Money truths they didn't teach you at school

There are a number of money ‘stories’ we have been told over the years that may not be true. Ex financial advisor Mel Browne reveals some of the money truths we weren’t taught at school.

One of my favourite money ‘stories’ relates to the modern-day piggy bank. When we think of saving money we often think of the ‘Piggy Bank’. This innocuous object has become synonymous with savings. Yet, if we think more deeply about it, why a pig? I mean, if I think about a pig, I think dirty, muddy, possibly greedy and of course, bacon. Now, what has any of that got to do with saving money? The truth is – absolutely nothing.

The name piggy bank originated from the word ‘pygg’ (probably pronounced ‘pug’), which referred to an orange clay in ancient times used to form all sorts of pottery items including jars to hold loose change. Whenever people could save an extra coin, they dropped it into one of these clay jars. They called this their pygg bank.

Over the next few hundred years, people appeared to forget that ‘pygg’ referred to the clay and not to the object itself. Fast forward to the nineteenth century when English potters received requests for piggy banks and they produced items in the shape of a pig. This ‘mistake’ appealed to customers, delighted children and the modern-day piggy bank was born.

This is now embedded as one of our modern money stories – that a pig equals saving. Other than being an interesting history lesson, what does the origin of the piggy bank have to do with your finances?  The answer is – everything. That’s because there are so many money myths and money stories we’ve subscribed to when it comes to our finances that we accept as truths.

Popular money myths

One of the money myths many of us now hold as truth is that in order to become good at personal savings, you need to create and stick to a budget. Researchers such as Elaine Kempson, Emeritus Professor from Bristol University, have found this is a falsehood.

Some money myths and money stories are cultural. These include that unless you have the right sort of education you won’t be a financial success. This might lead someone with an entrepreneurial bent to study a course they’re not excited about in order to keep their parents happy.

Other money stories and myths are ones that have been unwittingly passed down by parents and peers. Examples from Australia include that in order to financially succeed you must own your own home and that property always doubles every seven years.

Other money stories might centre around who controls the money in a relationship, whether money is good, bad or evil and, perhaps, even that a man should always look after a woman financially.

Two of my favourite money stories are that women are spenders and men are savers and that men are better investors than women. Well, not really my favourites as I think they’re infuriating, but they’re commonly spoken as gospel. Both of these myths have been busted by researchers time and again and yet many people accept both of these money myths as truths.

So, what can we do? How do we figure out if a money story is unhelpful or untrue? The first step is recognising them and the second step is calling them out. Two helpful questions are:

1. What money stories am I carrying that have been passed on by my parents, peers or society?
2. Are these money stories serving me or sabotaging me?

Of course, understanding that we’re carrying unhelpful money stories is only step one. The next step involves rewriting them so that they’re right for you and the life you want to design.

Cover image source: Sharomka (Shutterstock)