Saving, spending or investing? Smart money decisions shouldn't be based on money myths. So here are four common ones to be aware of – and some myth-busting tips to help you focus on getting the most from your money.

Myth 1: I can’t save money

Small amounts add up – by making saving a habit it gets easier. Here’s how to get started:

  • Small goals, or big ambitions? Choose your target – anything from a weekend away to a step on the property ladder. Track your progress online, keep a saving diary or try a bullet journal.
  • Save first, not last. Make saving one of the first things on your budget. Don’t leave it to the end of the month.
  • Scrutinise statements. You might spot a regular treat you could do without. Or hunt out a better deal on utilities and save the difference.
  • Every penny counts. Save your loose change at the end of each day – or try the ‘penny challenge’. Put aside 1p on day one, 2p on day two, 3p on day three and so on. By day 365 you’re putting aside £3.65 so it gets trickier, but you could save £667.95 in a year.

Myth 2: It’s rude to talk about money

It’s terribly British not to discuss money. But financial know-how is a great thing to share. Here’s how:

  • If you don’t ask, you don’t get. If a friend or relative has great money skills, ask for pointers.
  • Make decisions together. Hold a household meeting to discuss managing budgets. Encourage everyone to share ideas.
  • Listen in. Social media is full of money conversations. Try following personal finance bloggers, or search for ideas using hashtags like #moneysavingtips. Just don’t share personal information.
  • Talk to us. We could help you make the most of your money with a personal financial review.

Myth 3: Cash is king

Cash was toppled from its throne by debit card payments last year1 - partly due to the popularity of contactless. While coins and notes remain in the mix, there are many advantages to paying by contactless.

  • Quick and easy. Rather than rummaging about for cash, you can make payments up to £30 for anything from a pint of milk to a train ticket.
  • Convenient. There's no need to worry about having the right money on you, or finding the nearest cash point. The number of places accepting contactless payments is increasing every year.
  • Secure. Contactless cards have the same anti-fraud protection as regular ‘chip & pin’ cards.
  • Track every purchase. Unlike cash, your statements will tell you exactly how and where you’re spending money. So you’re even more in control.

Myth 4: I should put my money in bricks and mortar

Property can be an excellent investment, but it’s not the only way to put your money to work. Finding the right mix means doing a bit of homework – and potentially taking expert advice. You could consider:

  • Start with the basics. There are lots of ways to invest, from tax-efficient accounts such as stocks and shares ISAs and pensions, to investment funds and bonds. You could even pursue a passion and explore investments in art, fine wine or classic cars. If you’re new to investing – or want a refresher – you might find our 5 steps to investing helpful.
  • See both sides. There are pros and cons to any investment. For example, the potential returns on property could be higher than with bonds – but you can’t always sell quickly if you need to, without compromising on price. You can find some relative risks and returns for different asset classes here.
  • Establish your comfort zone. Consider your personal attitude to different types of risk. Common factors include: how long you intend to invest for, your income level, your financial goals, and the percentage of your total assets that any investment represents. You could opt for a diverse portfolio that spreads risk, but you should review performance regularly.

1. Source: UK Finance.