Free Advice is the WORST

Recently I gave some advice to a friend about a debt free plan he’s working on. I don’t think he’s going to take my advice. I’m going to share the situation and my advice minus the names.

First a reminder about the 80%/20% rule. Average Americans fall into the 80% category. The 80% category are broke, owe truck-loads of money, and one or two paychecks away from living on the street.

Always strive to be in the 20% minority. The 20% minority enjoy a debt free life.

My friend is in the 80% category and had to move in with relatives to pay off bills and get back on his feet. It’s not necessarily a bad idea but the just of it is he gets to lower his expenses using the extra money to pay off all of his bills.

Here’s the problem. There is no pain in the plan. Just because you eliminate your major housing bills doesn’t mean anything if you don’t take the money you saved and pay off all your bills.

While on your Debt Free Plan you must stop all spending especially discretionary expenditures. There’s no harm in eating at home and eliminating eating out at restaurants.

Further, scale back on gifts and vacations until you’ve gotten a handle on your spending. For some of you this is pain, for others it means nothing. There’s an old saying about the definition of insanity. Insanity is doing the same thing over and over again expecting different results.

There is a little pain involved when you stop spending and begin paying off your bills. Soon you will discover your bad spending habits will go away. For some the pain of not being able to spend money (or plastic I should say) is painful until they get used to paying cash for everything.

Anyway, back to my friend. He told me he would use his tax return to help pay off bills and he planned on having another car payment. My advice to him was to eliminate all debt and take your tax refund and put it into a savings account for emergencies.

The lesson is to pay off all debt. You’re either in debt or you’re not. It’s like being pregnant. You’re either pregnant or you’re not pregnant. There’s no in between.

The same goes for Debt Free Living. You’re either in debt or you’re not in debt. You either live debt free or you don’t live debt free.

Debt Free Living is a philosophy, a way of life just like living on plastic credit cards is a philosophy/way of life.

Go for debt free living...it's a wonderful way of life!

David…

P.S. The moral of the story? When you pay for advice you’re much more likely to take the advice. When you get advice for free you’re much more likely to treat it with a grain of salt (mostly ignoring).