I was shopping for some new furniture and I noticed that the salesman helping me had a nice Submariner Rolex on. After I complimented him on his watch, he said "Thank you. I'll have it paid off in three more months." If there was a "Dummy Alarm" around, it would have been obnoxiously loud right then.

I thought to myself, "You're making payments on a watch? Oh my gosh, IT TELLS TIME!!! If you can't afford to pay cash for the watch you have no business getting it!" But I just smiled and kept my thoughts to myself. I wondered how many more things he was making payments on to impress people.

One of the most financially irresponsible things you can ever do is finance a luxury. A luxury is anything you really don't need; you just want it. Luxury doesn't mean Lexus, Mercedes, Ferrari, Mansion, Rolex, or any other number of things that usually come to mind. A luxury can be something as small as a Starbucks coffee. If you are not where you want to be financially, is that $5 coffee taking you closer to or further away from where you want to be?

Things don't last. And no one really cares about your stuff anyway; they only care about their stuff. Don't sell your future for what you can finance at the moment. When you can pay cash for it and your finances are in good shape, then buy your luxuries.