Money myths… we’ve heard them all before and we know that most are untrue.
But why is it that so many of us keep believing them?
In this blog post, we break down the most common money myths that we’ve heard and offer some proven advice for those that want to take back control of their finances.
#1: Low balances, high limits
There’s nothing wrong with having a credit card, as long as you can pay off the balance at the end of each month.
However, some people may not have large balances on their credit cards, but their spending limits are incredibly high.
Lenders take credit card limits into account when they’re assessing your home loan applications.
They don’t care how low your balance is. If they see you have the potential to spend $50,000 over four different credit cards, they will massively reduce the amount you can borrow!
#2: Layaway doesn’t count, right?
In recent years, the ”buy now, pay later” (BNPL) industry has exploded with the invention of Afterpay and the like.
BNPL works well for anyone that is diligent with their payments, but for anyone prone to over-spending, it can quickly become an absolute nightmare!
When it comes to BNPL, always make sure that you stay on top of your payments. While they may seems great from a cash flow perspective, they can also significantly impact your credit history.
#3: Used cars aren’t sexy
Young people fall into this trap quite often, wanting to show off their success by buying a brand-new vehicle, usually by using a personal loan with double-digit interest rates.
A much better strategy would be to invest your savings into assets that will grow in value over time.
Then, in time, you can probably afford to go and buy a superior brand-new car – in cash.
#4: It’s too late for me!
It’s quite common for people to adopt a defeatist attitude when it comes to their personal finances.
In fact, by the time they are in their late 30’s, many Aussies believe that it is too late for them to improve their finances.
The truth folks – it’s never too late to improve your relationship with money!
If you don’t believe us, think of Warren Buffet, one of the most successful investors of all time. He didn’t earn his first $1 billion until he was past 50.
And better yet, he still drives an old car!