The Most Common Myths about Money Today

Money runs the world, so they say, and I couldn’t agree more. Everyone needs financial education if we’re to close the gap between the rich and the poor. Unfortunately, money is not spared from myths and misconceptions—some of which have held many people back for years.

In this post, I’ll break down 8 common money myths and explain why they’re not true. Let’s get into it.

1. My Partner Manages the Finances, So I Don’t Need to Know About Money

This is a trap many people fall into. It’s okay if one partner takes the lead in managing household finances, but both of you must know what’s going on.

Emergencies can happen—like job loss or illness—and you don’t want to be clueless about how to pay bills or handle investments.

The truth:

Every adult should be involved in managing their finances, whether it’s budgeting, saving, or investing. It’s about being prepared and ensuring financial security for the family.

2. Investing is only for the rich and debt-free

You’ve probably heard that you need to pay off all your debts before you start  investing. Or maybe that investing is only for those with millions in the bank. This couldn’t be further from the truth.

However, Investing is for everyone, including young professionals with little to spare. Even if you start small—saving Ksh. 2,000 per month in a Money Market Fund—you can build wealth over time. 

Remember, the earlier you start investing, the more time your money has to grow through compounding.

Investing for Beginners 

If you are in college or university, consider opening a Money Market Account. Save at least Ksh. 2,000 every month for 5 years. By the end of 5 years, your total savings (the principal) will be Ksh. 120,000.

With an interest rate of around 10% per year (compounded monthly), you could have more than Ksh. 150,000, including the interest earned.

This is the basic concept of investing—you don’t need millions to start. Consistent saving and investing over time can grow your money significantly.

3. Debit is ALWAYS Better Than Credit

Some people avoid credit cards like the plague because they fear falling into debt. While credit cards can be risky if mismanaged, they’re not entirely bad.

When used wisely, credit cards can offer rewards like cashback, discounts, and bonuses. They also help you build a strong credit history, which is essential if you ever need a loan for a car, business, or home. 

The key is to pay your balance in full every month and avoid spending more than you can afford.

4. Credit Cards Will Get Me Through Any Financial Crisis

Depending on credit cards to get you through a financial emergency is a great way to dig yourself into a deep pit of debt. Depending on your situation, you may not have the means to pay your cards on time, and with interest and late fees, you could be spending a lot more than you charged in the first place. 

Credit cards should not be relied on during a real financial emergency, such as a job loss, divorce, or serious illness. It’s best to proactively build an emergency fund consisting of three to six months’ worth of living expenses so you’re prepared for any unexpected events.

5. The only way to build wealth is by buying a home

For years, people have been told that owning a home is the ultimate way to build wealth. While real estate can be a good investment, it’s not the only way.

You don’t have to buy a house to build wealth. Other options, like starting a business, investing in the stock market, or contributing to a retirement plan, can also grow your money. 

Focus on what works for you and your financial goals—not what others think you should do.

6. I’m Too Young to Think About Retirement

Retirement planning often feels like something only older people need to worry about. But here’s the truth: the earlier you start, the easier it gets.

If you begin saving for retirement in your 20s or 30s, you can set aside smaller amounts while letting compound interest do the heavy lifting. For example, saving just Ksh. 2,000 per month in a Money Market Fund could grow significantly over the years.

If your employer offers a retirement plan like NSSF Tier II contributions, take advantage of it. If not, consider other options like SACCOs, pension schemes, or high-yield savings accounts available in Kenya. The key is to start now, no matter how small, and let your money grow over time.

This simple step can make all the difference in securing a comfortable, stress-free retirement.

7. I Have Enough Money; I Don’t Need to Budget

Budgeting is for everyone – not just those living paycheck to paycheck. Without a realistic budget in place, even individuals making six-figure salaries can easily spend their way into debt. 

A budget will force you to take a look at where how much you’re spending in each category (household, car, subscriptions, etc.) and help you make responsible money choices.