Unmasking money myths weighing you down

However, no matter how good you are with money, it's easy to fall for common misconceptions that can hurt your finances. Perhaps you were taught inaccurate information about finances growing up, received misguided advice from well-meaning friends or stumbled upon unreliable sources online.

By knowing which myths to look out for, you can avoid these pitfalls on the way to achieving your financial goals, so here’s the truth about some common money myths that everyone should know.

Myth 1: You need to be rich to invest

Many people think investing is only for the wealthy, but that’s not true. Anyone can start investing, even with small amounts of money. The truth is that there are investment options for every budget, and discipline and consistency are the driving factors for financial growth.

Starting small and growing your investment over time can lead to big gains. Waiting until you're ‘rich enough’ to invest means missing out on potential earnings.

Here’s why you don’t need a fortune to start building your wealth:

• Low minimum investment accounts allow you to start with what you have and build up your portfolio. Tax-free savings accounts let you start with a minimum amount and contribute as and when it suits you.  
• Compound interest is your friend because consistency and time are key to successful investing. Even small, regular contributions can add up over time as your money earns interest on interest, growing exponentially.

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Myth 2: Budgeting is boring

Some people avoid budgeting because they think it will limit their freedom and enjoyment of life. However, budgeting can be a rewarding experience and give you more control over your finances and help you achieve your goals. By creating a budget, you can prioritise your spending and make sure your money is going towards the things that matter most to you.

There are many different approaches to budgeting. One popular and easy strategy is the 50/30/20 rule, where 50% of your income goes towards necessary expenses, 30% towards wants and 20% towards debt payments and/or savings.

Setting goals for your cash helps you see what you're working towards and keeps your spending on track. When you know what you're aiming for, it's easier to say no to those tempting splurges and stay focused on the prize.

The key is to find a way that works for you, to be realistic and, instead of seeing it as something that restricts you, to view it as something that empowers you.

Myth 3: Credit cards are bad

Using a credit card doesn't automatically lead to bad debt; overspending does. If you use your credit card wisely and pay off the balance every month, it’s a tool that can help you accomplish the things you want and get you to where you want to be. It can also boost your credit score, unlocking better interest rates on future loans, such as mortgages or car payments.

Your credit card makes it safe, easy and convenient to make everyday purchases online and in-store, which means no hassles or risks about carrying cash or having to make withdrawals. Many credit cards also offer rewards that can often lead to cash back, travel points or discounts on purchases so you can do more of what you enjoy.

Having a credit card can also be a lifesaver when you need a cash boost in an emergency. The key is to be strategic and to use your credit card mindfully.

Myth 4: Talking about money is rude

Many people consider talking about money to be rude. Often seen as taboo, the truth is that it’s a necessary and important topic. Not talking about money makes people feel isolated and could lead to feelings of shame, misunderstandings and financial problems.

Since money affects so much of our daily lives, talking about money can lead to improved communication and trust in relationships, as well as better financial outcomes. Being on the same page as your partner about your spending habits and priorities can help you make better financial decisions to help your family prosper, instead of potentially harming them.

Talking openly or speaking to a financial advisor can expose you to new ideas and perspectives. You might learn valuable tips and budgeting strategies or even discover some investment opportunities.

Talking about your financial goals with someone also creates a sense of accountability, making you more likely to stick to your plan and take more control of your own situation.

Myth 5: The more you own, the more money you have

Watching reality TV or following luxury influencers on social media might make you think that being rich means living extravagantly. However, many wealthy people don't live in mansions or drive Bentleys. In fact, a lot of millionaires live modestly and respect their money.

They understand that the more you spend, the harder it is to build wealth. Don't be fooled by media imagery: true wealth is about smart financial decisions, not flashy displays of wealth. True financial freedom comes from building assets that generate income and grow in value. Therefore, the more income-generating assets you have and not just stuff, the more wealth you have.

You also don’t need to be so extreme or austere with your money decisions to be financially successful either. Of course, every penny counts, but sacrificing small expenses that bring us joy isn’t nearly as critical as big decisions such as choosing where to live or what car to drive. Life should be about the experiences and relationships that enrich your life, not the things that fill your home.

_{Disclaimer: This article is solely intended for information. It does not constitute financial, tax or investment advice or recommendation. Please speak to a financial advisor or registered financial professional before making any financial decision(s).}

_{Standard Bank, its subsidiaries or holding company, or any subsidiary of the holding company and all of its subsidiaries make no warranties or representations (implied or otherwise) as to the accuracy, completeness or fitness for purpose of the information provided in this article or that it is free from errors or omissions.}