1. The "I'm Not Vacationing" Lie

We Americans are careful about using our precious vacation days. About 57 percent of working Americans have saved up to two weeks of unused vacation time, according to a 2011 Harris Interactive poll. And when we do use our vacation days, we plan our big-ticket trips carefully.

Too often, in trying to save vacation days and on travel costs, we end up taking smaller weekend expeditions. The problem is that we don't budget for our "non-travel" trips as carefully as we do the "real" trips, for which we do set funds aside.

Since we aren't using vacation days for weekend trips, we tell ourselves that, technically, it's not really a vacation—except, a weekend visit can entail pricey activities, brunches and nights on the town that quickly rack up costs. Lonely Planet puts a midrange budget for US domestic travel between $175 and $225 per person per day, which means two or three weekend trips can cost as much as the average American vacation for four (about $4,000, found a 2010 American Express survey). Let's all do our wallets a favor and call a spade a vacation.

2. The "I Do Monthly Budgeting So I'm All Set" Lie

One of the biggest dangers of creating a monthly budget may be looking too closely at our spending each month. Participants in a study published in the Journal of Consumer Research were off-target by as much as 40 percent when budgeting by month, as compared to 3 percent when budgeting for the whole year. Certain hefty costs can occur quarterly, biannually or just irregularly and escape calculations focused too narrowly on the month-to-month horizon.

These unexpected costs can include trips to the dentist, insurance, (how does the plumbing fail right after a trip to the vet?), holiday shopping, car and home maintenance, weddings (no, it's not just you, people really are booking more destination weddings than ever before) or even haircuts. As a first step, it's okay to keep a list of items you spend on month-to-month; but you'll want to work the other way, too, making a separate list of random expenditures and events throughout the year, and setting money aside for those costs.

3. The "Money Saved Is Money Saved" Lie

Yep. An interesting problem can occur with extra income. In a 2005 study, researchers at Harvard gave two groups $25. The first group of participants was told it was a "tuition rebate." The second, was given the money as "bonus income." Wording alone had a significant impact on what happened next: On average, rebate participants spent $2.43 while bonus participants spent $11.16, or more than four times as much.

When you end up with extra cash— most likely, a tax refund, but also a rebate, a bonus or a purchase you cancelled—if you view the money as a free prize, you may spend more of it. If you can tell yourself that it is a rebate to You, Inc., it may change how much of it you save.

4. The "What the Hell" Lie

First coined in 2010 in a diet psychology study by researchers Janet Polivy and C. Peter Herman, the so-called "what-the-hell effect" suggests that falling off the wagon causes a feeling of failure, which leads to more indulgence ("If I've already blown it, I might as well go all the way"). But a carefully examined failure is better than the never-look-back kind of screwup. "When my clients fall off their budgets, I tell them to remember it's about making progress not perfection," says Carrie Birgbauer, a Manhattan-based financial adviser. "If you do overspend, take the time to reflect on the reason." Eventually, you'll notice areas where you consistently blow it: For instance, you've allocated money wishfully instead of realistically (a lot for "fresh produce" and very little for "eating out"), which means you wind up spending more overall (on too much zucchini and too much takeout). In this way, failures can be useful—as a way to troubleshoot and refine your budget. In other words, they can help stop the "what the hell effect" in its tracks.


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