If would first like to say that being swallowed up in debt [http://thedebtfreedream.blogspot.com] is not an idiots' disease. I would challenge anyone to prove that it has anything to do with a person's intelligence. My wife and I are both of better than average intelligence (I think) and we fell for the same "tricks" that everyone else fall for. As "smart" as we are, we really FAILED at figuring this really easy concept...
In order to be debt free, it's not how much you make it's how much you spend (thanks Outkast). Your income needs to be MORE than your outgoing. The reason we kept falling for the tricks is because we kept believing there were tricks. There are no tricks. It's as simple as the beginning sentence of this paragraph. And you don't want to break even. Breaking even really is just falling behind. You have to make MORE than you spend. The only thing I would add to the bringing in more than you spend is that you need money to the side that is just for emergencies. They will happen... and without a safety net, they will be bad. So it is important to prepare.
So where is our family in this equation?
Since we are just starting this debt free dream, we are just like most people. We don't have an emergency fund. We don't make enough to cover all of our bills. We are about $240k in debt (I will have more precise figures later) and we only make about $65k a year (not much more than the national average but FAR less than what everyone thinks we make). We get the phone calls all the time from bill collectors. And I know you are supposed to talk to them but sometimes you just don't feel like it (sometimes I want to record a stock recording and play it every time one of them calls).
See... We are an average American family! But now that we have started trying to live our debt free dream, we have decided that we wanted to be MORE than the average American family. So there will be lots more to come. The journey just started.
In order to be debt free, it's not how much you make it's how much you spend (thanks Outkast). Your income needs to be MORE than your outgoing. The reason we kept falling for the tricks is because we kept believing there were tricks. There are no tricks. It's as simple as the beginning sentence of this paragraph. And you don't want to break even. Breaking even really is just falling behind. You have to make MORE than you spend. The only thing I would add to the bringing in more than you spend is that you need money to the side that is just for emergencies. They will happen... and without a safety net, they will be bad. So it is important to prepare.
So where is our family in this equation?
Since we are just starting this debt free dream, we are just like most people. We don't have an emergency fund. We don't make enough to cover all of our bills. We are about $240k in debt (I will have more precise figures later) and we only make about $65k a year (not much more than the national average but FAR less than what everyone thinks we make). We get the phone calls all the time from bill collectors. And I know you are supposed to talk to them but sometimes you just don't feel like it (sometimes I want to record a stock recording and play it every time one of them calls).
See... We are an average American family! But now that we have started trying to live our debt free dream, we have decided that we wanted to be MORE than the average American family. So there will be lots more to come. The journey just started.