There are some Jagoans who are excited to start managing their personal finances, but they give up because of various myths. Indeed, there are many myths related to managing personal finances. However, most of these myths are false. Jago will discuss the top 4 personal finance myths.
4 Personal Finance Myths That Are False
1. Only people with a lot of money can save
How can you save if you only have enough money to meet your daily needs? Sometimes, there isn’t any money left, not even a little. That’s what many people believe. Jagoans, saving is something that must be done by everyone, regardless of their income in a month.
You can start saving, it doesn't matter if you only save a little. The most important thing is that there is always money set aside for savings every month before the money is used for the things you want or fun stuff.
2. Investing requires a lot of money
This second myth is also believed by a lot of people. Investing today is very flexible. If you invest in a mutual fund with Bibit, for example, you can start from only Rp100 thousand.
Just like saving, there's nothing wrong with starting to invest to strengthen financial immunity and secure the future. Moreover, it is better to start long-term investments early to get more satisfying investment returns.
3. Emergency fund is not that important
This myth can cause a lot of problems in the future if you believe it. Having an emergency fund is an important component of financial planning and management.
Unfortunately, the lack of awareness and good financial management makes an emergency fund neglected by some people. Many also believe that an emergency will not necessarily happen to them, so there is no need to prepare an emergency fund.
Some people prefer to deal with an emergency when it does happen. In the end, they borrow money or go into debt to get out of the emergency.
It is better to always be on guard. There is nothing wrong with having an emergency fund that is ready to be used in the event of an unexpected event that requires a large amount of money. By doing so, the funds that have been allocated to meet daily needs will not be used. You also don't need to borrow money and pay interest on the borrowed money.
4. Retirement planning before the age of 40 is too early
Retirement should be a happy time when you can enjoy life the way you want.
Retirement savings are not just about making sure you have enough money to meet your needs after you no longer work. Retirement savings should also be able to help you realize dreams that were not achieved while still working.
This is why you are encouraged to save as soon as you earn, not after you turn 40. The earlier you save and invest, the greater the results you can enjoy. You can also benefit from the concept of compound interest.
If you only start setting up your retirement fund when you turn 40, you only have 15, 20 or 25 years to save and invest (depending on how old you are at retirement). Compare if you started saving and investing when you were 25, for example.
In addition, you are encouraged to start building your retirement fund when you are in your 20s because you have fewer financial responsibilities compared to when you are in your 30s or 40s. You may already have a family, leading to more responsibilities.
Managing Personal Finances is Easy and Practical with Bank Jago Application
What do you think, Jagoans? All decisions are in your hands. To help you manage your personal finances, you can use the Jago application.
Some of the excellent features that you can find in the Jago application include the Saving and Spending Pockets to separate various needs, the Locked Pocket and Term Deposit for your financial goals, an automatic budgeting and saving feature, and e-Statements as a substitute for passbooks.
