By Tony Elion Jr.
Do you remember a time long, long, ago, when there was a magical system called “lay-a-way”? I recall my grandmother leaning back in her chair, gathering us youngsters around, and telling us of a simpler time. A time when you lived within a budget and if you didn’t have the money to buy something then you saved until you had enough. Gasp! This unthinkable lay-a-way program she described was straightforward and designed for people to live within their financial means.
According to her mythical tales, customers selected an item, gave the store a small amount of money to hold the item, and little by little paid toward the balance. Once the balance was paid in full they could take it home free and clear. It was a win-win for everyone. The customer got the item and left without any debt, and the store got the sale. Whoever heard of such a thing? Unfortunately for most of us, those days are long gone. We transitioned from a lay-a-way society to a now-and-later society. Today we use borrowed money, take home the item now, and figure out how to pay for it later.
Earlier generations experienced financial depressions and recessions which forced them to be mindful of their spending, consumption, and financial boundaries. For many families, money was tight and the goal was to avoid going into debt because debt only exacerbated their problems.
The legendary singer-songwriter Stevie Wonder once sang, “Looking back on when I was a little nappy-headed boy…Then my only worry was for Christmas what would be my toy. Even though we sometimes would not get a thing…We were happy with the joy the day would bring.” Stevie’s recollection on his childhood is an example of how we once existed within a culture of financial boundaries and delayed gratification. Families avoided debt even if it meant that they had to do without some of the luxuries they may have wanted for themselves or their children. Unfortunately, too many of us have traded in our discipline and delayed gratification for debt and dependency on borrowed money.
The cycle of debt and dependency on borrowed money must be broken to attain financial independence. The first step to breaking the cycle is learning to say “I don’t need that,” or “I can’t afford that,” or “I am not going into debt for that.” There is no shame in being financially aware. Know your financial limits and be proud of them. I say again for the people in the back of the auditorium, there is NO SHAME in being financially aware and knowing your limits! Knowing your financial borders gives you the freedom to pass up overtime and instead spend time with your family.
Knowing your financial boundaries helps avoid the stress that comes with living in debt. Knowing your financial limits opens your eyes to wasted money, inequitable financial agreements, and possible investment opportunities. Too many of us are in denial about our financial limits and try to live a Kardashian lifestyle on a Mickey Mouse budget.
We currently live in a consumer-driven society that has conditioned us to spend money at every turn. And make no mistake that conditioning is focused and intentional. We are conditioned to believe that if our neighbors or coworkers can “afford” it then we can too. We are conditioned to believe our children should have everything we didn’t have as a child. We are conditioned to believe that paying other people to use their money is a sound financial strategy. The hard truth is that those conditionings are false. First, there’s a strong likelihood that our neighbors and co-workers can’t afford those items.
Second, research shows giving our children everything we didn’t have doesn’t make them any happier. And finally, simply spending money for the sake of spending is a leading cause of most people’s inability to break the debt cycle. It is up to us to recondition our minds, spending habits, and overall approach to finance. Unfettered spending is an extremely dangerous way to exist. By not being financially aware we are unable to plan for the unforeseen or to create specific strategies for climbing out of debt. We have been duped into believing that we should have everything we want when we want it. Not only is this not true, but it’s not sustainable.
Sadly, we are in danger of passing that same conditioned belief system down to our children. Let’s make grandma and grandpa proud by creating a budget, cutting the cord on borrowed money, and climbing out of debt. It’s time to remember a simpler time when we only bought the things we could afford. A time when we were happy simply with being happy. By adapting our thinking and adopting the lessons of the past we can not only avoid repeating the financial mistakes that have doomed many before us, but we can attain the financial peace that so many of us desperately need.
Tony Elion Jr. is a Financial Investor and Author of “Sailor to Student.”