I can’t explain it. I have degrees and certifications in the finance field. I’ve held multiple positions in the financial industry. I really have no excuse. I wasn’t able to apply my financial training to my own financial life. I knew how to help people with their financial needs. But I couldn’t apply it to myself.
I can’t remember a time when I wasn’t expanding my financial knowledge. I was in my early forties before I heard about Dave Ramsey. I remember hearing Dave say people with financial education can be the worst when it comes to handling their own finances. Although I wouldn’t make such a blanket statement, I knew there was some truth to what Dave was saying. It was hard for me to hear, but I also knew I sometimes had trouble sleeping, wondering how I was going to pay off all my debt and invest enough to retire. Through the grace of God, I was able to put things to right.
Innocent Archetype
Now that I am nearing the end of my professional career, I feel compelled to help other people achieve the financial freedom I am enjoying. In preparation, I’ve been researching the tools I will need to help people. I’ve been reading books, including Brent Kessel’s, It’s Not About the Money. Kessel describes eight financial archetypes, which are collective patterns of beliefs and behaviors. Kessel believes ideally people are a healthy balance of all the archetypes. Every archetype has gifts and pitfalls. And people will likely reflect different archetypes during different phases of their lives.
It’s Not About the Money
Kessel says the archetype that is the hardest to read about is probably the one that fits you. The hardest archetype for me is called, The Innocent. A short description of The Innocent includes having the gifts of adaptability and hope, as well as the pitfalls of helplessness and avoidance. Prior to making the decision to put things right, many of the characteristics of this archetype applied to me.
I had personal debt for more than a year and I did not have three months of expenses in an emergency fund. I spent all my income on my lifestyle and maintaining my debt obligations, while continuing to increase my debt for lifestyle spending. For many years, I worked professional jobs with below average salaries. I lived a better lifestyle than my income alone would have provided by using debt. I had no plan for how I was going to maintain my lifestyle without continuing to borrow. I started to understand my financial situation when I refinanced my house and the bank, my employer at the time, closed my HELOC. I even took a cash advance to pay my property taxes twice.
The bottom
I started working towards a new job which would require me to move to a new part of the country. As the possibility of the new job increased, I decided to sell my house before I started my new job. Unfortunately, I owed more than the value of the home. I took money from my IRA to pay off my mortgage. And once I crossed that line, I decided to take more money out of my IRA to pay off my credit cards. But I still didn’t change my lifestyle and although I was making more money than ever, maintaining my debt didn’t leave me with enough money to start paying it down.
Having been a banker and an accountant specializing in reconciliation, I didn’t have trouble balancing my checking account. I didn’t pay more in overdraft fees than the bank paid me in interest. I was able to make ends meet. I wasn’t happy with the result, but I usually had a list of my bills and expenses. And even though the amount of my personal debt increased every year for several years, I still knew how much I owed in total. I just didn’t know how to pay it all off. Thankfully, it didn’t take a setback, such as illness or disability to force me to change.
I believed I would always be in debt
Although I experienced many of The Innocent behaviors, I had only one of The Innocent behaviors, I had only one of the beliefs of The Innocent. I believed I would always be in debt. Kessel describes The Innocent as mystified by money. Kessel says The Innocent have no training in how to earn, save or even understand money. With my degrees and certifications, I don’t have that excuse. I would love to hear Dave and Kessel have a conversation about highly trained financial professionals who have chronic personal debt and not enough investments to retire comfortably. I didn’t experience helplessness, but I did practice avoidance. And I had trouble feeling hopeful about paying off my debt. The ability to get out of debt and create a surplus to invest was not innate to me. I always craved promotions, but the additional income was never enough to make a difference.
Financial Freedom
Learning about the debt snowball and seeing my numbers gave me the hope to adapt to a new financial lifestyle. I will be eternally grateful to my husband for introducing me to Dave Ramsey’s baby steps. My new financial lifestyle led me out of debt and towards having enough investments to retire. I realized the only way to get out of debt was to lower my lifestyle expenses. By then I had a great annual salary, but I had to live a much more modest lifestyle. I lived in a house in a low-income neighborhood for many years to create enough excess in my budget to pay off my debt.
Live on Less than you earn
Learning how to live with the embarrassment of living in a low-income neighborhood is serving me well now as I continue to live on less than I make. Along the way, I learned the secret to being able to retire is living on less than you make. Those of us who are fortunate to earn a good salary need to invest that excess as we earn. The investments are how we will pay our expenses when we no longer work. If you can learn to live on less while you are working, you can maintain your lifestyle when you stop working.
I’m more qualified to help people now than I was thirty years ago. My experience in creating financial freedom in conjunction with my financial training makes me uniquely qualified to help others work towards their own financial freedom. I hope to be able to apply what I learned from It’s Not About the Money to help others create their own financial freedom.
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