Money Lies That You Often Tell Yourself

By | October 14, 2021

When it comes to money matters, most of us usually end up fooling ourselves. Here are some of the common money lies we keep telling ourselves and some simple solutions to overcome them.


When it comes to money matters, most of us usually end up fooling ourselves. For instance, there are quite a few of us who barely save any money and the lie we tell ourselves is that we don’t have enough to set aside. There are also those of us who splurge on unnecessary things just because we tell ourselves that a little bit of Credit Card debt will not hurt us. Lies!

Additional Reading: Tips To Deal With Credit Card Debt

But, what are all these lies doing to your finances? Simple! They’re holding you back from financial independence. These lies that you often tell yourself may give you momentary relief but, if you observe closely, you are actually making things worse for yourself.

It is high time that you face the truth. And to help you do so, we have identified some of the common money lies that we keep telling ourselves. Oh, and we’ve outlined some simple solutions to overcome them as well.

Lie: Retirement is a long way away, so I have more than enough time to save money for myself.

Whether you are young or you believe that you will never stop working (because you love your work), it is important to consider the fact that you’ll grow old and will eventually have to retire from work someday. And if you haven’t saved for your post-retirement years, you’ll have to depend on others for your everyday needs. You wouldn’t want that, would you?

What to do? Stop assuming that you’ll be able to work forever. You may be in prime health today, but that may not be the case a few years later. For instance, what if you meet with an accident that leaves you physically disabled or you fall victim to a critical illness? Not only will you lose your ability to earn, but you will also have major expenses to take care of. What would you do then? Food for thought, right?

The solution is pretty simple. You need to start saving a small amount of money every month (not just saving, but investing also). Think of savings as the only way you’ll be able to sustain your present lifestyle throughout your life.

Additional Reading: How To Get Started On Your Savings

Lie: It’s better to keep my money in a Savings Account.

When we talk about savings, a bank savings account is what comes to our mind first. They are the safest option to park our hard-earned money. We’re not against savings accounts, but they don’t allow your money to grow.

Of course, they are more convenient and pose lesser risks as compared to the other options, but the interest rates they offer are comparatively much lower too. Also, did you know that the value of money decreases with time because of inflation?

What to do? Now, do you think that it is wise to park all your money in a savings account? Don’t you think it is better to invest in other avenues, which would actually grow the value of your money? No, we’re not asking you to invest all your money. You could keep a fair amount in your savings account. For the rest, you could try options such as a Fixed Deposit, Equity Funds or Debt Funds.

Additional Reading: What To Remember When Choosing The Right Debt Funds

Lie: I should stay away from investments. They are complicated and risky.

So, you find investments very intimidating. Most of us do, actually. But, are they? Well, that depends on how much you know about investing. Besides, with stories of investment failures and fake schemes, people are more and more afraid to invest their money because they don’t want to lose their hard-earned money.

What to do? Firstly, you must get rid of your fear of investments. How? Learn about it. You can read about it online, check out stories of successful investors (Warren Buffet is one great example), talk about it with your friends and family members, or get help from a certified financial advisor.

Once your fear is in check, you must chart out your financial goals and assess your risk profile. Once you are done doing this, you can build your portfolio. Getting help from a financial advisor will be your best bet if you’re not confident about investments. A good financial advisor will help you build the right portfolio based on your risk appetite and goals.

Additional Reading: Tax-Saving Investment Options Under Section 80C

Lie: It is okay to take money from my savings account. I can always put it back later.

Most of us have done this, especially towards the end of the month when our salary account is almost empty. When we find ourselves out of cash, we find it easy to dig into our savings, promising to put it back later. But, how many times have we actually put back this money? Almost never, right? It really is very difficult to actually replenish all the money that you borrow from your savings account.

What to do? Plan your monthly expenditure well in advance. You could (actually ‘should’) create a monthly budget for yourself and stick to it. With a proper budget, you’ll never run out of money and you won’t need to dip into your savings. If you’re planning to buy stuff that isn’t a part of your budget, then you need to plan ahead. You can set up a sinking fund for such purchases so you won’t have to depend on your Credit Card. This will help reduce debt and maximise your savings.

Additional Reading: How Budgeting Can Transform Your Financial Life

Lie: Building wealth is only for the rich, not for me.

Really? Please tell us that you don’t actually tell yourself that. What would have happened if Warren Buffet or Mukesh Ambani thought the same? We do agree that wealth building is a long process, but instead of thinking of saving to become rich, it will be easier to save and build your wealth at the same time in order to become financially independent.

What to do? Start small. Setting aside a small sum of money consistently will eventually help you build considerable savings thanks to the power of compounding. But, if you want to truly take advantage of the power of compounding, you’ll have to start investing, especially in equities.

Additional Reading: The Power Of Compounding

Lie: I don’t care about my Credit Score.

Bad attitude, my friend! Your Credit Score is very important for your finances – check yours now for FREE here. If you think otherwise, it’s time to change the way you think. Have a good Credit Score? You’ll be the banker’s darling. However, if it isn’t, you aren’t going to be in their good books. It will be difficult for you to procure loans if you have a bad score.

What to do? Credit Cards are the biggest culprits when it comes to bad Credit Scores. Actually, not the card, but the way you use them directly affects your score. When it comes to your Credit Score, a Credit Card is like a double-edged sword. It can either boost your score or give it a sound beating. We recommend that you pay all your bills on time, manage all your debts wisely, and try not to utilise more than 30% of your Credit Card limit. If you do these properly, you won’t have to worry about your Credit Score anymore.

Additional Reading: 3 Ways To Improve Your Credit Score Quickly

Lie: If I ignore my creditors, they’ll leave me alone.

Ha-ha! Who you trying to kid? Unfortunately, the ‘out of sight, out of mind’ concept does not apply when it comes to debt collectors. They aren’t going to let you go unless you give them what you owe them.

What to do? If you are finding it difficult to pay your dues on time, you can talk to your creditors about the same. They may be able to work out a different payment plan or even reduce some of your debt, depending on your situation. There is no reason to run or hide from them. You just need to be a little proactive and use some of your negotiation skills.

Additional Reading: How To Handle Collection Agents

Lie: I’m already in debt. So, it wouldn’t be a big deal if I swipe my card again, would it?

Now, why would you want to add to your debt? Aren’t you already finding it difficult to pay off your dues? While swiping your Credit Card for small purchases may seem like the easier option, paying your monthly bill won’t be that easy. So, stop building your debt by swiping your card at every opportunity that you get.

What to do? For starters, create a monthly budget and stick to it. This will help you spend from your income without depending on your card. Also, while planning your budget, please include your debts too. If you have more than one debt – like Credit Card payments, Personal Loan, Home Loan, Car Loan, etc. – then you can aim to either pay off the high-interest one first or the smallest one first.

Additional Reading: Tips To Deal With Credit Card Debt

Lie: I don’t have enough money to buy this, but I think I can still buy it anyway.

Yes, this is a common lie shopaholics tell themselves. Even though they know they can’t afford something, they still end up buying it. No wonder they find themselves in debt most of their lives!

What to do? Is it something you need or something you want? The answer to this question is the key. If it is something you want, you can save (by setting up a sinking fund) for it and buy it later. Not convinced? Okay, then delay the purchase for at least 24 hours. If you still want to make the purchase after this time period, then go ahead and buy it.

But remember that the purchase will topple your finances in one way or another. You may not have enough money left to pay off one of your bills or you may end up with a fat Credit Card bill.

Additional Reading: 10 Bad Financial Habits That Could Affect Your Future

Living paycheque to paycheque is quite disastrous for your financial health. And if you have been feeding yourself any of the lies mentioned above, you are just adding to your financial woes. It’s time to address these issues and fix them if you want to become financially independent. Good luck!

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*First published in January 2017.
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