ust under two years ago I wrote an article about how my wife and I paid off over $140,000 in debt in less than 5 years. Now, it is time to share part II of that story.
Why is part II so important? Because as I’ve learned, getting out of debt is one thing but investing and becoming a 6-figure household is something else entirely.
Part II of this story starts somewhere in late 2020 when we decided it was time to stop focusing on eating beans and rice and to focus more on the big picture, long-term thinking in order to become a 6-figure household.
Like anything in life, we needed a plan. So we sat down together, created a plan, and started moving it forward. In reflecting back, I am grateful that we were able to reach our goal faster than we ever thought was possible.
If you are looking to become either a 6-figure household or even a 7-figure household for that matter, here are 6 strategies to consider adopting consistently in order to make that a reality for you and your family:
1. Trust
To go fast, go alone. To go far, go together. -African Proverb
This is first and foremost — even if you live alone. You have to trust yourself and your ability to create the life you want. You have to trust your skills and your worth. You have to trust the value that you bring to the world each day. If you have a partner, you have to start talking about financial goals and expectations before you can go where you want to go. You have to trust your plan and the processes along the way — both big and small. Love moves at the speed of trust and so does wealth.
2. Forget What You’ve Learned
“Our most precious gift is our brain.” — Jim Kwik
I remember as a kid when my parents would get a call from the banker in town to set up there annual meeting to talk finances. I also remember sitting at the bank reading a book while the banker came out in his suit and tie and welcomed my parents into his office. With the door shut, I would think to myself, “How does this work? Why do my parents trust the banker with our money? I wonder how much money the banker has? Does the banker work for my family?” In the mixture of confusion and curiosity, I would sink my head back in my book and keep quiet.
Fast forward to 2022 — Annual meetings are not my jam. I have chosen not to follow the example that was set for me as a kid. I want to know where my money is at as much as possible and so I check-in with my bank every two to three weeks.
If you haven’t checked in with your bank accounts in the past month, it’s time to stop reading this article and start paying better attention to your money. In my opinion, gone are annual meetings with “the banker”. Gone are days when you just hope your money is doing well. Hope is not a strategy. Banks are not doctors offices — a place for an annual check up.
We need to unlearn old ways of knowing and thoughts about how banks work and start asking more questions about our money. Like anything, they need to adapt and unless you and I are up on the wheel driving that change through our expectations, curiosity, and questions, things won’t change. Here are some great questions to consider during your next meeting at your bank:
- How is my money doing?
- Can it be doing better? If not, why?
- What else is the bank doing to help me with my wealth?
If you aren’t satisfied with your bank’s answer to these questions, switch banks or get a new banker (trust me — I had to do this and it was awkward but really beneficial in the long run!).
3. Salute Vestra Pecunia — Saving Your Money
Of course this goes without saying — if you are going to become a 6-figure household, you have to save money. This seems like a no brainer but it is actually harder than we tend to think. Sure, saving 5% a month may be easy but what about trying to save 25% or even 50%?
The rule of thumb in our home was saving between 30–50% of our collective income each month. Yes, this was hard but so is working at 60 when you could be laying on the beach or choosing to work rather than feeling forced to work. A good savings rate depends on where you are at in your life and I am really in no position to tell you how much you should be saving. Ultimately, this is for you to decide based on your needs, wants and responsibilities. However, if you want a benchmark, 20–25% seems to be a good goal from everything that I have read and experienced.
4. Find the Margins and Save There too
“I believe how you spend your 5-to-9 determines how you’ll spend your 9-to-5.”
― Jessica N. Turner, The Fringe Hours: Making Time for You
All of us have costs in the margins of our lives that we sometimes forget about. How many subscriptions do you have right now? How much money are you spending on those expensive latte’s? How much money are you spending on clothes so that you can get the rewards on your credit card? Are you paying that credit call balance off each month?
Costs in the margins of our lives can really pull us away from our goals. Instead of allowing that to happen, start writing down all of the costs you have in the margins of your life to better understand and evaluate what needs to stay and what needs to go. Do you really need 3 streaming services or can you try going down to 2 for two months? The margins matter.
5. Institute the 24-hr Rule
If I had a dime for every item that my wife and I found online that we both wanted, we would be a 7-figure family.
Don’t get me wrong, having ‘things’ is great and a true privilege. But we have decided to institute a 24-hr rule in our home. If one of us really really wants something, we wait 24 hours and then come back to it to see if that feeling is still the same. If so, the odds are good that we buy it. If the feeling has diminished or if we have completely forgotten about it, it’s probably a good idea to pass spending money on it.
This rule alone could save thousands of dollars for folks all over the world each year. With reduced friction to e-commmerce and online shopping platforms, it is so easy for us to spend our money faster and more easily than ever before in human history. Take a breath, give yourself 24 hours, then make your decision.
6. Take Responsibility
I hate to say it but here it is — No one can take responsibility for your finances except for you and potentially whomever you share your bedroom with. In our case, we started with very little and figured out how to start building a better life for our family. It has been exhausting at times and not easy by any means. In fact, sometimes it can feel boring too. But, we were committed to the long game and have continued to focus on this when we feel ourselves drifting from our plan.
Taking responsibility can actually feel quite liberating at times and there is tremendous inner strength that builds over time as you take control of your monetary situation.
At the end of the day, we are all on our own savings path and route to financial independence. Some of us will take longer, some shorter — but having a solid, trusted plan in chaotic, disruptive world will keep you centred and focused on the big picture when it comes to your financial well-being.
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Previously published on Medium
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