Singletary: ‘Alternative facts’ lead finances off a true path

Here are some:

• “Having insurance on my kids is a good investment for the future.” The truth: This is a falsehood that many parents buy in to. They are sold insurance for their children as a way to lock in a policy should the child become uninsurable in the future. Or they are told it’s a great way to save for children.

It’s not imperative that you buy life insurance for children, says James Hunt, a retired life insurance actuary who assists the Consumer Federation of America on life insurance issues. He added: “Sales costs are usually disproportionately high for the need.”

More importantly, the main reason to buy life insurance is income replacement. Unless your child is supporting the family, you’re better off putting money in a 529 college-savings plan.

• “He’ll pay me back, we’re family.” The truth: Many relationships are ruined or strained by loans.

Online lender iLoan surveyed 800 people last July about borrowing money from family and friends — mostly for education, basic necessities (food, water, electricity), or to buy or fix a car.

But the survey found that 36 percent of family and friend lenders weren’t paid back all their money. Fourteen percent never got any money back.

Just don’t do it. If you have the money and you don’t need it, just give it to the person. This way, your family member or friend won’t be tempted to lie about their inability to pay you back.

• “If I get that initially 0 percent interest credit card, I’ll have it paid off before the interest kicks in.” The truth: I’m not totally against such offers, which are typically pitched to help people pay off other cards. But you’ve got to have discipline when it comes to balance-transfer offers. If you don’t pay off the balance by the time the introductory period is over, you could get hit with a monstrous interest rate and back interest that will only exacerbate the problem you were trying to solve in the first place.

• “I can afford a trip to South Africa, even though I have no job and $97,000 of student loan debt.” The truth: This type of lie can create financial havoc for years to come. Yet I see it all the time. And I get it.

People see the vacation as an escape. But when you get back, your money problems will still be there — only now you’ve added to the stress by piling on more debt.

• “I work hard. I deserve to spoil myself — shoes, clothes, cars.” Or “I need a bigger Coach bag. This one isn’t big enough for all of my stuff.” The truth: Many of us have too much stuff because we’ve blurred the lines between needs and wants.

• “I am not wasting money, because I can afford to pay all my bills in full each month.” The truth: You may still be living above your means. People tend to live up to their paycheck, leaving little room for financial emergencies, retirement savings, etc.

• “Lunch out every day doesn’t add up to a lot of money.” The truth: Visa found in a 2015 nationwide survey that respondents spent an average of $53 a week, or $2,746 per year, on lunch.

Stop lying to yourself. Find your financial truth and you’ll see some enriching results.

Michelle Singletary welcomes comments and column ideas. Reach her in care of The Washington Post, 1150 15th St. N.W., Washington, DC 20071; or singletarym@washpost.com.