Personal finance is one of the most fundamental topics and aspects of our individual lives. Much has been said regarding how to practice good personal finance practices. Unfortunately, some of the information available out there is rooted in misconception. Here is an overview of some of the commonly perpetuated myths about personal finance.
“To make an investment, you need to be rich”
This misconception is based on the fact that most investments today are capital-intensive. One does not, however, have to be rich to successfully establish a business, as there are numerous options to source for startup capital. In addition, one can start a successful business with minimal savings and gradually advance the investment portfolio.
“Credit cards are bad for your financial discipline”
This personal finance misconception is rooted in the statistics that most credit card owners tend to lack financial discipline when it comes to spending. On the contrary, as long as you have good spending habits and practices, you can use credit cards without incurring debt. Keeping track of your finances in a spending book and setting forth rules for monthly expenses are two simple ways to establish this all-important financial discipline.
“It is too late to set financial goals”
Most people think that making financial goals is an activity solely for young individuals in their 30s. In actuality, financial goals can be set by anyone who endeavors to observe proper goal-oriented financial habits, regardless of their age. Even retired individuals should set good financial goals to take control of their expenses and income. Your goals will likely fluctuate as your life situation changes, so be sure to take stock of these goals every few years at the very least.
“My investment partner can take care of my finances”
This is one of the common personal finance myths associated with individuals holding joint investments or family businesses. While letting an individual handle financial planning streamlines the process, it is important to consider regular communication and using a hands-on approach to stay updated on your assets. Don’t let yourself ignore your finances—stay up-to-date on what’s happening with your money!