We all have some commonly held beliefs about money. Some are shaped by our own experiences, some are shaped by our childhoods and some are shaped by everyone else. Our thoughts and feelings about money often have nothing to do with what we want to do, but what we feel we should be doing. Over here at Friggin Finances, we are all about removing the "shoulds" with money and doing what aligns with our unique lives.

Here are 5 silly little finance myths you can kiss goodbye.😘

Investing is for fancy people that make over six figures

The greatest con of the finance world! In order to fund your retirement and life, you need a way to grow your money. Knock, knock investing is here! One cannot simply save their way to retirement - at any income level. Investing has come a long way since the 80’s. You do not need a large amount to start or any specialized knowledge. Starting while you are young is the single most effective way to retire with wealth. If you want to go DIY, try Questrade. If the whole thing intimidates the heck out of you, try a robo advisor like Wealthsimple. If there is anything you do for your financial self, let investing be it.

I’m young so I don’t need to worry about retirement

For all of us, there will be a time when we are unable to work. There will be a least a decade or more (if we’re lucky) we need to pay for while we are not working. Cue: a retirement fund. Your greatest asset when you are young is having the TIME to let your money work for you. It is wildly easier to begin investing in your 20s or 30s with a small monthly amount, instead of having to play catch up when you are nearing retirement saving huge chunks of money. I am BEGGING you to start investing for retirement now. Try $50-100 a month to get going, aim for 10-15% of your income once it becomes a habit. 

Renting is throwing your money away 

Oof this is a big one. Culturally we are all so obsessed with home ownership! We all find it very hard to talk about wealth without assuming you need to be a home owner to make it happen. Paying for your housing costs, whether that be renting or owning, is necessary because you need a place to live. The whole notion “you are paying someone’s else’s mortgage” is a silly way to describe paying for housing. When I eat at a restaurant, I’m not immediately thinking “Oh I’m paying for the owner’s mortgage!”. I’m being provided a service and exchanging money for that service. I implore you to think of renting like this - you are paying for a service. Don’t forget, housing costs are notorious for phantom costs - things we don’t think of when we are simply looking at the increase in home value. Things like closing costs, property taxes, maintenance (a huge one!), insurance. 

When you are renting, your rent is the maximum you will pay. When you own, your mortgage is the minimum. I am not for or against home ownership as a general rule. I’m always in the camp of running your own numbers for you, including everything, and see if it makes sense to own.

Insurance is not necessary for me

Often missed in personal finance is the talk about mitigating risk. Being prepared in case shit hits the proverbial fan is a major key. Your biggest financial asset is YOU and your ability to make money, not Tesla stocks. This means looking into disability insurance, critical illness insurance, and life insurance. First, check in with HR at work to see what your employment covers insurance-wise, which is common to have 1-2 of these covered. If you are self-employed, that is on you to meet with an insurance broker to get this set up. Most young people without dependents (kids usually) do NOT need life insurance just yet. Policy.Me has a great quiz to find out. People getting injured or sick and losing their ability to work can lead to financial ruin. You avoiding the financial ruin-type stuff is imperative to a wealthy life. 

You must be debt-free before you start saving

This is a nuanced one, but it has some merit. We live in the age of major student loan debt that can take years to pay off. And you’ll remember from above, the earlier you can start investing the better. Here’s where the trouble is. If your debt has a higher interest rate (ie: credit card debt), get that shiz paid off STAT. We cannot out-invest a credit card at 22% interest. However if you have lower interest debt (usually under 4-5%), I would begin investing especially if you are young. You can out-invest at this lower interest rate. I see many people wait to invest until they have paid off everything. At that point you have lost your biggest investing superpower - time! Compound interest is the GOAT. 

As always, I am forever cheering you on with your finances. Did any of these surprise you? Drop me a line @frigginfinances