Money can’t buy happiness. That’s not my tip – that is just a prelude, and an obvious one at that. Because, although money might not buy happiness, the lack of money has been known to buy misery. This is Financial Literacy Month, and it appears that Canadians need better financial literacy. As do our American cousins.
My tip today might seem obvious. Indeed, it is obvious – and it has been spoken by wiser and more eloquent people than me. Yet most people – including myself (sigh) – totally ignore it. Not everyone who ignores it is miserable, of course. But most people who are miserable about money are miserable because they have ignored this one simple tip:
Don’t spend more money than you have.
How many people ignore this simple tip?
Everybody who carries a balance on their credit card. Everybody who has taken pout a loan. Everybody who has debt.
I know, I know. Sometimes you get a wallop in the wallet and you just need to borrow some money. And, yes, a mortgage is usually a good investment (if you don’t try to buy as much house as you can “afford” with a mortgage).
But debt should be an exception to the rule. It should not be a way of life. If you are already in debt, that is not the time to decide to buy a cottage or a motor boat. First pay down the debt, then save up for the splurge, then have fun.
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Yes, you will have to wait. Yes, you will have to defer some pleasure. Yes, some people will say that you have only one life to live, so buy things right away and get the most out of life.
Sorry, that’s a lie. Buy now, pay much more later might bring you some pleasure sooner. But if later on you are spending so much of your money feeding interest payments, that you can’t buy the fun things you want, you don’t gain a thing. You lose; you might even lose big time.
And I know that more than one savvy reader is thinking about the even bigger misery that debt creates. It is no secret that couples fight most about money. And life sucks when you are fighting with your partner, your comrade-in-arms, your best friend. And even more so when you have to go through a divorce.
You can accelerate your savings by adopting some frugal habits. We have had some fun with frugal on this blog, but of course it’s about more than just fun. It’s about avoiding misery, too.
Am I the only person so unrealistic as to recommend spending only what you make? No. Here are a few of the top personal finance bloggers and their thoughts on the subject:
Money can’t buy you happiness, but it sure can help you avoid falling into a pit of misery. So earn more and spend less, and paint a great big smile on your face.