Have you set your next 5-year financial goal? A dream home? A bigger car? Freedom from debt?
No matter what your goals are, let us tell you that if you continue believing the common money
myths (as have been mentioned below) then there is every chance of your goals getting frustrated very soon. Some of these myths are a result of misinformation. You might as well be doing everything right with your money but it’s misinformation that may end up impacting your
financial goals. Documented below are few such money myths that you should duly steer clear of.
Myth #1: You end up undervaluing “cash”
That’s because most of them have already forgotten that during the recent economic decline
(2007-2009), people actually suffered significantly because they didn’t have enough cash in
hand. It is always important to keep a substantial amount of money handy. You can accumulate
3-months of your savings as cash. It would be more sagacious if you are actually in a position to
save up to 9-12 months’ of your living expenses. Do remember – contrary to what you may
believe- cash is important!
Myth #2: Each and every debt is bad debt
The reality is – not all debts actually hold you back! You are carrying a high balance on your
credit card. This will end up costing you way more than what you had actually borrowed. True
enough! You might as well have taken a quick loan which you are being unable to pay back!
The situation isn’t desirable either! We still will maintain that not all debts out there actually
hold you back in life. Just think about mortgage loans, student loans and business loans. These
loans are taken out for bigger purposes and they only help you continue moving forward in life.
Myth #3: You have to loan money to your relations
You think that loaning money to your family shows that you actually care. In reality, however,
it’s a gross money mistake because money borrowed by your family members is hardly paid
back. It ruins relationships as well. Financial experts, however, prefer giving money as gift to
your family (if you have got the money in the first place). Never ever think of loaning it.
Myth #4: There is no point in saving small
You are not being able to contribute big to your savings and this is precisely the reason why
there is no point in saving at all! That’s what you think! And, if you have already been acting on
this belief (i.e. you haven’t really saved up anything because you thought that small savings are
not worth it) then you have already committed a major gaffe. Think about a situation where you
start saving as early as 24 or 25. Even a 10% or 12% saving from your paycheck along with your
employer’s contribution to 401 (K) can actually help you save up enough for your retirement!
Can you think of any other major financial mistake which we keep on making without
acknowledging its detrimental impact on our lifestyle or future financial goals?