Money is vital for our survival. After all, this is what we use to get the things we need, including food, shelter and clothing. You’ll read and hear money tips here and there. But are they all true? Some of them might be costing you, instead of helping you to save more. Others may even prevent you from achieving your ultimate goal. Here are some of the most common money myths that many people believe.
A Higher Salary Will Solve Your Money Problems
It’s true that getting a higher salary than what you have now would give you more room in your budget. However, it still doesn’t ensure that your money problems will be resolved. Why? Even if you earn more cash, if you don’t manage your money wisely, you may still experience financial difficulties. You should always spend within your means. There are so many things available out there to buy. You can easily lose your hard earned cash if you don’t have control over your spending, no matter how big your paycheck is.
Spend Less to Meet Your Budget
Lowering your spending in some areas of your budget is one way to keep your budget under control. However, there are times that no matter how much you crunch the numbers, it still isn’t enough. Instead of finding more ways on how to cut back on your expenses, which could already be difficult for you, you may need to get another source of income. Apply for a second job or use your skills to make more cash.
It’s Always Best to Invest in a House than to Rent
This depends upon the situation. If you are looking for a house to stay in until you grow old, then it’s worth investing in a home. The mortgage that you pay will be worth it since the house would be yours after completing the payment. However, if you don’t see yourself living in that city for a long time, it may not be practical to buy a house. Renting could be a better option in this case.
Adding More Rooms or Features in Your Home Will Give You More Cash
Adding rooms and more features in your home will increase its value. However, you should also consider the amount that you’ll spend with the renovation. Take into consideration the final value of the house and see if you’ll earn from it. You might be spending several dollars upgrading the house only to realize that you’ve spent so much leaving you without profit when it’s sold.
Relying Only on Your Will to Determine Your Beneficiaries
If you think that all your money will be distributed to your beneficiaries according to your last will and testament, it may not be the case. This is because whoever are listed as beneficiaries on your accounts will receive the benefits, even if your will states otherwise. For instance, if your will states that son A will receive your money from a specific account, but son B is listed as your beneficiary on that account, son B would still get the money. So make sure that the beneficiaries of your will and accounts match so the right people would receive the money.
Everyone Needs a Life Insurance
A life insurance gives peace of mind knowing that your family would still continue living a comfortable life even after you’re gone. But this is not for everyone. If you’re single and you don’t have kids or dependents, there’s no reason why you should get a life insurance.
You Can Always Work to Earn More After Retirement
There are people who still get part time jobs after their retirement in order to earn more money. However, you should be enjoying your life, instead of working more after your retirement. Moreover, many retirees are unable to work after retirement because of health reasons. Instead of having this mindset, you should start saving early for your retirement to have enough money to live a comfortable life.
More Expensive Items are Better
There are situations in which you really get what you pay for. However, it doesn’t always mean that the most expensive products are always the best. If you search around and make a comparison, you could find an alternative that has the same quality without the hefty price tag.
Don’t fall for these money myths and learn from these mistakes. Manage your cash wisely to avoid financial disasters.
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