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A bank staff member counts Indian 500 rupee notes to give to customers on November 24, 2016. [Representational image]INDRANIL MUKHERJEE/AFP/Getty Images

If you are new to the space of personal finance, you might find it difficult to distinguish between facts and fiction.

And misleading information often leads to wrong decision-making and even fear of exploring lucrative options.

It's important to bust these myths before it gets too late. Let us look at five big myths that must be done away with to keep your personal finances on track.

1. Holding multiple credit cards could increase financial burden

Many people think an increase in the number of credit cards also increases the financial liability of a person, but this is not true in every scenario.

If credit card bills are paid before the due date, they don't just save you from growing bills, but also reduce the credit utilisation ratio for you.

As a good practice, you should keep the credit utilisation ratio between 25 percent to 40 percent. Maintaining this level becomes easy with distribution of spending across different cards.

You can hold different cards offering reward points and cashbacks on different purchases to meet various purposes such as booking tickets and hotels, shopping and purchasing fuel.

If used in a disciplined manner, holding multiple credit cards can prove to be beneficial for your finances.

2. Investing in mutual funds requires huge capital

A lot of youngsters who have just landed a job hesitate from saving as they feel they cannot set aside enough to make an investment.

Mutual funds allow you to start investing with an amount as small as Rs 500 every month.

You can either invest a lump-sum amount or go for instalments through the SIP method.

Mutual funds also give you the flexibility of withdrawing money partially or completely as per your requirements.

3. Loans are always bad

Contrary to the popular perception of loans being the bad guy in personal finance, they are often an effective borrowing instrument when it comes to purchasing assets such as property.

If the profit generated from a property is higher than the interest outgo for the loan, it can help you create wealth with limited financial potential.

If you wait to buy an asset until you build a suitable corpus for it, prices may increase, thus making it more difficult for you to attain it.

However, you must make sure that you do not take a loan for an amount higher than what you can afford to pay back.

Have a repayment plan in place, as any delay or default could impact your finances badly.

[Representational image]Creative Commons

4. Personal finance is for the rich

Personal finance is meant for everyone. It's about setting financial goals with what you have and working towards them by investing in the right assets and cutting costs.

As they say, it's not about how much you earn but about how much you save.

You can build a sizeable corpus if you start early, irrespective of the amount you save, and stick to your budget.

5. Spend first and save the rest

The practice of spending first and saving later is often met with various challenges which lead to compromising on the amount saved.

Even people with a sizeable income sometimes end up with little to save due to prioritising of expenditure over savings.

In order to build a wholesome corpus, it's important to prioritise savings overspending by setting aside an amount at the beginning of the month.

Indian rupee
[Representational image]Reuters

You can set a standing instruction with the bank to divert a certain amount at the beginning of the month from your salary account to your savings account.

If you have been taking your personal finance decisions based on any of these myths, it's time you took corrective measures to put back your finances on track.

The author is the CEO of Bank Bazaar.