I’m 26, and I graduated from college a few months ago. I was fortunate enough to have a job making $70,000 annually waiting for me. I don’t have any other debt, so my only real problem right now is about $5,000 in credit card debt. It doesn’t seem like a huge amount, but I don’t want to fall into the trap of relying on debt throughout my life. Do you have any suggestions for remaining motivated to stay out of debt in the years ahead?
Dear Emil,
Congratulations, young man! Aside from the credit card debt, it sounds like you’re off to a good start in life.
Paying off the credit card debt should be no problem with the income you mentioned. You can knock that out in two or three months just by living on a strict, written budget. Now, how do you stay motivated after that? I thinkitcomesdowntohaving a specific reason, something meaningful in your life that makes you never want to be a slave to debt again.
In my case, it was simple: We went broke and filed bankruptcy the year our second daughter was born. So, my reason for getting out of debt — and staying away from debt after that — was to be able to feed our kids and take care of our family the way a man should. My wife and I also didn’t want to feel the kind of pain that comes from losing everything again.
But here’s the thing, Emil. Everyone’s different. Your situation isn’t the same as mine was, so you’ll probably havedifferentmotivationsfor staying away from debt and buildingwealthbymanaging your money wisely. Maybe you want to be outrageously generous to churches, civic groups and nonprofits. Or maybe you want to bless your future family members with an inheritance somewhere down the road.
If you have a good reason for doing something — one that’s meaningful to you — it’ll make all the discipline and scratching and clawing to win worth it. I want you to read a book by Simon Sinek called “Start with Why.” In it, Sinek explains how an extremely personal reason for doing something can help you get up in the morning inspired to make it happen.
Remember, the enemy of excellence isn’t laziness. It’s the attitude of being okay with mediocre and the mindset of “Thank God, it’s Friday. Oh God, it’s Monday.” Ironically, it’s easy in America today to have a high-quality life while being mediocre. But who wants to be mediocre? Why not strive to be all you can be?
If you’ve got a good why, it’ll get you moving in a positive direction with a positive attitude every morning, every day for the rest of your life!
— Dave
Dear Dave,
I just got married a week ago, and my husband and I are already having problems. While we were single, we practiced doing budgets together, and we agreed to follow your plan and get out of debt. The other day, we sat down to our first budget meeting as a married couple, and he told me he doesn’t consider the balances on his two credit cards to be debt. He said he plans to keep them for emergencies, but he’s still using them for everyday things. He’s 33, and I’m 31. I really want this marriage to work and be happy, but I’m feeling
Dear Dave,
My husband and I are 38 years old. We’re completely debt-free, we each have great jobs with honest, conscientious companies, and we’re doing very well financially. We tithe regularly to our church, and we try to give wisely to civic groups and non-profit organizations in the area. We don’t talk a lot about this kind of stuff, because we’ve found it sometimes causes others to treat us differently. Believe me, we both understand how incredibly blessed we’ve been. We always try to give God the credit, and not brag as if we did it all ourselves. Do you think there’s a better way we could be handling our situation?
Amanda
Dear Amanda,
When you start building wealth and achieving some of your goals, you discover pretty quickly there’s a very small group of people you can celebrate with. It sounds like you’ve learned this already.
Lots of times there are friends, and even family members, you can’t celebrate with because it comes off as bragging—even if you’re just happy you’ve reached a milestone. So, you learn to keep stuff private and not even share the good things. Still, if you have a nice car or a beautiful home, these things can indicate you’re successful. Even if they’re a small percentage of your financial world, it will sometimes generate feelings of jealousy or envy in other people.
Jealousy is, “I want what you have.” Envy is, “I don’t think I can have what you do, so I don’t want you to have it either.” These are two really bad spirits, and they’re loose in our country today like never before. Part of the price of making smart decisions, and being wise with your money, is that some people don’t like it when you win or understand why you win. And they don’t think it’s fair that they’re not winning, too.
The truth is you guys have every right to enjoy the fruits of your labor. You’ve earned it. You’re generous, successful people, and you’re under no obligation to explain your income, net worth or the fact that you’re winning.
And you’re not obligated to be ashamed of it, either.
— Dave
Dear Dave,
I’m single, and I work with a well-known, high-end retail company. Over the years, I’ve noticed that certain models of some watch brands appreciate incredibly over time. I’ve seen a few that have doubled, tripled and even quadrupled in value over the years. With this in mind, what do you think about the idea of select watches, including vintage watches, as part of my investment portfolio?
Adam
Dear Adam,
I’ve seen a few really nice watches in my day. Now, I even own a couple. But watches, no matter the brand or model, aren’t what I’d consider to be an actual investment. Mutual funds are investments. Real estate and 401(k)s are investments. But watches? Not so much.
Whenyou’retalking about watches, what you’re really talking about is collectibles. For example, I have a friend who has collected over 1,000 bottles of wine over the years. While the value on most of them has gone up, it’s not part of his formal investment strategy.
So, if you’ve got your financial house in order, and by this, I mean you’re debtfree, you’ve got an emergency fund of three to six months of expenses and you’re putting money toward retirement, do some research, save up and go buy a very nice new, or vintage, watch. There’s nothing wrong with that if watches are something you really enjoy. Just don’t go crazy and buy a dozen, okay?
If you know your stuff in this area, that first purchase could launch you toward owning a fine collection of watches over the years. Some people do the same kind of things with cars, too. But whether you’re talking about watches, cars or even baseball cards, treat them like whattheyare—consumption items. They’re things you like and can afford to enjoy.
See what I’m saying, Adam? Things like that are hobbies, not real investments. But then, if they happen to go up in value over time, that’s a nice added bonus, isn’t it?
— Dave
Natalie Dear Natalie,
betrayed right now. Do you have any advice?
What bothers me about this issue isn’t some guy’s stupid (and wrong) statement that carrying balances on credit cards isn’t debt. It is debt. Period. What bothers me is, your husband is basically saying he doesn’t care about your opinions or being truthful with you. I’m really afraid that level of disrespect and dishonesty is going to invade every part of your relationship.
There’sanunderlyinglack of character here, along with an underlying lack of respect for his new wife. Instead of loving you, treasuring you andwantingtoserveyou,he’s all about what he wants to do and how he wants to look at things. He’s acting like he’s 14 years old. And I’ve got a feeling you thought you were getting a man as a husband — not a selfish little boy.
I think the core issue here is that you two have a really weak relationship. I’m not saying this to hurt your feelings, Natalie, but if he’s acting this way and treating you like this now, just imagine how things are going to look in a couple years.
Honestly? You shouldn’t accept his lack of honesty or the disrespectful way he’s treating you. I think you need to put your foot down now and declare a relationship crisis. Find a good pastor or counselor, and both of you — together — need to attend the sessions. Be open and honest about your feelings. See if you can get to the bottom of all this and fix things before they get worse.
God bless you both. I’m praying this works out well.
— Dave