Don’t be fooled. Believing money myths could hurt your bottom line.
There is no shortage of bad information out there – and falling for the misinformation could cost you $$$. Throw away these top five money myths, and you’ll avoid the consequences of believing them.
Myth #1. Being Bad at Math = Bad at Money
So you weren’t top of the class in mathematics – that doesn’t mean getting your parents or SO to be in charge of managing your money is a good move. No one cares as much as yourself when it comes to your future, so taking the time to get your financial life on track is a must. By simply spending ten mins a day tracking your finances, checking your income vs outgoings and researching new ways to save, you’ll be on your way to owning your finances like a boss.
Myth #2. Renting is Throwing Away Money
Finish college, get a job, get married, buy a house. That’s how life goes right? Wrong. If you are young and just starting out your career, renting is a better option. It gives you more flexibility to chase your dreams and is simply less work and grind. If you’re financially capable, buying a home could be better than renting if you don’t plan to live in the home. By purchasing a home to rent to others you can still the live the life you want while earning a healthy income.
Myth #3. Checking Your Credit Score Hurts Your Credit
There’s no harm in checking your credit score. In fact it is very important for you to monitor your credit report. Each credit bureau provides the opportunity to obtain a free copy of your credit report annually. You can contact:
- TransUnion: Visit www.transunion.com, call 800-888-4312 or mail in a request to TransUnion, 2 Baldwin Place, P.O. Box 1000, Chester, PA 19022.
- Equifax: Visit www.equifax.com, call 800-846-5279 or 866-322-3162, or mail in a request to Equifax, P.O. Box 740123, Atlanta, GA 30374.
- Experian: Visit www.experian.com, call 888-397-3742, or mail in a request to Experian P.O. Box 919, Allen, TX 75013.
- Free online credit reports are available at: www.annualcreditreport.com
There’s no penalty or downside, no matter how many times you check. Just remember to try and keep your score as high as possible, FICO will score you on the following when determining your score:
Myth #4. Credit Cards Always Lead to Big Debt
Of course ignoring your due balance is a recipe for financial disaster, but if you train yourself to spend reasonably there’s no need to fear credit cards. However it is vital to pay off your balance in full every month. That is how you maintain good credit. There are some other ways to build and maintain good credit but leaving a balance, any balance, is not among them.
Start smart by opening a CC with the best bonuses for you, like a travel miles or cash-back. And only use it for purchases you know you can pay off that month.
Myth #5. I Don’t Need an Emergency Cash Fund
Even if you have plenty of credit cards, credit cards can only take you so far. Did you know it takes an average of 4 months to get a new job? You can wrack up a lot of credit card interest in that amount of time. Could you pay your rent or mortgage with a credit card? While you can use a credit card for a one-off emergency it won’t bail you out of a few months of living expenses.
If you’ve not “saved for a rainy day” (or “life-emergency” in the case of becoming unemployed) your better options could be an installment loan. Short-term multi-pay loans are a perfect way to respond to unexpected emergencies such as car repairs, medical expenses, or travel – or wherever you need to spend it. The interest rate on your loan will depend on several factors including the type of loan you get, and your credit history.
Rule of thumb is aim to save enough emergency cash to tie you over for 6 months. If this isn’t a possibility, beware of payday loans which could spiral you further into debt. Contact a reliable company with no hidden extra fees that allows you to pay off the cash when you want to (for example paying your loan back over a longer period of time so your payments are more affordable, or even early to pay your debt off quicker).
It’s easy to become confused when wading into personal finance. The above money myths can get you into trouble and lead to false ideas about money, saving and investing. So do your research and eventually you can formulate your own set of financial principles to live by. This way, you can keep all these money myths from limiting your financial future and start succeeding with money like you never have before!
Our team at TLC Loans specializes in debt relief and we’re ready to help you. Contact us today!