There?s no telling how certain myths and various tidbits of wisdom get passed down. Unfortunately, when they do, they have a tendency to stick around even if they aren?t or are no longer true.?When it comes to your finances, there?s an array of money superstitions out there that you might follow, even though they are untrue or have become misconstrued over the years. Especially when it comes to your money, the last thing you want to do is follow the wrong advice.
Whether or not you know you adhere to certain money superstitions and myths, take a look at these four you shouldn?t believe. They may make you consider adjusting your habits.
1. Keeping a Balance on Your Credit Card Helps Your Score
Don’t fall for this money superstition. You in no way need to or should keep a constant balance on your credit card. While using your credit card regularly can help your credit score, it only does so if you?re able to pay it off in full each month.
A balance will just accrue interest, which only benefits credit card companies. If you keep using your card for occasional or smaller purchases, then a zero balance is perfectly fine to keep.
2. If You Can Afford the Monthly Payment, You Can Buy It
More often than not, we get the idea that as long as we can afford the monthly payment, then we can have whatever we want, even if you could never purchase the item in-full in one setting.
Whether it?s a house, car, furniture, or appliance, you should always consider the total cost of something, not just the monthly amount. Paying an item off monthly, as opposed to outright, simply means that you have less money for longer to put towards other financial goals.
3. Your Credit Card is Your Emergency Fund
For some, a credit card is their answer to a lack of an emergency fund. They figure so long as their limit is high, they can use credit to pay off larger expenses.
Unfortunately, using that card for emergencies simply means you?ll have debt to pay off in the long-run. Having a stable emergency fund, however, enables you to pay off those surprise expenses in the beginning.
This can save you from having money tied up in debt and interest, and giving you the opportunity to put future income towards a new emergency or savings fund and other important goals.
4. You Can Do Everything Yourself
We all have our area of expertise, which is why there are those that choose to specifically work in finances. Even if you?re someone who?s good with numbers and money, there are times when you should seek professional advice.
Whether it?s with taxes, investments, or even basic management, sometimes getting another and expert opinion can make all the difference.
Simply because most people believe something to be true, doesn?t mean you should jump on the bandwagon. Most people no doubt have their opinions on how best to handle finances. Because of that, certain myths and money superstitions have become long-held.
Of course not every popular opinion is for your benefit. Thus, you need to avoid these four money myths and do your homework before following others.
What are some money myths you have found to be true? Have you fallen for any of these money superstitions?
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Wise Dollar
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I always wondered where money myth #1 came from when I first heard it. I’m sure most of those carrying a balance isn’t for that reason. I do wonder how many have needlessly paid interested because they believed that myth.