Lies We Tell Ourselves About Money

Do you think you’re honest with yourself about money? Most people think they’re honest with themselves about their finances, but there are common lies that they tell themselves without even realizing they’re doing it.

Unfortunately, these lies can really limit you. They can hold you back from being financially successful, and they can make it nearly impossible to achieve life goals. Ignoring them will make the problem worse; it’s best to acknowledge the lies so that you can improve your relationship with money.

When it comes to money, honesty is always the best policy. Here are seven of the most dangerous money lies we tell ourselves, and how you can overcome them.

“I have strong financial willpower”

When it comes to spending and saving, most people’s belief in their willpower is strong but likely overestimated. If you were to test your self-control, it’s likely you would fail. Giving ourselves unmetered access to our own money gives us the freedom to spend it in whatever way we choose.

To combat this desire to spend, set up your account to send money to your savings regularly; if you have a Simple account, set Goals. This way, you don’t have to remember to save, as it will be happening every month (or day!) automatically.

In the real world, find ways to avoid places where you’re most likely to impulse spend. If you’re often tempted by the snacks on display at grocery store checkouts, try the self-checkout aisle; doing the work yourself will keep you busy enough to ignore the temptation. If overspending at restaurants and bars is your thing, set yourself a budget before you go out, or try inviting friends over for dinner.

“There is good debt and bad debt”

Lots of people have debt, and they like to divide the debt into “good” debt and “bad” debt. For example, student loans and mortgages are “good” debt, as they help to advance your life, whereas credit card debt is bad, as it isn’t beneficial and the interest rates are high. Avoid this mindset, as it helps you to rationalize having debt in the first place. It also means you may be tempted to focus on paying off your “bad” debt, but it is important to focus on paying off all debt. While it’s true that you should work to pay off debt with compound interest first, all debt should be eradicated (or avoided entirely).

“I prioritize having money saved”

Often people will prioritize one amount of money over another; for instance, they may be unwilling to use their inheritance money to pay off their credit card debt, as they feel that holding onto their inheritance is more important. While it’s true that in many cases, holding onto savings will help you reap interest rewards, credit card interest rates are much higher, and will cost you more in the long run. Finding a balance between saving and paying off debt is an important step toward financial freedom.

“I will never be rich”

Sometimes it can seem like it takes a whole lifetime to build substantial savings, which can put people off saving in the first place. Remember that saving isn’t actually about getting rich; it’s about having security and freedom. With every saving you make, you gain more security, and every payment improves your financial position.

“If I spend some of my savings, I can just pay it back later”

When you need money and your savings are just sitting there, it can be really tempting to use some of the savings and pay them back later. This may seem easy, but it is often much more difficult than people expect to catch up on their savings. You will also lose any interest that you could have accumulated during that time, so you are also effectively losing money. If you are struggling with money, make sure you make a repayment plan before borrowing from your savings to ensure you pay it back.

“I can’t afford to invest”

It’s a popular belief that only wealthy people can afford to invest, but it’s untrue. Anyone can invest; if you can afford to go out for lunch, then you can afford to invest. Remember that the key to financial success is how we choose to spend our money, not how much we earn.

“I don’t need to think about my future yet”

Ideally, you will be financially secure in both the future and in the present, but this is very difficult to do if you are financially biased toward the present. Those who “live in the now” will seek out immediate rewards over rewards later, which can leave them struggling in the future. Make sure that you are financially secure by placing equal importance on both the present and the future.

Disclaimer: Hey! Welcome to our disclaimer. Here’s what you need to know to safely consume this blog post: Any outbound links in this post will take you away from, to external sites in the wilds of the internet; neither Simple nor The Bancorp Bank, our partner bank, endorses any linked-to websites; and we didn’t pay/barter with/bribe anyone to appear in this post. And as much as we wish we could control the cost of things, any prices in this article are just estimates. Actual prices are up to retailers, manufacturers, and other people who’ve been granted magical powers over digits and dollar signs.

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