No matter how much money we have, we could all probably learn something about making better financial decisions; however, there are a number of myths that can catch people out and cause you to make the wrong choices. Here we look at five of the worst and explain why you should not believe them.
You don’t have enough to save
You may think that there is not enough money left at the end of the month to save; however, in the majority of cases, this is not true. According to a Money Advice Service survey, 40% of UK adults do not have a minimum of £500 in savings. Having a well thought-out monthly budget not only helps you to spend more wisely and save but can also be useful for paying off debts through an IVA.
Saving money will earn you more
Saving money is a useful way to build up assets, but it is important to think about how you use these funds. Simply putting them in a standard savings account won’t amount to much, as interest rates are so low; instead, look for a strong investment if you want your money to grow.
Use a set formula for investing
An old adage is that you should invest in the stock market based on your age; however, there is no set formula that works for everyone’s financial circumstances. You should factor in your desire for risk, personal health and goals for retirement when deciding how much to invest.
Many people are under the impression that it is best to pay for goods in cash whenever possible. In some situations, cash can be helpful and give you a discount; however, it can also result in you having less control over your finances, resulting in you having to ask yourself is an IVA for me? A credit card helps you to see exactly where your money is going and often rewards you for spending.
Only the rich can use the stock market
The stock market can be a scary proposition and it is often seen as the playground of the rich, but this is simply not the case. Information on companies can easily be gathered over the internet, commission rates are much lower and minimum deposits are not as high, opening up the market to first-time and smaller investors.