Spending Power

My friend Mike sent this to me a few days ago, I thought it was a perfect way to end the My Money Story series. For the rest of the series, click here

For the last month or so, Alex has been running a series about his money story, where and how he learned to spend respon­sibly. Reading those posts has led me to think about my own money story, which has a lot to do with the way my parents spend their money (money see, money do, if you will).

Even­tu­ally I stumbled upon an inter­esting truth that I had never really considered:

Although it may not have always been the case, the phrase “I can’t afford it” has become synony­mous with “I can’t buy it”.

This is a dangerous line of thinking because, compared to a lot of the rest of the world, Americans have virtually unlimited spending power. There is almost nothing that I cannot buy as long as I can convince someone to loan me the money for it.

And, at the end of the day, a loan is just as good as the money you’ve earned, right?

The trap that a lot of people fall into is purely philo­soph­ical. Without knowing how to separate the ideas of “can buy” and “can afford” you’re likely to start using a credit card to excess or getting a mortgage on a house that’s bigger and more expensive than what you need.

I’ve fallen into this trap myself, but maybe I’m a smarter person for it. If nothing else, I’ve learned from my mistakes and, because of them, I have a far better grasp of where and how my money (my actual money) should be spent.

What have your money mistakes taught you?

6 Responses to “Spending Power”

  1. Loren Pinilis September 26, 2011 at 9:28 AM #

    So many people just focus on the monthly payments for debt, and that can get them into a lot of trouble. What is possible is not always what is wise.

    • Alex September 26, 2011 at 10:02 AM #

      For sure. A great quote I once heard:

      “The rich ask, ‘how much?‘
      The poor ask, ‘how much per month?’”

  2. Alex September 26, 2011 at 10:01 AM #

    You all have read most of my money mistakes, but the biggest lesson I learned was “know how much money you have”. It was a hard lesson that involved me losing somewhere around 1000 dollars (all my savings at the time).

  3. Timothy Davis September 27, 2011 at 4:07 AM #

    Thanks for doing this series. It was insightful and a good read!

    Do you have an idea for your next series? Might I recommend something on uncon­ven­tional or not-so-appreciated ways people can save money in their daily lives? Think of being able to buy decent clothes at a thrift store or saving on car repairs by going to the junkyard for replace­ment parts, etc.

    • Alex September 27, 2011 at 9:13 AM #

      Hrm, a very inter­esting idea.

      I have a few series thoughts in my head, but I hadn’t consid­ered that one. I’ll think on it and see what I can come up with! If not next, I’ll defi­nitely add that series to the docket!

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  1. Five Blogs You Have To Read…Now! | TransformingWords - September 26, 2011

    […] of my good friends, Alex, runs a blog talking about handling finances from a practical, Christian perspec­tive: For the last month or so, Alex has been running a series […]

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