A comment I saw recently on the Bucks blog over at the New York Times really stuck in my head. In a post about Americans spending less and less time shopping for a mortgage, CG said:
Why is this a surprise to anyone? You USE a car. You USE a house. That’s what you spend the time shopping for. You don’t USE a mortgage. The mortgage or the car financing is just the means to get it. You can’t put the top down on the mortgage and drive it around.
He’s got a very good point. In our day-to-day life, we don’t see debt itself. We see a house. We see a car. We see a meal. We see a job. The only time we interact with our debt is that time once a month when we pay our bills – and sometimes, when the billing is automatic, we don’t even do that.
Instead, every single day, we see the effects of debt. We go to work at the highest-paying job, which is often not the job we would enjoy the most. We live in a location that isn’t where we would necessarily choose. We’re stressed out over our work and our social life and our appearance.
The problem is that many people don’t recognize – or don’t want to recognize – the effects of their debt.
We don’t connect job stress to overspending, even though they’re deeply connected.
We don’t connect the little painful choices we have to make each day to our overspending and debt in other areas.
We don’t connect our distance from family and old friends to our need for financial success.
A person who has made the “hard” choice to be debt free and to conserve some of their money has many, many more options available to them than the person who doesn’t.
How do they get there?
They USE a car, but that car is a used one, usually paid for in cash saved up from making lots of little financial choices.
They USE a home, but that home doesn’t have to be shiny and new. It’s also got a smaller mortgage, one that can be paid off much more quickly.
They USE their kitchen using functional low-cost equipment to make great meals at home instead of using it as a decorative element in their house and going out to eat all the time.
They actually use their stuff instead of admiring it or luxuriating in it. For that, they avoid debt and have freedoms in life that most people just dream of.
When you look at the stuff around you, think about what you can actually do with it, and also think about the cost of it. The more critical thought you actually apply to your world, the more likely it is that you’ll start looking the right way and wind up building the life you want.