If you don’t know the answer to this question, this is a great place to start your journey to financial health. These days, many of us have forgotten the fact that debt is risky. At some level, you understand this principle. You know how I know? Because you’re wise enough to decline “favors” from an ornery family member or friend who offers. They may say there are no strings attached, but you know they plan on making you pay for it somehow. Until you pay them whatever they expect, you’re beholden to them…

It’s a risky position. Credit cards, auto loans, and mortgages all operate on this principle. While many situations may seem to require debt (buying a house, paying for college), the truth is that we don’t have the money to acquire these items on our own. You know what we call that? Living beyond our means. That is what debt does, it allows us to live beyond our means.

I’m not here to judge where you are in your financial life. I’ve gotten it wrong myself. But I do know that the safest way to approach money is to avoid debt whenever possible. This means not trying to look like the Joneses. Guess what? The Joneses may look good, but they are likely in big-time debt. In 2015, the average US household carried credit card debt with an average balance of $15,310. That’s a lot of risk hinging upon the hope it will be easier to make those payments tomorrow. At the end of the day, a family living debt-free may have a greater net worth than the family living in a gorgeous house with great cars and fabulous clothes and … big monthly payments. That family is not prepared for life when it hits the fan, (and it will hit, believe me.) That family is not at peace with their finances. They are riding a merry-go-round of credit cards and they keep changing horses to try to stay one step ahead of creditors. I appreciate the way  Cameron Huddleston of Kiplingers describes this idea in her “10 Reasons You’re Still Broke” piece. (That Kiplingers article is not for the faint of heart, but if you want to challenge yourself, go read it.)

You don’t want to be the Joneses. You want financial peace. Otherwise you would have stopped reading two paragraphs ago. You are the kind of person I want to meet, because together we can make a big difference in your financial life.

Two of my old friends are serious mischief makers who did a lot of crazy things. Now, I’m not opposed to crazy (one of my favorite pins says “Don’t let someone drive you to crazy, it’s nearby anyway and the walk is good for you.”) But I am not a fan of foolish. In my experience, Crazy often travels with her twin sister, Foolish, and it can be difficult to tell them apart. So when the 3 of us friends got together, the other two had a blast trying to get me to do crazy (foolish?) things. Once we watched a 1989 movie about a group of friends who travel to the beach for a (pretty tame) bachelorette weekend. One of the characters, Luanne, is wound a bit tight, and earns her reputation of being a killjoy. I’ll give you one guess what my new nickname was.

Here’s the deal. If you work with me, a lot of my recommendations will make me sound like Luanne. But I deliver this advice knowing that I’m pushing you toward the wisest money decisions. You can be confident that you are shunning the foolish and embracing Luanne. In the end, she has a lot more fun because she is at peace. Don’t believe me? Let’s give it a try.

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