7 Money Myths You Can Stop Believing

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The Reality Presented By Freedom Federal Credit Union

With so many resources available telling you what you should and shouldn’t do with your money, many people fall for at least one of these widely talked about money myths. This month, Freedom Federal Credit Union takes on seven common money myths, and we provide our take on them and the best way forward.

Myth #1: Debit is always better than credit.

Reality: Credit cards, in many instances are a great payment method of choice, when used responsibly. And they come with many benefits and conveniences. First, many credit cards offer rewards in the form of travel miles, cash back, and other bonuses that you can use like “free money”. Second, building and maintaining a strong credit history is crucial for your financial wellness. The best way to achieve this is by using your credit cards and paying your bills on time. Finally, lots of credit cards offer purchase protection, which makes them the smarter payment method for big-ticket items.

Myth #2: Buy a home as soon as you can.

Reality: Buying a home can be one of the best investments you make. However, for many people, including those who are not yet ready to put down roots or who anticipate a career change that necessitates moving across state lines, renting a home or apartment might be the better choice, for the short-term.

Myth #3: Investing is just for rich people.

Reality:
Anyone with a small amount of savings can get started with investments in the
stock market. A smart investment strategy puts you on the track to financial
independence. There are many resources for investment strategies for beginners.
Do some research, and follow a plan that works best within your means. 

Myth #4: My partner manages our finances, so I don’t need to think about money.Reality: While it’s fine for one partner to actively manage the family’s money, it is crucial for both partners to be aware of the state of the family finances. Both partners should be capable of managing household expenses and investments if something were to happen to their partner. Ensuring both partners know where your money is going, and how it’s being saved, and spent, provides a stronger financial future for all.

Myth #5: Credit cards will get me through any
financial crisis.

Reality: Depending on credit cards to get you through a financial emergency is the perfect way to dig into a deeper pit of debt. Thanks to interest, you’ll be paying back a lot more than you spend. Credit cards should not be relied upon for a real financial emergency, such as a job loss, divorce or illness. It’s best to build an emergency fund with three to six months’ worth of living expenses so that you’re completely covered in case the unexpected happens.

Myth #6: I’m still young; I don’t need to think
about retirement.

Reality:
The younger you are when you start building your retirement fund, the less you’ll
be required to put away each month, and the more you’ll save by the time you
are ready to retire. Gift yourself the peace of mind of a comfortable retirement
by maxing out your 401K contributions and/or opening an IRA or another retirement
fund. Start today and let compound interest work its magic!

Myth #7: I have enough money in my account for my
expenses, so I don’t need to budget.

Reality: Budgeting is for everyone, regardless of your financial standing. A budget will force you to make responsible money choices, and ensure that you’re fully aware of the state of your finances at all times.

The Freedom Difference

As a member of Freedom Federal Credit Union you are provided best-in-class financial products and services you need and deserve. And when you step through the door of one of Freedom’s five branches, you know you’ll always be welcomed by familiar faces, warm smiles and friendly greetings.

Whatever your specific financial needs are, we’re here to help you manage your finances every step of the way. Call, click, or stop by to learn more about the Freedom Federal Credit Union Difference, and how to make your membership work for you in the best way possible.

About Freedom Federal Credit Union

Freedom Federal Credit Union is proud to be a financial partner to Harford County Public Schools. Freedom serves and is open to anyone who lives, works, worships, attends school, volunteers, or has family in Harford County, MD. As a credit union, we are committed to putting you first, not shareholders, and helping you achieve your financial goals. Learn more at freedomfcu.org or call us 800-440-4120 to see how we can help.

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