Money Myths and Misperceptions

Last month (Financial Literacy Month), I attended a virtual conference for financial educators sponsored by Next Gen Personal Finance. One of the sessions was about money myths and misperceptions. Below are 12 statements and a brief explanation of why they are false:

“The most common scam contact method is e-mail”  FALSE

The #1 scam contact in 2025 was internet platforms (e.g., social media and What’s App messaging).

 

“Carrying a credit card balance can improve your credit score” FALSE

What’s needed to improve credit is to use a credit card regularly and pay at least the minimum due by the due date.

 

“Buy Now, Pay Later (BNPL) is not a form of debt like credit cards are” FALSE

When you use BNPL, you are borrowing money to make a purchase and agreeing to repay it later.

 

“There is no reason to save for retirement before age 40” FALSE

This myth ignores one of the most powerful forces in personal finance: compound interest growth.

 

“Buying a home is always better than renting” FALSE

Buying isn’t universally better. It depends on your finances, timeline, and local housing market.

 

“You only have one credit score” FALSE

Different credit scoring models exist and there are also multiple versions of each (e.g., different FICO scores).

 

“You can be too old to invest in stocks” FALSE

There is no age limit on investing in stocks, which historically help protect against inflation.

 

“At age 40 (or 50), it’s too late to start saving for retirement” FALSE

You still have time for growth because time + compound interest can grow meaningful savings.

 

“Making minimum payments on a credit card is fine” FALSE

Making only minimum payments can keep you in debt for years and cost you a lot in interest.

 

“If an item is more expensive, it’s better” FALSE

Being expensive doesn’t guarantee it’s better. It may just be priced higher (e.g., brand names).

 

“Stocks are too risky” FALSE

Risk depends on how you invest, not just what you invest in. Also risk varies widely within stocks.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.