Cracking the Code: Resist the Urge to Splurge

Many women who are starting off tend to spend money as soon as they earn it. They are working hard, and they want the trappings that go along with it-good clothes, good vacations, and good handbags.

I know. I fell right into that trap. When I started working, I worked very, very hard-long hours. My pay was good, but, quite frankly, not great. And every weekend my best friend and I would take a long walk to a luxury mall and spend a lot of our paychecks on clothes and accessories. We felt good when we did it, and we felt we deserved it.

It took a long time to break that habit and even longer to pay off all that credit card debt. I wish I had been more disciplined and understood the power of compounding much earlier than I did.

If you get into debt (credit card or any other kind) the interest and penalties you pay will end up being far more than what you originally borrowed. If you invest wisely, the interest, dividends and growth in that investment that you earn will be far more than what you originally invested.

If instead of investing you borrow money and do not pay it back, or you borrow money for no good reason, then you are doubling your problems by both adding to the amount you have to pay back and by losing the financial growth that would have occurred if you had prudently invested those funds.

I took a major step forward when I began to be paid significant bonuses and broke those bonuses down into categories-spend, splurge and invest. I found it very helpful to have a portion that always went to splurge, and I have to admit that even today there is a part of the reward for a job well done that still makes me spend some on splurge.

As I have gotten older, I have added the category of philanthropy, so now when there is a significant bonus, the categories are, spend, splurge, invest and give.

Patricia Annino is a nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  For more visit:

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