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But we are at our wits end with DD10. She is so scared of getting into trouble for anything, small or big, that she lies about almost everything. And no, we don't beat her or ground her a lot or any of that, so I don't know what she is so scared of. DH says it is because she is scared to be thought less of (he was quite the liar too when younger, so maybe he is onto something there). Right now we are on a "someday you are going to want a cellphone/to go places on your own/a car and we need to know we can trust you for the little things before we can trust you for the big things" kick.

We are have had the same issue with our DD10. She only lies occasionally, but it's always a situation where it's obvious that she's lying. Sometimes it's little things like she's holding something in her hand (that she's allowed to have!) and denying that she has anything. Almost always the lie is to cover up something that she would not have been in trouble for to begin with.

At the beginning of the school year she cut her hair. Her hair is very thick and to the middle of her back. She basically cut long bangs (a piece on each side to ear-length). I noticed it and asked "Did you cut your hair?" She just kept denying it. It was so obvious that it was cut, but she wouldn't admit it. I even found the hair in the bathroom. Finally after an hour of being in her room I went to talk to her. She still denied it. I had a long discussion with her about trust and that this was something I could obviously see she had done-- how will I be able to trust her if I have no proof whether she's lying or not?
Sorry to go slightly off topic. This has been a huge source of frustration for me too.