Let’s face it—it’s all a bit doom and gloom out there. Inflation has been at record highs since the early 90s, and many are feeling the pinch after the last couple of years, so there’s never been a more important time to nail your personal finances.

There’s also loads of misinformation from 'TikTok Gurus', so it’s easy to be misled by common myths about personal finance.

That’s where the Kaldi team have your back. Take your first steps towards financial security as we dispel misconceptions surrounding personal finance and set you on the right path to smart money management.

Debunking Common Personal Finance Myths

Let’s tackle some of these widely accepted money myths and shake up the way you think about your personal finances.

Myth #1: Saving small amounts isn't worth it‍

The truth is, every penny counts when it comes to saving money. Even small savings can accumulate into a substantial nest egg over time, thanks to the magic of compound returns.

Developing the habit of saving, no matter how small, can provide long-term security and enable you to take calculated risks with less financial pressure. Did you know that if you invested £20 per month from18 years old, with 6% minimum annual rate of return, by retirement you will have over double the average UK pension!^[1] How comforting is it to have a buffer for future and unplanned expenses? That’s the value of saving, even in small amounts.

‍Kaldi makes 'little and often' saving habits easy. It has a target savings estimator, so you can track your progress towards your bigger financial goals. Pretty neat right?

Myth #2: Investing is only for the wealthy

Research conducted on behalf of HSBC revealed that 45% of Britons felt they lacked the funds for investing.

Investing is not exclusive to the wealthy (or people in their 50s),and today, anyone can start investing, making it an accessible financial activity for individuals regardless of their income level or age.

Numerous online platforms offer free or low-cost courses and tools, improving the accessibility of investment education resources for all who wish to make informed investment decisions.

Investing can help individuals to beat inflation, preserving their purchasing power over time, and can also provide a source of passive income.

The world of investing can seem dense and overly complicated. With Kaldi, you can auto-invest your savings into expertly curated funds to grow your wealth without even having to think about it.

Myth #3: Credit cards are always bad

Credit cards can be beneficial when used responsibly. They can lead to rewards like cash back, airline miles, or retail points, adding value to everyday purchases.

Responsible use of credit cards can increase your credit score, providing financial benefits such as lower borrowing rates. The tip here is to keep your credit utilisation under 30% of the total credit limit and pay off the credit card balance each month, which prevents interest charges and positively impacts your credit score.

Uncovering Personal Finance Secrets

Times are tough, especially for young people. In fact, 16.6% of 18-30 year old's from a pool of 10.1million are in debt, per Experian data.

While it may seem bleak, there are several finance secrets you can use to your advantage. Let's take a look...

Hack #1: Pay off high-interest debt first

High-interest debts like credit card balances and payday loans should take priority in your repayment plan because they often have interest rates that can quickly balloon, making them more expensive overtime.

By implementing the debt avalanche method, you can save money on interest and help you get out of debt faster.

But what does that mean?

Well, the ‘secret’ here is that you can actually avoid paying high interest to debt collectors by using a lower interest rate credit provider to pay them off.

Another strategy is debt consolidation, where you combine high-interest debts into a single loan with a lower interest rate, reducing total interest paid, and simplifying monthly payments.‍

Hack #2: Automate savings and investments‍

An under-appreciated strategy is the automation of savings and investments. This strategy instils a sense of consistent and disciplined investing, invaluable for those who may not regularly save. It’s a ‘set it and forget it’ so you can save your hard-earned cash without even realising it.

Setting up automatic transfers to savings and investment accounts ensures that money gets saved before there’s a chance to spend it, aiding in long-term wealth building. Also, contributing to employer-sponsored retirement plans through automatic deductions includes employer matching, boosting your retirement funds considerably.

‍Kaldi let's you auto-invest your cashback accrued from daily shopping so you can build your financial future without even lifting a finger!

Hack #3: Diversifying investments

Another less talked about strategy leading to financial success is diversification. Simply put, it means spreading out your investments across various assets to minimise the impact of losses from any single investment.

• A diversified investment portfolio offers several benefits:
• More stable and consistent returns
• Advantages for achieving long-term financial goals
• Less risk
• Protection against market volatility and economic downturns

Make your savings smarter with Kaldi

Personal finance is hard already, so why make it harder for yourself.

Kaldi's mission is to transform saving and investing by combating misinformation and apathy directly through education, gamification and rewards for building personal wealth. Join the Kaldi waitlist here.

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[1] Source:https://www.nutsaboutmoney.com/pensions/average-pension-pot-uk