Contributed post
Most of us make silly money mistakes now and then.
We apply for personal loans we shouldn’t, buy cars we can’t afford, and waste cash keeping up with the Joneses.
Many of the mistakes we make are down to misguided choices, and while this is partially our own faults, the faulty belief system we base them on isn’t. The world of personal finance is full of misinformation, resulting in more and more people spending and losing money they can’t afford to.
To keep your finances safe, you need to separate the fact from fiction, so here are some myths that you should ignore.
1. Two Incomes Are Better Than One
Having you and your partner both working might seem like a smart idea, as it brings extra money into the house, but, what most people fail to realise is that this actually depends on your lifestyle and circumstances.
If you have young children or pets, you may need to pay for someone to take care of them while you’re both at work. The commute may also cost more than it’s worth.
You should always consider the bigger picture when making big financial decisions like this.
2. Renting Is A Waste
Buying your own home has plenty of benefits and is a goal for many families all over the world. That being said, it might not be the best option for you right now.
If you’re young or just starting a family, looking for houses or apartments to rent is probably the best choice. Despite the common belief that renting is a waste, it offers flexibility and freedom that you simply don’t have when buying. This allows you to move whenever you like and find bigger properties later.
3. Only The Rich Invest
Investing may be a habit of millionaires, but it’s not reserved solely for those driving Mercedes cars and wearing Rolex watches. It is one of the best ways to boost finances and grow wealth and is something that can be done by absolutely anyone.
Of course, your investment opportunities will be limited by the cash you have available, but there are plenty to consider, even when on a lower income. Start small and move on to bigger things when you feel comfortable.
4. Emergency Funds Are Unnecessary
Everyone needs an emergency fund, regardless of your age or situation. Having a line of credit to fall back on when times get tough is helpful, but, it’s important to remember that the cash you borrow here is going to cost you in the long run and also won’t last very long.
An emergency fund, on the other hand, is your money, so it doesn’t come with interest. Ideally, your savings should cover you for around six months, so you also shouldn’t run out of cash any time soon.
Managing your personal finances is never a simple task, but it’s made that much harder when you listen to misinformation. To avoid wasting cash unnecessarily, make sure that you ignore the money myths listed above.