Your Brain is Lying to You and Other Truths about Financial Habits - Creative Money (2024)

We often think about our brains as the ultimate authority, the ultimate truth.

But, as it turns out, sometimes they are big, fat, liars.

The thing is, our brains have our best interests at heart, but they’re scared of change. They like things the way they are now — even if you have other goals to change your habits or create new ones.

In fact, our brains will tell us some pretty silly lies to try to resist change, especially when we’re trying to change a habit that requires a lot of willpower, like changing financial habits.

I’ve been talking about some “loopholes” over the last couple of posts(here and here)that Gretchen Rubin identified in her book, Better Than Before, and these are some of the silliest and most outrageous loopholes our brains come up with when we’re trying to change a habit.

But the good news is, even just exposing yourself to the loopholes can help you see them for what they are, and call yourself out when your brain starts being a dirty liar.

Lack of control loophole — “I can’t help myself”

Weirdly, people often have an illusion of control over things they can’t control (If I spend a lot of time worrying, the plane is less likely to crash), but deny control over things they can control (My friends invited me to go out at the last minute, so I had to go).

I think this one is super sneaky, because sometimes people don’t even realize they are invoking it! Especially with money issues, people fall into doing things because it never occurred to them that there was any choice involved (all of my friends did it… we have to have a big wedding… but we go out every Saturday night… but my kid said he wanted it).

This can also happen when you’re playing the blame game. “I can’t help my bad spending habits because my mom was terrible with money,” or “I have to spend money because my friends will ditch me if I can’t keep up.”

Keep in mind that you choose ALL of your spending decisions… if you start with that as your reality, you’ll retain greater control.

Questionable assumption loophole

Consciously or unconsciously, we make assumptions that influence our habits—and often, not for the better. They often become less convincing under close scrutiny.

“I should be able to figure this out on my own.”

“It’s ridiculous to pay for a gym/a trainer/a home treadmill/a personal organizer/a financial advisor to help me with this behavior, when I could do it perfectly well for free.”

I see this one in play a lot when people have been diligent pay off debt, saving money or cutting back on an expense; they think, Wow, I’ve been doing so great at this, I don’t need to check this as often! And then they stop doing the very thing that created the success.

A great way to discover if you’re using this loophole is to question everything. Every time you come across an answer like, “Because we’ve always done it that way,” or “That’s just what I do,” question it even deeper. Many times what you may assume is the only option really is just one of many.

Concern for others loophole — “I can’t do this because it might make other people uncomfortable”

This loophole makes us believe we’re acting out of consideration for others and making generous, unselfish decisions. Or, more strategically, we decide we must do something in order to fit in to a social situation.

My kids will be upset if we don’t go on an extravagant vacation.

I can’t let down/be rude/inconvenience my friends/spouse/coworkers.

If a particular habit makes you feel very awkward about being out of sync in a social situation, or you worry that you’re hurting other people’s feelings or making them feel uncomfortable, this is a real factor in the formation of a habit. But by identifying the loophole, you can identify possible solutions and experiment with different strategies.

Try weighing the concern for others against the real, tangible costs of your habit. For example, if you’re worried that your kids will fuss if you cut back on spending, weigh that discomfort and unhappiness against the cost of not saving money, paying down debt, or whatever other habit you’re working towards.

In my experience, the cost you’re worried about is almost never as big as the real cost of keeping up a bad habit.

Fake self-actualization loophole – “You only live once! Embrace the moment!”

FOMO! YOLO! And other weird hipster acronyms!

This loophole comes in the disguise of an embrace of life or an acceptance of self, so that the failure to pursue a habit seems life-affirming—almost spiritual. It’s totally zen to live in the moment and not worry about consequences, right? You’re manifesting your fortune.

But for most of us, the real aim isn’t to enjoy a few pleasures right now, but to build habits that will make us happy over the long term. Sometimes, that means giving up something in the present, or demanding more from ourselves.

I always like to ask, “What am I avoiding by being spontaneous?” More often than not, it’s some commitment or challenging habit — and it’s really less about living in the moment, and more about my brain lying to me and trying to come up with a good reason to avoid momentary discomfort.

We can almost always find a reason, a loophole, that excuses us from following a habit. But when we spot the loophole, we can perhaps reject the desire to let ourselves off the hook.

If you want more information on habits and loopholes, I highly recommend checking out Rubin’s bookor joining us inside Money Boss, where we examine our habits and attitudes towards money in a safe, supportive group space. Click here to learn more.

No spam. No games. Just timely, insanely useful content to help you grow your money.