My college roommate and I loved to "bargain shop"—a.k.a. purchase needless items at a deep discount. Think buy-one-get-two-free bath oils and out-of-season sweaters marked 70 percent off. On the bus ride back to campus, we'd marvel at how we'd "saved" over $100 (never mind that we'd spent $50). Had I truly saved $100 per month back then, I would have graduated with close to $5,000 in the bank and could have paid off my Visa debt in one fell swoop. Face-palm.

We sometimes cling to myths that can set us up for financial failure because of our complicated emotions surrounding money, from overexcitement to anxiety or fear. Here are some of the most persistent untruths—and tips for banishing them once and for all.

1. "Only rich people invest."

Photo: Jesus Ayala/Studio D

You may think investing is just for the 1 percent. But if you commit to investing $5 a day—about the cost of a large latte—in an index fund that tracks the market, you could have upwards of $85,000 in 25 years (assuming a 5 percent rate of return).

According to a Bankrate Money Pulse Survey, 52 percent of Americans own no stocks or stock-based investments. The number one reason given? They don't have the money.

TECH TOOL: The app Acorns automatically invests for you. Just connect a credit or debit card and checking account to the app, and for every transaction, it rounds up the charge to the nearest dollar and invests the change in a stock portfolio tailored to your age and risk tolerance.

2. "I'll save more when I make more."

It's an appealing idea, but the more you earn, the more your expenses might increase, too. Try automatically directing a small part of your paycheck to a savings account, working your way up to 10 percent of your take-home pay. Just start. Now.

3. "Little purchases don't matter."

Photo: Kristin Lee
Nearly a third of every U.S. dollar spent on food goes to dining out.

Dan Ariely, professor of psychology and behavioral economics at Duke University, believes this is a major mind-set challenge. "We think before making big purchases but don't focus on small ones, like dinners out," he says. The cure: Stick to a set amount of cash or a debit card with enough for the week's expenses. "If the card runs out," says Ariely, "you stop spending."

Nearly a third of every U.S. dollar spent on food goes to dining out.

TECH TOOL: Digit is a free app that syncs with your spending. It determines small amounts of money to save (think $5 to $50), then transfers them to an online savings account every few days.

4. "It's not polite to talk about money."

Peer pressure can actually help savers stay on track. A 2012 report found that participants in a self-help group—where they could openly announce their savings progress—had an average savings balance of almost twice that of the control group. Try starting a meet-up with friends (like a book club about money) or a private Facebook group focused on personal finance.

Farnoosh Torabi is an award-winning personal finance expert, author of When She Makes More, and host of CNBC's Follow the Leader and the podcast So Money.


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