Common Misconceptions About Finances

Today, in our Misconceptions About Finance series, let's address one of the most widely accepted misconceptions: that debt is normal. That it's okay to be in debt. That our American life as we know it is impossible without incurring massive amounts of debt (okay, maybe the "life as we know it" idea is true...but we'll get to that later). First, let's start with the big ideas about debt.

Debt as a Normal Trend

With all the ups and downs of the stock market, many people tend to envision that trading on the market is a terrifying, heart-palpitating experience. One in which you could lose every dime to your name. One in which you might be swindled by a smooth-talking, tailored-suited crook. One in which the fears outweigh any potential good.

However, the stock market doesn't have to be so scary. In fact, it can be a little fun. Let's look at some ways to begin to invest on the market without fearing for your life savings.

Research and Learn

When I was a teller many moons ago, I had a customer who adamantly believed the bank wanted to rip him off. He thought that overdraft fees were simply a part of life and that there wasn't a single thing he could do to avoid them. Many other people believe the same; banks are evil and run by greedy trolls. That is simply not true (okay, maybe the greedy troll part could be accurate...). In any case, banks are not looking to make all of their money on your overdrafts, and there are many legitimate ways to make your own personal overdrafting ancient history. Let's count the ways.

Everyone's heard the saying "Time equals money." It's often very true: More time working means more pay; putting time into a business means you'll (usually) make money; and taking time away from a person means that he won't be able to make money in that time period. Essentially, time almost always equals money.

America is a nation where everything is bigger. We super-size meals, cars and even houses. We are the proud nation that invented McMansions after all, and many of us expect to one day advance on our property ladder to the seven bedroom monstrosity that seems to have become a large part of the American dream. Really, who wouldn’t want more space in which to truly live?

My mother and grandmother are smart women. They know a lot about money, finances and investing. They taught my siblings and me how to make money, save and budget, and then they thought we were pretty set in life. I mean, they taught us the basics, right? We'd learn the rest in school they assumed.

Years ago I was talking to a co-worker at a bar after work, and she was lamenting the “fact” that she didn’t make enough money. I looked at her in surprise. She always wore the nicest clothes, always went out to lunch, and often made extravagant weekend plans. I assumed she made a lot more money than me, judging only by how much she spent. But this was not the case: she was sinking in debt.