No sphere of life gets spared by myths attached to it. Be it marriage, be it work, be it kids or whatever, money is no exception in the list. You talk to your grandmother or even your uncle, everyone has their own share of beliefs about money and money habits but because everyone believes it, does not necessarily mean it is true.

Myths are superficial practices or beliefs which interfere with the actual course of practice and modify the modus-operandi of anything. How many times have you heard your mom asking you to kiss the coin whenever you drop it? Or some crazy advice from your grandfather regarding credits has made you laugh deep inside? All of us have gone through these things but here in this article, I mean to bust those myths about money which hinder the regular course of saving money and practising healthy money habits.

  1. Only rich save and invest

False!

Unless you are David and Victoria Beckham’s kid, how rich were you when you started saving in your piggy bank? Did you even know what does ‘Being Rich’ mean? Most of us would answer this as NO. Then how come you have started believing this now that only rich can save and invest.

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You have been taught to save ever since you were a small child. Saving has been apart of our bringing up which reflects in our daily practices as well, be it negotiating with the sabzi-wala or waiting for season end sale to come, we save in every possible manner and that saved money is ‘Invested’ in buying the smartphone we have long-waited for or the Europe-vacation.

Whatever the mode is, saving and investing is a habit which can be developed and cultivated at any point in life. Start today and within a few months, you will have your stash to back you up.

 

  1. A balance in credit card account improves credit score

False again!

There is absolutely no need to carry any back balance in your credit account. A good credit score builds up when you clear all your credit balances on time. Every month pay off all your credit balances in full. Look for other options which help build a good credit score.

It is advisable you utilize your credit 20% below of what is permitted to you, this shows you can handle your money responsibly. And do not forget to pay off your bills on time.

  1. Avoid credit cards in totality

This is not correct. Using a credit card shows that you know when and how to use your money. Rather, making purchases on your credit card improves your credit score a lot and also earns you reward points in the form of shopping points or travel miles, etc. depending upon which type of card you possess.

A good credit score helps you get a loan easily which is a win-win situation as you can make purchases on your credit card as and when required and by paying off bills on time you can avail a home loan or car loan or any other type of loan easily.

  1. It is ok to be in debt

No!

Debt is a big no unless it is the last option left. Moreover, debt is not as simple a term as it may seem. There are two types of debt- Good Debt and Bad Debt.

Good debt is the one which in the future can prove to be financially beneficial whereas bad debt is bad always like a personal loan taken for a vacation which will never yield any financial benefits. Please exercise utmost caution when you take a loan or debt as this may hamper your long-term financial goals if left unsettled. Also, do not spend overly on your house or car or education or for whatever purpose you have taken the debt, make the optimum use of resources and money. Just because a car loan is available easily, it is not necessary to buy the top model of that car.

Use the debt wisely as you only have to pay it back, with interest! Now, this needs to be understood. Debt and income have a die-hard rivalry. You will not even realize where did your money go when you start paying off your debt through your income because of the heavy rate of interest.

If you necessarily require a loan or debt, please do your homework and look for the one with minimum interest rate.

  1. Tracking money is enough, the budget is not required!

This is the last and the most disastrous. It is good to track your expenses and know where your money is going but that in no manner is a replacement of your budget.

Tracking money means you know your expenses and have a list at hand of where did you spend your money, having a budget is different. A budget is a plan of your income, expenses, savings, and investments.

You ought to know what are you saving by the end of the month and what plan do you have for those savings. a budget is a plan of where you are going to spend your money so that it grows and helps create wealth for you.

It helps you prioritize your money actions. There might be a long-pending credit balance or a credit card with the highest interest rate which needs to be cleared-off first and foremost. And as the saying goes “Failing to plan is planning to fail”, will stand true in no time if you do not swear by your budget.