Statistics show that Americans have 1.5 billion credit cards. 14% of the population has more than 10 credit cards (creditcard.com). The average person seeking financial counseling is $43,000 in debt. (EconomyWatch.com).
There is a story about a young man who demanded his inheritance before his father died. There are three things that are important to know about this young man:
- He was impatient and could not wait until his father died to get his inheritance.
- When he got his inheritance, he took all his money with him to a distant location.
- When he got to his destination, he spent all his money on extravagant living.
When he found himself having to get a menial job, his life was miserable. After he hit rock bottom, he decided to go back to his father to ask for help. Fortunately, his father welcomed him home with open arms. This story has a wonderful ending that shows a parent’s unconditional love for his child. However, this story also teaches us a lesson about our finances. The son’s problem was that he mismanaged all the money that he had been in such a hurry to get.
I used to live just like this young man. I did not inherit a lot of money, but I did spend all the money I earned as soon as I got paid. I used to tell my dad, “I don’t know where my money goes.” It was as if my money left my house after I went to sleep at night! I thought the solution was to make more money but having more money would have simply meant that I would be spending even more. I had to change my attitude about money and how I spent it. Once I did that, I began living completely differently to have a productive life. My recovery started with determining the difference between things that I wanted and things that I needed.
Today’s exercise is to list and differentiate between what we need and what we want using the downloadable table below as a guide:
