Two Words that Will Change Your Financial Future

After last week’s post when I related a lack of travel to a lack of money, I got a little flack.  I know there are other reasons people don’t travel, but I do believe that more people WOULD travel if their finances were in a place that they could afford to do it more often.

I know that money is a very personal issue and everyone has an opinion. But when an article like this appears in my newsfeed this morning, I’m not going to sit back and keep my mouth shut.

The two words that will change your financial future are:

DELAYED GRATIFICATION.

clock with text

Tape it to your bathroom mirror, the fridge, or better yet, YOUR WALLET.  If you shop online, maybe the computer screen would be handy.

Winning with your finances can mostly go back to those two words.

Is it that simple?  Pretty much.

Why do we have a student loan crisis?  Does anyone teach their kids to take a few years off, live at home, save the money up and then pay for it outright?  Or maybe go part-time so they can work through college?  Um, no.  Because what would that require– Delayed Gratification!!

Car loans?  According to Dave Ramsey, the average American car loan is $486 a month!  OUCH!  You don’t need a car loan!  Dave has some great advice on how to avoid car loans  yet most people think that something is wrong with their car and they immediately just rush out to get a newer one.  What could solve this?  Delayed gratification!  (And probably driving a beater around for awhile).

I believe I can write about this because I know how Brian and I did our finances when we first got married.

Me: I’m hungry.

Brian: Do we have anything here?

Me: Not really.

Brian:  Do we have any money?

Me: Oh, we have like $40 in our checking.  Let’s go to Applebees.

Brian: Let’s go.

(I may have been doing well in college, but we were getting a D in financial literacy.)

 

This is a very very bad way to handle your finances.  It will lead you to ruin, unless you have a rich Aunt Jo who plans to leave you millions of dollars.  And really, even if Aunt Jo leaves you the money, you’re going to still be in bad shape because you won’t know how to manage those millions.

If you’re reading this and you think I’m just a pompous know-it-all, hey, even the American Psychological Association has a nice little PDF on Delaying Gratification. You can check it out here.

I know this is not easy.  While we were getting out of debt I hated really only buying needed work clothes instead of fashionable things I wanted.  I hated driving my Grand Am without air conditioning and sweating to death every afternoon on the way home from work.  I also really hated that backpack vacuum I wore to clean the local dentist office for an extra $36/week. I don’t even remember that season.

Quick tips:

1. Any purchase over $100 requires you to “sleep on it.”  (Except groceries)

2. Never use credit or take out a loan.  Ask, “Can I afford this?” NOT “Can I afford the payment?”

(As a disclaimer, I will say that Brian and I do use credit cards again.  We didn’t use them for about 5 years, and now do BUT only for things that are written down in our monthly budget).

3.  Save. Save. Save.  We pay cash for groceries and eating out and I save all my change from these transactions.  A month ago the kids and I counted out the change (homeschool!) and there was $65!  This was from less than 6 months of saving my change.  What a great way to start a savings account.  You’re less likely to go into crisis mode and take on debt if you have money in the bank to fix the car or clothe the kids.

coins

I am not perfect NOR have Brian and I always made good decisions.  My heart is this:  I want my people to not have the stress that debt can cause.  I want them to have money to GIVE.  And I think that we spend way too much time worrying about our kids extracurricular activities and not enough time teaching them something that will AFFECT THEM THE REST OF THEIR LIFE!

 

Stepping off soapbox.

 

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