Like most people, I grew up with a particular idea of what the “American Dream” should be. All I knew was that if studied hard and worked hard I could become successful and fulfill my dreams. It’s too bad that no one educates you on all the stuff in between and that the dream is a hoax.
You know that family who lives in that nice neighborhood in the big house with a big pool? Do you ever wonder what it would be like to drive nice cars like they do? Wear nice clothes? Go on perfect vacations? Are you wowed by all their nice furnishings and electronics?
Sure, one of them is a doctor and one of them is a lawyer. They make a great deal of money. It’s too bad they are in massive debt and are working long hours and living from paycheck to paycheck. “Smart and successful” doesn’t always translate to smart and successful. Don’t be like these people.
Envy the family who lives in the modest neighborhood with no pool. They’re the ones that own and drive the same cars until their odometer stops working. They’re the ones that still clip coupons and send their kids to public school. They go on vacations too, but they fly coach and look for discounts and deals, and maybe even free stuff to do.
The difference is, it doesn’t matter what kind of job they have. They can make a lot of money or make an average amount of money. They are smart and successful people. They just don’t feel the need to show off or present a false image of themselves to others.
Redefine success. Remove objects and tangible things from your definition of success. The American Dream doesn’t have to be a big house with a white picket fence. It doesn’t even have to involve having children. Remember where you came from and relish in the fact that you survived and can still overcome adversity. Make life about living. Make money to buy yourself more time.
What’s The Point?
Believe me, I’ve been there. I grew up poor. I literally lived in a tin roofed shack with concrete floors attached to the side of a garage when I was a child. I studied hard and worked hard. I even joined the Army to serve my country. I started making some decent money and started noticing that as I made more money, I started spending more money. My savings rate dropped dramatically and then I started taking on debt. I got married, and together, we had even more debt.
I knew things were only going to get worse if we didn’t change. So we did. We stopped doing home improvement projects cold turkey. We left our dining room table in its box and didn’t buy chairs for it. In fact, my computer still sits on a plastic folding table. We redirected all of our efforts into paying off our debt and streamlining our expenses. We are now saving more than 25% of our income and the only debt we carry now is our mortgage.
The Extreme Money Makeover Plan is about starting over. Over the course of this series I will help you reduce your monthly expenses and prioritize your debt payments. The ultimate goal is to start saving again so that you are working for you. So that you can become financially secure and are prepared to face challenges that may occur in the future without worrying about how you will continue to keep a roof over your head or where your next meal is going to come from. We’re going to move away from living paycheck to paycheck and give ourselves the freedom to live in the now, while being confident that our future will be secure. It’s not about becoming rich. It’s about living our reality and improving our prospects.
How Will We Do It?
We’re going to go step by step through a process that will get you on the road to financial stability. It’s not a quick process, and it will take some people longer than others. That’s OK. It’s not a race. There is no set time-frame which you must follow. The more you can pare down your lifestyle, the faster it will be. If you’re willing to make some simple sacrifices and be disciplined enough to put unimportant things off, you can be successful.
- Change your attitude about money and finances. It shouldn’t be a taboo subject. It’s OK to be open and honest.
- Prioritize your lifestyle and spending habits. Be realistic about how you want to live your life. You can’t avoid spending money, just do it wisely.
- Start saving a little bit of money. It’s important to start saving for retirement and have an emergency fund now, even if you can only start with a small sum.
- Pay off debt. Get rid of credit card debt, student loans, and any other extraneous debt that is weighing you down.
- Start saving a lot of money. Because you need to. You can only count on yourself when you need help the most.
Remember, I’ll be here throughout your journey and am always available to answer your questions (or direct you to who can) via comments, social media, or e-mail.