Managing money can be complicated, and myths are often born from people’s struggles to make it simpler. But simplistic solutions can cost you instead of saving you money.

If you believe any of these five money myths, it’s time to take a closer look at the financial realities.

1. Myth: Everyone needs a fat emergency fund

Certified financial planners typically recommend clients have enough savings to cover expenses for three to six months. If you’re living paycheck to paycheck, though, it can take you years to amass that much.

Say you spend $5,000 each month and somehow manage to trim your expenses by 10%. To accumulate three months’ expenses ($4,500 times three, or $13,500), you would have to put aside every dime of that $500 savings for 27 months. Accumulating a six-month stash could take nearly five years. Either way, it’s too long to put off other important goals, such as saving for retirement and paying off high-interest-rate debt. Read more…

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5 money myths you probably believe