A Way of Life?
Credit card companies have added many “benefits” to using their cards on purchases. Points to reimburse, cash back, airline miles, etc. have gained a lot of press, at least in their ads. However, there is a problem for most credit card users.
The problem comes with the volume of usage to gain the “benefits” versus the ability to pay for the usage. The “benefit” can be good if you are able to pay off your balance each month. The harsh reality is that most card users cannot pay off their monthly credit card bill balance.
That reality starts to cloud the glow of the credit card “benefits”. Most credit cards charge interest on the unpaid balance. (Yes, some cards have zero interest for a while, but they have limits—be aware!) With a growing balance, the interest charge will more than offset the “benefit”.
Stop to consider the facts. Ads sell the “benefit” but the pressure is on you to control the offset. Do you want that as your “Way of life”?
Learn from Stupid
I know you are smart. But sometimes we must learn from stupid things we or someone else did. My hope is that you learned from observation, like my little brother did watching my childhood mistakes! However, learning from your own stupid decisions is very important, too!
It is often hard to stop ourselves from making poor decisions. The problem lies in not asking ourselves some qualifying questions. Perhaps our financial decisions would be better if we considered:
- Can I afford this purchase?
- Did I check to see how much I have in the bank?
- Do I need this now or can it wait?
Since my goal is to help you build a better mindset for money, I am asking you to ask yourself qualifying questions before you go shopping.
A short hesitation before shopping just might save you months of misery trying to pay off a credit card bill. That would be a smart way not to be stupid!
Be Observant – Ask Questions
Family dynamics mixed with shopping can be a problem unless you make some common observations and ask some simple questions.
Showing love among family members is important. But emotion needs to be controlled when it comes to family finances.
If there is enough income to cover the basic needs of the household and provide for savings to cover any emergencies, then, there is a healthy family financial environment.
When the emotional wants are allowed to control the spending plan then the family will suffer pain until the ability to save becomes possible again.
That, of course, raises the question of what a need is or what is a want. We all have wants but they are only possible after we have taken care of our needs. That is the beauty of making a budget. Those wants versus needs are defined.
Work Smart – Budget
A budget is a scary thing to many people. However, the simple picture is that you are trying to make sure your income covers your spending. We often make short-term mistakes. However, a budget will help keep those decision mistakes short-term by turning them into learning experiences for a better budget!
As you learn to budget better, you can measure your progress by the size and growth of your savings and investments.
If you are lacking in savings and investments, then, you really need a budget!
Work Hard to Earn More
You can make your income enough by spending less than you make.
However, most of us eventually want more things or want to be able to go to more places or events. So that creates a need for more income.
What are you doing to fill that need?
Hard work is one thing. But that usually follows getting a job. And that takes some unpaid work to find a paying opportunity.
A Paying Opportunity
A paying opportunity can be employment or self-employment. Over time, self-employment has the greatest potential for earnings. But it takes the mindset of a business owner to be both disciplined and responsible.
Employment is easier to find than self-employment. However, it takes consistent effort to maintain your employment. No one wants to pay for work not getting done.
Your opportunity with employment will get better as you get better. So, work on yourself. Jim Rohn often noted about the advice he received as a young man starting out, “Work harder on yourself than you do your job.”
Regardless of your age or background, you cannot rest on any laurels of recent success. For most people, getting a job is a form of success.
However, your paycheck will lose value, and your perceived needs will increase, and you will become dissatisfied. If you do not add to your skills and willingness to take on more responsibility, you will find that raises are hard to justify.
Most people avoid more responsibility because they will not see increase pay right away. But that is the wrong philosophy for a brighter future. You get noticed when you show you can handle more responsibility. You must think of this as experience you can add to your resume for your next job search!
You can expect to change jobs every three to five years, unless your current employer uses and encourages your potential growth. So, you should maintain a file on your work experience. That will help you update your resume when the time comes to move on to your next paying opportunity.
Back to Debt – No!
I know there will be times when you wake up and say, “Why does life have to be so hard?” And, yes, difficulties will come. But you need to constantly work on your mindset. “Guard the door to your mind!” That was the advice Jim Rohn heard from his mentor, Earl Schoaff.
Stay positive. Remember, “this too shall pass”. “Faith is the evidence of things not seen.” (Heb. 11:1) “You get out of life what you put into it.” (John Key) These and many other reminders are useful to guard your mind.
Being responsible with your money requires you to continue to learn about how to manage your finances better. Learn from your mistakes. Read what others have done to make improvements in their personal finances.
Then, when you begin to look at debt, credit cards, etc. to avoid your problems with money, you will have the knowledge and the courage to say, “No!”