Money misconceptions Money misconceptions

Become an expert: money misconceptions and bad habits you should avoid!

We all have to make financial decisions every day and we always try to do what’s best. But if you base your decisions on one of these misconceptions, your results might not be as good as you would expect.

We go through life learning valuable lessons and learning how to build healthy habits to deal with money. And as we grow older, we have more tools and means to make better decisions. However, there are some misconceptions around money that are usually more fiction than not.

1-    The richer, the happier

If you didn’t know it by now, it’s about time you do: being happy is related to liking yourself, which turns out to be completely unrelated to money.
Wealth can buy recognition, but respect (and self-respect) are not for sale. Instead of obsessing with money, think about what really makes you happy and make only enough money to take part in those activities.

2-    A bigger income will keep you out of debt

This is just not true. It doesn’t matter if you make $50,000 or $500,000 a year. If you don’t plan your finances and you don’t build an emergency fund, you will be on the verge of an economic disaster should something unexpected happen.

Your living expenses (and your debt) usually rise with income, so the answer isn’t making more money. It is simply not borrowing money.

3-    Millionaires look like millionaires because of the car they drive or the clothes they wear

The answer is no. Actually, quite on the contrary. Self-made millionaires tend to live a frugal life. Actually, there is a book called “The Millionaire Next Door”, that shows that the average American millionaire drives an unexciting American car, lives in the same house they’ve owned for years, and dress just like you and me. And, actually, that is how they became millionaires in the first place.

4-    Life is funnier if you have more money

Not necessarily. While money can provide you with a lot of elements that will furnish your life, the reality is that if you need money to have fun, you are boring. That’s a fact. 

5-    Money equals security

This is true in a way, but there is not enough money in the world to have absolutely everything under control. So the premise is relative. Having money will allow you to have more or less control over some aspects of your life, but then again: the difference between control and chaos is just an emergency fund. And that is something you should save for, no matter how fat your paycheck is.

10 habits you should eliminate if you want to save money

You fail every time you set up a new plan to save money? Here are 10 simple things you can try to eliminate from your everyday life and start saving money.

Although saving money can be a bit frustrating, there are some simple habits you can start to change in order to achieve your goal.

These tips may seem a bit obvious, but ask yourself how many times you've tried to apply more complicated methods and just couldn't. These are simple steps, all you need is a little discipline.

So, take a look at the habits you need to change and really start saving money for once and for all!

10 things you don't need

It's time to save money, and that means you need to eliminate the following habits:

1.    Give up bottled water. Give tapped water a chance!
2.    Stop buying unnecessary paper products. Collaborate with the planet and your wallet.
3.    Buy less food. If you take a look at your supermarket cart you will probably notice that many products can be left on their shelves!
4.    Get rid of your phone home! You already have to face your cell phone expenses, why add your phone home to your bills?
5.    Cancel your gym membership. You probably aren't using it at all, so why do you keep paying it?
6.    Eliminate fast food from your diet. It's not healthy and it's also expensive!
7.    Drop your cable subscription. You are probably checking the news from your smartphone, so there's no need for paying cable.
8.    Stop shopping for unnecessary clothing items. Before you go into a store think if you really need to buy it and also remember you are trying to save money!
9.    Need jewelry? Then buy it at pawn shops! You can save plenty of money if you avoid jewelry shops.
10.    Get rid of unnecessary vitamins or supplements. Go to the doctor and check if you really need to keep on taking them. Otherwise, save money by getting rid of them!

Simple ways to save money

Saving money is a common struggle for almost anyone and sometimes it can be difficult to get around to it. The easiest way to start is to get to know your financial habits and the way you use and distribute your money.

Spending money on things you like is surely a very exciting thing, but saving money is important. Why? Because unless you are extremely wealthy, you will need to plan your finances throughout your life. Whether it is rent, a student’s loan, or a mortgage, you will have to face big expenses coming out of the same paycheck.

So your safest bet is to plan accordingly and create the budget that best meets your needs. 

Here are some great tips that will help you save money:

1-    Create a budget

As previously mentioned, budgeting is the best tool for you to keep track of your finances. It will allow you to acknowledge all of your spendings and adjust as necessary. It is like taking a photograph of your monthly income vs. expenses ratio. Visualizing it will make it a lot easier to understand how you spend your money and to detect any room for improvement. 

2-    Build an emergency fund

It is usually recommended to set aside at least 6 months’ worth of living expenses just in case an emergency occurred. This way, you avoid going into debt in case something should happen.

3-    Use the 30-day rule

Whenever you want to make a large purchase, apply this rule: take note of the item you want and how much it costs. If after 30 days you still think about having the item, then go ahead and purchase it.

4-    Lower your utility bills

Be as conservative as you can with your utilities. For example, simple things like unplugging any appliances you are not currently using or turning the tap off while you are brushing your teeth will lower your bill.

5-    Use coupons

You can find coupons in apps like SnipSnap that will help you find deals and save money in your purchases.

6-    Plan your groceries

Create a meal plan and buy accordingly. This way, you know exactly which items you need to buy and you will save a lot of money and time. It also helps not to go to the store when you are hungry because you are more likely to spend money on things you wouldn’t really it otherwise.

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