Have you ever tried to break a bad habit? Maybe biting your nails or swearing too much?
It’s hard to do.
It takes consistent effort, practice, and perseverance.
Now just imagine how hard it would be to break a bad habit that you don’t realize is bad… One that is so common that it seems like everyone around does it too. You would have to be the “different” one. The Maverick. The Lone Ranger…
So, what’s this terrible habit that everyone has?
Spending tomorrow’s money today.
Imagine life without any credit cards… no access to financing… nowhere to get a loan.
You would have to save up the cash to buy anything you wanted. A nice vacation, not so hard to do. A car – now that’s a little harder. Saving for a house would be really tough. So would saving for a college education, your daughter’s wedding, or open-heart surgery.
It’s a darn good thing we have the ability to finance big purchases.
The problem comes in when you use your available credit to cover daily living expenses. Putting your groceries, gas for your car and other necessities on credit is a symptom of a much bigger financial problem.
It’s likely one of two things is happening: either you aren’t making enough money to cover your current “necessary” expenses OR you are spending the money you need to cover those expenses on “stuff” you really don’t need.
In essence, you are borrowing money from your future to pay for the things you need (or want) today.
If you are ever going to get ahead, you need to put the breaks on this bad habit right now!
Gather up all your bills, organize all your expenses, and write them all down to create a budget. (Get started here.)
If you make less money then you need, you have 2 choices – make more money (by taking on a second job, starting a side business doing something you are good at, or have a big yard sale) OR spend less money (by reevaluating your expenses, cutting out luxuries, and shopping around for cheaper alternatives).
Get your budget under control. Stop stealing from your future self!
Here’s a link to the budget sheet we teach our students how to use. It’s a quick and easy way to get started on your budget.
The most important thing to remember is “Money In minus Money Out”. If you get a negative number when you subtract all your bills and expenses from your income… you are spending more money than you earn and building up debt every month.
It’s time to stop stealing from yourself. Your future self will thank you.
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National Credit Educational Services [NCES] is a 501c3 nonprofit organization offering free credit counseling and education. We can teach you how credit works, how to fix your credit report, and – most importantly – how to overcome the financial hardships of your past while building a brighter, more secure future.
This information is intended for informational and educational purposes only and not as legal advice. If you have concerns about your credit report, harassment, identity theft, illegal collections activity, garnishments, or property liens, you should consult an attorney who specializes in consumer rights and defense.