Level Money Blog Up for Debate: Investigating 3 Common Money Misconceptions

When you're sorting through financial advice from friends, family, and online experts, it can be challenging to determine which information is accurate. While many of those offering money management tips have good intentions, that doesn't keep them from spreading generalized or out-of-date advice that isn't appropriate for every millennial. To help you decide whether following or ignoring these guidelines is right for you, here's a deep dive on three common money misconceptions:1. Money Misconception #1 - Cash is King:Many financial bloggers encourage their readers to conduct all their transactions in cash to restrict their spending and avoid going into credit card debt. For people who really struggle to stay in control of their spending, leading a currency-only life might be the best option, but for the rest of us, here's why it can pay to use cash-alternatives for many purchases:Cash doesn't allow for insight into your spending: When you pay for everything with cash, it can be hard to keep track of where your money goes once it's out of your account. If, instead, you swipe your debit or credit card to make purchases, all your transactions are recorded separately. And when you connect your accounts to the Level MoneySM app, it becomes even easier to gain insight into your spending habits and where you can cut back.No safety net with cash: If your cash goes missing, it's quite unlikely that you will get it back. But if your credit card disappears, you can cancel the card and have a new one sent to you - plus, in most cases, you won't be responsible for covering fraudulent charges.Cash doesn't allow you to Build your credit: A big part of improving your credit score, is having and using credit responsibly. It's hard to demonstrate that you can manage debt responsibly when you've used cash for most of your purchases.Cash isn't the easiest: There are some expenses - rent, cell phone bills, airfare - that can't often be paid in cash, so you'll need a paperless payment alternative to cover these costs. Even without a credit card, these methods can make it easier to split bills with roommates or friends and make purchases online.2. Money Misconception #2 - I don't earn enough to save: Between high costs-of-living and large student loan balances, it's no wonder many in our generation find it hard to save. But despite these challenges, the majority of millennials have risen to the occasion proving better at saving than previous generations. Except in cases of major financial distress, most of us should be able to save a significant portion of our income, regardless of earnings. Here are some things to keep in mind:Retirement isn't cheap: One study estimates that millennials need to save 22% of their income annually to replace 80% of their income by age 67. Finding ways to put more funds in our retirement account may be even more vital than we realized.You can find easy ways to save: Increasing your savings doesn't always have to mean hard cutbacks and tough decisions. Try following in the footsteps of hipsters, eliminating unwanted expenses, and focusing your funds on what brings you the most joy - and don't forget take a hard, honest look at how much you can afford to save. AND you could earn more: If your savings goals still feel out of reach, it's hard to deny that making more money can help, especially when it's fairly easy to find extra work online or pick-up a few more hours as a ride-sharing driver.3. Money Misconception #3 - Buying a home is better than renting With housing costs making up a large portion of our monthly budgets, it's understandable why many of us are looking for cheaper alternative. Buying instead of renting is often touted as a more affordable option, but for some financially-constrained millennials, this may not be the best option. Before you begin making the rounds on open houses, consider these factors:The right time for you: Don't let low mortgage rates convince you to buy a home before you're ready. We've published an in-depth post on this topic, so check it out and be sure to consider your short- and long-term goals as well as your current debt and available savings when making this major decision. Prices in your area: Where you live can have a big impact on whether it makes sense to buy or rent a home (here's one example of many studies available).ALL of the costs: Sure, your mortgage payment is likely to be less on a 2-bedroom house than it is for your 2-bedroom apartment in a similar location, but when you're a homeowner, there are a lot of other costs to consider. When you rent, you don't have to worry about maintenance, property taxes, closing costs, and other fees.Have more financial claims you want investigated? Leave them in the comments below.Level Money℠ powered by Capital One®The compensated opinions expressed by the author at or through this blog are the opinions of the individual author, and may not reflect the opinions of any other person, legal entity or corporation. The author's opinions are not to be interpreted or held accountable as financial advice or recommendations.