☰ Menu
×
Routing: 302076017
Routing: 302076017
Routing: 302076017
Routing: 302076017

Money Myths

7 Money Myths You Need to Stop Believing

We all grow up hearing the same financial advice: Spend less, save more, and invest early. While most of these words of wisdom ring true, there are lots of widespread money management tips that are actually false.

Outlined here are 7 money myths that might be causing you more financial stress than benefit.

Myth #1: Debit is always better than credit

Do you automatically reach for your debit card when making a purchase? While it’s true that paying for expenses with money you already have in your account is often the best choice, there is a time and a place for credit cards as well.

The real deal: Credit cards get a bad rap for the debt trap they represent, but they may be your occasional payment method of choice. First, many credit cards offer rewards in the form of travel miles, cash-back systems, and other bonuses. Second, building and maintaining a strong credit history is crucial for your financial wellness. The only way to achieve this is by using your credit cards and paying your bills on time. Finally, lots of credit cards offer purchase protection, which makes them the smarter payment method for big-ticket items.

Myth #2: Buy a home at all costs

It’s part of the American Dream: Go to college, land the perfect job, get married, and buy a house, complete with a white picket fence and two cars in the driveway.

Unfortunately, though, too many people are fixed on that dream without realizing that owning a home might not be in their best financial interests.

The real deal: For many people, including those who are not yet ready to put down roots or who anticipate a career change that necessitates moving across state lines, renting a home or apartment might be the better choice. It can also be a financially expedient option if you live in a super-expensive area.

Myth #3: Investing is only for rich people

Investing is for people who drive luxury vehicles and have homes in three different states.

Or is it?

The real deal: Anyone with a small pile of money squirreled away can get a foothold in the stock market. A smart investment strategy can be the best way to let your money grow and put you on the track to financial independence. If you’re a beginning investor, look into passively managed index funds for an easy way to start building your wealth.

Myth #4: My partner manages our finances, so I don’t need to think about money at all

Are you living in blissful financial oblivion, confident that your partner is managing your money?

The real deal: Every adult should have a handle on the family’s finances, regardless of their partner’s involvement. While it is fine for one partner to actively manage the family’s money, it is crucial for both partners to be aware of the state of the family finances and to be capable of managing household expenses and investments if something happens to a partner.

Myth #5: Credit cards will get me through any financial crisis

Why would I need an emergency fund? I have credit cards!

The real deal: Depending on credit cards to get you through a financial emergency is the perfect way to dig yourself into a deep pit of debt. Thanks to interest, you’ll be paying back a lot more than you spend. You’re also more likely to overspend when you pay with plastic.

Credit cards should not be relied upon for a real financial emergency, such as a job loss, divorce, or illness. It’s best to build an emergency fund consisting of three to six months’ worth of living expenses so you’re completely covered for the unexpected.

Myth #6: I’m so young; I don’t need to think about retirement

Who can think about retirement when it’s so far down the road because they’re just starting a career? Besides, who can afford to save for retirement when they’re bogged down with more pressing expenses, like saving for a house and putting kids through college?

The real deal: There’s no better time to start planning and saving for your retirement than right now. The younger you start building your retirement fund, the less you’ll have to put away each month, and the more you’ll save by the time you’re ready to retire. Gift yourself with a comfortable, stress-free retirement by maxing out your 401(k) contributions, and/or opening an IRA or another retirement fund. Start today and let compound interest work its magic!

Myth #7: I have enough in my account to cover my expenses so I don’t need to budget

Budgeting is for people who are barely squeaking through the month. I have enough money; so why budget?

The real deal: Budgeting is for everyone. Without a realistic budget in place, those pulling in a salary in the high six digits can easily spend their way into debt. A budget will force you to make responsible money choices and to be fully aware of the state of your finances at all times.

 

Welcome to Empowered Living

Sooper Credit Union empowers members to take charge of their lives and to achieve their goals. You'll find both innovative thinking and tried and true strategies in our Empowered Living toolkit.

Open an Account

Related Posts

Budgeting Apps to Replace Mint

8 Valentine’s Day Hacks

Financial Glossary

At Sooper Credit Union, we are committed to providing a website that is accessible to the widest possible audience in accordance with ADA guidelines. We are working to increase the accessibility and usability of our website for all users. If you are using a screen reader or other auxiliary aid and you encounter difficulties using the website, please contact us at (303) 427-5005 or (888) SOOPER1 for additional assistance. Products and services available on this website are available at our corporate office located at 5005 West 60th Ave Arvada, CO 80003.

Sooper Credit Union Copyright © 2024

Insured by NCUA | Excess Share Insurance | Equal Housing Opportunity | NMLS# 422866

The ESI program provides up to an additional $250,000 of insurance once a credit union members’ balance exceeds the coverage provided by the primary share insurer (NCUA).

Attention

You are now leaving Sooper Credit Union’s website. Although Sooper Credit Union has approved this as a reliable partner site, the linked site is not owned or controlled by the credit union. The credit union is not responsible for the availability, content, or security of the linked site. The credit union is not responsible for any claims related to any goods or services obtained from the linked site, and does not represent you or the third-party in transactions conducted via this linked website. The linked site’s privacy policies may differ from those of the credit union and the credit union is not responsible for compliance with those policies.

OK Cancel