101 common money myths
If you believe that carrying a balance is good for your credit score or that bankruptcy will eliminate student loans, keep reading.
What if much of what you think you know is wrong?
Just because a belief is widespread and pervasive doesn’t mean that it’s true. If you read or hear something about personal finance or money, take a few moments to think it through. Do some independent research to see if there could be another side to the coin. And never let a financial myth stand in the way of achieving your financial goals. The only way one of these money myths can stop you is if you believe it.
I assembled some pervasive money myths after listening to unsuccessful people over the years. This is a big list, but I’ll bet you have a few you could add to it. Which of these have you heard?
- I don’t need to start a business or ask for a raise. I’ll just wind up paying more in taxes anyway.
- Saving 10% of my income is plenty to carry me to financial freedom in my retirement.
- There is a magic bullet out there somewhere that will make me rich. I just need to find it.
- All credit cards are alike.
- Budgeting is for nerds. I don’t need to waste my time.
- A few late payments on my credit card won’t hurt my credit score.
- A few bounced checks won’t hurt me either. The bank knows I’m good for it!
- An emergency fund is for someone who always lives in fear.
- I don’t want anything expensive, so I don’t need a savings account.
- I’m debt-free so I don’t have to worry about managing my money or budgeting.
- More money will make me happy.
- I’m renting out my home while I’m living in another city, but I don’t need to tell my homeowners insurance company.
- I can’t switch checking accounts because I’m using overdraft protection.
- I can eat out at restaurants as cheaply as I can prepare meals at home.
- The more credit cards I apply for, the better.
- I don’t need a will because my spouse and I own everything jointly.
- My home equity is my retirement plan.
- I don’t make enough money to save.
- Going to a private college is always worth the cost.
- Individual stocks are the best investment for the long run.
- I can time my stock buys and sells to take advantage of trends in the market.
- No one can pick stocks effectively.
- Renting a home is like throwing money away.
- My work is just a job and all I need to do is enough to not get fired.
- All loaded mutual funds are bad and any no-load fund is better.
- I don’t need to understand how an ETF makes money. I just need to know that it does.
- All mortgage companies have the same rates and fees.
- Real estate agents really understand the ins and outs of personal finance.
- I’m not very good at math, so I can’t manage my own money.
- I always get a raise and a bonus every year so I don’t need to worry about setting up a budget.
- Being happy is a direct result of being able to buy whatever I want.
- Money is the source of all evil, and trying to make more money is a bad thing.
- It’s a fantasy to imagine that someone would pay me to do what I love.
- With today’s low interest rates, I’m better off keeping my money under a mattress than in a savings account.
- I can make extra money anytime I want.
- Making extra cash by using the Internet is easy.
- You always get what you pay for.
- The U.S. income tax is illegal and voluntary according to their own charter.
- One of the major advantages of home ownership is the ability to deduct your mortgage interest on your income taxes.
- Real estate investing is the answer to all my financial problems.
- Late-night television infomercials have great ideas for making more money.
- Don’t worry about the fine print. Credit issuers won’t put anything nefarious in the contract.
- Bad credit won’t stop me from getting a great job.
- Bad credit won’t stop me from renting my dream apartment either.
- Unemployment benefits will keep me afloat for six months or more.
- I shouldn’t deprive myself of anything.
- It’s too late to do anything about college financial aid.
- Money is scarce.
- Paying all bills online is always cheaper.
- If I decide to walk away from my home, the mortgage company won’t care because they get to sell the home and keep the profit.
- I’m too old to start saving now.
- I’m too young to save just yet.
- I’m middle-aged and still trying to get established so I don’t need to save either.
- I don’t need to worry about protecting my identity.
- Term life insurance is always the best bet.
- I’m too young to waste money on life insurance.
- I don’t need any life insurance because no one is dependent on my income.
- No matter how much I have on deposit at the bank, I’m protected by the FDIC.
- A debt consolidation loan is the answer to my problems.
- I can declare bankruptcy on my student loans and get rid of them forever.
- Bad credit will follow me for the rest of my life.
- All credit cards come with automatic travel insurance.
- Life insurance is voided in cases of suicide.
- Only the rich pay higher taxes.
- Stockbrokers are required to have my best interests at heart.
- When the market hits the skids, it’s time to sell everything.
- A 401k is always the best way for me to save for retirement.
- I don’t have the time to develop a side income.
- I’m smart enough to handle all financial matters on my own.
- I can’t find a job that I really want.
- Whatever it is, it won’t happen to me.
- It’s useless to save money for college because my kids will be less eligible for financial aid if I do.
- Once you hit your salary goal, you’ll be satisfied.
- I can change my phone number and get those debt collectors off my back.
- Using credit counseling will hurt my credit.
- If something is on sale, it makes sense to buy it just in case you need it later.
- Actively traded mutual funds outperform index funds.
- To retire, you’ll need 80% of your current income.
- Retirement means kicking back and relaxing all the time.
- I shouldn’t worry about paying off my mortgage early.
- I can’t do anything to positively affect my credit report.
- Young people don’t have credit scores.
- A bigger home is a sign of success.
- You can get full Social Security benefits at age 65.
- Money experts are skillful with numbers.
- When layoffs are coming at work, it’s best to stay under the radar.
- My credit score will improve if I always carry a balance.
- I need a large sum of money to start investing.
- The government will take care of my mortgage if I have problems paying it.
- Borrowing funds to invest (using other people’s money) is a sure-fire way to make a fortune.
- I make rational, reasoned decisions when I spend money.
- A stack of credit cards could be used to successfully fund a new business.
- I should buy gold!
- There aren’t any really creative ways for me to save money.
- Minimum payments on my credit cards are OK.
- I can’t increase my value at work.
- I don’t need any particular strategy when paying off debt.
- I need someone else to help clear up my credit.
- My job is secure.
- I’m too old to buy life insurance.
- There’s nothing money can’t buy.
Related reading at The Wisdom Journal:
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