Speaker 1: Welcome to How the Money. I'm Joel and I am Matt,
Speaker 1: and today we're discussing a full proof plan to ditch
Speaker 1: holiday debt. You know what, buddy, this is. This is
Speaker 1: gonna be a really wholesome episode for all the folks
Speaker 1: out there who may have spent a little bit more
Speaker 1: than they meant to the past couple of months. But
Speaker 1: we're gonna talk about, first of all, why it is
Speaker 1: that having debt, why having those balances, why it's such
Speaker 1: a bad thing. We're gonna talk through how to put
Speaker 1: together a plan to eliminate that debt, as well as
Speaker 1: some other tips as well. Regardless of the the approach
Speaker 1: that you decide to take, there are a few things
Speaker 1: that you can implement, some different ways of looking at
Speaker 1: your debt in order to make sure that you are
Speaker 1: moving onwards and upwards with your finances. Yeah, and if
Speaker 1: people have been listening for any amount time, they know
Speaker 1: we like to be nuanced on the topic of debt.
Speaker 1: But we're specifically talking about like the crumbiest forms of
Speaker 1: consumer debt in this episode, which is what a lot
Speaker 1: of people are battling in January, right, and the credit
Speaker 1: card statement comes in your email in box and you're like,
Speaker 1: dang it, I didn't think it was that bad. Maybe
Speaker 1: even today that statement showed maybe you had a December
Speaker 1: fifteenth to January fifteenth statement and you are, yeah, you're
Speaker 1: you're maybe you're a little disappointed in yourself. Yeah, and
Speaker 1: but and that's how like that happens, right, people, But
Speaker 1: how do you combat those? Now? How do you move forward?
Speaker 1: That's yeah, what we're gonna talk about the exactly man. Yeah,
Speaker 1: but first, actually, so I've got a frugal or cheap
Speaker 1: for you, but it is actually for once, it's not
Speaker 1: me being cheap. It is it's up to you to
Speaker 1: decide whether or not Kate is being frugal or cheap. Okay,
Speaker 1: you're white, that's right. So she was considering getting this
Speaker 1: face serum. It's this oil that you if you ever
Speaker 1: see her do it, which that'd be weird. I guess
Speaker 1: if you're if you are doing a night she does
Speaker 1: it right before she gets to bed. But it's like
Speaker 1: this little glass usually hanging out of that time. Yeah, yeah,
Speaker 1: my wife has some face here, and so I think
Speaker 1: I do. She had like this dropper where she squeezes
Speaker 1: into this glass room and she likes squirts it like
Speaker 1: across her forehead, over her cheeks. I forget where normally
Speaker 1: buys hers from. But I tried to convince her to
Speaker 1: go with the Costco brand when it was on clearance.
Speaker 1: She gave she gave it a shot, and she's like,
Speaker 1: it's not it's not as good. This is garbage. And
Speaker 1: I was like, dang it. So maybe Kate felt that
Speaker 1: same way as well, because the stuff that she wanted
Speaker 1: to buy, I forget the name of the website, but
Speaker 1: it's like a hundred bucks. It's over a hundred bucks
Speaker 1: for a three ounce bottle, which is that is not
Speaker 1: very many ounces here? Uh? And so what and she
Speaker 1: realized that, man, this is too stink and expensive. But
Speaker 1: the website for the bottle that she was wanting, they
Speaker 1: list out all the different ingredients. They list out the oils,
Speaker 1: and obviously she doesn't know the exact ratios, and I
Speaker 1: mean there's a little bit of fragrance thrown in there
Speaker 1: as well, but she would had just ordered some nice
Speaker 1: organic versions of those oils and created her own blend,
Speaker 1: and so she's able to make a three ounce bottle.
Speaker 1: So the equivalent of what you would pay over a
Speaker 1: hundred bucks for and she's able to make that for
Speaker 1: under ten dollars, staying per bottle. It's like like argone
Speaker 1: oil or like rose hip, a little bit of like
Speaker 1: grape seed, like like all these oils combined, a lot
Speaker 1: of a lot of branding that goes into makeup. But
Speaker 1: so I'm just how's this going? By the way, She's like,
Speaker 1: it is going incredibly well, and so she's super happy
Speaker 1: with it. But what are your thoughts? Do you think
Speaker 1: she was being frugal or cheap? Sounds frugal? Is all
Speaker 1: get out to me? Like I think if I was,
Speaker 1: like I agree, I am all for this, it was
Speaker 1: like destroying her face or something like that. That's the risk, right,
Speaker 1: Like I guess if is there a risk that you
Speaker 1: run by not getting the proportions exactly right and you
Speaker 1: put on your face and all of a sudden you've
Speaker 1: got you know, first degree of burns. Yeah, if you
Speaker 1: were putting out with potentially face melting acid or something
Speaker 1: in this concoction, then it could be seen as cheap.
Speaker 1: You might need some sort of expert blender to get
Speaker 1: exactly right. But it's it's a bunch of these organic
Speaker 1: oils to create a face like the chances are you
Speaker 1: can't screw it up that bad, right, and you can
Speaker 1: always like test it out on your arm or something
Speaker 1: before going like full board, just like scorting it on
Speaker 1: your face. Right, But this sounds like thing in an
Speaker 1: inconspicuous location, sort of like if you're doing a treatment
Speaker 1: for laundry, right, that's what they say. Yeah, I'm thinking
Speaker 1: the next step for her though, could be the launched
Speaker 1: aside hustle with this, like start selling her own serums,
Speaker 1: kates serums. Yeah, I like it, so I don't know,
Speaker 1: maybe I'll talk her into that. Next time I sear
Speaker 1: Her first customer will be Emily. She probably probably hopefully
Speaker 1: it's a that that'll save us money too. So No,
Speaker 1: I like that. I like experimenting in ways like that.
Speaker 1: I think that's one of those things that you don't
Speaker 1: you don't even think of doing. Let me just try
Speaker 1: to make this concoction myself, because wow, they're charging a
Speaker 1: lot of money for it. But when it's when the
Speaker 1: cost is that insane, maybe it brings you back to
Speaker 1: the drawing board and you're like, yeah, maybe I'm gonna
Speaker 1: give it a shot and see what happens. Absolutely, I
Speaker 1: kind of like the creativity and the ingenuity that she's
Speaker 1: that she's expressing them. Yeah, thinking outside the box a
Speaker 1: little bit. I will pass along her the frugal approval
Speaker 1: by my cod were pound on the back for me. Well, alright,
Speaker 1: let's introduce our beer this episode. This is Perpetual Composition.
Speaker 1: This is a beer by Southern Grist Brewery, who we've
Speaker 1: had on the show many times before, but not this
Speaker 1: particular beer. And we will share our thoughts at the
Speaker 1: end of the episode, for sure. Let's get on the
Speaker 1: topic in hand though. We are talking about creating a
Speaker 1: fullproof plan to ditch holiday debt, and Matt there are
Speaker 1: some folks out there who might think that just a
Speaker 1: little bit of debt is no big deal. But it
Speaker 1: makes me think about something else that we might not
Speaker 1: consider to be all that bad, and that is sitting
Speaker 1: sitting down. And it's it's interesting. I think a lot
Speaker 1: of new information has come to light in recent years
Speaker 1: about how bad sitting can actually be for us. Like
Speaker 1: we we all sit down, You and I were sitting
Speaker 1: down doing this podcast right now, and we're not heeling
Speaker 1: over and dying, right, But uh, it turns out that's
Speaker 1: sitting on your butt all day is much worse than
Speaker 1: we thought. And it's actually been called the new smoking.
Speaker 1: You've heard people say sitting in a new smoking. Maybe
Speaker 1: I have only because I feel like I've heard you
Speaker 1: talk about it, but that this sort of sounds like
Speaker 1: a report that maybe came from Big Tennis Shoe, all
Speaker 1: the other shoot companies out there, by Nike and Reebok,
Speaker 1: all the uh the anti chair trade groups out there
Speaker 1: who are battling so many of them, so many of
Speaker 1: them clearly will know that when you look at stats
Speaker 1: from the Heart Foundation, they found that the people who sit,
Speaker 1: uh sit a lot are the They're in a greater
Speaker 1: risk for heart disease and death. They have a hundred
Speaker 1: twelve percent increased risk of diabetes, increased risk of cardio
Speaker 1: vascular events like heart attack and stroke, increased risk of
Speaker 1: death from cardio vascular events in general, and a forty
Speaker 1: increased risk of death from many couts just just because
Speaker 1: of the amount of time you're sitting in a day
Speaker 1: and uh, you know, debt. I don't think that that's
Speaker 1: not going to lead to diabetes, that I know if
Speaker 1: there's no link between the two that I've seen. But
Speaker 1: it can cause stress, It can cause relational insecurity, and
Speaker 1: it can actually lead to adverse physical effects like headaches
Speaker 1: and an inability to focus. So that's why we wanted
Speaker 1: out of your life. It's you know, sitting in small
Speaker 1: amounts isn't the worst thing. The right kinds of debt
Speaker 1: in your life aren't the worst thing. We've talked about
Speaker 1: using debt strategically. But if you've racked up the worst
Speaker 1: kinds of debt, consumer debt, and you you actually have
Speaker 1: more in your life than you expected because of what
Speaker 1: was happening at the end of last year and what
Speaker 1: you were you were spending money on. Well, today's show
Speaker 1: is all about creating a plan to ditch it because
Speaker 1: it's worse than you think it is. That's right. Simultaneously,
Speaker 1: it's not like sitting all day once it's going to
Speaker 1: kill you, right, Like like most of us probably sit
Speaker 1: for the majority of our waking hours. You're probably half
Speaker 1: of the folks out there might be sitting right now.
Speaker 1: Maybe you're going for a walk, though, But when those
Speaker 1: weeks turn into years, right and like when those years
Speaker 1: trying to turn into decades, like that is when this
Speaker 1: this fairly normal activity, how it can wreck our health
Speaker 1: and we definitely don't want consumer debt to become a
Speaker 1: fairly normal fixture in your life. But the truth is
Speaker 1: that if you don't have a plan, you are not
Speaker 1: going to take action. And so that plan part like
Speaker 1: that is crucial to getting you to where you want
Speaker 1: to be. Uh. And if not having debt, you know,
Speaker 1: lingering around is what you want and it should definitely
Speaker 1: should be, then we want to help you to get there. Um,
Speaker 1: like your say, angel, consumer debt, it's it's worse than
Speaker 1: most people think. It's not like this, this this cute
Speaker 1: little thing. It's not like a pet that you want
Speaker 1: to want to keep around. It's quite literally keeping you
Speaker 1: from achieving your bigger financial goals. It turns out that
Speaker 1: the average household today has more than nine thousand dollars
Speaker 1: in recurring credit card debt. And that's not even including uh,
Speaker 1: some of the other crappy debt products out there, like
Speaker 1: personal loans or by not pay later. Yeah, that's literally
Speaker 1: just credit card debt hanging out in people's lives. And
Speaker 1: you know, I think part of the thing that we
Speaker 1: need to address here too, is it debt. Credit card
Speaker 1: debt in particular, is getting worse. Variable interest rate debt
Speaker 1: is steadily becoming a bigger train on your finances because
Speaker 1: we're in an era of rising interest rates, and so
Speaker 1: credit card debt is actually worse right now than it
Speaker 1: was a couple of years ago. And it's always bad,
Speaker 1: right Sure, it sucks no matter what to have credit
Speaker 1: card debt. We've never liked it. But when you're talking
Speaker 1: about interest rates, closing it on twenty at this point,
Speaker 1: which we're gett pretty close to. I think we're over
Speaker 1: nineteen percent on average, And there's a lot of predictions
Speaker 1: because the Fed is likely going to continue to raise
Speaker 1: interest rates that we're gonna see at some point this
Speaker 1: year being the average APR on a credit card, and
Speaker 1: so making the minimums, making those minimum payments is now
Speaker 1: even worse for you than it was. That means more
Speaker 1: of each payment is going to pay that interest, which
Speaker 1: means your debt lingers even longer. And the reality is
Speaker 1: that almost half of folks have no idea what the
Speaker 1: interest rate is on the credit card they carry anyway.
Speaker 1: So people are like just would prefer to be ignorant
Speaker 1: and just gut their head in the sand. Yeah, they
Speaker 1: prefer to keep their eyes closed and not even think
Speaker 1: about how bad this debt is. Well, the truth is
Speaker 1: it's bad. And if you're clueless about how bad your
Speaker 1: debt is, you're likely you're you're less likely to prioritize
Speaker 1: getting rid of it, and we want you to get
Speaker 1: rid of it. So we want to tell you right
Speaker 1: now up front, Hey, it's worse than you think. It sucks,
Speaker 1: really bad, and we want you to be done with it.
Speaker 1: That's right. Yeah, And while existing credit card rates are
Speaker 1: in the sixteen percent range, uh new offers are at
Speaker 1: nearly twenty two percent. Uh So, like you said, it's
Speaker 1: becoming much more costly to carry a balance on on
Speaker 1: the credit card these days. That's terrible. But it's also
Speaker 1: important to look at what you are giving up by
Speaker 1: having to make these payments. We're talking about the opportunity
Speaker 1: cost here. So going back to the nine thousand dollars
Speaker 1: that the average household has, so assuming someone is just
Speaker 1: making the month payments with an and straight at around,
Speaker 1: you are looking at a three thirty dollar per month
Speaker 1: payment that is going to take over three years to
Speaker 1: fully pay off. And so that means you're you're looking
Speaker 1: at around twelve dollars that you're giving up plus another
Speaker 1: one thousand dollars where you two have invested that money, right,
Speaker 1: And so it's I'm pointing that out because it's not
Speaker 1: just that making payments to the bank that sucks, but
Speaker 1: it's also what you're not able to achieve because of
Speaker 1: those monthly payments. It kind of going back to the
Speaker 1: sitting analogy, right, It's it's not that the act of
Speaker 1: sitting on your butt that that in and of itself
Speaker 1: is bad for you. I think it's also what you
Speaker 1: are not doing when you are sitting down, right, Like
Speaker 1: there aren't you're not working out if you're sitting on
Speaker 1: your butt. Well, I guess technically you can go. You
Speaker 1: can get on that, you can get on a rowing
Speaker 1: machine or uh like a bike or something. Right, I
Speaker 1: do a rowing machines, So I guess I am technically
Speaker 1: you are. You are sitting. But most the time, you know,
Speaker 1: what the referring to is a sedentary lifestyle. You're talking
Speaker 1: about folks PLoP down on the couch watching TV. And
Speaker 1: not to mention the other behaviors that oftentimes a company
Speaker 1: sitting down, like eating some popcorns, some snacks, drinking a coke,
Speaker 1: that kind of thing. And so in the same way,
Speaker 1: it's a little bit different, I guess with that because
Speaker 1: the thing in and of itself is dangerous, It is
Speaker 1: bad for you. So it's more like smoking in this
Speaker 1: in this way where the actual act of it's not
Speaker 1: that you're just not spending money on other healthier products.
Speaker 1: Actually inhaling smoke is bad furial. Yeah, but may maybe
Speaker 1: there is a better analogy overall. But but but in
Speaker 1: this case, it also has to do with the things
Speaker 1: that you can't do with the money, the things that
Speaker 1: you're missing out on, and we want to make sure
Speaker 1: that we're highlighting that as well. Well. Yeah, and I think, well,
Speaker 1: just in the same way that people are are spending
Speaker 1: more hours of the day sitting, which is impacting their
Speaker 1: health negatively, people are keeping consumer debt around in their
Speaker 1: lives more than ever before two which is just negatively
Speaker 1: impacting their financials. And and so let's get back to
Speaker 1: that paying the bill on time and in full every month.
Speaker 1: We we always say that when we're talking about taking
Speaker 1: on credit card debt. We don't mind people using credit cards,
Speaker 1: and in fact, we think they're the best method of
Speaker 1: payment in many cases, but we sure I don't want
Speaker 1: people using them if they're not going to do that
Speaker 1: basic thing, which is to pay off the balance every
Speaker 1: single month. And and that's because each and every month
Speaker 1: that you don't attack that debt, that you're not doing that,
Speaker 1: you start to dig yourself a whole. And every month
Speaker 1: you let that credit card debt roll over, you're digging
Speaker 1: that whole even deeper. And so unfortunately, that's what a
Speaker 1: lot of people are are doing. According to bank rate
Speaker 1: of credit card holders roll over their debt each month,
Speaker 1: meaning that they're not paying off that balance in full,
Speaker 1: and so they might not be paying just the minimum,
Speaker 1: which is the worst possible. So here you know that you're, well,
Speaker 1: I guess the worst possible scenaries that you're not even
Speaker 1: paying that. But if you're just paying the minimum, you're
Speaker 1: it's going to take a really long time for you
Speaker 1: to make progress, for you to actually pay off that
Speaker 1: that debt. But some people might be paying more than that,
Speaker 1: but they're still they're paying interest to the credit card
Speaker 1: company on at least a portion of that balance, and
Speaker 1: that's not good. And so yeah, for a lot of folks,
Speaker 1: we think they can handle credit cards wisely, but we
Speaker 1: only want folks to consider using credit cards if they're
Speaker 1: going to be able to basically curb rolling over that
Speaker 1: debt if they're only only if they're going to be
Speaker 1: able to pay it off on time and it full
Speaker 1: every single month, Because yeah, we want you to refuse
Speaker 1: to allow yourself to pay extra for using this method
Speaker 1: of payment. That turns something that can be good for
Speaker 1: your finances into something that's pretty bad exactly. Yeah, we
Speaker 1: see it as a tool that you need to wield properly.
Speaker 1: And it turns out to more than one third of folks,
Speaker 1: according to a wallet hub survey, said that they overspent
Speaker 1: during the holidays. I think most folks it's something like
Speaker 1: in the th range, but hopefully just based on you know,
Speaker 1: just the beginning of this podcast asked you've been alerted
Speaker 1: to just how bad keeping credit card debt around can be,
Speaker 1: how it's actually getting worse, how it's bad for your health.
Speaker 1: Like quite literally, debt is bad for your health and
Speaker 1: you all. You also might want to even consider looking
Speaker 1: to buying a standing desk as well. After hearing Joel's
Speaker 1: the sitting stats. I mean, I'm thinking about it right now. Really,
Speaker 1: you have mentioned it multiple times. We saw last time
Speaker 1: you and I were in Costco together and I was like, Matt,
Speaker 1: maybe we should upgrade to these standing desks. It feels
Speaker 1: like just such a commitment, you know what, Let's figure
Speaker 1: out a way to just elevate our current desks, just
Speaker 1: to try it out. Like, I guess that's the thing
Speaker 1: for me. I guess we can always take it back
Speaker 1: to Costco, obviously, but it's the commitment of like getting
Speaker 1: I mean, they're big and heavy and a lot of
Speaker 1: times are adjustable, and so it's it's nice because, like
Speaker 1: you know, while sitting too much is bad for you, you
Speaker 1: you also can't stand necessarily for eight or nine hours
Speaker 1: a day and all I could in perpetuity. You don't
Speaker 1: want to be hunched over. You want it to be whatever. Yeah,
Speaker 1: size properly for you. Um. But back to debt. For
Speaker 1: the rest of the episode, we're gonna talk about creating
Speaker 1: an effective plan to get rid of that debt that
Speaker 1: we're talking about, and we will get to that right
Speaker 1: after this. All right, Matt, let's keep talking about debt.
Speaker 1: Let's do it. Clearly, we don't like consumer debt. We
Speaker 1: don't like these high interest credit card debts that people
Speaker 1: are keeping around in their lives and the average person.
Speaker 1: I think it's in in a recent survey I read,
Speaker 1: I think it takes something like five months for them
Speaker 1: to pay off the debt they accrued over the holidays.
Speaker 1: So we're talking about like we're basically in summer right
Speaker 1: by the time people are people are done getting rid
Speaker 1: of that debt. We don't want that to be the case.
Speaker 1: We want you to pay it off in short order.
Speaker 1: And the key to doing that is to create a plan.
Speaker 1: We want you to make a plan to pay off
Speaker 1: your debt. That's crucial to getting rid of it. And
Speaker 1: so that's what we're going to discuss now. Because you
Speaker 1: know that there are there are a lot of folks,
Speaker 1: by the way out there who who are going to
Speaker 1: tell you I can help you create a plan. And
Speaker 1: I'm not I'm not talking about us, but like I'm
Speaker 1: talking about that's what we're saying. Yes, we're saying we
Speaker 1: actually can. But there are organizations out there who wants
Speaker 1: you to pay them money and then they promised that
Speaker 1: they're going to take care of your debt issues for you.
Speaker 1: Do not want your money, right, No, don't send us anything,
Speaker 1: just just listen. But it might sound nice. There might
Speaker 1: be people on the internet or on let's say you're
Speaker 1: listening to traditional radio or something like that. There might
Speaker 1: be companies that say, listen for a small fee will
Speaker 1: help you created that plan, and even if you pay us,
Speaker 1: we'll take care of some of that debt on your behalf.
Speaker 1: And that sounds really nice because then you're offloading that
Speaker 1: responsibility to an expert or supposed expert. But almost always
Speaker 1: they end up making your situation worse. So we'll discuss
Speaker 1: more on that in just a minute, but but let's start.
Speaker 1: Let's talk about taking the d I Y route. How
Speaker 1: you can create your own plan. We don't we're not
Speaker 1: going to create it for you, but we're gonna help
Speaker 1: you create one. How can you create your own plan
Speaker 1: to get rid of that debt? Let's right, Yeah, So
Speaker 1: the first thing that you'll want to do is determine
Speaker 1: how much you owe by listing out all your debts
Speaker 1: between multiple credit cards and buy now pay later companies
Speaker 1: that are out there. My guess is that a lot
Speaker 1: of folks underestimate how much debt they get into. And
Speaker 1: I just mentioned by not pay later, it makes me
Speaker 1: think about Uh. We had a listener actually recently email
Speaker 1: us and she's she's an HR manager. She works for
Speaker 1: the government. She's talking about someone she's about to interview
Speaker 1: and he had something like eighteen delinquent by now pay
Speaker 1: later accounts on his name, and she didn't like flat
Speaker 1: out say that she wasn't going to hire this guy.
Speaker 1: But it wasn't a good thing. It's definitely not helping
Speaker 1: his change. He might not be all that responsible. Yeah, well,
Speaker 1: especially when it comes to different government jobs like that,
Speaker 1: because there's a security issue. So that's just store that
Speaker 1: one away. That's another benefit of making sure that you
Speaker 1: aren't carrying around large amounts of consumer debt and that
Speaker 1: you're not delinquent on your accounts because they can keep
Speaker 1: you from potentially getting a job that you're hoping to land.
Speaker 1: And by the way, and hunting for you just mentioned
Speaker 1: that we're probably a lot of people are underestimating how
Speaker 1: much they owe on some of these to some of
Speaker 1: these by now pay later companies, And it reminds me
Speaker 1: of when we talked about how much people I think
Speaker 1: they spend in subscription dollars every single month versus the
Speaker 1: reality of how much I spend, and I guarantee the
Speaker 1: same thing is true. They're people vastly under estimate how
Speaker 1: much they spend on recurring subscriptions, and once they dig
Speaker 1: into the details, we're like, oh, I didn't realize that
Speaker 1: so much I was spending, and I gives some problem
Speaker 1: is because most of most of the time, folks aren't
Speaker 1: digging into the details. They haven't sat down, they haven't
Speaker 1: done their homework. And that's the whole point of might
Speaker 1: not pay later. They want you to forget. They want
Speaker 1: you to make it easy installments so that you don't
Speaker 1: realize how much you're paying. Yeah, you immediately forget about it.
Speaker 1: But if you don't know how much debt that you
Speaker 1: are trying to pay, if you're not sure what the
Speaker 1: end goal is, well obviously it's gonna be a lot
Speaker 1: harder to achieve and it's almost always going to ensure
Speaker 1: that you're you know that you're gonna take longer to
Speaker 1: reach that goal. So what we would recommend is to
Speaker 1: log into the back end of your credit card, UH,
Speaker 1: log into Karna or after pay those different accounts so
Speaker 1: that you can put eyeballs on the numbers. We want
Speaker 1: you to get organized and write them all down in
Speaker 1: one place, because knowing the totality of how much you
Speaker 1: owe like that is a crucial first step so that
Speaker 1: you can make a plan to get out of the step.
Speaker 1: That's right, So first looking the numbers in the face,
Speaker 1: how much that do I actually have? Not just rounding
Speaker 1: it or are assuming, but knowing the actual specific amount
Speaker 1: that's gonna be a massive help in helping you in
Speaker 1: allowing you to formulate this plan. Next, let's talk about
Speaker 1: how to come up with how much a payment amount
Speaker 1: that you can reliably and realistically handle, because once you
Speaker 1: know how much you owe, it's important to figure out
Speaker 1: how much you can spare to pay that debt off.
Speaker 1: Can you put an extra twenty bucks a month towards
Speaker 1: it or an extra two Can you truly only afford
Speaker 1: to pay the minimums? Or is there actually more wiggle
Speaker 1: room than you thought? Those are good questions to ask,
Speaker 1: and you want to be realistic with how much you
Speaker 1: can devote to that debt in order to to keep
Speaker 1: yourself from flaming out after you've only been out it
Speaker 1: for a couple of weeks. I keep you're like, listen,
Speaker 1: I will reduce my grocery bill from six or fifty
Speaker 1: dollars a month to to fifty by eating only rice
Speaker 1: and beans. I'm making a thousand dollars. I'm gonna put
Speaker 1: a thousand dollar payment every single week. Yeah. Yeah. Fourteen
Speaker 1: days later you're like, oh yeah, gnawing, hunger paying star
Speaker 1: you're and you're like, I that was a bad move.
Speaker 1: I can't actually stick to this and you know, scrap
Speaker 1: it all together. That that's not a good way to
Speaker 1: tackle it. We want, we want you to financial stamina.
Speaker 1: And of course, like a simple budget is going to
Speaker 1: be an incredible tool that will help you to calculate
Speaker 1: a reasonable payment. So take a look at your overall incoming,
Speaker 1: your overall outgoing. That's massively important. It will help you
Speaker 1: figure out how much free cash you have left over
Speaker 1: after paying all of your other obligations to dedicate towards
Speaker 1: debt pay down and making it happen quickly. That's right. Yeah.
Speaker 1: And this past Monday, we talked with Jesse Meekham, the
Speaker 1: founder of y nap. And if you are looking for
Speaker 1: and and this is it's funny because they charge you
Speaker 1: in order to use the software, right, and so you
Speaker 1: might be thinking, well, man, Joel, I can't believe you're
Speaker 1: going to recommend going with this program, with the software,
Speaker 1: with this app that is going to cost me money well,
Speaker 1: first of all, free trial, and you don't have to
Speaker 1: inter credit card information into to take part in that
Speaker 1: free trial. But secondly, if you've never done this before,
Speaker 1: you might need some handholding. You might need uh an
Speaker 1: app or a program like that. And by the way,
Speaker 1: not everyone needs it in order. I think even Jesse
Speaker 1: would say that, you would say that, I would say
Speaker 1: that you don't want to certainly need a program. You
Speaker 1: can do it without one. But if that's what it
Speaker 1: takes to get you making it happen, and that is
Speaker 1: what it takes for a lot of people, like whin
Speaker 1: nap helps a lot of people, absolutely, and if if
Speaker 1: that's what it takes, we would it's worth the money, Yeah, totally.
Speaker 1: And when it comes to so maybe you're you're kind
Speaker 1: of like all gung ho about it, right, If that's you,
Speaker 1: it's important to note that we don't want you to
Speaker 1: empty out all of the cash that you have on hand,
Speaker 1: like all of the cash out of your your bank
Speaker 1: account in order to pay this debt off like a
Speaker 1: hammer to your piggy bank and all right, and then
Speaker 1: take it to your credit card. We still want you
Speaker 1: to maintain that that cash buffer. We still want you
Speaker 1: to maintain at least that bare minimum emergency fund of
Speaker 1: two thousand, four d and sixty seven dollars as a
Speaker 1: base amount in your savings account for just some of
Speaker 1: those other emergencies, some of those bumps on the road
Speaker 1: that could pop up, because you might be tempted to
Speaker 1: destroy this debt as fast as humanly possible by taking
Speaker 1: that balance straight down to zero, but that's gonna leave
Speaker 1: you in an incredibly vulnerable position two four six seven.
Speaker 1: That should be your essentially like your low water line
Speaker 1: that refuse to dip below. But then every every dollar
Speaker 1: above that, every dollar beyond that should be headed toward
Speaker 1: that debt demolition. Yeah, so we want you to list
Speaker 1: out those debts. We want you to figure out a
Speaker 1: pragmatic payment amounts which should maintain that cash buffer those
Speaker 1: that you're not dipping below it and putting yourself in
Speaker 1: harm's way. And then then once you know how much
Speaker 1: you can dedicate to debt payoff and how much those
Speaker 1: debts stack out to, what should come up with the
Speaker 1: timeline to get rid of that debt. We want you
Speaker 1: to have a firm week or month amount that is
Speaker 1: going to take you to get rid of it. Because
Speaker 1: now you. You have those numbers in hand, and you
Speaker 1: should be able to It's a basic math equation now
Speaker 1: that will tell you how long it's going to take
Speaker 1: to pay it off. So let's say you owe the
Speaker 1: average amount of holiday debt, which I said, it's something
Speaker 1: like one uh. And let's say you've got four dollars
Speaker 1: a month. You figured out that you can put towards
Speaker 1: paying off that debt, well, you should have it paid
Speaker 1: off in four months. And and now there's light at
Speaker 1: the end of the tunnel. Your debt elimination date is set.
Speaker 1: And that's powerful to know that, Hey, it's not just
Speaker 1: like this, I don't know how long it's going to take.
Speaker 1: I'm not sure when I'm gonna get rid of it,
Speaker 1: but I'm trying my best. Now it's like, no, no, no,
Speaker 1: I know what I'm gonna be done with it. I
Speaker 1: know when this monkey is gonna be off my back.
Speaker 1: And so we want you to have that specific date,
Speaker 1: do the math, and look at your calendar and put
Speaker 1: an X mark. And that's such just like an empowering
Speaker 1: feeling to have to say I know when this is
Speaker 1: going to be out of my life completely. In that way,
Speaker 1: it feels more like a program as opposed to just
Speaker 1: a slog right, like where your heads down, you're not
Speaker 1: even paying attention to the numbers. That being said, I
Speaker 1: think for some folks maybe that's what they need to do.
Speaker 1: I think different personalities are are going to react differently,
Speaker 1: but I think for a lot of folks, having that
Speaker 1: that thing that you're trying to achieve on a timeline
Speaker 1: is incredibly helpful. Like it's it's one thing to say
Speaker 1: that you want to pay that debt off like maybe
Speaker 1: sometime this year. It's a very different thing to say
Speaker 1: that you're gonna have the financial capability to pay off
Speaker 1: that debt by May, right, knowing how long it will take,
Speaker 1: I think only March, but maybe your reality that's okay.
Speaker 1: I think it'll just help folks to stick with that
Speaker 1: that payoff plan and to ensure that this debt payoff
Speaker 1: actually happens. We would recommend for you to automate the
Speaker 1: plan by setting up recurring payments of the amount that
Speaker 1: you want to make on a weekly or bi weekly
Speaker 1: or monthly basis. Again going back to once you've determined
Speaker 1: your payment amount, you've got your total, divide that out,
Speaker 1: you know how many payments you need to make and
Speaker 1: at what dollar amount? Well, go ahead and uh schedule
Speaker 1: those ahead of time. Uh. Something else you could do
Speaker 1: consider just talking about your debt payoff journey with a
Speaker 1: friend who might be interested in talking about finances with you,
Speaker 1: or if not, it is like you joined the Facebook
Speaker 1: group how do Money Facebook group, basically just giving someone
Speaker 1: else like a peak under the hood. I think that
Speaker 1: can provide not only some motivation, but some accountability to
Speaker 1: make sure that you're getting it done as well. There's
Speaker 1: also like that element of not embarrassing. I guess it's
Speaker 1: embarrassment if you kind of put it out there for
Speaker 1: the for everyone in the group to know that this
Speaker 1: is something you're working towards. And if you, I don't know,
Speaker 1: if you kind of slink off into the background and
Speaker 1: you don't actually achieve achieve that there might be some
Speaker 1: additional pressure there for you to actually get it. It It
Speaker 1: might be that kind of good pressure though, kind of
Speaker 1: like we talked about with Katie Milkman right earlier in
Speaker 1: the year, might be like good peer pressure. Yeah, it's
Speaker 1: like putting a good peer pressure to to kind of
Speaker 1: help force you in the right direction. So maybe you
Speaker 1: listen to this episode you do some of these steps
Speaker 1: here and you kind of realize, here's how much I owe,
Speaker 1: here's how much I can afford to pay, here's the
Speaker 1: timeline now for me. And then you make that public
Speaker 1: and how to money Facebook group. You you do a
Speaker 1: post later this week and you say, hey, guys, I
Speaker 1: know you don't know me, but I've just realized, like,
Speaker 1: this is how much consumer that I'm in and this
Speaker 1: is the date at which I'm not gonna have anymore.
Speaker 1: And I just love it. Hey, root for me. And
Speaker 1: that kind of public statement I think does go a
Speaker 1: long way, and it it's meaningful, and it can help
Speaker 1: kind of steal your resolve to keep pushing in the
Speaker 1: right direction, because hey, you made a public display of
Speaker 1: your hatred for dead and like when you're gonna be
Speaker 1: done with it? And even though those people most of
Speaker 1: them probably don't know you, maybe none of them know
Speaker 1: you in real life, there's still something powerful about that totally. Alright,
Speaker 1: So Matt, let's talk about we we've kind of got
Speaker 1: some of the some of those basics for how to
Speaker 1: ditch a debt and how to kind of kind of
Speaker 1: create a payment plan to make sure you're getting rid
Speaker 1: of it. Out of the way. But let's talk about
Speaker 1: maybe like the order of operations when it comes to
Speaker 1: debt payoff, like and and how you decide which If
Speaker 1: you have multiple debts, right, you might be just using
Speaker 1: one credit card and boom, it's it's a little bit easier.
Speaker 1: But you might also have multiple credit cards with balances,
Speaker 1: and it's hard to know which debt to pay off first.
Speaker 1: It's you might have some buy now, pay later debt
Speaker 1: as well, like you talked about. And that's a good question.
Speaker 1: I mean, I think the most important part of the
Speaker 1: debt pay off plan is is what is what we've
Speaker 1: just talked about. It's discovering how much you owe and
Speaker 1: how much you can dedicate towards paying off those debts,
Speaker 1: and then you know, creating that actual timeline. But it's
Speaker 1: important to configure an order of operations to to decide
Speaker 1: which debts you're gonna attack first. And and I think really,
Speaker 1: when it comes down to it, that question is mostly
Speaker 1: it mostly comes down to the snowball versus avalanche approach.
Speaker 1: That's right, Yeah, which one should you go with? And
Speaker 1: actually we have an article on that up on the website.
Speaker 1: So if you want to dive in deep here. We
Speaker 1: would recommend for you to check that out. We'll sure
Speaker 1: too linked to that article in the show notes for
Speaker 1: this episode. But in short, the snowball approach, that's the
Speaker 1: method where you are paying off your debts with the
Speaker 1: smallest balance first. This method prior prioritizes the psychological winds,
Speaker 1: the psychological satisfaction that you're gonna derive from getting rid
Speaker 1: of a small debt and then getting you get that
Speaker 1: endorphin rush, which will then only embolden your resolved to
Speaker 1: pay off that next debt even more quickly. Uh. And
Speaker 1: then you've got the debt avalanche method, and it prioritizes
Speaker 1: not the psychological side of things, but it prioritizes the numbers,
Speaker 1: like the cold hard facts, by paying off whichever debt
Speaker 1: in your life has the highest interest rate first. So
Speaker 1: this is it's all about the math, it's not psychology
Speaker 1: at all. And so which one is right for you? Well,
Speaker 1: I think it depends on your personality. It depends on
Speaker 1: a lot of the different things in your specific given circumstance.
Speaker 1: It depends on some of the debt that you have
Speaker 1: and the balances that you have. But at the end
Speaker 1: of the day, we think that something more of a
Speaker 1: hybrid approach is uh, that might be the best approach
Speaker 1: for many folks. The toyota prius of debt payoff methods,
Speaker 1: you might say, and I think you're right. I think
Speaker 1: if you were put a gun to my head and
Speaker 1: you're saying, which one done, avalanche, debt snowball, first off,
Speaker 1: don't do that because that would scare me. But debt snowball,
Speaker 1: I think is is something I think early on in
Speaker 1: our podcasting days, we would have been like, oh, we
Speaker 1: totally knocked the snowball. Yeah, we were Avalanche people because
Speaker 1: we're all about the facts. It's all about the numbers.
Speaker 1: But the more you learn about personal finance, the more
Speaker 1: you learned about the deep psychology that's play. And the
Speaker 1: more I'm married to someone who's becoming a uh, you know,
Speaker 1: working to become a licensed therapist. It's like psychology. It
Speaker 1: impact is a big rol our history are you know,
Speaker 1: all so many things going on underneath the surface in
Speaker 1: our brains and our bodies, like impact how we we
Speaker 1: tackle things. And so I do think that that psychological
Speaker 1: aid of getting rid of one debt like it can
Speaker 1: help build progress for people. Sure, And the fact is
Speaker 1: if it if it was only about the numbers, well
Speaker 1: you wouldn't be in debt to begin with because you
Speaker 1: would have seen the interest rate. You would have known
Speaker 1: that this is and end up costing you weigh more
Speaker 1: money down the road. And you would have said, I'm
Speaker 1: going to use credit cards the way that Matt and
Speaker 1: Joel recommend for me to write. But the fact is,
Speaker 1: if that is not how you naturally think, well, then
Speaker 1: we need to use the tools of psych psychology at
Speaker 1: those psychological wins, those emotional wins to your advantage, as
Speaker 1: opposed to using them against you. Yeah. Well, let's talk
Speaker 1: about that hybrid approach to a little bit like and
Speaker 1: maybe give an example here, because when we're talking about
Speaker 1: paying off let's say three different credit cards that all
Speaker 1: have between a an interest right between sixteen and nine,
Speaker 1: then we're really splitting heres and the snowball appear basically
Speaker 1: the same. The snowball approach is basically slam donk. Just
Speaker 1: pay off the lowest balance first. That's going to create
Speaker 1: the momentum boom. It's great, but if you let's say
Speaker 1: you toss a car loan into the mix that you
Speaker 1: financed a few years ago, we're not really seeing rates
Speaker 1: at one point nine percent these days. But let's say
Speaker 1: you locked in three years ago and you got that
Speaker 1: one point nine percent rate, that's a different story. Do
Speaker 1: we still want you to pay off that car loan?
Speaker 1: Of course, but there's such a massive disparity in the
Speaker 1: rates between what you owe on that car versus what
Speaker 1: you owe on the credit cards, and it's just so
Speaker 1: much worse that we'd rather see you even if that's
Speaker 1: the lowest balance that that that car loan, that car notes,
Speaker 1: we'd rather see you pay off the credit cards first, uh,
Speaker 1: and just the minimums on your car, because this is
Speaker 1: an instance where the specific type of debt, the specific
Speaker 1: interest rate matters, and and some people might be tempted
Speaker 1: to throw their mortgage in these calculations, and depending on
Speaker 1: your interest rate, like well, consumer debt is worse than
Speaker 1: these other kinds of debt, and so you just that's
Speaker 1: why you just have to be careful when you're coming
Speaker 1: up with these calculations so that you're not prioritizing the
Speaker 1: wrong thing first. And so yeah, just know that the
Speaker 1: higher the interest rate often the more important it is.
Speaker 1: And if the interest rates are close enough, then we
Speaker 1: would say snowball approach is great, but if they're far
Speaker 1: enough apart, that's when I think the hybrid approach makes
Speaker 1: the most sense. And if you're looking for a tool
Speaker 1: to help you create that payoff plan, if you if
Speaker 1: you don't want to just like sit down with a
Speaker 1: pen and paper or create your own Excel spreadsheet, but
Speaker 1: you want a software to help you out on debt
Speaker 1: dot it, we will link to it in the show notes.
Speaker 1: Undebt it is one of our favorite sites that helps
Speaker 1: you create a debt payoff plan if you want, yeah,
Speaker 1: some software to kind of have your back into where
Speaker 1: you can kind of track it and see it just
Speaker 1: helps you make that plan. That's always one of the
Speaker 1: my favorite resources that we always help check out if
Speaker 1: they're like I'm in debt, and especially if they have multiple,
Speaker 1: you know, multiple balances with different rates. It allows you to, h, yeah,
Speaker 1: create that hierarchy of which debts you're gonna attack for it. Again,
Speaker 1: just like we were talking about with why now do
Speaker 1: you need it? No? Can you do it yourself manually? Yes?
Speaker 1: But like does it help sometimes to be able to
Speaker 1: type some numbers into a piece of software and have
Speaker 1: it render everything for you so that you can more
Speaker 1: easily see your trajectory and and what that payoff plane
Speaker 1: is going to look like. Yeah, for a lot of people,
Speaker 1: that is a motivating factor and it's gonna help them
Speaker 1: actually stick to a plan. But now we've got more
Speaker 1: to get to. We want to talk about this foolproof
Speaker 1: plan to ditch holiday debt, and there are a few
Speaker 1: things you can actually do to speed up your progress.
Speaker 1: And we'll talk about how to do that and what
Speaker 1: to do if you're like I came up with a
Speaker 1: plan in and it said it was going to be
Speaker 1: thirty two years before I get out of this credit
Speaker 1: card debt. Like, if that's the case, then you might
Speaker 1: have to take more drastic measures. We'll talk about both
Speaker 1: of those things right after this. All right, man, let's
Speaker 1: continue to help folks on their way to becoming consumer
Speaker 1: debt free. We've got a few other suggestions in different
Speaker 1: ways to minimize the impact of your debt as you
Speaker 1: try to pay it off. Uh. And the first one
Speaker 1: is this is I don't know, I don't I don't
Speaker 1: want this to see him like, uh, the kind of moment,
Speaker 1: but uh, make more money when you have a bigger
Speaker 1: shovel that is going to allow you to dig yourself
Speaker 1: out of that hole even faster. A wallet hub survey
Speaker 1: found that fifty eight percent of folks would be willing
Speaker 1: to work longer hours to get out of debt. And
Speaker 1: we we like hearing that. We're all about work life balance,
Speaker 1: but if you took on too much debt over the holidays,
Speaker 1: you might actually want to take this approach. We're actually
Speaker 1: gonna give a bunch of ideasm how it is that
Speaker 1: you can increase your income in next week here on
Speaker 1: the show. But if you can increase your income, that
Speaker 1: will allow you to pay off crappy debt even faster.
Speaker 1: And of course you know, I mean, the best way
Speaker 1: to make more money in the long run is not
Speaker 1: to trade your time for money by like driving for
Speaker 1: Uber or taking online surveys that kind of thing. But
Speaker 1: it will quickly add ammunition to eradicate that debt in
Speaker 1: the near term, right like temporarily. If you are in
Speaker 1: a bind and you have some ridiculous debt where you're
Speaker 1: paying a dumb interest rate, then we are not above
Speaker 1: you taking some of these more drastic steps to make
Speaker 1: sure that you are out of that debt quickly. Yeah. Man,
Speaker 1: it's not often that we tell people to drive for
Speaker 1: Uber or you have to do some of these these
Speaker 1: um gig jobs where you beholden to these giant companies
Speaker 1: do with you whatever they want. Yeah, and we'd rather
Speaker 1: you make less money typically, but build something that could
Speaker 1: be more sustainable and potentially more lucrative for you over
Speaker 1: the years. But but if we're talking about getting rid
Speaker 1: of of some of this high interest debt and get
Speaker 1: rid of it more quickly, I think treating it like
Speaker 1: it's a serious problem and uh, signing up for whatever
Speaker 1: you can do to make a little extra income to
Speaker 1: make that debt payoff happen even more quickly is worth considering.
Speaker 1: It's like a tourniquet, like you are just trying to
Speaker 1: stop the bleeding. Yeah, we can worry about stitches later,
Speaker 1: but right now, just like whip off that belt and yeah,
Speaker 1: tighten that sucker. It doesn't have to be forever, right,
Speaker 1: even if it's just two months driving for Uber, so
Speaker 1: you can knock knock this out more quickly. That's that's fine.
Speaker 1: But let's talk to another thing that you can do
Speaker 1: and you should do in all likelihood. If you think
Speaker 1: this is as big of a problem as Matt and
Speaker 1: I do if you think this consumer debt is just
Speaker 1: a financial calamity, is that you should consider cutting your spending,
Speaker 1: and that there were a lot of folks in that
Speaker 1: same survey you just mentioned that said that they would
Speaker 1: cut out luxuries or skip vacations in order to get
Speaker 1: rid of their debt faster. Yeah, and I think those
Speaker 1: are both great choices. And again I feel like, you know,
Speaker 1: we're all about balance here. We don't want people working
Speaker 1: eighty hours a week normally, we won't want people skimming
Speaker 1: vacations for years on end or never buying anything they
Speaker 1: care about. Like we want people to be intentional with
Speaker 1: their spending too. But again, consumer debt should be treated
Speaker 1: like a real, severe problem. And I wouldn't want to
Speaker 1: spend personally a couple of thousand bucks on a beach
Speaker 1: vacation while credit card debt is still lingering in the background.
Speaker 1: I wouldn't want to be booking my beach vacation for
Speaker 1: for July and spending money that I don't have, adding
Speaker 1: to the problem. And so you know, dialing back you're
Speaker 1: spending on the big stuff until you've eradicated that debt
Speaker 1: is crucial. We also say don't forget the small expenses either, right,
Speaker 1: there likely some monthly spending categories where you can cut
Speaker 1: back at least temporarily in order to grow the gap,
Speaker 1: which is going to speed up the process. Again, that
Speaker 1: doesn't mean rice and beans right for months on hand,
Speaker 1: but there are smart ways maybe for a couple of months,
Speaker 1: though for a couple of weeks. I don't know how
Speaker 1: long you're being. Yeah, I think it can be a
Speaker 1: good approach. Yeah, it is a it's a real problem.
Speaker 1: And cutting back on spending, especially on some of those
Speaker 1: big things for the time being, until you've got it
Speaker 1: under control, until you've gotten rid of it, is I
Speaker 1: think it's a really important move to make. Yeah. Well,
Speaker 1: I mean again, it's temporary, right, and I think by
Speaker 1: making some of those more severe cuts, it can strengthen
Speaker 1: your resolve to actually stick with the program, to actually
Speaker 1: not want, you know, for you to say this sucks
Speaker 1: and I don't ever want to end up in this
Speaker 1: kind of situation. Again, I think it can can strengthen
Speaker 1: your resolve by actually experiencing some true, uh, temporary suffering
Speaker 1: when it comes to the money that you're spending. It's
Speaker 1: not again, like you said, this is not your new lifestyle.
Speaker 1: But maybe it is until you are out of that
Speaker 1: worst of the worst debts, like suffering with a purpose
Speaker 1: because it is I think it is doing is doing it.
Speaker 1: It's teaching you a deeper lesson and it's also at
Speaker 1: the same time helping you get out of this place
Speaker 1: more quickly. Exactly. Yeah. And so another way to make
Speaker 1: your debt less egregious and to catalyze the process is
Speaker 1: by asking for a lower APR from your current credit
Speaker 1: card provider. Asking for a lower rate. Obviously, if you
Speaker 1: don't ask, you you're certainly not going to receive You're
Speaker 1: certainly not going to get one. But seventy percent of
Speaker 1: folks who ask, according to recent survey, receives some sort
Speaker 1: of interest rate reduction. And we're talking about an average
Speaker 1: reduction somewhere in the ballpark of seven percent. That is huge,
Speaker 1: And of course that reduction will mean more of your
Speaker 1: dollars are then going to be attacking the debt balance,
Speaker 1: which is huge. And one of the reasons that we're
Speaker 1: highlighting this is because I'm afraid that like that we're
Speaker 1: a generation that where we're not advocating for ourselves enough.
Speaker 1: I think a lot of folks feel like it's personal
Speaker 1: where they feel like whoever they're talking to like that,
Speaker 1: they're then not going to be able to put food
Speaker 1: on the table because that there that they might be
Speaker 1: offering a lower rate. No, this this is just business
Speaker 1: and they either have the permission or they don't have
Speaker 1: their permission to lower your APR based on your credit score,
Speaker 1: maybe your payment history, a variety of different factors that
Speaker 1: they have to take into account. Right, you're not taking
Speaker 1: food out of the baby's mouth. The customer service representative
Speaker 1: you're talking to, you're just advocating for your for yourself
Speaker 1: and you are asking say, hey, based on my my
Speaker 1: longstanding relationships which with you with this bank as a customer,
Speaker 1: based on would you like to keep me around? Yeah,
Speaker 1: I'm basically a good customer for are you? Because I
Speaker 1: am willing to have this conversation? Yeah, yeah, will you?
Speaker 1: Will you now give me a little bit of a break.
Speaker 1: And I think they're willing to do that too because
Speaker 1: it engenders them to you. They want now now they
Speaker 1: they you're going to think of them as a company
Speaker 1: you want to continue to do business total because they
Speaker 1: were generous to you in a moment of pain. Absolutely, yeah,
Speaker 1: and so there's there's sort of like that element of
Speaker 1: it where it's just like, well, who am I to
Speaker 1: be asking? Uh, like why why why can't you know?
Speaker 1: Why wouldn't they just say no? So I feel like
Speaker 1: there's that side of it. Why wouldn't they proactively reach out?
Speaker 1: The norm? I rate that's not how it works, that's
Speaker 1: not how business works. But there's also sort of like
Speaker 1: the social norms and like mores associated with like asking
Speaker 1: for something, which we just actually publish an article on
Speaker 1: our side about asking for a discount, will link to
Speaker 1: that in the shop. It's because there are so many
Speaker 1: ways and and their their tips, I think, to help
Speaker 1: you do it the right way so you're more likely
Speaker 1: to get the answer as of meaning of yes instead
Speaker 1: of no. Yeah. I think a lot of times folks
Speaker 1: they're they're just too afraid of like rocking the boat. Uh,
Speaker 1: they're afraid of like offending whoever they're talking to, as
Speaker 1: opposed to just starting a versation. There's a way that
Speaker 1: you can go about this in a friendly way. Uh.
Speaker 1: You mentioned Costco earlier with a staining desk. That same trip,
Speaker 1: we're at Costco. We're grabbing pizzas for our families for
Speaker 1: a Friday night pizza movie night kind of thing. We're
Speaker 1: standing there getting ready to pick them up, and I
Speaker 1: was holding a bag of Meyer lemons and there's a
Speaker 1: lady there and we got to talking to her and
Speaker 1: she's like, man, Meyer Lemons. I didn't We've always been
Speaker 1: wanting to try those. And I was like, you want one?
Speaker 1: Which isn't a normal thing that you do with is
Speaker 1: standing there in the grocery store is like giving somebody
Speaker 1: some of your grocer but it's like a huge obviously
Speaker 1: it's Costco, so there's like there's a bunch of them
Speaker 1: in there. And she was like, well, yeah, but and
Speaker 1: so obviously I was like, yeah, sure, totally have one,
Speaker 1: and you autographed to know. But had she asked, I
Speaker 1: would have also been like, well, of course. I mean, granted,
Speaker 1: we were nice and kind of offered her one. But
Speaker 1: I think there's a way that you can go about
Speaker 1: asking for something in a way where you're building sort
Speaker 1: of good will, like be cheeky about it, right, like
Speaker 1: you're being a little irreverent about what you're asking for.
Speaker 1: If you can do it in kind of a funny way,
Speaker 1: if you can kind of do it in a kind way,
Speaker 1: I think a lot of times the answer that you're
Speaker 1: gonna hear is yes, I might just call up the
Speaker 1: credit card company the one number, and I might be like, hey,
Speaker 1: I'm sure you're getting this call. A lot a lot
Speaker 1: of people spent too much money at the end of
Speaker 1: last year. I'm one of them, Like, yeah, guilty is charged,
Speaker 1: and then start them. But I was really hoping to
Speaker 1: get that non to one and a half. What do
Speaker 1: you think, right? And like you gelve or thirteen right,
Speaker 1: And that at least is going to ensure that more
Speaker 1: of your payments are going to the principle and that
Speaker 1: you that your payment timeline is going to be shortened.
Speaker 1: So I think that's a really important one asking for
Speaker 1: a lower rate from your current issuer. Also, what about
Speaker 1: zero percent balance transfer cards? Matt, That's another way that
Speaker 1: you can take something that is pretty dang bad and
Speaker 1: turn it into something less awful. And and that's a
Speaker 1: that's another way to to just uh move your consumer
Speaker 1: debt around to make it less nasty and to make
Speaker 1: sure you can make more progress more quickly. And of course,
Speaker 1: like some debts are worse than others, like a three
Speaker 1: percent mortgage shouldn't be a top priority for you when
Speaker 1: you've got credit card debt lingering around. But but what
Speaker 1: if you could take a debt that looks really bad,
Speaker 1: It looks like a financial black eye, and you can
Speaker 1: just like, I don't do one of those killer makeup
Speaker 1: jobs with it, like and and nobody knows that you
Speaker 1: got punched in the eye. Well, that's kind of what
Speaker 1: transferring to a zero percent interest credit card can do
Speaker 1: for you. And by the way, we Matt, you wrote
Speaker 1: an article about the best balance transfer credit cards. You
Speaker 1: can go to how to money dot com slash balance
Speaker 1: transfer and you can read that list and you can
Speaker 1: find one if you're like, Man, I've got ten dollars
Speaker 1: with a credit card debt. I'm but if I can
Speaker 1: get it down to zero percent for twelve months, I
Speaker 1: can be rid of it without paying any interest, and
Speaker 1: I can do it much more quickly. Well, then this
Speaker 1: can be one of those methods to minimizing the impact
Speaker 1: of that debt as you're paying it off more quickly. Yeah,
Speaker 1: getting one means that you're gonna need to have a
Speaker 1: solid credit score, but it will also mean that you'll
Speaker 1: need to have the personal resolve to pay this debt
Speaker 1: off right because you know, transferring that debt to another
Speaker 1: piece of plastic and just continuing to spend like you've
Speaker 1: been doing like that is only going to do the
Speaker 1: whole deeper. It's possible to use this technique just to
Speaker 1: make your situation worse. You don't want to be shifting
Speaker 1: the chairs around on the deck of the Titanic. You
Speaker 1: want to prevent it from sinking. If you deploy the
Speaker 1: strategy before you're actually ready to make some permanent changes, uh,
Speaker 1: it's it's gonna end up making things worse for you
Speaker 1: for sure. Yeah. Some people think like, oh, if I
Speaker 1: just get the lower interest rate, that's going to solve
Speaker 1: my problems, and it's just not true. The plan is
Speaker 1: the biggest thing that having the plan, knowing the numbers
Speaker 1: and realizing how long it's going to take you to
Speaker 1: pay it off. Like these are just like uh, cherries
Speaker 1: on top of a Sunday. The sunday is the plan
Speaker 1: that you're gonna be able to create. And so, yeah,
Speaker 1: if you can lessen the pain of the debt, if
Speaker 1: you can make it less egregious, and if you can
Speaker 1: lower the interest rate on it, that's good because it's
Speaker 1: gonna benefit you and it's gonna allow you to pay
Speaker 1: it off more quickly, but there's also ways that you
Speaker 1: can screw that up, and so we don't want you to, yeah,
Speaker 1: take out other credit cards and then you know, add
Speaker 1: more consumer debt on to the pile that you already have.
Speaker 1: That you're making the situation worse at that point. But yeah,
Speaker 1: and let's talk about too. Matt I mentioned a minute
Speaker 1: ago about how somebody might have just so much debt
Speaker 1: and they are overwhelmed when they look at it that
Speaker 1: it's just that bad, right, that their consumer debt situation.
Speaker 1: And maybe it didn't happen just over the holidays. In
Speaker 1: all likelihood, if it's that bad, it's been happening over
Speaker 1: the course of years and years and years, and you
Speaker 1: have built up to the point where you're like, listen,
Speaker 1: I created one of these debt payoff plans that you
Speaker 1: talked about, and it just seemed insurmountable. Even at that point,
Speaker 1: it felt like I wasn't going to be able to
Speaker 1: make progress in any sort of timely manner. And sometimes
Speaker 1: you are so mired in debt that it becomes too
Speaker 1: hard to go it alone. And so maybe you are
Speaker 1: actually in too deep. And the truth is that this
Speaker 1: mountain of debt that you've accrued, it didn't happen overnight,
Speaker 1: like I said, and the fix isn't gonna happen in
Speaker 1: a week or two either, So it's important to know that.
Speaker 1: I think sometimes Matt people get into a situation over
Speaker 1: the course of a number of years and they want
Speaker 1: it to be remedied really quickly, but that's just not
Speaker 1: how it happened and when it fixed overnight, and hopefully
Speaker 1: you can fix it quicker than how long it took
Speaker 1: you to get into the mess in the first place.
Speaker 1: But it's just important to note that that you know
Speaker 1: it's it typically takes time to get out of this
Speaker 1: problem too. But if after running the numbers, it's gonna
Speaker 1: take you a lot of years to pay that debt
Speaker 1: off and it feels hopeless, we would say it's time
Speaker 1: to bring in the big guns and reach out to
Speaker 1: the not for profit folks at the NFCC or Money
Speaker 1: Management International, Unlike those for profit services that I talked about,
Speaker 1: who might you might hear advertised and they say, hey,
Speaker 1: pay us some money up front. You might see them
Speaker 1: on social media they you know, they're saying that they
Speaker 1: can they can help you get out of this debt.
Speaker 1: But for a small fee or sometimes a large fee.
Speaker 1: Often times they're gonna make it worse. Almost always are
Speaker 1: gonna make it worse. Well, the NFCC or Money Management International,
Speaker 1: those not for profit companies, they can help you put
Speaker 1: together a debt management plan that actually works, and they
Speaker 1: can even negotiate with creditors on your behalf. So we
Speaker 1: would say, go see a credit counselor. They can help
Speaker 1: you figure out the best way forward. If you run
Speaker 1: those numbers and you're like, it's it's worse than I
Speaker 1: even thought, that's when you're gonna want to like reach
Speaker 1: out to one of those companies, and typically it's free.
Speaker 1: Sometimes they'll charge very very modest amounts of money. I'm
Speaker 1: talking like sixty in order to see a debt counselor.
Speaker 1: But that's probably where you're gonna want to go. We
Speaker 1: will put links to both those organizations in the show notes.
Speaker 1: That's right, man. And one other thing that we would
Speaker 1: recommend is for you to celebrate some of the small
Speaker 1: victories along the way to paying down your debt. We
Speaker 1: would recommend for you to just treat yourself a little bit,
Speaker 1: not like Parks and Rex style treat yourself, but just
Speaker 1: find some different ways to mark your accomplishments, to mark
Speaker 1: the occasion. And it doesn't have to be and likely
Speaker 1: shouldn't be an expensive reward because obviously that will slow
Speaker 1: down your payoff payoff progress. But it's amazing how something
Speaker 1: that just that costs very little that or maybe something
Speaker 1: you already have on hand, or something that costs you nothing,
Speaker 1: how that can provide some additional motivation. You could just
Speaker 1: be a board game night with friends. You'd be like,
Speaker 1: that's my reward, or like I'm thinking of like a
Speaker 1: creative it's not even creative, but it's just like having
Speaker 1: a picnic in a like in your favorite park. But
Speaker 1: you might be paying off your first card here in
Speaker 1: a couple of months, once the weather warms up a
Speaker 1: little bit, invite some friends over, take a meal that
Speaker 1: you would have already eating at home. Maybe you can
Speaker 1: like show some two buck chuck, you know, like that's
Speaker 1: very affordable. That's the kind of wine. If you're into wine,
Speaker 1: you should be drinking cheap wine while you're paying off
Speaker 1: your debt. But take something like that to apart, because
Speaker 1: that is going to help you to mark the occasion.
Speaker 1: Not only that but you're also doing it with friends.
Speaker 1: That's something that they're gonna remember. They're gonna maybe even
Speaker 1: ask you about, like why are we doing this? Or
Speaker 1: you know, what's what's the special occasion? Which is really
Speaker 1: cool too because then it'll get you and your friends
Speaker 1: talking about money, and before you know it, you're all
Speaker 1: going to be getting richer, getting wealthier together. That's the
Speaker 1: kind of thing that we want to see you doing.
Speaker 1: We want you to pat yourself on the back a
Speaker 1: little bit here for making some smart choices and it'll
Speaker 1: make this journey a bit more enjoyable and less of
Speaker 1: a slog. It's not that we want we don't want
Speaker 1: you to intentionally make your life miserable miserable, but we
Speaker 1: do want you to make decisions that is going to
Speaker 1: leave more money in your bank account so that you
Speaker 1: can attack this debt and be done with it once
Speaker 1: and for all. Yeah, and we just don't want this
Speaker 1: debt lingering over you anymore. That we want you to
Speaker 1: be rid of it once and for all. And what
Speaker 1: we want you to looking ahead to, like the bigger
Speaker 1: and eight better things that you're that that you do
Speaker 1: want to achieve paying off this kind of debt often
Speaker 1: means you're looking kind of in the rear view mirror
Speaker 1: and set it through the windshield right in your life exactly,
Speaker 1: And so we want you to like, you know, you
Speaker 1: always need a rear mirror when you're driving a car,
Speaker 1: but we want you at least when it comes to
Speaker 1: your life, we want you to kind of be able
Speaker 1: to act that off. Well, that should be done with
Speaker 1: the spending, paying for the spending you did over the
Speaker 1: past year, and we want you to be thinking about
Speaker 1: what you can save up for and invest for so
Speaker 1: that you can think about building wealth and think about
Speaker 1: those bigger possibilities, right, creating more margin. You can't even
Speaker 1: get to that point when you've still got that debt
Speaker 1: lingering around. That's first priority. So absolutely hopefully we've given
Speaker 1: you enough tips to create an effective plan to get
Speaker 1: rid of it in hopefully not too much time. But Matt,
Speaker 1: let's get back to the beer that we had on
Speaker 1: this episode. This one is called Perpetual Composition. It's by
Speaker 1: Southern Grist who I believe they're out of Nashville, Is
Speaker 1: that correct? I think? So I can take a look
Speaker 1: here on the bottle, Yeah, Nashville, Tennessee. And this is
Speaker 1: perpetual Composition blend number two. So maybe we'll have additional
Speaker 1: blends here on the show. But what your thoughts on
Speaker 1: this one? If I can get some additional blends of
Speaker 1: this one, I'll take it. I'm all about it. It's
Speaker 1: delicious of it. You were just mentioning wine. This one
Speaker 1: has a lot of white wine fines. Actually sure, it's
Speaker 1: the sea so it's a Solera style food or beer
Speaker 1: aged for six months in a French Bordeaux fooder. Fancy. Yeah,
Speaker 1: and I guess what. We're also not in debt, so
Speaker 1: we can afford to splurge a little bit. Exactly, Well,
Speaker 1: this one definitely so my dad he always gets this
Speaker 1: white wine called govert Demeanor, but when we have Thanksgiving
Speaker 1: and uh, he has always called it Goosemeister for some reason. Goose.
Speaker 1: It's pretty goofy, but it's it's kind of a it's
Speaker 1: like more of like a dessert white wine. And I
Speaker 1: really don't drink wine very much, but I always look
Speaker 1: forward to it on Thanksgiving, even though I don't know
Speaker 1: anything about white wine, but this one has some of
Speaker 1: those elements. It's a little bit sweeter, kind of like
Speaker 1: one of those dessert white wines, but it's it's that
Speaker 1: golden sour. It's got more nuanced though, and I think
Speaker 1: part of that is the oak barrel aging. But I
Speaker 1: like everything I've had from Southern grist and this is
Speaker 1: one of the better ones. It's so good. Yeah, when
Speaker 1: when we poured it, it it just had like a beautiful
Speaker 1: I mean the sun was kind of shunning through. It's
Speaker 1: kind of it's been like a sun out, sudden hidden
Speaker 1: sun out, sun hidden kind of day, and like the
Speaker 1: rays hit it perfect. Oh yeah, yeah, Like right when
Speaker 1: I cracked this thing up and poured it, like the
Speaker 1: beams of light shot through the sun. It was just
Speaker 1: like sparkling. So it had this beautiful golden color. Uh,
Speaker 1: it was really carbonated initially. It's almost like champagne or
Speaker 1: like the a lot of effervescence coming up. But I
Speaker 1: think I feel like it was a nice balance of
Speaker 1: acidity and sweetness. It wasn't too over the top sweet
Speaker 1: for me. Um. It had that, yeah, that nice kind
Speaker 1: of tart acid profile as well, that combined with that
Speaker 1: depth that you get with the oak. If in particular, Yeah,
Speaker 1: if you like white wine, this is abs. Look up
Speaker 1: golden sours just in general because that is a style
Speaker 1: that you will it would likely find yourself gravitate towards.
Speaker 1: But if you know your beer and you're looking for
Speaker 1: an oak aged sour, would definitely recommend this perpetual composition
Speaker 1: by Southern Grist out of Tennessee most stuff. All right,
Speaker 1: that's gonna do it, Matt for this episode. And if
Speaker 1: you want, yeah, some of the links that we mentioned
Speaker 1: on this episode, you can find them up on our
Speaker 1: site at how to money dot com. There are also
Speaker 1: other helpful resources there too. We've got a lot of
Speaker 1: new money content that we're writing about that we're putting
Speaker 1: out on a weekly basis, and you can also sign
Speaker 1: up for our newsletter at how to money dot com
Speaker 1: slash newsletter. But Matt, that's gonna do it. Until next time,
Speaker 1: best Friends Out and best Friends Out