5 Myths About Money: Understand Them and Dispel Them

Myths abound about money. Unfortunately, like all fables, we unconsciously allow them to influence our behavior. Consider these five. Over the past three months, how have they affected your spending decisions? Do you see any areas you need to change? As you watch your spending over the next month, ask the Lord to help you implement adjustments.

Money myth #1: Money is the root of all evil

This legend comes from a misinterpretation of 1 Timothy 6:10, which clearly states that the love of money is the culprit. Some Christians behave as if money is bad. They do not study and therefore do not learn to manage effectively. Unwittingly, they do not provide adequately for the needs of their families. They believe it is wrong to save, plan for retirement, or hoard money in any form. They neglect 1 Timothy 5:8 which tells us that a believer must support his family or he is worse than an unbeliever. They also ignore Matthew 6:21 which states that where your treasure is, there will your heart be also.

Money is neutral; you only need it to buy things. Learn to use it wisely, because unknowingly it can become your idol, you become its slave, and you go down and stay deep in debt. Consider the words of Matthew 6:21.

Money Myth #2. Money is manageable

Probably the most life-altering myth about money is that it is manageable. We all use “money management”, “money management” and similar terms. When we say them, we believe them.

Stop; Think about it. How do you manage money? You want to buy a car, a house, clothes or pay university fees. Are these money management decisions? No! These are lifestyle decisions that require money to execute.

When we develop the attitude that money is unmanageable, our behavior will change. Before spending or committing to spend, consider need and overall affordability, rather than short-term payment options. Don’t buy a house just because the rent is lower than the mortgage. Consider all the effects on family finances, lifestyle, gifts to the Lord, and overall budget of homeownership versus the total effect of renting.

When faced with a financial decision, understand that these are life choices that could affect your family for decades. Where you live, what vehicle you buy, where your kids go to college are life choices. Before you commit to spending, think about these key questions and discuss them with your affected family members:

  1. Do I need it – the car, the clothes, the camera?
  2. How am I going to pay it?
  3. Will spending increase my debt and interest charges?
  4. How will this cost affect my family budget and my family’s lifestyle?
  5. Will it prevent family or family members from doing planned or unplanned events, such as family outings, dinner parties, camping trips, or other activities?

Money Myth #3. We make rational choices when we spend

If you need examples to illustrate the point, consider the buying habits leading up to the Great Recession. The subprime fiasco is the child of the poster. People bought houses they knew they could never afford. People were taking vacations they knew they couldn’t afford. People spent what they didn’t have to buy what they didn’t need. Nevertheless, ask ten people if the purchase procedure they followed was rational and logical, and the majority will give you many reasons why they had to act the way they did.

This irrationality has been with us for a long time. In the 1970s, people bought pet stones, invisible dogs, and other weird items.

Merchants know we spend irrationally and profit from it using advertising, packaging and smart financing. Otherwise, why would a deeply indebted couple with a small fixed income take out a home equity loan to buy a big-screen TV? Publicity grabbed them; it was captivating. They succumbed!

When we realize and accept that we don’t make rational choices before spending, along with the other four items in this article, we will be wearing merchant-proof vests when surfing the internet, browsing malls, and flipping through flyers. traders.

Money Myth #4. We save when we spend in a sale

In the last six months, how much did you spend on sales so you could “save”? If you spent $1,000 and the average sale price was 50%, did you save $1,000 (half of $2,000)? Where did you put those savings? You haven’t saved anything; rather, you spent $1,000. You never save when you buy an item. The price you paid may have been 50% of the original price quoted, but you didn’t save. Yet, even if you don’t save in a sale, you benefit from a sale when the NAPPY principle exists:

  1. You necessary the item.
  2. You could allow and did not increase your debts to buy it.
  3. You foreseen to purchase the item.
  4. You Less paid than the expected price you set before purchasing the item.
  5. You, not the merchant decided to buy the item – the merchant did not force you to buy it.

When the NAPPY principle, and the fact that you manage your lifestyle, becomes instinctive, your level of spending will drop and you will end up buying what you decide you need or want. You will ignore alluring advertising.

Money Myth #5. A budget or spending plan is a binding tool

A budget or spending plan is a liberating tool. It is neither a panacea nor a straitjacket, but an early indicator of likely results from realistic assumptions. It involves goals, plans, estimates. After that, as you progress through the budget period, you should compare your actions with the budget and execute the necessary behavior changes. Budgeting, the act of preparing a budget, is part of a total plan-execute-review cycle that I call PEACE budget control:

  1. Plan a set time period to achieve specific goals.
  2. Estimate and record the expenses necessary to achieve these goals.
  3. Follow the plan and record the results as you progress towards your goals.
  4. Compare actual spend with estimated spend and progress toward your goals.
  5. Execute the necessary changes to stay on track to achieve goals.

Do you want to be on top of your finances? Try working with a PEACE spending plan and budget control. You will notice a significant reduction in stress and a huge drop in family arguments over money.

Copyright (c) Michel A. Bell

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