“I say to you never involve yourself in debt, and become no man’s surety.”
– Andrew Jackson
What I’ve learned from being debt-free
Yesterday I was walking downtown and saw this cool hookah.
It would have been the perfect accessory for my living room.
According to the price tag I could have this awesome smoking apparatus for just $70.
My hand was on my wallet by the time I remembered that $70 is about how much I spend on groceries each week.
For $5 I can go out to eat.
My hookah would cost me the same as 14 lunches.
That’s a lot of money.
Smart spending has saved me millions
This might sound like an exaggeration, but making wise purchases has probably saved me more than a million dollars.
Instead of taking on student loans to pay for tuition, I dropped out and got a job.
The nine months that I worked for someone else sucked.
But it was better than saddling myself up with debt and having to spend the rest of my youth worrying about bills.
Had I stayed in school I would have ended up with crippling debt and been forced to get a lame office job somewhere in Iowa.
I would have had to buy a car to get to work. An apartment to go home to. Furniture for my apartment. And all kinds of insurance for my stuff.
That would have cost even more money.
My debt would have grown.
Paying off my loans, car payments, and other expenses would have taken decades.
Debt limits your opportunities
If you have monthly bills it’s impossible to uproot and move to another country or take time off from work.
Investing in an idea you like, or taking a risk, becomes near impossible.
When you owe someone else money you lose the ability to make decisions for yourself.
Paying your creditor back comes before everything else.
Shopping malls hate him!
There’s an easy way to avoid racking up debt.
Don’t buy things you don’t need.
In all honesty there is no reason for me to own a hookah.
14 lunches is much more practical.
The funniest thing about avoiding impulse purchases is the fact that you never feel like you missed out on something great.
It’s been less than 24 hours since I passed up that hookah and I could care less.
You’ll regret things like never seeing the world or starting a business.
Forgoing a new sofa won’t be something you’ll lament on your deathbed.
Easy ways to save money
I’ve listed five simple strategies that have helped me to save money over the years. None of them will blow your mind, but all of them are incredibly effective. With these you can protect your money while avoiding useless purchases.
1. Spend on quality, not quantity
The budgeting gurus all love to talk about how brands don’t matter and how the cheapest option is the best.
I don’t believe it.
While there are a lot of things that are fine in their generic form, I always buy generic brands of peanuts, there’s nothing wrong with a pricey but well made item.
When it comes to shoes I only buy Ralph Lauren.
That’s what I like.
I’m sure I could save money buy ordering generic shoes online, but I wouldn’t like them as much and they would never hold up as well.
If you’re going to get a lot of use out of your purchase, choose the option that’s best for you.
2. Don’t buy prepackaged food
I know tons of broke people who eat pizza and pre-made food.
This is like throwing your money in the trash.
You get zero nutritional value while overpaying for what you get.
An apple, ground beef, and some rice takes no time to prepare and is infinity healthier than some frozen entrée from the store.
3. Create another source of income
Starting a blog takes very little time.
Posting a Craigslist add offering to walk people’s dogs is a 10 minute investment.
There are a million ways to earn extra money.
Even if you only make a couple hundred bucks a month you’ll still be able to save money and pay off debt.
4. Have basic goals
Find a large sheet of paper and divide it into three columns.
The first is for the date, the second is for expenses, and the third is for income.
Fill each one out every single day.
Make it into a game too.
Try to make the income column bigger than the expense one.
Some of you might think that this sounds stupidly simple, but it’s how I’ve been doing my accounting for years now.
5. Wait before buying
If I see something impractical that costs more than $25, I wait at least a full day before buying it.
Do you know what happens 99% of the time?
I think “That would have been a stupid purchase,” and am glad that I never spent the money.
Aside from a few books, none of my impulse purchases have ever brought me joy.
There’s a little rush when you initially buy them, but after that they add nothing of value.
Do you know what the ultimate sign of rebellion is?
It’s not getting drunk, or holding up a sign and protesting “The Man.”
It’s not having to owe anyone anything.
When you’re a free man you can do whatever you want and no one can stop you.
They have no power and no way to control you.
You can do whatever you want without having to worry about how you are going to pay your financial masters back.