There are a lot of common money myths that float around among family and friends, on social media, and even on TV, Finance Dee writes.
It is essential to always fact check and do your own research on anything you hear that you’re going to use in your final decision. So what are some of these common money myths floating around?
Well here are just a few I’d like to clear up:
1. You need a lot of money to be an investor
In the past, it is true that investing was inaccessible to the masses, but now investing is generally accessible to anyone and everyone who has as little as £1 to spare.
Investors are now able to buy fractional shares on many investing platforms, which means less money is required to own a piece (no matter how small that piece is) of a company. If investing is something you are interested in, not having ‘a lot of money’ shouldn’t be a deciding factor.
2. I am too young to worry about retirement savings
This myth is a dangerous one, as pushing off saving for retirement just means that you will have to work extra hard to catch up later on in life. The magic of compound interest works best for those who start saving/investing for retirement earlier in life.
Worst of all, if your employer offers an employer match to top up your retirement savings and you choose to opt-out, you are literally throwing away free money. And who wants to do that?
3. There’s no point of earning more money as it will ALL be taken away by taxes
Oh taxes! It is a tough reality that as you earn more, your rate of tax will increase as you earn over certain thresholds. However, it is important to remember that not all of the additional income made will be taxed.
You will still very much benefit from lining your pockets as your salary increases over time. So feel free to be a go-getter!
4. Carrying a small balance on a credit card is good for your credit score
Carrying a small balance on a credit card is not a factor that positively impacts credit scores. In fact, it is quite the opposite. Lenders like to assess whether someone is able to handle credit appropriately, which means to pay off the full balance of the credit card every month.
Not only does paying off the full balance actually have a positive impact on your credit score, it also can save you a lot of money on interest.
5. Cash is King
Although cash is becoming more obsolete among the many technological advancements, cash of course still has its place. However, let’s be real, cash really isn’t king anymore.
Most retailers happily accept debit and credit cards, and some are even adopting newer technologies such as cryptocurrencies (but we won’t get into that!).
Paying for items with cash offers little to no protection on purchases, whereas debit cards or credit cards offer a host of benefits and protections to their users in case something out of your control (in most circumstances) goes wrong with the purchase.