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The 10 Biggest Financial Lies We Tell Ourselves(9 min read)

They say lying is an art and not everyone can do it well. Those who do it well pat their back by saying they can handle any situation. In one way or another, nearly all of us lie to ourselves when it comes to our finances. I can bet on it anytime. I have seen people lie to themselves in a lot of areas concerned with personal finance such as investments, savings, insurance, expenditure, etc.

These lies prevent us from taking action and getting the most out of our money.

Here are the 10 biggest financial lies we tell ourselves and how they rob from our financial future. Once we understand these lies, we won’t fool ourselves any longer. We’ll act differently with our money. We’ll make the most out of our hard-earned cash!

1. I will never be financially free

Most of us don’t believe that financial freedom is a possibility for us. We’re committed to working full day a week for the rest of our lives, but with no real plan of becoming financially free. If we don’t believe financial freedom is a possibility for us, then we’ll act in ways that will prevent us from ever achieving it. We won’t bother investing like we should. We won’t bother working towards our financial freedom! Financial freedom is a possibility for all of us! Maybe not to the same degree, but it’s still a possibility. Don’t fall victim to the lie that you’ll never be financially free!

2. Retirement planning still has a lot of time

We all somehow believe that retirement planning can be done later on and hence not required as of now. It is a human tendency to postpone things which do not occur now. It is dangerous since life’s important goals such as retirement need to be planned well in advance and cannot be achieved overnight (or even within 5-10 years). You should start planning for your retirement as soon as you start earning. It seems funny but with rising inflation, medical costs and uncertainties revolving around our heads retirement life is going to be a costly affair. Use a retirement calculator to know how much you need in order to maintain your current lifestyle after retirement.

3. I don’t earn enough to save any money 

This is one of the most common lies people tell themselves with money. Very few people really have to struggle with their earnings. And when those instances arise, they should only last for a very short time.

Having to live only on salary is more of a failure of the financial strategy you use rather than the amount of money you earn. Most folks will live on salary unless they have a financial system in place that will automate their investing, automate their savings.

4. Fix deposits are enough to help me reach my goal 

Bank deposits are giving you 6-7% interest which would further be reduced by tax and will come down to around 5%. The current inflation rate is 6% so you are getting negative 1% interest on your capital deployed. I have seen people are so conservative and blind that they put their money into bank deposits instead of mutual fund or stocks.

Secondly, with this 6-7% of return, you will never be able to achieve your goals. You bed to diversify your money into mutual funds, PPF and soon rather than sticking to one conservative product.

5. I will invest when I have more money

When I ask people to invest they say there is no scope for investment as there are other basic priorities like home loan, household spending etc. This is a common lie people tell me after finding out I’m an investor. I’ll let you in on a little secret though: it doesn’t require a lot of money to start investing. You can start with just little chunks of each of your salary. I don’t recommend going small, but it’s possible.

Here’s another secret: you’ll never build wealth by waiting to invest. You will, however, accumulate plenty of it if you start investing early.
There is no sense in waiting to invest. Waiting only pushes your financial freedom further down the road.

6. I don’t waste money

There are a select few that don’t waste money, but most of us, whether we like to admit it or not, waste some money from time to time. We waste money on groceries that don’t last. We waste money on toys that don’t get used. We waste money paying more taxes than we should.

Most people that don’t think they waste money don’t use a budget and have no real idea of how much money they lose every month. Imagine the wealth you could have accumulated if every rupee you wasted would have been invested instead. Surely, you could have amassed a decent amount of money.

I know I would have a nice chunk of change, and I’m sure I waste a lot less than most folks.

7. I don’t have enough time to manage my money

Managing your money every month shouldn’t take much time at all. There are two primary functions each month you need to take care of to manage your money successfully: 1) creating and using a budget, and 2) allocating your cash to all of your intermediate financial goals.

With the help of online budgeting platforms, you can create a budget in less than 10 minutes. And it only takes a few minutes each week to review your transactions, categorize them accordingly, and ensure you’re properly following your cash flow plan. There are many mobile apps available which help you to create and manage your budget. Set monthly spending target and saving target, stick to it and see how you will create a pool of saving every month.
Allocating your cash to all of your financial goals shouldn’t take much time at all. I’m able to do manage all my accounts and investments so quickly because I’ve created a slick financial system that manages itself for me. I rarely have to get involved.

8. I will lose my money in stocks/mutual fund

Whenever I talk about mutual funds, this is the most common thing that I get to hear. I try to answer this by analyzing why he/she might have lost money rather than just cursing mutual funds. However, I still fail to convince people on this. You don’t stop driving a scooter just because you fell from it once or twice when you were trying to learn. Doesn’t the same principle apply to investments as well? I know that life is quite comfortable in your conventional instruments such as FD’s, PPF, etc.

If you don’t have any knowledge of stocks still you can invest in mutual funds. Though the mutual fund is a single name, it comes in different varieties such as equity, balanced and debt. They have different objectives and strategies. You need to pick the one which suits your risk appetite and time frame of your goal. Not all mutual funds will eat away your money in bad situations. For example, a liquid fund is an example of debt fund which can serve as an alternative to your savings bank account with sufficient liquidity. You can withdraw your money at any time without any exit load or deduction.

9. I have control over my spending

We keep telling ourselves that we have control over our spending and don’t need to make a budget. In fact, we keep applying for credit cards with the same impression. One of my friends also stated to me that he uses a credit card only when it’s necessary. I believe it doesn’t really happen. Credit is credit. Yes, a credit card has reward points and few other advantages. But, it remains good only if you pay bills on time, do not default, do not frequently transfer the balance to another card or do not go for settlements. It will spoil your credit rating as well.

Some people don’t have any idea where their salary is gone. Last ten days of the month they don’t have money to survive even the smallest expense. And they borrow money for that last ten days. For which they repay at the beginning of next month and then it becomes a vicious cycle.

10. Term insurance is a waste of money 

We Indians have a tendency to get something in return for what we have done and that has to be in monetary terms. Generally, its ignored as it does not give back anything in return. However, it is the only form of insurance which actually addresses your need – protection for your family. If it’s the question of investment, there are tons of products in the market. We pay for car insurance every year like term insurance but we don’t get anything in return until you hit your car and send it to the garage for a fix. Still, we are paying for car insurance. Now when same is applicable to term insurance, but here we hesitate to pay the premium. My question here is: is our life is less important than our car?

We could be speaking out the sales pitch of insurance agents who re-iterate the need for traditional products. These products (in various forms) keep coming back to haunt us with changed tactics. No matter what changes happen, they have continuously failed against the biggest evil named inflation. Don’t go for traditional insurance plan ever.

Bonus. I Don’t Care To Be Rich

Guess what? Neither do I. But I do care about my freedom. I care about being able to spend more time with my family. I care about progressing. I care about making the most of my life.

I value my freedom and I value my family. Money is a tool that increases my freedom and enables me to spend more time with those I care about most. If I’m wise with my money, then I’m able to focus my life on what I value most.

The goal isn’t to become rich. The goal is to become free!


These are the 10 biggest lies we tell ourselves about our finances. When we fall victim to these lies, believe them, and use them as a crutch, we prevent ourselves from taking action and getting the most out of our hard earned money.

We can escape each of these lies and master our money!

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