Money Myths Costing You Financial Freedom

Money myths. We’ve all heard them. In fact, more than anything else, they’re the starting point for most of us since financial education isn’t a priority on school curriculums. If our parents didn’t learn about financial planning and make it their priority to teach us, we had to learn as adults. That process can be slow, costly and all too often at the wrong end of a hard lesson in the D word. Debt.

7 Money Myths Costing You Financial Freedom

So let’s talk about how we’ve applied some of these myths we’ve heard and how to work them out.

1. You can save your way to Wealth

It is the first dream sold to young people who aren’t from affluent households. Save. Get a good job. Save, save, save and be rich. But I promise you, no one considers their savings riches. Not one.

Now I’m not saying you shouldn’t be saving, but I’ve never met a person who was able to save their way to wealth.

Savings should be a cushion. A buffer for unplanned expenses, periods of no income and you guessed it, pandemics. We save for retirement. We save for our kids’ education. We do not save for riches.

Money sitting in your regular savings account (even if it’s a high yield one) will never be furnished with enough interest to impact your tax bracket. So what do you do? Save some, and put the rest to work!

2. One source of Income is Enough

One income is too close to none.

Have you ever heard this saying? It’s true. Whether you’re employed in a lucrative profession as an employee or an entrepreneur with a business that’s doing well, if all your eggs are in the same basket, what happens if it drops?

Affluent people have long explained that the average wealthy person has at least seven streams of income. The best kinds are able to operate independently of your time. For example, it’s not feasible to have three income streams all demanding you exchange your time for money.

Passive Income vs Active Income

Active incomes require you to exchange your time for money. This is what we’re used to and will typically refer to as the 9-5. The trouble with active incomes is that although time is infinite, our physical ability to keep up with it is not.

There are only twenty-four hours in a day, and your body needs some of that for itself; to rest and recoup. Plus, social constructs usually mean that even if you are still productive during certain hours, for example, at midnight, you aren’t always able to perform certain tasks outside of the home. Even your side hustle is an active income stream if it requires an exchange for your time to make money.

Passive Income Ideas

Instead, try to invest in passive income streams. Those that require an initial investment, but will continue to make money after the wheels are set in motion. Regular maintenance keeps the wheels turning, but largely, passive incomes are highly praised because you do not have to break your back year over year to see a profit. Best of all, they do not fall in the money myths category.

Common passive income streams are:

  • Investments (Stocks/bonds, Real Estate, Businesses, etc.)
  • Content Creation (Blogs/Vlogs, Social Media, etc.)
  • Create digital products (courses, books, apps, music, photography, etc.)
  • Rental Services (Vehicles, equipment, etc)

3. Investing is for the Rich/Wealthy

I don’t know about you, but I grew up thinking that ‘investors’ were people with boatloads of money who had nothing else to do with it. That’s not the case, I promise you. If you’re interested in learning and identifying investment opportunities that are right for you, start researching.

The first time I heard that I could buy stocks in an Initial Public Offering for as little as JMD&5000 (About US$30), I was floored. Watching money you put in to grow and double? Crazy.

It’s all about learning. Study, put some weight into your efforts and you’ll see results.

4. If You Make More Money, You Keep More Money

One common misconception is that lifestyle inflation is avoidable. That’s not necessarily true. Typically, making more money comes at a cost. You would have had to increase your input to increase the output.

This means higher expenses so you can keep making more, new financial obligations, debts to be repaid, higher taxes, lifestyle inflation and economic inflation.

When I worked at a call centre, it very quickly dawned on me that if I worked a 16 hour day as opposed to an 8 hour day, I made twice as much, but I paid twice as much in taxes and I was twice as tired. It also meant my schedule was off and rather than pick me up on his way home, hubby would go home and get me later (more gas).

It was less time to make meals so I ate out more. If I’d had a kid at the time, I would’ve needed to think about longer/new child care options.

And after all of that, who wants to work more, make more just so that their standard of living can remain to exact same? Not me.

It’s possible to manage these wisely so they don’t spiral (especially lifestyle inflation) but it requires diligence and work for efficiency. The notion that you can simply make more and keep your expenses the same indefinitely is a fallacy.

You May Also Like: 9 Family Financial Goals You Should Set

5. All Debt is Bad

Debt is typically sold as an undesirable monster. I have always hated the idea of ‘owing someone’. I still do. It’ just doesn’t sit well with me. But I’ve learned if you’re smart about it, debt can be a very useful and lucrative financial tool.

Debt can be good!

A loan to go to a party or vacation you cannot afford is classified as bad debt. A mortgage is good debt. Since it facilitates the acquisition of an asset, we recognize it mortgage) as good. So too are debts used to start/expand a business, or purchase assets.

Just… be smart about it.

6. Credit Cards are bad News

Eh! I hated the idea of credit cards too. Back to the whole ’owing’ thing. But, adulting requires an understanding of financial constructs, and whether we like it or not, they include credit cards.

Credit Card Benefits

1. Consumer Protection

In fact, in an increasingly digital world, I’m much happier to spend the bank’s money than expose my own funds when shopping online or using point of sale machines. Let them investigate fraud for three months. Their money is insured. Mine is not.

Imagine losing money from your debit card account and waiting for the bank to take three months to give you back your money… some won’t even give it back, period.

2. Access to funds during Emergencies

Another benefit is that the line of credit can help you out in emergencies. You never know when you may be faced with an unexpected expense. If you don’t have funds at your fingertips 24/7, a credit card can bridge the gap.

3. Rewards

Financial institutions make their money from credit cards by charging you high-interest rates on what you spend. It’s the reason they will offer you cards you didn’t apply for. It’s also why they’re willing to offer you a higher monitor if you make more money.

But credit card offers are a dime a dozen, so in a bid to remain competitive, most attach rewards to their credit cards offers. These rewards are typically presented as;

  • Ability to access cash advance.
  • Cash back in the form of checks and vouchers.
  • Air Travel Miles
  • Travel/Life Insurance
  • International access to funds while traveling

Who are we not to use up these benefits? Every little bit counts. Am I right?

The trick to credit card management is to use them as you would your debit card. Make a purchase, but remember that the bill will become due soon. Will you be able to pay for it? Don’t fall into the minimum payment trap! Interest rates are high!

Other best practices such as using a percentage of your credit limit to maintain a high credit score are unique to geographic locations, but for the most part, you should never be spending more than you can afford to pay back. Period.

You May Also Like: Good Money Habits to Teach Kids

7. Cash is King

Pop culture has a lot of us thinking, that if you’re able to flash bills around, it speaks to your financial position. Hardly. In fact, the more cash you have, the less secure your money is.

Money myths

Did you know that millionaires are rarely able to cough up that amount in cash? That’s because if your money isn’t in the form of assets or investments it’s not working for you.

Money sitting around in cash form is not making you any money and is generally quite simply at risk of being lost. It’s why we encourage grandma to take the cash from beneath her mattress. It’s just not safe, or smart.

If they steal it from the bank, it’s insured. If they steal it from you, it’s just gone.

The Bottom Line on Money Myths

Financial education isn’t the easiest topic to learn and some of us start at a disadvantage. Because of that, we learn through experiences, professionals and research. The last thing that is needed is money myths to cloud our analysis of our own financial situations.

P.S. I’m not a financial advisor. My posts under the Family Finance Category are not meant to be taken as financial advice, but rather for informational awareness and perspective.

Do you recognise any money myths you had to unlearn? How did it impact your financial well-being? Let me know in the comments.

Xo, Shandean.

Shandean Reid

A lifestyle blogger, digital and strategic communications practitioner and self-published author, I am also a heavily caffeinated, quintessential wife, mom and bookworm. This space is my contribution to the internet for the practical, resourceful everyday millennial.




  • Very great post. I’m actively trying to get on the investing train. My money needs to start working for me. As for multiple streams of income, I’m working on it too. Not even medicine in Jamaica is a steady stream of income anymore. While I’m grateful that I’m gainfully employed, if I ended up not landing a contract July I would’ve been at home working feverishly away on my laptop on those other income streams.

    • Shandean Reid

      So true! It takes time but it’s definitely worth it!

Leave a Reply

%d bloggers like this: