6 Lies You Probably Believe About Money, According to Rachel Cruze

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Money advice is more readily available than ever, and so are money lies. It’s not always clear what’s true and what isn’t, but ethical money experts like Rachel Cruze are here to help.

In a recent video on her YouTube channel, Cruze broke down six of the most common money misconceptions circulating today. Here’s her take on each one, including why it’s false and how the truth can set you free.

Budgeting Means Not Having Fun

People tend to associate budgets with discipline and self-denial. CNBC Select compares this thought process to the dieting mindset: You’re being “good” if you limit your spending and “bad” if you overspend. Either you deny yourself the pleasures of life, or you indulge and feel guilty. 

Cruze believes this mindset misses the point of budgeting. She believes a budget permits you to spend money when and where it makes sense. When you’ve allocated your funds for each category, you can let that money go without guilt. 

She encourages people to monitor their budgets throughout the month and adjust them as necessary. If you’re overspending on one thing and underspending on another, you can change the size of your “buckets.” 

You Need Debt To Survive

It’s easy to believe that everyone is in debt. More than 3 in 4 Americans live with some personal debt, whether it’s a mortgage, car loan, student loan or credit card balance. The median debt balance per household is $80,000. 

Most people are in debt — and most people are struggling. According to a recent survey, 65% of middle-class Americans don’t see a way out of that struggle.

Cruze said that’s no coincidence. Being in debt puts you in an endless cycle of getting a paycheck, seeing it go to debt payments and having the same debt payments the next month.

Debt is definitely normal, Cruze admitted, but it’s not inevitable. If you’re already in debt, smart budgeting can help you pay off your balances and take control of your money. Then, by only buying what you can afford going forward, you can avoid getting stuck in the same cycle — even if all your neighbors are still there.

Buying Things Makes You Happy

Even when we understand the trap of consumerism, we can still feel the “need” to spend. Cruze empathizes with the feeling that buying a certain brand or achieving a certain standard of living will change your life.

“That’s just not the truth,” Cruze said. “You are who you are until you decide to change, and that’s self-work. That has nothing to do with what you buy.”

For Cruze, the antidote is contentment. If you practice joy and appreciate where you are in life, you won’t need that next purchase, and you can put that money toward something that matters.

Money Management Is a Solo Task

According to a 2023 survey, 62% of Americans don’t talk about money, including 46% who don’t even talk about it with their partners.

Cruze believes that society needs to break this pattern.

“We’re made to live life with other people,” she said, and money habits are no exception. She encourages everyone to have at least one person they can talk openly with about personal finances. 

That person doesn’t have to be a partner or close family member. It’s just as valuable to have a friend who “knows everything” about your finances and will advise you honestly about your decisions. 

You’ll Start Saving After …

Cruze knows the stories people tell themselves. They’ll start saving “after” something, like the holiday season or a big family vacation. Many people don’t even have a milestone, telling themselves they’ll start saving somewhere down the road.

But down the road comes faster than you think and often brings financial burdens. One study of older Americans revealed that 58% regret not saving more and earlier. 

You can’t start saving yesterday, but you can start today. Every day you save gives you more time for that money to generate interest, which you can put aside to generate more interest. This process is called compounding, and it’s one of the best arguments for a long-term savings habit.

Giving Is an ‘Extra’

For Cruze, giving is an important part of a healthy budget. In today’s individualistic society, it’s easy to focus money decisions entirely on yourself and your family, especially when you’re just starting to gain control.

When you start your financial journey with that mindset, making space for generosity in the future is more challenging. Cruze encourages everyone to work charitable giving into their budgets early on, even if it doesn’t feel like a lot.

When you give, you avoid tunnel vision and maintain connections with others. You see money as a way to create the world you want — even if it’s on a small scale.

Then, as you earn more, you can give more. It’s all about adjusting and doing what works for you according to your values and what you have.

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