Money lies are prevalent in our society - it’s kind of how people trick themselves into believing that they’re doing okay financially. Some people are fully aware of the lies that they tell themselves, but refuse to make changes, as living in the dark helps them sleep at night. Even if you don’t like to discuss or think about your personal finances, good money management skills can take you farther in life. For this matter, here are seven money lies to stop telling yourself.
1. I’m Too Young to Think about Retirement
This is one of the biggest money lies, and it’s often uttered by young adults in their 20s and 30s. The truth is, you are never too young to think about retirement. If you want to live a cushy retirement with few financial worries, now is the time to start planning. Whether you make a little or a lot, speaking with a financial advisor can get your money on track.
2. I Don’t Need Life Insurance
If you’re not married and you don’t have kids, life insurance may be the last thing on your mind. But before you tell yourself that you don’t need life insurance, consider the assets that you do have. Do you have a vehicle loan or a mortgage loan? Would you like to pay off these assets and leave an inheritance to loved ones? If so, a life insurance policy can help. Then again, maybe you don’t have any assets. Even so, a life insurance policy can cover your funeral expenses and pay off your credit card debt.
3. Debt is the American Way
Yes, most people rely on a car loan and a mortgage loan. But this fact isn’t an excuse to accumulate a large amount of unnecessary debt. For this matter, stop making excuses for your high credit card debt and devise a plan to pay off your balances. Getting rid of your high credit card debt will not only improve your personal finances, it’ll also improve your credit score.
4. I Don’t Make Enough to save
A modest income isn’t an excuse to put savings on the back burner. An emergency fund can be a lifesaver after a job loss or other crisis. Make saving a priority, and then make adjustments to your spending habits to free up cash. Even if you only save a little, something is better than nothing. Take your lunch to work, carpool, cut your cable services or simply shop less.
5. Tax Money is Free Money
Stop thinking of tax money as free money to spend on anything. Blowing this money on clothes, electronics or a vacation provides instant gratification, but it doesn’t help you in the long run. The money you receive from the federal government each year can be the ticket to a bigger savings account.
6. I Have Time to Pay off My Student Loan
Although most student loan lenders allow 10 to 30 years to pay back student debt, look into ways to pay back your loan sooner. You will pay less in interest, and without this debt hanging over your head, you will have more disposable income for your savings account. Pay more than your minimum payment each month, or talk to your lender about loan forgiveness programs.
7. It'll All Work out in the End
This statement can be true as long as you’re taking action to improve your personal finances. On the other hand, if you’re sitting back and doing nothing to fix your situation, there is a chance that you’ll be in the same predicament in one year, five years or ten years down the road.
Rather than tell yourself money lies and accept a less than ideal financial situation, learn ways to improve your money. Call your creditors to modify your payments if necessary, live off a budget or consider working with a financial planner. Can you think of other money lies?