26th Oct, 2020

Four money myths to stop believing now

Rugby Editorial 25th Sep, 2020 Updated: 25th Sep, 2020

Confused about misconceptions around money? Here’s what you need to know about four common money myths.

Think you’re clued up about financial matters? According to TopCashback.co.uk, there are some beliefs around money that people could be getting wrong.

But it’s not always just a case of sorting fact from fiction. When it comes to misconceptions around money, often it’s case of clarifying some of the details.

Here, Adam Bullock, UK director of TopCashback, debunks four common myths around money matters:

Myth 1: Owning a house is always better than renting

Flexibility is probably the most obvious advantage for renting over owning. In the uncertain economy, not being tied into a fixed mortgage is something that those in difficult or pressurised financial positions may appreciate.

Buying a home can pay off financially in the long-term, but if you need to be adaptable and move around for work for example, being tied to the same property for several years may not be ideal.

There are also the additional costs that come with being a homeowner to consider, such as buying furniture and general repairs, some of which can be expensive such as replacing a boiler or fixing a roof.

Myth 2: Using credit cards is the be all and end all to a good credit rating

Yes, showing you are a reliable borrower who can meet their repayments can help your credit score. But having many cards in your wallet doesn’t necessarily mean you’ll be seen as a sound investment. If you’re juggling lots of accounts and miss payments, this can be viewed negatively.

There are also other ways to help your standing on credit reports, such as making sure you’re on the electoral roll and that your address for your mobile phone contract is up-to-date.

Myth 3: The amount of money you’ll get in returns is all you should consider when choosing where to keep your cash

With interest rates so low, it’s hard to make decent returns on savings right now. But remember to look for other incentives on offer, such as cashback and other switching rewards or monthly benefits.

Put a value on your time, too – and this means considering a firm’s customer service. If it’s easy and straightforward to talk to customer services, or navigate their website, then great -you’re not wasting your precious time.

Some banking apps have features that help you to save, while you can also grow money to set aside into savings by using websites such as TopCashback.

Belief 4: Investing is only for the rich

Investments can be a good way for anyone to grow their savings long-term, although you need to make sure you understand the risks and that you may end up getting less money back than you paid in.

Five years is often the minimum amount of time financial advisers would recommend you invest for. And having a diverse range of investments can help to alleviate some risks.

The Money Advice Service has a beginner’s guide to investing by clicking here

By Vicky Shaw.

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