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Seven Common Myths About Saving Money

Last Updated: May 20, 2010

Saving money is trendy these days, but there's a lot of misinformation flying around about the best way to do it. Even worse, too many people believe these seven common myths. Which one is stopping you from saving money?

1. Saving money takes a long time.

Sure, saving for a new house can take months or years. However, there are probably a lot of other things you don't buy on a regular basis because they seem too "frivolous." How long would it take you to save up for a massage, a meal in a nicer restaurant, or a pair of shoes that cost double your usual? Saving money can take weeks or mere days, depending on the price tag and the time you're willing to invest.

2. Saving money only makes sense if you have something specific to buy.

Can you predict when a co-worker will offer you half-price tickets to a Caribbean cruise, your new romantic interest will ask you to sign up for skydiving lessons together, or your favorite band will play a pricey benefit concert? How about predicting when your car will break down, your aging parent will need a hospital visit, or your water pipes will burst? Saving money lets you take advantage of once-in-a-lifetime opportunities and take sudden hurdles in stride.

3. Saving money is impossible if your family isn't on board.

Is there anything more infuriating than learning that your spouse just blew through your joint savings account? How about when your kids plead to go out for pizza after you've explained that you can't afford it until the credit card is paid off? Granted, it's easier to save when your whole family is on board. However, if they're not, then set up a private savings account, deposit your monthly savings before you contribute to household bills, and cheerfully encourage your kids to get part-time jobs.

4. Saving money means you can only spend on the basics.

Do you remember the food pyramid in health class, with the boring nutritious food groups at the base and the yummy no-no foods at the apex? News flash: there's no universal spending pyramid. Most people's spending goes towards basics like food, rent, and transportation, but that's an average, not a rule. If you want to rent a cheap room in a run-down neighborhood so you can afford designer clothing, go for it. Saving money means honoring your own priorities.

5. Saving money means learning about IRAs, 401Ks, and CDs.

Do you need to learn how to use an elliptical training machine before you can go for a jog around the block? Do you need to get a degree in graphic design before printing out garage sale flyers? Of course not. Likewise, you don't need to have an elaborate financial plan or spend hours researching complicated investing strategies. Saving money can be as simple as emptying your change purse into a Mason jar every evening.

6. Saving money is only possible if you're organized.

If you think you have to track your purchase, divide your cash flow into categories and create animated color-coded charts before you can save money, think again. Plenty of online tools will do the organization for you, like mint.com or your own bank's automated bill pay program. You can also turn disorganization into a benefit: hide $5 bills in your pockets before you throw your dirty jeans on the floor. Laundry time will reveal a forgotten savings stash.

7. Saving money means lowering your standard of living.

If you punish yourself by lowering your standard of living every time you want to save money, you'll hardly feel motivated to save. Instead, get creative. Brainstorm ways to make more money on the side, preferably by setting up passive streams of income. Try affiliate marketing, eBay trading or freelance writing. Saving money means finding smart ways to maintain your standard of living while putting money aside at the same time.

Now that you know the seven common myths about saving money, it's time to take action. You can save money starting today, and you can do it in any way that makes sense for you and your lifestyle!