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Act Your Wage

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I'm sure most of us have heard the term "act your age", there is a new term being used in the financial industry - "act your wage".

Many people these days are going into debt to buy that extra large house, or that new boat, or that nice SUV. The reality is most people can't actually afford for these things.

There seems to be more peer pressure these days on showing off your fancy possessions, part of it might be on how easy it is to get approved for credit these days, it might be the pressures of society or it might be something else. The other aspect is the whole "keeping up with the Jones-es" mentality - if your neighbor or friend gets something, you need to get it too, to keep up.

We must try to resist the urge of just buying stuff for the sake of buying it, and if we actually want something, we should save for it opposed to going into debt to buy it. Saving the money will help us actually determine if we really want it, it's easy to walk into a store and buy something by going into debt, it's a little more difficult to save for it. No matter how long it takes - days, weeks, months, years, etc - if we still want the item after we've spent the time saving for it - it will help prove that we really want it and that it's not just an impulse buy.

It's also proven to be more satisfying saving up for something before buying it, it's an accomplishment and not just a split-second rash decision.

In addition to the regular every day stuff, one of the largest purchases that most people make is usually a house. Most people end up with a house and mortgage which costs more money than they can afford. It's very important when buying a house and getting a mortgage that we understand we will be paying this off for a long time, we need to make sure we can actually afford this and everything else that we need.

We're not against buying things or spending money, just make sure that you can actually afford it and don't go into debt for it!

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