The number one reason why most of us buy things we don?t need with money we don?t have, to impress people we don?t like, is because of our desire to be accepted, appreciated and respected.
Do you have the “BLING-BLING” but no “Cha-CHING?” Are you wearing designer clothing such as “Prada” with “Not-a” dollar to your name? Are you driving a $30,000+ luxury car or “SUV” with “no money?” Do you sport a $500+ designer bag, yet wish you had $500 inside it? Did you purchase a lavish home, yet your savings and investments are bare to the bone?
Big house, new cars and designer clothes—you probably see someone who is prosperous and on the move. You may have bought into this illusionary model of success and you’re the very person I’m talking about. Sadly, I doubt if you know that it’s you. You’re under the impression that as long as you can make your monthly payments and continue to project an image of success, you are indeed a success. However, if you heard what I heard or know what I know—you see well-dressed poverty or a bunch of financial fakes.
If you’re offended by my candid style of communication, I apologize. Consider it tough love. I want to be unequivocal. Practically everyone who has utilized my services said that my frank, practical approach to finances gave them clarity. You cannot “fake it until you make it,” you cannot continue to “Pray on it and Pay on it.” You have to pay if off and stop borrowing! The scripture says that, “The rich rules over the poor and the borrower is slave to the lender.”
The late Larry Burkette said that today’s generation maintains the same standard of living that their parents do. There’s only one difference: Their parents took 20-30 years of hard work and sacrifice to get there. How can a generation short-circuit 20-30 years of hard work and sacrifice and live in the same neighborhood, drive the same car and take the same vacations as their parents? Can you spell credit? Generations before us were not as tolerant of debt. They would work, sacrifice, save and pay cash. Today’s generation cannot imagine college without a student loan, a car without payments, a house without a mortgage. In today’s culture you can purchase pets on credit.
The reality is that we have reduced our standard of living because we use credit. When you purchased things on credit, you pay a premium, called interest. In effect, you are paying more than market value for the item purchased and in some cases can pay up to three times the market value, which gives you less money to purchase other items.
Second, because you lack the money to pay cash for the item, you “burn” future income you have yet to “earn” in the form of payments. Having your future paychecks tied up in payments reduces the amount of money you have left to feed, clothe and provide basic utility for the family. Trying to find an extra dollar to save is like trying to find a needle in a “bill stack.” In fact, most people don’t have saving accounts. They have what I refer to as deferred spending accounts. Less material possession + less cash on hand = reduced standard of living. Still wondering why the little man can’t get ahead?
You probably never truly thought of it this way since you shop on an impulse. Patience is a financial virtue! You may have been too lazy to care. There’s a high cost for convenience. The number one reason why most of us buy things we don’t need with money we don’t have, to impress people we don’t like, is because of our desire to be accepted, appreciated and respected.
If you want to be a true financial success, you’re going to have to develop a required characteristic that those who have acquired and, more importantly, maintained wealth. You must become immune to criticism. You have to find fulfillment in reaching your financial goals instead of finding fulfillment from what others think of you.
(Damon Carr is the owner of ACE Financial. He may be reached at (412) 856-1183. Visit his website at www.allcreditexperts.com.)
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