Money myths and superstitions - and what they're costing you
Financial myths – from debt to personal finance – and their true cost
Friday the 13th might send a shiver down your spine but, when it comes to personal finance, letting superstitions rule your decisions could cost you more than a bit of luck!
Many homeowners and potential homebuyers are often swayed by financial myths, especially when these myths are tied to specific dates or numbers. Today – on Friday 13th – we’ve decided to separate fact from fiction. So, whether you’re looking to save money, refinance your home, or improve your financial health, we’ll debunk some of the common financial myths that may be holding you back.
But first… where did Friday 13th even begin?
The origins of Friday the 13th as an unlucky day really is a mystery, yet it’s become a firm part of popular culture.
The fear of the number 13, known as ‘triskaidekaphobia’, dates back centuries and is often linked to negative religious and historical events. For example, some believe it stems from the Last Supper, where Judas Iscariot, the apostle who betrayed Jesus, was the 13th guest. And Friday itself has been historically viewed as an unlucky day in various cultures which, over time, have combined to create the superstition surrounding Friday the 13th.
In finance, this superstition flows through to irrational decision-making – honestly, people avoid certain transactions or investments on this date or if they contain the number 13. But by understanding the origins we can help dispel the myths, allowing you to make decisions based on data and facts rather than superstition.
An Educated office poll on the most common financial myths…
Many personal finance myths can lead homeowners astray, even when they’re not wrapped in the mystique of Friday the 13th. We’ve gone through the office to see who’s heard what and there are some absolute doozies!
Apparently, you should never refinance your home on Friday 13th as it might bring bad luck. Saving money is pointless if you can’t save large sums at once, and a few brokers raised the myth that investing is only for the wealthy. But the biggest one we came across? The misconception that all debit is bad debt.
We’ve worked through each below so that you can not only recognise fact from fiction, but also make informed choices that enhance your personal finance, regardless of the number or date.
Common personal finance myths
Understanding the myths that often cloud financial judgment is key to effectively managing your personal finances.
Myth 1: You Need a Lot of Money to Start Investing
Myth: Many people believe that investing is only for the wealthy. This discourages many from exploring valuable opportunities that could enhance their financial health (not to mention also creating an invisible barrier to entry for those with limited funds).
Fact: Modern investment platforms have made it accessible for almost anyone to start investing with minimal amounts. Do your research – there are lots of options for those with only a small amount to invest, and getting started is the only way to open up opportunities for long-term financial growth through investment.
Myth 2: All Debt is Bad Debt
Myth: The perception that all forms of debt are bad can prevent many of us from making strategic financial decisions.
Fact: Distinguishing between good debt (such as student loans or mortgages, which can enhance future earning potential or provide stable housing) and bad debt (such as a high-interest credit card debt) is crucial. When used as a tool, and managed properly, debt can offer growth opportunities and improvements to your financial health.
Myth 3: Refinancing on Certain Dates Brings Bad Luck
Myth: Superstitions such as ‘avoid refinancing on Friday the 13th’ can lead to missed financial opportunities.
Fact: Decisions should be based on tangible factors like current interest rates, personal financial status, and goals, rather than the date. By focusing on these elements, you can potentially save money and improve your financial situation.
Myth 4: Saving money is pointless if you can't save large sums at once
Myth: If you don’t have large amounts to save, then saving money is pointless.
Fact: Regular small savings can accumulate significantly over time, and even the smallest of amounts accumulating on your mortgage add up to make a difference.
Breaking the Financial Myths
Breaking through these myths requires a combination of education, practical application, and critical thinking. Here’s how to tackle these challenges:
Be Open to Financial Literacy
A lack of understanding often fuels adherence to financial myths. The solution? Keep learning! Whether through books, courses, downloads, or seminars, keep improving your financial literacy. Knowledge lets you question misconceptions and make informed decisions, regardless of superstitious beliefs.
Question Superstitions
Myths often masquerade as truths, especially when repeated often. Question any financial advice that isn’t backed by data or expert recommendations.
Use Resources and Professionals
Navigating personal finance can feel overwhelming without guidance. Make the most of tools like budgeting apps, investment platforms, and professional advisors to gain insights and advice tailored to individual circumstances. A solid support system will give you clarity and confidence in decision-making.
Focus on Strategy
Superstitions can distract from effective financial planning. Take a strategic approach to finance, prioritising long-term objectives over short-term fears. Implementing a well-thought-out financial plan can replace a reliance on myths with absolute confidence in achieving your financial goals.
By addressing these myths head-on and embracing evidence-based financial practices, you can take control of your personal finance narrative and make informed choices that align with your life goals.
And hey – if most people avoid the number 13, it could well become a lucky number… but ignore us because we’re dispelling myths and misconceptions, not spreading rumours about lucky numbers!
Considering applying for a home loan? Reach out to Educated Finance.
Call 1300 338 228 and take up opportunities today with the team that’s also with you for tomorrow.
