3 Pieces of Financial Advice That You Don't Need to Consider

You may have received
or come across financial advice from several
people. Or perhaps you did your own research, going through different financial
content online to further your knowledge about money management.  

Nevertheless, there is
a plethora of financial advice out there. Some are reliable, while others are
not and could lead you astray, hurting your finances. To help you out, here are
three pieces of financial advice that you should pay no attention to maintain
financial stability. 

The Bank is the Safest
Place for All Your Money

While it’s a good idea
to keep the money you set aside for emergency in a savings account, that
doesn’t mean you should put all your money in the bank.

Bank accounts are
excellent for the reason that they safeguard your principal deposits. However,
they don’t offer much in terms of money growth.

Moreover, the interest
rates for savings accounts and certificates of deposits (CDs) have been low,
and even during great times, the returns they may generate can still be less than
what you may receive by investing.

Another disadvantage
with keeping a significant amount of money in the bank is that inflation can
hinder their growth, which could result in inadequate savings by the time you
retire.

That is why it’s better
to put your savings in retirement plans such as a 401(k) or an individual
retirement account (IRA). Plus, opening a 401(k) or IRA allows you to benefit
from a range of tax reductions.

Credit Cards Only Lead
to Debt

Debt is likely what
awaits you at the end when you recklessly use a credit card. But if you’re wise
and careful with it, a credit card could actually provide some boost to your
finances.

A credit card lets you
earn a cashback reward every time you pay for something with it. Cashback
rewards are bonuses that return about hundreds of dollars to your wallet every
year, especially if you can maximize the sign-up bonuses without exceeding your
usual spending budget.

In addition, credit
cards can raise your credit, provided that you’re consistent and on time with
your bill payments. The higher your credit score, the more likely you can
borrow money at a reasonable cost when you need to buy a house or a new car.

Buying a House is
Always an Excellent Investment  

Buying a house can be
an excellent investment option since
property values can increase over the long term, but that does not mean that
you should jump at that opportunity right then and there.

Let’s say you purchased
a house. But you ended up spending a great deal due to the repairs and
maintenance the house needed over the years. That could have curbed your
opportunity to save and invest.

Owning a house can help
you stay on steady grounds financially, although you can do better by being a
renter. Homeownership is not a bad idea, but keep in mind that such a financial
choice will not put you a step ahead of the renters.