Myths about money abound. Unfortunately, like all fables, we unconsciously allow them to influence our behavior. Reflect on these five. In the last three months, how have they affected your spending decisions? Do you see areas you need to change? As you monitor your spending over the next month, ask the Lord to help you make adjustments.

Money Myth #1: Money is the root of all evil

This legend stems from a misinterpretation of 1 Timothy 6:10, which clearly states that the love of money is to blame 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 provide for their families. They believe it’s 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, where your treasure is, there your heart will be also.

Money is neutral; you need it only to buy things. Learn to use it wisely, because unconsciously, it can become your idol, you become its slave, and you go down and you are left in deep 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”, “manage money” and similar terms. When we say them, we believe them.

Stop; think about this. How do you handle money? You want to buy a car, a house, clothes or pay college fees. Are these money management decisions? Nope! 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 spend, consider overall needs and affordability, rather than short-term payment options. Don’t buy a house simply because the rent is less than the mortgage. Consider the full effects on family finances, lifestyle, giving to the Lord, and overall budget of home ownership compared to the full effect of rent.

When faced with a decision involving 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:

1. Do I need it: the car, the clothes, the camera?
2. How will I pay it?
3. Will the expense increase my debt and interest costs?
4. How will this cost affect my family budget and my family’s lifestyle?
5. Will you prevent family or family members from planned or unplanned events such as family outings, dinners, camping trips, or other activities?

Money myth #3. We make rational decisions when we spend

If you need examples to illustrate this point, look at the buying patterns that led up to the Great Recession. The subprime fiasco is the poster child. People bought houses they knew they could never afford to buy. People took vacations they knew they couldn’t afford. People spent what they didn’t have to buy what they didn’t need. However, ask ten people if their buying 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 bought pet rocks, invisible dogs, and other strange items.

Merchants know that we spend irrationally and we capitalize on this through clever advertising, packaging and financing. Why else would a deeply indebted couple on 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 don’t make rational decisions before spending, with the other four items in this article, we’ll wear merchant-proof vests while surfing the Internet, walking through malls, and looking at merchant flyers.

Money myth #4. We save when we spend on a sale

In the last six months, how much did you spend on sales in order to “save”? If you spent $1,000 and the average 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 could have been 50% of the original list price, but you didn’t save. Still, even if you don’t save on a sale, you benefit from a sale when the NAPPY principle exists:

1. You necessary the object.
2. You could solve and you did not increase your debts to buy it.
3. You planned to buy the item.
4. You paid less than the planned price you set before you bought the item.
5. You, not the merchant, decided to purchase 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.

Money myth #5. A budget or spending plan is a limiting tool

A budget or spending plan is a liberating tool. It is not a panacea or a straitjacket, but rather an early indicator of likely outcomes from realistic assumptions. It’s about goals, plans, estimates. After doing so, as you move through the budget period, you should compare your actions to the budget and make any necessary behavioral changes. Budgeting, the act of preparing a budget, is part of a total plan-do-execute-review cycle that I call PAZ budget control:

1. Plan for a certain period to make specific goals.
2. Estimate and record the expenses necessary to achieve these goals.
3. Act according to the plan and record the results as you move towards your goals.
4. Compare actual expenses with estimated expenses and progress toward your goals.
5. Execute the necessary changes to stay on track towards the goals.

Do you want to be aware of your finances? Try to work with a PEACE budget control and spending plan. You will notice a great reduction in stress and a great decrease in family arguments about money.

Copyright (c) Michel A. Bell