10 Popular Money Tips That May Be Keeping You Broke

There is a lot of good information out there about personal finance. Everyone, from family and friends to people who call themselves financial experts, seems to have something useful to say. But not all financial advice is the same, and some tips that seem good at first glance may not be so good when you look more closely.

Let's sort through the confusing web of money advice to find ten “wise” money tips that could actually hurt your personal finances.

1. “Renting Is a Waste of Money”

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For a long time, people have thought that borrowing is the same as wasting money. It chooses whether to rent or buy too easy, though. Over time, having a home can build equity, but renting gives you more freedom and lets you skip many of the costs of owning a home, like property taxes, repairs, and insurance. Based on your situation, renting may be a good way to save money.

2. “It's Always a Bad Idea To Use Credit Cards”

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How you use your credit card makes it bad or good. Credit cards can help you build a good credit past, get cash-back rewards, and protect you from fraud if you use them wisely. You can get into much trouble with debt if you abuse credit cards by carrying significant balances and only making the minimum payments. It's important to be smart about using credit cards and paying off your debt every month.

3. “Only Rich People Invest”

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Rich people aren't the only ones who can invest. In fact, it's one of the best ways to get rich over time. If you want to start saving, you don't need a lot of money, but you do need a plan. Index funds and robo-advisors are just two easy-to-find investment choices that can help people of all income levels start investing and slowly build their wealth.

4. “Buying a Latte Every Day Is Your Main Problem”

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Cutting back on small treats like daily coffee is not always a good idea. Small costs can indeed add up over time, but focusing only on these small pleasures could make bigger money problems seem less important. Instead of focusing on small, unnecessary spending, looking at your whole financial picture, including high costs, savings, and investments, is important.

5. “You're Too Young To Think About Retirement”

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You may not be able to afford your later years if you put off planning for retirement. If you start investing and saving for retirement when you are young, your money will grow over time. Compound interest means that even small amounts of money you put away initially can grow into a lot of money over time. To reach your financial goals, it can be tough to put off planning for retirement until later in life.

6. “Carry a Little Debt To Improve Your Credit Score”

avoid credit card debt
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People who think having a small amount of debt can help their credit score are wrong. While you need some credit history to build your credit score, taking on too much debt can be expensive because of interest rates. Instead, to build and keep a good credit score, be smart about using credit, pay your bills on time, and keep your credit card amounts low or paid off.

7. “It's Safe To Keep Money Under Your Mattress”

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Not a safe or smart way to handle your money is to hide cash under your mattress. If you do that, your savings could be stolen, burned, or damaged in some other way. Putting your money in a safe bank account keeps it safe, makes it easy to get to, and you might even earn interest on it.

8. “To Save Money, You Need a High Income”

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It can be hard to save money when you think you need to make a lot of money. It's not how much money you make or how you spend it. It's still possible for people with low incomes to save money by making a budget, setting clear savings goals, and cutting costs that aren't necessary. No matter how much money you make, you can learn to save.

9. “Do Not Take Any Risks When Investing”

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It may seem safe to avoid all danger in your investments, but that can make it harder for you to get rich. Every trade has some risk, and if you try to avoid all risks, you might miss out on chances to make money. It's essential to spread out your finances and ensure they fit your long-term financial goals and risk tolerance.

10. “Your Income Determines Your Financial Worth”

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If your pay is the only thing you use to measure your financial worth, you might misunderstand your financial health. Your income is only one part of your overall financial picture. Things like your spending, savings, debt, and investments significantly impact your total financial health. A high income doesn't mean you'll be financially secure if you don't know how to handle it well.

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