Managing Money 101 - Part 2

Part 2: Control Lines

So you’re falling. 

But now that your chute has deployed, you’ve beaten nature at its game. The crisp, sudden sound of an enormous sheet of fabric has opened above you and slowed your speed.

As important as it is to arrest your descent, you should land in the right spot. How do you do that without ending up in someone’s swimming pool, or worse? There’s a lot working against you: wind, gravity, your body’s angle, etc. 

But the amount of things that can take you off course after a jump from a plane are little in comparison to a financial nosedive. So how do you navigate all these things to get to your preferred financial “LZ”?

Control Lines
As you’re falling, you grab onto some cords, called control lines, and use them as you have practiced. They were a bit tricky at first but after some work you figured out how to guide yourself where you want to go.

How do you steer your finances so that, as you approach the end of your life, you land close to where you intended?

In financial terms, figuring out what your control lines are, and how to master them, takes practice. Some of the control lines we employ are banking apps, money-saving choices, retirement planning, and good spending habits.

The elements you’re fighting against are things like lack of self-control, laziness, and obviously bad spending habits.

Credit cards can also be one of those things. Not only can they steer you far off course, but they can destroy your budget entirely and bring you to financial ruin.

We all have heard stories of people finding the hidden benefits of credit cards. They exploit little known hacks to their advantage, getting fabulous vacations or free flights. But behind the flashy appeal is a lie.

The lure

• Buy whatever you want without waiting
• Take care of the bill later
• Get phenomenal rewards
• Low interest rates

The trap

• Your future needs can no longer be met because too much debt has been accumulated
• You are assuming you won’t procrastinate to pay the bill
• The hidden gains can often be accomplished just as easily without putting your financial health at risk
• Interest rates can change - they are called introductory rates for a reason

Can some people use credit cards without ending up in debt up to their eyeballs? Sure. But why put yourself through that when you have everything you need to get it honest?

If you’re trying to prevent rips in your canopy, credit cards have sharp edges. If left unchecked, you will find yourself descending far more rapidly than you should like.

If you don’t have money to pay cash for it, that means you can’t afford it.  That is a rock-solid financial rule that will help you avoid a lot of disasters.

Put any existing credit card debt under your canopy as a budget item. One day you’ll find yourself writing the last check. It's a great feeling.

In part 3 of this series, we’ll talk about Spending Mastery. I’ll give you some life hacks to save money and we’ll talk about the true motivation for knowing your landing zone.