What if I told you that there is one rule, one principle, one truth that if applied, can almost 100% guarantee a life free from debt and a life of true financial freedom, would you listen?
No gimmicks, free of charge, without a hidden agenda, here it is:
“Never spend your money before you have it.” – George Washington.
That’s it! Nothing more, and nothing less.
If it is that obvious, why do so many of us ignore or blatantly violate this rule? Could it be that, until today, we’ve never heard of it so our own ignorance is to be blamed? Somehow, I doubt it.
If we can’t use ignorance as an excuse, what can we pinpoint as the main reason for dismissing this truth as we live out our daily financial lives? There are probably quite a few reasons, but here are two of the most pervasive.
I want it, and I want it now
Half of Americans are spending more than they earn, but don’t realize it – that’s according to the survey by Rasmussen Reports for Country Financial.
Our parents or grandparents understood that in life we can’t have it all, and that it takes time and sacrifice to reach certain financial goals. We’ve convinced ourselves that there is no use in waiting, since we literally can have it now, if not with cash then with credit. The “I’ll buy it now and pay for it later” approach is what’s driving so many of us to insane levels of debt. We make conscious decisions to “play now and hopefully pay later,” convincing ourselves that the days of reckoning will never come. If you’re living a lie that you can have it all, that debt is really not as bad as it seems, and that you’ll somehow manage those monthly minimum payments, it’s time for you to wake up! If the day of reckoning hasn’t come yet, it will soon, and the longer you wait the tougher your life will be. So how can you break this destructive cycle?
– Admit your problem.
– Find an accountability partner, someone who will have your permission to keep you on the “straight and narrow”.
– Stop using debt and live on a cash basis ONLY.
– Use a tried and true system, such as envelope budgeting to designate an envelope for each spending category, designate a specific amount for each of your envelopes and make a commitment to stop spending once the envelope is empty. You can fund it again with your next paycheck. This way, you will never spend more than you make, and can even start creating envelopes to help you make progress on things like paying off debt or finally putting money into savings.
“Nothing will work unless you do” – Maya Angelou
We are constantly bombarded with messages of simple, quick, no effort required solutions, that without realizing it, we have fallen for the “easy fix” lie and expect financial success to come without any work on our part.
Living a life of financial abundance, a life of contentment and financial margin will not come easy. There is nothing easy about the road to true financial freedom. It will require hard work, effort, commitment, guts, and going against popular culture or even peer pressure. Are you ok with that? Are you willing to work hard to make your financial dreams come true, or will you just keep dreaming? If you’re ready to put your “hands to the plow,” here are few steps you can take:
– If you don’t have a plan for spending your money, make one. You need to have a written financial plan, a roadmap that you can follow.
– Find a tool that will help you enforce your monthly budget. If you love technology, then search for financial apps that help with planning and tracking your daily expenditures.
– Spend 15 – 30 minutes every day reviewing your budget and where you stand to date. By doing this you’ll be able to see what parts of your budget are overspent or under-funded and you’ll be able to make quick adjustments in order to stay within your monthly spending limit.
Each of us could probably come up with few more reasons why we continue spending money before we have it, but I hope that this article can serve as a motivation to help you break that destructive cycle. Once you’ve put yourself on solid ground and have overcome financial challenges through applying these two solutions, you’ll be in great shape to follow the one rule from George Washington that will set you up for long-term success. The longer you wait the harder it will be, so make today the day of your financial turnaround. Work hard at it and give it time.