Money Lies We Tell Ourselves That Make Us Poor

Ok, level with me…when it comes to finances, have you ever told yourself a “little white lie” to justify spending or debt? If I were to ask you why you owe money to your credit cards, auto loans, or your friends, you would probably have an answer ready for me. It’s probably the same answer you tell yourself whenever you think about your debts. Whatever those answers might be, are you being totally honest? If you are lying to yourself, you are hurting your chances for financial success. Today we’re going to face some of those money lies and break out of the financial traps they create.

If you're not honest with yourself about your finances, your money lies will keep you poor. Here are 7 money lies we tell ourselves and how to face them.

I feel pretty certain that most of us go through a stage in our lives when we try to justify our spending habits that then spiral out of control into mounting debt. I know that I have done it myself and the way I justified my actions was to try to fool myself, lie to myself if you will. When I did that, I temporarily would feel a little better about the debt. But, deep down inside, I knew what I was really doing. It sometimes takes a serious wake-up call to make your behavior change for the good.

My Own Struggle With the Truth About My Spending

After my divorce back in 1997, I went through a period of depression which resulted in a lot of irrational spending that I later came to regret. Why did I do that? In my case it was spending money to make myself “feel better” about my life. Buying some luxuries like some expensive clothing or a new car was like the rush from some illegal drug and it definitely worked in the very short term. Buying those things and more was a way to say to others, “Hey, look at me. I’m doing just fine!”.

Twenty some years have come and gone since that period in my life, but unfortunately that behavior exists all around and I see so many people who still try to deceive themselves about money and the reasons they are in debt. That’s why I have put together this list of some of the lame and desperate lies that we all tell ourselves about spending and debt.

Money Lies We Tell Ourselves

1. I deserve the things I want even if I can’t afford them

We often want something so badly that we will convince ourselves we deserve it even if we really can’t afford it. Credit cards enable us with that. The truth is we don’t really need these things but we want them. If we simply thought about how the purchase could affect our ability to pay for really necessary things, we would stop making most of these purchases. In a way, it’s rewarding ourselves now only to set ourselves up for punishment later.

The way to fix it is to set up some kind of account or kitty and save for those kinds of purchases. When you actually have that “extra” cash, the reward is legit and the dangers are avoided. You can also mandate a “waiting period” before making unnecessary purchases. You’ll find that if you have to wait a couple of days or even a week, your desire for that particular want may fade away.

2. I’ll never get out of debt so what does it matter if I spend what I don’t have

We live in a consumer-driven world and we are bombarded with advertising and images of excess every day. Many people feel totally powerless and succumb to these temptations. But spending and building debt you can’t pay for is like sitting in a big deep hole and thinking the way out is to dig deeper.

The real way out is to realize that it took a while to get into debt and that it will take a while to get out of it. Changing your spending habits and some time will do it. The peace of mind you’ll get will give you real power when you were powerless before that change. Not everyone is in debt and many who were aren’t any longer. They did it and so can you.

3. I don’t have to worry about how my debt affects my credit score because I am never going to buy a house

Here’s a shock to many people. Your credit score and rating isn’t just about whether you can qualify for a mortgage or a car loan. It’s a measure of you showing that you are a responsible person and it can be used in considering you for a job or when you get auto insurance for just two examples. Your credit score is based on things like on-time payment and the amount of the credit you use compared to the total amount you have available to you.

Even if you have a “good” score, having an excellent score means you are more highly rated and it gives you advantages. If you have a lousy score, it may mean financial hardships and that condition can follow you around for years and years. Your credit score (or lack of any credit) is in your own control and can even start with something simple like whether you have and pay back any student loans you took as a teenager. Credit isn’t something “nice to have”. It may be a safety net for you and it’s always good to have a safety net in life.

4. I can spend my money now because I will have my Social Security when I retire

The first problem with this lie is that Social Security was never meant to be the only source of your income when you retire. Even when you qualify for the maximum benefits and you wait until the last moments to file your claim (age 70), you will still find that you will be short on income unless you want to live at or below poverty level.

It is true that when you retire there are definite ways to save and cut back on your expenses like downsizing your home or giving up one of your cars. But there will be things that you won’t be able to control such as inflation (affecting the cost of just about everything) and healthcare which is bound to cost you more as you age.

And that’s making the assumption that Social Security benefits will always be there and benefits won’t ever be changed or reduced.

Saving money towards your future and retirement isn’t just a good idea, it is a necessity. Spending your money now and thinking you’ll be just fine with your Social Security income is a recipe for disaster.

5. I have unpaid debts and I can just ignore the notices and debt collectors calling me because they will eventually give up and go away

If your creditors have proof that you owe a debt, even if you won’t ever admit to it, then the simple answer is that they will never give up trying to get their money and may get a judgment against you in court. If you owe government agencies money, you can be certain that they will pursue you forever.

Any judgments against you will affect your credit rating and can lead you as far as declaring a bankruptcy, all of which can stay on your record for years and years and even for a lifetime.

The best way to handle the notices and calls is to make an attempt to repay legitimate debts you owe. Try a negotiated payment plan or settlement that can resolve the matter and leave you whole and in good standing. It may be necessary to seek legal help in some situations. If you don’t pay your debts, ignoring them will lead you to even worse consequences in your life.

6. I’ll be earning more money in the future so I can buy these things now

While being an optimist is generally regarded as a good thing, when it comes to your income, it is a risk to assume that every year will be better than the last one. First of all, there is the obvious. You could lose your job, even by no fault of your own. Companies go out of business or cut back on employees when the economy toughens and you never know when that may happen.

If you are paid based on commissions or some other incentive in your pay, it means your income can vary a lot from year to year. In addition, there are wage freezes, or family situations that may cause you to have to leave your job. Rationalizing that you will increase your income automatically is faulty judgment. If you live within your current income level, when you do earn more money it will seem like a bonus to you that you can spend or save at your discretion.

7. I will start saving for retirement tomorrow

Your retirement seems like it’s always a distant thing that isn’t something to worry about. Saving tomorrow is a big lie we tell ourselves and for many people, tomorrow never comes along. The longer you delay the start of saving for your retirement, the more danger involved.

By waiting, you waste and miss valuable years of accumulating and compounding your money that can literally cost you hundreds of thousands of dollars over the years. No matter how little you can start with, saving for retirement is the first thing you should be doing with your paycheck when you are working.


Lying to yourself may not seem like it can be harmful, but it is. Even little lies we want to hear, just like the ones Fleetwood Mac sang about, can put a big hole in your financial matters. There are times when you are thinking about lying, but you know deep inside that you are making a mistake that will come back to haunt you. If you can’t talk yourself down off the ledge, then talk to loved ones like a family member or friend or even just simply sleeping on any decision is a better way. Getting a little bit of space away from the temptations can prevent you from digging that hole of debt even deeper than you are in right now.

Are you lying to yourself about your spending habits? Have you ever been in serious debt or are you in debt right now? What do you do if you find yourself in a situation that threatens your financial health?

6 Comments

  1. I had a supervisor once who was let go from our place of employment, but I remember him talking about the fact that the credit card companies kept sending him credit card offers, and he took them! He came by our office to show off the new Range Rover he’d financed. I was really worried about his spending habits. I could not see that turning out well.

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