On occasion, I’ll revisit and update past columns with the most universal financial advice. This column originally ran on Dec. 26, 2010. You don’t mean to, but you lie about your money habits. Me: “Do you eat out a lot?” You: “Not really.” If I suspect this isn’t true because the revolving credit-card debt or lack of savings says otherwise, I channel Jack Nicholson in “A Few Good Men” when he bellowed: “You can’t handle the truth.”

The truth: Here’s an illustration of what one monthly bank statement might list: $7 daily Starbucks stops (can’t start the day without a venti caramel macchiato); $120 for lunches out with co-workers; $47 for taco Tuesday; several deliveries using Uber Eats or Grubhub (because there wasn’t anything in the fridge even though it was stocked with food); and a few hundred dollars spent on Friday dinners and happy hour drinks because “we deserved it after a week of hard work.”

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Many people unintentionally misrepresent their spending, naively believing their own narratives about where their money goes until they are confronted with the undeniable evidence of their bank statements.

This financial amnesia shows up constantly during my workshops and radio call-ins. Here’s what happened when two callers got caught in their money mistruths.

I asked the first caller whether she had a budget.

She paused and then gave a hesitant yes.

When I hear brief silence or a break in the conversation followed by an “um” or “uh,” it usually indicates that the truth may be otherwise.

Experience told me to press her. Turns out, the woman didn’t have a budget. She was, however, trying to pay off debt. Budgeting will help you identify expenses you can cut and, as a result, the savings you will need to devote to reducing your debt.

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Another caller was fretting because she couldn’t keep up with her bills and was losing hope. She earned a good salary. She said she had cut out every possible luxury — cable, dining out. Then I asked her what percentage of her monthly take-home went toward her mortgage.

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She quickly answered 30 percent — comfortably below the 36 percent of net pay that many experts say should be the ceiling.

But something didn’t add up. If her expenses were low and she didn’t have any debt except her mortgage, why was she crying broke?

I asked again: “Are you sure your mortgage is just 30 percent of your take-home pay?”

She confidently replied yes again.

But then, with additional probing, I found out she had lost the part-time income that she had used to qualify for the mortgage.

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I pointed out that if her income had dropped, then the percentage of her net pay going toward the monthly mortgage would be more than 30 percent. It was obvious to me that the woman wanted to cling to the belief that she could still afford that.

By getting her to face the reality that her financial situation had changed, I helped her see that she needed to find another part-time job, take in a boarder or move to a more affordable home. She said she was willing to consider both the job and roommate options.

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Here are five of my favorite financial fibs:

I have a budget. Keeping a mental tally of your spending is usually not enough. You’ll have better control over money if you track your expenditures in a notebook, spreadsheet or Keeping a mental tally of your spending is usually not enough. You’ll have better control over money if you track your expenditures in a notebook, spreadsheet or budgeting app

I have an emergency fund. People will swear they have a rainy-day fund, but they raid it so regularly that it becomes just another spending account. I call this the emergency fund fallacy.

I manage my spending better with a credit card. Monthly statements show where money went, but research reveals that paying with plastic — credit or debit — increases how much people spend. A Federal Reserve Bank of Boston Monthly statements show where money went, but research reveals that paying with plastic — credit or debit — increases how much people spend. A Federal Reserve Bank of Boston report found that consumers spend an average of $22 per transaction when paying with cash, compared with $112 when using cards.

I don’t dine out a lot. This is typically not true. According to the Bureau of Labor Statistics, the average American household spent nearly This is typically not true. According to the Bureau of Labor Statistics, the average American household spent nearly $4,000 on food away from home in 2023, an 8 percent increase from the previous year. When I review people’s bank records, they’re often shocked at how much they spend dining out each month. One couple (a family of four) discovered they had spent $1,500 on restaurants in a month.

I don’t understand why I’m always broke. This is perhaps the most common financial fib people tell themselves. If you genuinely reflected on your spending habits and combed through your bank or credit union statements, you’d quickly uncover the reason your budget isn’t balancing — meaning you are spending more than your take-home pay every month. Or people overlook how small, frequent purchases add up. It often comes down to needs vs. wants. Be honest: You’ve probably classified too many wants as needs. This distorted view of your finances prevents you from seeing what should or could be cut.

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Stop fooling yourself. It’s time for a reality check.

Grab your bank statements from the past six months. Use different colored highlighters to mark your spending categories: restaurants, shopping, entertainment and whatever else appears.