| Gary Foreman is a former Certified Financial Planner (CFP) who currently writes
about family finances and edits
The Dollar Stretcher website
http://www.stretcher.com. You'll find hundreds of FREE
articles to stretch your day and your budget! |
Many of us are old enough to remember Nancy
Reagan's campaign against drugs. To this day I can still remember the slogan:
just say 'no' to drugs. It clearly explained the goal with a simple to
understand message. Saying 'no' could help you avoid pain and make your life
better.
The same thing is true in the world of personal
finance. Sometimes saying no can prevent problems and improve your lifestyle.
Let's take a look at some examples how just saying no can prevent a financial
overdose.
Just say no to buying more home than you can
realistically afford. In the last thirty years, houses have grown by roughly 50%
(from 1700 sf to 2500 sf). Yet the size of our families is about the same.
Buying too much house will almost certainly sink
your budget. You shouldn't spend more than 30% of your after-tax, spendable
income on housing (including utilities). The biggest problem with spending too
much on your home is that it is very hard to correct. Other areas of your budget
aren't big enough to overcome the problem. Often the only real solution is to
move to a more affordable home.
 Just
say no to 'no payments until...' offers. If a deal looks good to you because you
won't have to make a payment for months (or even years) then you probably can't
afford whatever it is. The seller is making the offer because he is betting that
you won't have the money later and will be forced to make payments on a loan
with high interest rates. Don't take the bet. Most consumers lose.
Just say no to rushing into a buying decision.
Years ago my Dad emphasized that it was a good idea to put off many purchases
until tomorrow. You might wake up to find that buying isn't as important as it
seemed yesterday. You might have thought of another way to get the same result
without spending the money or just decided that you could live without it.
You'll also avoid a lot of scams. Most con jobs
need you to act before you've had time to seriously think through the offer. The
vast majority of big financial decisions can wait for one day.
Just say no to believing that owning things will
bring real happiness. Sure, we need food, clothing and a roof over our head. If
we don't have those things getting them will bring happiness. But once you get
past a certain point (middle income?) more things don't mean a more enjoyable
life.
Face it, any happiness you can buy at a store is
going to be short-lived. Soon whatever it is will begin to lose it's luster.
There will be newer, fancier versions available and you will own the 'old'
version.
On a related subject, just say no to allowing
things to become more important than people. If you want real happiness, look to
your family and friends. Their love is more valuable than any thing you can buy.
Visit the elderly and ask them. Their best memories are of people. Not of
possessions.
Just say no to letting others dictate your
standard of living (and expenses). Just because someone else is foolish enough
to buy a car they can't afford doesn't mean that you should. The bumper sticker
is wrong. Dying with the most toys does not make you a winner.
Just say no to the 'you can have it all'
mentality. Set aside the fact that you don't really need it all. But why set
yourself up for disappointment when you can't get it all? Every day there are
people creating new things for you to want. It's pretty safe to assume that they
can come up with new things faster than you can acquire them!
Just say no to daydreams of getting rich quickly.
It's a trap. Countless people have lost money on both legal and illegal schemes
to make huge piles of money overnight. Don't join them. The odds of winning big
are very slim. You're more likely to be hit by lightning than to win the lottery
(seriously).
That doesn't mean that you have to give up your
hopes of attaining some wealth. If you work 40 years (and most of us will)
earning $25,000 per year, you will earn $1,000,000. So a lot of money will pass
through your hands during your life. It's up to you what you do with it.
Is just saying no enough? Well, no, it isn't.
Saying no while you sign a new five year car loan isn't going to help. You have
to say it and follow up with the appropriate action. But choosing to 'just say
no' can help you and your family to financial freedom.
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