There is a setting on our clothes dryer called ‘Normal’ and it never works.
In theory, the dryer is supposed to be able to detect when the clothes are no longer wet and turn itself off. The problem is that when I go to pull the clothes out of the dryer they are still damp. Every single time.
One would think we’d have figured this out long ago and stopped using that setting, but no we continued using it until one day I had an epiphany.
You see I realized that normal doesn’t work. It doesn’t work on our dryer, and like so many other areas in life, it doesn’t work for our finances.
Now you may have just read that and wondered where on earth is she going with this? Hold on…I’m getting to it.
What’s normal today?
From working with people as a fee-only financial advisor and coach, I know (and see every day) that being financially “normal” in today’s American culture means debt. Lots of debt and little-to-no savings. Personal debt, student loans and zero savings for retirement have become the norm.
Carrying tens of thousands of dollars in student loan debt has become the new normal. – CNN Money
80% of Americans are in debt today. That means 8 out of every 10 people you work with or simply just walk past in the grocery store are saddled with debt. And 76% are living paycheck to paycheck. That means they are literally one missed paycheck away from a financial crisis.
And student loans? Forget about it. 40 million Americans are carrying at least one student loan. Unlike other debt, student loan lenders continue to dish out loans to people who are so young they have zero financial track record or any sort of credit history.
What about those nearing retirement? Well, I’m afraid the statistics are grim. According to Smartasset, around half of American households have no retirement accounts at all. That means no 401(k) or IRA. In fact, the Government Accountability Office (GAO) stated, around 29% of households age 55 and older have neither retirement savings nor a pension. Those statistics are depressing.
Around 29% of households age 55 and older have neither retirement savings nor a pension. – Government Accountability Office
So this is what it means to be living a financially normal life? Large amounts of personal debt, student loans and little to no savings toward retirement. I don’t know about you, but I don’t want to be financially normal. As a matter of fact, I don’t want YOU to be financially normal. I want each and every one of us to live our lives financially abnormal – exceptionally abnormal. And how do we do that? I’m going to tell you.
How to be abnormal:
There are a few easy things you can do to buck the “normal” trend. Here are three key tips that will get you started on your way toward financial fitness!
1. Create a budget, a monthly cash flow plan, and you need to stick to it. A budget is just a plan telling your money where to go – it doesn’t need to be complicated. As a matter of fact, keeping it simple is best! It may take several months to get a good working budget, but do not give up! I promise you that creating a solid budget and sticking with it will be life-changing. It is the foundation for the next two steps.
Want free budgeting spreadsheets?
Get Dave Ramsey's forms in spreadsheet format sent to your email...
2. Get out of debt and stay out of debt. Debt is the largest wealth-building roadblock for most Americans. It also keeps people from living the life they’ve always dreamed about. Taking that dream job that maybe doesn’t pay as much, or perhaps you’d like to be home with your kids instead of dropping them off at daycare, but you’ve incurred so much debt that you NEED two incomes. Getting out of debt (and staying out of debt) is critical to building wealth. It may mean delaying purchases and making some short-term radical changes, but getting out of financial bondage will allow you to later live the life of your dreams.
3. Save! Once you are out of debt you are going to save. You are going to save for upcoming planned and unplanned expenses. That means having an emergency fund for when the unexpected occurs – because life happens and you must be prepared. You’re going to save for your children’s college so that they do not go into debt to obtain a college education. And you are going start saving for retirement. What do you want those years to look like? How old would you like to be when you retire? Do you want to travel the world? Or maybe you’d like to be generous and help fund homeless shelters or live abroad on a mission? Regardless, tap into your dreams and begin planning today.
Living on a budget, staying out of debt and saving money. That is how to obtain true financial freedom and live a financially abnormal life.
Tired of being normal? Are you ready to take action? As a fee-only financial advisor and coach, I can help you create a monthly budget, get out of debt, plan for retirement and build wealth. Don’t delay! Contact me today for a free consultation.