Never Rely on Tomorrow to Pay for Today

by Kevin on May 7, 2009

One of my largest annoyances with American society is our fixation on today. We want a new house today. We want a flat screen TV with HD service today. We want a new car today. We want to retire today.

You get the idea.

Honestly I see no problem with wanting those things. Sure the new car, television, and HD service are true wants and not critical to our everyday survival. I’m just saying I wouldn’t complain if I had them.

The problem we run into as a society — generally speaking (I know I have a lot of intelligent, frugal readers!) — is we combine want and today together into an unhealthy mentality.

Buy Today, Pay Tomorrow

This pretty much sums up our consumerism mentality. I want the car, the TV, the new house today. I’ll pay for them tomorrow or maybe the next day. I promise! I’ll pay them off. Honest. I really mean it this time…

As you can imagine this gets these individuals into trouble. They have homes full of nice things, but empty wallets and bank accounts. The phone rings off the hook from creditors demanding to be paid. The reliance upon tomorrow was missplaced, and disaster follows.

You Can’t Predict the Future

If you could predict the future your best bet would be to borrow as much money as possible and put it into an investment or gamble that you absolutely knew was going to pay off. The last time I checked no one reading this blog could predict the future.

I’ll also be the first to admit we all rely on tomorrow being relatively similar to today. We expect to go to work, pick up the project or task that we left unfinished from the day before, and continue on. We expect to have a home, a spouse, or a family to come home to. We expect our car to start and our paychecks to be direct deposited on time. These are all relatively safe expectations, and most of us rely on them on a daily basis.

But at the end of the day if I asked you to predict what tomorrow was going to be like you would only have a general idea. You wouldn’t be able to provide all of the specifics. Unfortunately during our days here on earth life is going to throw us a bunch of curve balls.

What If the Unexpected (and Unprepared For) Happens?

I expect my next paycheck come in, or a big bonus, or a promotion, or to land that next job. I don’t have goals and I spend money as soon as I get it, or worse yet I put it on credit.

Everything cruises along just fine until that fateful day where I get passed up for that promotion, I bomb that interview, or I get laid off and that paycheck — really, that series of paychecks — that I counted on suddenly disappear.

But the bills don’t disappear. They’re not figments of your imagination. You’ve filled your life and home up by overspending and now the bills are due without any income. (Good luck with that.)

How to Avoid the Today Mentality

If you been living your life in the unplanned and unprepared today, this is going to take some adjusting. Some quick pointers on how to stop relying on tomorrow:

  • stop the bleeding — stop buying on credit, stop buying in general, and start paying off your debts
  • understand everything you buy on credit has to be paid off eventually — ask yourself where this money is going to come from
  • try living off of yesterday rather than tomorrow by saving up money for future purchases (example: we live off of last month’s income)
  • analyze your spending habits in an honest and frank way — get help from a friend/spouse/significant other if you can’t be honest with yourself. Where are your blind spots?

{ 2 trackbacks }

Weekly Round Up | Master Your Card
May 8, 2009 at 10:47 pm
Reliance on Tomorrow Requires Debt Today
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Bob K May 7, 2009 at 7:01 am

Nice post and nice reminder of the dangers of trading pain in the future for pleasure in the present.

One thing I remember from business school is to take on long term debt only in order to gain an asset that can produce revenue (income). It’s instructive to apply that to personal finances. So – taking on debt in order to obtain a degree which can help you earn more makes great sense. Taking on debt to purchase a car to get you to/from work makes sense. Taking on debt to pay for a vacation… not much sense!

Irina I May 7, 2009 at 10:42 am

Great post! Loans HAVE to be paid back, no matter how much we do not want to.

MLR May 7, 2009 at 5:35 pm

I get ridiculed for this by friends sometimes. I budget my money pretty strictly and if I am near my budget for “x” I will often times be heard saying something like:

“Sorry, I can’t do that… gotta wait for my next paycheck.”

They all know I have the money, and I do too, but I don’t want to break the mentality of what is saved is for savings, not spending. I see it as a potentially slippery slope I don’t want to test.

Joe Morgan May 7, 2009 at 8:38 pm

This is such a dead-on post. This kind of lifestyle is a lot like a ponzi-scheme… paying our current selves with the funds from our future selves, and just like all ponzi schemes, the house of cards comes tumbling down!

Kevin May 16, 2009 at 2:12 pm

@Bob K: I agree with you to a point — you take on long term debt in order to earn enough revenue to not increase revenue, but to pay the debt back multiple times over.

@Irina: Thanks!

@MLR: I feel you. Sometimes it is easy to feel like the odd man out. This isn’t your fault — it’s our society’s spend, spend, spend mentality.

@Joe: Yup, pretty much. 🙂

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