Four Money Myths That Can Lead To Money Problems

Last week we talked about common financial problems in America, and this week we are continuing on the same track with some money myths.  Here are four money myths that can lead to money problems if taken too literally*.

Myth #1 – Two incomes are better than one.  It’s obviously the case that two incomes give you more money than one.  Counting on both of those incomes to pay your families bills often the case for most families, but make sure you don’t get caught in a situation if one of those incomes goes away unplanned.  You can avoid this by watching your monthly expenses to leave more room for savings.  Stacking that nest egg up will protect you from getting in real financial danger should your double income be suddenly cut in half.

Myth #2 – Owning is always better than renting.  While owning means your payments are building up your equity vs. your landlords in the case of a house, renting is not always a bad thing.  Everyone’s financial situation is unique and owning a home is not for everyone.  If you think you may not be in the same city in 3 years, buying would probably not be the best option for you at that time.  The key is to look at your own unique situation and really assess what your finances will allow to meet your long term goals. 

Myth #3 – A near-perfect credit score will get you the best loan rate.  Technically speaking, the higher the score the better, but there really is no “magic” number.  When determining a loan rate, many factors are taken into consideration in addition to your credit score.  Different loans and different lenders have different criteria and standards.  Having good credit is never a bad thing, though.

Myth #4 – You need to earn more to save more.  Earning more may increase your ability to stack more away for savings IF you are disciplined enough to do so.  Your ability to save is determined more on your discipline and responsibility with your budget than how much your paycheck is.  Make a budget, include savings in that, and then stick to it regardless of how much you earn each month.

Listen to Honor's Scott and 97.5 Y-Country's Wild Bill talk about money myths on Mason Jar Monday! 

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*Source - http://www.nasdaq.com/article/why-these-4-personal-finance-myths-perpetuate-money-problems-cm396086