Spend less than you earn and a giveaway

I guess that most people reading here every day would be working people - either out in the wide world earning money and/or at home running the household in ways to save it. I am proudly working class; work is part of my core, it's something I expect to do most days, but most of the work I do nowadays is not for money, it's to maintain the way I love to live. It may sound strange to some but I think that working for what you need and want makes you treasure it more, it has meaning because you know the hours of toil that went into it. And yet it seems to me that we have gone off the rails a bit with work. Many of us will work until we drop because we have too much debt to retire earlier. 

I believe that most of us work to get together our life's assets and to buy a house to live in, or to rent one. We might also buy a car. Once we have our assets, we work steadily to pay off the debt we acquired to buy it all. We hope to stay employed, we cut back and save what we can and if we're lucky, the mortgage is paid off earlier than planned and a few years later the credit card and car are all squared away. This kind of debt management is entirely possible, Hanno and I paid off our 20 year mortgage in eight years and have lived debt-free for many years.

But somewhere along the way, a whole generation fell for the idea that buying everything you want on a credit card is normal; encouraged in that by banks looking for higher profits and advertising promising happiness in a pair of shoes, a flash car, diamond earrings, or a jet ski, etc etc etc. It saddens me that many of these good honest people realise too late that they're in over their heads and they'll be working far into the future to pay for today's must-haves. Long after the bling has lost its shine, it is still being paid for.

There is a better way, although it requires sacrifice and hard work. It requires that we cut back on our desires, stop listening to best friends and focus on slowing down and living well rather than expecting to have it all, and then working to pay for it.

There is only one sure way to financial security. Spend less than you earn. One of the things that can delay paying off debt is paying more for the things you use a lot of, or for convenience foods. And by convenience I mean washed salads, processed food, pre-cooked frozen meals, tinned soups, as well as takeaway and fast food, and a whole array of foods that seemed to be a good idea at the time because they cut down on preparation and cooking time but they cost more and therefore add to the cost of living. When you're paying off debt, you want to reduce your cost of living, not raise it. Get back to basics and buy unprocessed foods, cook from scratch and reap the benefits - both in your health and in the money saved.

There is a decision to be made here. Do you work less so you have the time to do some things yourself or do you work more so you have the money to pay for everything you want? Your answer to that question will depend on whether you want to work your whole life so you can buy every thing you want and need, or whether you see value is cutting back on your wants so you have more time to enjoy life. 

You will never see an advertisement suggesting caution and prudence. On the contrary, they encourage excess and acquisition at any price. So I am going to encourage you to look beyond today, think about all those months you'll be handing over money to pay for what you buy today. Try to cut the cost of living and pay your debts off as fast as you can. Don't be conned into buying too much, expect to work hard for what you have, expect to do your fair share and think about saving rather than spending - not just this week or next, but far into the future too. Because if you can get off the debt roller coaster, if you stop spending just because you can, if you knuckle down and get serious about debt reduction, you will be able to retire sooner rather than later and just live. It may be with less "stuff" but it will be on your own terms and you'll own your life. I hope you find a plan of attack, encouragement and support in my group of budgeting posts here.

It all starts with a commitment to your own future, a clear vision about how you'll reduce debt and then the determination to get back on track and out of the clutches of the bank. I wish you the best and I'd be interested in hearing your story.

Kristen has done a review of my book and is generously giving away a copy of my book to Australians only. You can find her blog here for the details. The giveaway finishes next Monday.