What Financial Lies Are You Telling Yourself?

Derrick has had a stressful day at work, and when he comes home he doesn’t feel like cooking. He tells himself that he “deserves” a night out at a restaurant. This is repeated at least once a week, to a tune of $160 to $200 a month.

Victoria has $4000; instead of saving it, she remodels a part of her house. Before the remodeling is even over, she unexpectedly has a home repair of $8000. Because she has no savings, she must take out a loan from the bank. She laments that this is just the way her life is; she can never get ahead.

Billy frequents discount stores. Because he is getting items more cheaply than he would at a regular store, he tells himself it is okay to buy more. After all, he is “saving” money.

Rachael lives by herself. She thinks, what is the point of just cooking for one. She goes out to eat every night, spending over $100 a week.

What do all of these people have in common? They are all telling themselves financial lies. They have a recording in their minds’ playing over and over which causes them to make the same poor financial decisions over and over again.

In the first example, what Derrick really deserve is to save my money so that one day he can find another job that he enjoys more and is less stressful.

Victoria’s financial life is not as bleak as she imagines. She may be able to get ahead if she thought long term and saved her money instead of spending all of it whenever she gets a little extra.

Billy is getting a good deal by going to discount stores, but the good deal is lost when he spends just as much as (or more than) he would at a retail store.

Rachael could arrange a group of people that she swaps meals with; one week she cooks a meal x4 and shares with three of her friends. Three other nights of the week her friends share with her.

We all tell ourselves financial lies. We may do this unconsciously, yet they have dire effects on our financial future. What financial lies are you telling yourself?

On Not Keeping Up with the Joneses

I had a very good friend in graduate school (10 years ago!) that I lost touch with soon after grad school. When I knew her, she was heavy set and had long, curly hair and glasses. She refused to wear her hair up even in hot, sticky southern summers because she didn’t want anyone to see her neck.

I found her on Facebook a few days ago and excitedly sent her a message. I could tell from her picture it was her, but she looked so different. Her face was thin, her hair lightened and pulled up! She wasn’t wearing glasses. She looked very polished. When I showed the picture to my husband who also knew her, he wasn’t sure it was her. I had to dig up old pictures to compare to the Facebook picture. When I did that, I could really see the difference.

And that is when it happened. My husband and I started wondering what dramatic change had happened in her life. We started speculating about all sorts of things that could have happened to her in the 10 years since we have last seen one another.

And then we started looking at ourselves critically. We don’t look that good. Ten years time has aged us. (Having two kids can do that to a person.) We feel stagnant. My husband has been in grad school getting his master’s and Ph.D. for the last 7 years. We rent instead of owning a home, even though we are nearing 40. (That seems to measure certain failure to many, especially before the current economic downturn.) I am working at a job I don’t enjoy just waiting for my husband to graduate so I can be a stay at home mom.

We were previously proud of ourselves for NOT owning a home, for not taking on that financial burden when we weren’t ready for it. We do fairly well on one income, and we were also happy with that. Of course, we love our children and are grateful to have them; in fact, we would like to have one more. But one look at my friend’s picture and her new polished look made us immediately question everything we are doing.

Isn’t that the way it is? You see a friend drive up in a nice new car and you wonder how they can be doing so much better than you. You see a friend’s remodeled kitchen and you are envious and annoyed with your kitchen that previously you were satisfied with. But often what we are envious of is only a one dimensional image, like a picture.

I don’t know what happened to my friend; I hope to hear from her soon and reconnect. Meanwhile, like teachers used to say, “Keep your eyes on your own paper” we need to keep our eyes on our own life. We are working hard so that someday we will achieve the life we dream of. I hope that my friend has already achieved hers.