Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


Financial advisers far and wide preach the importance of paying off larger debts with higher interest rates first. While it is a good idea to pay down higher interest debt, there’s also something to be said for paying small balances. Research by the Harvard Business Review found that it’s very motivating for people to see small balances disappear. Paying off several accounts with small balances can have a powerful impact on one’s sense of progress.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


Snatching something up because it’s on sale or is a bargain is one of the biggest false economies out there, says Chelsea Hudson, personal finance expert for TopCashback.com. “In our eagerness to save money on expenses, believing you’re getting a bargain can financially punish you in the long run,” says Hudson. “Often, you are still wasting money. False economies include bulk buying, inadequate insurance policies and picking price over value.”



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


This certainly isn’t always the case, says Hudson of TopCashback.com. “Logging in extra hard-working hours doesn’t always equate to more money. In fact, overworking can lead to exhaustion and less productivity.” Moral of the story: work smarter, not harder.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


If you’re using a car loan to purchase a vehicle, buying a new car may actually be a better value. An analysis by Finder.com revealed that consumers may end up saving as little as $500 in interest when buying used compared to new. “Meaning that in the long run, the newer car will stretch your dollar further after taking into account additional costs such as insurance and maintenance,” said McDermott of Finder.com.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


Paying more doesn’t always mean you’re getting a superior product. Though it’s a notion we’ve been sold over and over. It is possible to find less expensive, generic brands and receive the same quality for less, says Hudson, of TopCashback.com. “When you pay more for the same product, you’re paying for the brand name, not the product itself,” said Hudson.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


Many young adults, especially those in their 20s, don’t make retirement savings a financial priority, in large part because retirement seems like such a distant concept. However, it’s never too early to start saving for retirement and in fact, the longer you have a 401k, the longer period of time your assets will have to appreciate, says Hudson, of TopCashback.com “Open a retirement account as early as you can and faithfully contribute towards it,” said Hudson. “Even if it’s only 5 percent of your salary; the longer you save for, the longer your investments have time to grow.”



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


Many retirees have been told that they can plan to spend about 4 percent of their retirement nest egg each year during retirement and not run out of money. However, this rule of thumb may be outdated, says Robert Johnson, professor of finance at the Heider College of Business at Creighton University. “While historically that rule of thumb worked in the United States, the current environment of low bond returns increases the likelihood that retirees may well run out of money if that rule is applied going forward,” he said. “Better safe than sorry, people would be better served to decrease their spending to perhaps 3 percent to make their money last.”



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


While there’s plenty of truth to the fact that you should never sell yourself short, the reality is that taking a pay cut might be inevitable at some point during your professional life, Hudson says. “Especially during a career or location change, including moving to an area with a lower cost of living or switching to a career that is less stressful,” said Hudson. “To get where you want to be, you may need to take a few detours along the way, including a lower salary.” You may need to make some monetary sacrifices in your career, and that’s perfectly okay.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


Renting has always had a negative stigma based on the idea that those who rent are throwing away money or paying someone else’s mortgage instead of building equity in a home. “However, changes in the housing market and taxes make it more difficult for owning a home to be the sure-fire way of accumulating wealth,” said Hudson. Owning a home also means less flexibility, and brings with it countless additional costs such as homeowners insurance, community fees, repairs, taxes, and more. In other words, buying isn’t always better than renting.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


Some experts firmly believe credit cards lead you down a slippery slope, and reject the notion that it’s necessary to constantly focus on improving your credit score. Why? Because the point of having a good credit score is to successfully obtain more credit. “This myth means we have to get more debt so we can get more debt because debt is how we get stuff,” said Ramsey, author of “The Total Money Makeover.”



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


While there may be some truth to this idea, it’s critical that you do your research first, says Millstein, editor of CreditRepairExpert. “Before this benefit is a certainty, make sure to adjust for cost of living in your new neighborhood,” he explained. “A job that pays twice as much sounds great until you realize that you must live in an area with prices three times as high.”



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


Life insurance isn’t for everyone. Those who’ve accumulated enough wealth and assets to care for their own needs and their loved one’s needs in the event of their death can forgo paying for life insurance, especially if it’s a term policy, advises Johnson. “Life insurance is a terrific risk-management vehicle for some and an incredibly poor investment for many others,” said Johnson.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


“The idea that after you retire, your basic expenses will be much lower is among the financial myths that are destroying people’s chances for a secure retirement,” says financial security expert and New York Times best-selling author Pamela Yellen. Items such as utility bills, the cost of groceries, home or car insurance will all cost more as the years go by, not less. In addition, healthcare costs are also likely to increase.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


Instead of focusing on amassing a multiple of your annual salary as a goal for retirement savings, focus on saving enough to cover your annual living expenses, says Joe Mecca of Coastal Credit Union in Raleigh, North Carolina. “If you make $80,000 annually and only spend $25,000 of it, you have a very different endpoint than someone who spends $75,000 of theirs,” said Mecca. “Set your goal around 25 to 30 times your annual expenses instead of a factor of your salary.”



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


Checking your bank account on a mobile app or online and knowing the balance isn’t the same as budgeting. Don’t fool yourself, says Karen Ford, financial coach. “A budget looks forward. Write it down, each month. Pre-plan. So, when a wedding shower or baby shower comes up, you’ve already got the money planned. If it’s not written, it’s not real,” she advises.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


Disability insurance is designed to protect you in case you can’t work for any reason, from an accident to an illness. In fact, cancer, heart disease, and other illnesses are usually the reason people need disability insurance, not accidents. “It’s easy to think you don’t need disability insurance simply because you don’t think you’ll be disabled during your career. But the truth is, just over one in four people in their 20s will become disabled before they retire,” says R. Tyler End, certified financial planner and insurance expert at the insurance website Policygenius.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


Don’t buy into the notion that you have to be an expert to succeed as an investor. It’s simply not true, says Timothy Wiedman, retired Doane University professor who taught personal finance for years. Those 40 and under should have most of their investments in the stock market — but should do so intelligently, says Wiedman, who recommends low-cost stock index mutual funds that mirror the market as a whole. Investing in such funds does not require any particular investing savvy and provides a better return than nearly any fixed-income investment portfolio.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


The three to six months’ savings rule of thumb has been around for years. The reality however, is that you need enough money in your emergency fund to pay your expenses for the entire time it takes to find a job, (as that’s when most people dip into such funds.) Depending on your occupation, it can much longer than three to six months to find work. Given that reality, your emergency reserve may need to be far larger.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


The days of getting a “one good job” are long gone, says Adrian Huether, head of finance for the software company Evisions. “It is a myth,” said Huether. “Nowadays, the new norm is having two to five streams of income. The future of work is multiple streams of income via the world of freelancing and the booming gig economy.”



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


When people start earning more, they often spend more, buying things they’ve always wanted or felt they needed. In the end, they’re not any better off financially. One of the best ways to ensure that higher earnings translate into a higher net worth is to remain focused on whether all of the spending is moving you in the direction you need to go.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


Coupon clippers are 22 percent more likely than those who don’t use coupons to report spending more than they planned, according to a proprietary study completed by Elevate’s Center for the New Middle Class. “The most effective way to control spending is to set strict spending limits,” says Jonathan Walker, Elevate’s executive director. “Those who set limits were able to maintain their spending.” Those who failed to plan at all spent 125 percent more than strict planners.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


One of the most glaring outdated money truths is that you should ignore day-to-day financial news and ups and downs when it comes to your investments, says James Pollard of TheAdvisorCoach.com. “Today, that’s not true because times really are changing,” said Pollard. “Retail stores are shutting down, people are cutting their cable subscriptions … All of these macro societal changes affect your personal finances and investments if you happen to have invested in old ‘safe’ companies that do business in these areas.”



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


The notion that using a debit card is far safer than many other payment options has long since become antiquated. “At one point there was some truth to this,” Chargebacks911 co-founder Monica Eaton-Cardone said. “Debit cards are protected by the FDIC, to an extent, and are more easily recovered than lost cash.” However, the rise of the internet has altered the landscape. Cash doesn’t work online. And most credit cards offer zero liability for fraudulent purchases, making them the safest bet.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


It’s a saying we’ve all heard time and again: Money doesn’t buy happiness. As it turns out, it does, especially for low- and middle-income people. One study from Princeton University found that as the income of test subjects increased, their outlook on life improved. In addition, income increases were found to bolster emotional well-being, improving the quality of day-to-day existence.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


If you remember nothing else, remember this: It is never too late to have an impact on your finances. It’s true that if you don’t start saving until later in life, you’re unlikely to be able to retire at 55. However, there are always actions you can take to improve your financial outlook and goals. Even small steps, like increasing the amount you’re setting aside right now, will help in the long run.



Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.


37/37 SLIDES