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Saving Money Myths

Cash savings are at an all-time low for most people and the rate of credit card debt is at an all-time high. Most individuals nowadays spend more money than they can afford because buying on credit has become so easy and convenient.

People are drowning in debt and the idea of opening a savings account is not something that people in debt consider as being viable. Those in debt are trying to make ends meet and pay off their bills and the idea of saving part of their money every month is not an appealing one.

There are all sorts of false beliefs and myths surrounding the idea of saving money, especially when a person is in debt. It is exactly at the time that they are in debt that people should consider putting money into a savings account and paying cash-only for their purchases.

Getting out of debt is easier than most people think if they are willing to be disciplined about their spending and cutting unnecessary items out of the monthly budget.

The top common saving myths

1.Many people feel that because they are in debt, they cannot afford to put money aside every month. This is simply not true. Even if it is only a few dollars a month that are saved, they soon add up. There are often unhealthy spending habits at the bottom of most debt situations.

Many people feel it necessary to eat out several times a week or to buy coffee at upscale coffee shops every day. The money saved by eating at home and making your own coffee can be quite substantial when the monthly total is added up. It is not that people cannot save money; it is more likely that the habit of going out to eat has become so prevalent that it does not even register how much money is wasted indulging in this several times a week.

2. Owning assets is considered the same as having cash by many and therefore it is not considered necessary to put money into a savings account. This is far from the truth. Owning a million dollar property cannot be considered the same as having $1 million in a bank account.

Owning cars and furniture is not the same thing as having cash on hand either. This is especially true if the home and the car are not completely paid for. Property can get damaged and the real estate market can fall, making the assets less valuable than they used to be.

Having cash safely in a savings or other account is the best way to be prepared for all emergencies. An account with a high interest rate can also provide a liveable monthly income for people so that they no longer have to work.

3. Saving money is thought to hamper lifestyle and make people sacrifice the things they would like to do or have. The opposite is true. Buying things on credit means that there are usually high interest charges attached to the purchase. This can really add up, especially if the debt is high.

This means that over several years it is easy to spend thousands of dollars to pay off interest charges on credit card debt or car loans. When unnecessary items are cut out of the budget and purchases are made in cash, the money spent to pay off interest can be put into a savings account instead. It is all a matter of prioritizing and being disciplined. Saving money can be a lot easier than most people think.

Article publié pour la première fois le 13/04/2012