Living Within Your Means
Rule Number One of life, in my humble opinion, is to spend less money than you make. It seems simple enough, but if you start practicing this rule the moment you start earning money, you will set yourself up for success for the rest of your life. And you will have infinitely less stress and more flexibility than those who do not pay attention to how much they’re spending.
One aspect that many people overlook is spending money while in debt. So many believe that it is normal to carry credit card debt from month to month, but I’d argue that’s not the norm. If your friends are telling you that carrying debt is what everyone does, then it’s probably time to get new friends.
Imagine the freedom of actually owning your possessions, and not having to write a check to debtors every month to reimburse them for the things you “own.” Now, let’s take it a step further. When you continue to spend money while carrying credit card debt, you’re living outside of your means. That cheeseburger and beer that you just charged isn’t money that you have…it’s money you already owe to somebody else. You just financed that cheeseburger, and are digging yourself deeper into debt. Seems silly, right?
Many people resign themselves to accepting that they are going to live in debt for the rest of their life. Don’t let this be you! It takes some hard work and sacrifice but if you dedicate yourself to it, you will be living debt-free before you know it. The easiest way to accomplish this is to put your mind to it and go all-in as quickly as you can. Just rip the bandaid off and get it over with.
When you keep the end goal in mind, that is your motivation to sacrifice some of the luxuries and conveniences that you’ve enjoyed thus far, and have gotten you to this point. You will be able to enjoy those same luxuries and conveniences soon enough, but when you do, you will enjoy them, even more, knowing that you were able to pay for them in full and didn’t have to go into debt to purchase them.
The problem arises when people treat credit cards as a source of income. Just because a bank or a lender extends you a line of credit doesn’t mean you should spend that money as if it’s your own. The proper way to use a credit card is only to charge as much as you know you can pay off at the end of the month. In this case, credit is simply being used as a convenience. The wrong way is to charge more than you are able to pay off when you receive your statement. That is when you’ve turned your card into a debt-creating tool rather than simply a convenience.
