The Short Stories We Tell Ourselves About Everyday Spending

I love a good story. In fact, I used to tell myself at least one new story every time I opened my credit card statement. “Oh,” I’d say to myself, “I was so busy last month, it makes perfect sense that I ate out a dozen times. I’ll just eat out less next month.”

Other months, I’d invent a fantastic story about why I thought it was a good idea to spend so much on new bike gear. “Man, I really needed a new jersey,” I’d say. “The other 10 were in the laundry, and I had a ride the next morning.”

Whatever story I told, they all had one thing in common: They were fiction.

All by themselves, numbers tell a simple, straightforward story. We spent X on Y. Our credit card statements are a work of nonfiction. But we have a habit of spinning them into wonderfully complex short stories.

We can’t help ourselves. For some reason, we feel the urge to embellish. We didn’t just spend $28.32 on lunch one day. We were helping out a friend who was having a bad week. That’s a great story, but it doesn’t change the numbers. We still spent $28.32 on a single lunch.

The big purchases often come with the biggest stories. Imagine the story we tell ourselves (and our spouses) about the $4,274 charge for a motorcycle. Of course, we really needed it. Besides, a motorcycle is far cheaper than the sports car our neighbor bought for his mid-life crisis.

So why all the storytelling? Our narratives provide a comforting counterweight to a hard truth.

The numbers are the numbers. What we spent and when we spent it are historical facts. However, depending on the wisdom of those buying decisions, the numbers can lead to feelings of shame and guilt. To make ourselves feel better, we come up with a story that blurs the numbers. These stories might be considered harmless, except for one, not-so-small problem: They’re not true. And with every story we tell, we slip into a never-ending cycle that increases the gap between our actions and our values.

First, we feel bad when we see certain numbers. (We didn’t mean to spend that much on our last shopping trip.) So we add a layer of fiction to make ourselves feel better. (There was an amazing sale, so we really saved money by buying when we did.) Then, we forget the pain, but only until the next statement because we didn’t make any changes to help avoid more, uncomfortable numbers.

If we stop telling stories, we can avoid this cycle completely. Start by sticking with the simple, nonfiction truths that credit card statements tell so well. Using those facts, and only those facts, we can close the gap and create alignment between our values and actions.

Shame, guilt, and the stories we tell won’t help us make better financial decisions. But the numbers will. Keep that in mind this month when you look at your next statement. What happens if you leave the short stories sitting on the shelf?

This commentary originally appeared June 29 on NYTimes.com

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The opinions expressed by featured authors are their own and may not accurately reflect those of the BAM ALLIANCE. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.

© 2015, The BAM ALLIANCE

Carl Richards, CFP®

Carl Richards is the creator of the weekly Sketch Guy column in The New York Times and is a columnist for Morningstar Advisor. Carl has also been featured in The Wall Street Journal, Financial Planning, Marketplace Money, The Leonard Lopate Show, Oprah.com and Forbes.com. His simple but meaningful sketches served as the foundation for his first book, "The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money."

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