5 finance myths you should stop believing right away
What's the story
Finance is one of the most myth-ridden topics of all. More often than not, these misconceptions lead people astray, in their financial decisions.
These myths often come from outdated beliefs or misconceptions about money.
By debunking these myths, you can make informed choices and improve your financial health.
Here are five common finance myths you should stop believing now.
Credit misunderstanding
Credit cards are always bad
Many people think credit cards are evil and they lead to debt. But used responsibly, credit cards can be useful.
They provide convenience, help you build credit history, and also offer rewards or cash back on purchases.
The trick is to pay off the whole balance every month to avoid interest charges.
Renting reality
Renting is throwing money away
The idea that renting is a waste of money as compared to buying a home is common but not always true.
Renting provides you more flexibility and fewer responsibilities than owning a home, such as maintenance costs and property taxes.
Depending on your lifestyle and finances, renting could be the smarter option.
Investment entry point
You need a lot of money to invest
One of the most common misconceptions people have is that investing needs a lot of money.
However, the truth is that most investment platforms let you start with small amounts.
With mutual funds or exchange-traded funds (ETFs), for instance, you can start investing with as little as ₹250, which makes it accessible for almost everyone.
Planning accessibility
Financial planning is only for rich people
Some think financial planning is only for the rich, but that's a myth. It's essential for everyone, regardless of income level.
Financial planning helps you set clear goals, manage expenses effectively, and prepare for future needs like retirement, emergencies, or major life events.
Without a plan, it's easy to overspend, fall into debt, or struggle with unexpected expenses.
Even simple budgeting is a form of financial planning. The sooner you start, the better your financial future will be.
Debt differentiation
All debt is bad debt
Not all debt has to be looked at through the eyes of negativity, there are differences between good debt and bad debt.
Good debt is taking loans for investments, like education or property which might appreciate with time.
Knowing this difference keeps your finances in check without fearing all kinds of borrowing.