Survival preparedness begins with common sensibility and an understanding of where and how we fit within the world around us. Unfortunately, many, and I mean many, people apparently do not ‘get it’. One element of this sensibility is to have a fundamental understanding of one’s financial capabilities and limitations, which are paramount to standing a chance of successfully navigating and avoiding compulsive or delusional emotions and the shark infested waters within the world we live. One glaring example, and one that many people fail miserably at, is buying a home that is at the top end of what they can barely afford.
Sadly, this often occurs at an early stage in life (e.g. a new young couple buying a home, or middle aged who are ‘trading up’), and subsequently binds them in chains of heavy debt, sapping them of the strength and ability to do more or otherwise with their money.
For some reason, many people feel the need to buy ‘big’, and/or to buy it extravagant, or to impress, or to fulfill their fantasy of living in a place of grandeur or stature. People find ‘excuses’ to convince themselves why they ‘need’ it… or why they need the more expensive one.
For many, it is easy to get caught up in the desire of wanting to spend the max for the big house, or the expensive one that is located or has the features that you gloriously envisioned. It’s easy to lose site of practicality and reality. The system WANTS you to buy it like that. The problem is… buying it like that is not always the best financial decision.
I mention this subject after having recently watched a few episodes of a TV series which documents the typical home buyer and their decision making process of choosing house A, B, or C. It struck me as to how many of them are at or BEYOND their maximum budget when they choose and purchase a home. Throughout my life I have witnessed similar circumstances with people I’ve know or worked with. I ask myself, why is it that so many people do this type of thing whereas instead they could have chosen to purchase a lesser expensive home and be left with a decent surplus of cash flow to do with as they choose?
Sure, people’s expectations are that their paychecks will always continue to increase, and eventually they will not be as ‘strapped’ with their mortgage payments as the day they purchased it. However one thing they often do not fully realize is that IF and when they get a pay raise, the few percent they MIGHT get is usually more than chewed up by often ‘invisible’ inflation and increased costs of living. In fact, most Americans have been slipping backwards for many years now, and are falling deeper into the abyss.
It amazes me how people can be so short sited and live beyond or at the edge of their means. If they only knew the freedom that they could have if they were to live well within their means. Having a large cushion between your earnings and your expenditures brings peace-of-mind beyond your wildest imagination. Unfortunately most people have no clue what that is like. If they only knew how much happier they would be if they would have just accepted their place within the world and not pretended to be in a place beyond their means.
Debt is a tremendous burden to one’s freedom and personal well being. All I can do is point it out, and hope that someone out there reading this will stop for a minute and consider being satisfied with a little less, and not fall victim to the desires of having more than you can afford.
It’s part of the overall package of survival preparedness.