Money on its own is neither good nor bad. Your beliefs and attitude about money are what make it such a powerful force in your life – and with good reason too. Money determines where you live, what car you drive and the number of lattés you can drink in a day.
For many of us, figuring out our finances is one of the most stressful things to do – no matter how much money we make. But do you know what’s even more stressful? Falling into the trap of believing the money myths born from our struggle of trying to manage our finances.
Whether you’re slightly concerned with your financial situation, up to your eyeballs or are anywhere in between, the problem might be what you believe about money and its role in your life. In an effort to help you with your financial well-being, we’ve collated a few money myths you need to replace ASAP:
- Earning more will make me rich
- Inflation does not affect me
- Money won’t buy me happiness
- Having more money means having fewer worries
- Working hard will pay off financially
- Financial planning should be left to the experts
- More money indicates success
If you nodded yes to even one of these, believe that they are just myths. You need to take control of your finances so that you can work towards a comfortable retirement, regardless of your earning potential.
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Consider the following tips for turning around the way you view and work with your money:
1. Create short, medium and long-term financial goals: make sure they are achievable so that you stick to your financial plan.
2. Consider speaking to a financial advisor: ensure that you go in prepared with all the right questions.
3. Budget and spend according to a financial plan. Organise your budget into:
- Fixed expenses
- Variable expenses
- Discretionary expenses
More importantly, remember that not all debt is made equal. Good debt, i.e. mortgages, student loans and business loans, is an investment and provides a positive return in the long run. On the other hand, bad debt, i.e. car loans, credit cards and consumer loans, is a liability used to pay off things that will not create value for you in the long term. Know the difference and ensure that you prioritise your financial needs accordingly.