Check out these four tricks used to get you to spend more (without you knowing it).
5 Minute Read
The only constant in life is change—sometimes for the better, sometimes not. But every change is an opportunity to learn. Several life-changing events in the last seven years have given one family an opportunity to learn.
Their story begins like many others. They were in debt after years of supporting a lifestyle they couldn't afford. They were keeping up with the Joneses, and it didn't matter that they didn't have the money for it. Credit was easy to get, and they always assumed they'd make more money the next year and be able to pay off their debt.
How We Used to Spend
"It became a tiresome cycle of debt," Margaret said. "We owed everyone." They had more than $10,000 in debt and owed the IRS more than $5,000. They were also driving a "fleeced" car to the tune of $600 a month. "We had no savings, and I looked forward to cashing out the equity in our home to pay off the bills," she said.
Then, just before her 30th birthday, Margaret's husband told her they were losing their home. Even though she knew they were barely afloat, she had no idea things had gotten that bad.
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So, with no other choice, the family of three sold their home and moved into an apartment. It was painful and embarrassing, but Margaret said it was also eye-opening.
How We Save Now
"We re-evaluated our lives at that point," Margaret said. "We knew we had some big changes to make."
They found Dave on the radio and read Dave's best-selling book The Total Money Makeover. With the pain of losing their home and Dave's guidance as motivation, they committed to living below their means.
First, they got rid of the expensive car (and the payment) and drove used cars. With the extra money, they began paying off the tax bill and credit card debt. With a $120,000 income, they were able to move quickly. Next, they began saving, and just two years after they were forced out of their home, they moved into a new home—one they could afford. Now, four years later, they have more than $100,000 equity in their home and over $70,000 in savings.
That would be impressive enough, but during that time, Margaret's husband was diagnosed with and overcame cancer. They also adopted their 15-year-old daughter to join their 10-year-old son.
Turning What They Have Into Millions
Recently, Boyce suggested meeting with a Dave Ramsey investment Endorsed Local Provider (ELP) to see if the family could do more to meet their savings goals. Margaret was skeptical. "Why do I need to go to a financial planner when I already know how to save money?" she asked. "I would never have guessed that an hour discussing my finances would have been so life-changing!"
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They visited with Brandt Spesshardt, ELP in Raleigh, NC, who started out by addressing Margaret's fears about losing money and how that fear was keeping them from reaching their goals. "When you've lost your house, you tend to react to money out of fear," she said. "He taught me to let go of that fear and how I can use money to help me get ahead."
Next, Brandt showed Maragaret how, with no debt and a solid emergency fund, they could put their income, their best wealth-building tool, to work for the future. Starting with an initial investment of $6,000 divided between three mutual funds, their plan is to continue to invest $3,000 a month.
Based on the last 25 years of their funds' performance, they can expect their portfolio to grow to over $3 million in the next 25 years, according to Brandt's conservative projections.
That means they could draw approximately $150,000 each year from their nest egg when they retire!
"I wish all of my friends and family could have had the benefit of my discussion with Brandt," Margaret said. "It sounds cliché to say it was life-changing, but that is the only way to describe it. My husband and I both agree that our outlook regarding our finances has been dramatically altered and our excitement about our future has never been better."
For this family, the road to millions started out rough. And, once they were on track, illness threatened to block their progress. Even now, with the road mapped out before them, it will take some sacrifice and commitment to get to their destination. But knowing the lessons they've learned and the desire they have to reach their goal, this is one family that has a great chance to finally live like no one else!
Start On Your Road To Millions Today
Find out how an investment ELP can help you make the most of your savings. Dave's ELPs follow his investment teachings and will take the time to help you understand your options. Get connected with your ELP today!