3 of the Most Frightening Money Myths Out There

Buying into these is really scary.

When it comes to money matters, there are certain points most people know better than to argue against. For example, most people will easily agree that it's important to have money in a savings account.

But unfortunately, there's some really bad personal finance information out there that has the potential to lead you astray. Here are some of the scariest money myths you can't afford to believe.

1. Carrying a credit card balance is good for your credit

You may have heard that racking up a credit card balance and paying it off over time can help you boost your credit. But actually, it has the potential to do the opposite.

If you charge expenses on a credit card and pay them off in full every month, then yes, that could help you build credit. But carrying a credit card balance month after month could damage your credit score if that balance gets too high. Not only that, but it could also result in you paying a lot of extra money in the form of interest charges.

2. You don't have to save for retirement until you're older

You might hear that you don't have to focus on your retirement savings until that milestone is closer, and that you should focus on other goals before funding your nest egg. Now that's not 100% false. Your primary financial goal once you start working should be to build yourself a solid emergency fund -- one with enough money to pay for a good three to six months of essential living expenses, if not more. But once that goal is complete, you should absolutely start pumping money into an IRA or 401(k) plan -- even if you're decades away from retirement.

The sooner you start saving and investing for retirement, the more time you'll give your money to grow with the help of compound interest. But if you wait too long to start funding an IRA or 401(k), you may find that your nest egg falls short once retirement rolls around.

3. It's best to play it safe with your investments

Some people will tell you that stocks are a risky investment worth staying away from. But while it's true that stocks do carry risk, if you don't put money into them, you take on a different risk -- stunting the growth of your nest egg or brokerage account.

If you're investing for a far-off milestone like retirement, then it absolutely pays to load up on stocks and enjoy the strong returns they have the potential to give you. Once you're within 10 years of retirement, then it's time to start moving away from stocks and shift over to more conservative investments, like bonds. But avoiding stock investing altogether could mean ending up with a lot less wealth than you want to accumulate.

It's easy to fall victim to poor financial advice. But these three myths in particular are really scary. Now that you know the scoop, do what you can to avoid carrying a credit card balance, focus on retirement savings early in life, and use stocks to your advantage until the time comes to start playing it safer.