Do you remember the story of that person in your neighbourhood, office, relation, or friend who never had a high salary yet they managed to achieve their financial goals? From building a house to buying a car and then saving for their future as well – they have done it all. Do you know how they managed to do it? All by keeping in mind the right strategy to use their money.

A dearth of this strategy leads us to spend more than save. If you are unable to reach your financial goals then blame the common money misconceptions. If you plan in advance the amount you need to save, earn, and invest, you won’t just have a smooth life now, but tomorrow as well.

So, in order to help you shift the money mindset you already have, we have come up with 9 common money misconceptions, that if avoided, will help you save much more than you have ever planned.

1. More Money Means More Happiness

This can easily be counted as one of the top money misconceptions. Money can never buy you happiness, hence the link between them is a misconception. The only time money matters to your happiness is when the basic needs are not met. Once they are met, the remaining amount doesn’t affect your level of happiness. In fact, several studies suggest that more than money, helping others





would make you happier. This is called Helper’s High. It is a euphoria you get after helping someone. Think wisely and use your money in the right places.



2. Bigger Income Means Financial Security

This is one of the biggest money misconceptions. The more you earn, the more you would want. Even those earning good remuneration, have a hard time paying bills. So, it is not up to your salary to make you feel financially secure, it is up to you and how wisely you spend your money. If a budget is not in place, you will always end up spending more than you earn. That is why you need solid financial planning that helps in your long-term goals. Also, always invest in building an emergency fund.



3. Big Income Means No Debt

Do you know the difference between someone who earns Rs. 10 Lakh a year with Rs. 20 Lakh mortgage and someone who earns Rs. 50 Lakh a year with Rs. 1 crore mortgage? The answer is - no difference. Both are just a paycheque away from any financial disaster. The higher the salary goes the bigger the debt is, hence, avoid this misconception for better financial planning.



4. Money Means Security

This certainly can be counted as one of the top money misconceptions. The main purpose why we want more and more money is to keep ourselves and our family out of harm’s way and live a luxurious life. It helps you control everything around you and be prepared for the unforeseen but what we don’t understand is that it is not money but a plan in place that will provide you security. And, that is when the Tata AIA Wealth Pro plan (UIN No.:110L111V03) comes to play. This ULIP plan multiplies your saving and grows your wealth courtesy of the power of market-linked returns. It also helps you achieve the major long-term goals of life.



5. Huge Salary Is Essential For Investments

Investments might sound intimidating to some. But if you understand the importance of compound interest and long-term savings, your money will grow manifolds, irrespective of how much you earn. You can start with a low amount and gradually increase your investments as your salary increases.



6. Things Will Work Themselves Out

This is again, one of the most common money misconceptions. If you are a believer in the idea that everything will fall into place on its own then you will either never reach your financial goals or find yourself in debt. It is important to actively plan and save for the big events of life. Also, if you have huge debts to pay and if a plan is not in place, you might land in financial trouble in the future.



7. You Need Money To Travel

To unwind yourself, you need to travel! We second that, but money has nothing to do with it. Travelling can come in many forms and yours can be an in-budget one. If you love travelling, then plan trips well in advance and choose budget hotels and cheap flights for the same. If savings and travelling both are on your mind, then you will find a way. All you need is good research.



8. Only Rich People Need Financial Advice

Another one of the biggest money misconceptions! Having a professional by your side to plan your finances has nothing to do with your salary. A financial advisor helps you in figuring out how much should you invest, save, and spend in order to meet your financial goals. This is even more useful if you don’t have a huge salary right now but plan for it in the near future. An advisor will make a financial roadmap for you so that you can make informed decisions about your money.



9. Your Emergency Fund Should Be Worth 3-6 Months Of Living Expenses

The list of common money misconceptions is incomplete without this one. An emergency fund certainly should be in place as unforeseen situations like a layoff or a health emergency might need it. But the amount should be enough for 6 to 9 months and not 3 to 6 months, so save accordingly.

Conclusion

So, with that, our list of biggest money misconceptions and top money misconceptions comes to an end. Its never to late to start building your own reality that secures your future financially. Hence, start investing right now, no matter how much money you make. The more you know the power of investment, the more you would be able to save. So, start saving today for a safer tomorrow!

L&C/Advt/2022/Mar/0654