30 Popular Money Myths Broke People Believe

Broke people don’t act the way they do because they’re broke; they are broke because they act the way they do.

Many people have made lifestyle choices – including myself– that got us into financial trouble.

I’m not talking about the single mom who’s husband walked out, and now she has to work 80 hours a week to support the family and is just scraping by meeting her basic needs. Or the millennials who were sold a bill of goods on how a $100,000 in student loans was their ticket to a bright future and now there are no jobs for them.

Everyone has the opportunity to have a debt-free life and a life of abundance. When you start to uncover the myths about money found in our society, you will start to recognize the opportunities each of us has to steer the ship in a different direction. You’ll start to make better choices and get ahead.


1. It’s normal to be in debt. Well, how’s that working out for you so far? It didn’t work out for me, so I decided not to be normal anymore.

2. We will never get ahead. If you have a plan to get out of debt and follow it, every year of your life will be easier than the last. If it doesn’t, something is wrong with your plan.

3. If I make a lot of money, it will all go towards taxes. Paying a lot of taxes is a good problem to have. It means you’re making more money.

4. Never trust rich people. Rich people got rich by cheating and exploiting their employees right? Or they inherited their wealth! B.S. According the book The Millionaire Next Door 90% of millionaires are first-generation millionaires. They are small business owners who create jobs and add value to the economy.

5. People with money have it easy. Most people who look like they have money are just as broke as you might be. Or more so! 80% of luxury cars are leased, not owned. The bank owns them. The owners are renting them. The bank owns their homes. Visa and MasterCard own their clothes, shoes, and purses.

The people who do have money made smarter choices to have money. Everyone’s story is different, so you never know what trench those people had to crawl out of to achieve what they have. Rather than looking at them with envy or thinking they are evil, say hello, can you tell me how you achieved your success?

6. We’ll pay it off with the tax refund. If you’re getting a tax refund you are giving an interest-free loan to the government, which is costing you money. Most of the time when the tax refund does come, people don’t pay down debt – they blow it.

7. I need credit cards to build up my credit. It’s harder to build up credit without a credit card, but it can be done. If you live in an apartment, you can pay with a service that will report your rent payments to the credit bureaus. You can get an apartment by having a parent co-sign on the lease agreement. That’s just one example.

I deserve this

8. I work hard. I make the money in the family. If I want to buy something, I’m going to buy it. Budget? No-way.

9. YOLO. You only live once. We’re on a cruise, when are we ever going to get the chance again to swim with the dolphins? It’s just $250 a person, and we’re never coming back.

10. We can reward ourselves just this once. I want to go out to eat! Getting out of debt is a struggle and it can take years. Often it seems like there is no end in sight. You’ve got the spending plan. Your partner is on board. But it’s hard. Month after month. I just want to have some fun. You should have fun when you’re trying to get out of debt. But add it to the plan and the schedule so you have something to look forward to occasionally.


11. We can’t afford children. But we eat out five times a week and have two car loans.

12. I need to save for my kids college education. Your kids are not going to pay for your retirement. You do not need to pay for your kids education. Yes, it’s a nice gesture. But that boy or girl of yours better start working when they are 14 and learn the value of a dollar. They better be hitting the books so they can get scholarships. There is no law that I’m aware of that says when little Johhny or Suzie graduates from high school, they have to go to a $50k a year school. Those moochers can work for a couple years and save up to pay for school. Or they can start out at 2-year community college and get all their core classes done for cheap.

13. We need cable. My husband wants to watch sports and relax. My wife is at home all day with the kids. My kids watch TV while my wife takes care of the house. You want cable. Nobody needs cable.


14. You should buy as much house as the bank will let you. I got this advice from an old boss. And came pretty close to following it by spending 40% more than I had planned to on a house. Big mistake!

The bank will always approve you for more house than you can afford. You should buy as much house as you can afford based on your calculations, not the banks.

15. We need to buy a home because the kids need to play. If you need more space, rent a house until you can afford to buy one. Besides that, are your kids really going to play outside or are they going to be wasting their lives away playing video games for hours a day?


16. My job is secure. Unless you own the company, it’s not your job. You have been given the privilege to work for someone. Best you do everything you can to make yourself valuable to the company, not goof off, and bust your butt. Work smarter to get raises, promotions, or set yourself up to find another job that pays more.

17. I can’t find a job. Make a job. When I was a teenager in a town of 2,000 people, I mowed lawns, shoveled snow, washed dishes in a restaurant, pumped gas at a gas station, painted, delivered papers on my bicycle. You can find a way to make a buck, you just have to be willing to do the work. If you are broke, no job is beneath you.

18. When we make more, we should spend more. This is not so much a belief as a very bad habit. Most of us our lifestyle choices keep pace with our incomes. If you keep your lifestyle at the same level even as your income increases, you’ll be filthy rich.


19. You’ll have a car payment for the rest of your life. I sold my bank-owned sports car and paid cash for a crappy truck. Still managed to attract a wonderful wife driving my clunker. This one decision was a turning point for me in building wealth. Seriously – what would you do with an extra $350 a month if you didn’t have a car payment?

20. My car might break down soon. Until your car breaks down, it’s not broken. Keep driving the one you own and forget about taking out a car loan for a new one.

21. Older cars aren’t safe. The safety issue is a trick you use to convince yourself you need a safer vehicle. If safety is your concern, go to the library and check out back issues of Consumer Reports and find the safest cars made. But you won’t, because the safest older cars are usually Volvos which are ugly, and nobody wants an ugly car. That will just prove it’s not about safety, it’s about looks.

22. Cars are an investment. Cars are depreciating assets. New cars lose $5,000 in value when you drive them off the dealer’s lot. They lose 40% of their value after the first two years. And the keep going down from there. Cars are a means of transportation, nothing more.

23. A newer car will save me money on gas. With as cheap as gas is, you would have to drive a car for ten years to make up the cost of getting a new car that is more fuel efficient compared to what you’re driving right now. It makes no sense to spend $20,000 on a new car that gets 40 mpg to save $10 a week on gas.

Saving + Investing

24. I can’t afford to save. You can’t afford not to.

25. I’ll start saving when I make more. What happens is we find ways to spend our increased income even before we have it. We start buying nicer clothes, nicer vacations, nicer cars, bigger homes, etc. We never get a chance to save more because we spend more.

26. I’m too old to start saving. Unless you are retiring tomorrow, you are never too old to start saving. Pennies add up to dollars which add up to tens, twenties, hundreds, and thousands. You just have to start.

27. People who invest in the stock market lose all their money. People who invest in the stock market, and don’t know what they are doing lose lots of money. People who follow what I and many others teach, including fee-only Certified Financial Planners, help you learn how to invest wisely for the long term. Not to time the market or try to get rick quick.


28. The government will take care of me when I retire. Yes, they will. But the quality of life you will have will be so low and you will be so poor, why would you want to let them?

29. My kids will take care of me when I retire. Yes, they will too. If you want to live in your children’s spare bedroom for your remaining years and spend your days babysitting the grandkids, ok.

30. I’ll put my inheritance towards my retirement. People are living longer and longer. Your parents may burn through their savings if they live to ninety. And what happens if they need long-term care, and you have to pay $4,000 a month for 24-hour care in a nursing home?

If I have one takeaway for you, it’s this – life is good when you have your finances in control. Winning with money starts with changing your mindset.

Some of us are starting a little farther behind than others. You are where you are. But if you find you’ve fallen for some of these myths, realize you don’t have stay where you are.

You might be at a low point. You might be a single mom who has struggled for years working multiple jobs just to stay afloat. It might take a long time to work out of your situation, but you can do it, you just have to stick to it. We are not guaranteed an easy life. When we get out of the struggles, we can look back with pride and celebrate the victory.

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