We all like to think we do our best when it comes to our finances. We think we are saving money, but we've never done sat and did the calculations. You might be surprised if you did.
Here are the top five money saving myths that we fall for:
1 Savings accounts save us money
Having money in a savings account for emergencies is a good idea. It is easily accessible, but not too easy. But if you want to save money or make your money work for you, a savings account of age is not necessarily the best way forward. First, you have to watch what you are paying interest rates. For example, if you have a student loan at an interest rate of 5% and a savings of reducing the interest rate of 3%, your savings are costing you approximately 2%. You better pay that student loan with your savings account.
It goes the other way. If your debt has less of an interest rate on your savings, your money is working better in the savings. But with interest rates today are so low, your debt is probably higher than the amount of interest you earn on your savings account. This means you are losing money.
2 purchases sales save money
I used to be a shopaholic, and sales were my drug of choice. Let me tell you it is not always save money. Yes, if you really need the item, to save money. But sales often lead to the purchase of items that normally can not buy. And you usually buy twice as much as it is on sale. So you did not save money.
So if you never use the question you made money lost. This also applies to negotiate purchases and bulk purchases. No matter if you bought your daughter 35 pairs of shoes at garage sales for $ 1 each. If you were using two pairs of them, you just lost $ 33.
3 Refinancing your home is worth
When you refinance your home, you can not save money in the long run. Yes, your monthly payments are smaller, but have refinanced for another 30 years. This means that if you have already paid 10 years of mortgage, then refinance for another 30 years, basically, extended his loan for a 40-year mortgage. Sit down and do the math and see if it really saving anything.
If you really want to save money, refinance for a lower and shorter-term interest rates. Your monthly payment may not go down, but your overall repayment may.
Four zero percent interest to save money
When you take a card with a payback period of zero percent, you're not saving money. You're just delaying the payment for the items. Do not save, not spend more. But if you do not pay the money within a period of zero percent, you'll pay interest on these items. That costs money.
5 saving is income
No matter how much you earn, you can save money. You simply have to spend less than you earn. If you make more money and spend more money, stores nothing. In fact, you might even spend more. Do not wait until you have more money to start saving. You have to start now.
