Financial decisions can be intimidating for many of us, so it’s tempting to think we’ll be okay as long as we bring home a paycheque and pay our bills. But there are some missteps that could be costing you in the long run. According to a recent survey conducted by financial services company Primerica, 61 per cent of respondents have made at least one costly financial decision, with an average loss reported at $29,000. Here are some of the myths that could be impacting your financial preparedness:
Myth: You’re too young to worry about retirement. It’s never too early to start saving. In fact, the earlier you start saving, the fewer dollars you’ll have to put away each month and the more likely you are to reach your financial goals, including a comfortable retirement.
Myth: You’re too broke to save and invest. Even if you are struggling to make ends meet, putting away something is better than nothing. Even small contributions add up over time. A financial representative can help you invest your savings so that your nest egg can benefit from the power of compound growth over time.
Myth: You don’t need life insurance. While you’re young you might not consider life insurance important but once you start having children or buying a property with your partner, your responsibilities start to peak. With added expenses like child care and mortgage payments, the death of a breadwinner or caretaker could be devastating. That’s when life insurance is essential to ensure your household stays financially stable in a worst-case scenario.
Myth: Making the minimum payment on credit cards is enough. You may think you’ll never get out of debt, so you might as well pay only the minimum on what you owe and keep spending. However, that only serves to keep you from reaching your financial goals. With strategies like debt stacking you’ll see quicker results: Make consistent payments on all your debts and identify one to pay off first (maybe the one with the highest interest). When it’s paid off, roll those payments to the other areas of debt, until you say good-bye to all of it. Now you can start saving for yourself what you were paying in interest payments to others!
Myth: You can’t afford financial advice. Financial advice isn’t only for the wealthy – there are many ways you can get financial advice, including from firms that offer a free financial analysis. Working with a licensed financial professional, such as life insurance and mutual fund representatives, can help you get on the right plan toward achieving a more secure financial future. Primerica’s study revealed that 90 per cent of people who have met with a financial professional would recommend one to others.