Are your financial decisions based on truth or lies? Too often, our financial decisions are based on thoughts that are simply not true. When we believe and act on these lies, we find ourselves discontent and swimming in debt. What are some of lies that lead us to financial ruin? Here are five of them:
- I deserve it. You deserve that new car. You deserve that bigger house. You deserve that expensive vacation. We don’t deserve anything. Everything we have is a gift from God. And we are to manage what God has given us well for the advancement of his Kingdom. And when a sense of entitlement supersedes the reality of your financial capacity, you are in trouble. A sense of entitlement doesn’t put money in your bank account. It drains it. No one is saying that you do not work hard—you likely do. But hard work doesn’t justify reckless spending. Reckless spending will completely wipe out the fruits of your hard work. You will work hard and have nothing to show for it.
- I can pay the debt off quickly. Many people get into debt without any understanding of what it will take to pay it off. College students sign loan documents, thinking that their debt will get paid off shortly after graduation due to their inevitable high-paying, future first job. Others buy furniture because they can finance it at a 0% rate. Certainly, they will have the new furniture paid off before the rate increases. But then the college graduate’s dream job doesn’t materialize. Then the interest rate skyrockets. The months pass, but the debt (and the burden attached to it) remains.
- I can always start saving later. Saving is something that older people do, right? Not if you want a financially healthy future. Your key saving years occur when you are younger. Why? Because of compounding—making money off your money. Even if it the amount seems small, save. Remember the formula: A little bit of money + A lot of time = A lot of money.
- If they can afford it, so can I. Social media has put the concept of “keeping up with the Joneses” on steroids. We are all bombarded with images of the “good life.” And you begin to think that you can also live the life you see portrayed on Facebook and Instagram. But there’s a problem—you are likely seeing a façade. The portrayed lifestyle is often propped up by debt or budgets that are about to implode. The perception of wealth is not the same as actual wealth. Don’t let the perception of wealth influence your financial decisions. It only leads to discontent and financial ruin.
- My income will eventually increase and fix everything. First of all, your salary may never reach the level you hope it will. Second, an increase in income doesn’t solve poor financial decision-making. Instead, increased income tends to exaggerate existing financial habits. If you are overspending with a smaller salary, you will likely overspend with a larger salary. Don’t wait until your income increases. Chase financial health now.