Stop Burying Yourself in Debt by Kevin Oleary

I get a lot of questions about how to get rich, and I always give the same answer.
Don’t spend too much. Mostly save. Always invest.
Seems simple enough, right? Yet so many people do the exact opposite—invest poorly, spend way too much, save almost nothing, and remain willfully ignorant about their finances.
Why? Because they don’t understand their relationship to money.
The first step in changing money habits is taking a cold hard look at your financial input and output. Here’s what you need to do: boil your money matters down to one simple number by adding up all your earnings and subtracting all your expenditures over three months. I call this your 90-day number.

Once you write that 90-day number down you’ll be faced with one of two truths.

1. Your number is positive. Congratulations, you’re one of the few people taking in more money than you spend!
2. Your number is in the negatives, and like the majority of men and women, you spend more than you make.

The good news is that no matter what your 90-day number teaches you about your relationship with money, there’s always room to improve. I’m going to help you do exactly that by pointing out 3 money mistakes everybody makes at some point in their lives, and teaching you how to fix them.

Money Mistake #1: You’re drowning in credit debt.
The Fix: READ THE FINE PRINT
Spending too much is a disease, and credit card debt is a cancer. The first time you get a credit card bill and don’t pay off the full balance, you’ve let the first financial cancer cell into your life.
Next time you get a credit card bill in the mail, put your glasses on and take a good, hard look at the fine print.
Credit card companies are required by law to tell you how many years it will take you to pay off your balance if you pay the minimum each month. In most instances, this number is a monstrous thing to behold.
With typical compound interest rates averaging around 16%, this black hole of debt keeps growing, and growing, and growing.
Once you take a look at the fine print, you MUST start dedicating every spare penny you have to paying off your credit. If you want to get rich, you need to eliminate your debt first.

Money Mistake #2: Spending makes you happy
The Fix: GET A HANDLE ON EMOTIONAL SPENDING
Most men and women who spend too much do so because it feels good, temporarily. But as I always say, mixing money with emotions is a toxic combination.
Don’t go shopping to change your mood. It might make you feel better in the short term, but I promise: the long-term fulfillment of saving and growing your money far outweighs the temporary satisfaction of retail therapy.
Recognize when you’re about to spend with your emotions, and go for a walk, cook, or read instead. Do anything; just don’t head for the mall!

Money Mistake #3: Frugality isn’t fun
The Fix: CREATE A “FUN MONEY” FUND
Many people who commit themselves 100% to eliminating debt and saving money find that a certain joylessness creeps in after a while. The same thing happens to dieters who deprive themselves of all their favorite foods for months, and then cave to late-night binges.
That’s not a way to live, and that’s not what I advocate. Austerity, yes; deprivation, no.
The key is to include spending on fun things in your budget. Set aside a manageable percentage every week in a fund that will let you splurge with cash. Go out for lunch, get your hair done, or use your fun money to go on a vacation—do whatever you want, as long as you pay for it outright. This way you can enjoy your splurges without feeling guilty!
Read more about finding financial freedom in the Cold Hard Truth On Men, Women, and Money.