Money Myths

A myth is a popular belief or tradition that is held by the majority of people but happens to be false. Like in all things, there are some beliefs around money practices that we may have never really questioned. Let’s rethink a few of these common money myths and rethink if they hold any truth.

Myth: I know where my money goes and don’t need a budget.

Truth: When you track your spending, you are looking at how you already spent your money. A budget helps you plan ahead of time how you are going to spend your money. It can help you prioritize your bills, pay off debt, save for the unexpected and plan for the future.

Myth: I don’t earn enough to save. In some cases, this may be true but not in many.

Truth: Try paying yourself first. We often say, “I’ll save what’s left at the end of the month”. Setting up an auto-deposit to a savings account from your paycheck will help you beat this common misconception. You can’t spend what you never had.

Myth: Loaning money to your family or friends shows you care.

Truth: Loaning money to family members or friends seldom gets paid back. If you have the money, make it a gift. A loan may be one of the quickest ways to ruin a relationship.

Myth: Credit cards are bad for you and they should be avoided.

Truth: If you pay off your credit card balance in full each month, making purchases with credit is not always bad. Using credit responsibly can help increase your credit score and earn you a lower interest rate. This will come in handy when you have to borrow in the future for a large purchase like a car or a home.