What’s the one thing you would change about your finances if you could? Whether it’s saving more money, spending less, or even just getting out of debt, everyone has different money management goals in mind. However, there are several myths that people believe that prevent them from reaching their financial goals. Here are ten money management myths you’ve got to stop believing if you want to get ahead in life and achieve your financial goals. Read on to learn the truth behind these popular myths, and how to avoid them!
Myth #1) Personal finance is boring
To anyone who’s been paying attention, money management has always been boring. But it doesn’t have to be. By avoiding some of these common money management myths, you can learn how to approach money in a new way and stop being bored with your finances. Use these tips for managing your money better than ever before and putting an end to boring financial advice. Myth #1: Money is Something Only Accountants Handle Creating a budget is just as important as eating three square meals a day, so don’t believe that it’s something only accountants can handle. When it comes down to it, anyone can create a budget—it just takes dedication and patience on your part.
Myth #2) Saving money is hard
Today’s market is riddled with money management myths that lead people to believe saving money is hard. If you really want to start saving, it’s time you recognized these common money management myths and avoided them. Follow our tips on how to save money, and soon enough, you’ll have some extra cash laying around.
Myth #3) Thinking about money is bad
The idea that thinking about money is bad, wrong, or somehow sinful has been around for a long time and there are still people who believe it. Money management doesn’t need to be overly complicated. The idea of making lists, checking them twice, and generally having a plan for your finances can help you avoid mistakes and stay organized with your money. Writing down what you want from your money—which includes goals like saving up for a car—can make sure you’re working toward what you want in life instead of letting money decisions fall by the wayside. Thinking about money isn’t bad or sinful; it can help you have more. If that’s wrong, then we don’t want to be right!
Myth #4) A budget stops me from spending
When we’re young, it can be difficult to imagine a scenario in which we would need much of a nest egg. It may seem like you can make ends meet when you’re living with your parents or still have student loans hanging over your head—but no one knows what life will throw at them. It only takes one emergency surgery, an unexpected job loss, or a trip out of town to realize that saving enough money is vital. If you don’t start saving now, when will you? Money management myths are everywhere – they could keep you from getting ahead by sabotaging your efforts or putting off financial milestones. It's time to shed these ideas and get started on building wealth early. Here are 10 money management myths that could hold back your savings
Myth #5) I can't make enough to save
The idea that saving is only for those who make a lot of money is a myth. In fact, an individual who makes $30,000 per year can save over $12,000 if they put away just 10% of their income each year. That's definitely something to be proud of. When it comes to creating a budget or figuring out how much you should be saving at any given time, remember that you can always go back and adjust your numbers until you find a good fit for your needs. The most important thing is just getting started and realizing that saving isn't about making money but rather what we do with it after we make it.
Myth #6) I need help with my finances
Overwhelmed by your money management responsibilities? There are certain myths out there that could help you sort things out. Whether it’s bills, budgeting or saving for retirement, there are plenty of ways you could be using your money more effectively—if only you knew what those myths were. If any of these sound familiar to you, here’s a closer look at some money management myths that could be holding you back from creating and living a secure financial future. (Getty Images)
Myth #7) Prepaid debit cards are risk-free and anonymous
Prepaid debit cards are subject to a plethora of fraud and abuse that consumers may not be aware of. While they’re marketed as a way for people who don’t have bank accounts, or who otherwise can’t qualify for traditional credit cards, it has been reported that at least 10% of these cards are issued by banks. However, prepaid debit cards aren’t always issued by banks – some are offered directly from retailers such as Wal-Mart and Amazon. So if you use a non-bank card, you should also know there’s no FDIC backing on these products. As always, caveat emptor – let buyers beware!
Myth #8) Overdraft fees are the same as bounced checks
Many people use their checking account as a piggy bank, drawing money out when they need it and paying in later. This often leads to bounced checks or hefty overdraft fees because there isn’t enough money in their account. If you’re one of these people, stop doing it. Overdraft fees aren’t an ATM fee; they’re interest charged by your bank for overdrawing your account, and those charges add up fast. Avoid bouncing checks or racking up overdraft fees by keeping track of how much is left in your account at all times—and remember that ATM withdrawals can sometimes cause problems too, so stick with debit cards unless you have extra cash in your checking balance already.
Myth #9) Investing takes too much time, effort, or skill
Many of us have heard that we should pay off our debt before saving money, and while there is some truth to that, it’s also easy to get carried away. Paying off credit card or student loan debt is a worthy endeavor, but if you put your emergency fund or retirement account on hold because of it, you might be making a mistake. Consider prioritizing debt repayment according to how long it will take for each item (remember those interest rates?) instead of your personal desires. Then see how much you can save and invest from there—you’ll feel better about doing so knowing you aren’t putting yourself in danger.
Myth #10) Debt needs fixing before saving starts
The conventional wisdom is that you should fix your debt before saving. That’s not true: your savings should be your top priority, no matter what form of debt you have. First, pay off high-interest debt like credit cards or car loans. Then, start building an emergency fund for when unexpected expenses hit—you can go with a traditional savings account or opt for something like a money market account if you want some flexibility in how you save and spend. After that, putting as much extra cash as possible into 401(k) contributions is usually a smart move since those tax-advantaged accounts give you a long time to let it grow. And if you don’t have any debt—congratulations!
Conclusion
Avoid these myths and you’ll avoid costly mistakes. Mistakes not only cost you time and money, but they also hold you back from doing what you want to do most: growing your business. Best of luck!
