Years ago, I camped. It was wicked fun and wholesome for the kids. I had so much fun, I let myself be talked into upgrading the camper after the first season.
As time went by, I realized that I had become a prisoner to my camper. Because I had a payment, I felt the need to “use” the camper and the seasonal site it sat on every weekend. I wouldn’t do anything else on weekends during the summer.
In retrospect, this was a very limiting way to live, and it was all because we didn’t save up and pay cash. We took out payments.
It’s easy to become a prisoner.
If you have ever been in this situation, then maybe you know the feeling… the feeling of being a prisoner of your possessions. It doesn’t have to be a camper. It could be some other seasonal vehicle, like a motorcycle or convertible. Or a timeshare in the Bahamas. Or a boat.
I have seen people succumb to the “need” to use all these toys, because of the payments attached to them. I was one of them! I felt like I was throwing money away.
It’s not just that the borrower is slave to the lender… he is slave to his stuff when the bank owns said stuff.
...the borrower is slave to the lender. - Proverbs 22:7 Share on XThe cure?
Save up and pay cash for stuff, especially stuff that has seasonal usage. This can apply to that Polaris Slingshot, or a hot new convertible. Stuff with engines (or that are engine-like) should not be worth more than half our annual salaries. This is a Dave Ramsey teaching. For example, the value of your vehicles/campers/boats should not total $120,000 if our annual salary is $60,000. That would need to be the other way around to be in a positive financial situation.
I suggest starting small. The next time you feel like you need a small toy, see if you can delay your purchase until you have 20% of the cash saved toward the purchase. Then shoot for 30% the next time, and so forth. If you want “must” purchase a recreational toy on payments, be sure the payment fits your budget and that your ratios do not get all out of wack.
As Always…
Thanks for reading! I hope this information provides food for thought. Remember that I am not a certified financial planner, a certified public accountant, a licensed real estate agent, etc. My content is for educational purposes. I am a math educator who happens to have a finance degree. Like they say, never take financial advice from a math teacher! (Do they really say that?)
But you should spend less than you earn, invest the difference, and stay out of debt!
I would so appreciate your sharing my content with anyone you feel could benefit. And if you would like a free exploratory conversation or just want to shoot the breeze about personal finances, call me and leave a message or send a text to 570-731-0425.