Have you ever tried to borrow money and got turned down? How did that make you feel? Mad? Disappointed? Frustrated? Belittled? You might not agree, but that person just did you a huge favor. What do I mean? Well, if you are borrowing money to make a purchase or to pay a bill, borrowing is not the proactive solution. It is much like digging a hole on the left to fill the one the right. Trust me, you will never get ahead that way. I know it’s tough, and borrowing often seems like the best short-term solution. We often borrow with the best intention to pay back right away, but life happens and resentment and avoidance becomes the name of the game.
Have you ever done the credit card shuffle where one credit card is used to pay the other, or transferring balances to new cards? This too is like stepping into a sinking hole, especially when we resort to using credit cards to pay for expenses that will either reoccur the next month, or making purchases so large that you cannot pay the balance off on the next due date. That awesome must-have flat screen TV on “sale” today will cost you three times as much on a credit card paid over time.
Operating in the red as your “norm” is guaranteed to heighten your stress level and blood pressure. It is a poignant example of the “borrower shall be a slave to the lender”. Statistics also indicate that the major cause of divorce in the U.S. is debt and money issues. This lends (no pun intended) true meaning to the words of an old song: “You can’t love without money, you can’t make love on a hungry belly!” Nothing kills the romance like lack of finance.
It amazes me that as adults we are expected to transition from high school and college into the work world, and be experts in managing personal finances. Many parents never talk with their kids how to be responsible stewards of their allowance, saving for purchases, or even balancing a checkbook. While schools wrangle with the dilemma to include or not to include sex education in the curriculum, managing personal finances is not even a distant thought. This is a sad rhetoric, considering many college grads leave school with a hefty student loan to repay, and the requisite car payment in addition to rent, and a paycheck that seems impossible to stretch.
In situations like this, the perfect solution would appear to be “MAKE MORE MONEY”. While this is true (to an extent), people who make big incomes would never experience high debt and difficulty to repay. We know the stories of entertainers and professional athletes gone broke. For many, the more they make, the more they spend. As such, the simple answer to peace of mind and building wealth is – spend less than you make. To do this, you must create a budget. Yes, a BUDGET and STICK TO IT!!!
Just like you name your car, your children and your pets, you must give a name to every dollar you take home or they will continue to disappear. What do I mean by naming the dollars? Something like this: Rent/mortgage -$1,100.00; Electricity: $135.00; Grocery- $150.00; Gas – $100.00, Emergency expenses- $50.00, and so on.
“SHOW ME THE MONEY!”
Knowing where every penny goes has a magical outcome of projecting the adequacy or lack there of your income, and allows you to pinch here or there, while you “fill the hole” so you can climb out and stand on solid ground. In time you will be able to “Show me the money!!”
“Live, Love, Laugh” – Dr. Carly.See some words or phrases that you don't understand? Check out The Dragon's Lexicon.