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?
Brandon (132)
Loren Pinilis (109)
Mike Luna (103)
ixnayonthetimmay (83)
Dustin (78)
moe (63)
Don Sartain (59)
Pastor Matt (36)
JeniferR (30)
Adam (20)
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.
For sure. A great quote I once heard:
“The rich ask, ‘how much?‘
The poor ask, ‘how much per month?’”
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).
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.
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!