Spend less than you earn. Pay yourself first. Save 10 percent of all of your earnings. These are some of the most basic principles of personal finance, yet millions fail to do this. There are hundreds of personal finance books that talk about these financial basics, and more are on their way. Simple solutions are often not that simple for many people, but they should be.
People let their financial focus dim when they see something they want, especially if a friend, family member, neighbor, and even an enemy owns it. These days we are able to get the things we want by using credit cards and various other loans. This route has become too easy and shows no sign of stopping.
Many years ago, credit was not so easy to come by, so people had to do without or they acquired what some call money hunger.
Money hunger is when a person hungers for wealth and they become more aware of wealth creating possibilities around them. They focus on how to obtain wealth. They thirst for knowledge on wealth creation; they seek out opportunities to gain more money to get the things they want. This is how you should go about getting what you want, not using someone else’s money just to keep up with the Joneses.
Think of all the stories about how wealthy people started out poor only to work their way to a better life. They were hungry for money. They knew what it was like to be without what many of their peers had, and they did not want to live that way the rest of their lives. They became stronger through their struggle for wealth.
No one likes to struggle. If there is an easier way, most of us will take it. That is where credit cards have become such a pitfall and have taken away many peoples’ hunger for money. People think to the future only to figure out if they will be able to pay the balance, only to charge even more with the same thought in our head. When they bill comes due, they find they have miscalculated and will only be able to pay the minimum balance. Then the cycle begins all over again. They have lost the focus and clarity money hunger brings. People need to think about their future and plan by saving money today for tomorrow.
I am not saying credit cards are completely evil. They serve a purpose for emergencies when the cash is just not there. They are also useful in providing a level of safety in some situations instead of carrying cash. In addition, you build a good credit score by using them, giving you a better chance at getting a job or buying your first home. Nevertheless, people need to become more dependent on their actual earnings, not what the bank is willing to loan them. In addition, if they feel they need more, they need to get hungry and look for ways to earn more.