not lost on me that they helped me out by letting me live at home for free while in school, but I worry about them. How do I tell my parents to watch out with the free financial advice they’re getting? ~JoelA: When it comes to free financial advice it is always wise to consider the source. While you may not be privy to someone’s personal financial details, if you get the feeling that something might not be quite as it seems, you’re likely right to be concerned about their financial well-being.The “free advice” landscape is vast, with no shortage of guidance from online forums, books, blogs, social media, websites, industry professionals, friends, family, colleagues and casual networking conversation. However, with such a plethora of information and advice it can be very hard to separate the wheat from the chaff, gleaning insight from what’s valuable and letting the rest go.When seeking financial advice, the goal is to improve some aspect of your situation. With that in mind, here are three instances when free financial advice might end up costing you:1. When banking on a “sure thing”When was the last time someone made a point to mention the interest rate on their savings account to you? If you can’t recall such a time, you’re not alone. There aren’t many “sure things” when it comes to money and finances. Those that do exist hardly receive a mention because they lack the fanfare that’s needed to promote and earn someone revenue from them.If anyone indicates a “sure thing,” especially with higher than average returns, as they dispense financial advice, be extremely skeptical of what they are telling you. Consider their credentials carefully, investigate options fully, read and verify every disclosure in its entirety and “sleep on it” before committing. It’s like that waterfront property in Arizona; a fictitious mirage.How can buying in to a “sure thing” cost you? Any investment with very attractive returns that is promoted as a “sure thing” is likely anything but. The higher the returns, the higher the risk of losing your invested capital; the two go hand-in-hand and are fundamentally opposite of a “sure thing.” No one can guarantee the future.Another way to lose your investment is to rely on insider information. Most people trust information they’re given from friends and family. However, if someone shares information with you about business activities that will influence share prices, beware that if you’re found guilty of insider trading as a result of buying or selling stocks to gain a profit, based on the insider information, you could lose much more than your initial investment. Make your investment decisions based on publicly available information to stay in the clear.How to Find the Best Financial Advisor for You2. When you’ve reached your decision-making limitAs each day wears on, after a bad night’s sleep or during especially stressful times, we are more prone to giving in and taking the easy way out. This has as much to do with feeling physically tired as it does with decision-making fatigue. Spending our days making decision after decision wears our mind out. Some successful people actually take steps to reduce how many decisions they need to make each day by establishing very specific habits and routines. They do this to preserve their decision-making energy.For instance, some have been known to create their own weekly uniform so they don’t need to decide what to wear each day. Others plan their meals so they don’t fall prey to snacking when they don’t know what to cook. People who schedule a set exercise time tend to stick to their plan better than those who decide to fit a workout in whenever they have time. Those who budget and assign each dollar they earn a “job” within the budget tend to stick to their spending plan better than those who budget on an ad hoc basis, e.g. deposit to savings when there’s extra cash.Build a Budget That Works for YouHow can decision-making fatigue cost you?Avoid making financial decisions at times when you are worn out and prone to giving in just to get it over with. This includes for instance, signing loan documents, committing to working with a multi-level marketing company, making a big-ticket purchase or even agreeing that the campaigner at your door can charge a monthly donation to your credit card.Anything worthwhile will wait for you to give it a fresh look when you’re feeling more on top of your decision-making capabilities.3. When relying on general adviceWhen free advice is generated, it is meant for everyone, often as a kind of advertising technique. It may not even come from a source qualified to give the advice. On top of that, everyone’s situation is different — goals, risk tolerances, income, assets, debts, spending habits, family composition and the household budget are all very individual. General advice doesn’t take your specific circumstances into account and can therefore end up costing you.How can general advice cost you? Consider this example: many people are worried about building or re-building their credit rating. They have heard that having a credit card can help, and one with loyalty points is a bonus. Imagine if general advice were to suggest that you spend as much as you can each month on your credit card to show that you are actively using it and to collect as many reward points as possible.This advice could cost you dearly if not accompanied by a budget that confirms you’re able to pay the balance owing off in full every month. Furthermore, if your credit card account is not in good standing you likely won’t be able to redeem the loyalty points.When something sounds too good to be true or offers a quick fix when no one else does, check into it carefully so that you’re not left further behind from where you started.Fix Your Own Credit Rating for FreeWhen is free financial advice worth it?There is definitely a place for free financial advice, but it’s worth pointing out that when it comes to specific advice based on your personal details, you need to interact with reputable, accredited professionals. While many working in an industry will give you a lot of advice for free, you do not want to jeopardize your privacy, security and well-being by divulging too much information to the wrong sources.The bottom line on financial advice that can cost youWhen it comes to financial advice, it can be hard to decide between what will benefit you in the long run, and that which could harm or set you back. Many people unfortunately, end up in situations they wish they had known more about ahead of time. We don’t know what we don’t know, so it’s vital to ask questions of reputable companies and agencies, verify information with provincial consumer protection authorities, check online ratings and reviews and inform your perspective with your own research. As you become more knowledgeable it gets easier to decide what is solid information from a reputable source versus what you need to disregard.Related reading:The Best Credit Repair Options in Canada6 Big Money Mistakes and How to Avoid ThemIs the Rising Cost of Living Stressing You Out?Scott Hannah is president of the Credit Counselling Society, a non-profit organization. For more information about managing your money or debt, contact Scott by email, check www.nomoredebts.org or call 1-888-527-8999.