4 Financial Planning Myths Busted
There are a lot of myths and misconceptions in the personal finance world, and some of them could hold you back — from saving money and improving your credit score to qualifying for loans.
No matter what your next financial goal may be, having a solid strategy is integral to getting you there safer and faster. With that being said, let’s take a look at four of the most common yet easily overlooked money myths and set the record straight.
Myth 1: Savings are only what’s in your bank account.
For loan applications, your liquid assets are your savings, and personal bank accounts are only a part of it — 401(k)s, brokerage accounts, IRAs and more are also considered savings. Once you tally up all of your liquid assets, you might be surprised by the amount!
Myth 2: Investing isn’t worth it unless it’s a large amount.
Small amounts of money can be a smart investment, especially if they have plenty of time to gain interest. In fact, investing meager amounts of money consistently over time can make a big difference in your financial future.
Myth 3: Debt is always bad for credit.
Only debts you don’t pay on time or that take up too much of your income hurt your credit score. If you keep your balances in check and always pay on time, debt can actually help your credit score quite a bit — and even make it easier to qualify for loans, too.
Myth 4: Small balances can raise your credit score.
Constantly carrying a balance won’t improve your credit score, but paying it off regularly will. You’re charged interest for remaining balances, so it won’t benefit you.
Want to learn more about how your financial choices could impact your journey to buy a home? Reach out today.
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