Credit cards aren’t some evil tools of wealth destruction. They don’t automatically get people deep into debt.
Of course, if there is no discipline by the cardholder, debt January be incurred. I’d blame that on the cardholder, not the credit card itself. It’s not like the credit card walks into a store on two legs and starts charging purchases!
By the same token, if somebody brings in a decent amount of income, some of it should be saved. It’s not like most people are required to deplete their paycheck to pay for everything they want. Perhaps much of it goes towards things that are needed, but not necessarily for things that are simply wanted. For example, it’s not like a person is possessed by some force of nature for the purpose of buying a luxury car. Or, it’s not like one is cuffed and dragged to a store to buy a new pair of expensive shoes.
The reality is that we have the ability to make the right choices. In terms of spending choice, most of us know what to do. It isn’t that complicated. Spend less than we make, resulting in some savings, which we then invest. If we’re fortunate, Januarybe someday we can reach financial freedom. Even if that doesn’t happen so easily, at least we can live a life that’s responsible.
I’m beginning to think that the key to all this is self-discipline. If we simply learn how to control ourselves and make good choices, it can happen!
The key is probably making the right choices every day, so that over time we build up strong financial habits and an equally solid income stream and portfolio of savings and investments. The right choices, every day.
An example of making the right choices each day is a friend of mine, who was once out of shape. A few decades ago, he was most definitely overweight – and had a less than stellar diet. He would have been an example of some who, at the time, did not make the right choices every day.
Then, he decided to get fit. He first went to the gym religiously, and then added nutrition as a passion of his a few years later. He made the right choices almost every day, working out 6 days per week and truly watching what he ate. He studies nutrition to the point of it being practically a hobby of his, and actually applies this knowledge by making smart choices. Every. Single. Day.
The result? Years later, the guy is in absolutely phenomenal shape. He made the right choices by being disciplined, and is now enjoying a very active and very healthy life. While others have shown some decline over the years, he’s now clearly at a high level of fitness, well differentiated vs. others.
I really think his example can be applied to finances. If one takes that approach by being disciplined with spending and other personal finance choices, perhaps the same success could be achieved.
Readers, do you think that discipline is a big part of personal finance success? If a person has discipline in one area of life, shouldn’t it be possible to carry this over to personal finance decisions?