Today’s article will take you to the true fun facts about saving money. I will discuss something that I think is very important, especially when you start your cash journey.
When it comes to money, we usually learn many real details only when we are old age or face specific events. Furthermore, when we establish a financial life for the first time, we tend to make many false assumptions about money.
I think many people think you should be some kind of money management expert. However, this is not the case. You just need to know the difference between true and false.
9 True Fun Facts About Saving Money I wish I knew It Earlier
When we traded TFD, we learned a lot about the truth about money and we didn’t know it at first. There is too much to discuss, but these are the nine most important things we want to know first.
1. You don’t need to save 20% to buy a house
I think many of us assume that to become a homeowner we will have to own 20% of the money in cash. But this is completely wrong. There are several programs that can help people get a mortgage.
If you’ve heard of it, it’s often referred to as an FHA loan. It allows people to buy a home without losing 20%.
In fact, they can start at 3.5% of the total cost of the home. This is especially useful for first-time buyers and gives you more flexibility in the type of home you want to buy or the time in your life.
Keep in mind that the less money you invest in your home, the higher you will pay for things like PMI or private mortgage insurance.
However, these costs also depend on factors such as your reputation. Even if you have very little money, you can be the ideal person to buy a house.
You just need to know some options. Please see the link below for more information on some types of low down payment mortgages that you can get for less than 20%.
2. Your credit score is more than just paying bills on time
It is a fun fact about saving money that the payment history only really accounts for only 35% of the total credit score. Other factors (such as the amount of available balance used, the number of hard checks, the duration for obtaining a loan, etc.) are important when deciding what your score will be.
If you do not pay on time, it is effectively undermining your ability to earn a good credit score. But you can’t believe you can receive good credit automatically just because you pay a bill on time.
You can have more information on creating and maintaining a good credit score.
3. Transportation is a big unseen cost
Transport is one of the biggest expenses of the daily budget. Americans spend on average 9% to 25% of their monthly transport budget, which is crazy when you consider that the average American could probably cut that cost in half.
This is one of the budget areas for which we do not really prepare and which we often do not talk about. But everything, from gas insurance, to the cost of a car, to car apps like Uber, Lyft or a taxi, is a huge daily expense.
You can achieve the goal of reducing the costs through cycling, biking, public transport or ride-sharing which is a great way to find extra space on almost any budget.
4. You can use credit cards without buying things you can’t afford
Many of us tend to be afraid or even avoid using credit cards because we associate credit cards with spending outside of your means.
Of course, many people are irresponsible in their relationship with credit cards, which can cause them heavy debts. However, there are many ways to use credit cards without excessive costs.
Credit cards are not only a great way to improve your credit score, but they can also protect you from theft. For example, if every purchase you make is directly linked to your bank account, you are more likely to lose that money. Believe me, when I say that getting a credit card is much simpler, it takes off a fraudulent charge than it is to get a bank to reimburse a checking account that’s been drained.
After skimmed my debit card and withdrawing almost $ 5,000 from my account, I didn’t get it back for a month.
In addition to the main advantages, you can also use your credit card to earn points, rewards or cashback to get significant benefits from the funds you’re already spending.
If you are a beginner and don’t trust credit cards, make automatic payments for your bills and leave them at home to avoid being tempted.
And, if you can make better use of them, set the following rules: You can’t buy anything with a credit card that you cannot fully payback for everything before the end of the month.
Getting a credit card is one of those really easy ways to get the most out of your daily expenses.
5. Working from 9 to 5 is not an automatic ticket for financial freedom
It seems that many students consider 9-5 job the solution for all of their financial crisis. However, if you don’t know how to manage your money, this becomes another issue.
Transferring money to your annual salary accounts every two weeks is a very simple way to avoid bad spending habits. The first thing everyone should do after getting a 9 to 5 job and get paid from it, is to make sure that all savings, investments, and pensions are automatically deposited into the account.
In fact, you should never see the money saved or it will become a source of temptation. Working from 9 to 5 can be very useful, but you need to know how to handle this financial comfort.
6. You don’t need to be wealthy to invest money
You don’t need to have money to invest. Another fun fact about saving money or investing money. Only 9% of millennials consider themselves investors, and it’s ridiculous if you think something like that:
- Things like retirement accounts are also investing
- You can actually invest a few dollars.
In addition to your 401k core work packages, there are many low-level mutual funds that allow people to invest in a serious budget.
Investment is not just wealthy old people do. If everyone knows the basics of getting started, then this is something for everyone.
7. You can invest without ever buying an individual stock
There are two things you should know about investing. First, there is no need to buy individual stocks. Secondly, buying them is not a good idea.
Things like mutual funds and ETFs, or exchange-traded funds, basically combine many stocks, allowing you to invest more slowly and safely.
In essence, over time, this investment basket follows a market that is almost always better than individual stocks. Investing in individual stocks is extremely risky.
In addition to the fact that you do not have to be an investor, you should also consider it a game of chance. You are using this occasion.
In fact, people even conducted experiments comparing a group of investment professionals to a group of kittens, and both groups opted for stocks.
Guess who is the best? The Kittens. If you are interested in individual stocks, now is the time to consider whether you want to support separate companies or industries.
But in general, you can and should be an investor without touching individual stocks.
8. Interest rates will kill you
If you are just starting financially, you can’t actually study interest rates carefully. But trust me when I tell you this will be one of the most important factors in your financial life.
From credit cards, student loans, car loans to everything you get, high and low-interest rates can actually be the difference tens of thousands of dollars over time. Even things like mobile phones can hit you at extremely harmful interest rates.
If you are just starting to increase or rebuild your credit, then low-interest rates may not have many options. But no matter what happens, should you always look at this number and say how much it will cost during the repayment process? And can I negotiate it down?
For example, if you find yourself in a situation where you can avoid paying interest such as, by paying off a credit card in full each month, avoid interest.
Here you will find more information about banks with the highest interest rates for a savings account.
9. The repayment plan you start is not always tied to you
Almost everything purchased on loan can be later financed or consolidated. This may not work for you. However, if your repayment plan meets your goals and budget, it’s always worth a look.
In the long run, maybe you can pay off the loan faster and retain some of it. Or maybe you can pay it back in a longer period of time without increasing interest.
There are many options available based on your credit score, payment history, and current budget. Check your various loans at least once a year to ensure that they are repaid in the smartest way.
In short, your financial starting point is not your financial destiny. You just need to know how to deal wisely with what you have.
If you liked these fun facts about saving money, put down your comment below that will motivate me in the future to write more about interesting facts.