The Truth About Common Financial Myths, Part 1

Managing your finances can feel a bit like navigating a maze blindfolded. There's a lot of advice out there, but some of it just doesn’t add up. The reality? Many of us are stuck believing outdated financial myths, which keep us from making the most of our money.

Since April is Financial Literacy Month, it’s the perfect time to set the record straight and address some of those misleading ideas. Below, we are addressing 5 of the most common financial myths and separating fact from fiction.

MYTH 1: Earning More Money Always Leads to Greater Wealth

Earning a high salary might sound like the fastest route to financial security, but this is a common misconception. Wealth isn’t just about how much you make. It’s about how much you save, invest, and manage what you have.

Consider this scenario: Sarah earns $30,000 annually, sticks to a budget, and consistently saves and invests. In contrast, Richard earns $300,000, but he spends excessively on luxury items and doesn’t save. Who is wealthier in the long term? Hint: It’s not Richard.

PRO TIP: Use a Home Budget Calculator to keep your spending on track. Monitor your monthly net income, mortgage payments, utilities, and other expenses. It shows you how much you can save and where your money is going.

MYTH 2: All Debt Is Bad

Debt gets a bad reputation, but you might be surprised to learn that debt CAN be good.

High-interest credit card debt? Definitely bad. But strategic debt—like a low-interest mortgage, business loan, or a student loan—can boost your earning potential and work in your favor. Good debt helps you reach goals without draining your savings all at once. The key is to borrow wisely. Shop around for the best interest rates and avoid taking on more debt than you can manage.

To learn more about different types of debt, check out our recent guide comparing Good Debt vs. Bad Debt.

MYTH 3: Saving Isn’t Worth It If You Can Only Contribute a Small Amount

Think saving $10 a week doesn’t matter? Think again! Whether it’s automatically transferring a few dollars from every paycheck into a separate savings account or rounding up your debit card purchases, even the smallest contributions add up over time. Plus, it helps you develop the habit of saving money, which will be beneficial throughout your entire life.

PRO TIP: Enjoy automatic savings with Saving Cents¹ from Academy Bank. In this debit card round-up program, you decide between adjusting your purchases to the nearest $1 or $5. Each night, the extra change automatically transfers money from checking to savings, helping you save without even trying.

MYTH 4: Buying a Home Is Always Better Than Renting

Owning a home is often seen as the ultimate financial milestone—it’s the “American Dream,” after all. Homeownership can sometimes be a sound investment if you are financially stable, plan to stay long-term, and have a good credit score. However, it’s not always the right financial choice for everyone. Instead, renting can be more practical for people who:

• Relocate frequently for work
• Need flexibility before committing to specific locations or school district
• Want fewer financial responsibilities, such as managing property taxes, HOA dues, or maintenance like lawncare and roof repairs

A simple Rent vs. Buy Calculator can help you decide what makes sense for your finances. And when (or if) you are ready to buy a home, compare mortgage² options and consult with our home loan specialists.

MYTH 5: Debit Is Always Better Than Credit

Sure, credit cards can lead to trouble IF you overspend or don’t pay the balance on time, but avoiding them altogether? That could do more harm than good. When used responsibly, credit cards offer serious perks:

• Rewards: Like cash-back or travel points
• Fraud Protection: Many debit cards don’t have the same security protections as credit cards
• Building Your Credit History: Establishing a strong credit history can open doors for financial opportunities, such as getting an auto loan, better terms on insurance premiums, and even scoring the best mortgage rates.

The trick? Always repay your credit card balance in full every month and only spend what you can afford. If you need extra help building credit responsibly, consider options like the Credit Builder Secured Credit Card³ to get started. It’s easy to qualify for and designed for people who are new to credit or simply looking to improve their credit score.

Bust Financial Myths Today!

Financial myths can lead you down the wrong path. But with accurate information and the right tools, you can make smarter financial choices that support your goals.

Let Academy Bank guide you through different financial milestones. Whether you are looking for business banking solutions, personal loans⁴ for debt consolidation, or helpful financial calculators, our full-service, local bank is ready to meet all your needs!

Find a Bank Near Me

Ready for the next installation in this myth-busting series? Check out The Truth About Common Financial Myths, Part 2.