Money Myths Your Teen Probably Believes (and How to Fix Them Fast)

FinStrike helps teens build real-world money skills through a four-year financial literacy curriculum, a Smart Tutor that helps students around the clock, and extensive free resources for parents and students.

Teens grow up swimming in financial misinformation. TikTok, YouTube, and friends at lunch pass around “money advice” that sounds smart but usually isn’t. The problem isn’t that teens are dumb, but it’s that they’re hearing loud voices with zero context. As a parent, your job isn’t to lecture them, but it’s to quietly debunk myths with facts and examples that stick.

Here are three of the biggest money myths teens believe and how to fix them fast.

Myth 1: “Using a debit card builds credit.”

This one sounds logical: you’re spending your own money, it’s responsible, so it must help your credit score, right? Nope. Debit cards pull directly from a checking account, so they never get reported to credit bureaus.

What to do instead: Explain that only credit products like secured cards, student cards, or being an authorized user build a credit history.

If they’re ready, set up a secured credit card with a $200–$300 deposit and automatic payment from their checking. That one small move will do more for their financial future than any number of debit transactions.

Myth 2: “Renting is throwing money away.”

Teens hear this from adults all the time, and it’s one of the most misleading takes in personal finance. Renting isn’t wasting money. It’s buying flexibility.

How to reframe it: Show them the math. A $300,000 house with a 20% down payment, taxes, insurance, and maintenance costs might require $2,000+ a month to own. Renting the same space could cost $1,600, but they would have no repairs, no HOA, no closing costs, etc.

Homeownership makes sense when someone is stable, ready to stay put, and has cash for emergencies. Renting makes sense when someone is building income, mobility, and savings. The key lesson: not all “renters” are behind; some are just early in their story.

Myth 3: “You have to be rich to invest.”

This myth keeps teens on the sidelines for years. They think investing is for adults with suits and portfolios. The truth? A teen who invests $50 a month is doing more than most adults.

Show, don’t tell: Pull up an online compound interest calculator together. Enter $50 per month starting at age 16, growing 8% annually, until age 65. The number? Over $370,000.

Then show the same plan starting at 26. The total drops by almost half. That’s time doing its job. The earlier they start, the less they have to invest later.

Bottom Line

You don’t need to out-lecture the internet. Just replace bad info with simple, repeatable truths.

Debit doesn’t build credit. Renting isn’t failure. And investing early isn’t just for the wealthy. It’s for the informed and the prepared.