Money makes the world go round – this is why people work for it, sing, dream and even make wrong assumptions about it.
Misconceptions about earning, spending and saving money are very common. But these beliefs are not as harmless as they seem.
Here we add to last week’s list of money myths that could cost you money.
Cheaper by the dozen
One way shoppers try to save money is buying in bulk because the unit price of items tends to be cheaper that way.
While this can be a great way to save some naira, it can also be an inefficient use of money and could prevent you from buying other important things you need in the immediate period or even increase your debt.
This is because the more of one item you buy, the less of another item that can be purchased for a given budget.
Buying enough cereals to last you a lifetime might result in you eating cereals throughout the month because you cannot afford to buy anything else.
The example is on the extreme, but it shows buying-bulk might mean forfeiting other items on your list or buying them on credit.
Unless the price of cereal would go astronomically high soon, it is wise to spend on the various needs you have today.
Another downside is that bulk-buying could lead to wastefulness and cost you money.
Items bought it bulk can get damaged or spoilt or consumed at a faster rate than if less was bought.
Read also: Some of the biggest money myths you should rid yourself of (1)
Expensive is Quality
Have you ever bought a more expensive variant of an item only to end up feeling like you have paid more than its worth?
People often mistake costly for quality but this is not always the case.
In fact, the money difference between various grades of an item could run into several thousand while the real difference might be just one or two extra features – as mundane as an extra camera or product colour in the case of a phone.
This doesn’t mean there aren’t inferior products that sell correctly at a low price. But the next time you want to pay “an arm and a leg” for quality, do your research to be sure you aren’t simply buying into a belief.
You will win a jackpot
The chances of picking six distinct numbers from a range of 1 to 49 are 1 in 14 million but that has not stopped many people from trying.
Even though many lottery schemes are only a fool’s errand, in 2016 Nigerians spent an average of N154bn on betting according to the Lottery Operators Forum (LOF).
The allure of a grandiose life promised for correctly picking six combinations or predicting soccer match outcomes is so compelling that many repeatedly stake their money and end up with debt and drinking problems.
As far as changing your fortunes through gambling is concerned, it is easier for the proverbial camel head to pass through the eye of a needle.
Money can buy happiness
People are easily defrauded because they often think their lives would be so much better if they had more money.
To an extent, this might be true because money offers one access to more opportunities and in fact, the world’s happiest countries and are richest.
But this is not always the case.
A 2010 study by Princeton University’s Woodrow Wilson School based on US survey suggests a positive link between life satisfaction and money up to about $75,000 a year – but not happiness.
“We conclude that high income buys life satisfaction but not happiness and that low income is associated both with low life evaluation and low emotional well-being,” said the researchers, Daniel Kahneman1 and Angus Deaton.
This is because happiness in life is defined by much more than money. Think of all those things you tell admit you can’t trade for the world like family, love and your pet dog.
Early Shoppers get the best deal
Ask the average shopper when the best time to get an awesome discount is, they would probably say during holiday sales or Black Friday and they are probably right.
But late shoppers many times get even better deals than the early worms.
For instance, in the weeks leading to Christmas shoppers can get discounts up to 20 percent off their purchases but post-Christmas the items not sold would be offered at a give-away price so stores create room for other seasons like Valentine’s Day sales.
Looking for early shoppers discount sometimes makes people prey to retailers sleight of hands which involves raising products price so high that discounts on those items are nothing but the original cost of the items.
However, the late shopping tactics works and saves money.
It’s too early or late to save for retirement
People often think it is too late to save or invest for post-work life but that is a wrong assumption.
Those who think it is too early believe they have all the time in the world but the average Nigerian in the formal sector would work for only about 45 years – earnings might not be awesome in the earlier years.
The others that believe it is too late are unaware of the fact that there are ways to still put sometimes tangible aside for retirement (as long as one is still working) by investing in certain assets that offer high returns.
