1 in 5 Young Adults Rely on “Fake It Till You Make It”—But The Hustle Ultimately Backfires

A 2024 report by Empower revealed that one in five Gen Zers and millennials tag the “fake it ‘til you make it” philosophy as being the secret to success in life.

The concept has its champions, from social media influencers and marketers to entrepreneurs and small business owners. Even the American folk rock duo, Simon & Garfunkel, effectively owned up to embracing this mindset in their 1968 single “Fakin’ It.”

But what effect can faking experience and expertise have on your personal finances? Should you spend with abandon, maybe go into debt, and pretend you know what you’re doing in order to appear successful? Or is it better to stick with spending limits, live and work within your means, and build your experience, confidence, income, and actual success?

Read on to learn some ways to build real financial knowledge and confidence, and leave the faking to others.

What Is Fake It ‘Til You Make It?

The famous psychiatrist and philosopher Alfred Adler first presented an early version of the fake it ‘til you make it philosophy in the 1920s. He referred to it as the “acting as if” technique. It involves behaving and walking through life as though you’re already the individual that you want to become.

Ideally, you’re just trying to convince yourself of what you can achieve as you build self-confidence and skills to meet your goal. The concept gets muddied, however, if you use it to convince others that you can fill a role you haven’t yet acquired the skills to master. Acting without knowledge, expertise, and experience can cause harm to others.

On the bright side, the fake it frame of mind can indeed make you feel more confident, at least when it’s used in behavioral therapies.

How It Can Affect Your Finances

Ria Money Transfer conducted a survey of 2,000 Americans of all ages and found that two of five of them approached their finances with a fake it ‘til you make it mindset. Forty-five percent said they felt that their friends and families knew more about finances than they did.

“The mindset can spiral fast, especially when it turns into ‘keeping up with the Joneses,’” says Joseph Camberato, CEO and founder of National Business Capital. “A lot of people start spending beyond their means just to look the part, and that works until life throws you a curveball. One job loss, one business hiccup, one unexpected expense, and suddenly you’re sitting on a pile of debt with nothing to show for it but a lifestyle you can’t sustain.”  

Successful financial management can depend on personal skills and knowledge and not merely feeling good about what you’ve convinced yourself you can achieve.

Fidelity Investments Canada points out that this can lead to unsound choices and decisions that will ultimately lead to increased debt and missing out on viable options you could have taken instead.

“I always tell clients that money just amplifies behavior,” says Dr. Stephan Shipe, a finance professor and founder of Scholar Financial Advising. “If you haven’t learned how to manage cash flow, save, and spend intentionally before you have money, those issues don’t go away. They get bigger.”

Do It, Don’t Fake It

Common sense suggests that you won’t have to fake anything if you gather the necessary knowledge and skills to handle your income and financial decisions capably. The question is where to start.

“Building real financial confidence means starting small,” Shipe says. “Automate your savings, pay off high-interest debt, and track your expenses. That’s how people start to feel in control, and that’s when the need to ‘fake it’ starts to go away.”

Define Your Financial Goals

If you don’t know where you’re headed, you can’t get there. So start off by clearly defining your financial needs and realistic goals. These should be based on what you want to accomplish personally and through your work.

This fundamental self-knowledge will build your confidence in your ability to select the financial tools that can help you reach your objectives.

Set Up a Savings Account

Yes, that’s right. It’s simple enough. Just tap that button on your bank’s website and transfer a little cash to a new savings account to get started.

You’ll have some options. Accounts can range from short-term savings to high-yield savings to long-term certificates of deposit, and more. Do your research so that you understand each option and which can best fit your financial needs and goals.

What to Save for

A liquid, easily accessible emergency fund might be a good place to start. Financial professionals recommend that you stash three to six months’ worth of living expenses in an account that will let you easily lay your hands on the money in a worst-case scenario.

Think unexpected job loss, or accident, where your income from work stops flowing. An emergency fund could provide a financial safety net until you find a new job or get back on your feet.

Create a Budget

A budget is a great financial tool that lays out your expenses and your income for a specific time period, usually a month. It can affect your spending and saving in positive ways.

By keeping a budget, you’ll know how much money you can expect each month and therefore, how much is safe to spend and even put into savings.

You have a couple of options when creating a budget. You can do it yourself with a pencil and paper or on your computer. Or you can take advantage of budgeting software if you’re unsure of how to proceed and like an automated approach. Take heart if you don’t know how to start your budget. Ria Money Transfer found that 86% of those surveyed had no idea how to do so.

Begin with an honest assessment of your available income and your monthly expenses. This can help you pinpoint how much money will be left over after you pay your bills. It can also help you see where you might cut some spending, if need be.

Another option is to create two categories with which to organize your spending: “Must-Haves” and “Nice-to-Haves.” Utility bills, rent, mortgage payments, groceries, insurance, and such would go in the must-haves. Nice-to-haves might encompass spending on restaurant dining, take-out food, certain entertainment, and weekend trips.

Pay Down Debt

You might come to the jarring conclusion that there’s no money left in your budget to put toward savings because you’re carrying a significant debt load.

Your first step is to avoid taking on any new debt, according to Fidelity Investments Canada. That’s even if you tell yourself you’re doing it to consolidate or pay down other debts that carry higher interest rates. Your second step is to develop a specific plan to steadily pay down and eventually pay off that debt.

Self-discipline is important here. Free up some cash in your budget by reducing what you spend on things you can live without. Then use that money for credit card and other debt payments. Add some to your emergency savings account, if possible.

Finally, strenuously avoid charging any more on those credit cards.

A Real-Life Example: Elizabeth Holmes

Elizabeth Holmes notoriously took the “fake it” concept into the world of finance in 2003 when she launched Theranos, Inc. The startup company touted medical technology that Holmes convinced others could work, perhaps because she had convinced herself that it would.

She claimed that her Theranos medical device could test blood for hundreds of health conditions, all from a single drop. The claims duped investors, luring them in before medical authorities began questioning Holmes’ claims regarding the Theranos technology. Ultimately, they couldn’t be substantiated.

Holmes faked it, but she didn’t make it. She was convicted of four counts of conspiracy and fraud on Jan. 3, 2022, and sentenced to more than 11 years in federal prison.

The Bottom Line

Nothing says you can’t swagger a bit after you’ve paid down debt and established a way to save. Next, you can turn to big-ticket items, like saving and investing for your retirement.

Just know that fake it ’til you make it is a losing proposition for most people.

“Act as if you’re already a star but back it up with action, hustle, and results,” Camberato advises. “That’s how you build real confidence. It doesn’t come from pretending but from showing up, taking smart risks, and growing into the version of yourself that you’ve been building toward.”