Finding a reliable source of information isn’t always easy, but when you’re steering your financial future, your economic health depends on truth — not money myths.
Myth number one: You can’t start saving until you pay off your student debt.
While that debt can be a big time burden, it doesn’t have to bring you to a stop. Break down your paycheck — Cover the essentials first, then take what’s remaining and pay your debt, and then stuff what’s left into savings.
Myth number two: Everyone needs an emergency fund.
Sure it would be nice, but not everyone can afford to have one. It’s recommended to have back-up funds to cover between three to six months of expenses, but if you can’t, aim for $500 for emergencies and go from there.
If you think a savings account is the best place to put your money, you’ve fallen for myth number three. Leaving money in savings long term can actually lose you money since interest rates don’t always keep up with the price of inflation. Check out a CD, money market account, or a high yield checking account to earn more while you save.
Next, investing is not just for the richest of the rich.
Start small, skip buying whatever this is every day and try investing that five bucks in an index fund. It adds up.
You can also link up your bank account to an app like Acorns which will round up the change from all your transactions and invest it.
Last myth, carrying a credit card balance improves your credit rating. Your credit competence isn’t built by slowly paying off that balance. If anything, you’ll end up owing more money due to interest. So, be sure to pay the balance in full every month and try to charge only a small percentage of your card’s limit, because the amount of available credit you’ve used is another factor in your credit score.
So keep driving forward and watch for the signs.
Separating financial truths from money myths will help you reach your destination in no time.