6 Figure Income...and not living large!

I read this article the other day and it really hit home.  How to go Broke on $100,000 a year

This really details out in black and white just how people with six figure incomes can easily get into debt without even really living extravagantly.  After seeing this, two main thoughts come to mind:

1) There are many more people that are in the same situation I was in.  If nothing else, this article validated the fact that I wasn't the only one with very decent income that fell into debt.  I really didn't think I was alone but this demonstrates just how easy it is to go down the debt path.  Debt is definitely not associated with lower income households...it's linked with people from all income levels.

2) This article really hit me with the reality that "making 6 figures" isn't equivalent to living luxuriously.  I guess it might have meant that in previous generations but it sounds like 6 figures just doesn't go as far as it used to.  I remember growing up thinking that if I made 6 figures, I would be filthy rich.  I'm talking MTV-type lifestyle :)  Heck, I was amazed at the thought of making even half that.  But that just isn't the case.  Don't get me wrong, people/households that make 6 figures should not be "complaining".  There are many more people that make much, much less.  And you should totally be able to live comfortably with a 6 figure income.  I'm just saying that the high priced toys and expensive adventures need to be put on hold.  On hold till you become debt free and have accumulated crazy wealth!  :)

The AHA Moment!

I had a deep conversation yesterday around what it takes for people to realize the true benefits of financial freedom.  In other words, what is the triggering event that forces people to change their financial lives?  What's that AHA moment?  We came to the conclusion that there isn't just one type of event or moment that makes everyone say.....OHHHH, I get it now!  Also, there's not one specific thing that I can say or do that will make someone else realize what I have realized, no matter how logical my argument could be.  Having said that, there are many life changing events that could prompt someone to re-evaluate their personal financial health:  death, newborn, career change, job loss, major injury, marriage, divorce, etc...  But I hope people don't wait for these extreme situations to make sure their personal financial house is in order.

For me, I can clearly recall my AHA moment.  Don't get me wrong, I have had many, many more lessons learned and self-realizations along the way that have pushed me down the path that I'm on.  But the following event was truly my life changing trigger.

AHA...I really need to start my debt free journey...and I mean really start. 

I remember the meeting so vividly.  My friend referred me to a local financial advisor that practiced Dave Ramsey's Total Money Makeover steps.  Just to back up a bit, this same friend was the one who suggested that I pick up Dave Ramsey's book in the first place.  I read the entire book (which is a major accomplishment for me since there are plenty of books that I've started which I just couldn't make it all the way through).  I thought the book was great, the steps were easy and the success stories referenced in it were absolutely amazing.  So, I proceeded to do what most people do after reading a book like that....I did nothing :(  So, fast forward to this meeting with the financial advisor.  I'm not sure what I was really expecting out of the meeting.  I guess I was thinking he was going to say something like, "stop eating out so much" or "you might want to hold off on a couple vacations for a little bit".  And I guess I was expecting him to have this grand plan laid out for me that would quickly get me out of debt and on track to build wealth like crazy.  I mean, that's what all the success stories in the book did....so why couldn't that happen to me?  I guess I was a bit nervous going into the meeting as I knew I had a lot of debt and I knew I wasn't being very frugal.  But hey, on the flip side, I had an awesome income and all the success stories in the book had crazy amounts of debt....so my situation shouldn't be anything he hasn't seen before and dealt with.

After the first 10 minutes (getting all the get-to-know-you stuff out of the way), it was time to get down to business.  I pulled out my laptop and showed him my spreadsheet that neatly listed all of my income and expenses on a monthly basis.  I felt so proud of how organized I was and how prepared I was for this conversation.  I was thinking inside that he was going to tell me that I knew what I was doing and that my debt problem would probably just fix itself, being that I'm so on top of things.  For the record, he did think I was organized and prepared :)  But more importantly, he was not at all impressed with the contents of my spreadsheet.  What happened next, I wish I could just erase from my memory.  We proceeded to walk through the details of our financial life and it was clear to me that he was truly amazed.  Only it wasn't in a good way!  I remember the summary was something like, so....you take home over $10,000/month and only $500 of that can be put towards paying down debt?  This summary was followed by a long, uncomfortable silence...at least that's what I remember.  I was waiting/hoping/praying he was going to follow it up quickly with...."don't worry, all you have to do is.......".  But nothing...it was like we stumped him....like our situation was something so bad he was a loss for words.  At that very moment, I knew something had to change...and change drastically!

I won't say the guy didn't have any feedback because he certainly had a few comments on what some potential next steps could be.  But he absolutely didn't have a full plan for us and I didn't leave his house feeling warm and fuzzy about my financial future.  In fact, it was flat out depressing.  Although, as hard as it was to recognize the truth of my financial situation, it was probably the best thing that could've happened to me.  My AHA moment served as a wake up call.  I used it as motivation to "fix" the problem and get on the right path.  It opened my eyes to what I really needed to do...it forced me to do things that I wouldn't have considered in the past.  In short, I'm grateful for the AHA moment...as it provided the necessary "push" in the right direction!

As hard to swallow as my AHA moment was, I'm very fortunate that it wasn't a result of a tragedy.  Moreover, I'm very thankful that I was able to do something about it and I'm ecstatic about the position my family and I are in today!  Actually, one of my reasons for sharing my stories with the world is in the hope that others will realize their AHA moment as soon as possible....or at least before their situation gets too out of control!

Excuses Excuses

Wow, I just looked at the date of my last post and it was one month ago from today. Then, I read the content of the last post...it talked about scheduling things you want to prioritize in your life. It went on to talk about how I wanted to make this blog a priority, and that I would start physically scheduling time in my schedule to commit to it. WHOOPS! So, obviously nothing was scheduled, and this blog never made it to the top (or even upper half) of my priority list. Don't get me wrong, I was very productive. I have spent many hours working my day job and spending quality time with my family. But I must admit that I've also had my fair share of "wasted time". It's almost embarrassing to admit how many TV shows I've been sucked into and the endless web sites and blogs that I have perused...instead of working on my own blog.

I had lunch with my blogging buddy today and I walked away from our chat thinking that I probably used every excuse in the book to try to justify why I had stopped consistently blogging. Fortunately, he was pretty nice about it and didn't really rub in the fact that I was just slacking. It's funny to think of the recap of all the excuses I talked about today:

1. My day job was sucking up a lot of my time, so I didn't have any "extra" time to spend posting.


2. I had to dedicate all the rest of my free time with my family.


3. I had writer's block


4. I lost my passion for the topics on this blog


5. I couldn't think of any new and unique topics to write about


6. And the excuses just kept on rolling....

So, here I am, writing on my blog again...telling myself that the excuses have to stop. And when I started listing all of the excuses I was using to prevent me from achieving one of my current goals (i.e. consistently posting on my blog and sharing my message), it hit me that excuses directly relate to the debt free journey.

I don't know what the exact percentages are, but I'm pretty sure that the overwhelming majority of Americans are in debt. So, you can even say that it's the "norm" in our society to have debt. Thus, to begin a debt free journey and fight your way to financial freedom is crazy hard. You've got everyone/everything around you saying that it's perfectly fine to be in debt. In other words, you have a plethora of excuses at your disposal to prevent you from following through with the journey. And sadly, most people never follow through. This explains all the people at retirement age that can't retire and will need to work till they die. This explains all of the families that "need" to have both parents work full-time just to pay the bills. This explains why so many people stay at jobs they hate and feel like they have no other options. Well, just like I should get past all the excuses I've created that prevented me from following through on this blog, I hope more and more people get past all of the excuses that prevent them from following through on their debt free journey.

Here are some of the excuses I had prior to diving into my journey, I'm assuming most people have similar thoughts when thinking about being debt free and obtaining financial freedom.

1. I can't be debt free because that would ruin my great credit score. Although there might be some truth to that (I'm not entirely sure because I don't really care about credit scores anymore), you need to ask yourself why you need to have a good credit score. For most people, they want that high score to get into more debt (get a good interest rate on mortgage, car loan, etc...)....seems pretty ironic to me. I do know that the credit score is used for other things (i.e. new employers run your credit report and if you are renting/leasing a home, they'll run your credit)...but there are workarounds for those things. Bottom line, I'd much rather be debt free than have a high credit score.


2. I can't be debt free because I need to own high quality things. Although I still believe it's better to buy quality over quantity...I now know that you shouldn't do that if it requires you to go into debt. I know for me personally (who is the unhandiest man alive), I used to convince myself that I had to buy new cars because I couldn't fix them myself and it would cost me way too much to maintain them over the long haul. I also took that same mentality with houses. Of course I had to get new houses....so I didn't have to deal with all the maintenance of an older home. The concept just expanded to all of my purchases. Soon, I was surrounded with high quality items and its associated mountains of debt. Like I said before, you can have and you should want nice, quality things....just make sure you can truly afford them.


3. I can't be debt free because my family has needs. First of all, "needs" has to be delineated from "wants". I would be willing to bet that one of the main reasons why people are in debt in the first place is that they think they "need" a helluva lot more than they really do. I'm all about taking care of my family, and I now know that it's actually much easier to support your family's needs when you are debt free.


4. I can't be debt free because I can't make anymore money. This actually was a big excuse for me. I remember getting so frustrated because I thought I made very decent money but it just seemed to leave my checking account as quickly as it got there. So, if you're like me, this could be one of the biggest reasons why you haven't started your debt free journey. But what I finally realized is that you need to look at both sides of the equation when attempting to be debt free. Of course you can attempt to make more money, but probably more importantly, you need to figure out how to spend less. In fact, we have accomplished the majority of our debt free journey without making a penny more than when we started.


5. I can't be debt free because no one else seems to be able to do it. When I first started my debt free journey, most of my family, friends, and co-workers were in debt. So, this was a very real excuse I used to tell myself. It was normal to just stay in debt and everyone else was in the same boat. But I've come to realize that there are many people out there that are living debt free. I've heard from several people that have read my blog that they are living debt free (people that I had no clue would/could be). And if you don't know anyone that's done it, "find" someone. I've always found that it's beneficial to surround yourself with people that have similar goals/aspirations. This is no different. If nothing else, it's a great supporting cast to have....which you go through your journey with.

Wow, I guess when I sit down and really focus on writing for this blog, it can actually come to fruition. Anyway, no more excuses, I want to continue to share my message and related stories in hopes of inspiring/motivating others to follow their debt free journey. So, next time, it won't be a month in between my posts.