Sunday, October 10, 2010

How People Keep Themselves Poor

It is often amazing to me how people treat money.  What I am about to tell you is a true story about somebody I know.

Someone I peripherally know got married.  She had not known the gentleman too long but it was young love and she did not know any better.  They decided to have a "traditional" wedding.  That of course means "expensive".  All told, the wedding cost over $70,000.  But here is the kicker.  The family did not pay for the wedding.  Instead, the bride put it all on her credit card.

This is not someone who comes from a very rich family.   $70,000 is probably two years of salary to this person.  But you only get married once right?  But wait, it gets worse.  The marriage lasted all of three months.  I will not get into the reasons why but the couple had differences that they were not prepared to deal with.  But think about this for a second.  Two years of salary are now down the drain.  In reality it is closer to three years when you factor in taxes.  All this for a marriage that lasted 1/10 the time it will take to pay off the expenses.  Let's compare this to my wedding.   I spent a total of $7000.  I make much more than the person I am talking about and have much more money in the bank.  I did not have to save for my wedding nor did I have to scrape to get the money together.  I just had it.  My wedding had no material impact on my financial situation and never will.  Despite the lack of impact it had on my finances, I can honestly say I had a perfect wedding.

This incident will impact this girl for the rest of her life.  She is going to spend the next several years attempting to pay this debt off and it will drag like a weight behind her no matter what she does.  So what is the lesson here?  The problem goes well beyond the mere fact that she spent way more on her wedding than she could reasonably afford.  It is about how people view money in relation to their life.

Like it or not, your life will involve, and often revolve, around money.   You need it to live and you need it to do most anything you want to do.  Since money is so involved with your entire life, the accumulation of wealth is something that has to be very carefully cultivated.  As this incident shows, one mistake can create havoc.  We live in a society where most people feel fine trading short-term wants over long-term needs.  This is what happened here.  I am sure the bride did not think about the long term ramifications of what she was doing.  She wanted to have the "perfect" wedding and was willing to trade away her future for it.  Of course, she probably did not consciously make this trade off and that is the problem.  The future seems so far away and unreal to some.  It is difficult to actually think about it and plan for it.  Because it is difficult, people choose not to deal with it.  Of course this is no excuse, life does not really accept excuses, and when reality hits them people often wonder how they got themselves in this mess without realizing they were the source of their own problem.  They just decided to defer the problem to their future self.

1 comment:

  1. Weddings are over rated. anytime someone i know can marry twice within 3 years and have 2 kids and is divorcing the 2nd. that 70,000 is gonna be used for child support.

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