Everyone has an opinion about money and how it should be spent. Never heard that you should avoid debt at all costs? Or that the property should be your ultimate financial goal?
Well, these are common beliefs, but they are not necessarily true for everyone.
Here we look at five myths of all too common money.
1) Everyone should aspire to own a home
accession to the property is sometimes considered synonymous with the American dream. Many people swear by the tax benefits too. Yet it is not for everyone.
If you are planning for the coming years or if you do not have the money to cover a payment and emergency down for repairs, then homeownership might not you, at least not now.
After the housing crisis, it several years ago, many Americans began to rethink their priorities and chose to rent or bought a smaller house, more affordable on a McMansion.
2) All debt is bad debt
Not all debt is created equal.
student loans and mortgages are technically debt, but they can increase your earning or net worth over time. These forms of debt often carry a lower interest rate than credit card debt and unsecured loans.
In addition, you may be able to deduct the interest on your taxes.
However, debt is debt and it must be paid thereafter. Students and mortgage loans must be reasonable in relation to your income and other expenses.
3) Abandon slats will solve your
money problemsexperts in personal finance like to attack daily latte habit of people, which is really a symbol for all those little purchases we do on a daily basis without question.
Of course, if you spend $ 150 a month on coffee ($ 5 x 30 days), then you could save. little money by reducing or making your coffee at home
But even brewing your own coffee always involves costs, and there are often bigger picture decisions that could save you yet more money -. and will require less
Perhaps instead of jumping Starbucks, you can cancel this subscription gym or cable TV that you rarely use. Or you could get a roommate and downsize your housing costs.
Lattes are probably not your biggest expense.
4) credit score impacts your own joint
Marrying someone with a high score or poor credit does not automatically raise or lower your own. Regardless of marital status, everyone maintains its own credit report and score.
Now, if you and your spouse apply for a car loan or a mortgage together, then the score of the other person does not affect your potential interest rates. And if you become an authorized user on your spouse's credit card, it could help boost your score.
On the other hand, missed a payment on a co-signed loan could lower your credit score.
But just say "I do" does not affect directly your creditworthiness.
5) the bankruptcy will fix all your money woes
Unfortunately, bankruptcy is not a cure and typically does not clear the debt such as student loans or child support . There are different types of bankruptcy filings:
- Chapter 7 discharge of debts, while Chapter 13 cut or restructure debts
- Chapter 11 is generally used by companies to reorganize debts. In chapter 7, you may lose the property as a home or a car. In Chapter 13, you might get to stay in your home, but keep making payments and live very modestly in the coming years.
Anyway, the deposit itself can cost you a thousand dollars or more and it could be several years before you qualify for an unsecured credit card or a mortgage.
Your turn ...
Have you heard of any of these myths money? What would you add to this list
Credit: amber10_79 via photopin cc
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