Guest Posting Americans will be told repeatedly throughout their lives that saving their money is an excellent idea. Everybody from your mom and banker will tell you to save money. America has a blueprint for success that includes saving money. There is no truth to the myth that one must live their life in accordance with this mythical guideline. America is not built for personal savings. Instead, the country was created to help corporations earn money. Individuals are then obligated by law to pay their debts. It sounds harsh. Now let’s dispel some myths surrounding saving money. Once you have decided, read this.
Myth 1: Save your money so you can get a high-paying job. You might think that saving up money for school is worth it, but if your job pays decently it’s not. A college education is the American dream. The cost of college is increasing and it’s not fair. Some college students have to borrow thousands of dollars. For a higher-paying career, such as a doctor or lawyer (for example), you may have to borrow money for another year and go to prestigious colleges. Many college graduates end up with thousands in debt (some have over $100,000), and they are unable to find employment until their loans are paid off. Saving money for school doesn’t guarantee you financial security. It is possible that you will be in financial difficulty for many years to come (and this only if you are able to find a great job).
Myth No. Two: “If you open a savings at my bank, you’ll be able to put money aside for your retirement.” You can pay your interest to the banks who will store money on behalf of you. It’s not the best place to invest (except maybe under your bed), but you will get the least return. Banks offer interest rates of between 1% and 2% on their savings accounts. The inflation rate historically was closer to 3 – 5 %. Therefore, the interest rates on your savings accounts do not match inflation. It is possible that your money may be less valuable than when it was originally deposited. You get just 1%, while the banks earn between 5%- 30%. You lose money to inflation while your capital is invested.
Myth 3 “Get the card and earn frequent flyer points or save 1% to 2%”. It may look like the small incentives offered by credit card providers are a fantastic way to cut costs, but they’re nothing in comparison to the interest rates of 10-30%. You do not save any money when using your credit cards to pay for purchases. You will lose from 6% up to 28% (depending on what interest rate you are paying on your credit cards). Even if your balance is paid in full at the end of each month, annual and other fees will still apply. The savings from the credit card company will be more than offset by this. Pay in cash each month if your budget allows it.