You're lying to yourself—and it's hurting your wallet

Dishonesty has become a hot button issue in the era of "fake news," but it's hardly a new phenomenon. Richard Nixon lied about not being a crook. Lance Armstrong lied about taking performance enhancing drugs. Your third grade teacher lied about how useful cursive would be.

In the midst of rampant public dishonesty, it's nice to know we can count on ourselves, right? Not so fast.

Ironically, being honest with yourself can be a challenge in itself. I can't tell you how many times I've told myself I'll stop eating cookies (ugh so many).

Humans are ego-driven creatures. For many people, it's easier to pad your ego than face a tough truth.

When it comes to your wallet, this can be a dangerous fact. And when the average American cannot afford a $1,000 unexpected expense, it's more important than ever to be thoughtful and deliberate with your financial decisions.

How are you fooling yourself?

1. I can handle a credit card responsibly.

The average household in the US has nearly $16,000 in credit card debt, according to NerdWallet. $6,000 of that is typically on a revolving credit line, with an average interest rate of 15%. That's an extra $900 in interest paid per year. If you are one of these people, it might be time to re-evaluate your spending patterns.

Credit cards can be an amazing tool to earn discounts and travel points. Personally, I love credit card rewards. But I am also obsessively focused on paying the full balance every month and rotating card usage to maximize points.

For many people, it may be better to stick to a debit card or cash.

2. This year will be different. I'm going to make use of my gym membership.

Every year, hordes of well-intentioned folks make seemingly genuine promises to themselves to get back into shape. Yet, year after year, 67% of gym memberships go unused.

At an average price of $60 per month, that's $720 per year down the drain. If we were to save and invest this money every year for 25 years, we could have an additional $50,000 in retirement (assuming 7% annual returns).

Not only are we wasting money on unused memberships, we are also wasting money on brand-spanking-new workout gear that also goes unused (gear envy is no joke).

Now, I am NOT telling you to give up on the gym and save that money instead. Maintaining your health has quantifiable benefits of its own.

But I AM telling you to get a grip. Be cognizant of the trade off. Maybe you should ease into a workout routine at home before jumping into an annual gym contract. Or enforce a penalty on yourself if you skip the gym. Or sign up for a month-to-month contract.

You'd never guess, but I haven't been to the gym since last year!

3. If I pick a few great stocks I can beat the market.

It's a common tale: Mr. Joe Hotshot picks his first stock and it goes up 50% in 6 months. He's a genius! I know exactly what Mr. Hotshot is thinking: "My hard work paid off! If I thoughtfully put in the time to pick great stocks, I can beat the market every year!"

Here's the reality. Even some of the best professional investors are only right ~55% of the time (in public stocks). These people spend all day, every day researching stocks. Many of them even have a highly specialized expertise, like a medical or engineering degree.

Over a long period of time, your hit rate likely amounts to a coin flip. Is it really worth your time? Probably not.

If you truly love researching stocks, that's fine. Just don't bet a large portion of your portfolio on your stock picking abilities. If you are young, I would encourage you to invest in some risky assets. But I wouldn't count on those to help you "beat the market" in any given year.

4. I have a monthly budget, so I am a responsible adult.

Net worth trackers and monthly budgets are an awesome start. If used correctly, they can dramatically alter your financial life. Here's the problem: if you're just checking in at the end of each month, you're not doing your best.

A month is a long time to stick to a budget mentally. It's nearly impossible to see the opportunity cost of each and every purchase you make if you don't know where you stand.

In reality, you should be checking against your budget every week. With Google Maps we can adjust our driving route to avoid traffic. Do the same with your budget. Small adjustments throughout the month will maximize the chance of hitting your goal.

5. I'll be happier if I buy this thing I want. Or, I'll buy this thing just this once.

Beware of this slippery slope. "Mood shopping" is a great way to get yourself into credit card trouble. I think deep down we all know that accumulating material stuff won't make us happier. In the end, it amounts to a bribe to yourself. Are you strong enough to tell yourself no?

This goes for healthy eating too. Cookies are my pesky vice. Once I convince myself that I'll be happier if I eat just one cookie, all bets are off. It may take me weeks to stop eating cookies after that.

Never make a purchase without following a simple framework.

Ahh, this is the only purchase I'll need for the rest of my life.

6. Higher price = better quality/features.

I used to believe this was universally true. I would always assume that a more expensive article of clothing is better quality. Until I started to look at the materials in the clothing. Or the durability of electronic devices.

In today's age of internet reviews, there's no reason you should fall for this trap. Google is your friend. Use it wisely.

Sidenote: I've always found it ironic that cheaper hotels come with free breakfast and internet, while expensive hotels usually do not. In this case, higher price correlates with fewer features.

7. I don't have enough time, I'll pay someone to do it.

Paying for convenience is a slippery slope that leads to lifestyle creep. There are tons of personal assistant apps nowadays like Task Rabbit and Hello Alfred. In certain circumstances, I get it. You're pressed for time.

But maybe it's not such a great idea to have Alfred wipe your baby's bottom, do your laundry, buy your groceries, and pick up your favorite cousin from the airport. It's only a matter of time until you have Alfred going to the gym for you, too (for an extra charge, I'm sure).

Paying for certain conveniences totally makes sense. Again, the key is to be thoughtful and deliberate with how you spend your time and your money.

Are you fooling yourself?

There are exceptions to every rule. You may have a perfectly valid reason to do one or more of the above. That's great! My main goal is to encourage folks to be more conscientious and deliberate.

Have you caught yourself in a lie?

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