5 Financial Beliefs I Thought Were Right But Turned Out to be Wrong

baked-potatoLast week my wife was surfing the Internet to find out the ideal temperature and cooking time to bake a potato. As she was digging for the information – she discovered an interesting fact: to properly bake a potato, you should place it bare on a cooking sheet (though, coated w/ oil and your choice of seasoning, of course). 

Mind blown.

For years, my wife and I were under the impression that a properly baked potato involved you wrapping it in tin foil, poking it with a fork and then placing it on the oven rack. We have been sorely misled. In fact – as my wife learned – wrapping a potato in tin foil actually steams it.  (Of course, many of you might be thinking to yourself, “uh.. duh?”)

This got me to thinking about other things that I have done in my financial life which I thought were right – but actually turned out to be wrong. Considering these things often makes me think about other things that I still could be doing wrong (You have to buy 9 items when it says 9 for $10, right?).

  1. Money will take care of itself. For many years I had been under the false notion that money doesn't need to be managed or directed. As a fresh graduate with a new job, I'd get my bi-weekly paycheck and the race was on to see how fast I could spend it. It was like an assignment: see how fast you can get rid of it. Afterwards, I remember thinking, “where does all my money go?” For years I lived by the popular saying, “easy come, easy go”. It wasn't until I finally got my financial house in order and wrote everything down (what was coming in and going out) did I finally have purpose and direction with money. No longer was I living on a whim and paycheck to paycheck – but every dollar had a mission. It took getting deep-in-debt to finally come to.
  2. Savings is for people who lack faith. There was a time in my life where I held a false belief (somewhat inspired by a misinterpretation of what a real Christian should be like) that certain acts of preparation or self-preservation were a sign of unbelief. So I was constantly riding this tidal wave of paying off one large debt after the other because I couldn't “weather” unexpected expenses due to a lack of emergency funds. It's only been in the last 10 years that I've seen just how important savings can be and how my thinking was “stinking”. Of course, you may have your own reason for not saving – it doesn't have to be as odd as mine. ;)
  3. Real men don't coupon. I grew up with a mother who was good with money and was always clipping coupons out of the Sunday circulars and coupon booklets. So for years, I thought couponing was only for the feminine specie. It wasn't until college (where I met Charlie) and then years later rooming with several of the cheapest, manliest men I'd met (Leo, Dave,  Zach, Daniel and Ed) that I could feel secure in my masculinity and coupon with the best of 'em (Check out Charlie organizing his coupon booklet).
  4. Debt isn't that bad. I've been very flippant about debt. For years, debt never really even bothered me. I figured it was a “fact of life”. Every one has student loans (not true), a car loan (not true) or credit card debt (false). This type of thinking is what kept me broke and in the hole. It was only when I shed this false belief about debt that I was able to change my financial future.
  5. To enjoy life, you have to spend money. Perhaps it was my younger years and being naive but I felt that to have a good time required spending money. Be it movies, entertainment, golf, sporting events, travel – etc. Today – this belief has been shattered. Some of the best memories involve being with family/friends and enjoying God's creation. All free.

Have there been some financial beliefs or principles which you have held on to – only to find out later they were entirely wrong?

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  1. Sounds very dave-ramsey-esque! Not that dave has a corner on the personal finance market, or that his ideas are unique …

    Telling your money what to do (budgeting), saving up an emergency fund, and getting out of debt are all universally good ideas for personal finances.

  2. At one point in my life I also thought all these were true. And it didn’t help me financially to think like this. I’m more considerate about money now, know what and when to spend and am also preparing for ‘tomorrow’.

    • Funny how we seem to always wise up as we age.. ;)

    • Haha – kudos to you!

  3. I like the list, especially the one about faith. There are a lot of contrary ideas about money in the church and it’s hard to make sense of it all.

    The only one I might disagree with is the first: on some level, I need to tell myself that money really will take care of itself. Of course, this is from someone who probably thinks/worries too much about finances.

    • It’s hard not to worry sometimes.. guess this is where faith comes in. But so much of life/survival is dependent on it.

  4. For years I had a misconception about money, specifically giving. In my smug form of Christianity, I felt like God wanted me to only support Christian organizations that were actively engaged in sharing the Gospel and in discipling people. I thought there were plenty of people out there who never gave a dime to a church — let them feed the poor! Then I read Matthew 25:35-40 for the 900th time, and God finally cracked my heart open. I realized that He was talking to ME! Now I understand that I have to help feed, clothe, and shelter the poor. I’m still not crazy about the United Way, but oh well …

    • Pops, I’ve had similar thinking too on the giving. Thanks for input!

  5. These are some excellent financial myths, especially the one about debt. Many people have the mindset that debt is ok and it’s a way of life because so many people have debt. But like you said, there are plenty of people without student loans, car payments, and credit card debt! Trying to keep up with the Jones’ will give you debt like the Jones’ as well!

    • Right – there are countless folks w/o ANY debt. It certainly is an anomaly today (hopefully not for long).

  6. LOVE the Halloween header! Yeah, I can identify with many of those incorrect beliefs. I used to think that really “cool” people bought whatever they wanted, and of course, the other biggie was that it’s okay to buy “as long as I can afford the payment.” YIKES!

    • Thx. Yup – been guilty of that too :)

  7. Great insights. I think everyone had their fair share of false notion when it comes to personal finance. In one way or another we are all guilty in committing or following a practice we thought was right but ended up suffering from it. I would have started earlier though if I knew what I know now.

    • With you there Marissa.

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