“If one is to be called a liar, one may as well make an effort to deserve the name.”
–A.A. Milne
When I was a young lieutenant in the Army, I concocted a brilliant story to tell myself.
Each paycheck, I’d put $500 in my IRA and $800 in a savings account.
Then, I’d withdraw $500 and put $800 on the credit card.
I’d tell myself I was saving and being responsible.
Because of that “responsible” behavior, I deserved to cut loose a little.
Pretty soon, I had a nice, fat credit card balance that I eventually had to deal with.
But, for quite a while, it was fairly easy to keep up the inner dialogue with myself.
What was happening is that Monkey Brain, my limbic system, is really good at treading in the gray moral areas of life. Back in the caveman days, when all he cared about was either eating the woolly mammoth or being eaten by the woolly mammoth, there were no such things like philosophy and morals. Each day had one goal: live to see the next day. Everything else was secondary.
So, when little trifles like honesty get in the way of Monkey Brain having a good time, he’s going to pitch a fit and rattle his cage.
To get his way, he’s going to stretch the truth a little or be just a little dishonest, hoping that the Thinking You, your prefrontal cortex – the part of your brain that is responsible for higher level, rational thinking – won’t notice.
Most of the time, it works.
MONKEY BRAIN: “WHITE LIE NOT BAD. LONE RANGER WORE WHITE. LONE RANGER GOOD GUY. THEREFORE, WE GOOD GUY.”
You: “Ah. Yes. You’re right! I’m a good person, and gosh darn it, people like me!”
We face a problem when we have to make changes in our lives to improve what will happen to us in the future. Monkey Brain doesn’t like change. He prefers things to stay just as they are, unless, naturally, the future involves more Jimmy Choo shoes and 183” flat screen TVs. Then, he likes change. But, otherwise, he wants yesterday to look like today and for today to look like tomorrow. This is called the status quo bias, and he’ll do anything he can to dig his paws in to the ground and not move.
This includes telling a few little white lies about what we’re doing in our lives.
As Duke’s Dan Ariely and others demonstrated through a series of experiments, we’re willing to push the boundaries a little in telling stories about ourselves if the lies aren’t too outrageous. We’d rather tell little lies to ourselves than to actually have to change our behaviors.
But, if we’re telling lies like the following, we’re actually doing ourselves harm:
The lie: I’m living within a budget!
The truth: I make a budget each month, but then I miss my budget by $200.
The lie: I’m planning for retirement!
The truth: I have this picture of me sitting on a beach sipping umbrella drinks, but I’m not really doing anything about it.
The lie: I’m a skilled investor!
The truth: I watch CNBC for stock tips and have no clue if my investments are solid. But, hey, Cramer said “BUY BUY BUY!”
There is ALWAYS something in between us an our money. We rarely ever use cash. I’ve seen evidence on both sides, indicating whether plastic actually increases spending. But the increase in dishonesty might be enough to make a change…
I thought your article on credit card revolvers spending more was interesting and made sense. We discovered our own bad credit card revolver habits pretty early on, so while we do use rewards credit cards, we only use them on things we purchase regularly and can’t really pay cash for, such as Netflix or Amazon Prime.
I’d love to see a study on whether or not automated bill pay creates that same level of disintermediation. I suspect it does.