Don’t PANIC! Living and loving the all cash life does not require you to give up your debit cards and credit cards, well perhaps your credit cards.
Living and loving the all cash life is about moving away from a dependence on debt, creating more options for your family and freeing yourself to be able to love, live, and give according to your dreams. The utilization of debt to fund the “American Dream” has turned into the path to an American nightmare. The US now carries more than $850 billion dollars worth of credit card. I’m not even sure how many zeros are in one billion,
Clearly the use of debt can help make the opportunity to receive a higher education, purchase a home or start a small business possible. However, many are stuck in a habit and mindset of using debt as a way of life or to fund a lavish lifestyle. The “opportunity” to attend the prestigious private college you love was a great experience while it lasted, but graduating with no job in site and a $50K student loan due was clearly not the “opportunity” you were seeking. Here are 3 quick tips to start living and loving the all cash life.
Step 1: Find your inspiration to take control of your financial future and use it to fuel your journey to financial freedom. What truly inspires you?
Removing the financial impurities from your life starts by creating a spending plan; this is code for budgeting. I think it's safe to say a great deal of us don't live on a budget. If you're like me, you made the money, paid the bills, and spent whatever was left over. I didn't get on a budget until I had almost completely drained my savings account. Not living on a budget is one issue, but a bigger issue is not having a clue how much you are actually spending from day to day. Here’s where you start.
(A) Amount – Borrow the least amount possible for what you need. I'm sure the 200k house would be really impressive to your friends but, hello it’s only you and your dog, Scruffy. Who is going to furnish, heat, and cool all that empty space?
(R) Rate – Borrow for the lowest rate you can get. Now this doesn’t sound like rocket science, but more commonly people make purchases based on the payment never having a real understanding of the rate they are getting. If you’ve ever purchased a car you will notice the salesman always ask, "How much do you want your payment to be?”. The salesman doesn’t want you to focus on the rate or the term of the loan, which determines the total cost of your loan.
(T) Term – Borrow for the shortest term you can afford. The term “afford” means living on a reasonable and at least halfway sensible budget not filled with eating out daily or $5 coffees every morning. Remember when you borrow money you are banking on a future you cannot see.
That's our Q to your A! Tell us what you think in the comments below.
Could you live an ALL cash life?
Are you already doing it? What's it changed for you?