3 Money Myths

by mike on February 10, 2011

When it comes to handling money, it’s not just about the money.  As strange as that sounds, it is true if you want to be successful with money.  Especially as a married couple, you have to have a plan together.   Many people make a lot of money or have a high income, but few people actually become wealthy.  The difference is having a plan.  The best way to start on a plan is to confront head on some myths about handling money.  Let’s look at three of these myths.

1. We are so in love, we won’t ever fight about money. I hate to break it to you, but love has nothing to do with handling money.  If that were the case, then money fights and money problems would not be the #1 cause of divorce in the United States.  Everyone starts out their marriage in love (ok, almost everyone: there are rare strange occasions).  So, based on this myth, no one would ever fight about money.  Ask anyone who’s been married for more than about two months, there will be some heated discussions about money. (sidenote: the exception to this is a couple who gets on the same page about their finances during their engagement)  The bottom line is that each spouse comes from a different family upbringing and have different spending and savings habits coming into the marriage.  Just assuming love will prevent you from arguing about money is a little naïve and just plain silly.

2. We have to have a lot of money to make money. Once again, this is just not true.  “How can I start a business if I don’t have any money” you may ask.   Plenty of people have become multi-millionaire business owners having started their business from their dining room table or their garage.  Also, it is assumed to be able to invest money, you have to make a lot of money.  The truth is that you do not need a bunch of money to be able to become wealthy for retirement.  You do need discipline and consistency.  For example, if you start at age 25 and invest just $85 per month, you will have $1,000,000 dollars at age 65, assuming a 12% return rate.  And, yes, you can get a 12% return from good growth stock mutual funds.  As financial author/expert David Bach says “Most people overestimate what they can do financially in a year-and underestimate what they can achieve financially over a few decades.”

3.     We don’t need to discuss money, everything will work out fine. Once again, this falls under the naïve category.  Many of you grew up in a house where money was never discussed.  For whatever reason, it was considered a taboo subject.  The problem with that is you were never taught how to handle money and definitely not how to handle tough money situations.  This upbringing can cause you to not want to discuss money with your spouse.  However, most financially successful married couples openly talk about money and make it a priority in their life.   A nice by-product is that you will be happier together as a couple when you plan your finances together.  It will cause you to agree on your dreams and your future, which will definitely cause you to have more intimacy in your marriage.

Obviously, there are many more myths about money and marriage, but these are three that are highly prevalent among couples.  Even if they are not in the forefront of your mind or ever discussed, they are myths that can linger in te background and prevent you from being successful.  The key now is to acknowledge these myths, take control, and do something about it!

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