Thanks to financial blogs, television experts, and input from friends and family, there is no shortage of advice about money-earning, increasing, and handling it. At times, you may fail to distinguish between fact and fiction. To help you out, the best personal finance consultants have shared the most prevalent money myths, encompassing everything from personal debt and credit cards to car loans, real-estate investments, and retirement funds. Please check them out now.
- Debts are Tools
Debt has been sold to modern-day individuals so aggressively that they cannot even imagine purchasing a car without an auto loan or going to college without an education loan and now at times with a personal loan. Debt contributes to risk, rarely brings prosperity, and is not used as much by the wealthier sections of society as we are persuaded to believe. It is always better to live within our means and pay cash for the things we want.
- Always Stay Away from Credit Cards
Credit cards are rightly considered an entry into debt. Thus, most people wish to stay away from them under all circumstances. However, credit cards allow you to relish a fair share of benefits, provided you make the payments on time and avoid interest by paying in full every month.
Several cards have reward programs with which you may earn points or get cashback. Also, making payments diligently increases the credit score. A high credit score lets you buy properties without hassle.
- Budgeting is for the Financial Savvy Only
Detailed budgets can scare an average individual and stop him/her from creating one. While a categorical Excel spreadsheet may be too much, several alternatives hardly require any maintenance, are flexible, and can still keep you on track. According to the experts providing Bajaj Finance personal loan, the objective of a budget is to keep the finances in order, and everyone can benefit from it.
- Save for Retirement Later
A large number of young adults, specifically those in their 20s, do not prioritise retirement savings because that seems like a distant concept. But you can start saving for retirement whenever you want. Open an account as early as possible and contribute toward it faithfully. If you save (even five per cent of your earnings) for an extended period, your investments get sufficient time to mature.
- Stock Market is too Complicated for the Average Investors
Do not believe in the notion that you have to be an expert to become a successful investor. People aged 40 and under must keep a significant portion of their investments in the stock market, but they must do so logically. Always opt for low-cost mutual funds that mirror the entire market. They do not call for special skills but offer a better return than almost all fixed-income investment portfolios.
- Money Cannot Buy Happiness
Everyone is aware of the famous adage – money cannot buy happiness. Well, it does, especially for people with low income. One research conducted by Princeton University showed that as the income of the participants increases, their attitude toward life enhances. Income increases can bolster emotional health, improving the overall quality of your daily existence.
You must spend sufficient time, exert utmost effort, and show cent per cent dedication to get your money on track. Unlearning the common money myths stated above will help you lead a stable financial life with practically zero stress. It is never too late to start!