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5 popular myths that cost you money

These have been repeated so many times that many people believe they're true.

By MSN Money Partner May 17, 2011 2:55PM

This post comes from Jim Wang at partner blog Bargaineering.


One of the fun parts about reading and writing about personal finance and money all day is that you run into a lot of good advice and a lot of bad advice. Over the years, I've been amazed at how much of both is repeated with great regularity.


Whereas some bad advice hurts no one, a lot of money myths are costing some people money (and helping others make a lot more than they should). So today I'll be hitting five popular myths that span your entire life, from spices to gasoline, with the hope that it spurs a discussion that helps us all understand why these myths are wrong and why they're costing us money.

Let the air conditioning run all day. For most HVAC systems, there is one setting -- on. The system is either running or it's not. It doesn't work harder if it needs to raise or lower the temperature more, it just works. If it's 95 degrees out and your thermostat is set to 85, it'll run until it hits 85.


When you leave your AC on all day, here's what happens most of the time. It runs until it hits 85, then it stops. When the internal temperature goes to 86, it turns on again. When it reaches 85, it shuts off. On. Off. On. Off. You get home and everything feels great but your unit has done the equivalent of about a dozen sprints in the time you were out.


Instead, get a programmable thermostat and set it to turn on half an hour before you get home. You won't be the wiser and your unit will thank you for not jerking it around all day.

Spices lose potency. Herbs and spices in your cupboards do lose their potency after time -- that statement itself is not a myth. The myth is that you should replace them. Unlike vitamins and drugs, which do the same, it doesn't matter if your spices lose potency. Just use more of them. Spice companies would love for you to believe that you should replace them because spices and herbs are insanely expensive. (If you fancy yourself a chef who needs only the best, you should be using the fresh stuff anyway.)

Oh, and while you're at it, go to "ethnic" grocery stores (any store that isn't your neighborhood grocery store) for spices because they're a lot cheaper there.


Premium gas is better. Premium gas is not better. Premium gas is just higher octane gas, and higher octane means it can better withstand compression before igniting. Cars that require premium gas will compress the gas-air mixture to a higher psi before igniting it. If you use lower octane gas in a premium-only vehicle, you'll get a knocking. That's the gas igniting before it's supposed to. If you put premium gasoline into a car that requires only regular, you're just wasting money. Post continues after video (the gas prices you'll see are from January).

Your taxes are complicated. There are really only two reasons you should pay an accountant to do your taxes:

  1. Your time is more valuable than the cost of an accountant.
  2. Your taxes are very complicated.

If it's No. 1, you will find no argument from me. You get to decide how valuable your time is. I don't. Your parents don't. Your spouse doesn't. Your friends don't.


If it's No. 2, I'd argue that it's probably not as complicated as you think and, with the sophistication of software packages, you can probably do it in a few hours without messing it up. Before you pay an accountant a few hundred dollars, invest some time in a package like TurboTax. For the packages online, you pay at the end, so you can complete your return (which is mostly data entry of forms you have to collect anyway) for free.


Almost any rule of thumb. The problem with rules of thumb are that they try to apply a basic idea to everyone. Rules of thumb like you should save 10% of your income or spend only 33% of your income on housing may sound like a good idea but they’re killing peoples’ finances. My finance situation is different from yours. It's different from that of someone in college. It's different from that of someone who is retiring.


Should a retiree be saving 10% of their income? Probably not. They're spending their savings.


Should I retire at 65? Why 65? Why not later? Sooner?


The lesson here is that you should view any rule of thumb with a healthy dose of skepticism.


More on Bargaineering and MSN Money:

May 18, 2011 1:33PM
As an A/C technician, I agree with number 1.  When your system cycles on, your electrical meter is hit with Start up amps (LRA) that can be 6 to ten times the amount of the amperage that the unit draws when it is running.  If you can't get a programmable thermostat, you can set your current thermostat for a temperature that the unit will never get to during the day, something like 60 degrees.  Also, when the electric motors (compressor, compressor fan motor, evaporator fan motor) are running, they create what is known as back emf, which means it becomes a little generator of electricity and further reduces the amperage flow during operation.  Hope this helps.
May 18, 2011 3:03PM
I'm sure any pets in the house would not appreciate you allowing your house to reach 80+ degrees for 8 hours a day. Being outside in the heat is one thing, but being in a hot, stuffy house is another.
May 18, 2011 2:26PM
father in law owns his own HVAC company and has been in the business for over 30 years.  His recommendation is set the thermostat and don't touch it.  What some of the arguments for the programmable thermostat  usually fail to mention is that by letting your house get above the temperature you want to keep, everything in the house has to be cooled back down to the temperature you want,  whether it's the carpet, couches, walls, ect....your A/C has to work just as hard to bring the temperature back down. 
May 18, 2011 2:34PM
Dumbest advice of all is to shut off your AC all day. If the temperature outside goes to 95 degrees, over the course of eight hours, everything in the house will go up to the 95 degrees; Then your AC has to try and bring it all back down to 85 degrees, thus working longer and harder.
How about if you have a pet in the house ?
You're better off with good insulation and letting the AC stay on all day, get a thermostat you can set the temperature difference on so it isn't every one degree difference. A final thing you can do is set it for a higher temperature during the day and then reset to the lower setting near time for you to get home.

Great advice..  But when it comes to TAXES I have learn my lesson..  As easy as some are making it sound like, it turns out that most people that their own taxes are not doing them correctly..  I have gone thru some headaques recently due to that and a lot of other people I know have as well... In the end, having H&R block not only fix our taxes but do our last taxes for this was the smartest thing we did and now we have peace of mind after dealing for some time with the IRS..
May 18, 2011 4:05PM
Comment on the spices "just use more" - yea.  Tried that one time. Had some Cinnamon that was 4 years old.  Usually took  a "pinch" for a recipe. Took one tablespoon of the weaker stuff.  The dessert looked diarrhea brown and tasted like stale bark.  So, no, it is not always a good to just "use more" - idiotic suggestion. Too much spice will not only change the taste, but color and texture!
May 18, 2011 3:25PM
Credit Unions are the only way to go.
May 18, 2011 5:54PM

I don't know the first thing about hvac but.............I know a great deal about cooking. Spices most certainly do get tasteless with age, not to mention moldy and buggy. The suggestion to "just use more' is about the most outlandish thing I have read in awhile and makes me doubt anything this writer has to say.

May 18, 2011 7:12PM
That one about taxes is a lie. I tried to use turbotax last year and after going through everything 3 times to make sure I didn't miss anything it said I would get $100 back. I ended up having my accountant do my taxes and I got $1500 back. Taxes can be complicated! 
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