Whatever your financial situation, there are money lies you should stop telling yourself because they could hold you back from financial success, happiness and peace of mind. If any of the mindsets below sounds familiar, you may want to rethink the way you approach your finances.
I wouldn’t have money issues if I earnt more.
Most of us have a tendency to increase our spending in line with a pay rise. It’s not about how much you earn but what you do with your money that shapes your financial wellbeing.
Typically, people start families in their 30s, a fact that causes monthly spending to increase. After all, children only get more expensive as they grow. Even if you don’t plan to have kids, there are plenty of factors that could affect your ability to pay off debt.
If you do earn more, you might not want to make the lifestyle adjustments needed to pay your debts off. After all, spending the fruits of your labour on old bills is nothing if not frustrating.
I’ll start saving as soon as I earn $x.
When you put off saving until you reach some arbitrary milestone, you are unlikely to achieve the goals you set for yourself. Age doesn’t always translate to increased wealth.
During the busy throes of your prime working years, it’s easy to put off saving for those golden years. But in reality, time is one of the most valuable tools you have to grow your savings.
Ramit Sethi, author of “I Will Teach You to Be Rich,” did the maths: If you put aside just $10 per week, after five years (assuming an average 8% return), you would have $3,295, and after 10 years, you would have $8,136. Putting away $50 a week would result in $16,473 after five years and $40,678 after 10 years.
You can’t mess with the power of compound interest.
I’ll save a bunch of money by buying the cheapest option.
Some things are worth buying secondhand, but not everything.
It’s tempting to try to “save money” by buying inexpensive, low-quality things, but oftentimes those cheap products will cost you in the long run.
Learn to invest in things that have value. They don’t have to be big purchases, either; there are several everyday items that can pay for themselves, and you’ll want to be careful of skimping on things like mattresses, computers, and more.
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