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 yourself.photo 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.

Every Household Needs a Piggybank

 

He who is faithful in what is least is faithful also in much; and he who is unjust in what is least is unjust also in much. – Luke 16:10

If there’s anywhere money can get away from you, it’s through your pockets. Today I’m going to discuss those incidentals of the budget. Those things that come up every day and demand cash. Where do you get those small bills in your handbag? The coins that jingle in your pockets? The cash you have to have to hand out to children to pay for some school need, or to drop in the office pool, or buy a cup of coffee on your way to work? They have to be budgeted for, of course, by the month, by the week.photo 1 piggy

Before you get to the household piggy bank, you have to decide how to disburse the cash that produces the left over coins that go into the piggy bank. And yes, it should be cash. Businesses have made it so convenient to use plastic. Even fast-food places take debit or credit cards now. Avoid that temptation. The more you use plastic, the less control you have.

Can You Afford It?

Good money management begins right here with these small purchases. If we don’t have the cash to buy that burger, we can’t afford it. We should just drive on and pull something out of the freezer or pantry for dinner. If our child asks for money for some school funding project, we give them only the cash we have on hand. Even if we have to write a check because the child can’t be trusted with cash, we must make sure the check is backed up with incidental cash.

Make It a Family Affair

Think back to the first argument you had with your spouse. Chances are it was over money. Finances send more couples to divorce court than anything else. We can learn to manage money together as a couple with a cash box. Put an agreed upon amount of cash in the box every week. Both husband and wife can take money out of the cash box as needed during the week.

It’s hard not to be considerate of your spouse if you see the amount of cash you leave. Depleting the box is hard not to see. And if you open the box and it’s empty because your spouse has cleaned it out—that’s hard to miss too. I’m guessing you’ll both have a discussion and come to a meeting of the minds before someone depletes the bank account. I speak from experience. This is our money box. It’s really an old jewelry box, but anything will do. You can see it’s not very large. We don’t keep much cash.photo 2 box

This sounds simple, but it works. Learning the strengths and weaknesses of each while handling petty cash leads to understanding and acceptance.

While both spouses should jointly control the cash box, children should understand only Mom or Dad can take money out.

What about the piggy bank?

Of course children should have their own piggy banks, but Mom and Dad should too. At the end of the week, or end of the day, if you prefer, put left over coins and bills in the piggy bank. At the end of six months, open the piggy bank and spend it on something you both can enjoy—a little reward for managing your money.

If we learn to handle our pocket money well, we’ll find it easier to manage the family’s finances. Those who are faithful in the small things of life will be faithful in the big things.

Therefore, it follows that a couple who can work together managing their small cash will be able to work together on the big things in their marriage. And money management is one of those things where the husband and wife must work as one. It’s typical for one or the other to be better at money management than the other, but both must know what’s going on and come to a consensus about what is to be done.

Coming Up

Graduation is coming up, and during the month of May I’m going to present a series of posts including information every young adult should know before he flies out of the nest.

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