My lips easily dry and crack and peel and I have a habit of peeling them if it's peel-able, even if only a little bit and ends up bleeding or peeling into the inner parts of my lips.

I think it's because I don't drink enough water or eat enough fruits (according to my mom) but even my own saliva dries it out. Chap stick? Lip gloss? Nothing, those dry it out even more as it moisturizes it for about half an hour then it becomes dried and cracked again. Even vaseline type ointments won't work.

Why is this and does this happen to anyone else?

You can't pick at the skin, that is opening up for infections which you don't want. You need a dermatologists advice. Or what you can try is vaseline on your llips at night and use a pillow case that your mom doesn't care about.

The Doctors Book of Home Remedies Chapped Lips
This link is very informative.

What climate do you live in? If its dry you have to drink like crazy, you don't have to drink water, if you don't like the taste (my mom doesn't) you can have water with grape fruit juice, or water with a pinch of lemon, and there's always lemonade and koolaid, and grapes arre great, if you need to hydrate.
And as for the peeling try not to, cause it can get infected and its no good. And keep using chap stick.

I have the same problem off and on. I've found I need to drink LOTS of water (I've cut almost everything else out) to stay hydrated, which helps. I've also been through several brands of lip balm; I like Blistex the most. There's one in a blue tube which is great, and there's one in a white tube that's like lotion for your lips, it's also great. I put vaseline on my lips every night as well. You don't need much, but it does help.

Avoid licking your lips, all that does is dry them out more. You're mom is probably right that you don't drink enough water... so start! :) For the lip balms you just need to reapply when it wears off, eventually your lips will re-hydrate and become healthy again.

Oh, and fight the urge to peel the flaking skin, it just causes more damage. You can buff your lips gently with a damp washcloth at night to get rid of the flakes, that will help. If you do that and then apply vaseline, you'll find it will help a lot.

I HAVE THIS 2! EXCEPT MY LIPS Don't PEAL AND I Don't PIK THEM, BUT THEY R SUPER DRY! I HAVE CHAPSTICK ON 24/7! (READ 'how to get chapstick out of your life!)
MY MOM ALSO SAYS I Don't DRINK ENOUGH! TRY DRINKING A BOTTLE OF WATER A DAY! IF U GET A GOOD ANSWER THAT WORKS, TELL ME! (reply to my question or tell the person 2 give me the same advice!)
Thanks
SUPER SORE LIPS