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Gossip spreads like wildfire, and the same is true for false financial facts. Everyone has an opinion or piece of advice about money, but you shouldn’t believe all of it. If you fell for any money myths, you aren’t alone. There was a time when many of us believed that goldfish have a three second memory, George Washington had wooden teeth, and bulls got angry at the color red. If you didn’t know already, all of the above are widespread myths.
We all want to be trusting and accepting, but we should all be a little suspicious when it comes to money. Lucky for us, we have the internet at our fingertips to bust any bad advice.
Fact checking is essential, so we’re breaking down the biggest money myths we’ve ever come across. We aren’t exactly sure how these myths start, but we do know that it’s time to shut them down. If you’re still adhering to the advice in these money myths, you can finally throw those bad habits away; it’s only up from here.
Here are the biggest financial misconceptions that you might still believe.
Checking Your Credit Score Hurts Your Credit
This one might be a painful realization. There was no need for you to avoid your FICO scorecard and cringe whenever you took a peek. You should always know your credit score, and that requires checking it. Your credit score is not impacted by how many times you check it.
Here’s what your credit score is dependent on: payment history, amounts owed, length of credit history, types of credit you use, and new credit you apply for. Notice how nothing is mentioned about checking your credit score?
Your credit is impacted by hard credit checks from those you’re borrowing from. Credit checks occur when you apply for new lines of credit. Somewhere down the line this got confused with checking your credit score, and the rest is history.
If you believed this myth for longer than you’d like to admit, go check your credit score!
Working Harder Is the Only Way to Earn More Money
It’s simple, Americans value hard work and dedication more than anything. Even though our culture values that cowboy-esc grit, it isn’t the best way to rise within our Capitalist system. Working harder isn’t the only way to get more money.
To make the most of your time and money you have to work smarter, not harder. I’m sure you’ve heard that cliché before, but it’s true.
So, how do you actually work smarter? It’s all about investing. Let’s knock out a bonus myth, investing is not just for rich people. Anyone can build wealth in the stock market, at pretty much any budget. Investing is the tool to help you build wealth without the backbreaking work.
If this myth has been the sole reason you’ve bitten off more work than you can chew, it’s time to reframe your financial perspective.
Credit Cards Should Be Avoided at All Costs
Whew, this one is a doozy. Even though the prospect of debt is dangerous to your finances, credit is necessary for almost everybody.
Credit is a necessary financial tool to be able to make significant financial moves in your adult life. Your credit is your reputation to those who will help you buy a house or a car. Your credit is your financial power.
Trying to make big money moves without credit is like running a marathon without shoes. Going without credit entirely can be painful and much more difficult. When you apply for a loan or a credit card, be diligent with your payments. In truth, it’s better to have no credit than bad credit. If you are able to pay on time and be smart with your credit, then you’re in the clear.
Go out there and build some credit so you can make take big financial steps in the future.
Investing Retirement Money in the Stock Market is Too Risky
It’s true, the stock market doesn’t come without risk. However, investing your retirement money could help you retire much earlier and live more comfortably. If you really want to retire, putting your cash in a savings account just isn’t going to cut it.
Things to Remember
- Factcheck money advice before you take it to heart
- Credit is a necessary tool, but always be diligent about payments
- Check your credit score, it won’t hurt
- Investing helps you work smarter, not harder