When it comes to financial advice, almost everyone has an opinion and not all of them are good. Here you’ll find some common financial myths that you’re better off ignoring. You’ll discover why these pieces of financial advice aren’t the best to follow, as well as what to do instead.
Always Use Cash Over Credit Cards
Though it’s definitely a good idea to pay off your credit cards as soon as possible, there are advantages to having them. Credit cards can help you establish a good credit score if used responsibly. The trick is to use them for purchases you can cover rather than as a replacement for money you don’t have.
Save As Much Money As You Can Manage
While it’s always great to have a nest egg, it’s a shame to allow all your money to sit in a savings account for years collecting less than 1% interest. Instead, try to make sure that your savings account can cover about 6 months of living expenses. Then consider investing any extra money in order to yeld higher returns.
Go To College Even If It Means Going Broke
Degrees can be great, but keep in mind that student loans are more or less impossible to escape. Before making the plunge, make sure they are worth decades of paying off. Knowing what you want to do will also help you consider whether a trade school is a cheaper option that makes sense.
Invest In Gold and Bitcoin
Despite all the recent hype around gold and bitcoins, they are both actually incredibly volatile. Though you may want to test the waters by investing in either, throwing in your entire retirement fund is not the best idea. Instead, try to maintain diversified investments that include various stocks, bonds, and savings.
Buying Is Better Than Renting
Home ownership can be a great investment but only when you’re ready. Just keep in mind that it won’t always be cheaper than renting, as you’ll be stuck with mortgage, interest, property tax, and repairs. It’s also not the best idea if you want to keep relocation open as an option for better jobs.