The Misconceptions Regarding Saving

The market is filled with plenty of apps nowadays that keep a check on people’s income and spending, and automatically transfer their wealth into their savings accounts. Most users of such applications are estimated to be 27 years old.

Just debating mentally over what to do with those last few dollars that you do not need to spend is energy and time misspent. Here are some of the misconceptions and real truths.

“The Most Important Thing To Do Straight out of College is To Get A Job and Start Saving From The First Pay check.”

The most important thing (anyone 20 years along the career line will tell you) is to think about what you want to do and how you can improve on your earning potential in that specific area. The misconception above sounds a lot like where people should be waning out their anxiety. You need to think about how much you care about money and what that means when it comes to a job for you.

You may have a lot of student loan on you, but it is still easy to figure out what you want to do without thinking about paying back the loan. If you are 21 or 22 deciding what you want to do is a decision that will help you in the long term.

“As Soon as you Get Out of School, Getting a Credit Card Is a Bad Move”

This is not necessary the scenario. Most millennials have gotten their first credit cards at the age of 11. If you can get your hands on a credit card, you should go for it. A good idea would be to get a card that has a $500 limit and you can use that capacity for the long run. A $500 limit is not something that will jeopardize your spending habits.

“Buying a House is The Right Financial Decision and should be a Priority”

A lot of what is better rent or buy depends on the place you live in. People in their 20s do not have as much responsibility, and there is no harm in leveraging from this, especially if you do not have much money, and have the burden of repaying back student loans.

“You Need To Get an Emergency Fund as Soon as You Graduate”

If you have a 401(k) through your job, that should act as your emergency fund. You may have to pay a penalty, but then again, there might not be a contingency ever and you may not. This is a better option than worrying about getting a separate fund and putting money into that.