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6 pieces of money advice you should always ignore

6 pieces of money advice you should always ignore
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Certain things are constantly drummed into us throughout life. Things like: don’t talk with your mouth full; wash your hands before dinner; and stop, look and listen when crossing the road. But for every set of genuinely wise words, there’s a plethora of equally unhelpful ‘common knowledge’ that circulates – particularly when it comes to money matters. So, before you believe everything you hear, here’s some money advice you can definitely take with a ginormous pinch of salt.

1. Buy; don’t rent

Comments like ‘renting is a waste of money’ tellingly reinforce our national obsession to be homeowners. Indeed, a report based on the 2010 British Social Attitudes survey revealed that 86% of respondents would choose to buy their home instead of rent.

While it’s true that renting can be more expensive than buying, it could be worth the price tag if flexibility is top of your priority list.

Plus, when you own a property, it’s down to you to continually invest in it to ensure it doesn’t fall apart. Ultimately that might not be a financial responsibility you actually want, depending your current circumstances.

It’s also important to remember that while investing in property is often hailed as ‘safe as houses’, that in itself is a myth. Like any investment, house prices go up and down, and you can lose (a lot) of money if your house price falls and the value of your mortgage is greater than the potential sale price (known as negative equity). So, if you don’t think you’re in it for the long haul, keeping your options open and renting not buying is probably wiser money advice.

2. Stay away from credit cards

Credit cards get a bad rap, and somewhat unfairly. In reality, it’s not credit cards that get people into debt. People get people into debt by spending more than they can afford on stuff they probably don’t need.  

Truth is, credit cards come with all sorts of perks (if used responsibly). For instance:

  • You get to buy things you might genuinely need, even if you don’t have funds upfront. Just to clarify – we’re talking things like a new washing machine or car brake pads, not Louboutins or Prada.
  • You can get rewards such as cashback or benefit from 0% interest for a limited time.
  • You can claim back for damaged items or unfulfilled services under Section 75 of the Consumer Credit Act 1974 as long as purchases are between £100 and £30,000.  

So, while a credit card is not the answer for everyone, if you think you’re responsible enough to handle one, it can be an essential part of your financial routine. Here’s our round-up of the best credit cards for 2020.

3. Don’t talk about money

You may well have been brought up to believe that talking about money is rude or vulgar. But talking about money opens up conversations about all sorts of important topics – like the gender pay gap.

Money is also a major contributing factor in divorce, which suggests couples don’t spend nearly as much time talking honestly about it as they do arguing over it. In truth, taking the time to talk about money is neither rude or vulgar if it helps you appreciate your value as an employee or solidify family relationships.

4. Save more

Vague phrases like this help no-one. After all, what does it actually mean – save more than what or who?

Saving is, of course, important, but rather than save more, aim to save enough. Enough what? Well, that depends on what your circumstances dictate. If you’ve got a budget in place and have something to save for, saving enough to meet those goals is good enough. Saving more potentially means placing unnecessary stress on yourself and your budget.

5. You need a degree to boost your earning power

This might have been true once upon a time, but today you don’t need much more than a solid work ethic and some grit, as these inspirational quotes tell us. Plus, with tuition fees and living expenses, university can be a costly option. Naturally, there are some jobs you can only do after earning your degree (few want to be treated by an unqualified doctor). But it’s important to remember that a degree does not guarantee success or wealth.

6. Estate planning is for the wealthy

Estate planning is essentially just sorting out your will and allocating where you’d like your home, money and possessions to go when you pass away. It’s important for all of us to sort out a will, regardless of wealth, so that our wishes can be respected and disputes over assets can be avoided.

Your money; your decision

At the end of the day, people can give you all the money advice they want, but it’s up to you to work out what’s right for you based on your own financial needs.

 

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