Everywhere you look, companies are still offering people the opportunity to be irresponsible with their money. Even PayPal has gotten into the ‘credit’ game recently with their new BillMeLater service…but don’t do it and here’s why.
Painful Credit Lessons Don’t Last Long
The past several years has brought a huge percentage of Americans to their knees financially. The continued wrongful use of credit cards and the ‘mortgage’ situation should have taught us a thing or two about buying ‘stuff’ with other people’s money, but no…we’re still tempted and enamored by the idea that we can have all the ‘stuff’ we want today and pay for it tomorrow.
STOP THINKING THIS! Thinking that you can pay for things later is what keeps getting this country into the problems it’s in. In the US government only spent money it had, we would NOT be in debt…we couldn’t be.
Think Like People Who HAVE Money
Here’s the thing…
Wealthy, financially free, rich people are wealth, financially free and rich because they practice some very important, and simple, time-tested financial principles. Principles like Pay Yourself First, Put Your Money To Work for You and others.
Paying for stuff with other people’s money isn’t one of those principles.
Question: if you want to learn how to play the flute, do you learn from a concert flutist or a soccer player? I know…stupid question, huh. The fact is, if you want to have money, you MUST do what people who have money do.
In all of our financial literacy programs, we teach participants that the ONLY reason to borrow money (and that’s what using a credit card is) is if you have the opportunity to MAKE money by using it. (Caveat…I’m not talking about an emergency like a medical expense or something life-threatening.)
In other words, borrow money to invest in assets that are going to MAKE you money like rental property, parking lot, a business and other assets that have the opportunity to create a cash flow for you.
I would venture to say that most things paid through PayPal are NOT asset-like!
Financial Principles You Can Thrive By
Two of our Creative Wealth Principles (aka…Rules to The Money Game) that go hand in hand with this financial strategy are as follows:
Only Borrow Money When It’s Going To Make You Money
We’ve already discussed this one…
If You Can’t Afford To Pay Cash For It, You Can’t Afford It At All
This principle is quite simple. If you don’t have the cash, i.e., REAL MONEY, to pay for something right now, you can’t afford it. This is where we need to go back to saving up for things we want to buy. Something happened to the whole idea of delayed gratification years ago when credit cards were introduced. People no longer had to save up for purchases…they just went and bought whatever they wanted…and this was the beginning of what has become a huge issue for a huge percentage of Americans.
What You Can Do
The most important thing you can do is to learn a little self-control and the way you do that is have a big enough WHY for not buying everything you think you want or need.
In other words, learn to tell yourself, “NO, because I’d rather….. (fill in the blank).
Here’s an example of what I’m talking about.
Imagine you’re in your favorite clothing store and you see a shirt that you just have to have. Instead of buying the shirt on impulse, you say to yourself, “Self, I’m not going to buy that shirt because I’d rather feel more secure with an extra $60 in my savings account this month.”
We must learn to look further into the future when it comes to making personal decisions in regard to money, health, relationships. We all want things right now, whether it’s a new iPhone, piece of cheesecake or hugs and kisses. Learning how to best assert personal self-control, i.e., self-disciple, gives you the tools to create the future you keep saying you want for yourself.
Answer the following sentences and then go look into the nearest mirror and say them to yourself. You won’t believe how powerful you’ll feel.
“I’m not going to buy this today because I’d rather experience……”
“I’m not going to eat this today because I’d rather experience……”
“I’m not going to say _______ to ________ because I’d rather create _________ type of relationship for the long term.”
And feel free to make up a few of your own.
As always, hope this information was valuable. Please leave your comments below and please share this post on your Facebook wall to share with your friends.
The Financial Literacy Lady
Just helping you think differently about money
* WealthWork is what wealthy people do in their spare time to create wealth for themselves.