The wrong financial information could jeopardize your financial future. If you are looking to achieve security, you need to have all the information you need on a few key topics to maximize the benefit to you. These are some of the top financial misconceptions you should stop believing in today.
Credit cards are dangerous to your financial health
Like any debt item, credit cards can be a great option when used as part of a planned financial decision. It is important to understand that credit cards attract a high interest than most other loans, and they would be better alternatives if they are available to you. Taking up a secured loan would attract a lower interest cost than a credit card loan would.
However, they can be an ideal option for a number of situations. For instance, a credit card could come in handy if you need an urgent injection of cash but cant access other types of financing due to a low score. Knowing when to use a credit card account to your benefit can be a great financial decision if planned out well.
A good salary will guarantee financial security
You should be wary of the oldest myth in the book. Having a good income now is by no means guarantee of a good income. Your income is not guaranteed, which means you could lose it at any time. You might be liable for some reimbursement if you have disability insurance. Even then, you will only receive coverage for any loss of your income for a certain period of time. Experts point to a rise in expenditures with an individual’s rise in incomes. If you have a good salary, chances are high that you’re spending it too!
Having some savings or financing investments with a surplus portion of your income will be a better financial decision than having a good salary. Even if you have to tighten your financial belt, saving up and growing your money will be key to achieving growth in the future.
Budgets never really work
Budgeting seems to be harder to put in practice than onto paper. Sticking to your budget can be challenging, and it may even require some sacrifice on your part. But it can be easy if you consider innovative ways to pull it off. For instance, if you are eating in more often, you could spend time with your family learning to make easy home meals for an enjoyable experience that will be easy to keep up with. Budgets work, but you need to approach them with the right attitude.
I am too small to get hacked
Identity theft is on the rise as more attackers target social media and other sources of information to get access to your accounts. The high number of personalized attacks suggest that you should be more vigilant than ever with data on the web. You can still overcome these malicious parties by maintaining a highly secure approach to sensitive financial information, such as avoiding sharing sensitive credit card information at all times.
Michael started with a master’s degree in finance before he went into technology and coding. He is now a freelance journalist and video producer living in Berlin, Germany. When he doesn’t write, he will travel many countries.