Still believe debt is “good” or that car payments are just part of adulting? Bust six stubborn money myths—and learn the habits that build real wealth—in this 2025 guide.
Introduction
Pull-up any social feed and you’ll see glossy ads for $70,000 pickup trucks, instant-approval credit cards, and “easy‐monthly-payment” everything. Small wonder so many of us absorb myths about how money has to work. The truth: most of those ideas were cooked up by marketers, not financial planners. Below are six of the worst offenders—plus what to do instead.
Myth 1 Debt Is a Useful “Tool”
Debt can certainly build a business or finance a degree, but for most households it acts more like a siphon. Every dollar you mail to a lender is a dollar that can’t compound for retirement or your child’s 529. Even a modest $10,000 credit-card balance at 22 percent APR costs $183 in interest every single month—money you could invest for future you.
Do this instead:
Treat consumer debt like a five-alarm fire. Build a $1,000 starter emergency fund, then attack balances smallest to largest while you develop the habit of living on less than you earn.
Myth 2 “Everyone” Has a Car Payment
In 2025 the average new-car loan runs $742 per month; used-car loans average $525. LendingTree Over a standard 72-month loan that’s nearly $45,000 out the door—and the vehicle starts depreciating the moment you crank the ignition. If you redirect just the average new-car payment into an S&P 500 index fund returning 8 percent, you’ll cross the million-dollar mark in 39 years.
Do this instead:
Drive an older model you can pay cash for while funneling the “would-be” payment into a down-payment fund. Repeat the process and upgrade every few years—still debt-free.
Myth 3 “Uncle Jim Will Pay Me Back”
Mixing money and family often ends in resentment. Academic studies show personal loans between relatives are repaid far less frequently than bank loans, largely because social pressure is weaker. The relationship bears the interest.
Do this instead:
If you want to help—and can truly afford it—make the cash a gift with no strings attached. Otherwise say, “I’m sorry, I can’t,” and preserve both your budget and the Thanksgiving vibe.
Myth 4 You Can’t Attend College Without Loans
Roughly 50 percent of students at public four-year universities graduate completely debt-free, and 78 percent finish with less than $30,000 in loans. APLU That’s because grants, in-state tuition hacks, community-college transfers, employer tuition aid, ROTC programs, and on-campus jobs still exist—although none are plastered on late-night TV.
Do this instead:
Start with FAFSA and state grant applications, then stack scholarships (yes, even $500 awards add up). Choose an in-state public school or community-college transfer route if the numbers don’t work. A part-time job that covers room and board can wipe out tens of thousands in future interest.
Myth 5 “I’m Too Young to Think About Retirement”
Compound interest laughs at age excuses. A 25-year-old investing $300 a month at 8 percent will have about $1.1 million by 65. Delay until 35 and you’ll need twice the contribution to reach the same finish line. Meanwhile Social Security’s full-benefit age is inching toward 67, and the wage cap for FICA just rose to $176,100. Social Security Translation: future benefits may feel smaller than you expect.
Do this instead:
Wipe out consumer debt, save 3–6 months of expenses, then funnel 15 percent of gross income into your 401(k), IRA, or Solo 401(k). Automatic payroll deductions turn discipline into default.
Myth 6 Checking My Balance Counts as Budgeting
Scrolling your bank app tells you where money went, not where it’s going. A real budget assigns every dollar a job before the month begins—mortgage, groceries, Roth IRA, even fun money. That forward-looking plan is what prevents “Where did it all go?” moments.
Do this instead:
Pick a system—spreadsheets, YNAB, EveryDollar, envelopes—and zero-out your income every month on paper first. Tracking follows; planning leads.
Final Thoughts
Money myths persist because they’re convenient; reality, on the other hand, demands change. Crush high-interest debt, ditch the perpetual car payment, keep family and finance separate, pursue college dollars that don’t need repaying, start investing yesterday, and give every dollar an assignment. Your future self will thank you—likely from a paid-off house rather than the dealer’s finance desk.
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