The former Hills star says his ego led to career and financial mistakes
Credit: Andrew Southam

By his mid-20s, Spencer Pratt, along with his wife Heidi, had reached the upper echelons of reality TV fame and fortune. Unfortunately, he admits now, The Hills stars let their egos get the better of them.

“When you get caught up in magazine covers and stories, you start believing your own hype,” Spencer tells PEOPLE exclusively. “There were movie stars with egos smaller than mine.”

Feeling invincible, the couple made a a series of poor financial decisions, spending money just as quickly as they made it.

“We thought we could do anything,” says Heidi. “But then the reality of life sets in.”

Continues Heidi: “It was such a materialistic world and I was so caught up with myself. When you are your own business, you become way too self-involved. I became so narcissistic and that’s not naturally who I am. I didn’t like the person I became.”

Adds Spencer: “We were keeping up with the Joneses but we were going up against Tom Cruise and Katie Holmes when we should have stayed in our reality TV lane.”

He continues: “The media can fake you out. They can pump you up, but then unplug you even faster. I was making millions and I just lost the plot.”

For exclusive photos and much more from Heidi and Spencer, pick up the new issue of PEOPLE, on newsstands Friday

Now, the couple is living quietly in Santa Barbara, California, still appearing on reality shows and holding onto lessons they learned.

“Mistakes don’t define who we are,” says Heidi. “It’s important to pick yourself back up and be able to move on.”