5 money lies we tell ourselves that are bleeding us dry
<p>It’s easy to get caught up in misinformation around personal finances. Here are five common red herrings to steer clear of.</p>
<p><strong>1. I'll start investing next year when things are better</strong> – Investing can be complicated, and so many of us avoid it altogether because we fear what we don't know. Don't shy away from informed commitment – it’s never too late and you’ll reap the rewards down the track.</p>
<p><strong>2. I'll need less money in retirement, so I can live off my savings and the pension</strong> – In reality, you are probably going to need more money in your later years. Even if you manage to ease into retirement debt-free and fully owning your home, there are a lot of expenses that come along with getting older. These include:</p>
<ul>
<li>Medical expenses</li>
<li>Major fixes on an old home</li>
<li>Helping out children in financial trouble</li>
<li>Inflation</li>
<li>Higher taxes</li>
<li>Living longer than expected</li>
</ul>
<p>If you don't think you have enough money for your retirement, make sure you are contributing extra to your super, or looking at other ways to boost your retirement nest egg.</p>
<p><strong>3. It’s on sale –</strong> This has to be one of the best spending excuses. Whether it’s an international flight, a new suit or television, it is easy to get caught up in the hype and fall for marked-down prices, but a sale item is only a great buy if you genuinely need it. We are easily susceptible to slick marketing hype, such as 50% off already exaggerated prices or selling items at prices just below a larger round number. Unfortunately, these tricks have been proven to work and are being played out on us constantly.</p>
<p><strong>4. It’s an investment –</strong> Beware of using this justification for luxury spending – whether it’s that a new set of golf clubs, couch, piece of jewellery or other “must-have” item. At the end of the day, unless you really need it, your bank account will have less in it and that is probably a poor investment.</p>
<p><strong>5. I deserve this –</strong> Telling yourself spending is a reward can be a good old pick-me-up. You might have had a tough time recently and just need to do something that will give you a bit of a boost. So you go out and get your quick retail fix, feel great for a while and then realise that you just blew more than you intended for something you don’t even need that much. There are times we need to do something to make ourselves feel better or even act as a reward for an achievement. Maybe try a different approach – helping others can also be hugely satisfying, so next time you feel the need to splurge, find a charity that is close to your heart and donate.</p>
