Common Money Myths and How to Stop Believing Them

The wedding was complicated and expensive. But it’s over and you are ready to settle back and enjoy your new life together. I’m here to warn you about some common money myths that newlyweds have been known to bring with them into their marriages.

But wait. You’re not a newlywed? No one is immune to believing these myths. No matter your marital status—learn these lies about money so you can stop believing them. It will improve your life.

 

 

Myth: Double the income, half the expenses

This is what I call newlywed fuzzy math: Merging your lives and incomes into one household is the equivalent of getting a raise. It goes like this:

When we live together, we split the rent or mortgage payment; we share the utilities and household expenses. We’ll have twice as much money.

Don’t believe that, not for a second. While there may be some truth in sharing expenses, the outcome is not what you think. Been there, done that, trust me on that. More likely, more money will immediately lead to more spending. Without a solid plan, that will quickly lead to more debt because you’ll use that money for a down payment on stuff you really want.

Counter the myth

Determine to start out living on only one income and save the second paycheck. This will require that you go against everything the culture insists you deserve, but it will allow you to move seamlessly into parenthood. When that day comes, you’ll have an impressive savings account and options. And a gallery of envious friends.

Myth: There’s stuff we can’t live without

No there isn’t. But it will be easy to convince yourselves that you absolutely must have matching furniture, new cars, a better apartment. You’ll feel entitled to all kinds of gadgets and services to make your lives easier and to keep up with your expectations, to say nothing of your friends.

Counter the myth

Make a pact that you will never go into debt for “stuff.” Period.

Myth: If we qualify, we can afford it 

Whether it’s a new credit card or a new nothing-down, interest-only mortgage for a house that in your hearts you know you cannot afford—never allow your ability to qualify to be the determining factor.

If you cannot pay the entire credit card balance in full each month or the mortgage payment including plus insurance, taxes and maintenance is more than 30% of your net income, you can’t afford it. Getting in over your heads is the recipe for a marital disaster.

Counter the myth

Never think of a credit card company, real estate agent, or mortgage broker as a financial advisor. They are salespeople looking to close deals. They have no idea what your true day-to-day money picture looks like.

Get advice from a wise person who will not benefit financially from the decision you make.

Myth: We have plenty of time

It does seem as though you have a lifetime ahead. And that you don’t really need to save money now while things are tight and you are struggling to get going. But that’s a myth.

The truth is you cannot afford to go one more day without a savings commitment for many reasons:

You do not want to feel forced into debt when something unexpected happens. You do not want to get used to spending all that you have. You want to create a sense of security and peace in your marriage. You will want to retire.

Counter the myth

See 10% of your net income as a mandatory financial obligation, just like your rent or mortgage payment. Pay it to yourselves without fail starting right now, if not sooner. Put it into a savings account to keep it out of reach. Never fail to save some part of all you receive.

Myth: Some money issues are best kept private

Whether it’s the $40 pedicure you launder through your grocery tab using the convenient “cash back” feature, the $80 cash you collected from your lunch buddies when you put the whole tab on your credit card—or a secret credit-card account—keeping money secrets from your spouse is not good for your marriage. You might be able to pull off financial infidelity for a while, but eventually it will come back to bite you.

Counter the myth

Start out with a commitment to full disclosure and total honesty. That will build something into your marriage that money cannot buy: trust.

Myth: Everything will be fine as soon as we make more money

It does make sense that if you are struggling now, you won’t once you get a big raise or you finish school or you get your grandmother’s inheritance or you win the lottery. The truth is that more money will never be enough until you learn how to manage well the money you have already.

Counter the myth

Make the necessary adjustments now to live beneath your means. Together, create a spending plan even if it is so simple you can write it on the back of a business card. That will ensure when more money comes into your lives, you’ll know exactly what to do with it.

Myth: It’s too late

No matter how long you’ve been married or how difficult your situation may appear, it’s not too late. It will take longer and be more challenging, but you can turn your situation around. Two people committed to reaching a single goal create a powerful force.

Counter the myth

Decide right now that you are going to do whatever it takes to live below your means, get out of debt and then go on to debt-proof your marriage.

First published: 9-13-17; Updated and revised 8-30-19

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