Hello Everyone,

I’m not sure if you’ve ever heard of the two following words together: opportunity cost.  I’ve only become familiar with it over the last couple of years.  If not, no fret.  It’s what the topic of discussion is all about today. 

With each choice we make to spend money, we’re defining our own opportunity cost to travel the world, purchase a home, buy a car, invest for retirement, someday purchase a home, etc.  Think of it like this, if I make “X” choice today, how will it affect my opportunity for “X” in the future?

What about living for now you say?  That’s definitely ok…it’s actually wonderful to enjoy the moment.  I wholeheartedly agree.  But I also agree with preparing for the future and making decisions with the thought of how they’ll affect my purchasing power tomorrow.

You can’t get back money that’s spent, I’ve had to learn that the hard way.  Ninety three thousand dollars?  Where did it all go?  Some of it accounted for; the other portion…well.  I probably should have cashed my paychecks, gotten in my car, rolled down the windows and thrown it out.  Sounds funny, but that’s just the way I feel sometimes.  At least that way I’d know where it all went.

I’m just kidding, but you can see where I’m going with this.  We all are guilty of enjoying today’s pleasures not thinking of how it’ll affect tomorrow’s desires.  Eckhart Tolle calls it living unconsciously…just going through motions with no thought.

For instance, I watched a couple on Property Virgins (an HGTV Network show) look for a home as first time home buyers.  They seemed to be very smart and intelligent, but they had one major issue….NO DOWNPAYMENT.  Why no down payment?  The bulk of it went towards eating out at least 5-7 times a week with friends.  If I remember correctly, they were spending over $10-20,000 per year just eating out.

So now, their payment has to be higher because of past decisions with spending.  It’s cost them the opportunity to have a much better deal when purchasing their home.  I can’t remember the outcome of the show, but needless to say a lesson has been learned.

Of course, swallowing dollars is definitely not the only culprit that can keep our future opportunities out of reach.  For each one of us, our goals, opportunities and costs are different.  But whatever your costs are, remember this:.

One secret of success in life is for a man to be ready for his opportunity when it comes. ~Benjamin Disraeli

In the end, it’s your life and I’ll leave you to live it.  But if for some reason there is an opportunity you miss due to misguided past choices, don’t beat yourself up.  We’ve all fallen victim.  You’ll just know to make better decisions in the future and next time, you’ll be ready when opportunity arises.

So what do you think?  I love hearing your feedback, so please leave a comment below with questions or your own thoughts about opportunity cost and what it means to you.  Don’t forget to share this post with your Facebook and Twitter friends by clicking on the icons below.  They’ll love you for it!  Thank you for sharing your time with me today!

###

Fortune Image by Elle

To get into your rightful place financially, you have to move past what has not only become comfortable, but what has become just a way of life.  When I say comfortable, I’m basically talking about life as usual. 

We have dreams of something bigger and better, but getting there sometimes seems too difficult.  What we normally do is keep the dream in our heads, but never move toward action.  We mostly use the One Day Theory.  You know…One Day I’m gonna have enough money to do whatever I want OR One Day I’m gonna own my own home.

You can probably rattle off a couple of your own One Day Theories – in fact, you’ve probably heard and said them many times over.  Truth is though, the One Day Theory is just another basic form of procrastination.

On a deeper level, procrastination overlaps with avoidance.  When a task initially seems too difficult to handle, we’ll put it off and put it off until it becomes a monster.  I don’t know what makes us think that the problem will go away.  It NEVER does. 

I know it seems easy to bury your head in the sand and ignore life along with your hopeful dreams.  The thing about that is, it’s suffocating.  You definitely can’t survive that way.  Survival of the fittest is taking responsibility quickly and creating the success you desire.

Do I suffer from the disease of procrastination?  Of course, I do.  All the time.  As I write this article, it is very late in the evening.  My initial thoughts were to shut the computer down and start fresh tomorrow.  But then I thought about how the delay would really throw me off schedule.  My right action was to do what’s needed now and feel good about what I accomplish later.

I remember reading a book a few years back by Brian Tracy called, Eat that Frog: 21 Great Ways to Get More Done in Less Time.  This book was key in transforming my thoughts about goal achievement and handling daily life.

My 4-Most Important Mantras from the book were:

1. Consider the consequences.  Take a moment to consider what the outcome will be if the task is put off until later.
2. Do the most difficult task first.  This statement is the entire basis of eating the frog.  Getting the difficult task out of the way first frees your mind for greater accomplishment.  It becomes a snowball of successful action.
3. Slice and dice the task.  Breaking down bigger projects into smaller manageable chunks = faster goal achievement.
4. Develop a sense of urgency.  A determination to stay focused until the project is completed.

He also says:

The key to reaching high levels of performance and productivity is for you to develop the lifelong habit of tackling your major task first thing each morning.  You must develop a routine of “eating your frog” before you do anything else and without taking too much time to think about it.

The thing is, I’m seeing many people achieve their dreams each day.  We all have our good and bad days.  The key though is to have more bad than good.  See if you constantly make two steps forward and only one step backwards, you’re doing your best to make greater strides in the right direction. 

So as you continue your day, consider something you have been avoiding – a work assignment, cleaning up your financial house, getting organized, any short or long term goal.  Be determined today to eat that frog.

How about you on the other side of the screen?  What’s stopping you? 

****

I appreciate you reading today.  If you enjoyed it, don’t be selfish – share this article with a friend.   Have a wonderful and prosperous day!

Gotta Get Organized Image by Szlea

I got a call recently from a close friend who was a bit disturbed by a phone call she received.  See, over the last few years, she has been very diligent with staying debt free, paying her bills on time and keeping a close eye on her credit scores.

Life didn’t start off this way for her, but she has been able to accomplish so much by sticking to her plan.  Now, she is seeing the benefits of her hard work. 

Well, back to the story.  She received a phone call from a collection agency.  The collector started off with the preliminaries verifying name, previous addresses, etc.  Receiving these types of phone calls is out of the norm for her so she asked that he get straight to the point. 

He was trying to collect on a automatic deduction payment debt that she cancelled sometime last year.  The collection amount was about $89.00.  She politely informed him that she did not owe this debt and that there must be some miscommunication. 

At some point and time during the conversation, he even offered to settle the debt for $70.00.  Again, she declined and stated that she would call the original creditor.  The collector stated that she could do that, but to save herself some time and trouble she could just pay the debt…“That way, it won’t go on your credit.  It’s only $70.00”, he said.  Her response to him was…“I’ll just take my chances.”

She did not allow the collector to intimidate or coerce her into paying a bill she did not owe.   She immediately called the original creditor and got the matter cleared within a few minutes.   I love the fact that she showed the greater strength, as Abraham Lincoln said -

Be sure you put your feet in the right place, then stand firm.

Don’t get me wrong;  I know that talking to most collectors is like talking to a rock.  They don’t hear you.  But what’s so important about this is that she had a leg to stand on .  My friend knew she didn’t owe the bill and had the records to back up her claim. 

As I see it, there are a few things she did right:

Spoke respectfully.  There’s no sense in getting agitated over an easily solvable matter. 

Kept good records.  The best thing to do this day and age is to leave some sort of paper trail.  This can be by way of written contracts, bank statements, cancelled checks, emails, etc.  When questions about payments arise, the proof is easily accessible.

Followed up immediately with the original creditor.  I know…it’s a pain in the rear, but allowing problems to linger only makes it worse later.

Asked for proof that the debt has been cleared.  This is very important.  Having a statement from the original creditor can be useful if this debt resurfaces in the future.

If this was a debt my friend really owed, this would have been a different story.  More on that later; but for now, if you owe a debt and are being contacted by a collector, here’s my advice:  Don’t allow yourself to be bullied.  Collectors do have rules and laws that they are held accountable to.  I encourage you though to find a way to resolve your debts so that you can build a solid financial house.  A house with holes in a few windows (the bad debts) doesn’t look too appealing.  Does it?

***

As always, thank you so much for reading.  If you have a question or a tip of your own to share, feel free to do so in the comments.  Also, don’t forget to spread the word about PFN – new readers are always welcome.

Standing Tall Image by Orin Zebest

I’ll start today with a little history lesson.  See that picture to the left?  Well, that is a picture of the Philadelphia County Prison in Philadelphia, PA called…the debtor’s wing.  This wing and others like across the American colonies in the early 1800’s, held people that owed debts but were unable to pay.

It was a very simple process.  Creditors who were owed money would simply ask the sheriff to arrest those that owed and throw them in jail.  The only way the debtors could be released was to post bail or pay the debt.  Since most couldn’t do either, they remained in jail for months or even years depending on the size of the debt and their family’s ability to raise the money.  Some even died before being released because of disease that ran rampant in the close quarters of the jail.

In 1831, the United States government ended this practice with the introduction of the Act to Abolish Imprisonment for Debt.  Whew!

Now almost 180 years later, most of us spend our time creating our own debt prisons.  No, we don’t have to worry about going to jail (except for taxes or child support), but it’s a jail all the same.  As Jon Hanson said, “Working while carrying a load of debt is like a prison work-release program.  You are released each day to work, but the balance of your time is spent in a mental prison.”

Over the last several years, we have really seen the effects of debt.  The lives of normal families that were living the American Dream shattered due to the carelessness of creating debt instead of wealth.  As I see it, living in a constant state of want leads to us becoming a prisoner to our passions.

Work no longer becomes a privilege, it’s a necessity in order to survive.

Think about the feelings you had as a child…probably “free”.  Yes, the responsibility of provision was upon your parents, but there was a feeling that time was no option and your opportunities were limitless.  Becoming an adult was like being given a huge stack of blank paper that weighed about the size of an elephant.

We aim wanderously, happily spending money and using credit when we really shouldn’t.  Most of us don’t even realize what we’ve done until it’s too late.  Picture this…you sitting down on the floor “Indian style”.  Now, add up all the debts you currently owe (credit cards, personal, consumer, student loans, etc).  Imagine yourself being surrounded by this amount stacked in dollars.  If you stand, can you see the outside world easily?

See, those few moments of fun have a price tag attached.  That price tag then leads to frustration and unhappiness.  So before you make you next purchase, ask yourself… “Is this helping me to get closer to my goal?”  If not, make the decision to walk away.  Just turn and walk away.  You can do it!

If you’re in a debtor’s prison, what’s your sentence?  How long do you have before release?

Philadelphia County Prison Image by whitewall’s buick

###

Thanks everyone for reading!  I really appreciate it.  Feel free to share your own experience with debt in the comments, if you’d like.  So until next time…

• Join PFN on Facebook!
• You may also share this article with your friends on Facebook by using the fshare button to the right.

Here’s how it begins.  You open a checking account.  You’re given a checkbook, a check register and a debit card.  Then you’re sent off into the fast paced world of spending.

For someone that’s not had to manage an intangible object such as money in the bank, keeping track can sometimes seem overwhelming.  If you want to achieve that Master of Household Management title, I’ve got two basic rules to share with you of which I hope you will make a mental note…

“Rule No. 1: Never lose money.  Rule No. 2: Never forget rule #1.” – Warren Buffet

The confusing part about having a checking account is the use of two systems tied to one account – checks and debit card.  Not only do we have to keep track of the checks that we write, but we also have to make sure we write down the ATM withdrawals and debit purchases made.

In a quick rush, we’ll make a purchase or withdrawal and will forget to write it down at that moment or will tell ourselves that we’ll make a note of it later.  Well, later never comes.  We forget all about it and lose track of what we actually have left to spend.  Keeping track is a little easier now because of online banking, but there are ways to work smarter – not harder.

My advice:  Make a note in your check register as soon as a purchase or withdrawal is made.  I know it’s easier said than done, but you’ll be amazed how starting a new habit will improve your flow of life.

Another tip:  The use of the “duplicate checks” feature offered by check printing companies.  I don’t write many checks, but with the few that I do write, I always have the carbon copy of who the check was written to and the amount.

The Balancing Act

I’ve heard many reasons around this task, but I believe it should never be overlooked – reconciling or balancing your bank account.  This is a basic task of comparing your check register to your bank statement for a specific period of time…usually monthly. I know it seems tedious, but there are several benefits:

1. You avoid overdrafting your account.
2. It’s a great way to find any errors made by you or your bank.
3. You can uncover unexpected bank fees.
4. Unauthorized withdrawals or charges are discovered quickly.

So for now, the pros far outweigh the cons to balance your checkbook monthly.  When it’s all said and done, I’d rather walk around with the comfort in knowing that the amount I want to spend is actually in the bank.  No more guessing game!

If you are already doing a great job of keeping track of your purchases/withdrawals, this message can be considered as a reminder to keep up the good work.  If you’re a veteran checking account holder and haven’t been following these principles, I urge you to take a few extra moments to start today.

Yes, I understand that you’ve been doing it this way for years, but I promise you won’t be disappointed trying it this way.  I’ve heard that it takes 21 days to create a new habit.  If you start today, you’ve only got 20 more to go.  We don’t want Mr. Buffett to be disappointed!

So what do you do?

Click here to view or share in the comments

Image by gravestone

***

I appreciate the time you spend reading the articles I write – thank you so much!  Take a few moments to help spread the word about PFN.

Dear Reader,

Can I talk to you about something?  It’s been bothering me for a while and I think it’s time to discuss it.  See, I’m concerned because it seems that we are continually making the same mistakes over and over again.  We’re supposed to learn from our own mistakes and/or the mistakes of others, but I on’t think we are listening.  I’ll just cut to the chase.  It’s the reasons why we end up in small claims court.

See, over the last few years, small claims court reality television shows have swept the nation settling all types real life disputes.  I don’t have a particular issue with these shows, they are actually very entertaining.  But to be honest, I think you’d rather avoid standing before Judge Judy or Judge Milian. 

But what I find interesting is that the cases are mostly the same, just different faces.  It can be a bit tricky, but there are ways we can avoid most of the drama in our lives.  I thought I’d write a about a few ideas I think you will find beneficial and maybe save you the trouble of having to go to court.

NEVER Co-sign for a loan

You co-sign a loan for a friend or family member because they can’t get the loan on their own.  They have good intentions.  Matter of fact, they even promised they would pay the bill on time.  They don’t mean to be late with the payments, but life happens.  They don’t mean to default on the loan, but the payment is too much for them to handle.  Their actions directly affect your credit and your future.  It all boils down to this, either just say no OR be prepared to make the payments if they can’t.

Read ALL Contracts Prior to Signing

I read a crazy statistic the other day.  It said that only 10% of people read contracts prior to signing.  10%! Contracts can be as complicated as a making home purchase or it can be as simple as understanding the store policy when buying a cup of coffee.  You must have a clear understanding of the terms just in case you have a change of heart.  We are entitled to change our minds, but at what consequence.  Just take that into consideration.

Avoid Loaning Money

I’ve not had this problem, thankfully, but I know of a few who have.  It’s a nightmare.  Your word against theirs and broken promises.  You risk ruining the relationship over money.  I know it’s hard to say “NO”, but it may be better than bearing the expense of saying “YES”.  If you can’t afford to give it, then it may be best not to loan it.

Now maybe you have no way to avoid loaning the money.  You could have them sign a promissory note which would include all the terms of the loan (parties involved, amount loaned, interest rate, payment schedule, signatures, etc.)  In the event that you would have to resort to small claims, the promissory note is considered as a written contract.

Document Accidents

The best way to handle an accident is to exchange personal information with all parties involved and be sure to get an accident report.  The report helps the insurance company determine who, if anyone, is at fault and will help to alleviate any future story changes.

To give an example:  In my early twenties, I was in a minor fender bender and was offered cash on the spot to “keep it moving”.  Can you guess what I did? Yes, I took the money.  But let me explain…It was only a minor scratch.  Looking back now, I realize that I should have reported the accident.  I could have made a horrible mistake  in accessing any possible internal damages.  My young eyes were not trained for that sort of thing.  But, you live and learn.

***

Not every scenario will fit within these four boxes, but most will.  We’re given opportunities daily to make better judgments.  Minimizing risky outcomes is up to us.

Does all this make sense?  Have you encountered any of these scenarios?  How did you handle it?  Share your thoughts in the comments.

###

Thank you so much for reading! Please feel free to share this article with your family and friends.  This website is becoming a success because of you and your support.  I wish you lots of financial success.  I send you much love!

• Join PFN on Facebook!
• You may also share this article on Facebook by using the fshare button.

Gavel Image by scottamus

Welcome to part three in this series on Spending Smart.  Before you read this article, I recommend you take a few minutes and read the first two parts (if you haven’t already) -

• Part One:  Money and Spending
• Part Two:  Social Pressure and Spending.

These ideas focus on us as consumers and household managers realizing that we hold the power for financial change in our lives.

The Lesson

We don’t have money that recreates itself as soon as we spend it.  Most of us also don’t have a million dollar trust fund to fall back on when our earned income gets a little low. 

Over the weekend, I took a look at the Parade Magazine which is a supplement to our local newspaper.  The topic?  What People Earn: Our Annual Survey.  The income ranges for the normal middle class families working full time were between $17,000 to $143,000+. 

Reading this information has given me a bird’s eye view of the occupations and incomes of normal people all across America.  While many of us are rich beyond measure with our personal lives.  Meaning our values, our families, our friends, etc.  But the truth is that there is no way that we can “Keep up with the Kardashians” with our realistic incomes.   We have to take what we have and make what we need out of it by spending wisely.

I’m not suggesting that you should never enjoy the fruits of your labor, but there is a method to the madness.

The Method

Preparation.  This means saving up for the spontaneous purchases.  There is nothing wrong with wanting things.  There just has to be a balance and keeping in alignment with what you can afford. 

So, how can this be accomplished?

Effective budgeting and planning.  This is how you can promote yourself from the basics of budgeting to becoming a master of Household Management.  Add extra categories to your budget for blow money, clothing, eating out, entertainment, etc.  Setting aside money for these purchases monthly will help you to stay financially on track and you won’t feel guilty for spending money on “not so planned” items or adventures.  You “spontaneously” planned for it.  

Also know that the economy will eventually make a full recovery.  But unless we take the initiative to become better at managing our spending, it won’t matter.  What’s most important is you and how well you manage your money.

How would you grade yourself as a Household Manager?  What can you improve? Click here to join the conversation.

***

Thank you so much for reading! Please feel free to pass this article on to your family and friends.  This website is becoming a success because of you and your support.  I send you much love!

• Have you heard about my special report!  Download your free copy of 10 Easy Tips to Save Money Now!
• Follow me on Twitter and join PFN on Facebook!
• You may also share this article on Facebook by using the fshare button.

This is part two of a series I’ve entitled, Spending Smart.  These ideas focus on us being more aware of our dollars and cents as we learn to take better control.  It’s a continuous process of learning and growing.

You can find part one here – Money and Spending.

***

What’s crazy about life is that it is very…shall I say adventurous!  There is always some type of cause and effect action.

Let’s see how it works.  You make an agreement with yourself that nothing will deter you from taking control of your money.  You do well for a short while, but then something happens…

The latest and greatest gadget rolls out, you and a friend go window shopping, you see the shiny new ride a co-worker just purchased, or your cousin just built a 4,000 square foot home and it is beautifully furnished, etc.

The effect?  You want to give in.  Lee Eisenberg explains it best:

Where’s the peer pressure to live small today so that we might live comfortably tomorrow?  Where’s the celebrity spokesperson to tell us how way cool it is to eschew the little luxuries of the moment in order to afford a long-term-care policy? Where’s the slick marketing campaign that can convince us to forgo a year’s worth of hair, makeup, and Botox injections to the forehead in order to pay an accountant to tell us we spend too much money and we’d be advised to downsize?  And besides, none of our friends or neighbors are doing these things.  Without a comparative yardstick, or the peer pressure to keep up with the Joneses’ retirement planning, we are not motivated to save.  So we keep up with the Joneses in the usual way:  consumption.  An iPod for an iPod. — from, The Number

You thought you left peer pressure in high school?  Not at all.  It follows us into adulthood.  We have to learn to control the external and internal pressures.  Oh, you thought you left learning in high school and college, too? 

My advice?  Make careful decisions.

How do you handle social pressure and spending?

###

You may want to subscribe by Email or RSS to join me as I continue the Spending Smart Series.

Thank you so much for reading! Please feel free to pass this article on to your family and friends.  This website is becoming a success because of you and your support.  I send you much love!

• Have you heard about my special report!  Download your free copy of 10 Easy Tips to Save Money Now!
• Follow me on Twitter!
• Join PFN on Facebook!
• Share this on Facebook using the fshare button.

This is part one of a series I’ll call Spending Smart.  What I hope to accomplish with this series is to raise our awareness of spending and find ways we can better manage it.  Learning to control our money does not happen in one day.  It is definitely something that is learned over time and tweaked as time goes on.  So without further adieu, here we go…

Over the past few years, my family and I have made some drastic financial changes.  Not all of these changes were totally financial, they were mental as well.  I hope the suggestions here will affect you similarly.  Let’s first start with the problem stopping us from Spending Smart.

“Failure to plan is expensive.” – Mary Hunt

Unplanned Spending

This can happen in many ways.  Some unplanned spending we are aware of, but we just do it anyway and deal with the consequences later.   Others just kind of sneak up on us and we don’t realize what’s happened until it’s too late.

Way back before we really got the gist of money management, my husband and I spent money kind of haphazardly.  We made sure all bills for the month were paid.  And because I was a commissioned employee, I made sure I set aside money in savings (for those not so good months).  Then we kind of just spent the rest.  No real purpose.  No plan.

I’m sure we’re not the only one’s that have fallen or falls victim to this kind of thing.  It can happen in at least three ways.

1. Small or Large Irregular Expenses. These expenses occur a few times per year (maybe bi-monthly, quarterly, twice per year, etc.)
2. Small or Large Impulse Purchases. Purchases that happen at any time.
3. Murphy’s Law. “Anything that can go wrong, will go wrong.” Purchases that have to be made for daily functional living.

How this affects us.

Unplanned spending causes stress and undue frustration.  Money spent on frivolous things many times cannot be retrieved which means you have less to pay for your items of necessity.  This can snowball into using credit, borrowing from family members, neglecting other obligations, etc. All of which are bad choices to rectify a problem.

This happens more often than we’d like to admit.  We continue to make the same bad decisions which help us get nowhere fast.  Here’s how it goes:  You don’t have enough money to do what you want so you do it anyway and suffer the consequences later.  Have you ever heard of this? “I’ll cross that bridge when I get to it!” I have.  The Cambridge Dictionary online defines this statement as…

an expression which means you will not worry about a possible future problem but will deal with it if it happens.

Well, guess what?  You will arrive at that bridge and it’s not that great of a feeling standing there wondering how you will cross over.  I’ll state for the record that I have been there, done that and got the trophy.

In the early part of our marriage, my husband and I spent lots of time going around the same mountain not realizing that life would have been a whole lot better if we’d just practiced better spending habits and planned for future expenses.

What Can You Do About It?

If your personal finances are not where you would like them to be, you have a few options.  You can continue on the same path and get the same result OR make plans to change it.  That’s it.

I can already hear someone saying, “You can’t plan for everything!” My answer:  No you can’t, but having some type of blueprint will get you out of the wilderness a little faster than if you had nothing.

If you decide that change is what you want and what you need, that is a great first step.  It may not be easy, but in the long run you’ll be much better for it.  Doesn’t that sound like peace already in the making? Join me and the rest of this community here to engage in and promote financial education.  We can all learn a thing or two from each other.

So, how about you on the other side of the screen. Are you in the process of finding a way to better manage your spending?  Have you managed to take control already and are reaping the benefits?  I’d love to hear about it.

***

You may want to subscribe by Email or RSS to join me next week as I continue the Spending Smart Series.

Thank you so much for reading! Please feel free to pass this article on to your family and friends.  You may use the blue Facebook Share button at the top of this article. This website is becoming a success because of you and your support.  I send you much love!

• Have you heard about my special report!  Download your free copy of 10 Easy Tips to Save Money Now!
• Follow me on Twitter!
• Join PFN on Facebook!

Decisions. Decisions.  Decisions.  Paying for an education, buying a car, purchasing a home, choosing a spouse, choosing a career, where to invest, how to invest.  Where does it all stop? 

They are all tough choices with one common denominator.  The affect on your financial future. 

It’s almost a gamble to trying to predict the outcome of your decisions.  Mostly, you hold on to the hope that the decision you make will be a good one.  But you realize that a huge swing in the wrong financial direction can cost you years to correct. 

Making choices quickly, without counting all the costs, causes the unfortunate circumstances of life to happen.  Probably some of which could have been avoided had the decision been thought out clearly.  Better choices lead to better results.

The world wants to influence your decision making process.  The constant raised hands with “Pick Me! Pick Me! Pick Me!” has become rather persuasive. 

There are actual marketing tests done in the hopes of creating just the right advertisement that will hopefully prompt you to buy.  Truth is, only you can make the final decision.  Your decision affects your life.

Here’s how it can all go wrong:

• Attaining a great education, but using a massive amount of student loans to do so.  If you have to use student loans, be wise with the amount you borrow.  It’s easy to get the money, but will be hard to write that check every month for payment.
• Purchasing a car and/or home that is too expensive for your income level.  Your car payment and house payment should be no more than 15%  and 35% respectively, of your income and even less than that if you have other debts that are out of control.
• Using the wrong option to finance your home (ARM, interest only, negative amortization, etc).  The best financing option is a 15 or 30 year fixed rate mortgage.  You can’t go wrong.  Yes, we have “plans” to only own the home for a couple of years and then we’re going to do this or that, so we take advantage of these initial lower priced options.  But sometimes life happens in those few years that cause those plans to backfire.
• Choosing a spouse that does not have the same financial values and goals as you do.  Financial issues are one of the main causes of divorce.  So when choosing a potential mate, it’s very necessary to talk about money BEFORE you say the “I do’s”.

Is there an easy way to make the right choice?  I don’t think so, but there are some steps you can follow to help the decision making process more clear.  Try this:

1. Pray or Meditate before moving forward.
2. Wait 24 hours before finalizing a huge decision.
3. Use a pencil and paper to weigh the pros and cons and to estimate the total cost of your choice(s).
4. Get a good night sleep.  Being well rested helps the mind to think clearly.

***

The Bottom Line

Don’t feel cornered because someone wants you to make a decision quickly.  This is your financial future and you don’t have to play by their rules.  Make your own financial rule book.  And if it takes you a bit longer to make a decision or two, that’s ok.  You’re just being careful.  Not fearful.  Careful.

“Before you speak, listen.  Before you write, think.  Before you spend, earn.  Before you invest, investigate.  Before you criticize, wait.  Before you pray, forgive.  Before you quit, try.  Before you retire, save.  Before you die, give.” – William A. Ward

In what ways has “life” affected some of your past financial decisions?  In hindsight, would you have made a different choice(s)?

###

Thank you so much for reading!  Please feel free to pass this article on to your family and friends.  This website is becoming a success because of you and your support.  I send you much love!

• Have you heard about my special report!  Download your free copy of 10 Easy Tips to Save Money Now!
• Follow me on Twitter!
• Join PFN on Facebook!