Personal finance beliefs millennials should ignore
Do you get caught up in money beliefs that don't serve you? If your answer is “yes,” you are not alone. There are a lot of money beliefs and myths out there that might make you question your own decisions, or make you feel like you’re behind in the game.
The truth is, though, everyone is different. There is no one-size-fits-all approach to personal finance. What you decide to do depends on what is right for you and what you’re capable of doing at any given time.
You must buy a home to be financially successful
Traditionally, it has been said that renting a home is a waste of money and buying a home is one of the main ways to build wealth and equity. And sometimes, that can be true. In some scenarios, in some low cost of living areas, it can be more affordable to own than it is to rent.
However, buying a home is also quite expensive and completely out of reach for many, many people. Telling people who cannot afford to buy a home that they are throwing their money away by renting their home is unfair and short-sighted. Paying for a safe place to live is never a waste of money.
At the same time, there are plenty of people to just don’t want to own their own homes. They don’t want to be responsible for maintenance, they don’t want to be tied down to one location, etc.
Applying this one-size-fits-all piece of advice can leave a lot of people out of the conversation and it can alienate the people who don’t want to achieve this goal.
There are plenty of other ways to make sure that your money is going where it needs to go in order to grow your wealth and support yourself.
Life insurance is always a waste of money
Many millennials are under the impression that life insurance is a waste of money. In reality, if you have a family and you want to be able to provide for them if something happens to you, some life insurance might actually be a good fit.
If you have anyone who is reliant on you for housing, income, or care, it’s important that you consider getting life insurance. Otherwise, if you were to pass away, the people who rely on you might end up not being able to financially care for themselves.
If you’re searching for life insurance on your own, you can compare rates through sites like the federal governments moneysmart life insurance comparison tool.
Saving can wait until tomorrow
It’s easy to fall into the idea that you can put off saving for the future, especially if you’re young. But the truth is, saving when you’re young is the best time to do so. When you’re young, you have time on your side. So, the younger you are, the less you actually have to invest, as long as you’re consistent.
The sooner you start setting money aside, especially if you’re putting it into an investment account, the more money you will end up having when it’s time to retire. Compound interest is when interest builds upon itself over time.
When you have more time for that to happen, the money will grow more and more. So, if you only put a little bit of money away every month starting when you’re 25 years old, you actually won’t have to work as hard as if you were to start saving lots of money when you’re in your 50s.
It’s never too late to get started! Whether you can save $5 a week or $5,00 a month, it’s important to just do it. Put it in a high-yield savings account or use investment apps that invest according to your budget.
Whatever your vehicle is, just do it. Your future self will thank you!
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This article via Millennial Money does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.