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5 Money Myths That Won’t Go Away

Stop Believing these 5 Money Myths

Money doesn’t grow on trees. No, that’s not one of the 5 money myths that your Billings accountant wants to tell you about; most people realize that money doesn’t grow on trees. It is important to be aware of what is right and what is wrong when it comes to money, especially since almost any move you make can be restricted if you do not have it. To help get you on the right track, here are 5 of the most common money myths which you should stop believing today.

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It is always best to pay in cash.

While paying in cash is almost equivalent to saying that you have the funds needed to pay for what you are purchasing, sometimes, it isn’t always a good idea to do so. Why? Because you might be missing out on special offers, discounts, and other rewards offered by credit card companies. As long as you make it a point to pay your full credit card balance when it is due (which means no interest is charged), you will be better off racking up those reward points instead of paying everything in cash all the time with no rewards. And don’t forget, carrying too much cash around is a security risk because it is prone to theft, and is untraceable. Though your credit card can also be stolen, it can easily be canceled or frozen to prevent unauthorized use.

I’m too young/old to save for retirement

When you start saving while you are still young, you’ll have the benefit of earning more through compound interest. Which means it’s never too early to start saving. On the other hand, even if you are a bit older, you’ll still get to enjoy compound interest when you save, just not nearly as much compared to starting when you were younger. Which means it’s never too late to start saving.

You get what you pay for.

When it comes to quality, almost everybody assumes that the more expensive it is, the better it is. This may be true in many cases, but not in all instances. A good example is generic drugs. Sure, you have this preconceived notion that the popular medicine brands will surely help stop whatever pain you’re feeling. But have you compared the ingredients to the generic? A generic aspirin will stop a headache just the same as a brand name one. The point is, the brand and the price tag shouldn’t always be the only deciding factors when you are making any purchase. There’s a time to be practical, as well as a time for brand-consciousness. Know when it’s worth paying the higher price, and when it isn’t.    

You can’t start saving until all your debt has been repaid.

Whoever started this myth should be ashamed of themselves. Because emergencies and unexpected circumstances are a part of life (just like death and taxes), paying off everything you owe before you start saving might be impractical, if not, impossible. Just think about it. You’re working, working, working to pay your debts and make ends meet, when someone suddenly gets sick. You don’t have extra funds to go to the hospital or buy medicine. So it’s a choice between sacrificing food and groceries, or getting into some other kind of debt. And instead of achieving your goal to be debt-free, you end up getting into more debt instead. The lesson: even if you still have debts to pay, strive to set up an emergency fund by saving even just a little bit each month so you won’t have to go into crisis mode every time something unexpected happens

A penny saved is a penny earned.

Minimizing your spending is indeed a great way to save. But it is illogical to think that the savings you get by cutting down on expenses will pave the way for elevating your financial status — you can only do that by earning more. The best way to get ahead financially is not to just save more, but earn more.

Practical Taxes Squashes the 5 Money Myths

Here’s a bonus myth that you should stop believing: stop giving the government an interest free loan. Overpaying your taxes is a good thing since most of us don’t have the discipline to save that money every single month. A sudden windfall is harder to spend than a dollar here or there, and can help boost your financial health dramatically.

To get that sudden windfall, you need a great accountant that will maximize your tax refund, and save you money. As the best accountant in Billings, we can do that for you!

 

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