Money management is as simple as this. Don’t spend tomorrow’s cash today. Doing so will put you directly in debt. Why would you do that? Some debt is unavoidable: because payments, rent, bills, these are all examples of “healthy” debt. Why do I say that this is a healthy debt? This type of debt is necessary for you to become financially independent. You need a place to live, a phone, electricity, and you may need a car depending on where you live. The point is that this is healthy debt because you need these items to survive in the world. I imagine you value your home, so you’ll be paying your bills on time.
So what is “unhealthy” debt? Unhealthy debt is spending money you don’t have on something you don’t need. So, for example, if you barely have enough money to pay this month’s rent, you shouldn’t even consider buying a new TV. I know, it’s common sense, but at the same time some people will end up buying the TV. This is unhealthy debt. Never force yourself into unhealthy debt.
But take it one step further. Don’t focus on today or tomorrow. Focus on this year or next year. What I mean by this is save money so you have enough money to pay several months’ rent. If you only have enough money to pay one month’s rent, then you will have to worry about paying the next month’s rent. But if you have enough money to pay six months’ rent, then all of a sudden that new TV doesn’t sound like a bad idea.
Not spending tomorrow’s cash extends into the future. If you’re not planning on moving any time soon, then your first priority should be saving enough money to stay in your current location for at least a year. You’ll always have bills to pay, so why not focus on saving enough to pay several months’ bills? Why not? Those bills will come back next month.
If you spend tomorrow’s cash today, you force yourself to become a slave to the past. Your past self did not care about your future, so in the future you will have to address the problems that your past self created. Help yourself. Save enough money to have a safe place to live for at least half a year. After saving the money, you can start thinking about making your home look better. But there’s no point in buying a TV if you don’t have a place to watch it.