Thanks for voting!You know that friend who eats 5 lbs. of carrots each day to improve his eyesight? Or the great Aunt who freaked out when the mirror broke because of the 7 years of bad luck thing? Ok, they may be a little, uh, eccentric, but you’d be surprised how many seemingly normal people let half-baked truths rule their everyday habits.
The same holds true for money. How many times have you heard “out there” advice about how to spend, save or invest your money? Have you had a hard time distinguishing myth from fact? Michael Rubin’s list of common financial myths may help you sort things out.
One truth we do know, personal finance is different for everyone. That’s why they call it personal. And remember, just because it’s been repeated time and again doesn’t make it fact. Know what you need at different points in your life and make your decisions based on those needs. Weed out the myths and get to the truth. And if it sounds too good to be true, it usually is.
What are some financial truths you live by?
Tags: Myths, Personal Finance, Truth
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“Slow and steady wins the race” is one of the financial truths that I put a good deal of faith in.
Schemes that proport to make enormous profits rarely seem to work out, while slow-and-steady savings works wonders over a long period of time. For instance, in investing, I think brilliant stock picking probably doesn’t matter nearly as much as habit of investing a small amount every month. In 10 to 15 years, the regular saver will have more put away than the person who is constantly bugging their friends for the latest hot stock tip.
Auto save, auto save, auto save. It doesn’t matter how much you designate for putting away every month, it adds up very quickly — far more quickly than you’d think!
Pay yourself first.
Never leave free money on the table (e.g. contribute to your 401k to get the full company match).
Think about any large purchase for a week (reduces impulse buying).
The point about staying emotionally connected to your money is a big one for me. We do pay off our credit card every month but man, paying for my hair cut and color in cash last week had me thinking twice. I’m not saying that I’ll give up coloring my hair but it was a good wake up call.
write down all the money you spend for 30 days, and evaluate where your money goes, it worked for me.
Writing down your credit card charges in the check register and subtracting it from the total ( as if you’ve paid your credit card bill). This helped me see how much I really was spending on the credit card. It’s like Jenny said paying with cash it really opens up your eyes and makes you think. Of course if you do this when you pay your credit bill don’t subtract it out since you already subtracted everything out individually. It’s really helping me! I also agree with the auto save plan. Just started it and love it.
Like Chris, I di d this for 30 days and was surprised how often I use my debit card for nonsense. It’s a good idea to do this. I stopped doing this and my debit usage went out the roof and now I am back to writing everything down to keep my money with me.
Slow and steady wins the race if you are a constant saver. Saving has been pushed to the “optional” table in this country. Right now, people are finding their way back, but if you are a saver you need a real plan. That includes constant and automatic savings, tricks to save more and what we call “building an asset train.” You can join our free Facebook personal finance group. Just search for “Live The Lifestyle Your Family Deserves.” We can save more - together.
Loyd Ford
http://www.middleclassmoney.com
“You get what you pay for”. What a crock. Don’t for one moment think that something has to be expensive to be worthwild, or that something inexpensive is junk. Do your homework and check an item for quality and correctness.
I’ve known retailers to raise the price of something that was not selling. “If it’s too cheap some folks don’t want to be bothered with it”.
Squido