Sometimes debt makes sense. Unfortunately it's your definition of sometimes that will determine if you are going to have an easy or a hard financial life. As you know, an easy financial life is a paradox. In order for your financial life to be easy, you need to make hard decisions. If you take the easy way out when it comes to decisions, then your financial life will be a struggle. The longer that you transpose the easy and the hard, the longer you will struggle financially.
There's no better opportunity to flex your financial muscle than when it comes to avoiding unnecessary debt. Your ability to do the hard thing will serve you well forever. The easy decision often shows its ugly face when you are shopping. If you can avoid going into debt while shopping, then you are ahead of the curb. Here are the three items that you should never go into debt to buy.
- An engagement ring- Have you heard the radio commercials telling you that you can finance your jewelry purchase through your local jeweler? Yeah me too. Jewelry is a luxury. Debt is the opposite of a luxury. Why would you combine the two to put yourself in a terrible financial situation? Why would you enter a marriage by making a poor decision to go into debt? Call me unromantic if you want, but I don't think you want to marry someone that would put you in a terrible financial situation to start the marriage.
- A television- "But my old TV just broke." So what? Do you want to know exactly what a terrible decision looks like? It looks like someone that buys a new TV on credit, because their old TV broke. There's a much simpler strategy to employ which will still accomplish the goal of buying a new TV: save the money first before you buy the TV. Novel concept, right? The more often that you can pre-fund a financial goal, the better off you will be.
- New furniture to replace old furniture- People love buying new furniture. Do you have a dusty couch from the 1970's? Yeah, get in line. Are you still able to sit on it? Good, then don't go into debt to buy a new one. Furniture stores have become masterful at teaching you how to make poor financial decisions revolving around furniture. Every time that you buy a couch on credit, an angel loses its wings. While the interest is racking up, you are literally sitting on your bum bum not earning the money to pay for it. Get off the couch, and make some money to pay for the couch.
Don't make these three brutal mistakes. It will set a terrible tone for the rest of your financial life.
