In the land of finances, it is often hard to know what or whom to believe. Financial worries are extremely stressful and with all kinds of information out there, it is hard to know what is fact and what is fiction. Here are some common myths about your money and finances and what is true.
Everyday Spending Money Myths and Facts
“I live Paycheck-to-Paycheck, I can’t start a savings.”
This is one of the biggest lies we tell ourselves. Most people who live paycheck to paycheck have more wiggle room that they realize. It is often just a matter of being honest about your priorities. Do you spend money on a bad habit? Do you not meal plan or at least make a list when you go to the store? There are lots of ways you can trim the fat in your budget to add even a small amount to a savings. One easy way to start a small savings is to do the $5 savings plan. If you still use cash, it’s as easy as placing every $5 bill you get into savings. They add up quickly!
If you don’t use cash most of the time, you can do something similar with apps. One I like to use is called Self ( Formally Self Lender). Not only does it help you build up a savings that you can’t touch until a certain period of time (perfect for those of us that are trying to develop skills in that area!), but it actually builds credit because each month you put something in, so each month it reports you as paying a “loan”. And, it can start with as little as $25 a month!
“Only extreme couponers really save money with coupons”
This is absolutely false. While it may require some extra time to clip coupons, you don’t have to in order to save big. Whenever I need a service like a oil change or a haircut, I go look at Groupon. There, I can find coupons that will save me on the stuff I need on a regular basis and I get to support local places. Also, before I do any shopping online, I look for coupons. Even if its just 10% off, why spend that extra 10% if I don’t have to? It’s as simple as Googling “store name + coupon/promo code”.
“If I check my credit too often, I will lower the score.”
The only time your credit gets lowered for checking it is when hard inquiries are made from potential lenders or leasers. Checking your own credit will not affect it at all and you can do it daily if you want with no effect. Sign up for a free credit report from a site like Credit Karma. One thing to keep in mind with credit Karma, though, is, it isn’t a perfect reflection of what number your score is. Sometimes, it can be 20 or more points off in either direction. Just use it as a reference of where your credit may be heading to keep an eye on it. It is also a great way to notice if new loans or lines of credit are opened in your name that you did not authorize as it alerts you very quickly when an inquiry happens.
“There really is no need to change my PIN numbers or passwords to my bank accounts as long as I don’t tell anyone what they are.”
This can be very dangerous. Even if a site is secure, there are still ways people who are hackers can find out your information. Every time you swipe your card you are putting it at risk. There really is no reason not to regularly change your account info. If you are concerned about forgetting your new pins and passwords, try picking 5 different ones you rotate every few months. Also, always change your pin or password if you get a weird feeling on a site online. Follow that intuition.
“Credit cards are inherently bad and I should avoid them at all costs.”
Actually credit cards are good if you use them responsibly. Just be sure not to take out more than you can manage. A credit card is like opening a new bank account. You will need to make sure you can track it, watch it and pay your monthly payments on time. Also, never use a credit card for fun shopping because you are bored. A credit card should not be thought of like “free money”. It is also wise not to use more than 30-50% of your available credit. When you pay a card off, use it to charge up a small amount again. This shows that you are using it and it is “revolving’.
“Thrift Stores have the cheapest price on Everything.”
This is not true in many cases. While thrift stores are often a great place to shop for some awesome deals, they do markup certain items to close the original price. Sometimes you can find a particular item you are shopping for online cheaper or even on sale. Don’t think just because it is at the thrift store it is the best price bottom line. If something seems to high, check it out online to see if you can compare.