Those long-held beliefs holding you back from financial freedom need to be dispelled. Take a closer look at budgeting and money management.
Myth: I need a credit card for emergencies.
Reality Check: Someone who just lost their job won’t be able to pay rent or their mortgage with a credit card. That’s why having an emergency fund that’s the equivalent of three months’ earnings is a must.
Myth: To invest, you need to be rich.
Reality Check: Investing is as easy as online shopping. It is not about the amount you earn, but the amount you save that builds wealth. Start investing small amounts consistently over a long term to build a sizable return.
Myth: Buying a home is better than renting.
Reality Check: Having a home is considered a good investment. However, sometimes it simply doesn’t make sense. If your business means you’re on the move a lot, renting is cheaper, and allows you to concentrate on work without the stress and cost of maintaining a house.
Myth: Saving for retirement starts when you’re 40.
Reality Check: In your 40s, financial responsibilities are often at their peak as kids head away to university, home renovations and holidays are on the cards, and health issues arise. If you haven’t started already, rest assured that investing a little every month will ease stress later in life.
Myth: I’m not earning enough to save.
Reality Check: It’s tempting to funnel every available dollar back into your business, so think of your savings as a necessary emergency fund. Create a budget, and stick to it, and automate payments and investments at the start of each month.
Myth: Having a loan is bad.
Reality Check: Taking a loan to build an asset that gives a higher return than the interest on it is profitable. By taking a loan, you can create wealth with limited financial potential but it’s important to speak to your accountant to discuss the smartest option for you and your business.