The Top 10 Lies About Money That Keep You in Debt (2024)

Lies about money are everywhere. Unfortunately, many of the biggest money lies people believe are usually taken as truth. I'm convinced this is especially true when it comes to getting out of debt.

I know you've heard them before. Things like “You need a high credit score” and “The middle class can never get ahead” are so prevalent that everybody believes them without even thinking.

Lies About Money Feel Sometimes Feel Like the Truth

When I talk to people about getting out of debt, I constantly hear the same lies over and over. They're the kind of financial lies that too many people believe because they've heard them so many times they eventually feel like the truth.

But I'll tell you this, no matter how many times you hear them, these lies bear no resemblance to the truth. These common money myths feel like the truth for a lot of reasons:

• Sometimes it's part of a money mindset that's been ingrained in your thinking from a young age.
• It's easy to believe someone else's opinions about money without ever developing your own.
• It's easy to believe a lie when it sounds plausible enough (and you don't consider a logical alternative).
• There are a lot of people and businesses with agendas that depend on you believing some of these lies about money, so they do all they can to perpetuate them.

No More Lies About Money!

Well, today I want to dispel some of those lies about money and spread a little financial hope to those that have believed them for so long. Your biggest financial asset rests between your ears. When you have your thinking right and know the truth about money, everything else will fall into place.

Ultimately, what you believe about money determines how you live your life. For better or worse, your money beliefs set the tone for you financially. They matter even more than your income, your expenses, or your chosen careeer.

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The Top 10 Lies About Money That Keep You In Debt

So here is a collection of money lies that I hear on a frequent basis, and the truth to counteract each one.

I Already Tried and Failed to Get Out of Debt

In a recent survey of my CFF readers, I discovered that 63% of you have tried to get out of debt and failed. Just because you tried and didn't succeed doesn't mean it's impossible. Whether you attempted to get out of debt multiple times or just once, it's still possible for you. So don't believe the falsehood that just because you tried and failed that you can't do it.

The truth: Edison failed 10,000 times before he invented a usable light bulb. Each failure teaches you and brings you one step closer to success. Keep the things that work and discard the ones that don't. Continue plugging away and eventually you'll find what works for you. If you haven't tried the CFF get out of debt course yet, you might want to give it a try. Click the link below to find out more about it.

Check out the CFF Get Out of Debt Course Here

You Don't Make Enough Money To Pay Off Your Debt

This is one of those lies about money that hits low income earners the hardest. When you have a small income, it's easy to believe that debt is something you'll always have because your income leaves little or no money left over at the end of the month. You believe that no matter how many hours you work, it just won't make a dent in your debt.

The truth: Even if you have a modest income you can pay off your debt. In the vast majority of cases, diligence and a good plan will get the job done. It may take longer to pay off the debt and reach your goal. It may take more sacrifices. But even if you have a small paycheck, you can fix your financial problems if want it bad enough.

Here's a good article that can help. Here's another one. And another.

Not Everybody Can Get Out of Debt

It's easy to believe the lie that debt freedom might be for some people, but not for you. Most of the time, this money lie is tied to feelings of self worth.

A lot of people don't believe they are worthy of achieving a lofty goal such as debt freedom. Sometimes it stems from a general lack of self esteem. In other cases it's due to issues with financial self control or past failures at getting out of debt. Whatever the issues are, getting ahead financially and self esteem can be intimately linked and hinder you from getting out of debt.

The Truth: Everybody is worthy of living a life of debt freedom! No matter what you've been through in the past or how many times you've tried and failed, you are worthy of being able to live a rich life!

It may take a change in mindset and habits that you haven't quite been able to achieve yet. But keep plugging away. Keep educating yourself and trying new things. Eventually it will click and you will find your way!

My friend Lauren Greutman wrote about her struggle in this area in her new book “The Recovering Spender: How to Live a Happy, Fulfilled, Debt Free Life” – You should check it out if you struggle with these issues.

You Don't Have Enough Discipline

I hear from a lot of people that have tried to get out of debt that they just don't have the discipline it takes to get the job done. They tell me they do ok for a while, but don't follow through. Of course, it's going to take some work to develop the right habits to become debt free. But I do know that anybody who wants it bad enough can develop the habits they need to succeed.

The truth: I've seen it work time and time again. The madder you get at your debt, the more likely you are to do what it takes to eliminate it for good! You're not missing some special discipline gene that everybody else has. You just have to want it bad enough to do whatever it takes to change your financial life for good. I've written a lot of posts on habits and behavior that can help.

Read My Posts About Habits, Behavior, and Mindset here

You Need a Credit Card for Emergencies

This is one of the biggest lies about money of all time. Most people view credit cards as a necessity, especially in an emergency. How else are you going to pay for an unexpected expense?

Eventually those unexpected expenses can add up to a big balance that's difficult to pay back. Add to that the temptation to use the card for non-emergency expenses, and you end up with a credit card bill that never seems to go away!

The truth: You don't need a credit card for ANYTHING! When you have a plan for emergencies in the form of an emergency fund, you're always prepared. An emergency fund allows you to pay cash for the problem and move on with your life instead of stressing over the credit card payments you incurred because you weren't prepared.

Read My Posts on Getting Rid of Credit Cards Here

Read My Posts on How to Build an Emergency Fund Here

You Need to Maintain a Good Credit Score

Another money myth perpetuated by the big banks. They've convinced us that in order to get by in life, a good credit score is extremely important. But that's not the truth. Maybe a high credit score is good if you want to borrow money all the time and stay in perpetual debt. I don't roll that way!

The truth: In reality, debt freedom is so much better! When you have no debt, you don't need a credit score! By the way, you don't need a credit score to get a mortgage, rent a house, or qualify for a job. There are ways to deal with those situations that don't require running up debt to get a good credit score. I've written quite a few articles about credit scores and why you don't need them. You can find them at the link below.

All My Articles About Credit Scores

You Have to Have Loans to Pay for College

Total student loan debt recently topped 1.4 trillion dollars. The average student loan debt for recent graduates is around $30,000 and rising. Who wants to start out life in such a deep financial hole?

Yes, college is expensive! But with the right strategy and some hard work, you can pay cash for college and stay away from the student debt that will keep you in financial bondage for decades.

Read “SoFi Review- How to Refinance Your Student Loans and Pay Them off Faster”

The truth: Even when my income got cut almost in half during the Great Recession, we were able to pay cash for my wife Angie's two college degrees. Now we're paying cash for our son's education and will for our daughter as well. It's all about having the right strategy.

Below is a link to an awesome book I recommend that shows you all the strategies you need so you'll never have to go in debt for a college education.

“Debt Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching off My Parents”

You Have to Borrow Money to Buy a Car

One of the most common lies about money that'll keep you in long term bondage. Just because cars are expensive doesn't mean you have to resort to loans and leases to get a car. Car loans and leases cause you to pay more for an expensive item that drops in value like a rock! It's a double whammy of interest and depreciation that wreaks havoc on your finances!

The truth: Again, it's all about the right strategy. It doesn't matter if you have a low income or not, you can pay cash for your next car (and every car after that!). Angie and I have paid cash for our last three vehicles and will never finance a car again! Here's a couple of posts about how to use our strategy to pay cash for your cars!

How to Pay Cash for Your Next Car- Even on a Low Income

Leasing a Car vs. Financing- Which is Better?

4 Steps to Getting Rid of Car Payments Forever and Pay Cash for Your Next Car

I'm Not Good at Budgeting

People use this excuse to lie to themselves all the time. Usually it's because they tried to do a budget once or twice and failed. Sometimes it's because they didn't stick with it for very long. For others, it's because the budget was not detailed enough or they kept using credit cards that blew the budget.

The truth:Anyone can do a budget, it's only third grade math! Sure, you may not be good with numbers or find it hard to be organized. I get that. But I can guarantee you, the more you do it the better you will get.

I don't think budgeting comes naturally to most people. I'm a numbers person and I had to get a few completed monthly budgets under my belt before I finally got it. But now it's second nature and only takes about 30 minutes a month to get it done!

Stick with it. Keep doing a budget every month and you will eventually wrap your head around it, I promise! Below is a link to the CFF Budgeting page where you'll find posts on how to budget, along with free budgeting forms and other great resources.

The CFF Budgeting Page

Debt is Just a Normal Part of Life

This is one of the biggest lies about money ever! Debt is a normal part of life for most people, but it doesn't have to be! Normal usually means broke and living paycheck to paycheck. Nobody wants that for their life, but that's what most people settle for. You don't have to settle for normal.

The truth: I don't care if you have a low income or make six figures, you can live a debt free life if you choose. To do it, you have to separate from the crowd and do the things they're not doing. You have to think differently and act differently. But the end result is that you are not in financial bondage to anyone! You are free to live your life the way you choose without debt holding you back. It's your choice… so choose freedom!

Question: Have you been held back by any financial lies you've been told over the years? Leave a comment on our Facebook Page or below and tell us about it!