In this era of financial disturbance, there are various myths that need to be busted to have stable finance. In this article, let's bust all the myths.
When you first start earning money, you must have various dreams to fulfil. It is okay to think, "Let me first do and buy whatever I want since my childhood," but adding, "It's not my age to do personal financial management," is merely a myth that needs to be busted today.
Here are five personal finance myths and the reality thereof follows:
Personal finance is for financial geeks We can say that people belonging to financial backgrounds can easily understand the concepts and know the calculations better. But, saying personal finance is only for people with financial backgrounds is the biggest myth.
You can simply start by budgeting expenses and tracking them. There are various online calculators available through which calculation becomes easier. Also, learning personal financial concepts should be considered as upskilling as well.
Retirement is for people aged above 60 Because of the government employees since the beginning, retirement is considered as the age instead of financial planning. However, retirement simply means when you are looking forward to working actively to earn your survival. Age is just a factor; for some people, the retirement age can be 35, and they restart their whole life after the same age.
Retirement planning should be done on the basis of your dream that needs to be achieved post-retirement. It might be travelling the world or spending time with family.
Investing is for rich people If you think investing is only for rich people, you might live in the dark. You can start investing with just ₹500 per month, depending on the type of securities you are planning to invest in. The amount required for the purpose of investing is part of the myth that needs to be busted, as because of the same, you might not even attempt to look at investing.
Insurance is a waste of money "What's the point of buying health insurance? What if I didn't fall ill?"
But, have you ever thought of a scenario of Covid-19 itself? Lakhs of people got themselves covered by health insurance and got sufficient health treatment required at that time without having to think about money a lot.
Health insurance is not merely for saving tax but also for giving you the right treatment whenever you need it. It is good not to fall ill, but buying helmets while riding a bike doesn't mean helmets are a waste of money because you didn't meet with an accident.
Savings means saving bank account Parking money in a savings bank account is totally different from saving money for your future. Your bank account is a viable option only for emergency saving, not for fulfilling other financial objectives like buying a dream house, retirement planning, or children's education.
You do not have to be an economist to manage your personal finances, but at least you can take a step ahead by knowing the reality behind the myths that you have in your mind. Having the right mindset toward finance is the key to personal financial success.
Courtesy - Mint Genie
Link - https://mintgenie.livemint.com/news/personal-finance/wealth-guide-5-biggest-personal-finance-myths-that-need-to-be-busted-151676358997118