No doubt you like to imagine that we are doing the very best we can with regards to our finances. We feel we have been saving money, but we've never actually sat down and done the mathematics. You may be surprised if you did.
Listed below are the top five money saving myths that we fall for:
1. Savings accounts save us money
Having funds in a savings account for emergencies is a great idea. It's easy to get to, yet not too easy. But if you want to save money or make your money work for you, an old-fashioned savings is not necessarily the ultimate way to go. First, you must take a look at what you're paying in interest rates. As an example, for people with a student loan with a 5% interest rate and a savings making 3% interest rate, your savings are costing you approximately 2%. You'd be better off eliminating that student loan together with your savings account.
It is the other way around too. If your debt has less of an interest rate than your savings, your hard earned money is working better in the savings. But with today's rates of interest being so low, your debt is usually more than the amount of interest you are generating with your savings account. Which means you're actually losing profits.
It goes the other way around too. If your debt has less of an interest rate than your savings, your hard earned money is working better in the savings. Although with today's interest rates being so low, your debt is most likely greater than the amount of interest you are earning with your savings. That means you're actually losing profits.
2. Sales shopping saves money
3. Refinancing your house is completely worth it
If you refinance your house, you aren't necessarily saving very much cash in the long run. Yes, your monthly bills are smaller, however you have refinanced for yet another 30-year term. Which means if you have already paid A decade of mortgage, then refinance for an additional 30, you have basically extended the loan to a 40-year mortgage. Sit and do the math and you will definitely see if that you are really saving anything.
When you want to reduce costs, refinance for a lower rate and a shorter term. Your payment per month might not exactly go down, but your overall repayment may.
Then in the event you never make use of the item, you've actually wasted money. This could certainly also pertain to bargain shopping and shopping in large quantities. No matter if you bought your daughter 35 pairs of shoes at garage sales for $1 each. If she only wore two pairs of those, you simply wasted $33.
3. Refinancing your home is completely worth it
When you refinance your home, you aren't necessarily saving that much cash in the longer term. Yes, your monthly bills are smaller, but you have refinanced for yet another 30-year term. This means that in case you have already paid A decade of mortgage, then refinance for an additional 30, you have basically extended your loan into a 40-year mortgage. Sit and do the math and you will definitely see if you are really saving anything.
5. Savings relies upon income
Listed below are the top five money saving myths that we fall for:
1. Savings accounts save us money
Having funds in a savings account for emergencies is a great idea. It's easy to get to, yet not too easy. But if you want to save money or make your money work for you, an old-fashioned savings is not necessarily the ultimate way to go. First, you must take a look at what you're paying in interest rates. As an example, for people with a student loan with a 5% interest rate and a savings making 3% interest rate, your savings are costing you approximately 2%. You'd be better off eliminating that student loan together with your savings account.
It is the other way around too. If your debt has less of an interest rate than your savings, your hard earned money is working better in the savings. But with today's rates of interest being so low, your debt is usually more than the amount of interest you are generating with your savings account. Which means you're actually losing profits.
It goes the other way around too. If your debt has less of an interest rate than your savings, your hard earned money is working better in the savings. Although with today's interest rates being so low, your debt is most likely greater than the amount of interest you are earning with your savings. That means you're actually losing profits.
2. Sales shopping saves money
3. Refinancing your house is completely worth it
If you refinance your house, you aren't necessarily saving very much cash in the long run. Yes, your monthly bills are smaller, however you have refinanced for yet another 30-year term. Which means if you have already paid A decade of mortgage, then refinance for an additional 30, you have basically extended the loan to a 40-year mortgage. Sit and do the math and you will definitely see if that you are really saving anything.
When you want to reduce costs, refinance for a lower rate and a shorter term. Your payment per month might not exactly go down, but your overall repayment may.
Then in the event you never make use of the item, you've actually wasted money. This could certainly also pertain to bargain shopping and shopping in large quantities. No matter if you bought your daughter 35 pairs of shoes at garage sales for $1 each. If she only wore two pairs of those, you simply wasted $33.
3. Refinancing your home is completely worth it
When you refinance your home, you aren't necessarily saving that much cash in the longer term. Yes, your monthly bills are smaller, but you have refinanced for yet another 30-year term. This means that in case you have already paid A decade of mortgage, then refinance for an additional 30, you have basically extended your loan into a 40-year mortgage. Sit and do the math and you will definitely see if you are really saving anything.
5. Savings relies upon income
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