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The opening chapter of Debt-Free by 30 by Jason Anthony and Karl Cluck talks about something called the 7 debtly sins. I thought this was interesting and it caught my interest so I thought I would share with you some of what I took away from reading this.
#1: Thou Shalt Not Count on Future Earnings to Pay Present Debt
As much as this makes sense, I think it’s something a lot of people get caught up in, especially in their college days. I know I was of the mindset that charging that new outfit or meals out would be easy to pay off down the road because I’d be making good money. Or at least, that was the plan. And as we get better jobs and make more money, our spending tends to increase proportionally with that income. Without commiting to changing your habits when you get a raise, you will only accumulate more debt and more stress.
#2: Thou Shalt Not Be A Slave to Immediate Gratification
I am one of those people who gets that rush of adrenaline when I slap down my credit card and purchase all of those “things” that I “need” so badly. But that gratification and spending-high comes crashing down when the bills come rolling in. Falling into this trend of retail-therapy is never a good thing. Learn to live without all those expensive shopping trips and impulsive buying. You will benefit in the long run. All the money I spent on frivolous things in my past could add up to quite a hefty savings account right about now.
#3: Thou Shalt Not Try to Keep Up With the Joneses
I think it’s practically human nature to want to compete with those around us when it comes to buying and having the best of the best. The big house. The fancy car. The brand name clothes and designer purses. Having these things is often a status symbol, but one that can come with quite the cost. If keeping up with your friends and co-workers is putting you further and further in debt, is it really worth it? Face it: some people can afford this lifestyle while others can’t. And most likely, many of the people you’re trying to keep up with can’t even afford that lifestyle. Don’t put yourself in a situation that will take years to recover from just to save face and get an extra compliment or two. Living smart and frugal now will practically guarantee you a better life in the future.
#4: Thou Shalt Not Pretend to be Too Busy to Think About Money
If you find yourself spending money left and right without a single thought as to why or how you can afford it, but making the excuse that you don’t have time to look at your financial picture…you may have a problem. When you become consciously aware of your financial situation, you are often more apt to make changes. When I realized that we were over $44,000 in debt, it shocked me into submission. I knew I had to make life changes and that paying the minimums on our credit cards weren’t going to get us out of debt any time in the near (to late) future. The longer you ignore your finances or tell yourself you’re too busy to get it all straight, the harder it will be to turn around and get on track.
#5: Thou Shalt Not Waste
All the money you’re bringing home for your hard work should be used wisely. Instead of squandering every single penny you earn on all the “things” you think you “need”…find ways to become a bit more frugal and stop wasting your hard earned money! Cut out your $5 per day Starbuck’s fix and start making your own coffee drinks at home for a fraction of the price. Cut back on extras on your phone plan or cable plan that you don’t REALLY use (or need). It’s the little things that can make a huge difference over the long run. Don’t waste your money! Make it work for you by investing it in high-yield savings or other investments.
#6: Thou Shalt Not Forget to Set Goals
Think back to how motivated you were growing up: You were bound and determined to some day move out of your parents house, go to the college of your choice, and land your dream job. You had goals, even then. So why should you stop there? By simply dreaming of your financial goals rather than setting them and taking steps to achieve them, you’re not getting anywhere. Having a $30,000 down payment for a home is a great dream…but it won’t happen on its own. You need to set goals and find ways to get there, one step at a time if need be.
#7: Thou Shalt Not Be Ruled By Your Social Life
Rather than thinking “work hard, play harder” maybe you should follow the “work hard, play cheaper” method. If the money you are spending to go out with friends and have fun is causing your budget to cringe, you’re doing something wrong. If too much of your money is going towards leisure and limiting your ability to get out of debt (or create a hefty nestegg), maybe finding cheaper ways of having fun is in order. Instead of dropping $100 at the bar on a Friday night, have your friends over for a night of drinks and socializing for a fraction of the price (especially if everyone brings a snack or portion of the alcohol!). Plus you won’t have to yell over the loud music or cough from the cigarette smoke that is almost inevitable at the bar.
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Well, there you have it. A great set of rules to live by (or rather, sins to avoid). Most of them seem like common sense, but even when things are common sense…that doesn’t always mean they’re easy to adhere to. It takes dedication and motivation to keep trucking along on the path to financial freedom.
