The Almighty Dollar

Restoring some fiscal sanity in our -- negative savings rate -- lives


Don't blow that extra paycheck

Last night, I celebrated my friend's good news. He had accepted a great job offer -- and with it, a higher salary. The pay difference isn't huge, but it is significant considering my friend's financials.

He is single and makes good money. Despite that, he lives paycheck to paycheck, saves little, and can't seem to get rid of a few thousand dollars in credit card debt. He told me how his poor state has taken a toll on his self-esteem and confidence, particularly among his peers.

Knowing all of this, I was surprised to hear him announce that as a gift to himself, he was going to use the extra money towards guitar lessons. (I was relieved to know he already has a guitar and won't have to buy one.)

Now, I am all for learning new languages, pursuing hobbies, doing what makes you happy. But in my friend's case, I think he is being foolish for not paying off his debts first. The lessons should come later.

By enrolling in these classes, he wouldn't be lowering his debt burden, but rather, adding to it. Although he's avoided the expense of buying a new guitar, other things are required in order to play seriously. For starters, he mentioned needing to purchase a tuner. The list goes on and on.

It is decisions like his that make me unsympathetic to people who say, if they only made a bit more money, then they'd pay off the debt. Let's be honest here -- that's just an excuse. How you spend every dollar counts.