Here’s more of a personal finance post, but, hopefully it gets you thinking. I’ve always liked the convenience of credit cards. They are certainly easy to use and above all it’s nice to be able to spend money on “instant loan” instead of having to wait until payday. The idea is to pay off your card at the end of each month in order to avoid interest on your monthly balance, but, if you are like most people you will settle for some debt, then some more, until you realize one day that you are in trouble.

The average American household with at least one credit card owes a collective sum of approximately $9,000 according to the Federal Reserve’s 2001 Survey of Consumer Finances. This is a very unfortunate statistic. Now keep in mind that this is an average. There are certainly people with much less, however, there are also some people with a lot more. Eventually once you reach debt well into the thousands of dollars it becomes increasingly difficult to get out of debt.

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Are you impulsive? If you are in business for the quick buck then maybe you need to take a step back. Starting and growing a new business requires time, care, and money. So here’s the million dollar question. If your new business takes off and you make $30,000 in short notice do you buy a new car, use the money towards your house payment, or put the money back into your business? The obvious choice for many people is to upgrade their status symbol, their car. Nice cars are certainly fun to have and they let others know that you are successful, but is it worth having a nice car if you don’t have any money left to put into your business?

Many people are quick to spend their hard earned cash on things that depreciate in value. In order to fit into society as a successful businessman it is assumed that you will own a Mercedes, have a big house, watch movies in your custom home theater room, and of course take expensive vacations a few times a year. These things can be signs of success, but they can also be signs of stupidity.

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