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5 Ways we Lie to Ourselves about Money

We’ve talked about the different ways that our brains and the way we think can work against us when it comes to money, but what about how we outright lie to ourselves?

Yes, in many ways, we’re the victim of our own lies when it comes to money. But generally, even if we trick ourselves into thinking our financial situation is stable and in order, we still can’t escape the fear that comes from being financially unstable.

Let’s look at some of the ways we lie to ourselves.

1. Looking at an incomplete picture: This has become easier with time. We have accounts with one bank, credit cards with another, a mortgage with yet another again. By shopping around, we get ourselves the best rates and can save ourselves money, but we also make it more challenging to get a complete financial picture. As anyone skilled in the art of lying will tell you, the key to a good lie is to make it as true as possible. So, we look at the good side of things. We might have 4 credit cards with which we’re doing GREAT, but it only really takes one bad one to make it a lie.

2. Spending money before we make it: With easy credit, overdrafts, payday loans and other services, this is easier than ever. But, when you spend money before you make it, you get ahead of your income.

3. Not planning for the future: Surprises happen. We can all hope for beautiful weather and cloudless days, but into every life, a little rain must fall. Clothes wear out, cars break down and houses need fixing. These are facts of life, neglect them at your peril. If you don’t plan for expenses in the future, you risk not having the available funds to meet these expenses.

4. Not knowing where our money goes: It might seem like a small thing, but when you start getting unpleasantly surprised by your bank balance, you are on the road to trouble. Not knowing what you have means you might spend more than you can afford, which is where a lot of people start down the road to trouble.

5. Not looking at the big picture: This is a broad statement, but it is true in many senses. You might save money buying larger sized products in bulk, but they could also spoil before you use them all. You might fall in love with fruit that’s on sale when it is in season locally, but buy it when it’s imported from across the world and costs accordingly. You could get a job that pays you $5,000/year more, but then spend $10,000 extra on gas, insurance and car maintenance because the commute is twice as far. Look at the whole picture. It’s complicated, but it’s also the only way to truly understand money.

Nobody likes a liar. Lies, even little white lies, often cause far more trouble than they save, and they can delay you from attacking problems while they are small and easily solved. Look at your small habits and how you think of money. Are you lying to yourself?

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