Follow Us!


We at B&J Bookkeeping love to discuss myths surrounding taxes. Since taxes are basically money out of your pocket, we thought it would be a good idea to go over traditional money myths. These tales run the gamut from the ones with a bit of truth to the downright silly or even harmful. We think they are fun to hear regardless. Read on to get our 5 bizarre money myths people still believe.
houston bookkeeper money myth

1. Expensive Coffee = Home Down Payment

Recently we were tickled by a millionaire with the bookkeeping tip of not buying avocado toast. In an interview for the Australian version of “60 Minutes,” billionaire Tim Gurner of Gurner real estate basically said the little things can add up to a down payment on a home. As he says, one $19 for avocado toast per week and a $4 cup of coffee every weekday does add up. However, do they add up to a home?

Let’s do the math. Even in Houston, it’s hard to find a home for under $150,000. It’s even harder across the nation and in Australia. Assuming a 20% down payment of $30,000, that’s a lot of avocado toast. At one per week, it would be 1,579 weeks or over 30 years to save up your down payment. Shall we add the coffee? The cost is about the same, or $4 every weekday, $20 per week. This also comes to 1,500 weeks or over 28 years. Even if you cut out both, it would be about 15 years for this down payment assuming home prices don’t increase.

However, we do agree that cutting out extravagances and using them towards wise investments can eventually lead to a home.

2. Keep Your Mortgage Going

Also known as holding on to a mortgage, the thought is that since they are low in interest, they should be paid off last. This isn’t always true. For example, cars also come with low interest and even no interest, yet they don’t take 30 years to pay off. This is why putting in even just a little extra on your home payment can add up big. By big we mean into the tens of thousands or even hundreds of thousands, depending on the value of your property.

Let’s do the math. We’ll use the $150,000 home as an example at a 30 year mortgage with 4.5% interest. So cut out the $19 avocado toast and $4 coffee, or about $100. Even if you’ve owned the home for 5 years without making extra payments, you would save over $20,000 and pay off your mortgage sooner.

3. Save 10% of Your Income

While a rainy day fund is always a good idea, this money myth is a blanket solution to a varying problem. Some families can’t afford a 10% savings plan, while others can easily afford this and beyond. With interest rates for savings account hovering at 1% in the best case scenarios, it does not make good sense. If you do have money to invest, do so. You may also pay off your mortgage earlier as shown above, or any other number of sound uses your local bookkeeper can advise you of.

4. Free TV is Best

Like the above, this is a one size fits all solution. Antenna tv is free, but one must sit through commercials. Consider that a cable tv subscription is about $50 per month and a hard drive to record them can be a one time expense. How much time do you spend watching commercials? With about 20 minutes of commercials per every hour, it can add up. If you watch just the 1 hour of television per day, that adds up to 10 hours per month spent watching commercials. If you make more than $5 per hour, free tv may not be for you.

5. Don’t Make a Gift of a Purse or Wallet Without Money

Ever received a purse or wallet as a gift and check it for money? This international custom is supposed to be good luck, although the money myth didn’t quite make it into the United States. The sentiment is if that the item isn’t given with money, it will never have money. Given that the U.S. is one of the richest countries and does not make a custom of this, it seems more myth than fact. However, we do like the thought of unspent money attracting more money.

Houston Bookkeeper Tips

If you live in Houston and need help a bookkeeper to help keep up with your money and expenses, feel free to contact us for assistance.

Share Away!


One thought on “Houston Bookkeeper Tip: 5 Bizarre Money Myths People Still Believe

Leave a Reply

Your email address will not be published. Required fields are marked *