Since I have started writing, talking and reading a lot about money I have come across so many interesting stories, but quite often I come across some repeated ideologies that just aren’t true e.g money doesn’t make you happy.
Chances are most of us including you have fallen for some of these money myths. From generation to generation, these inaccurate financial proclamations have been disguised as facts.
Some of these myths like “buying in bulk is always better” and “buy low and sell high” when investing could lead to serious damage on our financial wellbeing.
I have rounded up the most spread out money myths we come across on a regular basis. Below is my list of top money myths “they” like to tell us.
Myth 1: Money doesn’t make you happy
Personally, whenever I hear this statement I start to cringe. This is the most overrated statement and we use it to try comfort ourselves from not having enough money. According to research by Dunn et.al (2009), from the British Colombia University, the relationship between money and happiness is surprisingly weak, which may stem in part from the way people spend it.
Let’s be honest, the truth is money will make you happy if you have a money problem. Yes, you read that right. Money does make you happy. The distinction here is that money won’t solve non-money problems. So, when someone says money won’t make you happy, ignore them and decide for yourself what kind of problem you have.
If money is your problem, then more money may solve that problem and relieve you of the stress and unhappiness money is causing you. Money is just like anything else (like your health, job, relationship, etc.). More money will make you happier if you have a money problem. Just make sure it’s a real money problem and not something else.
Myth 2: A SALE IS A CHANCE TO SAVE
It has taken me sometime to disbelieve this myth. I have always been the kind of girl who loves sales and lights up whenever the new season starts rolling in and stores try their hardest to get us to set foot in their store. Imagine ignoring all those big RED signs written SALE all over the shop windows? Treacherous, isn’t it? Well…not really. You often end up spending more than you intend buying things you don’t need and can’t afford by buying during SALE days.
Of course, you will spend less on an item if you wait for it to go on sale. The problem is many of us discard our shopping list or exceed our budget when faced with a bargain. We focus on how much we could save, not how much we are about to spend.
Myth 3: Your current circumstances dictate your financial future
Stop looking at your circumstances. Create the circumstances you want instead of the ones you’ve got. Your current circumstances do not dictate your financial future. It may feel this way and you may think you’re stuck, but you’re not.
You have the power to change your financial future, regardless of where you are now. Just take a moment to pause and reflect on some of the people you either went to school with or have met in your lifes escapades. We all know people who have defied odds and have taken themselves from zero to hero. All you need is to work smart and find the right opportunity.
Myth 4: Insurance isn’t necessary
I came across a survey the other day which concluded that our generation is less likely than previous generations to have any form of insurance (health, life, disability etc). For the few who buy insurance, we choose the most basic option possible.
We have been named the most optimistic group of all time and I couldn’t agree more. If I could monetize the amount of times my friends have used the statement “Life will be better tomorrow” I’d be a millionaire. As young people, we have become too optimistic that we fail to plan for that future rainy day.
Truth of the matter is we need insurance. Insurance is necessary to protect all the assets which are of value to you. For example, car, house, health etc.
Myth 5: If you can afford the monthly payment, you can afford to buy it.
Guys, lets be real here. It’s not true that if you can afford the monthly payment, then you can afford to buy the item. You shouldn’t look at monthly payments when you buy something. You should look at the total cost of the item – whether it’s a car, a house, or something smaller, like a TV.
Purchasing based on the monthly payment is what I like to call a “renter’s mentality”. Instead, think of yourself as having an “owner’s mentality” and focus on buying things out-right, when possible. This will limit your payments and help you build wealth because you’ll have more available money to increase your investments and overall net worth.
Myth 6: As long as your partner manages your money, you don’t need to be involved.
Things happen. Life happens.
Unfortunately, people die, become disabled, get dementia, get divorced, lie, steal, and on and on. It’s not always happy and that’s just how it goes. :/
For these reasons, if your partner manages your money (or the family money) you need to be involved. Whether that means joining him at financial planning meetings, or sitting down with him once a month to review your budget, you need to do something to be a part of your finances.
It’s perfectly fine if you don’t want to be the one who sets the budget or is in charge of paying the bills. But you need to know what is going on. You need be aware and be included in the process.
A Final Note!
These 6 top money myths are believed by so many people. They’ve gotten me in trouble, too and im currently trying to rise above these.
I’d love to hear what you think about these money myths and if you have any others that I missed! Leave your thoughts in the comments below!