Managing personal finances is an essential life skill, but it’s often shrouded in misinformation. From get-rich-quick schemes to misconceptions about saving and investing, it’s easy to fall victim to financial myths. These are the little lies we constantly hear. Heard enough, they become part of your mindset and your beliefs. Here are 12 more myths about personal finance and the truths that debunk them.

1. Myth: You Can’t Save Money if You Have Kids

Truth: While raising kids is expensive, it’s still possible to save money with careful budgeting and planning. Prioritize savings and look for ways to reduce expenses. For example, consider buying second-hand items, using coupons, and planning meals to avoid unnecessary spending. Setting up a savings plan that includes contributions to an emergency fund can also help manage unexpected costs.

2. Myth: A Budget Means Deprivation

Truth: A budget is simply a tool to help you manage your money effectively. It doesn’t mean you can’t enjoy your money—it ensures that you’re spending in a way that aligns with your priorities and goals. Think of a budget as a roadmap that guides you towards your financial goals while allowing for flexibility. For instance, you can allocate a portion of your budget for leisure activities or hobbies, ensuring you still enjoy life while staying financially responsible.

3. Myth: You Need to Cut Out All Fun to Save Money

Truth: You don’t need to sacrifice all enjoyment to save money. The key is balance—find ways to enjoy life within your financial means and plan for occasional splurges without derailing your savings goals. For example, instead of dining out frequently, you could plan special meals at home or take advantage of free or low-cost entertainment options like community events or outdoor activities.

4. Myth: A Raise Means You Can Spend More

Truth: A raise is an opportunity to save or invest more, not necessarily a reason to spend more. Be mindful of lifestyle inflation, which can prevent you from using that extra income to build wealth. Instead of increasing your spending, consider directing a portion of your raise towards paying off debt, increasing your retirement contributions, or building an investment portfolio.

5. Myth: It’s Too Late to Start Saving for Retirement

Truth: While it’s ideal to start saving early, it’s never too late to begin. Even if you’re closer to retirement, small steps like increasing contributions or delaying retirement by a few years can make a significant impact. For example, if you’re in your 50s, you can take advantage of catch-up contributions to your retirement accounts, which allow you to save more than the standard limit.

6. Myth: Personal Finance Is All About Crunching Numbers

Truth: While math plays a role, personal finance is more about behavior. Creating good financial habits, managing emotions, and making informed decisions are just as important—if not more—than the numbers. For instance, understanding your spending triggers and developing strategies to avoid impulsive purchases can have a more significant impact on your financial health than simply crunching numbers.

7. Myth: You Can Rely on Social Security for Retirement

Truth: Social Security is intended to supplement retirement income, not replace it. It’s important to have other sources of retirement savings. Relying solely on Social Security can leave you vulnerable to financial instability, especially if your benefits are lower than expected. Diversifying your retirement savings through employer-sponsored plans, IRAs, and other investments can provide a more secure financial future.

8. Myth: You Should Always Pay Off Your Mortgage Early

Truth: While paying off your mortgage early can save on interest, it’s not always the best use of your money. Consider other investment opportunities that may offer higher returns. For example, if your mortgage interest rate is relatively low, you might benefit more from investing in a diversified portfolio that has the potential for higher growth over time.

9. Myth: You Don’t Need to Save if You Have a High Income

Truth: A high income doesn’t guarantee financial security. Without saving and investing, you can still face financial difficulties. High earners can fall into the trap of living paycheck to paycheck if they don’t manage their money wisely. Building an emergency fund, investing for the future, and living below your means are crucial regardless of your income level.

10. Myth: You Should Always Follow Financial Trends

Truth: Financial trends can be risky and unpredictable. It’s better to have a solid, long-term financial plan based on your goals and risk tolerance. Chasing trends like hot stock tips or speculative investments can lead to significant losses. Instead, focus on creating a diversified investment strategy that aligns with your long-term objectives and risk tolerance.

11. Myth: Gold is the Safest Investment

Truth: Gold can be volatile and doesn’t always provide the steady growth seen in other investments like diversified portfolios. While gold is often seen as a safe haven during economic uncertainty, its value can fluctuate significantly. A well-diversified portfolio that includes a mix of asset classes is generally a safer and more effective way to grow your wealth over time.

12. Myth: Saving Money is Enough for Retirement

Truth: Inflation and longer life expectancies mean investing is often necessary to ensure a comfortable retirement. Simply saving money may not be enough to keep up with rising costs and ensure you don’t outlive your savings. Investing in a diversified portfolio can help your money grow and provide a more secure financial future.