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10 money lies we tell ourselves

Financial fibs can derail your efforts to pay off debt and save money. It's time to stop rationalizing, justifying and shifting blame.

By Donna_Freedman Jan 16, 2013 12:31PM

Image: Dishonest man (Halfdark/fStop/Getty Images)A personal finance blogger named Serena recently listed the "Top 5 lies we tell ourselves about our money."

Only five?


Compared to some people she's doing pretty well. But comparison isn't a good idea, as Serena notes with Lie No. 3: My $5,000 credit card debt isn't that bad -- some people's debt is $30,000.

"Why not compare (yourself) to people doing better?" she asks.

Excellent question.

Obviously the reasons for consumer debt vary. Someone who can't afford insurance could wind up hospitalized by a fall on the ice or a bad case of the flu. Others can justify anything with a bit of financial fibbing:

  • Charging a pricey treat whose cost you're sure you can cover on payday (Lie No. 1).
  • Buying something you've wanted forever because it just went on sale (Lie No. 2).
  • Reasoning that most of your debt comes from buying necessities rather than "frivolous" stuff. (Lie No. 4).
  • And when unpayable bills show up? That's not your fault, either -- it's that your paycheck isn't enough (Lie No. 5). 
Serena says these lies come from two places: "fear and laziness." To which I say: Yes and no.

For example, sometimes your salary really isn't enough. It's no secret that many paychecks aren't keep pace with the cost of living. Entire books are being written on the subject.

Economics aside, it's time to come clean: Many of us do rationalize, justify and delude ourselves about money.

Rich but miserable?

Or what about this one: Wanting more money is just greed.  Personal finance blogger J. Money hears that one all the time

"Usually in a high-and-mighty tone, too, as if to look down upon those of us who desire more," he says in a post that includes a list of 10 ways to spend extra cash on anyone but yourself.
That sounds like a money lie I've heard: Rich people aren't happy. They don't enjoy simple pleasures the way we do. Maybe that's true sometimes, but I bet a lot of rich people enjoy simple pleasures regularly. However, they can pick their spots: savoring a simple slice of bread in a Paris boulangerie, or viewing a beautiful sunset from a private island.

That's not to say that some rich folks aren't miserable. But money sure forestalls a lot of financial problems, such as student debt or a lack of medical care.

Changing your outlook

A few more pecuniary prevarications:

It's just money -- you can always make more of it.
Not necessarily. Ask anyone who's been unemployed or underemployed since the recession started.

Life has no guarantees, so why not enjoy my money now?
You're right that life holds no guarantees. For example, there's no guarantee that the first thing your boss says to your tomorrow won't be "Clean out your desk." There's no guarantee that you won't live an additional 60 years only to find that Social Security doesn't begin to cover basic costs. And there's no guarantee that you can't enjoy life while planning for the future, so give it a try.

People like us never get anywhere.
There's some truth to this, since "people born at either end of the economic spectrum are likely to stay there," according to MSN Money columnist Liz Weston. That said, this is a self-fulfilling prophecy: If you truly believe you can never improve your life, you might never try.

Which leads me to a final, fatal whopper: I'll always have debt. You certainly will, unless you start looking for a new approach.

That can be tough to do, since you don't know what you don't know. But staying right where you are won't work, either. Hit the public library, visit MSN Money's Personal Finance page and keep reading Frugal Nation for ideas about ways to look at money differently.

What financial lives did you once tell yourself? How did you recognize them? Got any tips to share?

More on MSN Money:

Jan 16, 2013 9:34PM
I grew up in a piss poor family and we knew how to make do.  I'm no cheapskate, but I don't buy what I don't need.  I love to treat family and friends to meals and that's my one indulgence, but in all other things, I really watch where the money goes.  My mom always said there is nothing better than to have money behind you and she was right.  Now I bank every birthday, Christmas or whatever check.  I wrap pennies and will take fifty cents to the bank - I don't care.  I try to save as much as I can because you just never know and believe me, nobody cares!
Jan 17, 2013 2:56AM
Jan 16, 2013 6:56PM
Actually truly wealthy people do tend to enjoy simple things.  That is one of the reasons they have money, because they aren't constantly spending it on the latest whatever.
Jan 16, 2013 9:48PM
Individuals, corporations and governments, this applies to all, until you control your spending you will never have enough money regardless of how much income you generate or taxes you collect.

We all know people who whose income is many times greater than average and they still live paycheck to paycheck and we know people who retire comfortably on an average income. The difference is spending.

Jan 17, 2013 5:26AM
I wish I had known what I know now, 40 years ago (no debt and no ex)
Jan 16, 2013 9:34PM
Too many people today adamantly refuse to deny themselves any and all short term gratification by falsely believing they can economically "rent" prosperity.  Just look at the current marketing strategies used by overpriced producers who employ deceptive advertisements promising NO down payment with a low monthly payment instead of identifying the staggering size of the "real" price including initial price and finance charges.  Marketers exploit fear and greed with deceptive and often typical "bait and switch" techniques of pricing misdirection!
Jan 17, 2013 8:48AM
Hi,a fool and his money are soon parted !
Jan 16, 2013 6:45PM
@MoneyIllusion: Won't your friend be surprised if it turns out Mama really DOESN'T have money? Scary.
Jan 16, 2013 9:08PM
You hit the nail on the head, Donna!  I know quite a few people who need to read this, but even if they did, I'm afraid most of them wouldn't understand it.  *sigh*
Jan 17, 2013 1:12PM

My great-grandfather was quite wealthy.  My grandparents did quite well.  My father has been able to put together a substantial amount of wealth for he and my mom. 

What do they all have in common?  They worked hard.  They saved their money.  They were frugal in their purchases.  They enjoy(ed) simple pleasures. 


They didn't get rich because they inherited money...most of my great-grandfather's money and my grandparent's money was given to charitable trusts... I expect if my parents have money, that most of it will go to similar trusts, not to me.


So I work hard.  I save my money.  I'm frugal in my purchases. and I enjoy simple pleasures.


Its a family culture that serves me very very well.  You'll find most wealthy people practice the same frugality.


I tend to see that my wealthier clients are the ones who are the 'cheapest' while some of my poorer clients are the ones who don't pay attention to their spending...its frustrating.

Jan 16, 2013 1:29PM
I have a friend who spends because "when mama dies the inheritance will cover everything." Her mother is in her 90's but still kicking.  Not sure if mama has money or not but they assume she does. 
Jan 17, 2013 1:38PM

People need to PLAN to lose your job; it is not IF it will happen it is WHEN it will happen. You need at least 6 months to a year in savings, especially if you own a house and carry any sort of debt. I know people who make $200,000 a year and if they lost their job within a month they would be on the road to lose everything. Only people I feel sorry for when they go broke is for medical reasons. Medical Bankruptcy can get ANYONE and if you get some sort of bad disease then you can be screwed, rest of the people got themselves into the mess.

Jan 17, 2013 1:37PM

I am frugal to a degree.  I bought our mini-van slightly used.  It still is a high-end and we could have gone with a cheaper model but we knew we would be just as happy with a 1 year old van as with a new one so we saved about $8K.  I haggled Fios to save $20/month on our package.  We could have gone with the cheapest package and paid even less or no cable at all but life is about living a little.  Through my bank rewards program I get a $30 Starbucks giftcard every month so that I can enjoy a $5 caramel macchiato now and then.  We also gladly accept hand-me-downs for our daughters' (6 months & 2.5 years) clothes, furniture, and toys.  About 10% of their items did we by ourselves brand new.  It's all about enjoying life while getting the most out of your money.  We also have other streams of revenue (stocks & rental property) so that we're not stressed about getting downsized or laid off.  So far we're happy cause we don't have to worry about money while enjoying life.

Jan 16, 2013 11:08PM

Polonius said it, I have lived it 60+ years (at least the borrower part and most sorry when I got suckered into the lender part):  "Neither a lender nor a borrower be."

      Until the 1600's PAYING interest was a hanging offense. That's a fact gets little mentioned in today's banker controlled world. Gee, I wonder why?


Here's a truth. People are spenders and savers. I'm the saver in my marriage, and 3 times more than my wife. She is the spender and doesnt even go look for another better paying job.

I can't seem to get ahead on things in debt.

So it's not a lie I tell myself. I have scrimped as much as possible, and work 2 jobs covering all the overtime I can get.

Jan 20, 2013 4:41PM
There is no way you can tell me that anyone in this country will or is not in debt to someone all their life. "Debt Free" is a nice sounding phrase...problem, if you work you owe money, if you are retired you owe money, if you have a house, you owe money.

You can never be "debt free". Either you are paying a mortgage or the IRS or the utilities etc etc.

As far as being at one end of the "financial"  spectrum and staying there.........nope, wrong. There are rich people who are now out of work or have had their companies go belly up and there are poor people now who are making more money than ever based on home businesses or ideas.......No, things are different and I am the proof, a 20 year mechanic that has not had a job in 2 years, I spent the last 10 putting my credit back into shape to get out of mechanics and get a higher paying job, only to have the world suddenly consider pieces of paper to be the absolute guarantee that you can do the job instead of education and work experience or industry dedication.

Rich people who are still rich, are in fact happier than poorer people. They don't have to choose between eating this week or paying the rent..

Being 3,500 in debt right now......damn, that is good. we were nearly 0 cc and loan debt free until 2 years we owe more than 10 grand and it is going up, late payments,collections,unpaid end in sight.

Jan 16, 2013 9:36PM
I think someone needs a break.  I know many wealthy people and not one seeks the little things in life.   Making it too tough and when you make it big, you want to enjoy spending some of it. .  That does not mean to be an idiot but yachts do not suck people.  
Jan 17, 2013 11:35AM

Just waiting for Obama to pardon my debt like he gave amnesty to illegals and condoms to hookers.

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Donna Freedman's Frugal Nation blog is for readers who want to live cheaply -- whether due to necessity or a lifestyle choice. It explores living sustainably and making life more meaningful at the same time.


Donna Freedman

Donna Freedman, a writer based in Anchorage, Alaska, writes the Frugal Nation blog for MSN Money. She won regional and national prizes during an 18-year newspaper career and earned a college degree in midlife without taking out student loans. Donna also writes about the frugal life for her own site, Surviving and Thriving.