“Personal finance is about 80 percent behavior. It is only about 20 percent head knowledge.” – Dave Ramsey
Several years ago a friend and I decided to make a large investment in a condo on the central coast of California. If you’ve read this story in the book, you know things didn’t work out too well with this condo. After 7 years of paying on the condo, we sold it for a whopping $1000 more than we purchased it for.
We lost all of our initial investment in the house. We had, unfortunately, purchased just before the housing market bubble burst. The frustrating thing about all of this was more than just losing the money. It was how we lost it.
We were being financially responsible by putting down 20% and buying a home that was completely reasonable to live in. With the hopes to have an investment property and begin building a financial future with this condo. We planned to rent the condo and then go on and buy our own homes. Obviously, this did not work out for us as planned.
We lost out on the investment and our plan failed because so many other people had failed to plan properly and wisely. They had purchased a home they couldn’t afford put 5% or less down and defaulted on their payments. Ultimately, leading to the housing crash. While many of them took only a credit hit, we lost 1000s of dollars!
Not fair, I would say. But fair isn’t how building your financial future works. It’s hard work, saving, investing, and giving. As the Dave Ramsey quote says it’s 80% behavior.
The Choices You Make Now Matter More Than Your Past Financial Mistakes
So in this section of your LifeMap, I propose… No matter what plan you put in place or financial mistakes you’ve made in the past, your current choices are the key to building your financial future.
As you work on this Critical Area of your LifeMap start by taking a look at your financial story and situation. Do some brainstorming to see how you got to where you are.
What’s your financial story? Has it been filled with financial mistakes or have you been largely successful?
Read the chapter on finances and go through phase 1 and 2 in your workbook. Be prepared to put some work into this Critical Area. Your first step will be to put together an expense and income sheet. If you haven’t done this before, it is an excellent start to creating a budget and kickstarting your financial future.