Isn’t it fascinating that stores are offering layaway plans and touting them as something new, or at least something old returned? The credit card, it seems, destroyed layaway plans long ago.
What the credit card truly destroyed, or rather what our obsession with and misuse of credit cards destroyed was financial discipline.
With the exception of truly rare circumstances, like medical catastrophes which wipe anyone out, people who exercise financial discipline never have to worry about the bills, the debt, the threat of collections, and the threat of bankruptcy or of losing their home. When you exercise financial discipline you never buy more than you can afford and you do not incur more debt than you can comfortably pay off.
Here is a novel idea – exercising financial self discipline means you cannot have everything you want right now! It means you have to put off immediate gratification. You must save for important purchases. You must choose between things you might want and you must make sure you pay for what you need before buying what you merely want.
Debt, wisely managed, can improve one’s living standards and provide tremendous opportunities for business and wealth expansion. Poorly used – it leads to ruination.
Layaway plans are fine for people who simply have no self discipline. You don’t need a layaway plan however. All you have to do is put the money in your savings account. Pay yourself first, every month, no less than 10% of you income, directly into savings. If you want to save for a major purchase save more, perhaps 20% or more.
People who are financially successful learn financial discipline and practice it every day. If you want to be financially successful and if you want to build wealth developing financial discipline and saying no to yourself may well be the first big step.
Daniel R. Murphy
Daniel R. Murphy
Educating people for building wealth, adapting to a changing future and personal development.