5 Money Myths You Shouldn't Fall For

When it comes to these money “rules,” following conventional wisdom can cost you.

Money myths composite

Your money is safest in the bank. Not exactly. Money market accounts, savings bonds, your 401(k), a 529 plan and index funds may all be better alternatives (obviously, do your research or talk to your financial advisor). True, if your money is in the bank, it's safe because it isn't going anywhere. Banks' checking and savings accounts and certificates of deposit are insured by the Federal Deposit Insurance Corporation up to $250,000.

But if you have a lot of cash sitting in a savings account, you're technically losing money with interest rates so low these days, Sullivan says.

[See: 10 Ways to Cut Your Spending This Week.]

"You might have the comfort of seeing a stable account balance, but you are guaranteeing that your buying power will decrease due to inflation," he says.

Currently, inflation is at about 1 percent, which is pretty low. Unfortunately, the average savings account yields about 0.06 percent, so you're still losing a bit of money. But a couple of years ago, when inflation was about 3 percent, the loss was more pronounced: People were losing about 3 percent of their income's worth because their savings yields weren't keeping up with inflation, Sullivan says.

So the next time you're faced with a big financial decision, do your homework rather than making a snap decision based on what you've heard your entire life. You probably won't lose much if you believe in myths involving vampires and zombies. But losing thousands of dollars or your entire life savings – now that's scary.