Dear Dave,
I grew up in a house where my parents always lived below their means. They taught me to live that way, but they never showed me how to make it happen. Now, at 45, I’ve gotten out of debt and fallen back in several times. I’m sick of this, and I want to get control of my money. How do I break this bad cycle?
Sandy

Dear Sandy,
It’s frustrating, isn’t it? The fact is, you’re pretty normal. But who wants to be normal when normal is broke?

It sounds to me like you’ve had a “Dr. Phil” moment. You’ve taken a look at your situation and asked yourself how your behavior is working for you. You’re also smart enough to know that it’s not working and that you want to make a change. That’s a great place to start!

When it happened to me, there were three pieces to the puzzle that helped me break the cycle. One was disgust. I realized that what I was doing was stupid, I was tired of living that way, and I made a conscious decision that things were going to be different. The second thing was fear. I was scared to death that I’d retire broke. Now, don’t get me wrong. I don’t think you should ever live your life in fear, but a reasonable level of fear can be a great motivator.

The third piece, and I think it’s the most important part because it’s connected to our spiritual walk, was contentment. We live in a culture that is marketed to more than any other at any time in history. When we have this stuff crammed down out throats all day long, rapid-fire, it can affect our level of contentment.

One of the things I did was to stop going places where I was tempted to spend money. If you go wandering through a store or the mall without a specific plan, you’ll lose every time. You wouldn’t give a drunk a drink, right? So, don’t put yourself in a bad situation when it comes to your behavior with money.

When you have to go to the store, make a list of only the things you need, and take enough cash with you to make the purchase. If you can do that—walk in and walk out again without buying a bunch of stuff that wasn’t on your list—it’s a victory.

Spending money on a bunch of stuff you don’t need, and probably don’t really want, isn’t going to bring you contentment. I think that’s the word you need to keep in mind and the thing you should be praying for while you fight this battle. Believe me, it will help!
—Dave

Dear Dave,
Why do you recommend saving before paying off your mortgage? I’ve always thought of a house as a liability that should be paid off as quickly as possible.
Mark

Dear Mark,
You’re off base on this one. The truth is that a house is an asset, and the mortgage is a liability. That’s straight from the pages of Accounting 101. There are folks out there who will try to tell you a house is a liability, because it costs you money. In fact, that house will make you more money than it cost when you sell it, so it’s an asset!

I’ve met 70-year-olds with houses that are paid for and no money in the bank. It’s a really sad situation. That’s why I want people to work on having an emergency fund and 15 percent of their income going into retirement first. Then, take everything above that and put it toward paying off the house as fast as possible.

But don’t believe all this stuff about a home being a liability. It’s just not true!
—Dave