If you’re like me,
you’ve spent years wanting out of the rat race. You dream of a homestead
where you can live without owning a necktie, free of the confines of your
Dilbert-cubicle. You want to cut loose from the cutthroat bankers and
credit card companies, the corporate ladder-climbing, and the MTV
entertainment culture. Yet, you feel stuck. You’ve got a mortgage and
credit card bills up the wazzoo. Every week you work 50-plus hours, then
you spend every penny you make just paying the bills so you can start over
again next week. There’s nothing left over to pay for your dream
homestead.
I was in that spot,
too, and not that long ago. Despite being an accountant by trade and
having some clue about money and personal finance, I was on a financial
merry-go-round. My wife and I made a pretty decent living. A little
cottage on some land somewhere should have been within our means. That
is, if we hadn’t managed to rack up a sizeable chunk of high-interest
credit card debt to go along with two car payments, a mortgage, and hefty
utility bills. Then there were the cable bills and cell phone bills and
grocery bills, and all the other bills. Despite decent wages, there
always seemed to be too much month left over at the end of our money.
Buying land, creating a homestead, and leaving our corporate jobs looked
about as realistic as flapping our arms and flying to Venus.
It hasn’t been quick
or easy, but we’re now on the verge of making the break. Over the last
five years, we’ve managed to get rid of most of our debt (the last little
bit will be gone this year), and we’ve managed to buy 10 acres of lovely
Ozark woodsland, free and clear. Construction on the barn and the
cottage is set to begin as soon as the last of the debt is paid off.
How did we do it?
How can YOU do it? Well, everybody’s situation is a little different,
but here are five basic things to that apply to everybody.
TIP #1 - START TODAY
Lao Tzu is the
ancient philosopher who said, “A journey of a thousand miles begins with a
single step." Working toward your dream can start right now, from where
you are standing, with just one step. In fact, it can start no other
way. No one has what they consider to be a perfect financial life. Few
people come even close. But while some will idly dream of their futures,
you can be doing the job of a making yours happen. Slowly work your
way toward your goals, getting closer every single day. Take that
first step today, and then learn to enjoy the journey. That’s what
life is, after all.
TIP #2 – FOCUS ON
GETTING OUT OF DEBT
Note: Debt reduction
strategies could make up an entire article of their own, so I’m only going
to touch on some concepts here. The devil is always in the details, so you
will want to obtain more detailed information before you make any bold
moves in this regard.
Consumer debt – which
is debt on things like credit cards, boat loans, car loans, or cash
advances – is a dream crusher. It keeps you paying new money on old
things that you don’t even own any more. It allows you to satisfy small
wants today, but only in exchange for crushing your big dreams of
tomorrow.
The $20 pizza you
tacked onto the balance of your credit card? If you make minimum
payments, it’s going take you fifteen to twenty years to pay off, at a
cost of over $100. How can you possibly pay for your dreams if you are:
a) paying $100 for a $20 pizza, and; b) still paying today, for a pizza
that you ate ten years ago? The answer is that you can’t. Like a
financial version of the Terminator, you must work to ruthlessly eliminate
your debt.
The good news is:
there is a simple formula for getting out of debt. The bad news is that
it’s just like the simple formula for weight loss. That is to say, it’s
not going to be what you want to hear. I need you to get this part
however, because it’s important.
There is no magic
pill for debt relief, and anybody who says different is selling
something.
