Honesty is the best policy, even when it comes to money. So why do we tell ourselves these lies about our finances?
1. I deserve an expensive treat.
I am a big supporter of treating yourself when you’ve accomplished a goal or have had a particularly stressful week, but is it any less of a treat if you don’t spend a ton of cash on it? Reevaluate how you reward yourself.
2. My finances will work themselves out.
False. You need to set a budget to understand your own cash flow. What money do you have coming in each month and where does it need to go? Assuming you’ll have enough money to tackle all of your bills after a month of frivolous card swipes will set you up for disaster.
3. I’ve been preapproved for a credit card so I should accept the offer.
You don’t need to accept every offer that lands in your mailbox. In fact, it’s best if you don’t. If you’re interested in establishing or building credit with a credit card, see what your credit union offers first before accepting the offers that arrive unsolicited in your mailbox.
4. It’s on sale.
I am constantly justifying purchases because, “it was on sale,” and, “I got a really good deal,” even when it isn’t 100% true. Unless you’ve been planning to purchase the item and specifically waited for a price reduction, then you’re probably just falling victim to an impulse buy and trying to ease your buyer’s remorse.
5. I’ll just charge it now because I’ll be able to afford it on payday.
And so begins a vicious cycle of charging pricey items and struggling to pay them off with your next paycheck. If you don’t have the cash to cover it now, it’s best if you don’t charge it either.
6. My debt isn’t that bad, others have much more than me.
Instead of comparing yourself to others with worse financial struggles, why don’t you strive to be like those with a better financial situation? Remember: debt is debt, no matter how much.
7. I don’t make enough money.
Is this true or are you just over-spending? The only way to know for sure is to set a budget that includes your income and your monthly bills. Assign the remainder of your money after bills are paid to groceries, entertainment, and savings. Analyze your personal cashflow and you may find that you make plenty of money to survive and even save.
8. I need everything I buy.
I’m guilty of telling myself this all the time. Learn to separate your needs from your wants. Need: Groceries, Want: Designer Cell Phone Case. Trust me, I struggle with this one, too.
9. It’s okay to spend some of my savings now because I have plenty of time to make up for it.
Hooray! You’ve started saving! Boo… You tapped into it too soon. If you spend your savings prematurely, you’re not really saving at all. Set a savings goal with a specific timeline and stick to it. Using up that cash before you’re suppose to will only put you further away from your goals.
10. I don’t need to start saving yet.
The sooner you start saving, the less you have to save on a yearly basis to reach a comfortable amount by retirement. Save now and thank yourself later.
Don’t lie to yourself! Live an honest financial life and you’ll kick money stress to the curb.
Thanks to Get Your Life Straight for inspiring this post.