We are a nation of debtors. All the statistics over the past decade point to this. The savings rate is at an all-time low. At no point in our nation's history have we saved less money. At the same time, we also have used credit to supplement our spending, pushing this to an all-time high. The result is lots of people in financial turmoil. Unfortunately, part of reversing this dilemma is to begin putting some money away each week. Consistent saving of money is a habit that needs to be bred in all individuals if they hope to achieve financial independence. Of course, when you challenge people with this, they immediately begin to throw out the excuses. Some of these excuses are so prevalent that the majority of society believes them.

Here are the three biggest myths about saving money that people believe in:

1. I cannot afford to save money.

This is absolutely not true. Everyone can save something each week/month. The reason that individuals tend to spend everything that they have is because of habit. There are numerous ways to reduce expenses so as to have a little to put away. People often claim to be spending all that comes in. This is true in most instances. However, is it not possible to bring a bag lunch one day at the cost of a few dollars rather than going out. This will save somewhere between $4-$6 each time it is done. It becomes easy to put away $25.00 a month into a savings account when this is implemented.

Another aspect of savings that makes it really easy is the advent of direct deposit. Most companies offer this service to their employees. Typically, individuals have their entire pay check going into a single account-the checking account. Of course all bills are paid out of this. An easy way to alter this is to give the company a second account number. This account, a savings account, will receive a percentage of your pay; perhaps 5%. An interesting observation is that people do not even miss the money out of their checking account after a couple of weeks. It is also fun to watch the savings account grow over the course of months.

The two strategies make it fairly simple to save money on a regular basis. It basically requires a commitment to develop a new habit.

2. Just owning assets is the same as cash.

There is an old saying 'cash is king'. Nothing can beat having a lot of money in liquid form. There is simply no substitute. People who believe that having things that are worth a lot of money is what wealth is all about are misguided. It is true that owning assets are a vital part of financial success. However, having a net worth of $1 million is not the same as having a million dollars in cash. The primary benefit of assets is the cashflow that they throw off. Many people do not work a job because their assets throw off enough cash to cover their expenses.

The fallacy behind this belief is that often people do not own the assets they are referring to. Take real estate as an example. Those who claim to be wealthy when they add up the value of their properties often find themselves in trouble when market conditions change. This is because the bank truly owns the property. The mortgage needs to be paid in full before it can be considered an asset. Even after that occurs, there are taxes, insurance, and upkeep to be factored in. Also, if someone gets into a dire situation, it typically is not possible to turn real estate into cash. It is not a liquid asset. Cash is the one resource that will allow you to get through the difficult circumstances.

3. Saving will make me have to sacrifice the things that I want.

As mentioned, people spend more than they take in. When we factor the credit given to people, the average individual spends 110%-125% of what they earn. Obviously, that equates into a lot of interest paid over the course of time. Figuring the amount of interest of something bought on credit often runs into the thousands. Often the interest is equal to the original purchase price meaning that one paid double for the item. By saving money, one can pay for the larger ticket items such as furniture, a car, or vacations with cash. The savings in interest alone will more than pay for the 'sacrifices' you made. In reality, saving money does not hinder one's lifestyle; it actually provides freedom. Over time, you will not be without but rather enjoy more.

Refrain from buying into the myths about saving money. Shattering these beliefs will allow you to begin your path to financial freedom. It is the most basic component of investing. Setting a little aside each pay period will provide the resources to attain higher rates of returns. It will also reduce the stress and pressure that is common with the financially overextended lifestyle.