5 Money Myths You Need to Stop Believing

There are many money myths that have been circulating society for ages. Whether they be regarding assets, saving, or overall money management, money myths need to be debunked! Because financial education is not deemed as important as math and science in school, these myths are rarely corrected, and people continue to believe them. Luckily, we have researched some of the most common money myths to help you get a better sense of your financial management.

Myth 1: You Should Avoid Debt at all Costs.

Starting off strong with one of the most famous misconception about money. This means that sometimes to get ahead in life, you need to borrow money. It's nearly impossible to reach financial wealth without going into debt. For example, if you were wanting to start your own business, you may not be able to open it with just the money in your bank account. It's not smart, and you may struggle financially in the long run. You need to take out a loan and go into debt. HOWEVER, when your business generates profit, you'll be able to pay off that loan in no time. Debt should not always be a burden. When you are using debt in a positive way, it can be a powerful money generating tool, if you are smart about paying it off on time.

Myth 2: Your Home is Your Best Asset.

This may come as a shock to most people, but a home is not your best asset. This does not mean that owning a home is a bad thing, in fact, it's a great thing, but anything that does not put money in your pockets by generating income is not an asset. Owning a home means paying a mortgage for about 30+ years on top of other essential bills like insurance, loans, and utilities. However, if you own a home and rent it out as an Airbnb or as a rental property, then it becomes an asset because it is generating income for you. Other great assets to have are stocks, or a business.

Myth 3: Cryptocurrency Will Make You Rich.

Cryptocurrencies are all the hype these days. They have become so popular that more and more people are dipping their toes into cryptocurrencies. Many have been successful at getting wealthy this way, but those numbers do not compare to the ones who've failed. Yes, you can win back two-fold of what you invested into cryptocurrencies, but just like that, you can also lose everything you invested. Cryptocurrencies are also new and there haven't been a lot of studies and articles on how they work exactly, so it's best to stick with the safe options of investing.

Myth 4: Saving Isn't Worth it in Small Amounts.

What this myth wants to say is that saving $5 every paycheck or every month is not worth it. Well, it actually is worth it! It doesn't matter the amount you save, as long as you get started. If you can only save pennies, save pennies. If you can save $100, save $100. The amount doesn't matter because you don't get rich to save, you save to get rich!

Myth 5: Living Below Your Means Will Make You Rich.

Listen, if you're earning enough to save, pay bills, pay off debt, and you have enough money left over, why not enjoy it? You do not have to sacrifice your comfort and fun to "be rich." As long as you're saving responsibly and paying off any type of debt, you can splurge on yourself every once in a while!

Schools all over the country emphasize the importance of being real world ready. However, many schools don't teach financial literacy! The most important aspect of being an adult, or independent, is knowing how to manage your money, that is why we offer a New Wave Savings account for children ages 0 and up so they have access to many FREE literacy education resources. Teach your child financial literacy early on, so they are ready to face the real world!

What other money myths have you heard? Share them in the comments below!