Money Myths

The most common of the money myths are probably “money doesn’t grow on trees” and “See a penny, pick it up, all day long you’ll have good luck”. Fortunately, these myths are harmless; however, there are myths that could just burn a whole in your pocket.

“I’m too young for a Pension”
“The Early Bird Gets the Worm” is definitely true when it comes to saving money. Experts have told us that a person that starts a retirement account at age 25 and then retires at 65, compared to a person that starts a retirement account at age 35 will take home almost half of the amount that the 25 year old would take home. It is never too early to start saving!

“If I buy something on sale – then I am saving money.”
You may have bought a television or computer at a great price….but did you really need to buy it? Could these monies have been spent elsewhere? When you are shopping look beyond the sticker price, because if you do not need the item then in fact you are not saving money, you are spending money that could have gone elsewhere – like your savings account.

“I’m too young for Life Insurance”
You are never too young for life insurance. Have you ever heard the saying “Only the Good Die Young?” You may be young, but you are not immortal. Buying insurance at a young age is good for a lot of reasons, the most important is that the premiums are much lower for a 25 year old than they are for a 35 year old, and so on. Also, for some policies you do not have to take an medical exam.

“I don’t need a Will if I am leaving everything to my wife/husband.”
Dying without a will is called intestate. Every state is different in the way that they handle intestate. Most states grant one-third to one-half of your estate to your spouse, with the rest divided among your children or, if you do not have children, to other living relatives such as your parents or siblings.

“If I had or made more money, it would be easy to save money.”
Simply making more money does not make it easier to save money. In fact it makes it a lot harder. In most cases you increase your spending and not your savings when you receive a raise in pay or you receive an inheritance. It is always better to start saving and have a plan already in place beforehand.

“It will all work out somehow.”
You are correct, it will work out – there will always be a tomorrow. Unfortunately, all too often we see people having no other choice or option but to go back to work because they can’t afford to live on just their pension. Do you want to be working at age 65, or even 75? If you don’t think about your future today – you will fail to plan, and ultimately you will plan to fail.

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