Money Myths

26 Oct Myths vs. Truths: The Truth About Credit Card Rewards

Credit Cards Going Down the Drain Myth: Credit Card Rewards are a smart way to build your credit score and to earn something back while spending. Truth: You end up spending more money to earn your Credit Car Rewards than the reward is worth. The first red flag with this myth involves what used to be the most common reward system for your card: airline miles. Did you know that 75% of rewarded airline miles are never redeemed? We Americans can justify some pretty outrageous spending in the name of earning our free plane ticket that we aren't going to use. And even if you try to use them, so many restrictions apply that it becomes next to impossible to actually redeem the reward. So we switch to other rewards, like cash back and call ourselves smart because of all the money we're earning back. But the sad reality here is when we pay with plastic we end up spending 12-18% more than if we had paid with cash.
Read More

11 Oct I’m an Idiot, not a Financial Expert

Matt Wegner is a finance and business coach dedicated to teaching the principles of successfully living debt free. Learn more at <object width="425" height="344"><param name="movie" value=""></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>...

Read More

27 Jul Money Myths: The Truth About the Cost of Retirement

Myth: My expenses will go down when I retire so I don't need to save as much for retirement. Truth: With inflation, taxes and medical bills, your expenses will go up when you retire so you need to be prepared! Quite a few financial planners out there recommend a future nest egg value that will produce 80% of your current income when you draw a percentage of the dividends and earnings out of the account each month. The assumption is that your expenses will decrease by 20% when you retire and you will need less income to continue with the same standard of living. This means when you reach retirement age, you will have your debts paid off (including your house) and your dependents are gone, with your health remaining good and your taxes decreasing because you're pulling the income out of a tax-deferred retirement account, pension, or social security. Now, if you follow the L.I.F.E. Ladder and start early enough, you indeed should be debt free by retirement age and have fewer expenses in terms of debt. But the sad fact is, not very many of us actually follow those steps and we end up facing retirement with a huge drop in income but no drop in expenses. Actually, 43% of Americans have less than $10,000 saved for retirement. 27% have less than $1,000 saved. This is a problem.
Read More