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NEW YORK (MONEY Magazine) - Some who pretend a higher income bracket at least admit to themselves they're faking it. Many others don't.
A survey done at the same time as MONEY's -- this one by financial services firm Genworth Financial -- confirmed that many Americans spend more than they can afford to in an effort to keep up with people around them. But while 80 percent of the Genworth respondents recognized this failing in others, only 10 percent saw it in themselves.
"Faking a lifestyle becomes so much a part of your identity that you just don't see it anymore," says Gurney, who worked with Genworth on the study.
The MONEY survey likewise found that many of us -- 36 percent, in fact -- go to great lengths to avoid facing up to financial reality. Some 17 percent of respondents said they avoid thinking about their money by refusing to look at bank balances or financial statements.
A sizable number also put off paying their bills (13 percent) or ignore financial news (16 percent) as a way to avoid unpleasant realities. One in six avoid seeing a financial adviser.
Beth, a Connecticut lawyer, fell into the self-deception trap a few years ago while making a career switch. Instead of cutting expenses while she attended law school at night, she started splurging "to handle the stress." Eventually she rang up $30,000 on her credit cards.
"I knew my debt was out of control, but I just shoved my statements in a drawer and avoided looking," she says. Beth managed to disguise the depth of her problems until her mother had a medical emergency a few years ago. Beth's siblings all chipped in to pay for their mom's care, but Beth couldn't afford her share.
"That forced me to admit to my family that I was in over my head," she says. It also drove her at last to seek help from a credit counselor. Happily, Beth has since not only stopped burying her bills in a drawer but also managed to pay all of them off.
Beth's tale underscores the role that self-deception plays in the entire web of money lies we tell. Yes, whitewashing your financial situation may keep loved ones from worrying, but it also allows you to put off worrying yourself. Sure, hiding your latest splurge from your spouse may prevent a fight, but it also helps you avoid facing your overspending.
"Self-deception helps us deceive," observes David Livingstone Smith, a professor of philosophy at the University of New England and author of "Why We Lie." The most important money lie you tell, he says, is the one you tell yourself.
It's encouraging that many who took the survey do recognize that keeping money secrets -- from others as well as themselves -- can have consequences. Roughly one out of five say their deceptions caused them to make bad investment decisions. Nearly a quarter worry that keeping secrets hurts their relationships. Almost one out of three see that some secrets may prevent them from reaching their financial goals.
The challenge, then, is to take that realization a step or two further. Yes, certain money secrets can be the grease that makes life run smoothly.
But others are like a wrench in the works. The key, of course, is to recognize the difference.
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