Stop Telling Yourself These Financial Lies

We’ve all heard of or have told little white lies. They’re designed to soften the truth because we don’t want to be hurtful. It’s one thing to tell other people white lies to be nice, but why do we lie to ourselves? I think we lie to ourselves to make us feel better. Sometimes, it’s easier to believe lies because we otherwise have to make changes to our lives. It’s easier to say, oh, an extra 10 pounds is not overweight than to work out and diet to lose that 10 pounds.

Similarly, in the financial realm, it’s easier to put blinders on and think everything’s peachy rather than actually making changes. Here are financial lies we tell ourselves and why you need to STOP!

1. A Home is an Investment

Okay, a home can be wonderful. It’s really nice to have a space to do with as you wish but a house is not for everybody. Should you decide to buy a house, it will likely be the most expensive purchase you’ll ever make in your life so it’s not one to take lightly.

You should NOT buy a home thinking that it’s an investment. A home can be an investment and increase in price over time but that’s not a guarantee. Sure, you can say the same thing about the stock market. Nothing is guaranteed. But, I can buy stocks at a much lower price and can sell them pretty easily. A house is a big commitment that comes with a huge price tag. Think carefully before you proceed.


2. Credit Cards Are Evil

Some people subscribe to the school of thought that credit cards are terrible for you. If you’re incapable of paying off your balance in full every month then yes, please avoid credit cards at all costs. I view credit cards as a financial tool for establishing good credit and receiving cash back on my purchases.

When used responsibly, credit cards provide benefits that cash and debit cards do not. You get protection on your purchases and when there’s fraud, credit card companies will refund you your money. When your cash gets stolen, there’s not much you can do. It’s easy to make blanket statements and just tell ourselves that credit cards are bad and stay away from them but you’re missing out on a lot of benefits.


3. Investing is for Rich People

I hear people say this all the time, “I don’t make enough money to invest.” That’s an easy lie to tell ourselves because it means we can just keep on spending money like we’re used to instead of tackling the hard stuff and learn to invest. If you have the money to spend on Internet, cable, and cell phone plans, then you have money to invest.

Some people have the misconception that you need oodles of money to invest. It’s true that some index funds require an initial investment of $3,000. You can start small and invest in individual stocks and buy as little as one share. While some stocks sell for hundreds or even thousands, you can find stocks in quality companies for under $50.

Also, keep in mind that investing doesn’t just mean putting money in the stock market. You can invest in gold, bitcoin, commodities and a host of other things. They all carry risks so proceed with caution. The moral of the story here is that there are lots of investment options and you don’t have to be rich to get started. In fact, many people accumulate their wealth by investing. So, if you don’t get started, you can’t get there!

4. I Make a Good Living So I Must Be Doing Well

We really need to shatter the myth that bringing home a good paycheck means you’re doing well. In theory, that’s true but we should really focus our attention on what we manage to keep in our pockets at the end of every month. Think about it, which scenario looks more appealing. Would you rather make $10,000 a month and manage to save $500 of it or make $3,000 a month and save $1,000.

I’d choose the latter. Of course, the person who makes more has the opportunity to cut expenses and therefore save more but the idea here is really that it doesn’t matter so much how much you make but how much you save. If you do bring home big, fat paychecks every month, congratulations. Take a look and make sure you’re banking most of that instead of spending it. Don’t lie to yourself and think that you’re doing okay just because you earn a high salary.

5. I Don’t Need an Emergency Fund

No one likes to think about accidents and emergencies, it’s just not fun. Maybe we lie to ourselves about not needing an emergency fund because we think that having one actually invites emergencies. Unfortunately, life is unpredictable. The unexpected can and does happen. We tend to think that bad things only happen to other people. Have you heard of Murphy’s Law? Well, when you least expect something bad to happen is when it’ll happen to you.

I’m not even talking about catastrophic stuff. Something like needing to replace a leaky roof or the faulty radiator on your car can throw your finances out of whack when you don’t have an emergency fund because you have to scramble to find the extra money. Maybe you hate the idea of an “emergency” fund. If it’ll motivate you

Are  to save, call it a rainy day fund or freedom fund. Everyone needs a little cash cushion because you never know what life will spring on you.

6. I’ll Save For Retirement When I Make More Money

Retirement feels like such a long ways away, doesn’t it? So we tell ourselves to enjoy life and worry about retirement later. You might think, I barely make enough to survive, I’ll save for retirement when I make more money. The problem is, retirement will be here before you know it. By the time you’re finally ready to start saving, it might be too late.


When you’re young, time and the power of compound interest are on your side. You can start with small amounts of money that can really grow with time as opposed to trying to play catch-up in your 40s and 50s. If you haven’t started saving for retirement, start now! Don’t let the amount of money you make be an excuse.

Are there financial lies that you tell yourself?

We all tell little white lies but if you tell yourself financial lies, you need to stop because you're sabotaging your financial success. Find out how.