Are fun and spending the same thing? After all, if you pulled aside ten people on the street and handed them some spending money, chances are good that their eyes are going to light up and they’re definitely going to spend their money on something fun rather than something “boring” like paying the bills.
Yet there’s another question here that we think needs to get answered — are fun and spending necessarily the same thing? We don’t think so at all. When you’re trying to get out of debt, it’s important to note that fun and spending really aren’t the same thing at all. You can go out in the park on a warm summer day and play Frisbee with your friends. You might have had to pay for a Frisbee, but they’re not expensive at all. This means that you got in some cheap fun without going overboard. You got to get some exercise too and have some fun. There’s nothing wrong with getting in fun in the sun, or even spending some money. However, a lot of people do take it to extremes. These are the roots from which a lot of consumer debt springs. Most people are not trying to purposefully get into debt. They think “Oh, I’ll just charge a few things and pay them off when I get a little more money.”
Then life steps in to throw a monkey wrench into things. There might have been a shortage at work, or there might have been other problems that make it downright impossible to be able to do anything productive. You may end up getting very sick and unable to really do much of anything. There are all risks that we take in life when we spend. Of course, the credit card company knows this and they tell you that it’s okay to carry a balance. If you spend $1,000, they might tell you that all you really need to pay is $120. That’s your minimum payment and everything is forgiven, right?
Wrong. The bulk of that money is going to go towards paying the interest on your credit card. The rest is going to go toward the principal, which means that you’re really right back to where you started next month. This can go on and on are your debt skyrockets — those cute shoes you bought for $100 can easily become $300 after interest is applied. That’s a lot to pay for some shoes that might be unbearable after six months!
In order to lead a better financial life, you have to put spending in its place. We know that it’s hard to resist the latest techie goodies or those cute shoes that seem to have been born to grace your feet. Those things are fine in moderation. It’s really like dieting — there’s nobody that will tell you that eating a little ice cream here and there is bad, but there are plenty of studies that show too much of a good thing is really bad for your health.
You will have to step up and realize that only you can control your spending. If you trust other people to hold you back, they’re going to eventually fail. Why? They know that you will do whatever it takes to get what you want anyway, including wearing them down. That’s why the whole “freeze your credit card in the fridge” thing only works if you have already committed to spending less.
Of course, you might think that you really aren’t a spender. You might think that you only spend a few here and there, and that’s not a bad thing, right? Or you might take the argument that it’s your money and you’ve worked hard all week — so why not blow a little bit of your paycheck on pleasure? It all goes back to the core principles of personal finance — your finances are what you make of them. If you work towards your goals, that’s one thing. But what if your actions are keeping you from the lifestyle that you really deserve?
A lot of people will envy someone that has a nice house or drives a nice car, without stopping to think of the sacrifices that person has made in order to have those nice things. They might have had to take a second job to save up for a business that they worked at for eighty hours a week in order to get profitable. Or they may have taken an inheritance and invested the bulk of it, choosing to live “less” right now so they can have “more” than what they started with.
You have to make that same choice in your head. What type of life do you really want to lead? We can’t tell you what to do with your money, but we would rather have nice things for life, not just nice things for the short term. We would rather have a house that we own rather than hoping and praying that our landlords are kind. Yes when you first buy a home, you’re buying it from the bank and essentially paying rent to the bank. However, you also have the right to improve upon your house and make it better. Some people have seen their houses appreciate so much that the equity in the house made it worth dealing with the mortgage. That’s the power of ownership in action. Is a new car the same way? Not exactly, but if you live like most people, public transportation isn’t always an option. Yes, you can hope that your friend sand family will be content to drive you around, but that ship will sail eventually.
The time is right to get control of your spending. Of course, you definitely don’t have to make the decision on your own — you can get help with the decision. Credit professionals teach everything from personal finance to how to get out of debt, and they help you walk the walk instead of just talking the talk. Credit card settlement negotiation and debt consolidation are just two tools in a debt professional’s toolkit — why not get in touch with one and see what all they can do for you today?