The money cla.s.s: learn to create your new American dream.

by Suze Orman.

How to Enter The Cla.s.sroom

Welcome to The Money Cla.s.s The Money Cla.s.s. The information in this book provides the foundation for your work: The facts describe the new financial reality we have to apprehend, both collectively and individually. The new perspective offered paves the way for the inner work-the emotional and psychological shifts-to be considered. The financial guidance and information contained in this book are supported by a number of important tools and resources that are housed in The Cla.s.sroom on my website. It's also where I'll post any information updates you need to know.To gain access, go to the home page of my website, www.suzeorman.com.Click on The Cla.s.sroom The Cla.s.sroom icon. icon.You will be asked to enter a pa.s.scode.The code is: 999 999 999 999 999 999In The Cla.s.sroom you will find everything you need to put the lessons learned in this book into action. Throughout the book, this icon[image] will alert you to the additional information you can find online. will alert you to the additional information you can find online.In The Cla.s.sroom you will also find a special offer for readers of The Money Cla.s.s The Money Cla.s.s that you can learn more about that you can learn more about here here.

CLa.s.s.

THE NEW AMERICAN DREAM.

The American Dream. As a concept, it is so ingrained in our collective imagination that it doesn't even need to be defined, right? Think about it: Did you ever need to have it explained to you? My guess is you did not and that even from a young age, you, like me, knew it represented a promise-of opportunity, of possibility-that came with being American.

But on closer inspection, it is not just an American impulse that the American Dream describes, it is a human one, and it unites us. No matter your socioeconomic, ethnic, or religious background, we all aspire to the same things: We seek to provide for our family and keep them safe, no matter what shape that family takes, no matter if we are talking about our parents or our children, a blended family or a family "by choice," not blood. We want future generations to have even more opportunity than we ourselves have, a dream that is intrinsically linked with education and the advancement that follows from it. We want to live in a home that is secure in every sense-as a haven for our loved ones and as a wise place to have spent our money. We want the guarantee that our hard work will pay off, that it will support us financially, that it will allow us to achieve our goals, and that when it is time to stop working, we will reap the benefits of those years of dedicated service and live out the rest of our lives comfortably in retirement.

As universal as these desires are, we refer to them as the American Dream because for centuries this country has, for the most part, been able to make good on this promise of America as the land of opportunity. This belief has played a defining role in shaping our national psyche. It is at the heart of our Declaration of Independence-that we each possess "certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness."

How truly terrifying, then, to take stock of the American Dream today and to question the truth of it-to wonder if it still exists in reality or if it has become an illusion, a myth. Take a look around: As of December 2010, more than 14 million Americans were out of work; another 9 million were working only part-time because they cannot find full-time employment. That is 23 million people who are struggling to make ends meet. Many of those lucky enough to still be employed in their 60s are looking to hang on to their jobs as long as possible because they simply cannot afford to retire-which also means there are fewer job openings for young people entering the workforce.

In many areas of the country, the dream of homeownership has backfired. Real estate values have deflated to such an extent that a record number of people owe more than their homes are worth. That's not an American Dream-it's a nightmare.

Because of the dire economic conditions of recent years, many parents are unable to afford the high cost of college tuition for their children. And there is a record number of student loans in default, making people question whether they ever should have taken them on to begin with.

The sum total of all these facts and figures? The home, the job security, the education, the retirement-the very standard of living that all of us took for granted for so long is completely under siege.

Whether we speak about it or not, we are grappling with the frightening possibility, the fear, that we no longer live in a land where effort applied to opportunity produces a better life. The doors leading to more and greater things, once wide open, now seem to be closing. It is hard to move up in an economy where there has been no job or wage growth over the past decade. Once a manufacturing powerhouse-"Made in the U.S.A." was our calling card-we have ceded that engine of growth, and the jobs that go with it, to other countries as our own economy now relies on our ability to consume, not produce.

The impact of these economic shifts has been felt deeply within our homes. While the median household income for adults born in the 1960s is indeed higher than the income of their parents' generation, much of that is a function of smaller household size and the fact that there are now likely two wage earners per household. It takes more of us working more to maintain our forward progress. Even so, the pace of our growth has slowed considerably. According to a study commissioned by the Pew Charitable Trusts, family income doubled in the postwar years, between 1947 and 1973, but in the three decades since then the increase has been a mere 20%. That statistic provides important context to why household debt relative to income more than doubled over the same period: For many, borrowing was a way to keep up with our parents and grandparents. To put it in more emotional terms, it is why so many of us wonder how our parents and grandparents seemed able to enjoy a higher standard of living even though their means were so much less than ours.

The meritocracy that underpins our economy and culture-work hard, move up the ladder-has also been weakening, as the distribution of income has become increasingly uneven. In the 1950s and 1960s, our national economic growth trickled down across a broad spectrum of income levels. Since the 1970s it has been more fractured, with much of the economic gains benefiting upper-income households. This concentration of wealth leaves the middle cla.s.s, the heart and soul of this country, struggling just to hang on.

The epic financial crisis-and there really is no other way to describe it-that began in 2008 may have delivered a decisive blow to the stubborn optimism that we held on to in spite of the on-the-ground reality of how our financial lives have been marked by increasing struggle. For many, the crisis was a rude awakening; for others, it was a grim confirmation of the creeping anxiety we've been feeling about how we are going to make it all work. Either way, it is hard to find a family that was untouched by this financial disaster. It was a galvanizing moment for us as a nation-it has forced us to reckon with our beliefs in our country and our individual ideals.

Is it time, then, to p.r.o.nounce the American Dream dead?

In many ways it pains me to say this, but in my opinion the American Dream as we knew it is is dead. dead.

But listen to me: That is not such a bad thing. The old American Dream has been in need of revision for quite some time; we have just been very good at avoiding that truth. It's time to take that dream back into our hands and reshape it. It's time to create a New American Dream that is based in honesty, authenticity, good intentions, and genuine need.

What is important to understand is that the American Dream is not something to put your faith in, to pray for, to embrace blindly, and hope that everything turns out okay-despite its long, dependable run. Rather, it is a concept, a loose set of goals that beg for individualization. The American Dream was never one-size-fits-all. The New American Dream asks you to fashion a dream that suits you-not one based on false premises and the expectations of others. It asks you to take measure of your own needs and understand what it will take to provide for yourself and those around you-your family, your community, and those less fortunate.

The truth is, we are on the threshold of an important moment. We can come together, right here, right now, and each one of us can envision our own New American Dream-a dream that is rooted in reality, not superficiality; in truth and integrity, not illusion and faslehood.

MAKING CHANGE.

I am a great believer in the power of perspective. Often when we find ourselves in a difficult situation we come to believe we have no options. We convince ourselves there is no way out. Despair and frustration take root and convince us that things are more desperate than they may actually be. When I've found myself in those situations in my own life, I have learned that a change in perspective can change everything. What seemed insurmountable can be overcome. Not without difficulty, but through ingenuity and dedication. We can make a difference when we think differently. If you have any doubt about the truth of that statement, think of any significant achievement throughout American history, from our founding as a nation built on those inalienable rights and freedoms, to the civil rights movement.

What we need first and foremost then, to erase the feelings of hopelessness and to ease our fears, is a change in perspective. Let us recognize what the American Dream no longer is, in order to give birth to a New American Dream.

We must abandon any vestige of the old dream that suggested it was delivered on a silver platter as a matter of national birthright, and that our economy would forever be the rising tide that lifts all boats. The dream I am asking you to create-this New American Dream-is a very individualistic pursuit. It calls upon you to take stock of the challenges we face as a nation with an economy that is still struggling to recover from the effects of a crippling recession. And then it calls upon you to take stock of your own life, your own needs, your own security. We must transform ourselves from dreaming society's dreams and putting our faith in a false and misleading sense of ent.i.tlement, to being a society where each of us strives for dreams that are personal and realistic and that are in the best interests-in the truest and most honest sense-of us and our family. I am calling upon each of us to rethink the very way we dream.

WHAT I LEARN FROM YOU.

I am confident you are up to the challenge. I know you are absolutely capable of everything I am going to ask you to do. I also can feel that lurking just beneath your fear and frustration is an even more powerful resolve not to resign yourself to a life of less. You are resilient. It is a hidden upside to times of great turmoil. When we are shaken to our core, when the status quo no longer works for us on any level, we are motivated to change. Transformation becomes not just possible, but imperative. How do I know this? I have been listening to you-so many of you-over the years. I have heard your hopes and fears; I have made it my job to expose the falsehoods and deceptions we perpetrate on ourselves and others and encourage honesty and truth. And I hear how ready you are for change.

To that end, may I share some more statistics with you that I know you will find as heartening as I do? In a 2010 survey conducted by Charles Schwab & Company, 29% of respondents chose the phrase "Decade of Hope" to describe the coming years. Another 27% said "Decade of Great Change" and 20% chose "Decade of Personal Responsibility." Three-quarters of respondents understand what it is going to take to create a new, sustainable, and achievable dream: hope, change, and personal responsibility.

Those are the very elements I ask you to bring to The Money Cla.s.s The Money Cla.s.s. At the core of the change I am asking for is a willingness to stand in the truth. To take a clear-eyed accounting of exactly where you are today, what your circ.u.mstances are, and then plot a course that addresses your truth. The pendulum has swung out to an extreme and we now must ease it back to a more stable and sustainable sense of equilibrium. To do that, I am going to challenge each of you, after years of overextending yourselves, to put into effect a correction. I am going to challenge you not merely to live within your means, but to live below below your means. This is not meant to be a punitive strategy; it is a course in self-awareness, a return to values that our grandparents and their parents embraced. It is at the very core of the American Dream of old. Yes, there is still a beating heart in that dream. It is our duty now to rescue what was so right about it: the virtues of hard work and sacrifice; of self-knowledge and steadfastness in achieving one's goals; of aiming for something greater and longer-lasting than the fleeting rewards of instant gratification and indulgence. your means. This is not meant to be a punitive strategy; it is a course in self-awareness, a return to values that our grandparents and their parents embraced. It is at the very core of the American Dream of old. Yes, there is still a beating heart in that dream. It is our duty now to rescue what was so right about it: the virtues of hard work and sacrifice; of self-knowledge and steadfastness in achieving one's goals; of aiming for something greater and longer-lasting than the fleeting rewards of instant gratification and indulgence.

THE MONEY CLa.s.s CURRICULUM.

I named this book The Money Cla.s.s The Money Cla.s.s because what I can provide is knowledge-of what actions to take, what behaviors to correct, how to fortify yourself in the face of economic challenges, how to fashion a responsible dream and achieve it-and knowledge is the key. I can take you from here-a place of fear and despair-to there-a place of security and hope. You will need to learn and in some instances relearn what has changed in our world and in your life, and how you must adapt to those changes. because what I can provide is knowledge-of what actions to take, what behaviors to correct, how to fortify yourself in the face of economic challenges, how to fashion a responsible dream and achieve it-and knowledge is the key. I can take you from here-a place of fear and despair-to there-a place of security and hope. You will need to learn and in some instances relearn what has changed in our world and in your life, and how you must adapt to those changes.

I understand fully: At this moment in time, you are in fear of the unknown. You don't know exactly what to do or where to turn because you aren't sure what works anymore. You don't know who or what inst.i.tutions to trust. The truth is, you must learn to trust yourself. To follow a path that is right for you, to make choices that are realistic for you and your family. And becoming that person requires an education, a course of study.

The nine cla.s.ses that make up this book begin right here, with a lesson in learning how to dream. In the next cla.s.s, "Stand in Your Truth," I will teach you what it takes to become honest and stay honest. That lesson is the catalyst for everything that follows. The subsequent chapters on family, home, career, and retirement can only be put into action if you bring along a commitment to stand in the truth. Each cla.s.s will begin with an explanation of the important elements that have changed and require us to rethink our a.s.sumptions and reimagine what's possible. Next I will lay out the essential strategies to help you reach your newfound goals. With my guidance and your commitment, we can be a formidable team.

It is time to move beyond materialism in order to set our sights on authentic happiness. Authenticity Authenticity is a word I find myself returning to again and again these days. I would ask you to put your finger on what is authentic in your own life-and what endures. Surely that is our relationships-with those we love, with our community, with the earth. We strive for connection, we gladly sacrifice and find strength in working toward a greater purpose, a sense that there is a reward in being true to yourself and honoring the limitless power that comes from living a life of integrity. More than anything else, isn't that the legacy each of us would like to leave behind? Wouldn't we take pride in knowing that future generations will look to us for inspiration, just as we look for inspiration to the greats who came before us? Then let us embrace the ideals that forged the American Dream, then and now: honesty, integrity, dedication, commitment, courage, and hope. And let us turn toward the future. is a word I find myself returning to again and again these days. I would ask you to put your finger on what is authentic in your own life-and what endures. Surely that is our relationships-with those we love, with our community, with the earth. We strive for connection, we gladly sacrifice and find strength in working toward a greater purpose, a sense that there is a reward in being true to yourself and honoring the limitless power that comes from living a life of integrity. More than anything else, isn't that the legacy each of us would like to leave behind? Wouldn't we take pride in knowing that future generations will look to us for inspiration, just as we look for inspiration to the greats who came before us? Then let us embrace the ideals that forged the American Dream, then and now: honesty, integrity, dedication, commitment, courage, and hope. And let us turn toward the future.

The Money Cla.s.s is now in session.

CLa.s.s.

STAND IN YOUR TRUTH.

How do we usher in this new era of personal responsibility? By taking an honest inventory of exactly where you are today and what you want most for your future. Sounds like it shouldn't be so hard, right? But trust me-getting honest is the hard part. Based on my experience of working with people and their finances for three decades, I can tell you that culturally we have become a nation that hides from that truth.

I see it week in and week out when working on my television show on CNBC. The most popular segment of the show is "Can I Afford It?" in which viewers ask my opinion about a financial purchase they are considering. It is a very simple concept: Viewers want me to tell them whether they can truly afford to buy something.

Before I render my Approved or Denied verdict I insist on finding out everything I can about a viewer's financial situation. And I do mean everything. My staff and I pore over detailed financial information each guest must submit to be considered for the segment. Invariably we go back and forth a few times with the guest before the show is taped, until I am absolutely clear about whether they will be Approved or Denied.

Those of you who watch the show know that more often than not I have to tell guests they are Denied. I know that many of you think the people who are featured on the "Can I Afford It?" segments are just playing a game. I can't tell you how often people come up to me on the street and say, "Oh Suze, I saw the show last weekend and there is no way those people were for real-it was crazy what they thought they could afford!"

I am here to tell you they are most definitely real. What you don't see is that after they have been Denied and the taping is complete, the guests start trying to negotiate with me and my staff. They come back to us and change their story just a little bit in the hope that I will change my mind. The guests most desperate to change the verdict are caught up in what they wish were true; their desires about what they want in the here and now push them to bend the truth, to hide from the truth, just so I will tell them they are Approved.

I wonder if deep down on some level you are struggling with the same urge. That kind of wishful thinking is not unique to the guests who ask me "Can I Afford It?"; it's something many of us indulge in because it allows us to avoid tough decisions and owning up to a difficult reality that we may not be ready to face.

There is no blame, no finger-pointing that accompanies my observation. As we embark on The Money Cla.s.s The Money Cla.s.s I want to be crystal clear about my motivation for writing this book: empathy. I understand how painful it can be to face reality. Especially given the realities we are all facing, detailed in the opening cla.s.s. It often seems to be in conflict with a healthy optimistic impulse. I want to be crystal clear about my motivation for writing this book: empathy. I understand how painful it can be to face reality. Especially given the realities we are all facing, detailed in the opening cla.s.s. It often seems to be in conflict with a healthy optimistic impulse.

So trust me when I say that I know it is not easy. But it is necessary. No, make that vital vital. As I explained in the first cla.s.s, I am convinced that we can all move toward a better future, but in order to do so we must create a new template for achieving our dreams. An important starting point to these cla.s.ses is the recognition that the events of the past fifteen years or so that culminated in the financial crisis were caused by a collective disconnect from reality.

The most fundamental lesson of The Money Cla.s.s The Money Cla.s.s is this: In order to create lasting security you must learn to stand in your truth. You must recognize, embrace, and be honest about what is real for you today and allow that understanding to inform the choices you make. Only then will you be able to build the future of your dreams. is this: In order to create lasting security you must learn to stand in your truth. You must recognize, embrace, and be honest about what is real for you today and allow that understanding to inform the choices you make. Only then will you be able to build the future of your dreams.

In this cla.s.s we will learn: Finding Your Truth: A Personal Financial Accounting Living Truthfully: How to Stand Tall in Your Reality The Foundation of All Truthful Living: The Power of Cash LESSON 1. FINDING YOUR TRUTH: A PERSONAL FINANCIAL ACCOUNTING FINDING YOUR TRUTH: A PERSONAL FINANCIAL ACCOUNTING.

Moving toward new realistic dreams starts with an honest appraisal of exactly where you are today. I am not going to try to cajole you into this first lesson with some fancy window dressing. I am going to stand in this truth: There's no way around the fact that every lesson that follows in The Money Cla.s.s The Money Cla.s.s can only be helpful if you first take the time to create a personal balance sheet that shows you exactly what you currently spend and owe (your liabilities) and what you have managed to save for your future (your a.s.sets). can only be helpful if you first take the time to create a personal balance sheet that shows you exactly what you currently spend and owe (your liabilities) and what you have managed to save for your future (your a.s.sets).

I realize that sounds like drudgery. But you have it so wrong. Stick with me here, commit to this exercise, and I promise you the experience will be revelatory.

If you already use a software program that helps you track your spending and saving, great. But I suspect that many of you really don't have such a strong grip on where your money is going, month after month. If that is the case, I would like you to go to my website, www.suzeorman.com, and click on the link for The Cla.s.sroom. The Cla.s.sroom is where all the tools and resources referenced in The Money Cla.s.s The Money Cla.s.s are housed. There you will find my Expense Tracker tool. I have made it as easy as possible for you to determine your monthly income and outgo. But please know that your ability to stand in the truth comes down to how honest you are about inputting the data requested. Please do not guess or estimate. I am asking you to take the time to go through all your statements and doc.u.ments so you can input dollar amounts into each line item that are a realistic reflection of your actual spending. Be prepared-it could take hours, but that kind of ruthless honesty is necessary to beginning this lesson on a firm and true foundation. are housed. There you will find my Expense Tracker tool. I have made it as easy as possible for you to determine your monthly income and outgo. But please know that your ability to stand in the truth comes down to how honest you are about inputting the data requested. Please do not guess or estimate. I am asking you to take the time to go through all your statements and doc.u.ments so you can input dollar amounts into each line item that are a realistic reflection of your actual spending. Be prepared-it could take hours, but that kind of ruthless honesty is necessary to beginning this lesson on a firm and true foundation.

The next piece of information we need is your credit score. You can get that at myFICO.com. If you have a FICO credit score that is below 700, you have some work to do.

Improving Your FICO ScoreYour FICO score is important for many reasons, which you know if you've been following my advice for years, but it's even more so today. Before the financial crisis a strong FICO score simply enabled you to qualify for the best deals. Now you must have a strong FICO score to qualify for a loan, period. Typically that means a FICO credit score of at least 700720, and often lenders reserve their best terms for borrowers with FICO credit scores of 740 or higher. A great source of information on FICO scores can be found at ScoreInfo.org, a consumer site created by FICO.

Once you complete those worksheets and get a FICO score, please print them out. Hold those papers firm and give yourself credit. You have just taken a giant step toward getting honest. I realize many of you will not like what the numbers tell you. Do not panic. Do not beat yourself up. And do not give up. Making those numbers "work" for you is in fact the basis of the rest of this book.

Understand that we are not going to fix anything here in this cla.s.s. Our focus right now is on facing the facts, so you can identify the areas of your financial life that are causing you stress. I realize you probably have a sense of that without going through these exercises. But it may be just a sense, or an inkling, or a hazy dread. When you take the time to put it all down on paper it brings everything into a sharp clarity. You are no longer guessing, or able to "bend" the truth. With the facts right in front of you, you have the building blocks of a solid foundation that will enable you to stand in your truth.

LESSON 2. LIVING TRUTHFULLY: HOW TO STAND TALL IN YOUR REALITY LIVING TRUTHFULLY: HOW TO STAND TALL IN YOUR REALITY.

Now that you have a clear-eyed accounting of your financial reality, our next challenge is to give you the means to take action based on what those worksheets tell you. I need to repeat myself: Do not be ashamed or upset. Know that in spirit I am sitting right beside you and I am excited for you: You have taken a giant step toward getting honest! That is no small achievement.

In the cla.s.ses that follow I present a series of lessons that will guide you through making the adjustments and taking the proper actions to help you realize your dreams. Those chapters contain all the nuts-and-bolts information you will need. To be honest, the how-to part of those chapters is relatively easy; it is just a matter of understanding some basic financial rules, regulations, and truths and making smart choices based on that knowledge.

What I want to focus on in this lesson is how you find it in yourself to make those choices. The success of The Money Cla.s.s The Money Cla.s.s is not just what I can teach you, but ultimately, what you are able to put into action for yourself, for your family, and for the benefit of future generations. is not just what I can teach you, but ultimately, what you are able to put into action for yourself, for your family, and for the benefit of future generations.

Here are the cornerstones of the better financial life you can build with the lessons that follow: FOCUS ON WHAT IS REAL TODAY...

The only way you can move forward is to loosen your grip on the past. I know for many of you it is quite difficult to not look in the rearview mirror. You are still hoping your home's value gets back to where it was in 2006, or you are stuck thinking about how much more your retirement accounts were worth a few years ago, or how much easier it was to generate income when interest rates were higher than they are today. Those of you looking for work are unwilling to settle for a job that pays less than your last one.

Please know that I say this with full knowledge of how deeply wrenching it is: We must let go of the past. The decisions you make today must be based on what is realistic today-not what may have been true in the past, but what you know for a fact is an honest accounting of what is happening for you right here, right now.

...AND WHAT YOU WILL NEED TOMORROW What derails so many of our good intentions is that we find it hard to make decisions today that will serve us well in the future. So we spend today rather than save for tomorrow. Or we say yes to something-a vacation with friends, a cousin who is looking for investors in a new business-even though spending that money now will impede our ability to reach long-term goals. The process of standing in the truth must work for you not just in terms of what is right today, but also with a clear appreciation of the measures required to attain a secure future. Money you spend today is money that will not be able to grow and help you reach your most important future goals, be it a child's college education, paying off your mortgage before retirement, or being able to live comfortably in retirement.

PUT MONEY IN ITS PLACE.

Over the years you may have heard me say that money has no power of its own. It might have given you a moment's pause when you first heard it, but maybe the truth behind it didn't stick with you. So let's dwell on it a moment here, because it's truly an important concept.

When you are staring at the numbers on your worksheets, I want you to recognize that you have been the catalyst that made the decisions to spend, save, and invest those dollars. Money has no power on its own. It is the car; you are the gas, ignition key, and driver. Without you nothing happens. That should actually make you optimistic. You have the power to make the right and honest decisions about how you handle your money. And finding your power will set off a wonderful chain reaction: When you take the necessary measures to regain security-or build it for the very first time-you bring happiness into your life. You are better able to be present and connect with your family; you are less preoccupied by financial anxiety.

I am asking you to recognize and embrace this concept with your head and your heart: Your money has no power of its own; you are what gives it power. That you are here with me in The Money Cla.s.s The Money Cla.s.s tells me you are ready to own that power, fix what isn't working, and build lasting security. tells me you are ready to own that power, fix what isn't working, and build lasting security.

LIVE BELOW YOUR MEANS BUT WITHIN YOUR NEEDS.

The reality is that in order to reach your goals, and maintain those goals once they are achieved, you must live below your means. If you do not have money left over each month you will have nothing to put toward fulfilling your dreams. So "below your means" means making a commitment not to spend every last dollar you take home. "Within your needs" requires that you make a clear-eyed a.s.sessment of what exactly you are putting in that category. Yes, it is the act of separating needs from wants, something that I've discussed in previous books; but now, in fact, I am asking you to take a more penetrating look.

You need a house, but do you need a house that eats up 35% or more of your monthly income? Could your family be just as content in a less expensive house where the rent or mortgage is just 20% of your monthly income?

I find it so interesting that over the past thirty years the average square footage of a new home grew 42%, even though the number of people living in that house actually decreased. That's a lot more house to pay for, to heat and cool, to furnish and repair. We all need a place to live, but perhaps a smaller, less expensive place would help us achieve our new dreams. You are meeting your needs with the less expensive house but given the lower cost it will allow you to live below your means, and that can free up significant money to put toward other goals.

You need a car to get to work and shuttle the kids around. But can you honestly tell me you bought a car that met your needs but was as inexpensive as possible? The new dream car is one that is less expensive and that you drive for as long as possible.

I understand the desire to have the things that you want. You feel you work hard, so you deserve those things. But the truth of the matter is that they are just things and those things will never make you happy. Peace of mind will make you happy. Being able to sleep at night will make you happy. Not worrying about being able to retire one day will make you happy.

I want you to appreciate where I am coming from: My call to live below your means is the path to having more. Living below your means-but within your needs; this is not about punishing deprivation-will allow you to create more to put toward your goals. I need you to recognize, right here, right now, that your dreams for tomorrow reside in the choices you make today.

THE PLEASURE OF SAVING IS EQUAL TO THE PLEASURE OF SPENDING.

I want to share a dream of mine: Someday, hopefully not too far in the future, I will have people call in to my television show or stop me on the street and excitedly share with me their latest savings triumph. I mean, let's just say no one has ever asked me if they can afford to save another $500 a month, if you catch my drift. But a girl has gotta dream...

I am not suggesting you never allow yourself to spend money today. But what is painfully absent from so many of your lives is an appreciation that what you manage to save today is in fact what gives your family security, hope, and opportunity. When you see it from that vantage point, you begin to understand what I mean by the pleasure of saving. It is what makes your dreams possible.

To be sure, some of you do understand the pleasure that comes from saving. But those families seem to be the exception, not the norm. So my dream is that each and every one of you can embrace the power, security, and control that comes from saving: - When I see a family that has an eight-month emergency fund, contributes to their workplace retirement funds, and also makes annual contributions into their own IRAs, I know they understand the pleasure of saving and that their family is not beset with financial stress.

- When I see a family that drives a six-year-old car they own outright that runs perfectly fine, and even though they can afford to buy a new one they do not, I know they are standing in the truth.

- When I meet families, as I have so often these past few years, that tell me with well-earned pride that they have cut back on their household spending and have reduced their credit card debt by 30%, I know they get it. When you stop me in the street to tell me you have managed to cut your food expenses dramatically by cooking dinner at home and reserving fancy restaurant meals for special occasions, I see that you've got a handle on your priorities.

- When you tell me you stopped yourself cold in the mall and put down an impulse purchase because you recognized it really wasn't something you needed, I am happy for you, for you have experienced the pleasure that comes from saving.

One of the goals of this book is to make savings part of our national conversation. It's my dream that someday soon we will share and measure ourselves by our saving exploits, rather than judging ourselves and others by what we spend. I've heard newscasters and pundits refer to this shift as the "New Frugality," but I have to tell you, the negativity of that phrase turns me off. Finding equal pleasure in savings as you do in spending strikes me as something far more hopeful and exciting. It carries with it the promise of freedom, of liberation, for when you make it a priority to save, to fund your current expenses and future goals, you are in fact buying yourself freedom from crushing debt, from having to cross your fingers that the markets-real estate and stock-will generate the money you want and need. With savings comes control. And I think we can all agree that on many levels what went so wrong in the recent past and came to a head during the financial crisis is that we lost all control over our future. We borrowed it from the banks, or based it on unrealistic expectations.

YOU DEFINE YOURSELF BY WHO YOU ARE, NOT WHAT YOU HAVE.

With all the spending of the past few decades came a not-too-surprising by-product. Money became our ident.i.ty; we became defined by what we owned, or what we dreamed of owning. The New American Dream is rooted in a definition of self that has everything to do with character and intention and nothing to do with material things. When you are motivated by your own beliefs, aims, and principles, you possess the clarity and single-mindedness to achieve that which is truly valuable: security and peace of mind.

YOU CAN SAY, "I'M GLAD I DID," RATHER THAN "I WISH I HADN'T"

Making tomorrow's dreams a reality requires being able to make the right choices today. As you consider the options before you, I ask that you take a few moments to consider how that particular decision might play out over the next year, the next decade, the next generation, and imagine how you might grade your decision with hindsight. You will know you are standing in your truth today if during this exercise you can imagine your future self saying, "I'm glad I did make that decision," rather than "I wish I hadn't." For a decision to be powerful it must not only provide you immediate gratification or relief, it must in fact be a choice that brings long-lasting satisfaction.

YOU ARE AN ELEPHANT.

Don't be offended-I mean that as a compliment!

I have a favorite saying that I recall whenever I need help to stand in my truth: The elephant keeps walking while the dog keeps barking The elephant keeps walking while the dog keeps barking.

The elephant stays on course, moving toward its goal, regardless of all the barking and noise that swirls around him. I do what is true and right for me. I listen to advice. I seek advice. But ultimately I know when I am standing in the truth because my mind and my gut are in agreement. The goal is to achieve an internal calmness that comes when your intellect and your instincts are operating in harmony.

Why is this saying so important for you? If you are going to stand in your truth then you will have to be strong and tenacious. You will have to be committed to your goal and determined to stay the course. You may feel pressured at every turn to spend money; there are many enticements all around us trying very hard to get you to part with your hard-earned cash-the sounds of excitement coming out of restaurants and clubs, the heady scents that waft out the doors of department stores, persuasive ads, the pages of glossy magazines telling you about the "must haves" of the season. Let me tell you, it's not easy to ignore all that barking. A lot of time and money and invention is spent on coming up with ways to seduce you to spend. But if you are steady and true and you are able to just keep walking when your friends say let's go skiing this weekend, let's go out to eat, come on, live a little-if you can just keep walking then you will end up where you want to be, regardless of the obstacles thrown in your path. An elephant walks where it wants-surely and steadily it arrives at its destination, and that is the truth that I want you to stand in.

In the New American Dream we must all aspire to be elephants. We must decide what is true and right for ourselves and our family and then stay devoted to actions and behavior that are in service to our greatest goals. We must not let the barking dogs distract us.

LESSON 3. THE FOUNDATION OF ALL TRUTHFUL LIVING: THE POWER OF CASH THE FOUNDATION OF ALL TRUTHFUL LIVING: THE POWER OF CASH.