One of the best feelings for an individual would be when they start earning. And, while at the end of the month, salary credited gives you joy, the utility bills, loans, and personal expenses do tend to empty your bank balance sooner than expected. Is it possible for you to save, then? What about your dream vacation? Just as you are earning, it is crucial that you have an understanding of how to plan, save, and invest.
Personal finance myths have been there for a long time, including savings plan myths, investment myths, stock market myths; however, these myths would only make your future unstable. Below find out some of the financial myths that you would get to hear even now.
Credits Cards Are Only Meant For Emergency
There has been a prevalent myth that even if you have lost your job with a credit card, it would be easy to pay EMIs and loans. Many believe that as long as their credit card has enough limit, there would be no need for having an emergency fund. It is time that you debunk this myth because no emergency purpose can be served using a credit card.
As an adult, it is your responsibility to ensure you have enough funds stored in case there is an emergency like a medical emergency, or you have lost a job. One needs to understand how to survive during such dark days, and that too without a credit card.
You Have To Be Rich To Invest Well
This is one of the biggest myths you would get to hear regarding personal finance. You do not have to be wealthy to invest. You can start with a small amount and can eventually increase the amount as you gain experience and become accustomed to how finance works. Invest as low as Rs. 500 in mutual funds because investing is easy, and there are experts present to help you out.
It is never about how much you earn but what you do to save your money and invest in the best possible way. Be consistent about your investments so that your money grows in the long term.
Purchasing Home Is A Better Option Than Renting
For many, owning their own home is a lifelong goal. Rather than being a rational decision, it is often an emotional one. A lot of individuals believe that land investments and purchasing homes are ideal investment options, just like some still think gold is a good way to invest. However, it does not always make sense depending on your financial stability.
If your job requires you to travel from one place to another, then renting would be a wiser choice than owning a place. You have to pay less and do not have to worry about maintenance and other expenses that come with owning a home, including no loan headache.
You Do Not Have To Think About Retirement Before 40
For a working person, their retirement begins at age 60, and for some companies, it can be 65 or even 70. Many believe that retirement plans should be put into action after they have reached 40 or 45. They cannot be far from the truth. You need to understand that your financial responsibilities will be at their peak when you are in your 40s. This would include your children’s education cost, health insurance, best long term saving plans, and others.
From the very start of your professional life, putting aside small amounts for your retirement is a sure-shot way of securing your future plans, making sure you have enough for any medical emergencies and others. Again, as your financial responsibilities in your 20s are not overwhelming, you can take risks by going for mutual funds and other investments.
Being Burdened By A Loan Is Bad
You might think having a loan puts your financial plans at a dead end, that is not the case. Loans are not always bad, especially if you have taken a loan after making a rational decision rather than an emotional one. If you have taken a loan so as to build your asset, then with higher returns, it ensures you can pay off the loan sooner than later. If you wait until you have saved up enough, then the stock prices might increase, and you could end up not buying them at all.
Going for your lifelong goal that is building a home or a business by opting for affordable EMIs, is never a bad idea. However, first, compare the interest rates and the repayment cycles of different banks offering loans to make an informed decision.
Wrapping up, these are some of the myths that you would get to hear a lot regarding personal finances. Handling finances is never hard and overwhelming when you debunk these myths and go for expert help. Never let these myths stop you from growing your wealth.Content provided by One Source Process – embassy legalization services