Some Common Myths About Personal Finance Decisions

It’s dangerous to have misconceptions about money and what good financial decisions are. It is probably a good idea to consult a financial expert before embarking on a personal finance plan.

Personal finance involves everything including saving, spending, investing and careful planning.

However, when you receive a piece of financial advice take it with a grain of salt. You need to evaluate your situation thoroughly before you go through with anything. Financial advice can also be subjective as well and vary from person to person.

Here are some common myths people believe about personal finance:

You can save money later. Enjoy what you have now. 

You should always save money and time can help you increase your savings actually. You should learn to save small amounts of money now even if you don’t make that much or have debt. It can teach you to have good habits when it comes to money. The younger you start, the better it is too.

If I just pay the minimum, I’m fine!

If you have any kind of debt, don’t pay the minimum amount every month. Besides the principal amount, there will be interest and finance charges to think about. This adds up after a while and you may end up spending more than you bargained for.

Don’t marry someone with bad credit!

This only becomes a factor if they two of you apply for a loan jointly. It can make things complicated because lenders will default to the lower score when determining if your eligible for credit. However, it won’t affect you as an individual.

I don’t have a lot of money so I don’t need an estate plan.

Estate tax affects everyone, regardless if you are rich or not. However, you may want someone to take over your property and to take care of your children if you become sick or die.

It is much less risky to invest in bonds than in the stock market.

They both can be risky but in different ways. Bond prices are affected by rising interest rates mostly. However, the stock market also comes with risks as well. Stock market prices are determined by how well a company is doing or the market they are in.