It is often said that money makes the world go round, but the truth is that money is a complex and multifaceted issue that can be both a source of great joy and immense stress. Unfortunately, the myths and falsehoods that surround personal finance only serve to worsen this complexity. In Nigeria, where over 40% of the population falls below the poverty line, it is more important than ever to debunk these myths and offer practical advice on how to achieve improved financial wellness.

In essence, our intent is to offer well-researched facts and practical advice that’ll enable individuals to make informed decisions about finances and increase overall financial security.

Myth 1: Money is the root of all evil

One of the most pervasive myths surrounding money is that it is the root of all evil. This belief is often used to justify a lack of financial ambition or to condemn those who have amassed wealth. However, the truth is that money is simply a tool that can be used for good or bad, depending on the intentions of the person using it. Money can be used to create jobs, fund charities, and improve the lives of others. It can also be used to finance wars, perpetuate inequality, and exploit vulnerable populations.

The key to using money for good is to ensure that it is earned and spent ethically and responsibly. Instead of demonizing money, we should focus on the actions of those who use it, and work to promote positive financial behaviors. This includes encouraging people to save and invest their money wisely, to give to charity, and to support ethical businesses.

Myth 2: Financial security requires immense wealth

Another common myth about personal finance is that achieving financial security is only possible if you are immensely wealthy. While it is true that having a high income can make it easier to achieve financial goals, it is not the only path to financial security. In fact, many people who earn modest salaries are able to live comfortably and achieve their financial objectives by being smart with their money.

The key to achieving financial security is to have a clear understanding of your financial goals and to develop a sound plan for achieving them. This may involve saving aggressively, investing wisely, and reducing unnecessary expenses. It may also require making tough choices, such as delaying gratification or sacrificing short-term pleasures for long-term financial stability.

Myth 3: Investing is exclusively for the affluent

Another pervasive myth about personal finance is that investing is exclusively for the affluent. This belief is based on the idea that you need a large amount of money to start investing, and that investing is too risky for the average person. However, the truth is that investing can be a powerful tool for building wealth and achieving financial security, regardless of your income level.

In fact, many investment options are accessible to people with modest incomes. This includes mutual funds, exchange-traded funds (ETFs), and robo-advisors, which allow individuals to invest small amounts of money in a diversified portfolio of stocks and bonds. Investing may also involve participating in an employer-sponsored retirement plan, such as a 401(k) or IRA, which can provide tax benefits and help individuals save for retirement.

Myth 4: More money guarantees greater happiness

One of the most persistent myths about money is that having more of it guarantees greater happiness. However, research has consistently shown that this belief is unfounded. While having a certain level of income is necessary for meeting basic needs, such as food, shelter, and healthcare, beyond a certain point, additional income does not lead to greater happiness.

Instead, studies have shown that factors such as meaningful work, positive relationships, and a sense of purpose are more strongly correlated with happiness than income. This means that individuals should focus on developing a well-rounded and fulfilling life, rather than simply chasing after more money.

Myth 5: Financial literacy is reserved for financial experts

Another common myth about personal finance is that financial literacy is reserved for financial experts. This belief is based on the idea that personal finance is a complex and technical subject that requires specialized knowledge and training. However, the truth is that anyone can learn the basics of personal finance and develop the skills necessary to make informed financial decisions.

This may involve reading personal finance books and websites, taking courses or workshops, or seeking advice from a financial advisor. It may also involve developing basic skills such as budgeting, saving, and investing, which can be learned through practice and experience.

Myth 6: All forms of debt are detrimental

Finally, a common myth about personal finance is that all forms of debt are detrimental. This belief is based on the idea that debt is inherently bad and should be avoided at all costs. However, the truth is that debt can be a powerful tool for achieving financial goals, such as buying a home or starting a business.

The key to using debt responsibly is to ensure that it is manageable and used for productive purposes. This may involve borrowing only what you can realistically afford to repay, choosing low-interest loans, and avoiding high-interest credit cards or payday loans. It may also involve developing a plan for repaying debt over time, such as through a debt consolidation loan or a structured repayment plan.

Conclusion

In conclusion, myths and falsehoods about personal finance can make an already complex issue even more challenging to navigate. However, by debunking these myths and offering practical advice on achieving financial wellness, individuals can make informed financial decisions and increase their overall financial security. The key is to focus on developing a well-rounded and fulfilling life, while using money as a tool to support positive outcomes.