In here we share with you 10 Money Lies You Might Be Telling Yourself.
A lot of the things we hear and say to ourselves about money come from a good place, but they can actually steer us in the wrong direction.
Some of it’s rooted in misconceptions or outdated practices and some of it is even misplaced confidence in our own financial habits.
It’s time to make some changes. These are some of the biggest lies we keep hearing about money, but the truth will set you free of them.
Table of Contents
- Lie No. 1: I’ll Be Earning More in the Future
- Lie No. 2: I Need a Lot of Extra Money to Start Investing
- Lie No. 3: ‘My bank account’s the best place to keep my money.’
- Lie No. 4: All debt is bad and should be avoided
- Lie No. 5: I Have to Buy It; It’s on Sale
- Lie No. 6: I Have Enough Money. I Don’t Need to Budget
- Lie No. 7: I’ll Start Saving Later
- Lie No. 8: Only rich people can build wealth
- Lie No. 9: It’s OK to keep secrets from your partner
- Lie No. 10: If I ignore those debt collectors, they’ll go away
Lie No. 1: I’ll Be Earning More in the Future
When planning our future, we often do a good job of predicting expenses, but operate under the faulty assumption that our incomes will increase.
I know people who have purchased larger homes than they can truly afford, justifying the expense by arguing that they’ll be getting pay raises down the road.
We all want to assume we’ll be earning more as time goes on, but there are no guarantees. Your company may freeze wages, or even lay off workers.
You may decide to stop working to raise your family. To achieve financial freedom, work to ensure your spending is less than your actual current income. This way, any pay increases you receive are like bonuses.
Lie No. 2: I Need a Lot of Extra Money to Start Investing
You’ve been warned it’s a gamble. Stocks are expensive. And it takes forever for the average person to make money investing.
There’s some truth there, but again, it’s been distorted.
While coveted stocks like Apple and Netflix will run you hundreds of dollars per share, you can buy fractions of those shares and still get in on the action.
You probably won’t get rich quick by investing, but it’s a reliable way to grow your money much faster than a regular savings account. Because despite the down months and years, the markets keep growing over the long-term.
Investing doesn’t require you throwing thousands of dollars at full shares of stocks. In fact, you can get started with as little as $1.*
And you can invest your money in crypto if you want with binance. it ‘s great place to invest money as a beginner.
Lie No. 3: ‘My bank account’s the best place to keep my money.’
Many people associate saving with, well, a savings account. But while it’s good to have an emergency fund that can cover your living expenses for several months, many people keep “far too much” of their savings in a low-interest savings account.
Understand that “cash is not an investment,”and “Its value always decreases over time because of inflation.”
It’s important to understand that while stocks go up and down in the short run, they’ve historically risen in value over the long term, whereas the value of cash goes down because of inflation.
Rather than placing all your savings in a low-interest account, putting some into basic investing vehicles like low-fee funds or ETFs can help you build wealth.
Lie No. 4: All debt is bad and should be avoided
Some people believe debt is bad, full stop. But this may be one of the money lies you should stop telling yourself.
Talbot Stevens, author of “The Smart Debt Coach,” explains that when used wisely, debt can be a helpful financial tool. “Governments, businesses and most wealthy individuals use debt to grow their economies and wealth,” he says.
Taking on debt through a personal loan, for example, could be a good way to pay for a large purchase (think wedding or car repairs) and student loans are an opportunity to invest in your or a child’s education.
Lie No. 5: I Have to Buy It; It’s on Sale
There are several ways to look at sales. They can be opportunities to save money, or even make money. By all means, we should shop the sales when we are looking for a specific item.
However, buying something when it’s on sale just because it is on sale is a terrible way to waste money.
If we buy something, for instance a blender, for $60 because it is reduced by $20, we think we’ve saved money. But if we didn’t really need a new blender (remember the need vs. want argument) we haven’t saved $20 at all…we’ve spent $60.
It can get even worse when we buy lots of sale items simply because we like the feeling we get of saving money. We cannot fall into that trap. Unless we really need something, or can see a way to buy and sell at a profit, we should all avoid those sales like the plague.
Lie No. 6: I Have Enough Money. I Don’t Need to Budget
It’s like the difference between grocery shopping with and without a list. You can grab everything you need. But what are the chances you’ll overspend or forget something you really need?
Budgets help you spend and save efficiently, so you don’t overspend or forget to leave yourself enough money to pay for something you really need to.
Lie No. 7: I’ll Start Saving Later
Retirement always seems like such a long way off. We tell ourselves that we have plenty of time, and many years ahead before we need to start putting money away. But before we know it, retirement age is on our doorstep and we’ve hardly saved at all.
And because we waited, we missed out on the power of compounding returns. It’s easy to come up with reasons not to save money, but very few of them are valid.
Consider your retirement fund to be the first bill you need to pay each month. You won’t miss the money now, but you’ll be happy to have it down the road when you stop working.
Lie No. 8: Only rich people can build wealth
Sometimes it may seem like it will take decades to build substantial saving, so it can feel daunting. But it’s important to remember that “saving is not really about getting rich,” Fulton says.
“Saving is working toward the goal of having financial security throughout your lifetime.”
Thanks to the power of compounding, your savings can grow faster than you might think. Even if you start small, you can build substantial savings by setting aside money consistently. “Remember: The vast majority of rich people are first-generation rich people who started with very little.
Lie No. 9: It’s OK to keep secrets from your partner
Partners could fall into the habit of being less than upfront about their money habits for a host of reasons, including guilt, fear or personal attitudes about money.
Yet hiding how you manage your money could affect trust and intimacy in a relationship, as well as a couple’s ability to meet joint financial objectives.
Have open communication to determine how finances will be managed—both guidelines for joint and individual accounts—and consider planning a regular date night to discuss financial matters and make plans to fix any problems that pop up.
Lie No. 10: If I ignore those debt collectors, they’ll go away
Maybe some people have convinced themselves that “out of sight, out of mind” applies to debt collectors. Or perhaps they’ve decided that a life spent avoiding collection calls is a desirable way to live.
Face the facts: “Debt collectors will not go away,” says Fulton. “If you are in this situation, don’t panic and be proactive.” Start by learning your rights, which include disputing the debt if appropriate.
Don’t be afraid to negotiate, Fulton adds; in many cases, you can work with the debtor to arrange a payment plan or erase some of the debt if you promise to pay it off by a certain date.
Whatever your financial situation, there are money lies you should stop telling yourself because they could hold you back from financial success, happiness and peace of mind. Set goals and target financial priorities. They’ll keep you honest with your money and yourself.
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