Friday, March 16, 2012
For the Love of Dave.
“The silly marketing America fall for has resulted in this: We buy things we don't need with money we don't have to impress people we don't like.”
- Dave Ramsey
One of my favorite 'davisms' is 'Act your Wage'. If you read blogs (other than and including mine) and you social network at all than you have witnessed firsthand that we are not a society that acts our wage. American's are constantly buying things they can't afford. Arguably you can't afford anything you can't pay for. I will go ahead and say that I consider houses to be the exception. Many of us will not be able to buy a house in cash in our lifetimes, even if we are financially responsible. That's not to say it's impossible, however.
Cars are a prime example of people not acting their wage. If you buy a $28,000 (which amazingly, isn't uncommon) and you make less than that in a year, it doesn't take a rocket scientist to figure your car is outside your means. Now, I realize many people don't buy into saving and paying cash for cars but as Dave says, most people are broke.
Here's what I've really come to terms with in the last few years - I don't want to be normal. I don't want to drown in student loans (even though I want an MBA badly). I don't want to pay for anything multiple times over by paying interest on it. I'd rather do without then set myself for financial failure.
I have learned that this will mean people don't understand you, criticize you, tease you, and be annoyed by you. I've had to say no to certain things, in order to say yes to more important ones. I've had to wait for what I want. I've had to stop spending when the money in that catagory runs out. I have had to sacrifice...but it's for a purpose.
I own my car, my clothes, and my education. I no longer owe anyone a single cent for them, so they are really, truly mine. I'm on track to pay my house off around the time I turn 40 which sounds far away but would actually be quite young. I have an emergency fund which does not include a credit card or borrowing from my parents. And I will be able to buy my next car in cash (since paying off my last car, I have been saving a 'car payment' every month to ensure this).
Let me pause here to say that I do not make a ton of money. You will not see my name on any 100 richest 20-somethings lists. What I do is tell my money where to go. And I pay the Lord and then myself, always. Dave calls it 'paying yourself first' (savings) but I'm a firm believer in paying myself second. I give the first portion of my money away (called: tithe) and then I pay myself. After that I pay my bills and later I get to spend.
Learning and living discipline isn't easy but it is rewarding. I budget for what I want and I save. I keep a travel fund so I can see my family, friends, and a little of the world from time to time. I budget for clothes because lets be honest, I'm going to buy them. I budget to constantly be doing little things around my house, because I love it. But I am very much acting my wage.
I love, love, love this quote:
“You must walk to the beat of a different drummer. The same beat that the wealthy hear. If the beat sounds normal, evacuate the dance floor immediately! The goal is to not be normal, because as my radio listeners know, normal is broke.” - Dave Ramsey
I have committed to not be normal. Normal is lazy. Normal is broke. Normal demands things it hasn't earned and can't pay for. So if you're eating Ramen noodles to carry $500 handbags, I've been there, but do yourself a favor and look long and hard at where that lifestyle is getting you. Your friends may be jealous of your pricey pieces or extravagant vacations but you'll be jealous of them when you're paying for your mistakes (usually, at least twice).
I will leave you with this sobering fact: 60% of bankruptcies filed are by people under the age of 30. (source) I'd say that's proof enough it's time to start acting our wage.