When it comes to managing money, we often come across conflicting advice or deeply ingrained myths that can lead us astray. Let’s tackle a few common financial questions and uncover the truth behind them.
Can you negotiate bills or debt?
Yes, lenders can work with you.
It’s a common misconception that bills and debt are set in stone. In reality, many lenders and service providers are open to negotiation, especially if you are transparent about your financial situation. Whether it’s negotiating medical bills, credit card debt, or utility payments, being proactive can lead to reduced amounts or extended payment plans. All it takes is asking the right questions and being persistent.
Can you change a bad credit score?
Yes, with good money habits over time.
A bad credit score is not a life sentence. You can absolutely improve your credit score by adopting good financial habits such as making on-time payments, reducing your credit card balances, and avoiding new debt. While it takes time and effort, consistent improvements will be reflected in your credit score, and you can eventually reach a healthier financial standing.
Where is a safe place to keep your money?
In a high-yield savings account.
A safe and practical place to keep your money is in a high-yield savings account. These accounts are federally insured, meaning your money is protected up to a certain limit. Plus, they allow your money to grow with interest over time. While options like gold and the stock market can also be part of a financial strategy, savings accounts provide low risk and easy access when you need liquidity.
Am I too young to think about retirement?
Never.
It’s never too early to think about retirement. In fact, the sooner you start, the better. Time is your greatest ally when it comes to building retirement savings, thanks to the power of compound interest. Even if you’re just starting your career or still in college, setting aside small amounts can have a significant impact over the long term.
Is cutting expenses the only way to get out of debt?
No, you could earn more to pay off the debt.
While cutting expenses can help, it’s not the only strategy for getting out of debt. Increasing your income through side gigs, asking for a raise, or finding higher-paying opportunities can accelerate your debt repayment process. By combining smart budgeting with additional income, you can pay off debt faster without feeling like you have to sacrifice everything fun in your life.
Does a credit card balance help your credit score?
No, the closer to zero, the better.
Carrying a credit card balance doesn’t help your score; in fact, it’s better to keep your credit utilization low or at zero. Paying off your credit card balance in full every month shows lenders that you’re responsible with your credit, which can help boost your score over time. The lower your balance compared to your credit limit, the better your credit score could be.
The bottom line
Money myths can cloud our judgment, but with the right information, you can make smarter decisions about your finances. Negotiating bills, improving your credit score, and balancing saving with spending are all possible. By staying informed, you can take control of your financial future and avoid costly mistakes.
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