6 Myths You Should Never Let Control Your Finances -

There are a lot of financial myths out there, and it’s important that you know fact from fiction. Without this, you may find yourself following these myths, and that can be disastrous to your personal finances. What are some of the biggest myths, and the realities behind them?

How do You Save?

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Image via Flickr by Jake Wasdin

Myth: The more money you make, the more money you will save

Reality: This is so far from the truth it is almost laughable. In fact, the more money you make, the more you spend. People get accustomed to a certain lifestyle. It can be difficult to break out of that. Unless it is budgeted in early, it is just as difficult to save money at a higher income as at a lower.

Myth: You can only save money by buying things on sale or using coupons.

Reality: Though using coupons can be helpful, and buying things on sale can save you a few dollars (or in some cases, cents), that is not going to rack you up major savings. In fact, in a lot of cases, you will end up spending more in gas driving from one store to the next for the “best” deal than what you save on the items. Coupon what you can, but don’t stress over it.

It’s a Family Thing

Myth: Two incomes are always better than one.

Reality: This isn’t always true. If you have kids, it may be more expensive to have both parents working. Consider daycare, travel costs, etc. Take a good hard look at the real cost of both parents working, and compare it to what the income would be with only one working. Is the difference really that much? If so, two incomes is probably great for your family. If not, you may want to reconsider.

Ideas on Debt

Myth: It’s bad to have any kind of debt.

Reality: Ok, we’re not going to say that debt is a good thing. However, being able to show that you can manage your debt by paying it down monthly is beneficial. You want to keep a handle on your debt; don’t let it get too high. But having a reasonable amount of debt is going to help your credit score, not hurt it.

Myth: Pay off all credit cards before putting money into savings.

Reality: Though you want to pay toward your credit cards, it is also important to have a good savings built up. Make sure that you are putting something toward savings each month. It will help you in the long run.

Investment Opportunities

Myth: Property is always the best investment.

Reality: Though property is usually a good investment, remember that it is going to take a much larger investment than other options. This can be difficult if you don’t have a lot to start off with.

Don’t let financial myths run your finances. These myths are everywhere, and it can be a little overwhelming to distinguish them from the truth. Fisher Investment Forbes‘ Ken Fisher can help you sort the myth from the reality.