Money-Management Myths and Little Lies That Can Hurt Your Finances

A YourMoneyCounts® Exclusive by Lynnette Khalfani-Cox, The Money Coach

Staying on top of one's finances can be a daunting challenge made more difficult by money-management myths we believe and little lies that we often tell ourselves. In some areas of life, a little white lie might be perceived as harmless. But when it comes to money matters, the myths and misconceptions we believe can do some serious damage.

To ditch those misconceptions that might be holding you back economically, think about whether you're guilty of subscribing to - or telling yourself - any of the following six money-management myths:

Money Management Myth #1: It's Someone Else's Fault

Be honest. Have you ever blamed someone else for one of your financial predicaments? Perhaps you rue the day you met your ex-spouse, because he or she ruined your credit. Or maybe you're convinced that your efforts to garner a promotion and raise have been sabotaged by a nasty-co-worker. Alternatively, your entire financial life may be a mess and you've been subconsciously pointing the finger at your parents. After all, you figure, they never taught you how to manage finances properly.

Financial Truth #1: Your Finances Are a Direct Result of Your Own Action

I hate to break it to you: but the truth of the matter is that your finances (both the good and bad facets of them) are a direct result of your own action. It's a very hard reality for many people to accept, but your own personal state of affairs actually is directly linked to what you've done - or what you've failed to do. If you can accept responsibility for your own condition, it's not self-defeating. On the contrary, it's empowering, because it gives you license to begin taking control of your situation and to correct flaws or rebound from setbacks. If you believe the lie - that it's someone else's fault - you cast yourself as a financial victim, and you rob yourself of having the power to make positive changes.

Money Management Myth #2: If I Just Earned More Money...

This is an enormously popular misconception - and one we're all apt to buy into when we're struggling financially. The myth essentially boils down to this line of thinking: "If I just had a little more cash, then most of my problems (or all of them) would go away." Unfortunately, nothing could be further from the truth.

Financial Truth #2: It's About Your Spending; Not About What You Earn

No matter how much money you make, if you don't control your spending, you'll never achieve financial security. Numerous instances of extremely well-paid celebrities going broke prove that how much money you make is far less important than what you do with that money.

Money Management Myth #3: I'll Get to That Later

Procrastination is an enemy of good financial planning. Yet, many of us put off so many financial tasks that we know we could, and should, do today. The little lie we tell ourselves is: "I'm too busy, so I'll get to that later." Needless to say, tomorrow is not promised to anyone.

Financial Truth #3: You'll Regret It If You Run Out of Time and Haven't Tended to Your Financial Affairs

Sometimes, our biggest regrets in life aren't over the things that we've done - but over the things that we neglected to do. Nowhere does this truism manifest itself more than the area of personal finances. If you fail to do basic financial housekeeping or to address various money-management issues as they arise, you put yourself and your family members unnecessarily at risk.

Money Management Myth #4 Financial Help Is Too Expensive

Have you ever wanted to hire a financial advisor, or maybe pay someone to create a plan for you or do your taxes, but then squashed that idea, based on the grounds that financial help is "too expensive?" If so, you bought into an unsubstantiated financial myth - and one that could be costing you dearly.

Financial Truth #4: The Cost of Failing to Plan Far Exceeds the Price of Getting Help

In reality, not getting help costs you far more in the long run than making a short-term sacrifice to get any professional guidance you may need. Think of hiring quality financial help as an investment in your future. The advice and services of a good financial planner, accountant, stock broker, or other financial specialist can pay huge dividends. Besides, sometimes the very same people decrying the cost of financial help are simultaneously spending chunks of money on luxuries, like eating out, clothing or extra household appliances and electronics.

Money Management Myth #5: Just This One Time Won't Hurt Me...

To be an ace at managing your finances doesn't mean you have to achieve perfection in all money matters. But it does mean you should have a track record of regularly practicing prudent financial habits - as opposed to sporadically giving yourself license to commit financial transgressions that can throw your finances out of whack. It can be a slippery slope when you tell yourself that you'll make a questionable money move because "just this one time won't hurt me." The problem is two fold: First, where do you draw the line - with splurging on a shopping spree "just once" or with fudging your income taxes "just this one time?" The second issue is that all-too often negative behavior that you might start out thinking will occur only once actually winds up becoming the norm.

Financial Truth#5: Financial Lapses and Shortcuts Aren't Worth It

Allowing yourself to make financial goofs, or to do unwise things with your money, simply isn't worth it. Ever. For example, say you decide "just this one time" to let your auto insurance lapse. As (bad) luck would have it, that's the one time you may wind up getting into a car accident.

Money Management Myth #6: People Like Me Never Get Ahead...

When you're stuck in a financial rut, and everyone who looks likes you also seems to be experiencing economic challenges, it's easy to accept the misguided notion that "people like me never get ahead." The "people like me" part of the myth may be tied to anything: your gender, race, age, professional title, religion, educational background, or some other factor. No matter what the category, though, it's flat out wrong to lump all such people - yourself included - into one financial pot. Despite certain odds, economic success knows no racial, gender or religious boundaries.

Financial Truth #6: People Of all Backgrounds Can Get Ahead Financially

The problem with this myth is that it makes the assumption that certain groups of individuals are always held back by outside forces, individuals or institutions. In truth, however, no matter what your background, you can get ahead economically and many others in your same situation have likely already done the same thing - even if you don't know about such successes. So don't buy into the wrong-headed notion that people like you can't get ahead. Know that your financial destiny lies in your own hands, and that your economic fate isn't dictated or determined by others.

In summary, believing in a host of money myths and little lies can prevent us from achieving real financial success. Only by first recognizing these financial misconceptions can we rid ourselves of them, and then replace these false beliefs with economic truths that serve to both empower and enlighten