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?