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Money saving myths

Money saving myths

You will come across many money savings tips, and while some may be worth your attention, some are just myths or do not always work for everyone,  they may neither help you in achieving financial goals nor help you save. Here are three such money savings myths:

Paying the mortgage quickly

You may have heard people say that one way you can save money if you have a mortgage is through quick payment. This is far not always true, especially if you do not have any money left after making these payments. It may be pretty impressive if you can achieve fast payments, but the price you will pay for this can lead you into more debt.

If you pay the mortgage quickly, it often means you’re parting with a huge amount as a monthly installment, this means you will be leaving gaps which can prevent you from saving, investing or even paying for other important expenses. It can also be creating a financial break which needs to be bridged through credit cards or loans. You will be paying off your mortgage but you may be putting yourself into more debt, some of which may be more expensive given the repayment period.

Cash is always better than credit

There is a misconception that cash is always better than credit. Those who present this argument, claim that when you are dealing with cash, you are more likely to monitor your spending well. They argue that dealing with cash will only allow you to use what you have and that you cannot end up spending more than you have.

While this may be true to some extent, one also has to consider the risk of carrying cash. There are higher chances of losing it and loosing track of small change, but when you misplace your debit card, no one can use it unless they have access to your passwords. Also dealing with credit cards does not mean you will always overspend. When you use it well, you can manage your spending, and sometimes even better than when paying cash.

Buying cheaply will help you save money

Those who said that cheap is expensive were not contradicting themselves, rather they were on point. When your focus is only on the price, you will buy things cheaply or at lower prices but within a short time you will be back in the market to buy another product. You will end up spending more than you would have if you bought a product or a service which is somewhat higher in price but that meets quality standards.

Let’s avoid some of the common myths which are out there about saving and we will be on the path to financial freedom.

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Disclaimer: The above information is general in nature and not intended to be advice. You should consider seeking professional advice before following any suggestions in this blog/website.