The personal finance world has seen tremendous change over the last decade and the same rules are not useful anymore. That is why here we have collected some financial tips that we don’t need to follow anymore. Below are the rules with the reasons for not to follow them anymore.
#1: Credit Card Debt should be avoided in any case
If you have a low APR credit card such as 0% then it will be wise to use that credit card in case of emergency. For example: medical emergency.
#2: Investments need a lot of money to get started
Investment may sound intimidating at first but new generation apps have made it easier. For example: Wealthsimple, have made it simple to get started with it. Not taking advantage of this is like saying ‘no’ to free money.
#3: You and your partner can work out your money issues
One of the major reasons for failure of marriages is financial issues. That’s why it is better to talk to your partner beforehand about their financial status honestly. You don’t want to end up taking charge of the whole living cost.
#4: Buy a house or condo at the earliest, not rent it
You should not consider buying a property unless you have at least 20 percent for down payment. Taking mortgage before you can afford one can be harmful. The time has only made it difficult to own a house.
#5: Pay yourself first
Saving from everything before you pay your bills can be wise in a certain situation. But if you have high interest debt loathing on you then don’t follow this advice, because you will only end up paying more in the long run.
#6: Close your credit cards if you don’t use them anymore
An old credit card can make healthy contribution to your credit score. So, even it would be wise to use your credit card to spend for supplies and pay them off in full every month.
#7: Do not discuss your income with others
It’s intelligent to discuss your financial status with friends and family. In this way you may get to know about financial role models, and few benchmarks.
#8: A big tax refund is a good thing
Deduct the just right amount of money as tax. Yes you may get it back in the form of refund, but indirectly you are lending the money to government for free, no interest. That money could come to your paycheck.
#9: Don’t save for retirement from your 20s.
Looking at the current time, it is best to start saving for your retirement as soon as you can. 64 percent of people are afraid of running out of money in retirement. The earlier you save, the better it gets.
#10: Don’t spend money on frivolous things
If you treat yourself once in a while and spend some money on experiences, then it is not bad to spend some frivolous amount of money. Time away from office and vacations make you more productive.