You must debunk the money myths for proper financial management. Unfortunately, such fallacies tend to be potential barriers to the people who are starting to get their finances back on track. Personal finance advices manifest themselves in multiple forms and shapes.
Starting from having social media interactions to listening to podcasts, talking to an acquaintance, and surfing the Internet, everyone gets lots of suggestions on their financial life. As they continue their journey, they must make sure to never ignore the myths below.
- It is Easy to Become Rich
The professionals providing recommendations about financial wellness South Africa said becoming rich is a sort of art that needs concrete investments in well-thought instruments. Through cautious planning and a methodical approach, one can accumulate wealth over time.
For most individuals, it seems like a far-fetched dream that someday, gradually, they may be able to turn themselves into self-made billionaires. However, the truth is accumulating wealth is not about putting all of your hopes into that ‘someday’. If you begin young, you will have more opportunities to amass a fortune.
- Paying Taxes is Not Necessary
Most of the millennials have a wrong idea about filing the income tax returns and are fine with placing this critical exercise at the very bottom of the list of their priorities. Paying taxes is an important part of the overall financial journey. Taxes keep this economy running and let the government fund multiple schemes for the betterment of people.
- Having Credit Card Enhances the Credit Rating
There is a little truth in this, but, having credit card enhances the credit rating only if you agree to pay back the dues each month. The credit cards can be utilized as a tool for enhancing credit rating. On the contrary, if you have a credit card and are not able to pay off the bills timely or make even a minimal payment, your credit score will be seriously damaged.
- Purchasing a Residential Property is Mandatory
Purchasing a residential property is considered an excellent investment decision. However, that may not be the case always. With the rent ratio to EMI being escalated in multiple cities and relocation a reality, it may not be smart to take up burden of excess EMIs specifically in an economy where the job security is not really strong.
This would rely on an individual situation. One must conduct a detailed analysis before buying the house. They must never buy a house just because it is a financially wise decision.
Apart from the myths stated above, according to the experts performing financial wellness South Africa, while most people do assume this is true, expenses do not alleviate during retirement.
Certain expenses creep into the budget such as medical expenses. How much money exactly one would need for the retirement will depend on their lifestyle choices. But, to live comfortably, they must be ready to spend.
