Did you know that the average American has $38,000 in personal debt? Think about that for a minute. Let’s say you buckled down and started paying $800 a month to get rid of the debt. At that rate, you would be paying off that $38,000 in about 8 years and would pay a total of $82,000 due to the $44,000 you paid just in interest!
Hold on a second while I catch my breath…..
Now think about this. What if you did not have that debt and were free to take that $800 a month and invest it in that 401(k) your Human Resource administrator keeps bugging you about at work? Considering the average 401(k) earned about 8% last year that same $800 a month invested for the same 8 years could be worth $107,094 with $30,294 of that coming from interest earned.
So instead of earning $30,294 over those 8 years, you paid $44,000! Feel like you were robbed?
You might find yourself asking, ‘who would intentionally put themselves in that kind of personal debt if the consequences are so drastic’?
Of course, no one would do that intentionally, which brings up my point. One of my mentors, Sean Allen, CEO of WizeFi says, “If you’re not intentional with your money, you’re likely giving it to someone who is.” I like this saying and try to help my clients abide by this rule. So, what does it mean to be intentional with your money? Two simple thoughts come to mind.
Knowing what you value and setting goals to support those values
As it relates to your finances, have you ever thought about the times in your life you were most satisfied? What about the times when you felt most accomplished or proudest? Identifying those types of things can help you realize what you value the most and if you have goals in place to support them.
For me, I felt like I really reached a milestone when I became debt-free including paying off my house. There is an old proverb that says “the borrower is slave to the lender” so I really took that to heart as a core value for me and my family. Not having to pay others allows me to have more income available to live, save, invest, and give. So one of my top goals is not to ever owe anyone anything.
Manage Your Money to Align With Your Goals and Values
Once you have identified your values and have goals in place to support them, the next step is to simply manage your money in a way that is in alignment. For my family, we take the time each month to have a budget in place so we know exactly what income we have available for the month. This allows us to spend based on how much is available instead of getting to the end of the month and realizing we have spent more than we made. Some people hear “budget” and automatically cringe and think the days of having fun are over! But it is really the opposite. We are able to plan out our expenses on things like groceries, eating out, kids’ activities, and car care. But we also budget for vacations, big purchases, and monthly giving.
The point is that since we have identified our values and goals (staying out of debt) it is much easier to intentionally manage our money through budgeting.
What about you? Are you intentional with your money? What are your values and goals? Does the way you manage your money support what you have identified as important?
One thing I believe for sure is that people who are intentional with their money don’t have $38k in personal debt. But if you do, or if you have any personal debt at all, and you want a plan to be more intentional so you can get out of debt quickly, I’d be happy to show you a program that can help you. Just schedule a FREE 15-minute call and let’s set up a time to talk. This program helps people get out of debt 78% faster and helps them establish plans that help them reach financial freedom as much as 15 years early. So why wait? Let’s chat today!
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