Money management is a tale as old as time, and it seems everyone always has their version of events ready to dish out. While it is okay to listen to money advice when offered, you should be wary of those you apply as not all of them may apply to you and your circumstance.

For a moment, let’s think of money as a medication. People settle for different doses depending on their situation. So, what works for one person may not work for you, and this is why you must be deliberate about what money talks we allow to shape our lives. 

Here are 3 money tips that do not always benefit you. This does not mean they are wrong in their entirety, but they are not an absolute truth that you must abide by. 

1. You can keep your emergency fund in a savings account.

There are many benefits to owning a savings account, including easy access to your funds and automatic transfers. However, when it comes to keeping your emergency funds in a savings account, you have to consider the opportunity cost. 

On an average, the typical savings account in Nigeria yields an interest of not more than 5%. We have seen this percentage go below 2% in the past few months due to the effects of COVID on the economy and recession. This means people who have their emergency fund in a savings account stand to gain little to nothing. 

Other alternatives like mutual funds, stocks, and government bonds tend to have a higher rate of return and they are just as easy to access in the event of an emergency. Although these alternatives are slightly riskier than a savings account, they are a safe balance between risk and high returns. 

2. The higher the price, the better the quality.

In an ideal market, price is the result of production cost, marketing cost, and supply and demand. Therefore, when we see something expensive, the natural assumption is that a lot must have gone into its production and the producers are simply trying to recoup these costs. Unfortunately, the concept of price is more complex than this. While producers will want to recoup their production price, they also care about consumer’s perception of their products and this is why they can choose a high price regardless of a product’s quality. 

As if we needed more reasons to understand that a high price does not always mean better quality, studies show that there is a weak relationship between quality and price. So next time you are considering buying an expensive product because you believe it has better quality, carry out your research and consider other things like its functionality. For instance, that Zara top that is three times the price of the same top at H & M does not automatically mean it has a better quality

3. Buying a house is ‘always’ better than renting.

I’m sure we have all come across this advice at one point in our lives, and if you are like me, who abided by the advice in the “Richest Man in Babylon’ in their early financial years, you will know that owning a home was something to aspire towards doing. While this is great, there are instances where renting is better than buying. Here are a few things to consider before jumping at the next house sale that comes your way.

First, the world is more of a global village now than ever. Except you are sure about never relocating, you can never know where the winds of life will take you. So suppose you own a home and choose to relocate today, you will have to its maintenance while you are away. While there is the option of renting it out or selling it, these may not favour you, and they can cost you more money. This is primarily because housing values do not always appreciate even when the figures are higher (consider inflation). Furthermore, the option of rent comes with its risk. A careless tenant will depreciate your home faster than you can imagine, and you will always have to, once again, worry about the cost of renovations and maintenance.

In a nutshell, owning a house is a lifelong commitment that can tie you down so reconsider your reasons and choose your location wisely.