It’s clear that most Americans have embraced the concept of always having debt, and understandably so. Who doesn’t love to stress about things such as how you’ll make your next car payment or if you’ll be able to eat next week. Instead of setting ourselves up for success, let’s live a reckless financial life full of things we can’t afford and hope we get lucky with the lottery!
Confession: I watched 2 hours of “How the Lottery Changed my Life” this weekend on TLC since my wife was out of town, and it got me fired up. I hate seeing people struggle financially, and I hate it even more when people get the opportunity of a lifetime and blow it.
So, to ease my mind, I’m going to give ten easy to follow tips to stay in debt forever. Follow these if you never want to get ahead financially.
1. Buy more house than you can afford
This is one of the best ways to stay broke. First, spend as much as you’re approved for by your lender. Lending limits have tightened up in the last five years, but they still remain much higher than you should actually spend. I definitely would spend more than my recommended 2X income on a house purchase. Hint: I recommend only spending 2X household income.
Also, just as you get closer to retirement, make sure you upgrade your house so that you can keep paying a mortgage the rest of your life. There’s no greater peace of mind than having the stability of a monthly mortgage payment the rest of your life!
2. Always have a car payment (How much car can you afford)
I love, Love, LOVE car payments for people who want to remain in debt. Not only can you get the false sense of satisfaction from driving around in a car you can’t really afford, but you also get to spend your potential retirement nest egg now. Wouldn’t you rather pay a $500 monthly car payment for the rest of your life than potentially build a $2.9 million retirement nest egg??? To do this, definitely spend more on a car than the 20% of your annual income I recommend.
3. Think about “how much per month” rather than total price
The more you can get in the mindset of “how much per month” rather than total price, the better chance you’ll have to remain in debt the rest of your life. Want a new TV – how much per month? Ready to buy some new furniture – how much per month?
Things seems a lot cheaper when you’re only paying by the month so you’ll spend more than you should and you’ll be guaranteed to stay in debt.
4. Don’t keep track of your spending
One of the methods I used to build up $50,000 of debt and remain in it was to have no idea where my money was going. Sure, I did some other things like buy a new car and charge up a credit card, but not keeping track of my spending definitely helped me stay in debt. Tracking your spending is for suckers who want to control their money and someday get rich.
5. Live paycheck to paycheck
Have some money leftover from last week’s paycheck? You better spend it before you get your next paycheck! It really doesn’t matter what you spend it on, just make sure you don’t have any excess money left before the next check.
6. Don’t have an emergency fund
You really don’t need an emergency if you have a credit card. Instead of $1,000 or 3-6 months worth of savings, follow step five and spend every dime of your paycheck while waiting for the next one to come through. If you do this, you’ll be like the other 1/3rd of Americans who would be homeless within in a month if they lost their job.
7. Don’t save for retirement
This one is pretty easy to do if you’ve followed all of the steps above – because you’ll guarantee that you don’t have any money to save for retirement. Also, if you don’t know how to now, never learn how to start investing.
8. Keep up with the Joneses
Did Jim Jones (not a good name choice) down the street buy a new boat? Then you should buy a new boat; don’t let a guy named Jim Jones look like he’s richer than you. Ever wonder how people have so much money or why everyone seems rich but you? It’s because they’re spending money they don’t have… they’re masters at following step 3 (think about how much per month).
9. Have the attitude that you deserve stuff because you work hard
You work really hard at your job so you deserve a splurge; just like I worked really hard in college so I deserved a new car! Maybe you don’t even work that hard… but you still deserve to buy things you want! Fulfill that inner-princess and let MasterCard help make all of your dreams come true!
10. Don’t be on the same page financially as your significant other
If you’re married, one great way to remain in debt is to be on a different page financially than your significant other. You should also take out credit cards under your name (or their name), not tell them about it, and then rack up loads of debt. This will not only keep you in debt, but it might also end the relationship! You should keep your finances separate and treat your money like your money (instead of combining finances and making it the family’s money).
One last bonus tip to staying in debt forever, read the 12 things I do to stay frugal and don’t do any of them!
I hope these tips help everyone who want to remain in debt do so for the rest of their life. What about you? Do you have any tips for people who want to remain in debt forever? If so, leave them below!