Personal Finance Myths Holding You Back

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MONEY
5 Personal Finance Myths that are Holding You Back Financially 💸

There’s a lot of bad personal finance advice out there. It can be hard to cut through the noise, and I often see rhetoric that perpetuates money myths standing in the way of your success.

Today I am unpacking a few common personal finance myths may be holding you back.

Let’s get right into it!

1️⃣ You’re screwed if you haven’t started investing yet.

The best time to start investing was yesterday. The second best time to start is today.

No matter how hold you are, investing in the stock market is how you grow wealth. Whether you are starting with $5 or $500, the goal is get your money moving as soon as possible.

You have so much time. Don’t let the fear of being “too late” hold you back from getting started. I share a bit more about my investing strategy in this video.

2️⃣ You need a financial advisor.

Never heard anything further from the truth. A financial advisor (a good one) can be an excellent addition to your financial toolkit, especially if you come into some money unexpectedly.

But most of us don’t need one. There are so many resources that are readily available online - I recommend you start with the investor education section on the Vanguard website (it’s fantastic).

No one cares about your money more than you do. Learn how to do it yourself before you ever consider adding someone into the picture!

(Real talk: A few years ago I paid $2,500 for a financial plan from an advisor and they did not provide any additional insight that I couldn’t get/wasn’t already doing on my own).

3️⃣ Credit cards are bad.

Credit cards can be bad, but only when used incorrectly. When they are used responsibly, they can actually add a lot of value to your financial picture.

I use my credit cards to earn travel rewards and pay for my flights and hotels. Even if I can’t completely cover a trip, applying points from money I’ve already spent helps reduce the costs significantly.

Right now, I primarily use my Chase Sapphire Preferred card. I am also planning to open a cash back card in June!

Just remember to never put more on your card than you can pay off in full, and don’t carry a balance.

4️⃣ Renting is throwing money away.

Ughhhhhhhh. I hate this one so much. Buying a house should not be the end-all-be-all of financial success. It can actually financially ruin you if you purchase before you are truly ready.

There are so many hidden costs of homeownership - many of which are continuing to rise in our current economy. Don’t be afraid of continuing to rent. You have your whole life to buy a house. Be ready and run the numbers!

5️⃣ Making a payment = you can afford it.

Being able to make a payment on a car, a house, or an apartment does not necessarily mean you can AFFORD it. If that payment means you can’t do other things (like enjoy your life) then you can’t afford it.

You need to put the payment into the context of your budget (which is why I recommend using a tool like the PFD). Don’t allow lifestyle inflation to destroy your finances!

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