Debt-Free Forever (4 page)

Create any number of milestones to keep you focused and feeling great about your accomplishments. The smaller the steps, the more successful you’ll feel. Pretty soon you’ll be so focused on the final outcome because you’re so used to being successful that instant gratification will pale in comparison to achieving the Big Goal.

Perhaps the biggest goal you can set for yourself is to change your attitude toward how you deal with your money. Decide that you’re not going to feel bad, overwhelmed, stupid, stressed, or anything else negative about your money anymore. Instead, you’re going to do something about it—no matter how small those steps—so you can achieve your own sense of financial peace. Close your eyes, take a deep breath, and repeat after me: “I am more than what my financial life says about me. I can have anything I want, if I am prepared to work hard. Today I want to….” Go ahead, fill in the blank.

You probably know people who believe that using credit is “normal,” that it’s what they should be doing. After all, their parents did it, their brother is doing it, so is their best friend. In fact, most of the people they know are doing it.

It’s as if people are afraid to just be. They have to drive the right car, go on an annual cruise, have new leather furniture, watch a high-definition television, eat out three or four times a week, drink the best Scotch, or consume premium store-bought coffee every day. And they’re willing to exchange hours, days, months, years of peace of mind for the momentary high that comes with the new acquisition.

One way to gain some perspective is to ask yourself (and your partner) what it is you really want in life. If you only had six months left on this sweet earth, what would you want to be doing? Would you be shopping for new furniture? Would the kind of car you drive really make a difference? How about the handbag you’re carrying?

I often talk to my daughter, Alex, about how important it is to live a worthwhile life: a life that brings challenge and love; a life that allows you to share, to laugh, and to be happy. So, what are the things that make your life worthwhile? And what are you doing to put more of the things that make you happy into your life?

If you love your life (as opposed to your stuff), relish the time you spend working, look forward to seeing the people you share your space with, and feel as if you’re making a difference, I don’t think the kind of car you drive, whether you have a big-screen TV, or how often you eat in a fancy restaurant will mean much. If you can focus on creating the life you want, taking small steps to achieve your goals and finding a way to laugh while you’re doing it, I’m willing to bet you won’t even miss your credit cards.

Now choose the first goal you want to accomplish based on your revised
A
list and/or what you’ve negotiated with your partner. Hold off on making this about cutting your spending, paying off your debt, or saving a bag of money until we’re farther along in this journey together. For now, make your goals something to do with your life, and not specifically with your money.

When I was writing this book I had a goal—to get the book written by a certain date—along with a series of milestones that would see me to my goal by the date I’d set. My steps included setting aside a certain amount of time each day to write. I also knew I wanted a few people to read my first draft and comment, so I had to build that into my schedule. My milestones were these:

• Create an outline for the book by …

• Break down the outline into specific chapters by …

• Write
x
page49per day (ongoing)

• Have three chapters complete by …

• Give the first three chapters to K for review by …

• Have the next three chapters complete by …

• Give the next three chapters to K for review by …

• Incorporate K’s first set of comments by … … and so on.

Now it’s your turn. Decide on your first goal and write it at the top of a piece of paper. Create a series of milestones for that goal.

All through the goal-setting process, you should ask yourself these questions:

1.
WHY
do I want to achieve this goal?

2.
By
WHEN
do I want to achieve this goal?

3.
WHAT
specific steps will I need to take in order to meet this goal?

4.
HOW
will I do this?

5.
WHOM
may I need help from to achieve this goal?

6.
WHERE
in my priorities is this goal?

You answer the WHY question because you want to create a clear picture in your own mind of what this goal is going to do for you. Maybe you want to go to school, and your WHY is to be able to make lots ‘n’ lotsa money.

You answer the WHAT question to lay out the steps you must take to get to your goal. The more detailed those steps, the better your plan. A good test of your “steps” is to hand them to someone else and ask whether they make sense and are clear and complete. Sometimes getting another perspective helps us see the holes in our plans.

WHEN
is important because a goal without a deadline is just a dream. If you want to get into your program of choice “someday,” in all likelihood “someday” will never come. If you want in this September, then you’ve got to get your butt moving to make it so. Every single step in your WHAT should have a WHEN if you’re serious about getting to where you want to be.

HOW
is a reality check. If you say you want to go to school, but you don’t have two red cents to rub together, how will you support yourself, pay school fees, buy books, and eat! HOW isn’t meant to poop on your dream. HOW asks you to be real about what you want in light of where you are now.

WHO
helps you to identify the other people who will affect (or be affected by) your goal. If you want to go to school and your partner is prepared to help, (s)he’s your WHO. If your parents are willing to give you money for birthdays and other special occasions to help you achieve your goal, they are your WHO. If your kids are going to have to cook and do their own laundry so you have time to pursue your goal, they are your WHO.

WHERE
speaks to the fact that people often have multiple goals competing for limited resources and time. You want to go to school. You want to have a family. You want to buy a house. You want to travel. While the initial stages of the process have you prioritizing your goals as
A, B,
and
C,
with
A
being of greatest importance, once you get into the process you may find that your priorities are shifting. Taking the time to check back with WHERE is an important step.

Let’s look at an example to see the six questions at work and develop some familiarity with the process. Say you decide your first goal is to own a house. Start with the specifics of your goal so we can answer the WHY.

• Why are you buying a house? As a long-term investment, as a quick-fix flipper, or as a home to live in with your family?

• Describe the house. Is it a fully detached house, a condo, or a cabin in the woods? Is it a bungalow, a three-storey
Monster Home, or something in between? Will you pay $75,000, $500,000, or $2.1 million?

Next comes the timeline.
WHEN
do you want to buy your new house? Within six months, three years, five years?

WHAT
steps will you have to take to make the goal happen? This plan might include steps like these:

• Figure out how much house you can afford.

• Decide where you want to live.

• Decide when you want to move into your new home.

• Decide how much down payment you want to have.

• Save the down payment.

• Save the closing costs.

• Shine up your credit history.

• Get pre-approved for a mortgage.

• Find an agent to help you find the right house.

When you take these steps and add a timeline to each one, you begin the process of creating milestones, as in …

• I will figure out how much house I can afford by the end of next week.

• I will calculate how much of a down payment I’ll need to avoid mortgage insurance by the end of the month.

• I will create a plan for accumulating the down payment by the end of the month.

GAIL’S TIPS

Is your goal a pipe dream or something you can actually achieve? HOW rears its ugly head! If you’re making $40,000 a year, HOW are you going to come up with a down payment to get into the $300,000 fully detached house of your dreams in a year? HOW will you be able to afford to carry the house? HOW will you ever get pre-approved for a mortgage?

All the way along the process of setting a goal and creating milestones, you need to be evaluating and adjusting the information you come up with. If you decide that a 20% down payment will take too long to accumulate and that you want to be in a home sooner, you might adjust your goal for how much down payment you’ll save or how much you’ll spend on a house. That, in turn, may affect where you choose to live. You might also decide to add a milestone like this: “I will work a part-time job on the weekend, earning a minimum of $100 a
week, to go directly to my down payment fund. I will have this job in place by the end of next month.”

WHO
will help you with your house buying? You’ll likely need a lender, maybe a real estate agent, perhaps a home inspector, a lawyer to close the deal, your cousin Fred and his van to move, and your mom and your sister to clean the place before you move in. Coordinating multiple resources for any goal takes a plan. Wing it and you’ll be wheeling your furniture down the road from your rental to your new home all by yourself!

WHERE
gets you to think, once again, about where in your priorities house-buying fits. There’s a ton of stuff involved in buying a house, and right now you’re stretched thin by your work schedule combined with that extra course you’re taking two nights a week. How do you dovetail what you want with your limited resources and time? Will extending some of the deadlines help? Will bringing in more WHOs make the process easier? In the big scheme of things, how badly do you really want to achieve this goal and what are you prepared to give up to get it?

Once you’ve set your goal, it’s a good idea to create a visual reminder of what you’re working toward. Cut out a picture of the home you hope to own and stick it on your fridge. Or tape a small picture of a house to the back of your credit card so you remind yourself of what you’re delaying when you go shopping. Make a chart with all the steps. Buy a wall calendar and lay out what you’re going to do and why so you can
see the plan. Get yourself a notebook and label it My Book of Goals, or open up a file on your computer to keep track of what you’re trying to achieve. Use charts, diagrams, and posters to help keep you on track. There are dozens of ways to incorporate goal setting into your life.

Once you know what you want, all that’s left is to execute your well-laid-out plan. So DO IT!

Sometimes it doesn’t matter how much we say we want something, stuff just keeps getting in the way. We decide we want to be debt-free. Yet we go out and charge up a storm, buying expensive stuff for our homes, our friends and family, ourselves, ignoring the fact that when the bill comes in, we won’t be able to pay it in full. If it’s such common sense to only spend what you can afford, why do so many people spend money they don’t have?

Think about it for a minute. Why did you whip out your credit card and pay for that meal in a restaurant, pair of new shoes, or groceries? Why did you buy that big-screen TV, that couch, that surround-sound system on a buy-now-pay-later program? Why did you use your line of credit to pay off your credit card? Be honest. Why?

Social pressure to conform isn’t in your imagination. It’s real. But if you submit, if you’re willing to live a life of smoke and mirrors, if you want it
all
right
now,
then you need to accept that you’re creating a miserable life for yourself. It’s only a matter of time before the piper comes a’knocking.

Peer pressure is something we associate with teenagers
and their inability to distinguish between a sensible course of action and a dumb one. We know peer pressure can lead to bad decisions, and we want our kids to be able to think for themselves. But have you given any thought to how you may be affected by the peer pressure from your friends, particularly when it comes to how you spend your money?