The Five Top Money Saving Myths
Jul 14, 2009 Debt Consolidation
We all think we do the best we can when it comes to our finances. We think we are saving money, but we never sit down and do math. You may be surprised if you do.
Here are the top five money-saving myths that fall for:
1. Savings accounts save us money
When you refinance your home, you surely are not saving that much money in the long term. Yes, your monthly payments are lower, but you refinanced for another 30-year term. This means that if you have already paid 10 years of the mortgage, then refinance for a further 30 have essentially extended its credit to 40-year mortgage. Sit and do math and you’ll see if they are really saving anything.
If you really want to save money, refinance to lower rates and a shorter period. Your monthly payment may not come down, but the discharge in May
2. Refinancing your home pays off
When you refinance your home, you surely are not saving that much money in the long term. Yes, your monthly payments are lower, but you refinanced for another 30-year term. This means that if you have already paid 10 years of the mortgage, then refinance for a further 30 have essentially extended its credit to 40-year mortgage. Sit and do math and you’ll see if they are really saving anything.
If you really want to save money, refinance to lower rates and a shorter period. Your monthly payment may not come down, but the discharge in May
3. Refinancing your home pays off
Having money in a savings account for emergencies is a good idea. It is easy to obtain, but not too easy. But if you want to save money or make your money work for you, old-fashioned savings account is not necessarily the best way to go. First, you should look at what give in interest rates. For example, if you have a student loan with 5 percent interest rate and savings account to 3% interest rate, your savings have cost you about 2 percent. You would be better off paying off that student loan with savings account.
4. Sales shopping saves money
4. Zero percent interest rate saves money
When you take the card with zero percent repayment term, you’re saving money. You are only delaying payments for items. You can not save and not spend more. But if you do not pay the money back within the zero percent period, will pay interest on those items. This will cost you money.
5. Savings depend on income
No matter what you do, you can save money. You just need to spend less than you make. If you can spend more money and more money, you are not saving anything. In fact, you may even be spending more. Do not wait until you have more money to start saving. You must start now.
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