Changing The Way You Think About Money
Changing the way you think about money! Nearly thirteen years ago a family member slipped a book into my husbands hands that would change the whole direction of our future. It was The Total Money Makeover by Dave Ramsey. We were newly married, and each owned our own houses prior to marriage, so we had two houses and I had a lot of college debt. At the time, it seemed normal for us…because everyone has debt, right? We didn’t even realize we needed a financial Makeover!
With every little slip of paper that came in the mail, it seemed we had less and less power to decide what we wanted to do with our money. The further we read into Dave Ramsey’s book, the more we changed the way we thought about money. We wanted to tell the money where to go, not have it decided by the bills coming in. Living in debt started feeling very foreign to us, it was no longer welcome.
{This post may contain affiliate links, which means I may receive a commission if you click a link and/or purchase}
When you pay cash, it is always 0% financing
I worked in the mortgage industry for many years, a few of those years in the underwriting department and was very familiar with how credit reports worked. First hand, I saw how they approved mortgages and what debt ratio’s they would allow. Some brokers, that tried to get approved with us, really pushed debt ratio’s. They pushed DTI (Debt to Income) ratios so much that I remember thinking if this persons car breaks down, they will default on their loan. This is an important note, just because you get approved for financing doesn’t mean you can afford it. Dave Ramsey once stated that he had enough money to buy an entire apartment building, but couldn’t rent one of the units because he didn’t have a credit score. Society rewards you for being responsible with debt, but doesn’t know what to do with someone who doesn’t have any. The concept seems so backwards to me.
I also worked at a bank in the past and remember a conversation I had with one of our personal bankers. I was explaining why my husband and I had decided to no longer have any car loans. The look in his eyes said it all, he thought I was crazy. He also seemed really confused….he just didn’t understand. He said life was short and he wanted to drive something nice. I know many great people who have loans, it is just going to be very difficult to build wealth, long term wealth if you are spending money on something that depreciates. The more you start to change the way you think about debt…the more foreign your thinking becomes for sure, in a good way.
Be Different By Changing The Way You Think About Money
Having the mindset to get rid of debt is very different than the way the world thinks. It is very different from the way businesses advertise too! Many advertise with the monthly costs in bold print, not the total cost. Businesses know how most consumers decide if they can afford something, they are also so quick to offer solutions on how to get what you can’t afford, because that is how they make all their money. Don’t let a salesman tell you what you can afford. Be different, simply by changing the way you think about debt.
Why did you get in debt in the first place? Let me ask you another question…why is debt OK? Does it bring more stress into your life or less? Really be honest with yourself, why do you borrow money? I know for me, in the beginning, I would have said because that’s just what you do. Everyone has debt.
We have been there. Two houses (we were trying to sell one, but it took over a year), car loans, student loans, eating out, vacations….none of it bothered us until we realized how little power we had over our money.
Our biggest push to be debt free was being in a position to help others if God prompted us to. We didn’t want to be strapped down financially. So when we finally made the push years ago to change, we ended up paying off $30,000 in 11 months using the Dave Ramsey steps. I’ll talk more about his debt snowball in part 2, but it is contagious and definitely builds momentum!
5 Reasons to Change Your Financial Thinking
So here it is all laid out, the big question….why change your way of thinking and what will it help?
- Changing the way you think allows you to really determine if you can afford something or not. Affording a monthly payment is different than being able to afford something long term, especially if things go wrong. Cars break down, etc…
- Changing the way you think fuels that desire to get yourself into a better financial situation. You start thinking long term, instead of monthly.
- Getting yourself into a better financial situation helps reduce financial stress, which can help in multiple facets, especially your marriage.
- Changing the way you think means being different than society. Instead of living in debt, imagine if a majority of the money coming in could be used anyway you desired. You could invest, travel and the list goes on.
- Changing the way you think helps you prepare for a rainy day…and financially there will be rainy days, it is just a matter of time. So be ready.
Making It Personal, Why Changing The Way You Think About Money is the best thing you could ever do!
Getting a hold of Dave Ramsey’s book changed our way of thinking, and as a result changed our whole future. We didn’t know at the time that our first child would be born with a Giant Congenital Nevus. Within 3 months of his birth we started surgically removing the nevus to hopefully prevent it from turning to cancer. Over the last nine years, and 18 surgeries later, praise the Lord he is still cancer free. We are thankful for great insurance, but our portion of the medical bills were still thousands and thousands of dollars each year. Not once did we have to stress over paying them, I can’t say that it ever managed to be fun paying medical bills, but they were paid.
I am writing this post today with a $3000 medical bill currently in my bill box from our son’s most recent surgery. I can’t say that it is easy, we had to say no to “big” family vacations, we often said no to small ones too. However, my husband and I knew where we were going and that it would be worth it. We see financial freedom in our future.
Changing Your Future
I understand that it is a big step to change the way you think. It is far from glamorous. We have older cars, our house repairs move much slower than we want…we finally just replaced a TV that should have been replaced 3 years ago. However, our retirement is in great shape, we aren’t stressed and we hope in the next 10 years to pay off our house. There isn’t a day spent stressing over where the money is coming from.
In part 2, I will touch more on how we budget…changing your thinking is the first step, putting it into action with a budget is step 2.
How To Create A Budget…Click Here!
Want to read The Total Money Makeover by Dave Ramsey? Get it Here! I loved this book! It was so enlightening, I couldn’t put it down!
Let your financial dreams begin! A new year, a new future! Thanks for checking out my post!
