For starters, there is already a big hurdle to talking about money. Because, let’s be real, unless you have a lot of it, you’re not ready to chit-chat about your financial insecurities with most of your friends and coworkers. And when we don’t talk about something as crucial as money, well, how we expect to get better with it?
In addition to our cultural hesitancy toward discussing money matters, we also face this reality: There’s a lot of bad money information out there. So, when we do talk about money, we repeat outdated tropes and money myths that prevent us from reaching our full financial potential.
What are we talking about when we say ‘money myths,’ exactly? Think: All the money advice or practices that are so ingrained in your psyche that you’ve never second-guessed them. It’s time to not just reassess these money myths, but throw them out come 2019.
Here’s the seven money myths we’re ready to say ‘good riddance’ to.
Money Myth #1: Men should always pay for dinner
Talk about outdated gender tropes here. Aside from it being almost 2019, so many of us cling to the idea that men should pay for dinner, for lunch, for our drinks, for our—you name it. If you’re in a same-sex relationship, either partner can still fall into the trap of expecting the other to foot the bill for certain expenses. This can be due to one partner earning more, to cultural norms or, simply, out of carelessness.
Think, though, about the greater implications here. In assuming that one partner pays for X, you’re avoiding very real conversations about your finances and how you can work to tackle money matters—together.
Money Myth #2: Salary increases only come at the annual review
Getting up the courage to ask for that salary hike is hard enough. But, don’t scare yourself out of asking for that pay raise just because you’re afraid it isn’t the “right time.” The truth is, from the employer’s perspective, it’s never the ideal time. So, don’t put off the conversation just because you’re afraid that there might not be enough in the budget, that you have to wait until the annual review, or until things are “settled” at the company.
Yes, it’s still important for you to familiarize yourself with what the actual processes are at your workplace but don’t make assumptions about what’s possible without doing your research. Otherwise, you’re leaving money on the table.
Money Myth #3:You can never have too much in savings
We’re all continuously told to save, save, save. And once you do start saving, it can be tempting to just let the numbers go up and up. After all, how else are you supposed to meet the savings target that experts say you need to meet by age 30, 40 or 50? What’s the downside to saving money?
Here’s the thing: You can save all you want, but after a certain point, you need to put your money somewhere where it incurs interest. Not doing so means you lose money over time, thanks to inflation. Go ahead and secure your rainy day fund, but be sure to divvy up the rest of your savings toward your retirement goals and investing opportunities. What’s better than saving money? Saving money to make more money.
Money Myth #4: All debt is ‘bad debt’
Among the many pieces of money advice we receive is this: pay down your debt—ASAP! This is sage advice on the surface. You don’t want to throw away your hard-earned cash on interest payments or find yourself drowning in debt payments. But, we also have to realize that while there is “bad debt,” there is also “good debt.”
Good debt is the kind of debt you take on to secure something better for the future. (No, charging that cashmere sweater on your credit card does not fall under this category!). Think, instead: student loans that help you secure a high-paying job; a mortgage at a low rate, or expenses that help jump-start your career. Sometimes, it’s necessary to take on debt—just make sure the payoff is worth it and you can manage the debt.
Money Myth #5: Having a credit card is never a good idea
By now, we’ve all heard so many horror stories about credit cards that even having one can seem like a dumb idea. Why bother with the temptation anyway? Of course, credit cards are bad when we abuse them and when we don’t pay them off in full ASAP. Simply having a credit card isn’t a sin.
There are, also, certain credit cards with good reward points and perks that can make them ideal tools for groceries, gas, or travel. Keeping open a credit card (even if you’ve paid it off) for a long period of time can also help you boost your credit score. Be wise about how you use them, but don’t write them off altogether.
Money Myth #6: Smart people say ‘no’ to avocado toast
We all remember when, in 2017, an Australian millionaire advised millennials to stop spending money on avocado toast if they wanted to buy a home and be financially secure. Obviously, that spanned a lot of memes and backlash on social media since, uh, that’s not really what’s causing financial stress for our generation. (Think, instead, student loans, a financial crisis, and low-paying jobs.)
Still, the idea that our financial woes will be solved simply if we penny-pinch enough persists. Saving money is only one part of the formula for financial success. We also have to advocate for equal pay, robust benefits, and put our money to work for us (i.e. invest).
Money Myth #7: You need to have your own place to be an adult
It’s generally understood that most people have roommates during college and in the immediate years afterward. But, once you get into your late 20s and definitely by 30, there’s an expectation that you live alone. After all, adults don’t have roommates—do they? While affording your own place can be a worthwhile goal, the reality is it’s not financially feasible for everyone. And if it is, it’s an easy way to save costs on housing.
There’s a growing housing crisis across major cities in the US that’s unlike the dilemma homeowners faced during the subprime mortgage crisis. Today, many cities across the states face the new challenge of too-few housing options, a growing population, surging rent prices, and people getting shut of the market altogether.
All of that means more adults are sharing their living space. If that’s your situation, know you’re not alone. And it doesn’t make you less of an “adult.”