I have a crazy massive excel sheet with a 22 year plan for our savings.
Massive Excel sheet WIN:
I have kept our financial goals on track and stopped us from buying two timeshares and a Lexus SUV. (First world problems, I know.)
Because we have our eye on the prize.
Because I know exactly how much needs to go where.
Because I REFUSE to get stuck into the ‘middle class loop’.
So what’s this ‘middle class loop’ you say?
You know all the people who have really fancy cars, huge houses and drool worthy Instagram perfect holidays? If everything is on a loan/credit card and if the main income holder of the house looses their job, their finances are crushed in less than 3 months. Apparently more than half of Americans live pay-check-to-pay-check so the real numbers would probably be closer to 2 weeks.
They only have liabilities. They do not have assets. And no, a house is not an asset unless it pays you every month. They only have one stream of income. They are too busy ‘Keeping up with the Jones’. And I refuse to get stuck in this ‘loop’. We’ve made some unpopular financial decisions and I am 120% happy about them.
If you’re currently finding yourself walking right into the ‘middle class loop’, feeling the pressure to ‘keep up with the Jones’, and refuse to step into it here’s 3 steps to get you started:
Step 1 – Know What You Want
The saying that we all want it all is simply not true. We only want what we truly want, and most of the time it’s not all at the same time. If you want to travel more does backpacking sound good or do you need a place that has room service? Do you prefer to live in the city or in the suburbs where housing is a little cheaper? Do you want kids and what kind of education do you want for them?
Once you know what your values and priorities are, it’s easier to say no to the things that don’t matter as much. With the decisions that my husband and I has made around our mortgage, future children’s education and buying a new car, I made an excel sheet. You don’t have to be crazy pants and do that too. My brain works in a combination of visual aid & words. Do what words to help your brain wrap around the concept.
Step 2 – Reduce and keep your liabilities down
Liabilities are anything that you own and need to pay back, aka debt. The most common ones are student loans, credit cards, car payments and the mortgage. If you have any liabilities, focus on paying them off or taking it off your plate. Avoid keeping a balance on your credit cards and aim to pay your car in cash. When you take out a loan, there’s an interest rate – and that’s what we don’t want to be paying for.
Tip: If you are in the red right now, create a rainy day fund worth 3-6 months of your expenses before tackling the debt. This way when the poo hits the fan (you know what I mean) you’re not falling back on the cards.
Step 3 – Create another stream of income
Did you know most millionaires have 8 streams of income? Mind blowing – I didn’t! The thought of creating another stream of income never crossed my mind until I was past 30. Most people around me didn’t like to talk about money, and maybe it never crossed their minds either.
In our world today it is crucial to have more than one stream of income, because stability is a thing that’s been thrown out the window. This is why I’m obsessed with building my online business. My vision is creating a lifestyle where I can stay at home with the babies, have location freedom, and my business be portable. By portable I mean mostly work from my cellphone, because I am so done lugging my laptop through airports.
There you have it. 3 steps to get you going to get out of the ‘middle class loop’. Which step are you focusing on right now? Are you feeling stuck anywhere? Leave a comment and let me know!
PS: I’ll be honest – I’m not a financial expert. I’m a person who loves abundance and is obsessed with creating a lifestyle of my dreams. And I’m here to support you, and walk the journey with you. If you ever want to chat or shoot me a message, I’m here for ya!
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