ERROR: Failed to buil gem native extension because PostgreSQL is too old - ruby-on-rails

Question

I'm attempting to run bundle in my Rails project on Mavericks. It fails when getting to the pg gem with this error.
It said Your PostgreSQL is too old. Either install an older version of this gem or upgrade your database.. so I installed postgresql-9.3.4 and gem install gem but same error occurred.
Building native extensions. This could take a while...
ERROR: Error installing pg:
ERROR: Failed to build gem native extension.
/path/to/.rvm/rubies/ruby-2.1.1/bin/ruby extconf.rb
checking for pg_config... yes
Using config values from /usr/local/php5/bin/pg_config
checking for libpq-fe.h... yes
checking for libpq/libpq-fs.h... yes
checking for pg_config_manual.h... yes
checking for PQconnectdb() in -lpq... yes
checking for PQconnectionUsedPassword()... no
Your PostgreSQL is too old. Either install an older version of this gem or upgrade your database.
*** extconf.rb failed ***
Could not create Makefile due to some reason, probably lack of necessary
libraries and/or headers. Check the mkmf.log file for more details. You may
need configuration options.
Provided configuration options:
--with-opt-dir
--without-opt-dir
--with-opt-include
--without-opt-include=${opt-dir}/include
--with-opt-lib
--without-opt-lib=${opt-dir}/lib
--with-make-prog
--without-make-prog
--srcdir=.
--curdir
--ruby=/path/to/.rvm/rubies/ruby-2.1.1/bin/ruby
--with-pg
--without-pg
--with-pg-config
--without-pg-config
--with-pg_config
--without-pg_config
--with-pg-dir
--without-pg-dir
--with-pg-include
--without-pg-include=${pg-dir}/include
--with-pg-lib
--without-pg-lib=${pg-dir}/lib
--with-pqlib
--without-pqlib
extconf failed, exit code 1
Thanks in advance.

Answer 1

Try adding your postgresql installation to your path:
export PATH=/usr/pgsql-9.3.4/bin:$PATH