This blog is a way for me to share hard learned lessons about money with those who are just starting out on their own. I hope it's a way for you to avoid making the mistakes I made, and to benefit from my experiences

Wednesday, July 12, 2006

Lesson 1: Live Beneath Your Means

The first and most important lesson everyone should learn about money is to live beneath your means. Wealthy people did not become wealthy by blowing all their money as soon as they made it on new cars, fine dining, expensive clothes and toys, or expensive travel. Wealthy people became wealthy by living beneath their means, spending their money wisely and investing it in assets or businesses that made them even more money.

Accumulating more and more stuff will not bring you happiness. Having the latest Coach purse or a new car every couple of years will not bring you happiness. Oh, it may briefly make you happy, but that happiness is fleeting. What it will bring you is debt. And debt will not bring happiness. Debt brings misery and frustration. And that lasts as long as your debt does.

It's easy to get caught up in all of it. I did too for many years. We see all the stuff on TV and see that our friends and parents may have all the stuff. You think you deserve it too. However your friends may be in debt up to their eyeballs, just a paycheck away from bankruptcy. Your parents didn't accumulate their stuff overnight. They most likely worked and saved for it. You don't deserve to have all the stuff just because you exist! Life doesn't work that way.

As a result of that, I had credit card balances of up to $20,000 for years. I would struggle to pay the minimum balances, making a little headway, only to go out and spend again. And after all that, I had very little to show for it. I still rented an small 1 bedroom apartment and was getting nowhere. I had nothing in the bank. I was living paycheck to paycheck.

Don't make the same mistake I did. You don't need all that stuff! It only clutters your life.

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