“Financial fitness”, in many ways, is similar to physical fitness; Every individual has a different experience level, they must be dedicated and disciplined to meet their goals, and there are many misconceptions that can plateau their journey.
Here are 6 common financial misconceptions that could be deterring you from meeting your “financial fitness” goals.
1.Credit Cards Are a No-Go
Credit cards tend to have a bad reputation in the eyes of consumers. Having the ability to rack up debt and the potential to fluctuate your credit score are valid concerns to keep in mind, however, with swipe-moderation, being responsible, and making timely payments, credit cards can be a highly beneficial tool for your financial picture.
2. I Don’t Need To Start Saving for Retirement Until I’m Older
Oftentimes, the worry about retirement savings does not loom until it’s on the horizon. Retirement planning is not a tomorrow problem- the time to start preparing for retirement is sooner rather than later. This allows you to accumulate enough savings to hopefully manage your expenses and comfortably enjoy your retirement days.
3. Identity Theft Won’t Happen To Me
With identity theft rates continuously on the rise, you likely know someone who has been affected by this unfortunate issue. Many still hold the belief that it won’t happen to them, and in turn, fail to take the necessary precautions to protect their identity. With an astonishing 16.7 million victims of identity theft in 2017 alone, simply believing you are in the clear is not enough and the inherent results can be extremely damaging to your financial plans.
4. I Don’t Make Enough Money For an Estate Plan
Estate planning is not just for the wealthiest one percent, or those nearing retirement. From the moment you begin making financial decisions, an estate plan is necessary to control what happens to your property and financial responsibilities after your death. No matter how small your estate, you want to be certain that your family is taken care of and that your money and property are passed on to those who matter most.
5. Life Insurance Is Too Expensive
One of the most common misconceptions regarding life insurance is its affordability. More than half of Americans believe that life insurance costs 3X more than it does. According to “Life Happens”, a healthy 30-year-old man would pay roughly $13 per month for $250,000 level term policy. Additionally, the younger you are when you purchase life insurance, the lower the cost will be.
6. My Taxes are Simple I Can Just Do Them Online
Online tax filling websites have become very popular with consumers. While this may be suitable for those without extensive financial factors to consider, it is best to work with a tax professional. By filling online, you may be missing out on opportunities to reduce your taxable income or fail to address all of the complexities of your financial status.