Comments on: All Liabilities are Not Equal http://www.silverbeach.com/Money/archives/35 Thoughts by an Engineer on How Money Works and How to Make the Most of What You Have Fri, 21 Nov 2008 09:26:20 +0000 http://wordpress.org/?v=2.0.4 by: Kit http://www.silverbeach.com/Money/archives/35#comment-1027 Fri, 27 Apr 2007 20:09:03 +0000 http://www.silverbeach.com/Money/archives/35#comment-1027 Firstly let me say, Congratulations on your upcoming wedding. Managing your finances is an important aspect of a good life, but finding a life partner is even more important. My concern is that you seem to be in a pattern of spending first and paying later, rather than saving first and spending later. To me this is the primary distinction between those who are wealthy and those who are going to be wage slaves their entire lives. In the post I reference in the article you say that you had a goal in January of saving $7000 for your wedding and $4000 for your Honeymoon. In the report you say that you didn't make any progress on either of these goals, not even partial progress. It's one thing to shoot for $7K and only save $5K, but so shoot for $7K and not save anything? There will ALWAYS be something out there that you really want to have or do that is going to cost money. You absolutely have to acquire the discipline to say "I can't afford that", or "I don't want to afford that". If you don't you will be a wage slave your entire life. Now it's the wedding and honeymoon, next it will be a house, then furnishings for said house, then it will be a child, etc. Each of these things are things that people tell themselves they owe themselves, and if they just acquire them, happiness and a good life will follow. The entire capitalist system is built on some very smart people working very hard to convince you that there are things you really want to have right now. With the advent of easy credit they also allow you to buy now and pay later. This is a trap, don't fall for it. I hope I'm wrong in my assessment of your situation, but it sure seems like you are better at talking the talk, than walking the walk. Firstly let me say, Congratulations on your upcoming wedding. Managing your finances is an important aspect of a good life, but finding a life partner is even more important.

My concern is that you seem to be in a pattern of spending first and paying later, rather than saving first and spending later. To me this is the primary distinction between those who are wealthy and those who are going to be wage slaves their entire lives. In the post I reference in the article you say that you had a goal in January of saving $7000 for your wedding and $4000 for your Honeymoon. In the report you say that you didn’t make any progress on either of these goals, not even partial progress. It’s one thing to shoot for $7K and only save $5K, but so shoot for $7K and not save anything?

There will ALWAYS be something out there that you really want to have or do that is going to cost money. You absolutely have to acquire the discipline to say “I can’t afford that”, or “I don’t want to afford that”. If you don’t you will be a wage slave your entire life. Now it’s the wedding and honeymoon, next it will be a house, then furnishings for said house, then it will be a child, etc. Each of these things are things that people tell themselves they owe themselves, and if they just acquire them, happiness and a good life will follow.

The entire capitalist system is built on some very smart people working very hard to convince you that there are things you really want to have right now. With the advent of easy credit they also allow you to buy now and pay later. This is a trap, don’t fall for it.

I hope I’m wrong in my assessment of your situation, but it sure seems like you are better at talking the talk, than walking the walk.

]]> by: Matt http://www.silverbeach.com/Money/archives/35#comment-997 Fri, 27 Apr 2007 12:14:16 +0000 http://www.silverbeach.com/Money/archives/35#comment-997 I agree completely that not all liabilities are created equal and that my Fiance and I financing our honeymoon on our credit cards but there is a reason for it other than just 'Fun'. We're using the credit cards because pretty much all our other money is tied up with the wedding, we're expecting money from both families that they've told us to expect which in turn will go to paying off this honeymoon. I got myself into huge debt by living beyond my means with 'fun' purchases on my credit cards and I'm sill paying that down, I wouldn't make the same mistake twice at least not at the price of a honeymoon. Credit cards should not be used when you have no means to repay them but making an advance purchase when you know you will have the money isn't necessarily bad as long as you're willing to incur the additional finance charges. I agree completely that not all liabilities are created equal and that my Fiance and I financing our honeymoon on our credit cards but there is a reason for it other than just ‘Fun’. We’re using the credit cards because pretty much all our other money is tied up with the wedding, we’re expecting money from both families that they’ve told us to expect which in turn will go to paying off this honeymoon.

I got myself into huge debt by living beyond my means with ‘fun’ purchases on my credit cards and I’m sill paying that down, I wouldn’t make the same mistake twice at least not at the price of a honeymoon. Credit cards should not be used when you have no means to repay them but making an advance purchase when you know you will have the money isn’t necessarily bad as long as you’re willing to incur the additional finance charges.

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