My best financial tip

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.

This blog post is part of the Blog for Financial Literacy campaign, where each participant offers up their best financial tip.

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.


  1. Hey there, found you via Life Insurance Canada. Living within your means is probably the first step to being financially fit. Thanks for sharing.

  2. I always say “It’s not about how much money you make, it’s how you save it”. We need to stop making excuses when we are already in debt about why we “need” a boat or a cottage. That instant gratification just keeps piling up and it is just that instant and then it goes away. It’s like Christmas time when people go over the top with spending and put it on credit. They are happy for 1 day but just wait until all the festive hoopla is over and the bills start coming in. Spend less than you earn and budget… great post mate. Mr.CBB

  3. Great advice. Sadly, too many people don’t have a sense of what they have available to spend, or what they need to be saving to ensure a comfortable retirement. The first step is doing some planning, going over the numbers. It can seem like a painful exercise, but once people face the music, they can begin to make some better financial decisions.

  4. By all means, we have to spend what we have. But, yes, money can never buy happiness. Yet, we have to continue earning money or else we will not be able to survive. Let’s just say, all we need is to exercise prudence.

  5. Hm, I don’t have any debt myself. I am careful with what I spend, but obviously would like more financial freedom. Perhaps the trick isn’t just to spend less, but figure out ways to earn more, without necessarily working any harder.

  6. My wife and I just bought a flat and in order to pay the mortgage we need to start saving. However, she seems to find it very difficult to stick to the budget. If we don’t save up we will loose the first payment as well. I will show her this article and hopefully somethings will change. If not it doesn’t look good.

  7. I am always struggling financially. At the end of the month, I am always in debt in my bank account. Somehow, I can never seem to close the minus in the bank and also never save up money. This all because of my credit card, spending money more than I had. Now I am suffering for my idiotic decision in the past.

  8. All my life I have been organized and spent as much as I had and was able to put money to the side. However, its harder now to keep your finances stable when you are having children. I am trying to budget everything but somehow i am still struggling.

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