If you don’t want to find yourself in any financial bondage, you need to not believe these five money myths.
Over time, we have been encouraged to believe some myths about money, thinking those beliefs will set us free from financial bondage.
Some of these beliefs are passed down to us and till today you’ll still see people around you promoting these myths when they are trying hard to give you financial advice.
Unfortunately, some of these myths have no basis in reality and it’s high time we stopped believing them.
So when you hear people saying these five things about money, you should beware their belief about money could keep you in financial bondage.
1. Debt is a tool to build wealth
A lot of people believe that if you use debt responsibly, it will help you build a solid financial life as you can get a loan to build a home, get a car and meet other financial goals. So, the belief here is that debt allows you to do things you couldn’t otherwise.
Reality: The truth is, debt is a drain on your financial life as it makes you pay more for anything you buy. Debt wastes your money because the extra money you pay on everything you buy could be spent on some other things.
2. Budgeting doesn’t work- I have tried it
You’ll probably have heard people saying they have tried to create a budget and follow it but it didn’t just work for them. They might even tell you how they tried hard to use a budgeting app to track their expenses to no avail. And because of their experience with it, they believe budgeting is a scam.
Reality: You need not believe this before you discard it because the only explanation for this is that they probably didn’t spend according to their budget.
A budget is a detailed plan of your expenses and if your spending is not guided by it, you’ll most likely spend more than you earn at the end of the day.
3. Not everybody can get out of debt
Many people also believe that everybody borrows money to achieve some financial goals and till rapture happens, people will continue to be in debt and not everybody can get out of it.
Reality: Forget this fallacy. Everybody is worthy of achieving debt freedom regardless of how much you make. You can settle your debt if you financially disciplined and embrace a new money habit that allows you save more and spend less.
4. Investing in stock market is too risky
Investing in stock exchange is some people’s greatest fear because it is easy to lose your money once crash happens. So, people who nurse this fear believe that it is better to stay away from the stock market and stick to low-risk investment.
Reality: Every business comes with its own risk. There is no such thing as a no-risk investment.
5. You need a credit card for emergencies
Using your credit card for emergency and other spendings it is not meant to serve can keep you in debt for life if care is not taken.
Some people believe using your credit card for emergency represents financial security, but this could be a huge mistake.
Reality: Instead of this, a fully funded cash emergency fund guarantees more financial security as this won’t keep you in debt.
Source: News Agencies
