Forget April fools pranks, some people actually believe things that are simply not true. It happens in every area of life. When it comes to financial myths people believe, you may like to think they will wise up. After all we take few things as serious as we take our finances. Though one may be eager to get information about finances, not all the information you get is true. Then there are those who simply have some very wrong ideas about money and finances, just outrightly ridiculous money myths. It is important that you get some of these things straight. You will definitely have a happier life when some of the following misconceptions are cleared out and you get to know the truth about money.

Sadly, the most common misconceptions about money are cherished by young people. At least, the elderly have the advantage of experience and some have learned, the hard way, that most ideas that go around concerning money are actually misconceptions. It is important to clear out some of these ideas because those who take them seriously will obviously be led astray, only to find themselves in a state of total financial confusion.

More money will bring more happiness

Of course money can help you get things and have better experiences in life. But the amount of money one gets is not proportionate to the amount of happiness he or she experiences. To think that when you have more money, you will definitely be happier is a great deception. People who think they can’t truly be happy until they have lots of money are indeed vain. If your happiness is tied to money, you will have to postpone being happy until you actually become rich. However, the word rich is relative to people and places. How much money or property would you say makes a man rich? People usually have different perspectives on what it means to be rich. One person may be admired and called rich by another while the former is dissatisfied and unconvinced that he or she is actually rich. That’s the foolishness of the idea that money brings happiness. It’s hard to determine what is enough money. The thought that money will bring happiness is one of the worse financial myths people believe. The truth about money is that it doesn’t bring any more happiness than any stuff will.

If you measure happiness in monetary terms, you will hardly be happy because every day’s happiness will be dependent on getting more, and believe me, you cannot always get more of everything. What makes one truly happy is fulfilling purpose and positively affecting the lives of others. Having a great relationship with family and friends and being loved in return. Those who need money to be happy have a very shallow way of reasoning. Bottom line is, you may or may not be happy when you become rich. And you may or may not be happy without money. It all depends on your understanding of happiness.

Money means security

So when you get more money you can now afford guards and tighter security, and all thats just going to keep everything that threatens your well being away? Nope! First, the feeling of insecurity comes with more money, especially getting more money than you actually need. Plus, money or wealth only attracts insecurity. After all you will not be a target to anybody if you did not have something people can risk going to jail for. Its better to be the guy with just enough money who is not looking over his shoulder every minute than have lots of it and live in insecurity and discomfort every day.

And for those who think of securing the future and their families by getting more money, you cannot always do that. But you can live healthy and properly to prevent some dangerous sicknesses and unforeseen circumstances which cannot be handled with money. More money will not make you more secure than any other person, it will only attract threats and bring fear. You can be very rich and secure, but the security should never be dependent on money. Thinking money will guarantee security is simply one of those ridiculous money myths you have to let go of. The truth about money is that it demands security, instead of giving it.

If I earn more, I will stay out of debt

Well, I say think again. Some financial myths people believe are simply falsehood that should be thrown into the trash. People don’t borrow because they don’t have enough money. In fact most people who are neck deep in dept actually earn more than enough to take care of themselves and their families. You get into debt by borrowing money and you can only stay out of debt by NOT borrowing money. If you have poor spending habits, no savings and investment principles or worse still addicted to gambling, it does not matter how much you earn, you will always end up in debt. Don’t try to earn more in order to get rid of or stay out of debt. It will be like trying to carry water in a basket. Opening the tap more will not get the basket full because it simply cannot keep water. What you need to do is deal with the holes in the basket. Deal with your financial loopholes and you will stay out of debt.

You need to earn a huge sum to save

Saving in an important principle for financial increase and prosperity. Since it is a principle, it has to be respected no matter what you think or feel about it. Some people seem to earn just enough to take care of their monthly expenses and it seems they never have enough to save. But that is not true. You don’t need to earn more in order to save. You just need to make up your mind never to use up all that you get. Cut down your monthly expenses if you have to, but save every single time you get the paycheck.

There may be so many things you are buying which you do not really need. Figure them out and eliminate them from your expenditures. If you always buy just what you need, consider reducing the quality you buy. What I am saying is, save by all means.

I need to carry cash around

Carrying cash around is a good idea, if there is a reason for doing so and if the reason is right. If there is no reason why you are carrying cash around, especially when its more than a few hundred dollars, just don’t do it. Some people may not have a problem with abrupt or unplanned spending but a good number of people, especially ladies do. You don’t need to carry cash in your wallet or pocket whenever you go out if you don’t plan to buy anything or spend it in anyway. There are a few reasons why you should do away with the issue of carrying cash around. First, it is likely you are going to buy something you did not plan to buy and secondly you may just loose the money. Either ways, the money is wasted. Whenever you carry cash around, let it be money you plan to use or may have to use.

Money is meant to spend anyway

NO, money should not always be spent. There are other things far more noble to do with money. especially if you are not spending on something reasonable. You can save, invest or even give money to help others. Those who only have a spending mindset seem to think money is always at their beck and call. But its not and you need to get out of the fantasy of spending money without any plan. Even if you have lots of it, there are other things you can do with your money. Things which will be more rewarding and more fulfilling.

Its too early to save

You should start a retirement savings account or save for any other reason. Its important you do. More importantly, take note that the earlier you start savings, the better off you will be in the future. It is never too early to start saving, especially if you have an income. No matter how much you get or how young you are, now is the time to start saving. The truth about money is, if you don’t learn to respect the principle of saving when you have little, you won't save when you have more than enough. If you start early, you will be glad you did when you look back at your finances few years from now.

Its better to buy a home than rent

Like most other financial myths people believe, this one needs to be carefully considered. Buying a home is only more profitable when you consider certain factors against your options. For example those who plan to buy a house without having the finances necessary to make full payment will make a wiser decision if they decide to rent. Buying a home may not have any advantage over renting if the home you are buying is way out of your budget or the house you are renting is going at a price good enough to maintain financial balance. For young people who do not yet understand the complications of home expenses, it is better to rent and take out time to prepare to build or buy your own house. Don’t let general ideas that mean little or nothing put you on the wrong track financially.

You can boost your credit score by having a credit card balance

Its just totally unreasonable to think that you can have a good score by keeping a credit card balance. Just learn to stay out of credit card debts and you will have and maintain a good credit score.

Rich people buy the most expensive things.

Its quite understandable why this should fall amongst financial myths people believe. Talk about cars, designers clothing and other such expensive stuff and people think they are owned by millionaires. Well, not exactly. The authors of the book titled The Millionaire Next Door carried out some research which proved that the average American millionaire seldom buys those expensive things we see advertised on TV. Of course there are people who buy them, but most of them are not millionaires. How can the people who buy those unreasonably luxurious stuff be millionaires when their finances are constantly being drained by the desire to show off? If you want to be rich, really rich, you must make a firm decision between looking rich and actually being rich. Some times, you just cant have both. It will take time and experience to manage being rich and looking rich. For most people, before that time comes, they must have given up.

Banking is the best way to save your money

Not necessarily true. If you can get a safe and keep it safe, it may be better than trusting your money in the hands of a bank. Banks get robbed and there are sometimes cases of fraud and even sudden closure. So don’t be deceived to think that when your money is in the bank, it is in the safest or best place. Secondly, before saving with any bank, you must understand the banking policy as well as the terms and conditions surrounding the creation of the particular account you are opening. Some banks frequently make changes to their terms and policies. This may cost you a few hundred dollars monthly. At the end of the day, you may come to the conclusion that keeping your money in a personal safe is a better way of preserving it.

Its OK to borrow, as long as you can pay back

NO! it is never Ok to borrow. Amongst financial myths people believe, this one just proves that some people do not really understand financial principles. We all face financial challenges at one point or the other, but borrowing is not always a way out of it. Sometimes you need to just use what you have and be disciplined enough to stay out of debt. It is worse when people borrow carelessly on the assumption that it wouldn’t hut since there is a means to pay back. You should not get indebted simply because you have the collateral or means to pay back. First taking loans you don’t absolutely need could become a habit. Apart from that it is a terrible thing to borrow for trivial things. There are people who borrow to buy clothes and shoes or other material things which are neither an emergency or a necessity. You could take a loan when you are under some form of financial pressure or the other. But make it a principle to never borrow if you don’t have to.

I don’t need a budget or financial plan because I don’t have a lot of money

Now this one is just a dump thing to say. Whether you are earning just a few hundred dollars or hundreds of thousands, you need a financial plan. Not only will it help you keep your finances, it will help you make the right choices along the way. But you get to make choices that are necessary for financial growth and establishment.

Paying in cash is better than paying with a debit card

It depends on what you are buying and the considerations you are making. Paying with a debit card may sometimes have the advantage of bonuses that come from credit companies. The reason people usually have or present for not wanting to pay in cash is fear of overdraft. If you pay in cash you cannot be tempted to buy for more than you have the money to pay right? Well, its just about financial discipline. You can own and use a debit card and never spend more than you actually have on that card if you make up your mind not to. And you will also have the above mentioned advantage.

I will have more fun with more money

I say balderdash! You don’t need money to have fun. It is one of the worse financial myths people believe. Lets take children for example, and remember when you were a child and had no money. I am quite certain you had more fun then than you are having now that you earn a few thousands. The thing is, people who think they need money to have fun are vain and are themselves hardly fun to be with. What it takes to have fun is simply having a sense of humor and having great friends or relationships. Money can indeed spice up our experiences, but make no mistakes, if you need money to have fun, it means you are not fun to be with and sincerely even if you have all the money in the world, you will still be no fun to be with. The truth about money is that it could only help you have fun in certain areas or with certain things but having fun should not be tied to places or things.

Money will help me meet interesting people

Some myths people have about money are just insane right? The truth is, in the club of rich people, few are interesting. Money does not add value to one’s real personality. You can meet interesting people almost anywhere in life. Most times, those who have little or nothing are the people who have actually had experiences in life. They have a better understanding of the world and find it easy relating with people.

On the other hand, money could get you in the midst of people who are vain and myopic in their reasoning. One reason is, rich people, especially those who never had to go through anything to be rich, are scoffers. Most of them are self centered judgmental men and women who are also sometimes very insecure. Summarily, getting rich is no guarantee that you are going to meet interesting fun-to-be-with people. As a matter of fact, joining the rich men’s club could actually reduce your chances of meeting interesting people.

With more money, I will have more friends

A thousand times no. I can assure you of one thing; money will bring a lot of people around you but about 98% of them will be people you cannot call friends. Money attracts people but not friends. Friends are there because of their attachment to your personality. So it is most likely you will get real ones before you are rich. Most rich people have no real friends. Those who do have friends got them before they became rich.

More so, being rich has a tendency to put you on the defensive when it comes to people and friends. If you are rich and naive, you will often feel like those who come around you are coming for your money, making it difficult to open up to real relationships.

Again there is a chance you may loose your real friends when you have money if care is not taken. Real friends feed on your attention and communication with them for the relationship to grow. If you become rich and distracted by the wealth, they would see no reason to still be friends. Worse still, if you are stupid and deluded enough to just assume that they will stay by you because of the money, you would have completely messed everything up.

 I can get anyone to Love me if I have money

Of course not! It is common sense to know that women who are only going to love you when you get rich are really not after you but after the money. This particular money myth is common amongst men who have low self esteem and have failed a few times at building successful relationships with women. As a man or woman, you can only trust those who love you when you have no money to throw around or those who have proven their love even while the money is there. You have a better chance finding true love if money is not a factor. Also, it shows some level of naivety for a person to imagine that money can buy love. Time and experiences of other people have proven otherwise. Love comes because one person is enchanted by the personality of another, not their wealth.

There are more than enough money myths to keep people on the wrong lane until they ultimately get into a financial wreck. Now you know some of the things you may have held on to as far as the subject of money is concerned and the truth about money. You should simply avoid them.