Are your finances suffering from 'excusitis'? Beat it, now

Liar, liar, pants on fire. We Aussies are masters at coming up with excuses for our spending and debt. I’ve heard it called “excusitis”.

We convince ourselves that “we’re different” or that “we need it”, or “everyone else does it”. It’s that six inches of grey stuff between your ears that’s at fault. And it’s getting worse. A staggering 70.19% of Australians have a credit card  and our balances have grown from $5.9bn in 1995 to $51.8bn in 2016. Ouch.

You may not even realise you’re constructing a cock and bull story. There’s a common failing in the human brain called “cognitive dissonance” which means we rationalise things that would otherwise cause us anxiety, guilt, or other pain. We’re all honest liars for this reason.

(You can find out more about the psychology of self-deception in this TEDx video.)

If you’re convinced you don’t tell yourself untruths about your debt then ask yourself honestly if you make any of these excuses:

Head in sand lie: I haven’t got that much debt

Too many Aussies fail to realise that their debt is dragging them down. Debt has its uses, but it’s very easy to wake up one day and realise that you’re drowning in debt.

Spending lie: It was only $5

Five bucks every day adds up to $35 a week. Look at your bank and credit card statements and ask yourself honestly if you really needed to spend everything you did today. I saw some obvious candidates on my Visa bill that added up to way more than $35 a week. More like $140. All of this wasted money could be channelled to paying down debt FAST.

The never never lie: I’ll start saving when…

That day never comes. Start saving today. Game yourself. During the day actively choose to say “no” to something you’d usually spend money on. Then in the evening go onto your online banking and transfer that money to your savings account.

The ‘I can’t’ lie: I don’t earn enough money to save

I repeat. Virtually every Aussie alive spends money on non-essentials. Chocolate, Coca Cola, coffee, petrol, cigarettes, package foods, and much much more. Saving is a habit and you need to start by nixing that little voice in your head that says “can’t”. Also question whether you’re spending more on essentials than you need to. We need a house, but does it need to have four bedrooms and two bathrooms?

Psychology lie: I needed it

Did you really? There’s hardly anything we own that we actually NEED. We don’t NEED holidays on credit or designer cloths. Beware that there’s a blurring of lines. We need accommodation. But do we NEED to live in a million dollar house? Do we “need” to drive the car we live to get to work or a more basic model?

Poor me lie: Life’s hard

That’s true. But every dollar you spend on credit makes it even harder. It means you’re paying more than everyone else for the same things. If you think life’s hard and want to make it easier for yourself financially then cut up your credit cards and stop spending.

The great big mortgage lie: I’m wiping my debt clean

Homeowners are fast becoming the biggest liars in Australia. Over the past 20 years excusitis has mutated and it has become increasingly common to roll your credit card debt, and car purchases onto the mortgage. Using this “spare equity” hides your spending, but it’s still bad debt if you’re dipping into the mortgage to pay for living expenses. We’re also mortgaging our Super if we play to use it to pay off the out of control home loan when we retire.

Here’s a concept. Some people have no debt (other than the mortgage, and they’re paying that down, not using it as an ATM). More than 40% of Australians have no credit card debt, according to the Australian Bureau of Statistics. That means they don’t have credit cards or they pay them in full each year. Another chunk doesn’t even have a credit card. And that includes plenty of young people.