A Penny Saved: Money Myths That Break The Bank

From flickr

Money makes the world spin. For families, it’s even more critical. A regular person has a bigger budget and more expendable income. A family with kids has to account for every penny to ensure they make it from one paycheck to the next. Struggling to pay the bills is enough to make a parent who is a homeowner wish for a break. “I mean, come on man!” The idea that the world is against you is a tempting one, but it isn’t true. The reality is that the people in charge of finances (you and your partner) are the ones who make mistakes because of a lack of knowledge.

Here, then, are the myths which could harm your finances.

A Penny Saved Is A Penny Earned

In simple terms, this saying encourages you to save as much as possible to enhance your wealth. Even a single penny can make a significant difference over the course of a lifetime, right? Sadly, it isn’t the case because managing finances isn’t what makes a person rich. The wealthiest people on the planet do one simple thing: they increase their income. Instead of settling for $50,000 a year, they double or triple it. Don’t waste money unnecessarily, but don’t think that cutting costs is the key to wealth.


Real Estate Is A Sound Investment

Maybe this was the case in the past, but things have changed in the past two decades. Nowadays, there are numerous costs which either didn’t exist or were not as extortionate. Property taxes are a prime example, as are maintenance costs. But, the real kicker is the fact that house prices are down and don’t look like increasing any time soon. Unless you can afford a property in a bubble, such as London or New York, it isn’t a foolproof investment. It is possible to make money, but it is by no means infallible.

A Bank Is The Best Place For Money

For starters, there are lots of places to find lenders with favorable interest rates. Companies such as homes.loan and moneysupermarket.com can show you where to search. More importantly, a bank isn’t the best place to store your hard earned cash. Why? It’s because of fluctuating interest rates. In the past, people used to earn more in a month in interest than modern day savers do in a year. It’s almost as bad as putting it under your mattress for a rainy day. Unless the rate keeps up with the rate of inflation, it isn’t a savvy investment.


Credit Cards Are The Devil

Lots of families use cash or debit cards to make purchases so as not to spend more than they earn. It’s a good move until you realize you are missing out on potential rewards. Card companies have plenty of goodies and promotions to entice customers into a sale, and you should take advantage. Cashback, for example, is an excellent way to make money without putting your finances at risk. Yes, they are dangerous, but only when you misuse them.  

If you can get over these myths, your bank balance will benefit.

Speak Your Mind