home loan finance blog
We can’t foresee the future and I’m pretty sure that’s a good thing. Although we can’t see the future or what it holds for us, we do need to be prepared financially to deal with it. If you spend like there will be no tomorrow, when tomorrow does get here, you’re going to be in deep trouble.
The trick in debt management is to live as well as you can today while preparing to live even better in the future. Just because you live in a financially responsible manner doesn’t mean that you always have to do without everything that you want right now. You do, however, have to choose.
There are three important factors in successful debt management today that will prepare for the unseen future.
The first of these three ingredients is saving. It will never work to save what is left at the end of a pay period. There will never be anything left. You must save before you spend. The most painless way to save is to never get the money that you will save at all. Go by the payroll office where you work and sign a form that instructs your employer to deduct some money from your paycheck and save it for you.
The second ingredient is to prepare yourself for debt. Before you make a purchase for which you will have to make a monthly installment payment, save the amount of the monthly installment for three months before you make the purchase to see if you can comfortably live with that much less in disposable income every month.
The third ingredient is a little trickier. You must know yourself. You must make choices based upon your own set of priorities. Would you rather buy that new car, or would it really make you happier to do with the car you have and buy a boat? You really can’t have both if you are going to prepare for the future.