I have had several questions lately about consolidating credit card debt, rolling over to another lower rate card.
These options can be beneficial from a monthly payment standpoint, but only temporarily deals with the real problem.
When people make fun of the term “Millionaire Nurse”-saying it is impossible on a nurses’ salary, all I do is show them the math. If you start saving between 5-15 % of your income in a tax-free account after you graduate from nursing school-(provided you don’t graduate at age 45 or later), you can be a millionaire at retirement, with only a very conservative 6% rate of return on your money.
So how do you develop the skills to live like a millionaire-copy what the wealthy do. People who have and are building up significant wealth, don’t carry balances on their credit cards at 15 +% interest. They may use cards for convenience, but pay them off monthly.
Studies show people spend more when shopping with plastic, rather than paying cash. Wealthy people can get away with a little over-spending, those trying to build wealth cannot.
The real problem for most people is the temporary use of other peoples’ money, that will require a pay back with interest for the privilege. This allows you to spend more than you make. Overspending does not allow the build up of wealth.
So, my recommendation is when you consider credit card or debt consolidation, do it only after you have made short and long-range plans and goals. You have developed a spending plan that will allow you to live within your means. You have an emergency fund to prevent those “I had to charge it, it was an emergency!” moments.
So, live like a millionaire-no that does not mean over spending, it means building wealth-which requires you to live on less than you earn, to have left-over money at the end of the month.
Do you have questions-comments, be sure and let me know. If you need “Emergency Money Resuscitation” to help with your money problems, check out my free ebook at www.themillionairenurse.com.
