There are many beliefs about personal finances that are sometimes unfounded and often not interpreted correctly. As people?s relationship with money can vary a great deal, when it comes to personal finances there are unfortunately no magic formulas for ?getting rich?, ?saving?, or ?eliminating debt? that can be applied to everyone.
Here we?ll look at 3 common personal finance beliefs and dispel the myth behind them.
Myth: A credit counselor is required to repair credit.
This is not true. You can repair your own credit using patience and fortitude. Credit companies can help, but they can virtually do nothing that you cannot do yourself. The first thing is to order a free credit report. Northern Credit will give you one free report per year while TransUnion Canada and Northern Credit Bureau will provide them as requested. Report any errors in writing to each of the agencies. You can contact credit companies and work out a plan that can fit your income. You must be willing to show income statements, a budget and a plan. You may be able to re-negotiate the debt.
It is a myth that by closing accounts you can get more credit score points. Dropping a card may actually reduce your credit. It?s important to show that you are paying off credit with credit on time. If you already have or wish to apply to get airmiles card, it is one of the best reasons for having a credit card as it allows appreciation in travel miles. Do not get a new credit card if you are already in debt.
Myth: Interest rates will rise. This is the time to buy a house.
The Canadian housing market has been robust, resilient and growing. It has managed to remain outside the speculative quagmire that has snarled housing sales for our southern neighbour. The Canadian Real Estate Association changed a previous negative sales forecast to now show a 1 percent increase in sales, predicting 450,800 homes for 2011. CREA has reported only a 1.6 percent drop in sales from a year ago same period. The current average sale price, $363,500, represents an annual 7.2 percent increase, with the Vancouver market driving the lead.
Would one be desperate to rush into the market while interest rates are at their lowest? The Toronto-Dominion Bank reports home inspection rates and mortgage pre-approvals are several points down from last year. The Manpower job outlook for Canada, backing up home sales, appears positive.
This may very well be the time to get into the housing market. Due diligence must be pursued. Investigate and compare rates across the various provinces. One must understand that the Canadian economy is also part of a world macro-economic frame that is still under correction.
Myth: A college education bears multiple values.
Total student debt has been estimated at $20 billion, and student loans owed to the government increase by $1.2 million daily. With tuition rates uncharacteristically rising, up to 27 percent of students graduate with over $25,000 in debt. Defaults on the 8 percent government loans can easily compound a $30,000 loan into a $60,000 debt.
Graduating students are being forced to delay careers by taking up low-paying jobs outside their specialties. With no opportunity to build individual wealth, these students are unable to obtain credit to buy automobiles or homes.
Is college the way to go? A family?s personal finance figures importantly on planning foreseeable costs for college education. While some pundits point to a job market demanding college degrees or diplomas, others are saying the resulting student debt burden outweighs the benefit.
There?s a variety of non-repayable resources available when planning for education, just as there is a line of thought that a worthwhile profession can be obtained outside college. The family or individual must take a detailed, personal look at career prospects before committing financials or signing loans. Get a copy of ?Canada Job Trends Update 2011? and go to the Working in Canada government site, among others, to obtain practical views of job outlooks
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Source: http://canadianfinanceblog.com/dispelling-3-personal-finance-myths/
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