Why we lie about money and debt

December 6 No Comments latest by

Seventy-five percent of respondents, for example, claim they don’t make any major purchases on credit cards unless they can pay them off immediately. But 74 percent say they are concerned about being able to pay their credit card bills every month.

Read the rest of this excellent article from BankRate.com:

Why we lie about money and debt

Incidentally, sometimes it’s not lying. One of my friends asked me to help her set up a budget a few days ago. When she came over, I took a look at her finances (she has a part-time job and earns $220.00/week) and asked her one question:

“How much do you spend per week?” “$30-$50,” she told me.

This is a cool fact: Almost all of the people I’ve taught underestimate their spending by at least half.) I wrote “$50″ down and we began analyzing what she spends weekly together. When we came up with the final number, her face was ashen with disbelief:

With a weekly income of $220.00, she was spending $205.00. In other words, she was spending over 93% of her income.
-$45 on drinks
-$40 on food
-$20 on magazines
-$20 on clothes
-The rest was miscellaneous spending

She wasn’t lying–she just didn’t know. Isn’t it worth your time to spend an hour figuring out your budget?

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Posted December 6, 2004 under Miscellaneous, Saving

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