If it were that simple to have perfect finances then there wouldn’t be any debt and everyone would have plenty of money to live off of during retirement, but the truth is, although it seems like common sense, even the simplest money rules to live by are being avoided. Time is money, and the longer you wait to start really focusing on the personal financial goals in mind, the worse off you will be in the future, probably trying to scramble later.
Spend Within Your Means
Something that I had trouble with when I was in my young 20’s, well even until I was 30, was spending within my means, which is why I had a credit card debt problem. I was constantly going out, going on vacations, having an expensive car lease payment. Life experience are definitely important, I’m not advocating giving everything up to save money, but there needs to be a line drawn in the sand somewhere where you can be avoiding spending more than you are making, and thus avoiding debt going forward, and hopefully tightening spending so that you can free up more money to save.
Stay Out of Debt
While it almost goes hand-in-hand with spending within your means, staying out of debt is important as a notable mention on its own. Taking credit card debt for example, when you missing paying the full statement balance by the due date you carry over a balance that is susceptible to the APR, which can be upwards of 16%, so depending on the balance, it could be hundreds of dollars a month spent on interest payment, and if you are not able to make large payments each month, little will be done to chip away at the principal balance. From that point on you will be constantly be behind, trying to put every extra dollar you have towards getting out, which hopefully you are able to.
Don’t Worry About Looking the Part
Shopping can have its own category as well, as this can be a big reason why debt is created anyways, so much like living within your means, dressing like you have money does not give you any extra money, so if you are dropping extra money on premium brand clothes as well as a luxury car, it can give the appearance you are able to afford the finer things in life, but others aren’t paying your bills, you are, and will probably struggle. You can still look nice with basic clothes from Target, driving a nice domestic car.
Think About Long-Term Instead of Now
We all need to get into the mindset about “do I really need this?” when spending any money really, because if you think about spending a couple hundred dollars now on unnecessary purchases, you could have invested that money and in a few decades, you could have thousands of dollars. While it is tough to think that far ahead, time goes by quickly, so the earlier you start to focus on the future the better off you will be.