Money affects almost every aspect of our lives, yet many of us make financial decisions based on misconceptions, outdated advice, or half-truths passed down from generation to generation.
Financial literacy means understanding how money works, how to earn it, save it, invest it, and grow it. And sometimes, the first step to getting better with money is unlearning what’s financially wrong.
This Financial Literacy Month, let’s debunk some of the most common money myths that might be keeping you broke.
Myth 1: You Need a High Income to Build Wealth
The Truth: Wealth is built by how you manage money, not how much you make.
Many people believe that earning a high salary automatically leads to financial success. While earning more can help, it doesn’t guarantee wealth because even high earners can be broke.
If you spend everything you earn, it doesn’t matter how much you make. True wealth comes from:
✔ Spending less than you earn
✔ Investing early and consistently
✔ Avoiding unnecessary debt
✔ Making smart financial choices
Myth 2: Saving Money Alone Will Make You Rich
The Truth: Saving is important, but investing is what grows wealth.
Many people believe that just putting money in a savings account will secure their future. But here’s the problem: inflation.
Money sitting in a regular savings account loses value over time because the cost of goods and services rises faster than the tiny interest you earn.
Instead of just saving, learn to invest. Consider:
✔ Stocks and mutual funds for long-term growth
✔ Pension plans (like PAL Pensions) for retirement security
✔ Real estate and other assets that appreciate over time
Saving protects your money. Investing grows it.
Myth 3: A Budget is Too Restrictive
The Truth: A budget gives you financial freedom, not limitations.
Many people see budgeting as a way to limit their spending or feel deprived. But a budget is really just telling your money where to go instead of wondering where it went.
Create a simple budget that works for you:
✔ The 50/30/20 Rule: Spend 50% on needs, 30% on wants, and save/invest 20%.
✔ Use budgeting apps like Mint or YNAB.
✔ Adjust your budget as needed. It’s a guide, not a prison.
A budget gives you control over your money so you can enjoy life without financial stress.
Myth 4: You Can Wait Until Later to Start Saving for Retirement
The Truth: The earlier you start, the better.
Many people think retirement is too far away to worry about now. But the longer you wait, the harder it becomes to save enough.
Start saving for retirement now, even if it’s small. If your employer offers a pension plan, contribute as much as possible. If not, set up a personal retirement account like PAL Pensions.
Here’s why:
- Saving ₦10,000 a month at 25 can grow to millions by retirement.
- If you start at 40, you’ll have to save double or triple to get the same result.
Time is your biggest advantage. Use it.
Myth 5: You Don’t Make Enough Money to Invest
The Truth: You don’t need to be rich to invest. You need to start early.
Many people think investing is only for the wealthy, but even small investments can grow into wealth over time.
✔ Start with what you have, even ₦5,000 a month is enough.
✔ Use compound interest to your advantage, small amounts grow significantly over time.
✔ Invest in stocks, mutual funds, or retirement accounts.
Financial literacy is understanding money, making smart choices, and unlearning bad advice. This month, take the time to:
✔ Question what you’ve been taught about money.
✔ Make informed financial decisions based on facts, not myths.
✔ Start building wealth now, no matter where you are financially.
What money myths have you believed in the past? And what will you do differently now?
