The Credit Card Generation

credit_cardWe are living in times of great opportunity and hope. It is actually possible to live and work anywhere thanks to mobile phones and internet, two biggest inventions of our times. Add to it improved healthcare, better means of travel and boom — world is your oyster.

We are also spending more than ever on foods, clothes, automobiles, and recreation. This has given rise to economy and brands world over.

Blessed are those born with a silver spoon — they do not have to worry about spending. Then there are rest – reeling under peer pressure, driven by unfulfilled dreams, and waiting to live a life as they see in movies. They also want to enjoy all luxuries under the sun. At such times they turn to a credit card. It helps them buy now and pay later.

Where does it lead?

It leads to mindless spending — which in most cases is more than one can afford. “Buy now and pay later” philosophy creates in you a need for instant gratification. This at times is not fulfilled by a single credit card. So a second credit card starts adoring your wallet. And you move further on the path of mortgaging your future. In such a situation your salary comes and goes out to credit card companies.

Whose fault is this?

I would like to say that somebody from the other galaxy came and created such situations for you but most if the financial situations are created by person in question himself. This happens by not taking time to think, set priorities and making a spending plan.

What does it do?

When you are under debt — your ability to take risk diminishes and most of the times you will be thinking of staying afloat and pay the minimum. This gets you into a scarcity thinking mode. Abundance thinking is better than scarcity thinking — and it comes more naturally when you are not reeling under debt.

How do people reach there?

It starts with an education loan. Your first job helps you get your first credit card. it comes the ability to buy now and pay letter. So people buy and pay later. Then one fine day they buy so much that they get on to the minimum payment cycle. Then desire to continue on the path of freedom and buying happiness, comes couple more credit cards. Then the grind called “Pay Cheque to Pay Cheque” starts.

Let us look in the mirror

If a life filled with fun and joy is your focus then I am with you. But it is more fun to keep a balance. Think about it when you spend plastic money — you are enjoying the moment — but is having the last laugh – The credit card company earning high rate of interest in return of your moment of joy. You work really hard the entire month — and then burn a week’s or month’s earning in one evening — depending on how hard you party. Does it make sense to you?

Think about it. How much your parents earned while they we raising you? May be much less than you still they were able to live and help you get education. May be they did not live a life of your dreams; but still they were more satisfied.

What are you after? Lasting joy and monetary joy — lasting joy comes from rich relationships, a life well-lived, giving, caring for others. Momentary joy comes from eating food you like, shopping, and being with a person whose company you like. Momentary joy lingers on for a while but it does not last. There is no harm in having your moments of joy but focus more on lasting joy.

Give yourself time: To think about all these things you will need time and solitude. Give yourself both. A lot of challenges of the youth of today can be solved if only they give themselves time to think about — what makes them happy; what can do or get to become really happy.

What parents reading this can do?

Parents can teach their kids to earn their own money to invest in their education?  If you do not want as patent your child to face the grind then why can’t you save for their future?

Teach your kids about importance of hard work, savings, having fun- right ways of having fun, importance of friends in life — how to find real ones; list can go on.

Teach your kids value of pursuing excellence in life. It is likely that school will give them the first opportunity to do that. Tell them that life is no marathon it is a sprint. It is ok if they fall; but it makes sense to try. Share with them the benefits of starting early. Tell them ways to do that. Imbibe in them a spirit of creativity and let them be the best they can.

Benefit: Your kids when they grow up – will not have to be under the burden of education loan. They as tomorrow’s youth will be able to enjoy life and make investments. This can be your biggest gift to them in life.

An alternative path

Have fun, live life and spend some of what you earn; but do not spend it all. Save, save and save some more. Save a part of it to create your own leverage fund to make an angel investment or buy your own office.

How to cope with plastic money reality?

Be Creative: I will suggest a balance. Keep and entertainment fund, emergency fund and the fixed cost fund and also a savings fund. Enjoy but also save. And only spending money cannot help you live life there are other ways. Meet friends, cook together, because your own masseuse, become a volunteer life guard, volunteer to help, and the satisfaction in you get   will last longer than an unmindful weekend vacation from where you will only come back tired and with a dent in your savings.

Try minimalism. Ask yourself – do you really need a new pair of jeans if you already had 4 pairs. Or what a new iPhone can do for you what your existing phone cannot do.

Think twice: A lot people spend money out of their comfort zone to impress and look stylish. Style is overrated — what is important is that if you can sleep relaxed at night thinking about new idea, ways to disrupt and meet with your friends and be with family — without worrying about your debts.

Focus on daily savings: You can try one thing — just record your daily expenditure and daily earnings. I know that you are not a daily wage earner but you can divide your monthly earnings by the number of days of month.

If you are a freelancer or entrepreneur and have fluctuated earnings that take the average of past 3 months. Now based on your average daily earnings — just make sure that your daily expenditure is less than your daily earnings. This will keep you in net plus.

What is the point in burning midnight (or mid-day) oil to earn it later like a fool? Many of you earn money burning midnight oil and later spend it like fools. Of course whatever you have gained through hard work has to be enjoyed but there can be better ways of doing it.

You can be creative about your enjoyment part. Create an entertainment fund — put money in it from your earnings. Rather than going out to party bring friends over at home — may be for an entire day, cook together, talk your heart out and dance. Later go out to have an ice-cream. I am sure you will enjoy it. Take time to spend with family members. It is more important to know people at home than knowing somebody outside or best take time to know yourself and know your purpose.

So all you all members of credit card generation just do something about it. Have fun, spend some but do not stack it up. Let us move ahead and create a life full of abundance.

Do you have any experience to share?

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