Don’t Buy These Three Money Myths


And He said: “Take heed that you not be deceived. For many will come in My name, saying ‘I am He.’ And, ‘The time has drawn near.’ Therefore do not go after them. – Luke 21:8

With all the avenues of communication open to the world, media, TV, internet, it’s amazing that so many are deceived. Apparently deceivers are better at communicating than truth tellers. Myths are a tool used by deceivers throughout history, and some of those myths have been around for a very long time.

Here are three old sayings about money I consider myths. You can judge for 1 (7)

1. Pay Yourself First

No, we can’t pay ourselves first. We have to pay our obligations first. You know—those expenses, loans, mortgages. Not paying our obligations is the same as stealing. If we’ve taken items or services from someone else, the money to pay for those obligations belongs to them at the time agreed upon, not after we’ve paid ourselves. Even God Who expects our first fruits wouldn’t expect us to steal.

We should pay ourselves, though. It’s called saving. But that’s why a budget is important. So we’ll live within our means in order to have enough to pay ourselves.

2. You Get What You Pay For

No, not always. This myth refers to the belief that the more money you pay, the better quality you’ll get. Actually, the more affluent we are, the more likely we’ll overpay. When you buy a particular brand, you may be paying for prestige instead of real quality. How do you tell what something is worth? Nothing is better than experience to teach us which item or service is of better quality for the money. Recommendations and reviews come next.

Buying shoddy items is a waste of money, of course, but overpaying for a brand name is equally wasteful. Accountability requires that we pay only what goods and services are worth.

3. A Penny Saved is a Penny Earnedphoto 4 (1)

How wonderful if this were true. Unfortunately, it rarely ever is. Your penny saved today is not going to be worth what you could earn at a future date. In other words, inflation will eat away at your savings. Inflation is a given in a capitalistic economy, so your savings must take this into consideration. Also, there are no true hedges against inflation. The only way to guarantee value will remain the same is to save the actual goods and services. Since there’s no way to save services, and goods will deteriorate over time, that isn’t a viable option.

Not all old sayings are myths, however. Save for a rainy day is absolutely true. No matter the circumstances, as long as this world exists, there will be rainy days. It isn’t a question of if emergencies will occur, but when. Our budget must contain savings for emergencies.

In spite of what economists say about the economy improving, fewer people are saving at all. It’s easy to understand why. Full time jobs are as hard as ever to obtain. Household income is falling. Those who were wise in days of plenty, now have their savings to fall back on.

We live in a world of deception, but the wise are never deceived. No matter how many say something is true, no matter how long they’ve said it, test it for yourself. Then make sure you don’t deceive yourself.

Getting Through the Lean Years

 And the seven years of famine began to come, as Joseph had said. The famine was in all lands, but in all the land of Egypt there was bread. –Genesis 41:54

While I was working toward my BBA I took a lot of economic classes. None of what I learned helped me in my job as a government purchasing agent. It didn’t help in my job as an accountant. I swore that somehow, some way, in my lifetime, I’d find a way to use that knowledge. The time has come.


The Value of Money

What is money worth? Whatever the government says it’s worth. Years ago we lived under a gold standard, meaning the government couldn’t print money unless it was backed up with gold. Did that make a difference? It kept the government from printing money recklessly. Now, that’s determined by the Federal Reserve. Since this is a capitalistic economy, economic pressures motivate the Fed. The stock market, the labor market, consumers, business, all contribute to these pressures. If one thing goes out of whack, the whole economy suffers. But though the government puts a monetary value on money, that’s not really what it’s worth.

Your money, whether paper, coinage or gold, is only worth the goods and services you can exchange for it. Enter 2

The Cost of Living

The economic downturn began almost six years ago. Since then we’ve been in a recovery. Did you know that? Wall Street investors know it. They’ve done great. Laborers haven’t fared so well. Even those who’ve remained employed have seen their income shrink. The middle class has shrunk. Some have moved into the top ten percent, but many more have fallen into the lower economic class.

Did you know inflation is pushing people into the lower class? No one talks about it. Luxury and high priced items have remained stable, but prices for food and other necessities of life have crept up at a steady pace. This doesn’t affect upper income people and the government weighs certain items. Food isn’t considered as important as a car (how convenient) and some necessities are taken out of the inflation equation, so on paper, the numbers don’t look bad. But in the marketplace, it is bad. The cost of living is a lot higher for poor and middle income 2 (1)

The Economic Cycle

In capitalistic countries the economy goes in cycles—prosperous, lean, recessions, booms, depressions. Regardless of which cycle we’re in, we have a chance to move from one economic class to another. America still has opportunities.

If we only had Joseph’s insight during ancient Egypt, we’d save during the prosperous years so we’d have enough during the lean. But though we don’t know how long the cycle will be, if we maintain an emergency fund, we can weather the lean years. Just remember you’ll need more than you think. Money saved today won’t be worth as much in future years, especially with interest rates on liquid accounts being almost non-existent.

Save Things When Possible

I save durable high inflation items like paper products and detergents, even food items like rice, beans, coffee, sugar, and canned food. If there’s a sale I stock up. I’ve saved a lot on coffee alone, and let’s just say I have enough toilet tissue to take me through the tribulation. Laugh if you must, but these are inflation-proof items.

Your emergency fund must cover more than emergencies. It must see you through the lean years of the economic cycle.

But be of good cheer. It’s sometimes during the lean times that we’re motivated to progress. America’s greatest resource is the innovative spirit of its people. Somewhere out there people are working to provide the stuff we need at a lower cost.

Oh, and there’s something else that goes in cycles—politics. When the people get fed up with the economic policies of one group, they’ll switch to another.

I’m glad I was finally able to get this economic stuff off my chest. I feel better now.

Next week we’ll do a budget checkup.


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