Don’t Spend Tomorrow’s Money Today

Money management is as simple as this. Don’t spend tomorrow’s cash today. Doing so will directly put you in debt. Why would you ever do that? Some debt is unavoidable: car payments, rent, bills, these are all examples of “healthy” debt. Why do I say this is healthy debt? This type of debt is necessary for you to grow into a financially independent person. You need a place to live, a phone, electricity, and you may need a car depending on where you live. The point is, this is healthy debt because you need these items to survive in the world. I imagine that you value your home, so you will be paying your bills on time.

So what is “unhealthy” debt? Unhealthy debt is spending money you don’t have on anything you don’t need. So for example, if you barely have enough money to pay your rent this month, you should not even be considering buying a new TV. I know, it’s common sense, but at the same time some people will still end up buying the TV. This is unhealthy debt. Do not ever force yourself into unhealthy debt.

But take it one step further. Don’t focus on today or tomorrow. Focus on this year or next year. What I mean by this is save up money so that you have enough money to pay multiple months’ rent. If you only have enough money to pay for one month’s rent, then you will have to worry about paying off next month’s rent. But if you have enough money to pay six months’ rent, then all of a sudden that new TV doesn’t sound like such a bad idea.

Not spending tomorrow’s cash extends far into the future. If you are not planning on moving anytime soon, then your first priority should be saving up enough money to stay at your current location for at least a year. You will always have bills to pay, why don’t you just focus on saving up enough to pay for multiple months’ bills? Why wouldn’t you? Those bills will come back again next month.

If you spend tomorrow’s cash today, you force yourself to become a slave to the past. Your past self didn’t care about your future, so in the future you’re going to have to address the problems that your past self created. Help yourself out. Save up enough money so you that you have a secure place to live for at LEAST half a year. After saving up the money, then you can start thinking about making your home look better. But there’s no point in buying a TV if you don’t have a place to watch it.