Are these debt myths holding you back from becoming financially fearless?
We bet you’ve heard at least one of them before.
We chatted with Brittni Sennett, MBA, Purse Strings Approved WMC Financial Advisor at Northwestern Mutual, about 5 debt myths that are hurting your money mindset.
5 Debt myths that are hurting your money mindset
Myth 1: There’s good debt, and there’s bad debt
There’s no good or bad. There just is. When it comes to your money mindset around debt, try shifting from a good or bad mindset to one of grace and gratitude. Think of debt as an opportunity to access a resource to live life the way we want or need to live. Be grateful for the abundance of having debt as a resource to potentially change the course of your life.
Myth 2: You need to pay off debt as soon as possible.
It’s important to have an opportunity cost conversation before jumping into paying off all your debt right away. When deciding if you should pay the minimum vs. working to pay off the debt in full, consider the impact it has on your cash flow and what else you might be able to do with that cash flow to help put you in a better situation to help you achieve your long-term goals
Myth 3: You need to carry a balance on your credit card to build credit
This is not helping your credit score. If you don’t pay your balances off in full, you’re not paying credit, you are just paying interest. If you can’t pay the full balance on your card, pay the minimum and pay it on time.
Myth 4: Checking your credit score will hurt your credit
We have access to free credit reports every year at freecreditreport.com. Take advantage of this 4-6 months before you’re looking to make a big purchase so you can check your credit history. You’re allowed to check your credit as a consumer. Keep in mind there is a difference between hard and soft inquiries in a short time.
Myth 5: You need to pay off your debt before working with a financial professional.
You are already worthy of this support, and you do not have to be completely debt-free to take advantage of a financial professional and their resources. Time is the best resource we have when it comes to our finances, and it’s never too early to start investing or building helpful financial habits.