Myths about money abound. Unfortunately, like all fables, we unconsciously allow them to influence our behavior. Reflect on these five. In the past three months, how have they affected your spending decisions? Do you see areas that you need to change? As you monitor your spending over the next month, ask the Lord to help you implement the adjustments.
Myth of money n. # 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 it is the guilty. Some Christians behave as if money is bad. They do not study and therefore do not learn effective stewardship. Without knowing it, they do not adequately support their families. They believe that it is wrong to save, plan for retirement, or accumulate money in any way. They overlook 1 Timothy 5: 8 which tells us that a believer must provide for his family, or he is worse than an unbeliever. Furthermore, they ignore Matthew 6:21 which states that where their treasure is, there their heart will also be.
Money is neutral; you only need it to buy things. Learn to use it wisely, because unconsciously, it can become your idol, you become its slave and you descend and remain in debt. Pay attention to the words of Matthew 6:21.
Money myth # 2. Money is manageable.
Probably the most shocking 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 this. How do you manage the money? You want to buy a car, a house, clothes, or pay college fees. Are these money management decisions? No! They 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 spending, consider needs and overall affordability, rather than short-term payment options. Don’t buy a home just because the rent is less than the mortgage. Consider all the effects on family finances, lifestyle, offerings to the Lord, and the overall budget of home ownership compared to the total effect of rent.
When faced with a decision related to money, understand that these are lifestyle choices that could affect your family for decades. Where you live, the vehicle you buy, the college your children attend, are lifestyle choices. Before you commit to spending, ponder these essential questions and discuss them with relevant family members:
- I need it? The car, the clothes, the camera?
- How will I pay for it?
- Will the expense increase my debt and interest costs?
- How will this cost affect my family budget and my family’s lifestyle?
- Will it prevent the family or family members from having planned or unplanned events, such as family outings, dinners, camping trips, or other activities?
Money myth # 3. We make rational choices when we spend.
If you need examples to illustrate this point, examine the buying patterns that led to the Great Recession. The subprime mortgage fiasco is the poster boy. People bought houses that they knew they could never afford. People took vacations that they knew they couldn’t afford. People spend what they don’t have to buy what they don’t need. However, ask ten people if their purchasing procedure was rational and logical, and most will give you numerous reasons why they had to act as they did.
This irrationality has been with us for a long time. In the 1970s, people were buying pet stones, invisible dogs, and other strange items.
Merchants know we spend irrationally and they take advantage of this through advertising, packaging, and smart financing. Why else would a heavily indebted couple, with a small fixed income, take out a home equity loan to buy a big screen TV? The publicity caught them; it was captivating. They succumbed!
When we realize and accept that we do not make rational decisions before spending, with the other four articles in this article, we will wear merchant-proof vests while surfing the Internet, touring malls, and looking at merchant brochures.
Money myth # 4. We save when we spend on a sale.
In the last six months, how much did you spend on sales to be able to “save”? If you spent $ 1,000 and the median sale price was 50% off, did you save $ 1,000 (half of $ 2,000)? Where did you put those savings? You didn’t save anything; rather, he spent $ 1,000. You never save when you buy an item. The price you paid may have been 50% of the original list price, but you didn’t save. Still, even though you don’t save on a sale, you benefit from a sale when the NAPPY principle exists:
- you necessary the object.
- You could to pay and he did not increase his debts to buy it.
- you planned to purchase the item.
- you paid less than the planned price you set before purchasing the item.
- You, not the merchant, decided to buy the item; the merchant did not force him to buy it.
When the NAPPY principle, and the fact that you manage your lifestyle, becomes instinctive, your spending level will drop and you will end up buying what you decide you need or want. You will ignore seductive advertising.
Myth of money n. 5. A budget or spending plan is a restrictive tool.
A budget or spending plan is a liberating tool. It is not a panacea or a straitjacket, but an early indicator of results that are likely to be based on realistic assumptions. It implies goals, plans, estimates. After doing so, as you progress through the budget period, you need to compare your actions to the budget and implement any necessary behavior changes. Budgeting, the act of budgeting, is part of a total plan-do-run-review cycle that I call PEACE budget control:
- Plan a certain period to achieve specific goals.
- Estimate and record the expenses necessary to achieve these goals.
- Act according to plan and record results as you progress toward your goals.
- Compare actual expenses with estimated expenses and progress toward your goals.
- Make the necessary changes to stay on track to meet your goals.
Do you want to be aware of your finances? Try working with a PEACE spending plan and budget control. You will notice a significant reduction in stress and a big drop in family discussions about money.
Copyright (c) Michel A. Bell
