It's How You Spend It

Have you ever noticed that debt doesn't seem to respect incomes? Some people don't make much money and yet are debt free, but some people have big incomes and yet are always shy on cash. That's because there are two ways to do just about everything-one way that costs a lot of cash, or the better way that costs little to nothing.

Let's take going to the beach. You can pack your lunch, remember your sunscreen, and bring lots to eat and drink. A good book is a great idea, too, to while away those hot hours in the summer sun. And, of course, because you know you can be tempted, you leave the cash at home. The other way, you can buy your lunch at the beach ($12), the bug spray and tan lotion because you forgot to plan ($16), and end up with no money in your pocket at the end of the day-because you brought cash to the beach.

What about a night out? You can go to the lounge and have one inexpensive drink, then switch to soda, and dance the night away. Hungry at the end of the night after that long dance work out? Because you planned, you're going home to nachos and cheese dip and a late night movie you picked up-all for about $20. Or, the other way, you can drink the night away sitting at the bar, then go out to a restaurant and buy some late night munchies. You'll spend a whole lot more.

So, how do you spend it?

The thing about going deep into debt is that debt doesn't respect how much money you make. Debt respects how you choose to spend the money you make. Wise buying decisions and not spending what you do not have means that you can have many of the fine things life has to offer. Debt generally occurs a few dollars at a time-a night out here that you couldn't afford, a too-costly present there-and all too quickly the credit card is maxed out. Unfortunately, too many people don't stop there. Having set themselves up with a lifestyle image, they don't want to stop living the good life. But that life is more than they can afford.

It's how you spend your money that will determine whether you have a debt free life or one riddled with troubles over money. Keeping your money in your pocket, your cards locked in your car, and choosing the same entertainment but on the cheap, will let you have the great life that you want-and can afford-without the grind of debt to drag you down.