non-mortgage debt, and that is what we want you to focus on zeroing down in this book.
Grab another sheet of paper, and this time write down your total non-mortgage debt in the biggest, boldest, most horrifically disgusting gigantic black numbers that will fit on the page.
Look at that monster and see it clearly for what it is. Stare at it and let it sink in.
Shocking, isn’t it?
That’s your debt… and it is holding you back from the life you deserve.
Keep staring at it until you’ve really internalized what this debt means to you. Understand what this number represents, what that money could have been used for, and how it continues to hold you back.
Let it sink in.
Now, take that piece of paper and destroy it. Crumple it up, light it on fire, or tear that mothereffer to shreds! Scream out to the world and promise yourself, “Never again!”
Your debt doesn’t own you, it doesn’t define you, and you will overcome it!
When you perform this crazy stunt, you’re going to feel a sense of relief, a sense of accomplishment, and a sense of control that you never even knew existed.
Now you know what the problem is. You know what it looks like. It’s time to zero it down. It’s time to attack.
Action Items
Gather all of your debts together. Total them up so you know how much you owe in both total debt and non-mortgage debt. Write it down and internalize it. Acknowledge the problem and understand what it is costing you. Then, reassert your commitment to defeating it.
Don’t get intimidated or discouraged. Remember, even the longest journeys start with a single step. We’re going to defeat this monster together, one step at a time. You got this.
1. 2015 American Household Credit Card Debt Survey, Nerdwallet, https://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/, April 15, 2016.
Notes
Notes
Notes
Notes
CHAPTER 3
Zero Down Your Debt with a Zero-Sum Budget
In this chapter you’ll learn:
•Why making a monthly budget is the most important financial skill you can learn
•How a monthly budget actually creates freedom rather than restrictions
•Why your past budgets have failed
•How to create a monthly budget that actually works
•How to create a budget if you have a variable income
“A budget helps us curb these problems. Instead of spending unconsciously, a budget encourages us to spend our money deliberately and with purpose on the things we value most. It stops our paycheck from performing a vanishing act, and protects the money we’ve worked so hard to earn.”
Ah, budgeting. The dreaded B-word. It just sent shivers down your spine, didn’t it?
Seriously, it’s OK. There’s nothing to be afraid of.
You might not realize it yet, but a budget isn’t some steel cage holding you back from the things you want. In fact, it’s exactly the opposite.
A budget is a financial tool that, when used properly, can help set you free: Free from the stress of living paycheck to paycheck. Free from the wage-slave mentality that crushes your soul and forces you to stay in a job you despise. Free from the attitude that you’ll never live life on your own terms and have the experiences you desperately desire.
A budget is your ticket to financial freedom. Let us explain.
TRUTH #5:
When you tell your money what to do, it listens.
When you don’t, it disappears.
You already know that your paycheck is your most powerful wealth-building tool. Still, most of us squander its potency. Month after month, we buy things without thinking about it. We make purchases here and there, large and small, with no idea how much we’re really spending. In short, we waste our paycheck on fake “needs” and impulse buys that don’t do anything to fulfill our deeper desires. We spend without purpose, and – when our paycheck disappears– we have no idea where it went.
A budget helps us curb these problems. Instead of spending unconsciously, a budget encourages us to spend our money deliberately and with purpose on the things we value most. It stops our paycheck from performing a vanishing act, and protects the money we’ve worked so hard to earn.
Even better, a written budget (yes, we said written) helps us remember how and when we need to put our paycheck to use. It’s easy to forget which bills are coming in and when they’re due. This can easily trip us up, causing a shortfall for the month. When we’re short on cash, it’s tempting to use debt to paper over the problem. By using a written budget, however, we’ll have a clearly defined, organized plan that helps us get the most out of whatwe earn.
Harnessing the power of your paycheck is essential for getting out of debt and building wealth. To zero down your debt, you’ve got to take advantage of every last penny at your disposal. A zero-sum budget is your ticket to doing just that.
TRUTH #6:
A zero-sum budget is the most effective tool for harnessing the power of your paycheck.
Knowing how to create a budget is the most important money skill you can learn. The great thing is that anybody can do it. All you need are a few basic skills and a tiny bit of effort. When you master it, the tables will turn: You’ll learn to control your money instead of letting it control you.
Why Should You Learn How to Budget?
Let’s explore a few reasons why budgeting is so important to your financial success:
•A budget provides a clear, visual picture of where you stand financially each month.
•A budget helps you prioritize what really matters to you.
•A budget encourages you to be disciplined with your money and helps you save more of it.
•A budget presents a clearly organized plan that helps you remember which bills are due
