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Getting out of Debt

10 Money Myths Broke People Believe

10 Money Myths Broke People Believe

8 Minute Read

Let’s face it. There are a ton of myths out there parading around as truth. But the real truth is that these myths are keeping broke people . . . well, broke!

We’ve all messed up when it comes to money. Maybe you signed up for every credit card offer you received in the mail, or you just thought debt was a way of life. Maybe you’ve fallen into the trap of the almighty FICO score.

Don’t worry—you’re not the only one. That’s why we’ve compiled this list below. It’s about time we call out these long-believed “truths” for what they really are: myths. Plus, once you know the real truth, you can start your journey toward financial peace.

1. I can always save later.

Saving is for yuppies, right? Well, not if you want to stop living paycheck to paycheck. Nearly one in four people in America today don’t save each month.(1)

But the key to building a solid future with your money starts with budgeting and saving. And it doesn’t start when you make more money—it starts today. The more you can set aside now, even if it’s just a little bit, the less you’ll have to worry about later. Start your free budget and begin saving now with EveryDollar!

More than 5 million have beaten debt this way. You can too!

2. Old cars just aren’t as safe.

In Everyday Millionaires, Chris Hogan states that the average millionaire drives a four-year-old car with at least 41,000 miles on it.(2) Yep—you heard us right. Millionaires are driving used cars. Not only that, eight out of 10 millionaires drive off the lot debt-free without a car payment. If millionaires can drive used cars, why can’t the rest of us?

Let’s face it—an old car can be just as safe as a new car. You just have to do your research. And when you buy used (with cash), you won’t have to worry about paying on your car loan long after your car goes kaput.

Buy a car used, and save the money you would have put toward a car payment. In no time, you’ll have enough money to trade up for a nicer, newer car—all without a pesky car payment!

3. My family won’t be happy if I don’t give them the best.

There’s no denying the fact that family should be at the top of your priority list. And their happiness should definitely play into that. But if happiness is being found in stuff, then you might actually have a case of “want-itis.” Want-itis is the aftermath of discontent, believing that your stuff will make you happy. But believe us—it won’t.

And when it comes to raising money-smart kids, it’s important to show them the value of a dollar through hard work. You might have had to work at a young age when you were a kid, but don’t let your past be a burden on your children. Help your kids to know what it’s like to work and be responsible. When they’re ready to leave the nest, they’ll thank you—trust us.  

4. I’m too old to win with money.

Forgive us for shouting, but IT’S NEVER TOO LATE TO START PREPARING FOR YOUR FUTURE. It doesn’t matter how old you are. What matters most is that you start now! If you have debt holding you back, it’s time to pay it off as quickly as you can.

And once you’re out of debt, save like you’ve never saved before in Baby Step 3. After that, you can move on to Baby Step 4 so you can begin to invest and set yourself and your family up for the future . . . especially for retirement.  

Retirement will look different for everyone. Maybe for some, it’s traveling and leisure. And for others, it’s the chance to have a second career you’ve always dreamed of. Maybe you just want to make sure you’ve left a legacy for future generations of your family. Whatever it is for you, you can do it!

5. My credit score is everything.

If you haven’t heard, your credit score is just another word for an "I love debt" score. The finance industry has been working hard to secure the myth that a credit score is what you need to conduct business, purchase a house, or buy a car. But the credit score really only judges you based on your relationship with debt. Pretty crazy, right?

Let us assure you that the economy won’t fail—and neither will you—if you decide to attack your debt with everything you have. Once you’re out of debt and at peace with your finances, that credit score won’t matter anyway!

6. I earned this.

Ouch. This one is a tough mind-set to break, especially when you’ve just put in long hours at the office and worked overtime for three weeks straight. We get it, you want to celebrate by spending that hard-earned paycheck!

But listen closely: Spending without a plan is never a good idea—whether you’re on vacation, in your 20s, or just plain tired of working so much. No matter where you are in life, it’s always smart to make a plan, track your spending, and stay on track with your future goals.

7. Why should I make more money? Uncle Sam will just take it all away.

We’re going to get really honest for a minute. Children do what feels good, but adults devise a plan and follow it. And we hate to break it to you . . . being an adult means paying your taxes and your bills and making a plan for the future.

The best thing you can do for your family is to make sure you’re not going to be a burden on them financially. If you want to leave a legacy and change your family tree, you have to start learning how to live differently.

Check out these top characteristics of debt-free living, and learn how to incorporate them into your own life.

8. I don’t need insurance.

We get it. No one loves spending money on insurance. But it has a great purpose: to transfer any losses you might have in the future from you to your insurance company. Whether it’s a house fire, a flood, or—heaven forbid—a loss in the family, insurance takes the brunt of the loss so you don’t have to.

No matter if you rent or own your home, it’s important to cover your bases.

If you drive a car, you need insurance. It’s illegal to drive without it.

And if you’re a living, breathing human . . . you want life insurance. Life insurance may sound morbid, but if something were to happen to you, you want your loved ones taken care of. Speaking of life insurance, always choose term life! Whole life insurance covers you throughout your entire life, which sounds pretty good, right? Wrong. The truth is that you’ll spend a lot more throughout your lifetime on a high premium and may never even see the cash value. Yikes.

9. The neighbors have it. Why shouldn’t I?

Let us stop you right there. Keeping up with the Joneses is a very dangerous game when it comes to your finances . . . and really, your life.

If you’ve got your eyes on what your neighbors have, you might find yourself with a big hole in your pocket. Pretty soon, you’ll find yourself deeper in debt and chasing things that won’t actually make you happy.

When you choose gratitude and seek contentment with what you have, you’ll be much happier. Plus, your family (and your bank account) will thank you later.

10. I will always be broke.

What you believe about this statement will determine if it’s true. If you believe you’re always going to be broke, you’re probably right. And guess what—what you believe has a direct influence on what you do. So, if you believe you’re always going to be broke, you’re probably not actively seeking ways to get ahead.

Let’s change that attitude! Broke people get out of debt when they finally decide they’re sick and tired of being sick and tired! It’ll take hard work and motivation, but you can become debt-free!

Whether you’ve bought into some of these myths or not, the truth is that they’re still . . . myths. And maybe this is the first time anyone has ever told you the truth. Either way, there’s hope!

You can be on the road to financial peace and leave these money myths behind for good. Tune in to The Dave Ramsey Show, and learn how you can change your story—one decision at a time.

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