As long as Money has been around, there has been a family friend or work colleague that has been happy to tell you what you should do with your money, usually wrong though. It’s also a subject that really isn’t taught at school and so has long been a topic surrounded by myths and misconceptions. From the false belief that math skills alone guarantee financial success to the notion that only the rich can be rich, these myths can lead to poor financial decisions and so many missed opportunities.

Below are the top 10 myths about money that really do need to be debunked!

1. If you are good at maths, you’ll be good at money

It’s commonly assumed that if you’re skilled in math, you’re automatically good at managing money. Even worse, it was assumed that boys were better at maths than girls and in many older relationships, it was the man that looked after the finances, ridiculous. In any relationship both of you need to be fully aware of what’s going on with your finances, even if one prefers it more than the other.

While being good at numbers can certainly be an advantage, effective money management encompasses a broader range of skills, such as budgeting, investing, risk assessment, and decision-making. And let’s not forget, unlike maths, dealing with money can be emotional, how else do you explain greed, envy and the despair of being poor.

2. You can do it all on your own

While it’s not impossible to look after your finances by yourself, it’s like anything new, ‘you don’t know, what you don’t know’, and can lead to some very expensive mistakes. You wouldn’t try to build your own pool in the front garden, you of course would get in an expert who knows what they are doing. Seeking advice from financial experts, like financial advisors, accountants, or money coaches, is exactly the same and can provide valuable insights and strategies that you might not have considered. And like any good coach, they are also able to keep you accountable and on the right path to achieving your goals.

3. Banks are the safest place for your money

While banks are generally considered safe places for your money and should be for any short-term goal like saving for a trip or deposit for a home for example, but if you are looking long-term for financial security or freedom, it’s wise to diversify your investments. Exploring alternatives such as shares and property can provide additional layers of security and growth, and additional income streams with dividends and rent. Also importantly, historically they provide a significantly higher return over the long term to get your money working harder for you especially as we are all now living longer.

4. Retirement planning is only for when you are close to retiring

Delaying retirement planning until you’re close to retiring is a myth that can severely impact your financial future. Starting your retirement planning early gives you more time build a diversified investment portfolio and allow your investments to grow significantly over time, through the power of compounding interest. This is very important when creating financial security as we are all living longer and need our money to last.

5. All debt is bad debt

Contrary to popular belief, not all debt is inherently bad. Mortgages, student loans, and business loans can be considered a great investment in either allowing you to buy a property that you would not be able to save up for or allow you to get through university to ensure a better career. Debt such as credit card debt or buy now, pay later schemes which you buy lifestyle assets with are counted as bad debt and should be paid off as soon as possible, as not helping you financially and usually have very high interest rates. It’s important to distinguish between good debt, which buys assets that provide an income, and bad debt, which buys everything else.

6. You put away savings at the end of the month after you pay your bills and living expenses

Treating savings as what’s left over after expenses is the most common way people save but is also a myth as most people don’t have anything left over at end of the month. This can lead to insufficient savings or worse going into debt to pay the bills. Instead, make savings a priority or even as your first bill to pay after receiving your pay. Create a budget that allocates a portion of your income directly to savings, and most importantly pay it first. A disciplined and consistent savings method is the number one way to save for any goal including building a ‘savings nest egg’ – 3 month’s of salary available in a readily accessible bank account.

7. High Salary = Wealthy

If anything over all the time I have been an adviser or coach, this is the biggest myth as earning a high salary never guarantees wealth. Most of the time, when your salary increases so does your expenses or your lifestyle. To become “wealthy” you need a good financial plan and budgeting system to ensure you are saving money regularly, regardless of your salary. Once you have spare funds, it’s what you do with these funds that separate the wealthy from the rest. For me it’s all about building multiple income streams through property, shares and super. Making money while you sleep!

8. Only The Rich Have Share and/or Property Portfolios

The myth that only the wealthy can have a share or property portfolio is simply not true, it’s especially not true in the 21st century. Investing now is accessible to anyone, regardless of their salary, age or circumstances, especially if you want to reach financial freedom sooner with building multiple income streams to supplement your own salary (or ultimately replace it altogether). Starting with small investments and gradually diversifying your portfolio to get your money working harder can lead to significant growth over time. The longer the time frame the easier it is so start as soon as possible.

9. You Don’t Need Insurance If You Are Healthy

While being healthy is a positive attribute, it doesn’t remove the need for insurance. Any good financial plan needs a safety net if the unexpected happens and that usually means insurance until you have enough assets to cover any loss.  I am also talking about Life insurance type insurances (Life, TPD, Trauma, Income protection), not general insurance like car and home insurance which are also important.

It’s strange as when I talk to people about insurance, they of course insure their car or their house, but may not cover the very thing that pays for all this, you!  So, look at this type of cover and for some of this you can organise through your superannuation to save money. You just want to make sure your family are financially protected and have peace of mind, and it’s even easier when you are in good health.

10. You Only Need a Will When You Are Older

Creating a will isn’t something reserved for the elderly, it’s a critical step for all adults. Regardless of your age, once you start acquiring assets or have debts, a will ensures that your assets are distributed according to your wishes and doesn’t leave a headache for a loved one. Once done you can forget about it until another major life event such as when you have children or moving home.

Bonus Myth: Money Can’t Buy You Happiness

While the age-old saying “money can’t buy happiness” holds some truth, with the right plan you are able to reach life and financial goals, for travel, buying a home and creating a life free from financial stress and hardship. Financial wellness a popular topic at the moment, is all about creating a happy and fulfilling life, especially when it comes to money, as money used correctly, can create memories that last a lifetime and that’s what life should be all about.

Understanding and dispelling money myths that have been around for generations is so important if you are wanting financial success and security. By understanding and getting control of your money, and building sound financial habits, you can navigate life and your financial journey with confidence and your future self will absolutely thank you for it!


Article by Marc Bineham – Money coach, speaker and award-winning author of The Money Sandwich