Personal finance can be a confusing task to stay on top of. It’s made even more difficult by the dozens of myths that have been floating around for years relating to finances. Below, I’ve listed some myths that should be put to rest when you work to secure your financial future.
Retirement Is A Cookie Cutter Process
Many believe that if you follow a few general guidelines, retirement is a given. This is far from the truth as every person’s retirement takes on a very different shape. Retirement planning is conducted is by analyzing the habits of an individual during their working years. If someone lives from paycheck to paycheck during their careers because they are constantly buying more things, then their retirement income will never be able to maintain this type of lifestyle. It’s called the poverty trap, and though it can be difficult to escape, everyone should be aware that retirement is never a given. Each person must plan for retirement according to their specific needs and not use the plans of other to determine their own direction.
Buying Always Trumps Renting
While buying can be more economically viable than renting for some consumers, it is not necessarily the case for all. Renting eliminates many costs for consumers such as home repairs due to aging as well as property taxes. Renting is also more beneficial in particular areas of the United States as compared to others where it is more cost effective to purchase a home. Thorough research should be done to make this decision, though it all ultimately comes down to the priorities of the consumer. Depending on what homeowners value most, renting can be just as financially viable as as purchasing a home in the long run.
Credit Card Balances Help A Credit Score
Not only is this finance myth false, but it has the potential to cost consumers thousands of dollars in interest payments every single year. Carrying a balance on a credit card means some of the highest interest rates in the financial sector will be paid every single month. It is always a good idea to pay off credit card balances in full each month. Things like online autopayments can help make the process easier for payers.
By learning about myths in the financial sector, consumers can be much better suited to make decisions that will always be in their best financial interest.