Money Management /

5 Financial myths debunked

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seek some clarity on some commonly held financial beliefs

By reading on, you may have an eye opening experience with regard to your personal finances.

Myth 1: It is better to own a home than to rent

Home ownership is a very personal choice as the decision will depend on your unique set of goals. If you choose to rent, it can often be cheaper than owning your own home due to mortgage and maintenance costs1. By renting, you can generally rely on your landlord to maintain the property, for example; fixing leaky taps and blocked toilets2.

On the other hand, having an unencumbered home can be a significant asset, but getting to this stage can be a lot of hard work and can add some significant financial stress to the average person’s budget. Doing the hard yards over a few years may pay off in the end – you could own your home, and if you’re cash poor, you have the option to sell up and move into to a smaller place. You may even have some cash left over to help fund your retirement.

Myth 2: The amount you spend with credit cards vs the reward points you earn is worth it

Generally, owning a credit card comes with its risks, however, there can be some value in owning one3. For example, reward points may be exchanged for gift cards or for any other specified goods and services. This is usually only beneficial if you pay off your credit card before the interest-free period runs out, otherwise, you risk having to pay a hefty interest rate on your expenses.

It’s important to be responsible with the use of your credit card; consider paying back as much as you can afford and as quickly as possible to avoid having to pay interest4. Creating a budget can help with ensuring you have enough left over to live with day-to-day so you don’t have to resort to using your credit card. Otherwise, you risk being trapped in a credit card debt cycle5.

Hot Tip: Consider reflecting upon your spending habits and behaviour when using a credit card. Are you buying things that you don’t necessarily need to earn reward points? Identifying exactly what your needs and wants are, can be an important step in responsible budgeting and credit card management6.

Understand the difference between between needs and wants

Myth 3: Pay for your holiday after you get home

It’s so easy to forget about the consequences of paying for everything on your credit card while overseas. The ‘buy now, pay later’ option could set you back both financially and emotionally after having realised that you owe a lot of money7. It's a beautiful thing – being able to enjoy your holiday without the prospect of future financial stress looming over you. Consider setting up a budget and putting away some cash to reach your holiday budget goal. You’ll thank yourself later and save yourself the worry.

Myth 4: It's too late to reach my financial goals

Throwing caution to the wind could be a risky move. If you’ve got this far without any future planning or a heavy reliance on credit, some may say that you’re doing okay. But once you hit retirement age, all this could change. Simply relying on your superannuation and pension payments may leave you struggling financially. It’s likely you would want to lead a comfortable retirement, and putting away extra savings may help get you there. So it’s never too late to start saving8.

Myth 5: Managing finances is difficult

What may initially appear as a challenging endeavour, not all is what it seems. Start small and before long, you'll build up the confidence to navigate the realms of financial independence and responsibility. With some help on debunking some commonly held beliefs, you could be on your way to a better financial future.

In Summary

Now that you have a better understanding of financial health, share this blog post with your friends, family and colleagues, or get in touch with IMB Bank to help steer you in the right direction.

Enquire about a planning for your financial future


1. The Conversation, ‘Buy, rent, or do both: the perversion of negative gearing’, April 26, 2016

2. New South Wales Government: Department of Fair Trading, ‘During a tenancy, information for landlords’, February 2017

3. Federal Government of Australia: Australian Securities and Investments Commission, ‘Reward Schemes’, April 18, 2017

4. Federal Government of Australia: Australian Securities and Investments Commission, ‘Smart ways to use your credit card’, November 4, 2016

5. Everything Finance Blog, ‘How to Avoid the Vicious Credit Card Debt Cycle’

6. Investopedia, ‘The Complete Guide To Planning A Yearly Budget - Needs Vs. Wants’

7.,‘Simple Tips for Dealing with Holiday Financial Stress’, December 28, 2015

8. University of Notre Dame, ‘It’s never too late to save for retirement’, 2005


The advice contained in this article is general only and has been prepared without taking account of your objectives, financial situation or needs. Before you act on this advice you should consider the appropriateness of this advice in regard to your objectives, financial situation and needs. You should consider the relevant Terms and Conditions or Product Disclosure Statement before deciding whether any of our products are suitable for you. You should also consider seeking professional legal or financial advice.

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