Common lies we tell ourselves about money
We all tell ourselves stories about our money. Maybe it’s the idea that a small splurge or several won’t hurt, or that we’ll start saving seriously next month.But if we’re not careful, even seemingly harmless little stories like these can gradually derail our financial goals. Fortunately, recognizing common money lies and the truth behind them can help you, and your wallet, do better.
“I deserve this purchase, even though I can’t afford it.”
While spending on occasional treats can be healthy, making it into a habit can lead to overspending on nonessential purchases and credit card debt.
Treating yourself can easily turn into emotional spending. Maybe after a rough day, you find yourself browsing for shoes you don’t really need. Over time, that new purchase rush can become tied to your mood, making it easier to justify splurging at the smallest setback—even if it depletes your savings or puts you into debt.
Real self-care isn’t about swiping your card to feel better. It also doesn’t mean cutting out every fun buy. Instead, consider planning bigger purchases in advance, or giving yourself a 24-hour pause before checking out so you can decide if it’s something you truly want. And of course, find healthy strategies to deal with difficult emotions that don’t involve your wallet, so you feel empowered to break the “I deserve it” cycle.
“I don’t need to save now. I can always do it later.”
It’s easy to justify spending rather than saving, especially if you don’t have a lot of extra cash to put aside right now.
Spending may reward you with instant gratification, but time is your best friend when it comes to saving. The longer you wait to start saving, the more catching up you need to do. Even small amounts can add up to big savings over time thanks to accounts that earn compound interest.
Compound interest is when the interest you’ve earned earns interest , in addition to the principal. Over time, this makes your savings grow faster and faster, like a snowball getting bigger as it rolls downhill.
Put another way, the sooner you start saving even just a little, the less you’ll need to set aside later to hit the same savings goal.
“It’s normal to have a lot of high-interest debt.”
It’s true that many people carry some debt. And not all debt is bad. But high-interest debt, especially credit card balances, can quietly do some damage.
High-interest debt can make your initial purchase way more. Credit cards usually have higher interest rates than things like mortgages or auto loans. That means more of your money goes toward interest payments instead of your balance, dragging out your payoff date.
There are other downsides, too. Missed payments could result in late fees. Carrying a high balance for a long time can lower your credit score, which can make it harder to get approved for new credit and lower rates going forward.
Even small amounts of high-interest debt can add up if not managed aggressively. Paying it off slowly over time does not build your credit. In fact, the sooner you tackle it, the better off you'll be.
“I don’t need a budget. I make enough money to pay for everything.
A budget isn’t just about restrictions. It’s about making informed financial decisions. Even high earners can benefit from gaining more awareness around their income and expenses.
By giving all your money a job, you can make sure it’s working most efficiently for you. It also helps keep your spending in line with your larger financial goals, whether that’s saving for a house or retirement, paying off debt or taking a well-earned vacation.
But it’s not only about big-picture goals. Budgeting allows you to spend on occasional “nice-to-haves” with confidence because you know how much money is left after covering essentials and paying into your savings.
If an unexpected cost pops up, a budget can stop it from wrecking your finances, since you can temporarily adjust your allocations according to your priorities.
While spending on occasional treats can be healthy, making it into a habit can lead to overspending on nonessential purchases and credit card debt.
Treating yourself can easily turn into emotional spending. Maybe after a rough day, you find yourself browsing for shoes you don’t really need. Over time, that new purchase rush can become tied to your mood, making it easier to justify splurging at the smallest setback—even if it depletes your savings or puts you into debt.
Real self-care isn’t about swiping your card to feel better. It also doesn’t mean cutting out every fun buy. Instead, consider planning bigger purchases in advance, or giving yourself a 24-hour pause before checking out so you can decide if it’s something you truly want. And of course, find healthy strategies to deal with difficult emotions that don’t involve your wallet, so you feel empowered to break the “I deserve it” cycle.
“I don’t need to save now. I can always do it later.”
It’s easy to justify spending rather than saving, especially if you don’t have a lot of extra cash to put aside right now.
Spending may reward you with instant gratification, but time is your best friend when it comes to saving. The longer you wait to start saving, the more catching up you need to do. Even small amounts can add up to big savings over time thanks to accounts that earn compound interest.
Compound interest is when the interest you’ve earned earns interest , in addition to the principal. Over time, this makes your savings grow faster and faster, like a snowball getting bigger as it rolls downhill.
Put another way, the sooner you start saving even just a little, the less you’ll need to set aside later to hit the same savings goal.
“It’s normal to have a lot of high-interest debt.”
It’s true that many people carry some debt. And not all debt is bad. But high-interest debt, especially credit card balances, can quietly do some damage.
High-interest debt can make your initial purchase way more. Credit cards usually have higher interest rates than things like mortgages or auto loans. That means more of your money goes toward interest payments instead of your balance, dragging out your payoff date.
There are other downsides, too. Missed payments could result in late fees. Carrying a high balance for a long time can lower your credit score, which can make it harder to get approved for new credit and lower rates going forward.
Even small amounts of high-interest debt can add up if not managed aggressively. Paying it off slowly over time does not build your credit. In fact, the sooner you tackle it, the better off you'll be.
“I don’t need a budget. I make enough money to pay for everything.
A budget isn’t just about restrictions. It’s about making informed financial decisions. Even high earners can benefit from gaining more awareness around their income and expenses.
By giving all your money a job, you can make sure it’s working most efficiently for you. It also helps keep your spending in line with your larger financial goals, whether that’s saving for a house or retirement, paying off debt or taking a well-earned vacation.
But it’s not only about big-picture goals. Budgeting allows you to spend on occasional “nice-to-haves” with confidence because you know how much money is left after covering essentials and paying into your savings.
If an unexpected cost pops up, a budget can stop it from wrecking your finances, since you can temporarily adjust your allocations according to your priorities.
“I’m bad with money, so I ignore it.”
Many of us didn’t learn about money when we were younger and it can seem intimidating. If you associate money with negative feelings, it can be tempting to avoid minor money issues rather than confront them.
But avoiding your finances can actually create worse consequences down the road, like debt you ignored being sent to collections, a low credit score preventing you from being leased an apartment or delaying your financial goals.
It’s never too early or too late to learn about money. Financial literacy is for everyone, even if you’re not a math whiz, and there are plenty of free resources out there to help you learn.
Start small by making sure you have a savings account to start planning for the future, as well as a checking account to manage your spending. Then, create a budget to keep track of your income and expenses. With the basics down, you’ll build the confidence you need to navigate bigger decisions like buying a home, retiring or getting out of debt.
And it doesn’t mean you won’t make any mistakes. What matters is learning to recognize them early so that you can address them ASAP and learn from them.
Many of us didn’t learn about money when we were younger and it can seem intimidating. If you associate money with negative feelings, it can be tempting to avoid minor money issues rather than confront them.
But avoiding your finances can actually create worse consequences down the road, like debt you ignored being sent to collections, a low credit score preventing you from being leased an apartment or delaying your financial goals.
It’s never too early or too late to learn about money. Financial literacy is for everyone, even if you’re not a math whiz, and there are plenty of free resources out there to help you learn.
Start small by making sure you have a savings account to start planning for the future, as well as a checking account to manage your spending. Then, create a budget to keep track of your income and expenses. With the basics down, you’ll build the confidence you need to navigate bigger decisions like buying a home, retiring or getting out of debt.
And it doesn’t mean you won’t make any mistakes. What matters is learning to recognize them early so that you can address them ASAP and learn from them.