When it comes to managing finances every one seems to have it all figured out, and has a master plan when it comes to making more money and managing finances. You will find many books and articles giving people the shortest routes to making more money and becoming filthy rich.
Well, you might wonder why the world isn’t full of rich people. The obvious fact is that most of these people are just spreading rumors on how you can manage your money. The best way to handle your finances and funds is to talk with an expert from Fund Administration. Get the best tips from an expert who has both the knowledge and academic qualification.
Getting your personal finances in check is very important. However, with most of us exposed to plenty of misinformation everywhere we go, it’s hard to make the correct choice. In this article, we are going to separate the chaff from the good grains by pointing out some of the most common money myths you have been believing all along.
1. You need to earn a lot of money to save
This is one of the most common myths that many people have fallen prey to. There is no written rule in the finance world that you need to earn a certain amount of money to start saving. Most millennials believe this narrative that you need to make a lot of money to start saving, others take the myth further by saying they are still too young to start saving. Well, simple mathematics shows that the earlier you start saving the more you are likely to have by the time you reach retirement age. And just because you earn a little doesn’t mean you can’t save more than the person earning a six-figure salary. Come up with an auto deposit locked account that will allow you automatically have a few bucks from your salary. There is no logic in spending everything you earn at the end of the month.
2. Making the minimum monthly payment is enough
Good job, you are making timely payments of your debt. What if you have a chance to make higher monthly payments and clear your debt much faster? Well, many people never consider that they find it more comfortable paying a debt for many years and months by making the minimum monthly payment. If you happen to get an unexpectedly large amount of cash, it’s best you use a large portion of that amount to pay off most if not all your debts. Whether you believe it or not, monthly payments on a debt is a trap that makes you pay more interest on the debt you have. This means increasing your monthly payments will set you free from debts sooner than you can imagine and save you more money that would have been paid as interest.
3. Focusing only on the monthly payment when taking a loan
Even the rich people to take loans, but the difference between you and the other person is how informed or misinformed each of you is with regards to the loan. Most people when taking any loan focus more on the amount of money they will be making in the monthly repayment plan. This is very dangerous since it makes you vulnerable and the lender or creditor can end up charging you very high interests and adjust the loan repayment period to benefit them more. When looking for a loan there are some very important factors that you need to take into consideration and not just the monthly payments you will be making towards the repayment of the debt. The following factors are very crucial when taking any kind of loan:
The fees associated with the loan
The repayment period of the loan
Your repayment plan
Down payment of the loan
The reason for taking the loan
The type of loan
The loan provider
4. Purchasing Your own home is better than renting
A few years back this was very true, however, there have been so many changes in the real estate market and now people find it cheaper to rent than to buy homes. Before purchasing a home there are many factors you need to take into consideration, especially when your main objective is saving money in the long run. Every American dream of owning a home, however without proper planning and research this dream can turn out to be the worst nightmare ever. Before you commit yourself to a few decades of mortgage investment it’s important to talk to a real estate expert and consider other options, there are some states where renting is more affordable than buying a home, while other states the case is different. What if you don’t plan on staying in that particular region for many years, then buying a home will prove to be a wasted investment.
5. You only get what you pay for
Crazy as it may seem, just because something is expensive doesn’t mean its high quality. The product might just be selling a brand name and not quality and durability. Whether we believe it or not just because something has a high price doesn’t mean you are paying for quality, you might just be paying for prestige. The main thing you should focus on when purchasing any item is durability and comfort, Look for a product that will prove to be very beneficial to you in the long run. Why spend so much money on kitchen hardware only for it to get spoilt after a few weeks. The best way to make sure you don’t fall for this myth is to avoid buying or making any financial decision when you are emotional. Take your time to research on a product or service before you make the final decision to pay for it.
The reality about money management is that you need to talk to an expert and after listening to them, pick the tricks and tips that will work for you. Everyone has different spending habits and expenses and therefore, the money management idea that worked for your friend might not work for you. You also need to take into consideration your financial goals and objectives before you implement any money management tips into your financial practices.