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Money Myths That Can Cost You Dearly

We’re all doing our best to drive down the cost of living and make our money work harder for us. In an uncertain economic climate, it can seem like no matter how hard we work or how much overtime we put in we never have enough to go round. The good news is that there’s a lot of advice out there which can help you right the ship that is your household finances, both from online sources and from friends and family. The bad news is that for every piece of knowledgeable and insightful information, there’s half a dozen myths based either on economic principles that just don’t hold water in this day and age or simple wrong-headedness. Here we’ll look at some money myths which will not only hinder the growth of your capital… they can actually wind up costing you dearly…

Money Myths That Can Cost You Dearly - female with twenty pound notes
Image by Public Domain Pictures via Pexels

Service providers will reward your loyalty

A healthy household budget is the key driver of your financial health. And that means accounting for all the household’s costs and doing what you can to keep them manageable. However, when it comes to services like your car insurance, home insurance, utilities, phone and broadband, don’t make the mistake of assuming that service providers will reward your loyalty. In fact, they’re likely to reserve the best deals for new customers and charge you inflated prices for rolling over. 

Why? Because acquiring new customers costs them more, and they’re counting on you to do nothing. Don’t reward their greed!

Bad credit = bad options

The old maxim “neither a lender nor a borrower be” is hard to live by in the 2020s. And while there are occasions when borrowing credit is unavoidable, it can quickly become a slippery slope. If you find yourself needing to borrow more than you can realistically pay off, you may find yourself with a less than stellar credit score

Still, don’t make the mistake of assuming that having bad credit only means you have bad options. Whether you’re looking for car credit or payday loans, it pays to do your homework and compare the offerings of different providers. Don’t assume that bad credit means you only have bad options.  

Investment is better than saving

Saving is the most risk-free way to build your wealth… but it’s also undoubtedly the slowest. Especially if you’ve had the same savings account from your high street bank since you were a kid. Those lured in by the promise of fast and sizable returns can certainly see appeal in the world of investment. But with the potential for great gains comes risk. And unless you know exactly what you’re doing, the value of your investments can plummet overnight. It may be better to move to a better savings account with a healthier rate of interest than ditch savings altogether for investments.

Renting is dead money

Finally, it’s time to put the economic fallacy to bed that rending is dead money. Firstly, a roof over your head is always worth paying for. Secondly, with property ownership comes a level of responsibility that not all households are ready for. Carrying out household repairs and maintenance can create a huge burden on your household’s finances. At least when you’re renting, all that stuff is your landlord’s responsibility.

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