4 Financial Myths That May Be Ruining Your Life
Credit Cards Are Bad - Believe it or not, credit cards are not bad. They can actually help you to establish and build your credit. They can help you to purchase a home, car and even cell phones. If you forgo getting a credit card, lenders don’t have a lot of ways in which to learn how creditworthy you really are. If you’re worried about your debt, just remember to keep low balances and use the card on a rare basis. Get a card that offers no annual fee and a rewards program.
Buying Outright Is Better Than Renting – Not necessarily. If you want to buy a home, it’s best if you have 20% of its cost. It’s not a good thing to pay outright for something because if you have no money down the road, you may find it difficult to deal with emergencies that come up later. While it can be cheaper to buy a home than it is to rent, you have to remember that it doesn’t pay to buy if you’ll be moving within seven years.
You’re Giving Into Your Cravings – Yes, your Starbucks habit is costing you money, but there’s no reason to deprive yourself totally. When you allow yourself small treats, you tend to remember the overall goals and watch how you spend. Penny pinching can cause you to overspend later on. Don’t fixate on the cost, but instead find ways in which you can earn more money. Maybe you can get a side job online or partake in a skills-building class that will further your career.
It’s A Necessity To Have Six-Month’s Savings For Emergencies – Don’t stress about this too much. A little more than a quarter of Americans can say they have six months’ worth of savings, but that’s not an easy goal to attain. The best way to build up your savings is to take out $50 or 5% out of every paycheck and put into an online savings account. If you have to, do direct deposit or do a recurring monthly transfer, so you don’t have to remind yourself to do it physically.