There is a wonderful quote in the bible from Proverbs 22:7. It states, “The rich rule over the poor, and the borrower is a slave to the lender.” How incredibly true is this? As you start to build your budget, think about all the people and entities you owe money. If you are making payments on your vehicle, you don’t really own it – the bank does.
If you can’t make the payments, your vehicle will be repossessed no matter how many monthly payments you made in the past. What about your house? Again, unless it is paid off – the bank owns it and will take it back if you suddenly lose your job and can’t make the payments. As you structure your monthly budget, what do you really own? Are you paying other people interest to rent your items hoping you eventually pay them off in full? How many other people truly own your material possessions – or your education?
According to an article by CNN Money, in 2017, 107 million Americans had vehicle loans.¹ The average monthly payment on those new vehicle loans was $515.² Do you have an extra $515 a month lying around? You would if you paid cash for your vehicle. This is the part where you need to be painfully honest with yourself. If you can not pay cash for that $35,000 truck you bought, then you don’t need it. This goes back to our wants vs. needs. You could save up and buy a used vehicle with cash for $5,000 – $10,000 that will do most of the same things your current vehicle does. This may sound absurd to you and I realize I may lose a few readers over this. If you want a more detailed explanation of exactly how much money you are wasting on that vehicle, check out my related article at 5 Reasons Car Loans Are A Bad Idea.
Just like I am not asking you to give up your daily coffee habit, I’m not asking you to take the bus to work every day. You can save considerable money by making your coffee at home, and purchasing a reasonably used vehicle has the power to catapult you towards being debt free. If you can not give up some of these expenditures that are keeping you in debt, you may not be ready to transform your life right now. Financial transformation is about a mindset. It is about screaming, “ENOUGH IS ENOUGH!” and taking control of your life. No more lying in bed each night worrying about how you are going to pay your bills each month. No more hoping your car doesn’t break down because you don’t have the money to fix it. No more money stress – period.
As you can tell, I have spent a considerable amount of time trying to bring you to a realization that you can not live the same way you have been living. If you want to continue to live like your friends and neighbors, you will continue to be broke and stress about money – like your friends and neighbors. The reason I am so passionate about this is that I have a financial peace I want everyone to experience. This blog is dedicated to educating you about money and how you can control it rather than it controlling you.
The reflection must start now. I want you to be happy and financially stress-free so you can live for your passions and be extremely charitable to others. If you have had enough, welcome aboard! You have nowhere to go but up! If you still need more convincing, ask yourself this – would you rather be the lender or the debtor? Debt and financial slavery go hand in hand – and I refuse to live my life in shackles.
If you missed my article about budgets, I recommend you go back to it and start there: