Money has a peculiar way of playing with our minds. It holds the power to create fantasies and shape our hopes for the future. We often find ourselves constructing intricate plans and dreaming of financial success, only to be blindsided by the realities that lie beneath. In this post, I delve into the lies we tell ourselves about money and planning our future, unravelling the illusions we create and exploring a path towards genuine financial well-being.
Lie #1: “I’ll start saving later.”
One of the most common lies we tell ourselves is that we have plenty of time to start saving for the future. We convince ourselves that there will be a more opportune moment, a time when we will have more money to set aside. But the truth is, there is no perfect moment. Every day we delay, we lose the power of compounding interest and the opportunity to build a strong financial foundation. Instead of falling for this lie, we must embrace the present and prioritize saving, regardless of how small the amount may be.
Even if you are nearer retirement than the start of your career, it’s better to start than give it up as a lost cause. To paraphrase the saying: “The best time to plant a tree is 20 years ago. The second best time is yesterday.”
Lie #2: “I’ll rely on luck or windfalls to secure my future.”
The allure of unexpected windfalls can lead us to believe that we can rely on luck to secure our financial future. Whether it’s a sudden inheritance, a lottery win, or a significant promotion, we place our hopes in these uncertain events. While it’s true that windfalls can bring temporary relief or even boost our financial situation, relying on them as a solid plan is a dangerous lie. Building wealth requires consistent effort, discipline, and sound financial decisions. Rather than counting on luck, we must focus on developing a solid financial strategy that involves regular saving, investing, and budgeting.
If you have your eye on an inheritance don’t ignore the fact that it could all be spent covering the cost of later life care, or be given to the local cats home.
Lie #3: “I can handle my debt later.”
Debt is a burden that many of us carry, whether it’s student loans, credit card debt, or mortgages. It’s easy to believe the lie that we can deal with our debt later, that somehow it will magically resolve itself. However, the longer we postpone facing our debt, the more interest accumulates, and the harder it becomes to break free from its grip. Confronting our debt head-on requires honesty, discipline, and a proactive approach. Seeking professional advice and creating a repayment plan can help us regain control of our financial situation.
The situation is slightly different with mortgages if (and only if) you have an investment portfolio with the purpose of paying off the mortgage at the end of the term. Whether you chose to pay off your mortgage or invest to build up a pot to pay it off in the future will come down to personal preference. With mortgage interest rates where they currently are reducing the debt will avoid a lot of short-term pain. The downside is that you will interrupt compound interest when it is working its magic.
Lie #4: “I don’t need a financial plan; things will work out.”
Planning for the future requires a proactive mindset and a willingness to confront the hard realities of life. Believing that things will magically work out without a plan is yet another lie we tell ourselves. By neglecting to create a financial plan, we leave ourselves vulnerable to unexpected emergencies or missed opportunities. A well-crafted financial plan acts as a roadmap, helping us navigate through life’s uncertainties and providing a sense of direction.
Lie #5: “I’ll be happy when…”
We tell ourselves we’ll be happy when some future state occurs; when we retire, or have that promotion, or have more money, a bigger house, nicer car. These external motivations never provide lasting happiness or fulfilment because once we have it we are immediately onto the next upgrade. Happiness can only come from within, it’s a state of mind, not a destination. No matter how much money we have we’ll never be happy if it’s our measure of happiness. There are plenty of miserable millionaires and millions of people who are happy despite not having money.
Money holds tremendous power over our lives, and the lies we tell ourselves can hinder our ability to achieve genuine financial well-being. By recognizing and challenging these lies, we can break free from the illusions that prevent us from building a secure future. Embracing the present, cultivating disciplined saving habits, resisting the urge to compare.
Photo by Jeremy Perkins on Unsplash
