Whether or not people enjoy a healthy relationship with money is highly dependent on their psychology of money. Even the Holy Book says, “As a man thinketh in his heart so is he”. Growing up as a child in Ekondo-Titi, a small village in the South West Region of Cameroon, it was almost like an invisible code written on stone to suspect every wealthy man of being a ritualist. The movies that were trending in the early 1990s in my community fed this mindset with a balanced diet so much that becoming wealthy was not a common dream among the righteous. Some of these myths about money have played an active role to the degrading state of personal financial development in the lives of many and we will be debunking some of them in this write-up. We hope this serves as a transformational piece thus boosting your relationship with money for the better.
1. “I am not an extravagant spender, I don’t need to budget”
The human mind tends to develop a sense of security and responsibility as a defense mechanism from time to time. While some people think they don’t have enough money to budget, others think that they are not wasteful thus there is no need to budget. Budgeting helps an individual to keep their finances in order, it is not only for the financially savvy, it is for everyone. There are many free tools and apps to make the process easy, give your goals an opportunity to be achieved faster through budgeting. It is only then that you can fully attest to whether or not you are not an extravagant spender.
2. “I can Save later”
I guess you can attest to the fact that this always turns out to be untrue. Procrastinating savings is as good as never saving, be it in a situation where you feel like you have earned the paycheck and you just want to spend it with the intention of cutting out something to save in the months to come or you think you don’t have enough to go round let alone save. If you don’t spend what is left after saving, you may never save at all. Make it a habit to make saving obligatory and a top priority to save yourself from fruitless procrastination. "A budget looks forward. Write it down, each month. Pre-plan. So when a wedding shower or baby shower comes up, you've already got the money planned. "If it's not written, it's not real," says Karen Ford, financial coach. To know more about saving money, read THIS article.
3. “I can always borrow to cover my expenses”
While loans can help you to expand your business thus increasing your net worth, unfruitful consumer loans are not usually advisable because a job loss or other unforeseen circumstances can affect your repayment plan. Most people who believed in this have been caught in overdrafts or a borrow Peter to pay Paul scheme. When starting, it always seems logical until you fast realize that you cannot easily live without loans from here and there. Dave Ramsey suggests that it's better to instead live below your means and pay cash for the things you want than to play a game of chess with debts. If you are constantly borrowing to cover for your expenses, it means you are living above your means. Budgeting and diligently tracking your expenditures will help you to know the lifestyle your financial package can support and what excesses to cut on, an extra source of income can help to cover for some other basics.
4. "I need to keep my family happy by always meeting their financial demands"
This is one of the cultural limitations that has not only kept many Africans bound but has also led some to vicious cycles of debts. The feeling of being indebted to your family thus owing them your proceeds has haunted generations and does not seem to be going anywhere any time soon. It is common to hear questions like “what did you do with all that money” when family demands are not met. This cycle usually leaves the elderly banking on the younger as their retirement plan and it goes on and on. Is it a bad thing to take care of family? Of course not, but it must be done wisely. Introduce it in your budget and learn to communicate with family when you cannot meet all their financial expectations. Some people in trying to always keep their families happy get into serious debts that the same family is trying to pay off after their passing.
5. More income makes you more wealthy
More income does not always equate to more wealth. People tend to increase their expenditures and standard of living with an increase in income. Most people tend to use more income as an opportunity to make their fantasies a reality rather than to increase their net worth. Remaining focused on your financial goal and gaining full control over your urge to spend is a useful tip necessary for translating more income into more wealth.
6. Working harder means more money
While it is true in some cases, working harder does not always mean more money. In the long run it turns to be falser because exhaustion leads to reduced productivity which can affect inflow of cash. Add more smartness to the hard work and watch the outcome.
7. “Everyone has it, why shouldn’t I?”
From time immemorial, the human mind has had a way of engaging in subtle competitions. Tempted to measure success, happiness and wellbeing from the rod of how others are faring. The internet age has made it worse with a constant brandishing of what the perfect life is, many fall prey to wanting to align their lives to trends even beyond their financial capacity. Truth remains; the fact that everyone has it does not necessarily mean that you need it. You need to stop wasting money. Trying to live your life based on other people’s terms will eventually create a big hole in your pocket. Live a gratified life and seek contentment, your bank account and future self will thank you for it.
8. You need a lot of money in order to invest
The misconception that you need a lot of money to invest is in the minds of many and it has served as a limiting factor as to why many have never invested in anything. There is no minimum amount where investing starts to make sense, there is an opportunity and a possibility for a wide range of amounts and if you search diligently you will find something for that one cent you want to shovel away. The digital age even brings investment options a click away, do your research and evaluations, start small and grow. Learn more about the 7 Rules of Investing.
9. Life insurance is only for salary earners
Life insurance, retirement plans and benefits have been left at the mercies of the employer thus leaving only salary earners who tend to benefit from such. As a self-employed or stay home spouse do not deprive yourself of this, it is a generic human need. "If you're the sole earner in your family and your spouse passes away, how would you handle all the auxiliary expenses you would require for child care and other household management issues?" asks Marc Diana, CEO of the website MoneyTips.
10. Buy because it is cheap
This is one of the advertisement strategies used to make buyers feel like they will miss out on a once in a lifetime opportunity. "In our eagerness to save money on expenses, believing you're getting a bargain can financially punish you in the long run," says Chelsea Hudson, personal finance expert for TopCashback.com .
Some of these myths may be strange to you while others are very familiar to you. We hope you have bought the truth shared in this article and are willing to change course unto financial soundness and peace. It is not too late to reach your financial goals, you can start today, you can start now. We will be glad to hear a myth that you are particularly familiar with in the comment section, feel free to share your thoughts. Thank you for reading and until next time, BESTech remains your BEST bet.