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Do not go into debt! If I could offer any advice about money, it’s that; Do not go into debt. How you handle money is a lifestyle choice. People have different ideas, practices, and views on how they handle money and what they do with it. I’m not here to tell people what to do with their money. I want to offer an insight into how I made a decision at a young age to treat money. I want to help others understand that money can be viewed in many different ways; from frugal and thrifty, to excessive and even wasteful.

Money is still a faux-pas where we are afraid to talk about it. This hampers people to the point that they’re uninformed about making decisions with money and they end up getting into debt. It’s time to be open about money.

There are so many horror stories that you can read about how someone went into debt and how it nearly ruined their life, lost them their job, their family etc. and how by changing their lifestyle and saving up they turned their life around. But what if there was advice for the person who didn’t want to get out of debt because they never got into it in the first place? Because they were smart bout how they handled money. If there’s one principle to live by when you don’t want to ever get into debt, it’s this;

‘Buy what you can afford and don’t live outside your means’

But this isn’t always easy. In fact, this is how I have lived most of my life, by adopting this principle. It won’t always be comfortable and there will be certain times when you may feel the pressure. It’s doing things the harder way by developing a discipline and a knowledge of understanding what it is you can afford, the foresight into when you can afford it, and debating whether you need it or not. Something is either a ‘need-to-have’ or an expense. ‘Need-to-haves’ such as food, clothes, and shelter are basic human needs. Expenses such entertainment and even charity are something that you can go without until you can afford to introduce it into your life when you are able to. When you have the margin to.

Think of it as; can you afford to this thing or can I go without for a couple of weeks until I have the money for it? Video games, music and TV subscriptions, even health insurance; these are all ‘nice-to-haves’ that you can forgo until you have the income to provide the ‘must-haves’. For example, When I transitioned to working freelance, I had to cut back on my expenses. This included buying video games, and even cancelling my health insurance. But this scarcity led to me changing my mindset – I knew my health was important to me, so instead of paying for a service in case something happened me, I replaced that by going for a run in my local park. This way I was saving money and improving my health both mentally and physically by getting outside and away from sitting at my laptop. It was a win-win.

That scenario required me to be in a state of scarcity to understand this. I couldn’t afford a ‘nice-to-have’ such as health insurance, so that forced me to live by my principle of; ‘Buy what you can afford and don’t live outside your means’, and by doing so, helped me out in the long run because it changed my lifestyle and saved me money.

Most of us like to help others in some form, but can you afford to give to charity when you can’t provide for yourself? It’s about being smart with your money. It’s about making smart choices.

You can’t tell people what to do with their money, nor condemn them for how they spend it.

I know a lot of people, friends and family members (the ones that do talk about money), who choose to live a life of comfort by going into debt and living outside their means. This is the wrong advice to be giving to young people, college students, teens, and even kids. You may have been thought to compromise. People may say, “going into debt is bad, but you need a car for work”. The important part is to prepare for that scenario so that you don’t have to go into debt, or get a loan out and accrue so much interest and debt. Remember, when you get a loan, you’re actually paying more for something than you would have if you were to save up and buy it outright with your own money.

If you don’t have money for something, don’t buy it.

Here are 5 ways to help train yourself and change your mindset when it comes to money, saving and staying out of debt;

  1. Save for a rainy day – Because you never know. Sometimes something springs up out of nowhere and without warning or just cause. A car accident or a medical emergency, or something else of a smaller magnitude. When you have some savings put away, you can dip into it to cover the cost and keep you out of debt. Open a new account with your bank or credit union, deposit a certain amount of money a month directly to it, or have a cap on how much you keep in there. It will give peace of mind and clarity in case that day ever comes.
  2. Have a budget – Keeping a budget is a smart move. Say you earn €2,500 a month at your day job. Allocate a certain expenditure towards the things you need to pay off – your rent or food. Do the same with your savings account as I just mentioned. Maybe you deposit €50 a month into it? Likewise with entertainment, events, and charity. When you know how much you can spend, you can plan further in advance.
  3. Keep a diary – Inevitably, you’re going to over-spend from what you allocated in your monthly/weekly budget. You can’t account for unexpected things that crop up. So when they do, keep a diary of all expenses you made that week. Then look back and analyse what you spent that you could have instead saved on. Maybe you didn’t need those new shoes, or maybe you don’t need those €5 coffees from Starbucks twice a day.
  4. Live within your means – This means knowing how much money is coming in, and how much is going out. How much can you afford to spend vs. how much you’re earning? What kind of a life do you live? Start working toward that life without working outside of it. Everything is relative. The person buying a €50,000 watch is living the same life as someone buying a €50 watch. It’s just at different ends of the scale. A different circumstance. If you’re ever feeling bad for not being rich, remember, there are people who live on less than €1 a day. You’re doing just fine.
  5. Don’t take out a loan – Please, do not do this. By doing this, you’re in fact living outside of your means even though you think you aren’t. By taking on a loan, you’re paying more money than if you had saved and bought the thing outright. Do you want to be in control of your life, or do you want it to control you? The master or the slave. Choose one.

Is it going to be easy? No. But it’s incredibly rewarding to know that you own everything you have. Your computer, your car, smartphone, DSLR, even your house. It’s all about choice and understanding which is the wiser choice at the time and living a life within your means. Is something going to set you back and make you struggle? Or is it going to make you grow and help towards a future payment or investment?

There’s a lot to be said about buying things that you like or will eventually own. If you want to buy something that will make you happy and can afford, I suggest buying it. Start by not justifying Debt. Don’t make excuses for poor choices. Take responsibility. You never have to go into debt, it’s your choice. There are always alternatives for whatever scenario you are considering. Buy what you can afford, live within your means. There is no such thing as ‘good debt’.

Don’t be afraid to talk about money. What you earn is not a reflection of who you are as a person. You’re more than the work you do and the money you have.