When it comes to successfully managing our finances, we'd do well to ignore some of the money myths that get spread around. Here's a few key ones to get straight so you can turn around your finances.
Carrying a credit card balance improves your credit rating
To help lenders see that you can manage credit well, it's good to be active with using credit. Having a balance when the statement arrives is fine, but rather than carrying it over, make sure you pay it off in full.
Paying only the minimum amount almost always means you're actually paying interest, unless you have 0% interest purchase or balance card deals. However, don't be tempted to miss credit repayments as this could seriously impact your credit rating, as missed or late payments stay on your credit report for at least six years.
Using regular direct debits - at a time of the month you know you'll have the funds, for example after payday - can help ensure you don't miss payments and pay your balance off in full.
Investing in the stock market is always risky
Shares can go down as well as up, as the saying goes, but in the long term stocks will almost always beat other forms of savings, from cash accounts to bonds.
No investment is failsafe, but make sure you take good advice and don't jump into it without assessing the risks.
Spread your risks by keep your assets diversified into unit trusts or several different companies, perhaps in different industries.
If you have a long-term goal and can put thoughts of the money you're saving to one side, then investing in stocks and shares is likely to give you more joy in the long-run.
I can wait to start saving for retirement
Saving from an early age can boost your payout later in life. Pension plans, stocks and Lifetime ISAs can draw out significant gains if you start young.
In fact, if you started saving at 40 you would need to put in 20% of your salary every month - which would mean a princely £400 a month even on take home pay of just £2,000.
Auto-enrolment means you are likely contributing 8% of your salary of which you employer must pay at least 3%. It's effectively free cash for the future, and many companies match or even double what you 'sacrifice' from your salary. What's more, the amount you contribute doesn't count towards your taxable income.
You have to be rich to think about investments
Investing starts now from Young Saver accounts and Junior ISAs, and online savings accounts can often be started with as little as £1. After a while savings may be enough to consider moving them alternative investment options, such as stocks and shares, which may have a higher return over a longer term.
If you're between 18 and 39 it could be also worth thinking about opening a Lifetime ISA. This it gives you a 25% boost on up to £4,000 saved in a year for your future home or even retirement.
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