Dave has helped thousands and thousands of people – people living below the poverty line, those in the middle class, and those who are wealthy. He’s very pragmatic, very straight-forward, and challenged most of what my husband and I understood about finances and “good” debt.
I am so very thankful for his 7 steps on how to methodically make payments, which ones to pay 1st, which ones to put on the back burner, how much to have in savings, etc., that I want to share it with you!
I personally know several families who have followed or are currently following his suggested steps to get out of debt. And I can tell you, it works!
There are no short cuts, though. It’s equivalent to trying to lose weight the only way that really seems to work – through changing your diet and exercising – not by taking a pill. This is that kind of financial plan. It’s not a gimmick. It’s not quick. It’s effective. It’s hard. And it’s totally worth it!
In fact, I bet if you posted on facebook something like, “We really need to get our debt under control. How do we start?” several responders will recommend Dave. How do I know? Because I did it myself!
We have been following Dave Ramsey’s steps to paying off debt for over 3 years now. We are a single-income family of 6 (although when we started we were a family of 4). And that single income is well under 6 figures. In that time, we have managed to pay off over $45,000 in debt that we had accumulated through credit cards, student loans, and a personal loan from my Mom (paying off the mortgage comes in a later step).
It has been grueling. I have made many sacrifices with tears in my eyes, saying “no” to luxuries big (vacations) and small (eating out) so that we can build momentum in paying off our debt and eventually build wealth!
Dave Ramsey’s book called The Total Money Makeover outlines the steps to becoming debt-free. They are very easy to understand, but their effectiveness really depends on your motivation to follow them.
The goal of the 1st part of the book is to motivate you and challenge you. If you’re not motivated reading my summary, then get the book. (Or to save money, check it out from your local library.) If you’re already motivated or my summary is successful in motivating you, then move onto Step #1 (which will be part II of this article).
And if you’re not motivated by my summary, it’s because I don’t include any of the amazing testimonials in the book. They are super inspiring, but I don’t have the time or space to include them here.
For the record, I am in no way affiliated with Dave Ramsey! Please let me know if you have any questions along the way. We’re still on our journey to being debt-free and building wealth, but the hardest part was simply getting started. Good luck!
The Total Money Makeover
By Dave Ramsey
The Total Money Makeover Challenge
Your ways of handling money have to work in good times and in bad. The principles that you build your life on will determine your level of success. If you have good intentions in the world, but build your financial house on bad ideas, it will fall.
With this last recession, many more Americans are discovering that their theories about money and their assumptions about how money works were wrong. And they discovered they were wrong the hard way – through pain.
The Normal American Family
It seemed every month I sat at the same table with the same worries, fears, and problems. I had too much debt, too little savings, and no sense of control over my life. No matter how hard I worked, it seemed I couldn’t win . . . When Sharon and I “talked” about money, we ended up in a fight, leaving her feeling afraid and me feeling inadequate.
I was tired of sitting down to “do the bills” and having a heaviness come over me. The hopelessness was overwhelming. I felt like a gerbil in a wheel – run, run, run, no traction, no ground covered; maybe life was just a financial illusion.
Oh, some months everything seemed to work, and I thought maybe we were going to be okay . . . Those times offered enough wiggle room that I could continue to lie to myself that we were making headway, but deep down, I knew we weren’t.
I Did It My Way, and My Way Wasn’t Working
We started with nothing, but by the time I was 26 years old, we held real estate worth over $4 million. I was good at real estate, but I was better at borrowing money. Even though I had become a millionaire, I had built a house of cards.
We were sued, foreclosed on, and, finally, with a brand-new baby and a toddler, we were bankrupt. Scared doesn’t begin to cover it. Crushed comes close, but we held on to each other and decided we needed a chance.
So after losing everything, I went on a quest, a quest to find out how money really works, how I could get control of it, and how I could have confidence in handling it.
The Big Challenge
Wealth building isn’t rocket science; winning at money is 80% behavior and 20% head knowledge. What to do isn’t the problem; doing it is. There are no secrets, and yes, this will be very hard. Hey, if it were easy, every moron walking would be wealthy.
My Total Money makeover begins with a challenge. The challenge is you. You are the problem with your money.
The Total Money Makeover plan isn’t theory. It works every single time. It works because it is simple. It works because it gets to the heart of your money problems: you. It is based on a series of prices that must be paid to win. All winners pay a price to win.
The Total Money Makeover Motto
This plan works, but it will cost you. It will teach you to say new words, like “no.”
Your Total Money Makeover will be a personal money makeover where you learn this motto: IF YOU WILL LIVE LIKE NO ONE ELSE, LATER YOU CAN LIVE LIKE NO ONE ELSE. If you make sacrifices now that most people aren’t willing to make, later on you will be able to live, as those folks will never be able to live.
I’m sorry there isn’t an easier path to feature in the motto, but the good thing about this one is that it works. You can repeat this motto to yourself as you pass up a purchase in order to hit your goals. It reminds you that you will win, and the payoff will be worth the cost.
My Promise to You
My promise to you is this: if you will follow the guidelines of this proven system of sacrifice and discipline, you can be debt-free, begin saving, and give as you’ve never given before. You will build wealth. This system will not work unless you do, and then only to the degree of your intensity in implementing it.
My financial life began turning around when I took responsibility for it. People all across America have used these steps to become free, regain a sense of confidence and control, and build a future for their families.
Denial: I’m Not That Out of Shape
The next few chapters will identify some major obstacles to YOUR Total Money Makeover. My Dad used to say that 90% of problem solving is realizing there is one.
Focused intensity, life-or-death intensity, is required for you to reset your money-spending patterns, and one of your biggest obstacles is DENIAL. This is not a book for the wimpy. This is a book about winning, about really having something.
Don’t Wait to Have Denial Knocked Out of You
For your own good, for the good of your family and your future, grow a backbone. When something is wrong, stand up and say it is wrong, and don’t back down.
You are a real candidate for financial mediocrity or even a major crisis brought on by denial, and you have to see the need to make dramatic changes. If you are apathetic because everything seems “just fine,” then you will be unwilling to make the huge changes needed to get huge results.
The Pain of Change
Change is painful. Few people have the courage to seek out change. Most people won’t change until the pain of where they are exceeds the pain of change. If you keep doing the same things, you will keep getting the same results. You are where you are right now financially as a sum total of the decisions you’ve made to this point. If you like where you are, keep it up.
Break through the temptation to remain in the same situation, and opt for the pain of change before the pain of not changing searches you out.
Debt Myths: Debt Is (Not) a Tool
It is human nature to want it and want it now; it is also a sign of immaturity. Being willing to delay pleasure for a greater result is a sign of maturity. However, our culture teaches us to live for the now.
Don’t Let the Monkeys Pull You Down!
Debt has been sold to us so aggressively, so loudly, and so often that to imagine living without debt requires myth-busting. Debt is so ingrained into our culture that most Americans can’t even envision a car without a payment, a house without a mortgage, a student without a loan, and credit without a card.
According to CardTrak, Americans currently have $928 billion in credit-card debt.
Most people who have made the decision to stop borrowing money have experienced something weird: ridicule. Friends and family who are disciples of the myth that debt is good have ridiculed those on the path to freedom.
Myth vs. Truth
If, at the end of this myth-busting section, you conclude I’m just a nut with a book you will not be forced to change. But just in case the tens of thousands of families who have experienced a Total Money Makeover have something to say to you, read on in a relaxed state. Let your guard down. You can always put the shields back up later.
Myth: Debt is a tool and should be used to create prosperity.
Truth: Debt adds considerable risk, most often doesn’t bring prosperity and isn’t used by wealthy people nearly as much as we are led to believe. It is a method to make banks wealthy; not you.
The Forbes 400 is a list of the richest 400 people in America . . . When surveyed, 75% of the Forbes 400 said the best way to build wealth is to become and stay debt-free. Walgreen’s, Cisco, and Harley-Davidson are run debt-free.
I have met with thousands of millionaires in my years as a financial counselor, and I have never met one who said he made it all with Discover Card bonus points. They all lived on less than they made and spent only when they had cash. No payments.
Myth: If I loan money to friends or relatives, I am helping them.
Truth: If I loan money to a friend or relative, the relationship will be strained or destroyed.
We don’t control how debt affects relationships; debt does that independently of what we want. The borrower is a slave to the lender; and you change the spiritual dynamic of relationships when you loan loved ones money. They are no longer a friend, uncle, or child; they are now your servant.
Hundreds of times I’ve seen relationships strained and sometimes destroyed. We all have, but we continue to believe the myth that a loan to a loved one is a blessing. It isn’t; it is a curse. Don’t put that burden on any relationship you care about.
Personally, my husband and I borrowed money from my Mom to sell our condo at a loss before we began our Total Money Makeover. We bought at the peak of the market and sold at the trough. It was awful. I am so thankful to her for her generosity, and I think the only reason this worked for us is that my husband and I paid her back diligently every single month.
Sometimes we were only able to pay her $20. Other months, if it was a 3-paycheck month or we received a handsome check as a gift, 100% of it went to paying my Mom back. We were aggressive and mature in our repayment and my Mom noticed and was thankful for it.
Myth: By co-signing a loan, I am helping a friend or relative.
Truth: Be ready to repay the loan; the bank wants a cosigner for a reason, which is that they don’t expect the friend or relative to pay.
Myth: Cash advance, payday loans, rent-to-own, title pawning, and tote-the-note car lots are needed to help lower-income people to get ahead.
Truth: These rip-off examples of predatory lending are designed to take advantage of low-income people and benefit only the owners of the companies making the loans.
The lending rates of these types of operations are over 100% interest, and if you want to stay on the bottom, keep dealing with these guys. You know why these types of operations are located only at the poor end of town? Because rich people won’t play. That is how they got to be rich.
Myth: 90 days same as cash is like using other people’s money for free.
Truth: 90 days is not same as cash.
We buy things we don’t need with money we don’t have to impress people we don’t like.
- If you will flash cash in front of a manager who has a sales quota to meet, you will likely get a discount. If you can’t get a discount, go to the competitor and get one. You do not get the discount when you sign up for the finance plan.
- Most people don’t pay off debt in the allotted time. Nationally, 88% of these contracts convert to a debt – a debt where you are charged a rip-off interest rate of 24-38%, and they back-charge you to the date of purchase.
- You are playing with snakes and you will get bitten.
Personally, I used to work in a doctor’s office and many patients would finance their elective surgeries like LASIK. We did offer a 3 month interest-free period. I would look my patients square in the eyes and tell them that they should take the financing if they couldn’t afford the surgery costs outright and would be disciplined enough pay it off in less than 3 months. Most of my patients were successful in paying it off in the allotted time. In my opinion, you have to know yourself and your finances before making this decision. I’m sure Dave would disagree. :)
Myth: Car payments are a way of life; you’ll always have one.
Truth: Staying away from car payments by driving reliable used cars is what the average millionaire does; that is how he or she became a millionaire. The average millionaire drives a 2-year-old car with no payments.
Having been a millionaire and gone broke, I dug my way out by making a decision about looking good versus being good. Looking good is when your broke friends are impressed by what you drive, and being good is having more money than they have.
You have to reach the point that what people think is not your primary motivator. Reaching the goal is the motivator. When the goal, not how you look, begins to matter, you are on your way to a Total Money Makeover.
We have two cars, a sedan and a minivan. My husband bought the sedan right after college and we just so happened to pay it off before we started our Total Money Makeover. He plans to drive it (a very reliable car) until it dies.
After beginning our Total Money Makeover, we needed a 2nd, bigger car when we were expecting our 3rd child. We asked God to help us with this since we didn’t have any extra money and were desperately trying to pay down our debt. Through a friend of a friend, we were able to buy a Honda Odyssey minivan in very good condition for $4000, almost the exact amount we got back as our federal tax refund! Boom! Done.
Myth: Leasing a car is what sophisticated people do. You should lease things that go down in value and take the tax advantage.
Truth: Consumer advocates, noted experts, and a good calculator will confirm that the car lease is the most expensive way to operate a vehicle.
The auto industry lobbyists are so powerful that the law doesn’t require full lender disclosure. The industry argues that you are merely renting, so they shouldn’t be required to show you the actual effective interest rate. The Federal Trade Commission requires a truth-in-lending statement when you buy a car or get a mortgage, but not on a lease, so you don’t know what you are paying unless you are very good with a calculator.
Shouldn’t you lease or rent things that go down in value? The Math doesn’t work on a car, for sure. Your lease payment is designed to cover the loss in value plus profit.
The National Auto Dealers Association states that the average new car purchased for cash makes the dealer an $82 profit. When you finance with the dealer, they make $775. And if they can get you to lease the car, they make $1300!
Myth: You can get a good deal on a new car at 0% interest.
Truth: A new car loses 60% of its value in the first 4 years; that isn’t 0%.
While the money to borrow isn’t technically costing you, you are losing so much in value that you have still been taken. So even though the interest rate is attractive, pass it up because the whole transaction still means throwing $100 bills out the window each week.
Some people want to buy a new car for the warranty. If you lose $17,000 of value over four years, on average you have paid too much for a warranty. You could have completely rebuilt the car twice for $17,000.
Myth: You should get a credit card to build your credit.
Truth: You won’t use credit with your Total Money Makeover, except for maybe a mortgage, and you don’t need a credit card for that.
Myth: You need a credit card to rent a car, check into a hotel, or buy online.
Truth: A debit card will do all that.
I carry a debt card on my personal account and one on my business and do not have one credit card. Paying for things with money you have now is part of your Total Money Makeover. There is one thing a debit card won’t do: get you into debt.
We’ll get more into this later, but Dave recommends paying everything with cash. I’m a busy, distracted Mom who leaves my purse unzipped on chairs in public places. For that reason, we don’t use cash. We use our debit card, just making certain that when we swipe it and it gives us the option for debit or credit, we select credit. Yes, use your debit card as credit. We can’t go into debt with our debit card, and I’m more relaxed than carrying around envelopes full of money in my wallet.
Some people are tempted to spend more (I know I’ve done it!) when they have plastic on hand, so if you are that person and you are conscientious enough to not lose your wallet, Dave would recommend carrying cash only. To my little sister who loses her wallet and driver’s license monthly, the bank won’t issue you new cash if you lose it, love. For you, I think Dave would recommend the debit card.
Myth: The debit card has more risk than a credit card.
The perception is that it’s riskier to conduct business with a debit card. The fact is, Visa’s regulations require the card-issuing bank to afford the debit card the exact same protections in cases of theft or fraud. Remember in order to get the full protection, be sure to run your card as a credit transaction – not using your PIN number. That’s what I do.
Myth: If you pay off your credit card every month, you get the free use of someone else’s money.
Truth: CardTrak says that 60% of people don’t pay off their credit cards every month. When you play with snakes, you get bitten.
According to MSNBC.com, 90% of the airline miles are never redeemed. A study of credit card use at McDonald’s found that people spent 47% more when using credit instead of cash. It hurts when you spend cash; therefore you spend less.
No matter how appealing the points or rewards of credit cards may seem, Dave never recommends them. Never. You will spend more and justify it by what you’re gaining in terms of the points. I had a patient who used her credit card to pay for her $5,000 elective eye surgery. She smiled saying, “I’m not paying for surgery! I’m getting a free flight!” Flights don’t cost $5,000. Elective surgery does.
I trust Dave on this and my husband and I do not have credit cards. It made my husband very nervous at first in case a major car or home repair was needed. But we have done without one for several years, faced major home repairs during that time, and figured out how to pay for it without borrowing.
Myth: Make sure your teenager gets a credit card so he or she will learn to be responsible with money.
Truth: Getting a credit card for your teenager is an excellent way to teach him or her to be financially irresponsible. That’s why teens are now the #1 target of credit card companies.
The reason lenders market so aggressively to teens is brand loyalty… We consumers are very loyal to the first bank that certifies our adulthood by issuing us plastic.
I had a credit card from the moment I turned 15 and got a car. Yes, I got a new car the day I turned 15 – a Jeep Wrangler at that! I used the credit card for gas which was my parents’ primary motivation for giving it to me. With their knowledge, though, I’d eat out and go shopping with my friends all the time. My Dad was rich. He paid the bill. I kept up this habit after college and into the 1st few years of my marriage. At this point, I wasn’t rich. And I paid the bill. Hello, credit card debt. Ugh.
Myth: Debt consolidation saves interest, and you have one smaller payment.
Reality: Debt consolidation is dangerous because you treat only the symptom.
The debt is still there, as are the habits that caused it; you just moved it! Debt is not a problem; it’s a symptom of overspending and undersaving. Debt consolidation seems appealing because there is a lower interest rate on some of the debt and a lower payment.
In almost every case we review, though, we find that the lower payment exists not because the rate is actually lower but because the term is extended. If you stay in debt longer, you pay the lender more, which is why they are in the business of debt consolidation.
Money Myths: The (Non)Secrets of the Rich
Things won’t be okay unless you make them that way. Your destiny and your dignity are up to you. You are in charge of your retirement.
Myth: Gold is a good investment and will cover me if the economy collapses.
Truth: Gold has a poor track record and isn’t used when an economy collapses.
Myth: Playing the lottery and other forms of gambling will make you rich.
Truth: The lottery is a tax on the poor and on people who can’t do math.
Rich people and smart people would be in the lottery line at the gas station if the lottery were a real wealth-building tool, but the truth is that the lottery is a rip-off instituted by our government. Studies show that the zip codes that spend four times what anyone else does on lottery tickets are those in lower-income parts of town.
The lottery offers false hope, not a ticket out. Energy, thrift, and diligence are how wealth is built, not dumb luck.
Myth: I don’t have time to work on a budget, retirement plan or estate plan.
Truth: You don’t have time not to.
You have to make your money behave, and a written plan is the whip and chair for the money tamer. The quality of your life at retirement depends on your becoming an expert in money management today. You must think long-term to win with money, and that includes thinking all the way through death.
My husband and I use Dave’s online budgeting software. You can create your own budget here for free to see if you like the software. When we 1st signed up, I think it cost us $85 per year and with that we also received his Total Money Makeover book and wallet that includes envelopes to label with your different expense categories (gas, groceries, dining out, clothing, etc). You put your month’s allotted cash for that category in the envelope. When it’s gone, it’s gone.
Since I’ve used the software online for so long, I recently received an offer to pay $200 for lifetime use of the software. I love it, update it every week or so, and it seemed like a good deal since I’ve paid $85 per year for 3 years already. My husband agreed.
When I was 1st introduced to Dave Ramsey, I thought it was foolish to spend money in order to save money. I felt kind of like he was a scam artist selling me stuff since I was in debt.
But I’ve been motivated and organized enough to stick with the budgeting and debt payments, and it has been worth every single penny. I’m sure I’ve saved much more than I’ve spent on the software taking into consideration the interest I would have been paying on my debt had I not paid it off quickly using the online budgeting!
Myth: I’ll just file bankruptcy and start over; it seems so easy.
Truth: Bankruptcy is a gut-wrenching, life-changing event that causes lifelong damage.
Few people who have been through bankruptcy would report that it is a painless wiping-clean of the slate. I have been bankrupt and have worked with the bankrupt for decades, and it is not a place you want to visit.
Chapter 7 bankruptcy, which is total bankruptcy, stays on your credit report for 10 years. Chapter 13 bankruptcy, more like a payment plan, stays on your credit report for 7 years. Bankruptcy, however, is for life. Loan application and many job applications ask if you have ever filed for bankruptcy. Ever.
Most bankruptcies can be avoided with a Total Money Makeover. If you take the thoughtful step backward to get on solid ground instead of looking at the false allure of the quick fix that bankruptcy seems to offer, you will win more quickly and easily. I know from personal experience the pain of bankruptcy, foreclosure, and lawsuits. Been there, done that, and it is not worth it.
Myth: I can’t use cash because it is dangerous; I might get robbed.
Truth: You are being robbed every day by not using the power of cash.
We teach people to carry cash. In a culture where the salesclerk thinks you are a drug dealer if you pay with cash, I know this suggestion may seem weird. If you carry cash, you spend less, and you can get bargains by flashing cash.
But trust me, you need to be far more worried about the danger of using credit cards than the danger of being robbed while carrying cash. Carrying cash doesn’t make you more likely to get robbed; on the contrary, the mismanagement of plastic is robbing you every month.
Cash enables you to say no to yourself. When the food envelope is getting low on cash, we eat leftovers instead of ordering pizza again.
Myth: I can’t afford insurance.
Truth: Some insurance you can’t afford to be without.
I constantly push people to get the right kind of insurance. We all hate insurance until we need it. We pay and pay and pay premiums, and sometimes we feel insurance-poor. But you must have insurance in some basic categories as part of a Total Money Makeover:
- Auto and homeowners insurance – Choose higher deductibles in order to save on premiums. They are the best buys in the insurance world.
- Life insurance – Purchase 20-year level term insurance equal to about 10x your income. Term insurance is cheap and the only way to go.
- Long-term disability – The best place to buy disability insurance is through work.
- Health insurance – The #1 cause of bankruptcy today is medical bills; #2 is credit cards. Look for large deductibles to save on premiums.
- Long-term care insurance – If you are over 60, buy long-term care insurance to cover in-home care or nursing home care.
My husband and I have been blessed to have financial planners at Ameriprise that my husband has worked with since he started his 1st job. His parents gave him a financial consultation as his graduation gift – brilliant! I hope I remember to do this for my kids!
A quick google search will help you find an experienced financial planner in your area. Many financial planners will work with you at no charge. They get paid commissions by buying and selling stocks, etc, that they buy with your money.
We pay our financial planners for their services, and they don’t take a commission. Find out what works for you in this regard. Don’t be intimidated by it. Even if you think you have no money for them to invest on your behalf, it’s still in your best interest to meet with one. The sooner you start, the more time you’ll have to build wealth!
Since we have the financial planners, we had all of the insurance listed above before even beginning our Total Money Makeover. We haven’t needed any if it but the homeowner’s insurance yet, but I feel at peace about our future if something were to happen to my husband affecting his ability to work. I know it can be overwhelming just thinking about how to even begin. Be overwhelmed at first. Do the research. Then get it done!
Estate planners tell us that 70% of Americans die without a will. In this case, the state will decide what to do with your stuff, your kids, and your financial legacy.
A will is a gift you leave your family. It is a gift because it makes the management of your estate very clear and light-years easier.
I was on a game show and won a trip to Italy! But we had to leave our 2 small children behind to go on this trip of a lifetime. We awkwardly, sheepishly wrote a will just in case something happened to us while we were gone.
There are different laws for each state as to what makes a will valid. In most cases, I believe, a written will with your signature will suffice. Some states require them to be notarized to consider them valid. Find out what your state requires and do it tonight! You don’t need an attorney for this. I’d be happy to share our very basic will with you if you need a starting place. Just let me know in the comments! And if you know more about wills, please let the other reads know in the comments as well.
Also, if you have financial planners, writing a will will be one of their suggestions. Also having end of life directives will be encouraged. It’s may seem morbid to think about it, but it’s naive not to!
Two More Hurdles: Ignorance and Keeping Up with the Joneses
To set out a game plan and not acknowledge the obstacles to that plan would be immature and unrealistic. If you can box up the things that would defeat your Total Money Makeover, then the plan will work.
Hurdle #1: Ignorance
In a culture that worships knowledge, to say ignorance about money is an issue makes some people defensive. Ignorance is not lack of intelligence; it is lack of know-how. No one is born with the knowledge of how to handle money, but we aren’t taught it!
Overcoming ignorance is easy. With no shame, admit that you are not a financial expert because you were never taught. Your actions should show that you care about money by learning something about it. Wealth doesn’t just happen.
You will spend some time and effort on getting rid of ignorance. Spend more time on your 401k options and your budget than on picking out this year’s vacation. What you don’t know about money will make you broke and keep you broke.
If you have a financial planner, this is part of what they will do. In fact, I just (a few minutes ago) updated our 401k allocations based on the performance of the mutual funds that my husband’s employer uses. Ameriprise did the research, figured out which were most profitable, and gave us exact percentages to put in each mutual fund. Boom. Done.
Hurdle #2: Keeping Up with the Joneses
We all need to be accepted by our crowd and our families. This need for approval and respect drives us to do some really insane things. One of the insane things we do is destroy our finances by buying garbage we can’t afford to try to make ourselves appear wealthy to others.
Most millionaires live in a middle-class home, drive a two-year-old or older paid-for car, and buy blue jeans at Wal-Mart. The typical millionaire found infinitely more motivation from the goal of financial security than from what friends and family thought.
This made me laugh. This sounds like my Dad wearing Wal-Mart jeans driving an old, paid-for Porsche.
Resistance of the heart is real. We like our nice houses and nice cars, and selling them would be painful. We don’t want to admit to everyone we have impressed that we are fakes. Being real takes tremendous courage.
What is the one “money thing” that makes you grin inside when you see others admiring it? Do you need to give it up to break that feeling inside you? Until you recognize that weak area, you will always be prone to financial stupidity on that subject.
As I was going broke, losing everything, I kept the Jaguar by refinancing it repeatedly at different, friendlier banks. I couldn’t afford to keep up the maintenance on the car, so it began to deteriorate. It ran poorly and wasn’t reliable, but I still loved it and hung on.
My friend suggested I sell my precious car. I was mad at him. How dare he suggest that I sell my car! So the bank not so gently suggested I sell the car or they would repo it. I tried to stall and only came to my sense and sold the Jaguar on a Thursday morning because the bank assured me they would take it on Friday.
The process was humiliating. Because I was too stubborn to address what that car represented in my life I caused much damage that was avoidable.
Past the Obstacle Course and Up the Mountain
This mountain is doable, but not if you are still bogged down on the obstacle course. Some things I’ll tell you to do won’t work and will cause damage if you still cling to Denial, Myths, Ignorance, or Approval.
Why not climb? The only other path is to follow all the normal people who are broke. What you have falsely believed and acted on or not acted on has brought you to the place you are today with your money. If you want to be in a different place, you must believe and do things differently. The change will be painful, but the result will be worth it.
Phew! That’s the summary of the 1st part of Dave’s book. Are you ready to get started? Let’s move on to Baby Step #1: Saving $1000!