Robbing Yourself of Tomorrow to Pay for Today
Jun 4th, 2007 by Jennifer Lynn
True wealth accumulation dismantles the philosophy of, “let’s forget about tomorrow only to live for today“
Are you still frittering money away on purchases through credit cards by paying for ’stuff’ with future earnings? Does the thought of savings (or lack thereof) still leave you squirming and feeling uneasy?
Isn’t it time to break free from restrictive habits and follow a wiser path to complete financial freedom and peace of mind?
In essence, has your debt overwhelmed you and made you finally declare, enough is enough?
Throw away the attitude of paying for today with tomorrow’s earnings
What types of financial mentalities exist? Let’s examine a few. Do you:
- Use credit cards to acquire the things you desire - and each month pay the minimum 2% of the total balance … forever
- See a desired item and immediately wonder if you can afford the monthly payment
- Quickly, conveniently and unconsciously buy as much ’stuff’ as you can afford with current credit limits, without ever paying cash
- Essentially, rent your lifestyle instead of owning it?
The points outlined above can be extremely seductive in a consumerist society - as well as a recipe for disaster and financial suicide. As you accumulate ’stuff’ through frenzied credit card purchasing, you unknowingly continue building negative wealth.
Bare in mind that when you purchase an item or service, someone immediately becomes richer while you are almost instantly poorer. Therefore it’s essential to transform your consuming philosophy into a healthy outlook which allows more conscious spending. After all, wealth is no good if wasted carelessly.
So how do we shift toward a more productive and sound financial lifestyle? Here are a few starting suggestions for any income level.
- Savings. Put away a consistent amount of income for savings (between 10% - 15% of every paycheck)
- Goal Recognition. Keep a clear, concise list of goals and establish a ’wish’ list - what you want now, in a year, in five years and in ten years
- Goal Utilization. Brainstorm a realistic way to translate your wishes into specific goals with reasonable deadlines
- Wise Spending. Slowly work toward your goals while investing prudently
- Reap the Rewards. Align your spending habits with specified goals as you continue focusing on making your dreams a reality
- Frugality. Keep overall spending habits down as your wealth increases
- Conscious Spending. Learn to avoid status symbols and other unnecessary purchases (what I lovingly refer to as ’stuff’)
- Use Credit Cards to Your Advantage (and not the credit companies). Use credit cards with money all ready in the bank and diligently pay off the balance in full each month
Not all debt, of course, is inherently bad. When in doubt, remember that good debt has the ability to appreciate over time (such as low-interest loans to finance a home, educational loans or starting a new business venture).
Once you find direction with your finances, it becomes much easier to reign in wild splurging and get spending under control.
Now, today, is the day to plan for tomorrow. It’s time to lift away the shackles of needless debt and chase after your dreams.
~†~ Baby Steps Are Key ~†~ Stop sacrificing your tomorrow for today
=^..^=
All great tips. I really need to re-establish my goals. I was pretty good about reviewing my financial goals on a regular basis, but then I got sick and went to the hospital. All my productive habits disappeared when I got home.
Good to see you again Jen
And it goes without saying that this is probably one of the biggest and most important posts any college student should pay attention to in terms of personal finance.
Good points made here.
Here’s how I budget while in school:
http://www.campusgrotto.com/how-to-save-money-in-college.html
[…] Robbing Yourself of Tomorrow to Pay for Today […]
Great tips for anyone! Thanks! It’s a Post of the Day.
Hm.. my problem is saying “NO” to sales people, because I tend to want to be nice and not say no.. or I just say “Yea that sounds great” then take whatever they’re offering me and head to the counter (especially in Sephora)
Now I actually wait, ponder over the item for 15 minutes, try and justify what I have at home and what I want to buy…
I think your advice is right on the money. I would also emphasize the importance of keeping track of one’s spending. It doesn’t matter whether you use personal finance software like Quicken, write everything down on a notebook or use some other way as long as it you do it regularly. You can’t really know how much you can afford to spend or save unless you first create a spending plan or budget.
These simple steps are so important–especially for young people like myself and my friends who save so little! I like that you are educating people on saving and investing now rather than waiting until we’re older.
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The step you mentioned “goal recognition” got me thinking. It doesn’t just apply to financial goals or lifestyle goals…in the short term it can apply to our purchasing wishlist.
I make myself write wishes down (books, DVDs, bigger things) and wait on them for a few weeks. Then I ask “Do I still want it?” “Do I really ‘need’ it?” and such. Often the desire has cooled.
Another way is to coordinate the financial goal wishlist with the purchase wishlist: “If we save $325 this month, then we can spend $25 on a movie.”
Anyway, great post overall!
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Very well put. I especially liked:
“Essentially, rent your lifestyle instead of owning it?”
Wouldn’t it be great if more people realized that by going into debt to pay for things that they were essentially renting?
Sorry, I put the wrong blog in the name field. I don’t want to confuse people.
Great tips!
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