Guest Posting Over the course of American history, many people have been repeatedly advised to save their money. Your mother will probably tell you this. In the American model, this is what’s most important to success. The description sounds like a fairy tale. America’s economic system has been designed to make corporations prosper while keeping people in debt. We will dispel some myths that may seem harsh, click to read more.
Myth No. 1 – If you have enough money saved, then you’ll be able attend college. Get a great education and land an attractive job. The idea of saving up money and finding a high-paying job in order to attend college sounds smart. To go to college is an American ideal. But why does it cost so much and get more expensive every day? For many college students, it is necessary to borrow thousands for the cost of their education. You may need to take more student loans to be able to obtain a college education that can lead to a job with better pay, such as a lawyer or doctor. Many students have debts in the tens and hundreds of thousands before they are able to get a job. College is great, but saving up for it doesn’t guarantee success financially. The possibility of years with no income if you are not hired is high.
Two – Myth two: “Open an savings account at my local bank so you can save money for the long term”. Even though the bank will earn interest from your money, the savings account is not the most lucrative place to put your money. The interest rate on a savings account is usually between 1% and 2 percent. Inflation historically has been around 3% to 5%. Money in the bank doesn’t match inflation. In other words, the money that you have saved will be less valuable in the future when it’s withdrawn. Then, as if this wasn’t bad enough they also earn anywhere from 5%-30% of your money. Then you receive a pitiful 1%. The investment they make is the amount you would’ve made. And your savings value will decrease as inflation rises.
Three-fold myth: Get a high-interest credit card to get 1 or 2 percent off your purchases, and/or earn frequent flyer miles. The offers of credit card companies may appear great. However, when you factor in the interest rates that you will pay for your purchases, these savings are nothing. You can lose up to 28.8% of your money if you use credit cards. If you choose to pay your full balance every month, there will still be transaction and annual charges. Avoid fees by paying your balance in full at the end each month.