Costly Money Myths That Could Ruin Your Finances*

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*This Is A Collaborative Post*

Managing your money and getting out of debt aren’t always the easiest of tasks. After all, if they were, there would be a lot fewer people struggling to figure out their personal finances. What makes these jobs that much more difficult, however, is paying attention to all of the financial advice you’re given throughout your life. Sayings like “You get what you pay for” certainly seem to make sense, but most of the time, they just don’t apply. This can cause you to make costly mistakes that put your finances at risk. With that in mind, here are ten money myths to ignore.

Two Incomes Are Better

Bringing extra money into the house is rarely a bad thing. However, having both you and your partner working could cost you more than you earn. If you have children and pets or need to travel quite a way away to get to your job, then you might have to spend out more than your salary on childcare and travel. Having two paychecks also makes some couples more careless with the money they have. In these circumstances, sticking with one income makes the most sense.

Good Salary Equals Stability

Making good money, unfortunately, doesn’t mean that you’re financially secure. For some families, even with a large salary, it can be difficult to pay the bills. Plus, it’s always a possibility that you could lose your job or might need to take some time away from it, in which case, you’d be left with little to no income anyway. This means that, even when you’re a high earner, you need a solid financial plan. You should also build an emergency fund and buy insurance cover.

Credit Cards Are Dangerous

Your credit card is not evil. In fact, it’s an incredibly helpful tool, which, when used correctly, is far from dangerous. When you pay on a credit card, it’s like taking out a small loan. But, as long as you pay your card off on time, you won’t face any interest. In fact, you’ll instead see a number of benefits, including a better credit score. Credit cards also offer extended warranties and fraud protection, which, in some cases, makes them a much safer option than paying in cash.

Only The Rich Invest

When most people imagine investing, they think of gold bars, jewellery, stocks, and houses, all of which are far from cheap. However, that doesn’t mean that this practice is for the wealthy alone. There are investments options out there for almost everyone, even those on the lowest of incomes. All that you need to do is find the opportunity that is right for you. For most of these options, you can get started almost right away. Just make sure that you consider the risks.

Wills Benefit The Elderly

Everyone is going to die someday, whether we want to admit it or not. But, not everyone manages to live a long life before they do. You never know what tomorrow might bring, which is why you should always have a will prepared. If you don’t already, there are many wills and probate solicitors out there who can help you. Without this vital document, there are no guarantees that your money and assets will be divided in the way that you wanted them to be.

Renting Property Wastes Money

When you rent a property, you don’t get to keep the home, like you do when you buy it. This has led many to believe that it is a wasteful practice. That being said, while buying definitely has its advantages, it isn’t the best decision for everyone. If you’ve just started a new career, move around a lot, have no solid plans for the future, or are just quite young, then renting might be better for you right now. This gives you flexibility, which you won’t have if you buy a house.

Too Poor To Save

Regardless of your age or circumstances, everyone needs savings. This gives you a cash cushion to fall back on in emergencies or just on rainy days. Unfortunately, many people believe that they can’t save up, as they simply don’t earn enough money each month to allow them to. Rather than give up, you should find ways to free up some cash. You could start working from home, for example, or eliminate unnecessary expenses. You can switch to cheaper plans too.

Always Buy In Bulk

Buying in bulk is an effective way to save money on your shopping. Although you shouldn’t purchase everything you need in large quantities. Perishable items, for example, should usually be bought as and when you need them. The reason for this is that these goods tend to go bad before you get the chance to use them. This means that you’ll waste money rather than save it. Non-perishable items, on the other hand, like canned goods and soaps, can be a steal.

Quality Means Paying More

Although in some cases, you do get what you pay for, this isn’t always true. More often than not, you don’t have to pay through the nose for a quality product or service. A good example of this would be medications. The pills you find in generic packets are the same as those in branded ones. The only difference, other than the price, is the box. Before paying extra for a seemingly better product, consider what the differences between that and the generic kind actually are.

Mother Knows What’s Best

Most of what we learn throughout our lives comes from our parents. From the moment that we’re born, they start to teach us things, from how to talk to how to go to the bathroom. They also give us advice on how to handle our money. However, times have changed significantly since your parents were your age. This means that their wisdom might now be outdated. Rather than taking your parents’ word as gospel, you should do your own research.

Managing your money is definitely tricky, but avoiding the myths above can make the task a little easier.

*Post contributed by Sam Jones*

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