During my second and third years in college, I made some poor decisions regarding which classes to take.
I took out a big enough loan to cover tuition, but then I found myself at a crossroads.
How much more do I need?
My response should have been to get the smallest loan possible.
Instead, I got myself a rather hefty one.
I excused this, arguing that it would somehow cost me more to move to a smaller apartment.
I was extremely lucky to get a job directly out of college during the 2000-2002 recession.
Many of my classmates were not so lucky.
Instead, I had excuses.
The student loans received minimum payments and the interest on them continued nibbling away at my financial situation.
I started hanging out with a high-spending crowd shortly after I got that job.
They would play golf on the weekends and constantly talk about and compare the things they were buying.
“These are my friends,” I told myself.
“I need to buy this stuff to keep up.”
So I opened my wallet for evenings on the town.
I opened my wallet for golf clubs and rounds of golf.
I opened my wallet for the latest gadgets.
The excuse was simple all my friends were doing it, so I should do it, too.
I bought everyone expensive Christmas gifts.
I took everyone out for meals when they would visit me.
I’d buy groceries for my parents when I visited them.
I didn’t need to buy all of this stuff to show them that I was successful.
We got married in 2003 and I wanted it to be a memorable one.
Although we planned and executed a pretty modest wedding, we splurged big time on our honeymoon.
We stayed in great hotels, ate like kings and queens, and did all kinds of extravagant things.
In 2004 and 2005, we racked up alotof credit card debt.
Unsurprisingly, we ended up putting a fair amount of that expense onto our credit cards.
Our excuse here was the grandaddy of them all: ourfuture selveswill pay for those bills.
We’ll be making more in the future, right?
Well, then, our future selves will be able to pay these bills.
This excuses us from thinking about it right now.
It’s just easier to do it this way.
I’d rather not bother making any changes.
All of my friends are doing it.
I am a success and I need to show it by opening my wallet.
This is a once-in-a-lifetime event, so it’s fine to open our wallets as wide as possible.
Our future selves will pay for it.
Our financial disaster was built on a mountain of excuses.
Wehadto break that cycle.
So, how did we do it?
We didn’t even know exactly what we wanted, let alone have a timeline for it.
Our main one was to achieve complete debt freedom, something we achieved in 2011.
Goals like this are incredibly clear.
There is no ambiguity as to what debt freedom means.
The things to be done to get there are also really clear.
There is no ambiguity as to how to eliminate debt just pay off your debts, right?
A big central goal like that shines like a beacon through your life.
It has an impact on almost everything you do and almost every decision you make.
Will buying this item help us move toward eliminating our debt?
What can I do instead?
Will going out to eat help us move toward eliminating our debt?
What can we do instead?
This question needs to become aroutine.
Today, this question is practically unconscious.
It’s an integral part of how I approach every buying decision.
However, it took alotof work to transform this bang out of questioning into such a deep habit.
There’s an interesting psychological phenomenon called “decision fatigue” that affects all of us.
I’ve found a lot of value in the ideas expressed in Atul Gawande’s bookThe Checklist Manifesto.
Basically, I have a checklist of tasks that I need to take care of each day.
Doing these tasks ensures that most of the important things in my life are just taken care of.
I don’t have to plot out breakfast it’s already sitting out and ready to go.
Doing this leaves me with more “decision energy” for the rest of my day.
That’s just a fact of life.
No one is perfect in their spending choices.
Donotbelieve that you’re always going to do perfect.
Donotbelieve that you’re always going to make the best choice.
I believed that for a long time.
Looking back, it’s laughable obviously, I wasn’t.
I don’t eventryto be a perfect decision maker.
Instead, each day I resolve to do better than I’ve done before.
Nothing really matters except for the decision that’s coming up.
Can I make the right decision?
Is this decision I’m making a good one?That’swhat matters.
Instead, I’m going to look at it and ask myself how I can do better next time.
You never reach perfection, of course, but you getbetter.
That’s all that really matters in the end.
You’re not perfect, but you might certainly be better than you were.
All of those things are in line with my personal and financial goals.
They don’t cost anything (or, if they do, they don’t cost much).
They’re in line with my existing interests.
The “good” options just came more and more naturally.
Seek them out in your community and start building friendships with them.
You’ll often find them at community meetings or at the library or at free public events.
Invite them over to have dinner.
Find something inexpensive or free to do together.
Yes, you’re dealing with the consequences of those choices now.
Don’t waste your time.
As my daughter constantly reminds me in her singing voice,“the past is in the past.”
No matter how much you daydream, you might’t undo the mistakes of the past.
They’re set in stone now.
Focus on putting yourself on a better track going forward.
Don’t worry for a second about the track that you used to be on.
Do not look back at the past as a sad series of mistakes.
Don’t reflect on the rollercoaster of luxurious events they were inevitably followed by painful bills anyway.
Don’t give a second of your thoughts to how things might have been.
Don’t look back.
The present and the future are what matters.
The past is already written and cannot be changed, but your present and especially your futurecan bechanged.
Focus on what you’re free to change and abide by what you cannot.
Are you willing to break the cycle of financial excuses in your life?
The tools are in your hands.
It’s your choice whether or not you use them.
