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Speaker 1: What's up, everybody.

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Speaker 2: Welcome to financial heresy, where we talk about how many

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Speaker 2: works so that you can make more, keep more, and

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Speaker 2: give more. Today we're going to be discussing the best,

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Speaker 2: the fastest way to get out of debt and why

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Speaker 2: specifically it is so important to do that Right now.

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Speaker 2: Today we live in a time that is more extreme

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Speaker 2: in terms of the risks that our country has faced

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Speaker 2: in a very long time. If you look at the

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Speaker 2: amount of debt that exists in our system, when you

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Speaker 2: look at the federal government, obviously, national debt is at

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Speaker 2: an all time high. The debt compared to the GDP,

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Speaker 2: which would be kind of like, you know, a measurement

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Speaker 2: of the country's net worth, although not exactly. You know,

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Speaker 2: like if you take your debt and you compare it

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Speaker 2: to all of the assets that you own. Let's see,

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Speaker 2: you owe one hundred twenty thousand dollars in debt, and

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Speaker 2: if you sold everything that you owned, you'd have one

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Speaker 2: hundred thousand dollars. You use that to pay off your debt,

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Speaker 2: you still owe twenty thousand. That would be a debt

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Speaker 2: to GDP ratio, or a debt to net worth, or

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Speaker 2: a debt debt to asset ratio, you know, one hundred

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Speaker 2: and twenty percent. The federal government has you know about

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Speaker 2: a debt to GDP ratio of about one hundred and

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Speaker 2: twenty percent right now. So if they were to command

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Speaker 2: and control, take control of the entire US economy, even

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Speaker 2: though it's private, it's you know, it doesn't belong to

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Speaker 2: the government, but the debt does. If they were able

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Speaker 2: to take that and then somehow find a buyer to

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Speaker 2: sell everything, all of our wealth, and then use all

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Speaker 2: that to pay off the national debt, there would still

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Speaker 2: be debt left over. So that's what a debt to

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Speaker 2: GDP ratio means, if it's over one hundred percent. Corporations

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Speaker 2: are extremely highly leveraged as well. Households have more debt

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Speaker 2: that they've ever had. That's both housing debt and non

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Speaker 2: house debt. That's credit card debt, that's student loans, that's

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Speaker 2: auto loans, it's personal loans, it's everything. It'sffice it to

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Speaker 2: say everybody has a ton of debt now. Interest rates

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Speaker 2: for a long time were like the lowest they've ever been,

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Speaker 2: especially in like twenty twenty and twenty twenty one. Interest

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Speaker 2: rates were crazy low. Many people have mortgages that are

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Speaker 2: you know, two and a half three, three and a

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Speaker 2: half percent. That's unprecedented historically speaking. And so people, individuals, corporations,

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Speaker 2: governments loaded up on a ton of debt because debt

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Speaker 2: was cheap. But what's happening now is that that is

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Speaker 2: that debt is is becoming more expensive. Interest rates are

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Speaker 2: going up. And so for those people who have you know,

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Speaker 2: a three percent mortgage, that they don't get affected by

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Speaker 2: that unless they have to move. If they have to move,

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Speaker 2: then you know, than they're screwed. So people aren't wanting

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Speaker 2: to move right now. But when you have, you know,

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Speaker 2: something like credit card debt, and that interest rate goes

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Speaker 2: from you know, an introductory rate of a year ago.

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Speaker 2: Two years ago you had a zero percent introductory rate,

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Speaker 2: and then it goes to ten percent, and then it

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Speaker 2: goes to sixteen percent, and then I think average now

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Speaker 2: is twenty percent or more. And in the beginning, if

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Speaker 2: you loaded up on debt when it was cheap, and

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Speaker 2: then you get into a situation now where your minimum

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Speaker 2: payments are increasing and you're not making any any headway

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Speaker 2: on your principle, it's nice to say that it's very easy.

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Speaker 1: Many Americans right now.

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Speaker 2: Are trapped in a cycle of debt, a cycle of

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Speaker 2: bad debt. And I know what this feels like. I

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Speaker 2: know what it feels like to be loaded up with

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Speaker 2: debt to the point where it feels like you are

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Speaker 2: not going to be able to escape from it. And

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Speaker 2: so we're going to go over My wife and I.

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Speaker 2: You know, when we got married, we paid off it

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Speaker 2: was thirty thousand dollars of debt and we did it

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Speaker 2: in nine months, and this was before we were making

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Speaker 2: any money. And so I'd like to share the process

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Speaker 2: and the steps, the strategies, the tactics, and the tricks

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Speaker 2: that we used, because today it's more important than ever

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Speaker 2: to be able to deleverage. It's more important than it's

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Speaker 2: ever been to be able to get out of debt.

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Speaker 2: It's more important than it's ever been to be able

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Speaker 2: to have a positive net worth because things are things

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Speaker 2: are getting hard, and they're going to get harder as

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Speaker 2: the government becomes a bigger and bigger burden on the economy,

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Speaker 2: interest rates go higher and higher. And so number one,

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Speaker 2: it's important to de leverage and be debt free because

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Speaker 2: that will allow you to survive. Number Two, you will

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Speaker 2: be able to then take advantage of deals. Everybody looks

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Speaker 2: at you know, twenty ten, twenty eleven and says, oh, man,

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Speaker 2: how nice would it have been to have some cash

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Speaker 2: to start buying real estate in twenty ten, twenty eleven.

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Speaker 2: While opportunities like that are coming, you don't want to

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Speaker 2: be the ones stuck in the gutter when those opportunities arise.

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Speaker 2: And so it's more important than ever today to be

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Speaker 2: able to be debt free, to get out of debt,

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Speaker 2: or at least get out of bad debt. So I'm

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Speaker 2: going to share the uh, share everything that we did.

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Speaker 2: And this was what year was this? This was about

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Speaker 2: nine years ago, and so obviously prices are higher. So

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Speaker 2: the inflation adjusted numbers for both income and the debt

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Speaker 2: level are higher today than they were for us. I

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Speaker 2: don't know what the exact numbers are when you adjust

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Speaker 2: them for inflation, because it depends on whether you're the

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Speaker 2: official inflation numbers or you know, the real inflation numbers.

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Speaker 2: So we're going to use the you know, the the

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Speaker 2: you know, twenty fourteen numbers, whatever the actual what the

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Speaker 2: dollar numbers were. So my wife and I got married,

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Speaker 2: I was making lesser minimum wage because I was working

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Speaker 2: at a job where, you know, basically working for a charity,

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Speaker 2: and I had to raise my own salary from from

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Speaker 2: donations and donors, and so you know, I worked full time.

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Speaker 2: But if I couldn't get enough people to donate to

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Speaker 2: prove my salary, then you know that that was basically

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Speaker 2: what I had, what I had to live on. So

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Speaker 2: ended up I was making less than minimum wage. And

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Speaker 2: then my wife was making thirty five thousand dollars a year,

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Speaker 2: and to me, that seemed like a lot. That was great,

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Speaker 2: and and so that was step number one, was we

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Speaker 2: got to figure out a way to make more money,

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Speaker 2: because I think together we I don't know, it was

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Speaker 2: something I don't even remember the exact amount. I was making,

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Speaker 2: like three dollars four dollars an hour or something. So

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Speaker 2: step number one is make more money because no matter

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Speaker 2: what you do, you're never going to be able to

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Speaker 2: dig your way out of a out of a hole.

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Speaker 2: You're only going to be able to get out of

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Speaker 2: a hole if you can add dirt back into it. Right,

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Speaker 2: if you're in a hole and you've got a shovel,

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Speaker 2: no amount of digging is going to get you out

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Speaker 2: of that hole. You've got to be able to add

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Speaker 2: dirt into the bottom of the hole so you can

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Speaker 2: fill in the hole and you can start climbing out.

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Speaker 2: Make that whole shallower and shallower until you can climb out.

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Speaker 2: So step number one for us was make more income.

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Speaker 2: And by the way, all these things, these are what

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Speaker 2: we did that worked for us, that helped us, and

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Speaker 2: my personality, I'm a little bit more extreme, and so

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Speaker 2: take what take from this what works for you. I'm

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Speaker 2: not saying this is what everybody has to do, or

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Speaker 2: that any other approach is wrong, but this worked the

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Speaker 2: best for us, and we had much better results than

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Speaker 2: anybody else that we knew. And so I think that,

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Speaker 2: you know, some of the things that we did were

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Speaker 2: were good and beneficial. So for us, we needed to

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Speaker 2: make more income because we had thirty thousand dollars of debt.

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Speaker 2: My wife made thirty five thousand. I basically made nothing.

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Speaker 2: You're not going to be able to get yourself out

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Speaker 2: of that hole in that situation. You just do the math.

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Speaker 2: You can't get out of that. So step number one

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Speaker 2: we had to make more money. So I got a job.

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Speaker 2: I got a you know, a real job where I

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Speaker 2: didn't have to ask friends and family for donations to

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Speaker 2: be able to provide for my salary. So I got

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Speaker 2: a job at Amazon. The role was a it was

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Speaker 2: like a global security role. I've talked about it on

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Speaker 2: the podcast before, but basically it was it was a

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Speaker 2: very monotonous, mundane It was a night shift job. I

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Speaker 2: was basically, you know, at a at a local center

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Speaker 2: kind of in charge of making sure that the security

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Speaker 2: teams around the different warehouses around the world were doing

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Speaker 2: their jobs. And so if there were different you know,

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Speaker 2: cameras or alarms or door locks, door you know, windows

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Speaker 2: that things got left open, then we would you know,

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Speaker 2: contact the local teams to have them fix them. And

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Speaker 2: one of the one of the worst jobs I've ever

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Speaker 2: had in terms of just like the meaninglessness of it,

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Speaker 2: but it was. It was forty thousand dollars was my

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Speaker 2: salary there, and so it was like, Okay, forty thousand

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Speaker 2: plus thirty five thousand is seventy five thousand. It's like

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Speaker 2: it's not it's not a ton, but it's definitely enough there.

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Speaker 2: I know plenty of people who are you know, making

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Speaker 2: one onto the six figures, who are still trapped in

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Speaker 2: cycles of debt and not being able to get ahead financially.

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Speaker 2: It's like, Okay, at a certain point, if you can

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Speaker 2: do the math and it'll work out, then, but it's

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Speaker 2: not working out in reality, then that's an action problem.

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Speaker 2: It's a habit problem, it's a discipline problem. It's not

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Speaker 2: an income problem. It's like the federal government right now,

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Speaker 2: they keep on trying to raise taxes and then they

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Speaker 2: keep on spending way more than they bring in taxes.

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Speaker 2: They've they're making you know, they're they're pulling four trillion

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Speaker 2: dollars out of the economy every single year for taxes,

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Speaker 2: but they're spending six trillion. It's like, you're never going

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Speaker 2: to be able to get ahead in that situation. And

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Speaker 2: it's not. At a certain point you have to take

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Speaker 2: a look inward and say, okay, is this an income

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Speaker 2: problem or is this an expenses problem? And initially for us,

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Speaker 2: it was an income problem. We did need more income,

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Speaker 2: and then once I got that job, now we're okay,

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Speaker 2: we're making seventy five thousand dollars, we owe thirty thousand.

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Speaker 2: Now keep in mind this was student debt. So I

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Speaker 2: know some people are in situations where maybe the interest

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Speaker 2: is higher, the minimum payments are higher, where you know,

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Speaker 2: you know, because for us it was it was we

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Speaker 2: chose to make it a high pressure situation because we

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Speaker 2: wanted to be debt free. And so I understand that

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Speaker 2: the mental pressure on some people might be more difficult,

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Speaker 2: but that's that can actually be a good thing. You

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Speaker 2: can use that to your advantage. Because for us, we

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Speaker 2: always had the temptation like, hey, if we want to

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Speaker 2: go back down to the minimum payment.

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Speaker 1: We could, So we had to force ourselves.

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Speaker 2: To continue along a difficult path even though nobody else

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Speaker 2: was lighting that fire under us. So you can always

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Speaker 2: reframe your situation. If you actually want to achieve a goal,

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Speaker 2: you can reframe your circumstance in a way that helps

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Speaker 2: you move forward. And so if you do have some

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Speaker 2: of that, you know, more intense high pressure debt, you know,

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Speaker 2: maybe it's thirty grand of credit cards instead of student

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Speaker 2: debt student loans, and it's like, all right, well, use that,

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Speaker 2: don't don't have, don't despise that, use that as motivation

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Speaker 2: as fuel. So we got our income up to the

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Speaker 2: seventy five, we had thirty thousand of debt, and and

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Speaker 2: so now we had to figure out, Okay, what's the

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Speaker 2: best path forward? To be able to attack this debt

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Speaker 2: as quickly as possible. And you know, after after taxes,

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Speaker 2: there's you know, seventy five thousand dollars. Obviously you don't

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Speaker 2: take that home. So that was our Those were like

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Speaker 2: our actual you know, salaries, not our not our take

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Speaker 2: home pay. And we looked at our take home pay

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Speaker 2: and it was something around it was something around thirty

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Speaker 2: let's see, let me let me do the math here.

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Speaker 2: So I was taken home two thousand dollars per month.

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Speaker 2: That was that was what I was keeping. And and

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Speaker 2: I think I was I was paying a little bit

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Speaker 2: more of the taxes that we.

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Speaker 1: Would have on mine. And then I believe, I believe

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Speaker 1: we had a little bit.

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Speaker 2: Maybe I was doing like twenty five hundred a month,

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Speaker 2: and then my wife was doing like three thousand dollars

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Speaker 2: a month, thirty three hundred dollars a month, something like that.

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Speaker 2: So what we did was we basically just said, okay,

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Speaker 2: my wife's salary goes towards the debt. My salary pays

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Speaker 2: the bills. And so that gave us like fifteen to

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Speaker 2: set fifteen hundred dollars something like that, maybe seventeen hundred

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Speaker 2: dollars every two weeks when she got paid to put

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Speaker 2: towards put towards debts. So we were doing like three

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Speaker 2: thousand dollars every month towards towards paying off off the

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Speaker 2: off the debt, and so that left like it was

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Speaker 2: like two thousand, maybe it was like, you know, twenty

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Speaker 2: two hundred and twenty three hundred dollars left over to

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Speaker 2: be able to just afford living. Now, I understand that,

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Speaker 2: like you know, today things are more expensive than they

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Speaker 2: were back then, but you know, most people, especially like

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Speaker 2: even in intro level jobs now, like I just drove

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Speaker 2: by in and out the other day and they're hiring

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Speaker 2: starting twenty bucks an hour and in and out, and

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Speaker 2: so that that's how much you know, that's forty thousand

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Speaker 2: dollars a year if you work full time, and it's

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Speaker 2: more much more than that if you do overtime, and

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Speaker 2: that's in and out, and so you know, at that time,

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Speaker 2: you know, in and out was probably you know, like

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Speaker 2: twelve or thirteen dollars an hour or something like that,

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Speaker 2: and so everything has gone up, is basically what I'm saying.

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Speaker 2: So we had to we had to get really tight obviously,

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Speaker 2: because you know, two thousand to twenty five hundred dollars

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Speaker 2: per month is not a ton to be able to

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Speaker 2: live off of. So this is this is the steps

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Speaker 2: that we took. So number one, we got a one

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Speaker 2: month emergency fund built up. I'll show you how we

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Speaker 2: did the expenses, but basically that meant that that's you know,

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Speaker 2: it was basically two grand in an emergency fund. And

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Speaker 2: uh and so that's that, you know, that's step number

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Speaker 2: one because if something happens, you want to be able

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Speaker 2: to cover your expenses for thirty days, you can you

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Speaker 2: can figure things out. You know, if let's say one

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Speaker 2: of you loses your job or something like that, you

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Speaker 2: can figure something something out in thirty days if you

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Speaker 2: really put your mind to it, if you really put

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Speaker 2: your uh, you know, your your your feet to the road,

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Speaker 2: you start doing the work, you put the work in,

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Speaker 2: you start making the calls, you start you know, going

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Speaker 2: to going to the you know, the interviews, whatever it

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Speaker 2: is that's needed. You can figure things out in one month.

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Speaker 2: And uh, and so we did one month's worth of

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Speaker 2: expenses in our emergency fund. The next thing, this is

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Speaker 2: where we'll spend you know, a significant amount of time

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Speaker 2: here is on the budget because This is where most people.

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Speaker 2: Most people just they fail before they start by not

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Speaker 2: getting the budget right. This is this is the blueprint.

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Speaker 2: This is the engine that will get you to where

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Speaker 2: you want to go. And so here are the steps

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Speaker 2: to do a proper budget. If your goal is to

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Speaker 2: get out of debt, the first thing you have to

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Speaker 2: do is you have to go and I would say

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Speaker 2: print out because it's just easier to flip through. You

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Speaker 2: get a pen, you get a highlighter, but you can

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Speaker 2: do it on the computer too if you want. You

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Speaker 2: get the last three months of statements for every single

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Speaker 2: one of your bank accounts and every single one of

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Speaker 2: your credit cards.

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Speaker 1: So you get.

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Speaker 2: Literally so that you have a line item list of

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Speaker 2: literally everything you have spent money on for the last

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Speaker 2: three months. And that's minimum. I would recommend probably doing

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Speaker 2: six months, but yeah, at least have to do three months.

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Speaker 1: So you get these.

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Speaker 2: You get these three months, and what you do is

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Speaker 2: you go through and you categorize all of your transactions

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Speaker 2: and you're so you're gonna open up an Excel spreadsheet

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Speaker 2: if you have a you know, if you're doing this

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Speaker 2: on a Windows computer or if you use Mac, then

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Speaker 2: you're gonna use numbers or you know, on anything. You

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Speaker 2: can do the Google Google's version Google sheets, I believe.

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Speaker 2: And so you're just gonna use a cheat and you're

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Speaker 2: going to list out every single transaction and then you're

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Speaker 2: going to categorize them and you can this is this

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Speaker 2: is there. You have some freedom here. You don't have

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Speaker 2: to follow the guidelines that like some of these financial gurus,

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Speaker 2: like you know, Dave Ramsey or whatever talk about. You

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Speaker 2: have the freedom to set these categories up anyway you want.

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Speaker 2: You know, everybody's got different needs, and so right here,

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Speaker 2: all you're doing is categorizing. You're organizing. You need to

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Speaker 2: get a feel for your cash fill. You need to

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Speaker 2: get a feel for where your money goes, because nine

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Speaker 2: times out of ten, when people have money problems, they

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Speaker 2: have absolutely no idea where their money goes. They think

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Speaker 2: they do, and then once they start looking, they're like, oh,

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Speaker 2: my gosh, I had no idea. I thought I was

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Speaker 2: spending you know, three hundred dollars a month on eating out.

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Speaker 2: I'm actually spending nine hundred dollars a month on eating out.

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Speaker 2: I thought I was spending four hundred dollars a month

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Speaker 2: on groceries. I'm actually spending twelve hundred dollars a month

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Speaker 2: on groceries. It's like most people have absolutely no idea

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Speaker 2: how much they spend. They they they're underestimate by at

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Speaker 2: least fifty percent. And it's not until you sit down

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Speaker 2: and you get the last three, four, five, six months

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Speaker 2: and start adding up all of the expenses and categorizing

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Speaker 2: them that you really see and you get a feel for, Okay,

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Speaker 2: every month for the last four months, I've spent in between,

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Speaker 2: you know, five hundred to seven hundred dollars on eating out,

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Speaker 2: and you just write it down. We're not making any

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Speaker 2: decisions here yet. We're not making any cuts here yet.

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Speaker 2: All we're doing is getting a really good, nitty gritty

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Speaker 2: grip on exactly what our financial situation is.

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Speaker 1: So you'll categorize it.

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Speaker 2: And the categories will be things like, you know, you'll

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Speaker 2: have eating out, and you'll have groceries, and you'll have rent,

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Speaker 2: and you'll have or mortgage, and you'll have homeowners insurance,

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Speaker 2: you'll have car insurance, you'll have gas, you'll have electricity,

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Speaker 2: you'll have you know, literally like just you categorize it all.

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Speaker 1: You just put it all.

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Speaker 2: Down and and on the areas that uh, that fluctuate.

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Speaker 2: Just go with you know, an average, an average number here. Now,

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Speaker 2: what you'll probably find is that the amount of money

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Speaker 2: that you're spending is equal to or more than the

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Speaker 2: amount of money you're making. Once you get everything listed out,

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Speaker 2: you'll say, Okay, here's how much we spend on our mortgage,

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Speaker 2: on our gas, on our food, on our entertainment, on movies,

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Speaker 2: on you know, on trips, whatever it is. You add

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Speaker 2: it all up, and you say, okay, every month we're

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Speaker 2: spending you know, five thousand dollars and we only make

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Speaker 2: four five hundred dollars in income every month when you know,

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Speaker 2: we count our paychecks together. Oh and by the way,

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Speaker 2: I'm just I'm you know, obviously I'm saying this through

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Speaker 2: the lens of you know, a married couple, because I'm

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Speaker 2: giving you the steps.

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Speaker 1: That my wife and I took.

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Speaker 2: This applies to single people, This applies to people in

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Speaker 2: you know, relationships, It applies if you want to do

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Speaker 2: this with a roommate or whatever it is, like, obviously

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Speaker 2: take this and apply it however it works best for you.

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Speaker 2: That's the reason why I'm doing it through this lines

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Speaker 2: is because that's you know, I'm just basically telling you

361
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Speaker 2: my story and what worked for us and uh, and

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Speaker 2: so you have to detail the transaction. You add them

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Speaker 2: up and then you see, okay, well how much income

364
00:19:23,480 --> 00:19:25,879
Speaker 2: do we have and you'll either be equal to or

365
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Speaker 2: you'll be spending a little bit more. And that's why

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Speaker 2: you have a debt problem, obviously, because how else would

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Speaker 2: you have a debt problem if you're not spending more

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Speaker 2: than you make. If you weren't spending more than you made,

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Speaker 2: then and you do have debt, that means you have

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Speaker 2: savings and you can pay off the debt from the

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Speaker 2: savings and then you're done, and you'd go no further

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Speaker 2: with this episode. And so you are at some point

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Speaker 2: spending more than you make. That's why you have a

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Speaker 2: debt problem. So you got to figure that out. You

375
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Speaker 2: got to look at you got to add it all up,

376
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Speaker 2: and you got to see, okay, how much are we

377
00:19:56,080 --> 00:20:00,440
Speaker 2: negative every single month? Now comes the hard part. And

378
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Speaker 2: if you're married, if you're in a relationship, this is

379
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Speaker 2: this is the part like where you really have to

380
00:20:05,800 --> 00:20:08,360
Speaker 2: have to come together and you say, hey, look, this

381
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Speaker 2: is not me fighting you, this is not you fighting me.

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Speaker 2: We are side by side, facing forward and there's a

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Speaker 2: big enemy, a big you know, a dragon, a monster

384
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Speaker 2: that we're attacking together here, because if you start to

385
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Speaker 2: attack each other, you're gonna you're gonna fail. You cannot

386
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Speaker 2: succeed with this because there will be so many things

387
00:20:27,240 --> 00:20:30,879
Speaker 2: trying to stop you from succeeding at this that if

388
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Speaker 2: you're not able to pull together and do it together,

389
00:20:33,600 --> 00:20:35,720
Speaker 2: side by side, and you're tearing each other apart at

390
00:20:35,760 --> 00:20:37,880
Speaker 2: the same time, it's just not gonna work. You gotta

391
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Speaker 2: be side by side, holding hands, you know, arms locked together,

392
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Speaker 2: moving forward against a common enemy, and.

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Speaker 1: Not each other.

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Speaker 2: So you got to look at this ruthlessly, and you

395
00:20:45,560 --> 00:20:48,680
Speaker 2: got to you gotta say, hey, look, okay, here are

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Speaker 2: all of the absolutely necessary expenditures. So mortgage, Yeah, that's

397
00:20:55,240 --> 00:20:59,720
Speaker 2: that's pretty necessary, rent, pretty necessary, uh, gas to get

398
00:20:59,720 --> 00:21:06,360
Speaker 2: to work, pretty necessary. You know, all the little expenses.

399
00:21:06,720 --> 00:21:09,680
Speaker 2: You add them up and you say, okay, if we

400
00:21:09,680 --> 00:21:12,120
Speaker 2: were forced to, you know, if we no longer had

401
00:21:12,200 --> 00:21:17,239
Speaker 2: access to credit cards and our income started dropping, like

402
00:21:17,400 --> 00:21:20,760
Speaker 2: what is the minimum what are our minimum expenses that

403
00:21:20,800 --> 00:21:24,080
Speaker 2: would prevent us from dying? Like what is the survival

404
00:21:24,160 --> 00:21:27,920
Speaker 2: threshold here? Like, yes, right now, we're spending five hundred

405
00:21:27,920 --> 00:21:31,320
Speaker 2: dollars a month on groceries. But that doesn't mean that

406
00:21:31,320 --> 00:21:36,280
Speaker 2: that grocery expense is necessary. Maybe only four hundred dollars

407
00:21:36,600 --> 00:21:41,680
Speaker 2: is necessary because instead of buying Chicken of the sea tuna,

408
00:21:42,119 --> 00:21:45,359
Speaker 2: you decide to get the off brand tuna. Instead of

409
00:21:45,359 --> 00:21:49,840
Speaker 2: getting Dukes or Helman's mayonnaise, you get store brand mayonnaise.

410
00:21:51,960 --> 00:21:55,920
Speaker 2: Maybe you're like I was, you're just eating way too much.

411
00:21:57,800 --> 00:22:00,520
Speaker 2: There's some savings right there. Maybe go on a little

412
00:22:00,520 --> 00:22:03,240
Speaker 2: bit of a diet and stop consuming so many of

413
00:22:03,280 --> 00:22:07,240
Speaker 2: your dollars in food, and there's some things you can

414
00:22:07,280 --> 00:22:10,280
Speaker 2: cut out there. So basically you have to be ruthless

415
00:22:10,520 --> 00:22:13,960
Speaker 2: with each other, attacking it together and say, okay, here's

416
00:22:14,000 --> 00:22:17,000
Speaker 2: our absolute minimum. So my wife and I we were married,

417
00:22:17,520 --> 00:22:20,520
Speaker 2: we didn't have any kids, so we looked at this

418
00:22:20,560 --> 00:22:22,240
Speaker 2: and we said, okay, we got a pair rent, but

419
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Speaker 2: we're going to move into a place that's extremely cheap.

420
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Speaker 2: So we got a place that was six hundred fifty bucks.

421
00:22:28,280 --> 00:22:30,479
Speaker 2: It was in a terrible area town, very dangerous, just

422
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Speaker 2: in the ghetto. It was just like a bad area,

423
00:22:34,200 --> 00:22:37,040
Speaker 2: but it was six hundred fifty bucks and the utilities

424
00:22:37,040 --> 00:22:39,439
Speaker 2: were like they were like included in that it was.

425
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Speaker 2: It was just, you know, really, those are not the

426
00:22:42,440 --> 00:22:44,560
Speaker 2: place the types of places that you want your kids

427
00:22:44,600 --> 00:22:48,439
Speaker 2: to live someday. But you gotta do what you gotta do.

428
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Speaker 2: So we moved into a place that was cheap. We

429
00:22:52,800 --> 00:22:55,480
Speaker 2: had We did keep our both of our cars because

430
00:22:55,480 --> 00:22:57,119
Speaker 2: we both had jobs, so that allowed us to have

431
00:22:57,200 --> 00:23:02,119
Speaker 2: the income and and then you know, we shopped around

432
00:23:02,119 --> 00:23:05,439
Speaker 2: for cheaper car insurance. We got the cheapest cell phone

433
00:23:05,640 --> 00:23:08,920
Speaker 2: plan that we could. Instead of going with Verizon, which

434
00:23:09,000 --> 00:23:11,239
Speaker 2: was you know, thirty forty dollars more per month, we

435
00:23:11,280 --> 00:23:14,920
Speaker 2: went with I think T Mobile, which was cheaper every month.

436
00:23:16,720 --> 00:23:20,600
Speaker 2: We we did not have home internet. This is one

437
00:23:20,600 --> 00:23:22,280
Speaker 2: of the expenses we cut out. Instead of spending a

438
00:23:22,320 --> 00:23:24,680
Speaker 2: hundred bus one hundred fifty bucks a month on home internet.

439
00:23:24,800 --> 00:23:27,080
Speaker 2: We said, look, we do everything on our cell phones.

440
00:23:27,200 --> 00:23:29,600
Speaker 2: If we want to use our iPad or our laptop,

441
00:23:29,880 --> 00:23:32,399
Speaker 2: we'll just do the hot spot from our phone. Because

442
00:23:32,920 --> 00:23:36,000
Speaker 2: we had it was like cheap unlimited hotspot data through

443
00:23:36,040 --> 00:23:40,320
Speaker 2: T Mobile, and so we we said, okay, that's that's

444
00:23:40,359 --> 00:23:42,200
Speaker 2: a huge expense we can cut out. I mean, when

445
00:23:42,200 --> 00:23:44,480
Speaker 2: you're only living off of twenty two hundred dollars a month,

446
00:23:45,280 --> 00:23:47,800
Speaker 2: if you you know, one hundred dollars is a big

447
00:23:47,840 --> 00:23:50,560
Speaker 2: deal if you cut that out. And so we were

448
00:23:50,720 --> 00:23:53,280
Speaker 2: very ruthless. We took a fine tooth comb and we

449
00:23:53,359 --> 00:23:54,880
Speaker 2: just said, nope, we're not going to do that. Nope,

450
00:23:54,880 --> 00:23:56,080
Speaker 2: we're not going to do that. Nope, we're not going

451
00:23:56,119 --> 00:23:58,840
Speaker 2: to do that. And we cut it down to the absolute,

452
00:23:59,000 --> 00:24:01,400
Speaker 2: absolute bear bones. We spent two hundred and fifty dollars

453
00:24:01,440 --> 00:24:05,960
Speaker 2: a month on groceries. And then we took all of

454
00:24:05,960 --> 00:24:09,560
Speaker 2: our bills and we updated them to annual bills because

455
00:24:09,880 --> 00:24:12,280
Speaker 2: for all the ones that gave you a discount to

456
00:24:12,320 --> 00:24:15,240
Speaker 2: do so, and usually a lot of you know, insurance

457
00:24:15,320 --> 00:24:17,040
Speaker 2: or whatever it is, they'll say, hey, you'll save five

458
00:24:17,200 --> 00:24:20,280
Speaker 2: percent if you pay us annually instead of every month,

459
00:24:22,240 --> 00:24:24,960
Speaker 2: and uh. And so we did that to save like

460
00:24:25,080 --> 00:24:29,119
Speaker 2: literally every single area we could you have to cut

461
00:24:29,480 --> 00:24:31,560
Speaker 2: and we were able to get our expenses down to

462
00:24:31,840 --> 00:24:34,080
Speaker 2: just my income. And then we took her entire income

463
00:24:34,119 --> 00:24:37,320
Speaker 2: and we use that to pay student loans twice a

464
00:24:37,400 --> 00:24:40,520
Speaker 2: month every single time she got her paycheck. Didn't even

465
00:24:40,640 --> 00:24:42,359
Speaker 2: do you even even allow that to sit in the

466
00:24:42,400 --> 00:24:45,160
Speaker 2: bank account, because the longer it stayed in the bank account,

467
00:24:45,560 --> 00:24:50,440
Speaker 2: the longer you think oh man, that'd be really nice

468
00:24:50,520 --> 00:24:52,240
Speaker 2: to be able to have this this month. That'd be

469
00:24:52,320 --> 00:24:54,040
Speaker 2: really nice to go on that trip. That'd be really

470
00:24:54,119 --> 00:24:57,399
Speaker 2: nice to uh, you know, buy that extra you know,

471
00:24:57,640 --> 00:24:59,800
Speaker 2: get get that car this month. I'd be really nice

472
00:24:59,840 --> 00:25:05,240
Speaker 2: to whatever it is. And so you don't even let

473
00:25:05,240 --> 00:25:07,720
Speaker 2: it sit. Every single time it comes in, it goes.

474
00:25:08,080 --> 00:25:10,520
Speaker 2: It goes towards that debt payment. So basically what we

475
00:25:10,560 --> 00:25:12,200
Speaker 2: did was we got really ruthless and he said, Okay,

476
00:25:12,200 --> 00:25:14,280
Speaker 2: this is exactly what we're going to spend. And here's

477
00:25:14,280 --> 00:25:17,639
Speaker 2: the deal. You have to do a weekly budget meeting.

478
00:25:18,400 --> 00:25:21,200
Speaker 2: I know some people say twice a month, some people

479
00:25:21,200 --> 00:25:25,400
Speaker 2: say once a month. I say weekly. Why because stuff happens,

480
00:25:25,680 --> 00:25:29,560
Speaker 2: things change, And so number one, you sit down before

481
00:25:29,600 --> 00:25:32,199
Speaker 2: the month starts. This is the most important one. So

482
00:25:33,520 --> 00:25:36,840
Speaker 2: you know, if you're planning the budget for June, you

483
00:25:36,920 --> 00:25:39,280
Speaker 2: have to sit down at the end of May and

484
00:25:39,359 --> 00:25:41,000
Speaker 2: you have to say, Okay, how much money are we

485
00:25:41,040 --> 00:25:43,040
Speaker 2: going to make this month? And you put it into

486
00:25:43,080 --> 00:25:45,520
Speaker 2: the budget sheet you're the one that you created for yourself,

487
00:25:45,560 --> 00:25:48,159
Speaker 2: the Excel document. You put it in and it's the

488
00:25:48,200 --> 00:25:50,640
Speaker 2: same every month probably unless you're in a sales position

489
00:25:50,840 --> 00:25:52,919
Speaker 2: or an hourly, you're doing overtime, whatever it is. But

490
00:25:53,000 --> 00:25:55,600
Speaker 2: you say, okay, here's how much my our paychecks are

491
00:25:55,640 --> 00:25:57,680
Speaker 2: going to total out. Here's our total income for the month.

492
00:25:57,760 --> 00:26:00,240
Speaker 2: So you write it in. Then you say, okay, okay,

493
00:26:00,240 --> 00:26:03,280
Speaker 2: here's the expenses for this month. Here's what we're going

494
00:26:03,359 --> 00:26:07,760
Speaker 2: to spend, and here's the amount we're going to pay

495
00:26:07,800 --> 00:26:11,560
Speaker 2: towards our debt, and here's the amount we're gonna spend

496
00:26:11,640 --> 00:26:15,280
Speaker 2: on these categories that are not our usual categories. So like,

497
00:26:15,320 --> 00:26:17,439
Speaker 2: you know, sometimes a wedding comes up and you have

498
00:26:17,520 --> 00:26:22,400
Speaker 2: to get a plane ticket or a gift, somebody's birthday

499
00:26:22,440 --> 00:26:24,480
Speaker 2: comes up, whatever it is. So I'm not saying that

500
00:26:24,520 --> 00:26:26,560
Speaker 2: you have to be, you know, a jerk to everybody

501
00:26:26,560 --> 00:26:29,000
Speaker 2: around you, but I am saying you have to ignore

502
00:26:29,040 --> 00:26:32,199
Speaker 2: other people's expectations of you. Because other people expect you

503
00:26:32,240 --> 00:26:34,000
Speaker 2: to live in a nicer place they can come over

504
00:26:34,040 --> 00:26:36,919
Speaker 2: and visit. Other people expect you to have a you know,

505
00:26:37,560 --> 00:26:40,000
Speaker 2: you know, WiFi when they come over. Other people will

506
00:26:40,040 --> 00:26:43,160
Speaker 2: expect that, you know, whatever it is. You know, your

507
00:26:43,720 --> 00:26:47,320
Speaker 2: situation is going to be different than than ours. But

508
00:26:47,640 --> 00:26:51,440
Speaker 2: you have to ignore people's recommendations and expectations because everybody

509
00:26:51,440 --> 00:26:54,280
Speaker 2: else is normal, and normal people are broke and they

510
00:26:54,280 --> 00:26:55,919
Speaker 2: are miserable. And so if you don't want to be

511
00:26:55,920 --> 00:26:58,680
Speaker 2: broken miserable, you can't do what all the broken, miserable

512
00:26:58,720 --> 00:27:01,920
Speaker 2: people do. And that means you're gonna be viewed as abnormal,

513
00:27:01,960 --> 00:27:05,000
Speaker 2: and that's okay. I don't want to be normal. So

514
00:27:05,040 --> 00:27:07,160
Speaker 2: you sit down before the month begins and you say,

515
00:27:07,160 --> 00:27:09,200
Speaker 2: this is exactly the number of dollars I'm gonna get.

516
00:27:09,600 --> 00:27:12,800
Speaker 2: This is exactly where we are going to spend every

517
00:27:12,840 --> 00:27:16,600
Speaker 2: single one of those dollars. So you pre plan the

518
00:27:16,680 --> 00:27:21,240
Speaker 2: destination for every single one of those dollars. And that

519
00:27:21,320 --> 00:27:23,920
Speaker 2: way when those money, when those dollars come in, they

520
00:27:24,080 --> 00:27:27,280
Speaker 2: already have a set destination. You already know where they're

521
00:27:27,280 --> 00:27:31,240
Speaker 2: gonna be going. There's already a plan for it. And

522
00:27:31,320 --> 00:27:34,880
Speaker 2: so when you when you when you get that money,

523
00:27:35,040 --> 00:27:40,840
Speaker 2: it goes out to the pre planned places. I say,

524
00:27:40,880 --> 00:27:43,440
Speaker 2: we have you have a weekly meeting because stuff comes

525
00:27:43,520 --> 00:27:46,199
Speaker 2: up and stuff changes, so there may be situations in

526
00:27:46,240 --> 00:27:51,080
Speaker 2: which you need to change things around, like hey, this happened,

527
00:27:51,119 --> 00:27:52,919
Speaker 2: we don't have any rooms, so we're gonna have to

528
00:27:53,000 --> 00:27:55,840
Speaker 2: cut down a little bit on our groceries, you know,

529
00:27:55,920 --> 00:27:58,360
Speaker 2: like spend ten US dollars, like we need to find

530
00:27:58,359 --> 00:28:00,919
Speaker 2: a cube on or something like we or maybe like

531
00:28:01,040 --> 00:28:02,679
Speaker 2: you know some you got to have a little bit

532
00:28:02,720 --> 00:28:04,639
Speaker 2: of fun, a little bit of So we did like

533
00:28:04,640 --> 00:28:06,520
Speaker 2: I don't know, fifty dollars a month for eating out.

534
00:28:06,560 --> 00:28:08,640
Speaker 2: So it was like twice a month we were able

535
00:28:08,680 --> 00:28:11,439
Speaker 2: to go out to like a really cheap restaurant. And

536
00:28:11,480 --> 00:28:13,280
Speaker 2: so maybe one month you have to cut that out

537
00:28:13,320 --> 00:28:15,399
Speaker 2: to be able to buy something else. Whatever it is, like,

538
00:28:15,480 --> 00:28:19,280
Speaker 2: you're going to have things that come up. Maybe you

539
00:28:19,440 --> 00:28:22,080
Speaker 2: ended up having to spend more money than you expected

540
00:28:22,160 --> 00:28:24,400
Speaker 2: in a certain category. So you got these weekly meetings

541
00:28:24,440 --> 00:28:26,000
Speaker 2: just to make sure you're on track. Did we get

542
00:28:26,040 --> 00:28:28,680
Speaker 2: the paychecks? And then you monitor your bank accounts because

543
00:28:28,680 --> 00:28:31,640
Speaker 2: you've been living life large as if you were rich

544
00:28:31,840 --> 00:28:34,240
Speaker 2: for a very long time, got you into problems of debt.

545
00:28:34,720 --> 00:28:37,639
Speaker 2: So you may wind up halfway through the month and

546
00:28:37,720 --> 00:28:40,800
Speaker 2: you realize where did we were supposed to have three

547
00:28:40,880 --> 00:28:42,640
Speaker 2: hundred dollars more right now than we do right now?

548
00:28:42,640 --> 00:28:44,280
Speaker 2: Where'd that money go? So you got to have those

549
00:28:44,320 --> 00:28:47,520
Speaker 2: weekly meetings. You look through your bank accounts and you say, okay,

550
00:28:48,160 --> 00:28:50,800
Speaker 2: that was an unexpected expense from something I signed up for.

551
00:28:50,840 --> 00:28:53,480
Speaker 2: A year ago that I forgot about. It just recharged again,

552
00:28:53,800 --> 00:28:55,560
Speaker 2: So you got to go cancel. You gotta go get

553
00:28:55,560 --> 00:28:58,320
Speaker 2: your refund. So this you've got to keep track. You

554
00:28:58,400 --> 00:29:01,160
Speaker 2: got to be watching. So these weekly meetings, what you're

555
00:29:01,160 --> 00:29:03,640
Speaker 2: doing is you're reconciling the accounts. So you look at

556
00:29:03,640 --> 00:29:07,000
Speaker 2: your bank account, you look at your statements, your cards, everything.

557
00:29:07,160 --> 00:29:10,280
Speaker 2: You say, okay, this is how much we're spending. This

558
00:29:10,360 --> 00:29:13,240
Speaker 2: is happening according to plan. This is the money came in,

559
00:29:13,400 --> 00:29:16,520
Speaker 2: the money went out, all right, everything's good. The longest

560
00:29:16,520 --> 00:29:18,960
Speaker 2: meetings will be the ones right before the month starts,

561
00:29:18,960 --> 00:29:21,720
Speaker 2: where you're making the plan for the following month. And

562
00:29:22,360 --> 00:29:24,280
Speaker 2: the short meetings will be the weekly ones just to

563
00:29:24,280 --> 00:29:30,320
Speaker 2: make sure everything is on track. Now, everything left over

564
00:29:30,440 --> 00:29:34,840
Speaker 2: once you know, you butcher your your budget and you

565
00:29:35,280 --> 00:29:37,560
Speaker 2: get as much money freed up as possible to attack

566
00:29:37,640 --> 00:29:40,040
Speaker 2: the debt. So what is the best plan of attack

567
00:29:40,320 --> 00:29:44,000
Speaker 2: for that debt? There's two approaches, and I want to

568
00:29:44,040 --> 00:29:49,600
Speaker 2: emphasize that neither of these are incorrect. These are preferences

569
00:29:49,920 --> 00:29:54,160
Speaker 2: that will work best based on your personality. So we're

570
00:29:54,160 --> 00:29:56,480
Speaker 2: going to look at these from the two personality types.

571
00:29:56,600 --> 00:29:59,880
Speaker 2: I call this personality number one. I call the machine.

572
00:30:00,480 --> 00:30:04,000
Speaker 2: Personality number two, I call that animal. So these are

573
00:30:04,040 --> 00:30:08,400
Speaker 2: like I name these very intentionally because these are these

574
00:30:08,400 --> 00:30:11,880
Speaker 2: are both good. There's neither one of these is bad.

575
00:30:11,920 --> 00:30:13,480
Speaker 2: It's not like one is good and one is bad.

576
00:30:14,480 --> 00:30:16,880
Speaker 2: Because each of these has advantages that will allow you

577
00:30:16,920 --> 00:30:19,560
Speaker 2: to you know, if you use them to your advantage,

578
00:30:19,560 --> 00:30:23,360
Speaker 2: you can succeed financially, like crazy, going down either one

579
00:30:23,360 --> 00:30:26,040
Speaker 2: of these paths, depending on which one is your personality.

580
00:30:27,160 --> 00:30:29,120
Speaker 2: One is the machine, one is the animal. These are

581
00:30:29,120 --> 00:30:31,280
Speaker 2: both good. These are you know, the monster, the fire

582
00:30:31,320 --> 00:30:34,280
Speaker 2: inside of you. So the machine, what is the machine?

583
00:30:34,280 --> 00:30:38,560
Speaker 2: This is a person who is very low in volatility,

584
00:30:38,720 --> 00:30:44,240
Speaker 2: very low in neuroticism, somebody who is unemotional about making

585
00:30:44,280 --> 00:30:48,400
Speaker 2: decisions that you know, you don't get emotionally affected by

586
00:30:48,480 --> 00:30:55,280
Speaker 2: making decisions or uh. And when when something comes up,

587
00:30:55,320 --> 00:30:57,840
Speaker 2: it's just like, well, this was the plan, obviously we're

588
00:30:57,880 --> 00:31:01,440
Speaker 2: gonna do that. And so you're it's more of a robotic,

589
00:31:02,040 --> 00:31:06,120
Speaker 2: low emotion machine like approach. And so if you're the machine,

590
00:31:06,600 --> 00:31:08,520
Speaker 2: then that's a good thing. Think of yourself, I'm a machine.

591
00:31:08,520 --> 00:31:10,320
Speaker 2: I'm gonna you know, I'm gonna I'm gonna go accomplish

592
00:31:10,360 --> 00:31:11,440
Speaker 2: my goals and nothing can get.

593
00:31:11,280 --> 00:31:11,720
Speaker 1: In my way.

594
00:31:12,080 --> 00:31:16,360
Speaker 2: The other personality is the animal. You got this aggressive

595
00:31:16,920 --> 00:31:21,200
Speaker 2: uh animal like you know, monster inside of you that

596
00:31:21,280 --> 00:31:24,200
Speaker 2: propels you towards your goals. Now you are going to

597
00:31:24,320 --> 00:31:26,640
Speaker 2: have a lot more this. The animal is a lot

598
00:31:26,680 --> 00:31:28,480
Speaker 2: more volatile, has a lot is a lot higher in

599
00:31:29,040 --> 00:31:35,080
Speaker 2: UH neuroticism, and can be easily influenced by internal emotions.

600
00:31:35,120 --> 00:31:37,600
Speaker 2: And when a decision comes up that's difficult path one

601
00:31:37,720 --> 00:31:43,280
Speaker 2: or path two, depending on your state of mind at

602
00:31:43,280 --> 00:31:47,080
Speaker 2: the time, it can sway which way you want to move,

603
00:31:47,200 --> 00:31:51,120
Speaker 2: so you are less analytical about things, more swayed by emotion.

604
00:31:51,240 --> 00:31:54,800
Speaker 2: And just so you know, I'm the animal and I

605
00:31:55,120 --> 00:31:57,920
Speaker 2: this is where self awareness comes in. I didn't know

606
00:31:58,040 --> 00:32:02,280
Speaker 2: this when when I was younger, when my wife and

607
00:32:02,320 --> 00:32:05,120
Speaker 2: I got married, you know, I would have said that

608
00:32:05,200 --> 00:32:07,400
Speaker 2: I was the machine. And so that's you know, one

609
00:32:07,440 --> 00:32:10,280
Speaker 2: of the one of the benefits to inviting somebody in

610
00:32:10,720 --> 00:32:13,560
Speaker 2: to a lifelong commitment to live together is that they

611
00:32:13,920 --> 00:32:16,880
Speaker 2: show you who you really are. And so I realize

612
00:32:16,880 --> 00:32:20,000
Speaker 2: now that I am the animal type. And so we

613
00:32:20,120 --> 00:32:22,680
Speaker 2: got these two. We've got these two personalities, the machine

614
00:32:22,720 --> 00:32:24,640
Speaker 2: and the animal, and they're both good, but they change

615
00:32:24,640 --> 00:32:26,720
Speaker 2: which approach you should take to get out of debt

616
00:32:27,160 --> 00:32:30,920
Speaker 2: the fastest and the easiest. So what the machine should

617
00:32:30,920 --> 00:32:36,120
Speaker 2: do is pay off the lowest interest debt first. That's

618
00:32:36,160 --> 00:32:42,440
Speaker 2: it very simple, and so I'm sorry, the highest interest

619
00:32:42,520 --> 00:32:45,960
Speaker 2: rate debt first. So if you've got a credit card

620
00:32:46,040 --> 00:32:49,880
Speaker 2: that's charging you twenty five percent, another credit card that's

621
00:32:49,960 --> 00:32:53,040
Speaker 2: charging you twenty percent, another credit card is charging you

622
00:32:53,120 --> 00:32:56,800
Speaker 2: sixteen percent, and an auto loan that's charging you nine percent,

623
00:32:56,840 --> 00:33:00,280
Speaker 2: and a student loan that's charging you six percent, in

624
00:33:00,320 --> 00:33:04,320
Speaker 2: that order, pay off first, take all of your well

625
00:33:04,480 --> 00:33:07,520
Speaker 2: number one, make your minimum payments on everything. Number two,

626
00:33:07,640 --> 00:33:09,760
Speaker 2: take all that extra income that you freed up when

627
00:33:09,760 --> 00:33:13,920
Speaker 2: you got the crazy aggressive budget. Take all that extra

628
00:33:14,000 --> 00:33:16,800
Speaker 2: money and pay off the highest interest rate debt first,

629
00:33:17,120 --> 00:33:19,240
Speaker 2: that twenty five percent interest rate credit card.

630
00:33:19,760 --> 00:33:20,400
Speaker 1: Pay that off.

631
00:33:20,960 --> 00:33:24,040
Speaker 2: From there, you then take all that money plus the

632
00:33:24,080 --> 00:33:26,680
Speaker 2: minimum payment from before, because that one's gone now and

633
00:33:26,760 --> 00:33:30,080
Speaker 2: you snowball that. You avalanche that. You do that, and

634
00:33:30,160 --> 00:33:33,840
Speaker 2: attack the next highest interest rate debt. Doesn't matter what

635
00:33:33,960 --> 00:33:36,280
Speaker 2: kind of debt it is, whether it's credit card, student loans,

636
00:33:36,400 --> 00:33:39,040
Speaker 2: auto loans, personal loans, anything like that. You just go

637
00:33:39,120 --> 00:33:42,960
Speaker 2: in order of interest. This is something that the machine

638
00:33:43,520 --> 00:33:47,160
Speaker 2: needs to do because number one, mathematically, this is the

639
00:33:47,280 --> 00:33:49,800
Speaker 2: fastest way to get out of debt. If you are

640
00:33:49,880 --> 00:33:53,360
Speaker 2: able to do this with the considering the same amount

641
00:33:53,360 --> 00:33:54,840
Speaker 2: of money. You have two people that have the same

642
00:33:54,840 --> 00:33:56,840
Speaker 2: amount of money to devote towards getting out of debt.

643
00:33:57,160 --> 00:34:00,920
Speaker 2: The machine will get out of debt sooner doing it

644
00:34:00,960 --> 00:34:04,000
Speaker 2: this way, because you're getting rid of the one that

645
00:34:04,120 --> 00:34:09,040
Speaker 2: costs the most first, and so just mathematically speaking, obviously

646
00:34:09,320 --> 00:34:10,600
Speaker 2: that's going to get you out of debt a little

647
00:34:10,640 --> 00:34:14,520
Speaker 2: bit faster. Here's the deal, though it's not an insane

648
00:34:14,680 --> 00:34:16,279
Speaker 2: I mean, it depends on how much debt you have.

649
00:34:16,360 --> 00:34:18,160
Speaker 2: If you have got, you know, two hundred thousand dollars

650
00:34:18,239 --> 00:34:21,160
Speaker 2: worth of debt, not including your house, then you know,

651
00:34:21,840 --> 00:34:24,600
Speaker 2: it could be the difference between you know, it could.

652
00:34:24,400 --> 00:34:25,400
Speaker 1: Be years of difference.

653
00:34:26,840 --> 00:34:29,520
Speaker 2: But for the average person, it's not going to mean

654
00:34:29,560 --> 00:34:32,680
Speaker 2: a significant difference in time to get out of debt

655
00:34:32,719 --> 00:34:36,680
Speaker 2: between the two approaches. And to be honest, very few

656
00:34:36,719 --> 00:34:40,280
Speaker 2: people are the machine approach. And the reason why only

657
00:34:40,320 --> 00:34:43,279
Speaker 2: somebody who knows they are absolutely the machine should take

658
00:34:43,320 --> 00:34:46,480
Speaker 2: this approach is because it's very difficult to do it

659
00:34:46,520 --> 00:34:51,839
Speaker 2: this way. You will be discouraged because you will not

660
00:34:52,040 --> 00:34:55,680
Speaker 2: make any progress at first. It will be a lot

661
00:34:55,719 --> 00:35:00,960
Speaker 2: slower in terms of when you see milestones get hit. Now,

662
00:35:01,000 --> 00:35:03,080
Speaker 2: most people are in the camp that I was, the

663
00:35:03,239 --> 00:35:06,239
Speaker 2: animal approach, which is good and you use it to

664
00:35:06,280 --> 00:35:11,720
Speaker 2: your advantage, but you're swayed by emotions at least somewhat,

665
00:35:11,880 --> 00:35:16,719
Speaker 2: and so small wins that release that dopamine hit can

666
00:35:16,760 --> 00:35:22,719
Speaker 2: be extremely helpful in achieving any goals. So an example

667
00:35:22,719 --> 00:35:25,840
Speaker 2: of this when I started my business. It was July

668
00:35:26,000 --> 00:35:30,279
Speaker 2: twenty nineteen. Six months later in December. Five months later,

669
00:35:30,320 --> 00:35:34,239
Speaker 2: in December of twenty nineteen, I was considering throwing in

670
00:35:34,280 --> 00:35:37,280
Speaker 2: the towel and starting to apply for jobs again because

671
00:35:39,440 --> 00:35:44,120
Speaker 2: I didn't see it working. In December, I got my

672
00:35:44,280 --> 00:35:49,200
Speaker 2: first YouTube video that got over one thousand views. I

673
00:35:49,239 --> 00:35:53,560
Speaker 2: crossed the thousand subscriber mark, so I was able to

674
00:35:54,120 --> 00:35:59,400
Speaker 2: apply to YouTube to get my channel monetized, and I

675
00:35:59,440 --> 00:36:05,200
Speaker 2: got my first online sale of one of my online courses. Now,

676
00:36:06,000 --> 00:36:08,680
Speaker 2: all three of those things together resulted in a grand

677
00:36:08,800 --> 00:36:12,960
Speaker 2: total of like two hundred ninety five dollars, you know,

678
00:36:13,080 --> 00:36:16,799
Speaker 2: from the business. So it's it was obviously it's not

679
00:36:16,880 --> 00:36:18,840
Speaker 2: enough to pay the bills. It's not recurring, that's not

680
00:36:19,040 --> 00:36:21,759
Speaker 2: passive income, that's not anything. So there was there was

681
00:36:21,880 --> 00:36:25,520
Speaker 2: nothing like, objectively speaking, that should have made me say, okay,

682
00:36:25,560 --> 00:36:28,520
Speaker 2: that's enough to keep on going now. But the dopamine

683
00:36:28,560 --> 00:36:32,439
Speaker 2: hit the mental the encouragement, the motivation that that gave

684
00:36:32,480 --> 00:36:36,000
Speaker 2: me to say, hey, I just crossed these few milestones.

685
00:36:36,680 --> 00:36:39,160
Speaker 2: Now I don't feel like throwing in the towel anymore.

686
00:36:39,360 --> 00:36:41,239
Speaker 2: That allowed me to keep on going. And it was

687
00:36:41,480 --> 00:36:44,720
Speaker 2: just a few short months later when things really started

688
00:36:44,719 --> 00:36:47,719
Speaker 2: getting going for me. So I'm so glad. I'm so

689
00:36:47,840 --> 00:36:51,799
Speaker 2: thankful for those little tiny gifts, even though in objective

690
00:36:51,840 --> 00:36:55,600
Speaker 2: reality they were meaningless. For your emotions and to force

691
00:36:55,640 --> 00:36:58,640
Speaker 2: you to continue doing, you know, pushing forward towards your goal,

692
00:36:58,719 --> 00:37:03,360
Speaker 2: they're everything. So if you're the animal type like I am,

693
00:37:03,520 --> 00:37:07,840
Speaker 2: you need to attack the smallest dollar amount of debt first.

694
00:37:08,160 --> 00:37:12,399
Speaker 2: So ignore the interest rates, look at all of your

695
00:37:12,400 --> 00:37:14,520
Speaker 2: different debts and you say, okay, I've got one hundred

696
00:37:14,560 --> 00:37:17,480
Speaker 2: dollars on this credit card, I've got one thousand dollars

697
00:37:17,560 --> 00:37:21,320
Speaker 2: on that credit card. I've got you know, ten thousand

698
00:37:21,360 --> 00:37:25,480
Speaker 2: dollars on that personal loan, and i've got you know,

699
00:37:25,640 --> 00:37:29,200
Speaker 2: twenty thousand dollars on that auto loan. Go in the

700
00:37:29,360 --> 00:37:36,560
Speaker 2: order of dollar amounts. Ignore the interest rates because you're

701
00:37:36,560 --> 00:37:38,399
Speaker 2: going to make your minimum payments on everything, so you're

702
00:37:38,400 --> 00:37:40,480
Speaker 2: not going to default on anything. You go to that

703
00:37:40,520 --> 00:37:45,799
Speaker 2: first one for one hundred dollars, and today it's gone.

704
00:37:45,840 --> 00:37:51,319
Speaker 2: The mental motivation you get from that is stunning. It's

705
00:37:51,360 --> 00:37:53,920
Speaker 2: only one hundred dollars. You've known for months. You could

706
00:37:53,920 --> 00:37:56,640
Speaker 2: get rid of that anytime you want. It's nothing, so

707
00:37:56,680 --> 00:38:00,600
Speaker 2: get rid of it. Small wins build more momentum, and

708
00:38:00,640 --> 00:38:02,920
Speaker 2: they lead to big wins. It proves to you that

709
00:38:02,960 --> 00:38:05,080
Speaker 2: you're the type of person that says you're going to

710
00:38:05,120 --> 00:38:06,640
Speaker 2: do what you say you're going to do and can

711
00:38:06,680 --> 00:38:10,120
Speaker 2: make progress towards your goals. So you go in that order,

712
00:38:10,400 --> 00:38:12,440
Speaker 2: and those small ones that happen at first will give

713
00:38:12,440 --> 00:38:14,600
Speaker 2: you so much momentum and so much energy and so

714
00:38:14,680 --> 00:38:17,359
Speaker 2: much motivation and discipline and clarity on achieving your goals

715
00:38:17,400 --> 00:38:17,959
Speaker 2: that it will make.

716
00:38:17,880 --> 00:38:18,680
Speaker 1: It much easier.

717
00:38:19,440 --> 00:38:23,000
Speaker 2: Yes, technically this process will take just a tad bit

718
00:38:23,120 --> 00:38:27,080
Speaker 2: longer than the process that the machine will go through.

719
00:38:28,040 --> 00:38:29,920
Speaker 2: But if you're an animal and you try and go

720
00:38:30,040 --> 00:38:33,359
Speaker 2: the path of the machine, you'll quit. You'll get two

721
00:38:33,360 --> 00:38:35,600
Speaker 2: months into this. You won't pay off any credit cards.

722
00:38:35,760 --> 00:38:38,319
Speaker 2: You'll still have all the same balances on everything, a

723
00:38:38,320 --> 00:38:40,280
Speaker 2: little bit less on the first one that you attacked,

724
00:38:40,560 --> 00:38:43,080
Speaker 2: but you won't actually complete anything. You won't check anything

725
00:38:43,080 --> 00:38:44,799
Speaker 2: off your list, you won't be able to scratch off

726
00:38:44,800 --> 00:38:46,200
Speaker 2: that credit card off your list.

727
00:38:46,640 --> 00:38:47,839
Speaker 1: And you'll quit.

728
00:38:48,719 --> 00:38:50,760
Speaker 2: And so, if you're an animal, go the animal route,

729
00:38:50,880 --> 00:38:55,000
Speaker 2: go in dollar amount order. If you're a machine, go

730
00:38:55,120 --> 00:38:59,040
Speaker 2: the highest interest rate route first. Now here are some

731
00:38:59,160 --> 00:39:03,960
Speaker 2: tips and tricks. Basically my wife and I approaching it

732
00:39:04,040 --> 00:39:05,759
Speaker 2: from you know this standpoint.

733
00:39:05,840 --> 00:39:07,600
Speaker 1: We paid off all of our debt.

734
00:39:07,640 --> 00:39:11,479
Speaker 2: It was just about nine months, give or take, and

735
00:39:12,080 --> 00:39:15,080
Speaker 2: we had I did the math, and it wasn't purely

736
00:39:15,120 --> 00:39:17,720
Speaker 2: from just our monthly income because we had just gotten married.

737
00:39:17,760 --> 00:39:20,239
Speaker 2: So we had like a few thousand dollars total that

738
00:39:20,280 --> 00:39:23,960
Speaker 2: we got in like gifts from our wedding from people,

739
00:39:24,360 --> 00:39:27,239
Speaker 2: and so we used that as well, and so that

740
00:39:27,360 --> 00:39:30,719
Speaker 2: knocked off a few thousand dollars. But altogether we paid

741
00:39:30,719 --> 00:39:34,080
Speaker 2: off just about thirty thousand dollars in just about nine months.

742
00:39:34,360 --> 00:39:37,040
Speaker 2: And then we had a couple thousand dollars every month

743
00:39:37,120 --> 00:39:43,480
Speaker 2: freed up once that was gone, and so and we

744
00:39:43,520 --> 00:39:45,880
Speaker 2: did the animal approach. So here's some little tips and

745
00:39:45,920 --> 00:39:50,080
Speaker 2: tricks and you know tactics that we used that assisted us.

746
00:39:50,640 --> 00:39:52,960
Speaker 2: So Number one, how many bank accounts should you have?

747
00:39:53,520 --> 00:39:56,000
Speaker 2: So remember earlier when I said we switched over to

748
00:39:56,080 --> 00:39:59,399
Speaker 2: the yearly bill payments instead of the monthly ones, Well

749
00:39:59,400 --> 00:40:02,160
Speaker 2: we still had to remember those were coming up and

750
00:40:02,320 --> 00:40:05,160
Speaker 2: plan for those because we didn't have any money left over.

751
00:40:05,200 --> 00:40:07,240
Speaker 2: It's like we had people asking us, WHOA what happens

752
00:40:07,280 --> 00:40:09,279
Speaker 2: with you know, one month you just decide not to

753
00:40:09,280 --> 00:40:11,680
Speaker 2: stick to your budget. It's like you'd understand what a

754
00:40:11,680 --> 00:40:15,800
Speaker 2: budget means if you're asking that question. The money comes

755
00:40:15,800 --> 00:40:17,440
Speaker 2: in and the money goes out. The only thing a

756
00:40:17,440 --> 00:40:19,680
Speaker 2: budget does is you saying this is where it's gonna go.

757
00:40:20,320 --> 00:40:23,919
Speaker 2: So we didn't have there, There was no We didn't

758
00:40:23,960 --> 00:40:27,160
Speaker 2: have the credit cards. We destroyed them, we cut them up.

759
00:40:27,280 --> 00:40:29,120
Speaker 2: You don't have the ability to spend more than you make.

760
00:40:29,560 --> 00:40:31,440
Speaker 2: The money comes in, you tell it where it's gonna go,

761
00:40:31,560 --> 00:40:35,359
Speaker 2: and then it goes there. And so when you have

762
00:40:35,640 --> 00:40:39,560
Speaker 2: when you have bills that are annual bills, that's gonna

763
00:40:39,600 --> 00:40:42,480
Speaker 2: that's gonna wreck your plan if you don't, if you're

764
00:40:42,520 --> 00:40:44,840
Speaker 2: not prepared for that, and So what you have to

765
00:40:44,880 --> 00:40:47,480
Speaker 2: do is we went to Capital One, and I believe

766
00:40:47,520 --> 00:40:50,960
Speaker 2: they still have these savings accounts. They were just at

767
00:40:51,000 --> 00:40:53,120
Speaker 2: the time, in my opinion, the easiest ones to use,

768
00:40:53,160 --> 00:40:55,600
Speaker 2: but I'm sure there are plenty that are higher interest

769
00:40:55,680 --> 00:40:58,040
Speaker 2: paying and a little bit easier to use now. But basically,

770
00:40:58,040 --> 00:41:00,640
Speaker 2: you just set up a bunch of different online savings

771
00:41:00,680 --> 00:41:03,359
Speaker 2: accounts that are all free, and you name each one

772
00:41:03,400 --> 00:41:06,799
Speaker 2: of them. We had one named car insurance, we had

773
00:41:06,840 --> 00:41:10,440
Speaker 2: one named you know, renters insurance. We had one named vacations,

774
00:41:10,560 --> 00:41:14,480
Speaker 2: we had one named gifts, we had one named whatever.

775
00:41:14,600 --> 00:41:16,520
Speaker 2: So we looked at all the people we knew that

776
00:41:16,520 --> 00:41:18,120
Speaker 2: we were going to be buying birthday gifts for, and

777
00:41:18,120 --> 00:41:20,000
Speaker 2: we said, okay, we're going to spend you know, let's

778
00:41:20,000 --> 00:41:23,799
Speaker 2: say twenty five bucks on each birthday gift. Twenty five

779
00:41:23,840 --> 00:41:27,600
Speaker 2: dollars times this many people means on average, every month

780
00:41:27,640 --> 00:41:32,040
Speaker 2: we have to save thirty five dollars. And some months

781
00:41:32,040 --> 00:41:35,560
Speaker 2: there will be birthdays, some months there won't. But every month,

782
00:41:35,960 --> 00:41:38,120
Speaker 2: since you know throughout the whole year, you add up

783
00:41:38,120 --> 00:41:40,000
Speaker 2: all the times you're going to spend that money, divided

784
00:41:40,000 --> 00:41:41,560
Speaker 2: by the amount of money you're gonna send each time

785
00:41:42,040 --> 00:41:46,120
Speaker 2: and that's thirty five bucks. So into your birthday gift

786
00:41:46,239 --> 00:41:50,080
Speaker 2: fund account, you transfer thirty five bucks each month, and

787
00:41:50,120 --> 00:41:52,759
Speaker 2: then every month when there is a birthday, you have

788
00:41:52,960 --> 00:41:56,240
Speaker 2: the money in that account to fund that birthday gift.

789
00:41:56,400 --> 00:41:58,440
Speaker 2: So then you transfer that money back from your savings

790
00:41:58,440 --> 00:42:00,920
Speaker 2: account back into your checking account, and now you have

791
00:42:00,960 --> 00:42:02,919
Speaker 2: the money in there to spend on the birthday gift,

792
00:42:03,120 --> 00:42:06,160
Speaker 2: just like you planned. And you do this with every category.

793
00:42:06,200 --> 00:42:11,040
Speaker 2: So if your car insurance is one thousand dollars a

794
00:42:11,120 --> 00:42:13,560
Speaker 2: year to well, let's say twelve hundred dollars a year,

795
00:42:13,880 --> 00:42:16,400
Speaker 2: then and you're paying that annually because you get the

796
00:42:16,400 --> 00:42:19,680
Speaker 2: discount on it, well, then you move one hundred dollars

797
00:42:19,760 --> 00:42:23,840
Speaker 2: every month into your car insurance savings account, and then

798
00:42:24,120 --> 00:42:27,000
Speaker 2: every year when that bill comes up, you transfer the

799
00:42:27,000 --> 00:42:29,640
Speaker 2: twelve hundred dollars that you have saved up now back

800
00:42:29,640 --> 00:42:31,799
Speaker 2: into your checking account and you have the money to

801
00:42:31,800 --> 00:42:34,200
Speaker 2: be able to spend it on. And so you can

802
00:42:34,320 --> 00:42:36,920
Speaker 2: plan for these expenses. And the same thing with vacation.

803
00:42:37,040 --> 00:42:39,600
Speaker 2: We said, okay, we're going to take you know, this,

804
00:42:39,600 --> 00:42:42,400
Speaker 2: this vacation with your family, this vacation with my family,

805
00:42:42,440 --> 00:42:43,960
Speaker 2: and those are going to be our two vacations we're

806
00:42:43,960 --> 00:42:45,879
Speaker 2: going to take this year. This is how much we're

807
00:42:45,880 --> 00:42:48,760
Speaker 2: going to spend on a monthly basis. When you average

808
00:42:48,760 --> 00:42:51,000
Speaker 2: that out throughout the year, that's going to be you know,

809
00:42:51,320 --> 00:42:53,439
Speaker 2: forty five dollars that we have to save every month

810
00:42:53,480 --> 00:42:55,000
Speaker 2: to be able to plan for that. So we have

811
00:42:55,040 --> 00:42:57,560
Speaker 2: a vacation fund and every month forty five dollars goes

812
00:42:57,560 --> 00:43:00,920
Speaker 2: into the account, and you plan for it. You just

813
00:43:00,960 --> 00:43:03,120
Speaker 2: get ready for it. And that's it. And so how

814
00:43:03,120 --> 00:43:06,960
Speaker 2: many bank accounts do you need? Well, you need at

815
00:43:07,080 --> 00:43:11,680
Speaker 2: least at least four. So your first bank account is

816
00:43:11,719 --> 00:43:14,799
Speaker 2: going to be your joint checking account where all the

817
00:43:14,840 --> 00:43:17,879
Speaker 2: expenses get paid from your paychecks both go into there

818
00:43:18,360 --> 00:43:25,759
Speaker 2: and your your expenses, your necessary expenses go out of there.

819
00:43:25,800 --> 00:43:28,800
Speaker 2: So the rent, the mortgage, car insurance, the gas, the whatever,

820
00:43:28,840 --> 00:43:31,600
Speaker 2: it all comes out of there. If you just froze

821
00:43:31,640 --> 00:43:34,680
Speaker 2: and said I would never have a joint checking account

822
00:43:34,680 --> 00:43:39,360
Speaker 2: with my spouse, you have bigger problems than your debt.

823
00:43:40,880 --> 00:43:44,960
Speaker 2: If you don't trust your significant your your your spouse.

824
00:43:44,960 --> 00:43:46,879
Speaker 2: If you're married to someone you don't trust them enough,

825
00:43:47,400 --> 00:43:48,719
Speaker 2: or you're going to get married to someone you don't

826
00:43:48,719 --> 00:43:50,719
Speaker 2: trust them enough to have a joint account. You don't

827
00:43:50,719 --> 00:43:56,640
Speaker 2: trust them enough to be married to them. That's that's

828
00:43:56,680 --> 00:43:59,080
Speaker 2: a you know, a discussion for another time. But there

829
00:43:59,200 --> 00:44:01,560
Speaker 2: was some skin there. There are some steps that you skipped.

830
00:44:01,680 --> 00:44:06,000
Speaker 2: If if you're not able to share one checking account

831
00:44:06,520 --> 00:44:10,440
Speaker 2: with that person, then that's that's a concern. You maybe

832
00:44:10,480 --> 00:44:13,000
Speaker 2: shouldn't have decided to spend the rest of your life

833
00:44:13,000 --> 00:44:17,319
Speaker 2: with this person. There's some other issues there. But you

834
00:44:17,360 --> 00:44:19,200
Speaker 2: have one account where the money comes in and the

835
00:44:19,200 --> 00:44:22,359
Speaker 2: bills go out, then it's the normal bills. You also

836
00:44:22,400 --> 00:44:24,960
Speaker 2: have two individual accounts, one for you and one for them,

837
00:44:25,160 --> 00:44:27,920
Speaker 2: one for him and one for her, one for you

838
00:44:28,000 --> 00:44:31,400
Speaker 2: know whoever. And these are your own spending accounts. So

839
00:44:31,480 --> 00:44:33,839
Speaker 2: everybody's going to have their own amount. I think when

840
00:44:33,840 --> 00:44:36,440
Speaker 2: we started it was like twenty five dollars or fifty

841
00:44:36,480 --> 00:44:40,600
Speaker 2: dollars a month, something very small that I could spend

842
00:44:40,640 --> 00:44:42,640
Speaker 2: mine on whatever I wanted, She could spend hers on

843
00:44:42,640 --> 00:44:45,640
Speaker 2: whatever she wanted. And you each have your own accounts,

844
00:44:45,680 --> 00:44:48,440
Speaker 2: and so if I want to save mine up for

845
00:44:48,440 --> 00:44:50,520
Speaker 2: a couple of months and then spend it on something bigger,

846
00:44:50,680 --> 00:44:53,960
Speaker 2: I can. If I want to spend it all every

847
00:44:53,960 --> 00:44:57,200
Speaker 2: single month on junk food and cookies or chips, then

848
00:44:57,280 --> 00:45:00,200
Speaker 2: I can. And these are your own individual accounts. You

849
00:45:00,200 --> 00:45:02,239
Speaker 2: have transfers that are going into them from the joint

850
00:45:02,239 --> 00:45:09,759
Speaker 2: account that fund your own personal expenses that you've predecided. Hey,

851
00:45:09,760 --> 00:45:12,759
Speaker 2: we're both going to spend this amount of money on

852
00:45:12,800 --> 00:45:14,600
Speaker 2: whatever we want, and neither of us can tell each

853
00:45:14,600 --> 00:45:19,200
Speaker 2: other how we're going to spend this money. And that's

854
00:45:19,239 --> 00:45:21,960
Speaker 2: your individual fund money. You can do whatever you want

855
00:45:21,960 --> 00:45:23,920
Speaker 2: with it, and you have your individual accounts for that

856
00:45:23,920 --> 00:45:27,400
Speaker 2: that only you can control. And then I say at

857
00:45:27,440 --> 00:45:29,840
Speaker 2: least four, because your fourth account could technically be like

858
00:45:29,880 --> 00:45:33,759
Speaker 2: one hundred accounts, and that's the savings account that I

859
00:45:33,800 --> 00:45:36,279
Speaker 2: talked about for all the other expenses that you know

860
00:45:36,320 --> 00:45:39,240
Speaker 2: are going to come up throughout the year. And remember

861
00:45:39,320 --> 00:45:42,240
Speaker 2: you're not building up a pool of savings at this point.

862
00:45:43,080 --> 00:45:45,759
Speaker 2: You're paying off debt, and so you shouldn't have a

863
00:45:45,800 --> 00:45:48,240
Speaker 2: savings account that you're putting one hundred dollars two hundred

864
00:45:48,239 --> 00:45:50,879
Speaker 2: dollars one thousand dollars a month into to build that up.

865
00:45:51,840 --> 00:45:53,799
Speaker 2: You should be getting out of debt first, and then

866
00:45:53,840 --> 00:45:57,040
Speaker 2: you can build up your savings much faster with less

867
00:45:57,120 --> 00:46:01,000
Speaker 2: risk because you don't have that debt. And so how

868
00:46:01,040 --> 00:46:03,000
Speaker 2: many bank accounts do you need? You need those three,

869
00:46:03,080 --> 00:46:06,160
Speaker 2: the joint one and then the two individual ones, and

870
00:46:06,200 --> 00:46:09,400
Speaker 2: then as many individual accounts that you can label that

871
00:46:09,440 --> 00:46:13,000
Speaker 2: are savings accounts for those yearly expenses that are not

872
00:46:13,080 --> 00:46:19,200
Speaker 2: happening every month that you can you can just plan for. Now,

873
00:46:20,080 --> 00:46:24,360
Speaker 2: what about budgeting software. I've tried every budgeting software in

874
00:46:24,360 --> 00:46:27,680
Speaker 2: the book. I've tried them all. I've tired Dave Ramsey's,

875
00:46:27,719 --> 00:46:30,560
Speaker 2: I've tried the Quicken, the Mint, I've tried the I've

876
00:46:30,560 --> 00:46:33,000
Speaker 2: tried them all the ones that are built into the

877
00:46:33,000 --> 00:46:36,279
Speaker 2: bank accounts. Guess what, they all do the exact same thing,

878
00:46:36,360 --> 00:46:39,480
Speaker 2: and they're all garbage compared to making your own Excel spreadsheet.

879
00:46:41,000 --> 00:46:43,839
Speaker 2: When you use these budgeting softwares, you're saying, Okay, here's

880
00:46:43,840 --> 00:46:45,920
Speaker 2: how much I'm going to spend on this category. And

881
00:46:45,960 --> 00:46:48,920
Speaker 2: then it tries to track your expenses and say, okay, well,

882
00:46:48,960 --> 00:46:52,960
Speaker 2: you spent money at Walmart, so we're just going to

883
00:46:53,040 --> 00:46:56,520
Speaker 2: put that into groceries. But what you bought at Walmart

884
00:46:56,600 --> 00:47:00,319
Speaker 2: was a gift for one of the birthdays, and so

885
00:47:00,360 --> 00:47:03,600
Speaker 2: it puts it in the wrong category. And it's just

886
00:47:03,600 --> 00:47:05,839
Speaker 2: because it can't know what you bought and then what

887
00:47:05,880 --> 00:47:07,560
Speaker 2: the purpose of what you bought. It can get a

888
00:47:07,560 --> 00:47:10,120
Speaker 2: general idea, but then you have to go through and

889
00:47:10,160 --> 00:47:12,640
Speaker 2: make sure it's all right. Otherwise your budget's going to

890
00:47:12,680 --> 00:47:14,880
Speaker 2: be off. So you have to do the work anyway.

891
00:47:15,400 --> 00:47:17,640
Speaker 2: So might as well just get it tailored perfectly to

892
00:47:17,680 --> 00:47:18,560
Speaker 2: exactly what you want.

893
00:47:18,680 --> 00:47:19,120
Speaker 1: Number one.

894
00:47:19,280 --> 00:47:22,399
Speaker 2: Number two, if you have a software doing it for you,

895
00:47:22,400 --> 00:47:24,880
Speaker 2: you never get a feel for controlling your money. And

896
00:47:24,920 --> 00:47:27,120
Speaker 2: if you don't control your money, your money controls you.

897
00:47:27,200 --> 00:47:29,360
Speaker 2: And the Bible says, do not be a slave to money.

898
00:47:29,480 --> 00:47:32,480
Speaker 2: The way you do that is by being a master

899
00:47:32,920 --> 00:47:36,200
Speaker 2: over your money, aka being in control over it. Make

900
00:47:36,280 --> 00:47:40,120
Speaker 2: money a slave to you. Don't be a slave to money.

901
00:47:40,520 --> 00:47:45,000
Speaker 2: And so until you have spent six months a year,

902
00:47:45,200 --> 00:47:49,920
Speaker 2: however long it takes, tracking every single dollar in and

903
00:47:50,120 --> 00:47:55,319
Speaker 2: every single dollar out and controlling how that happens, what

904
00:47:55,360 --> 00:47:58,279
Speaker 2: money comes in and where it goes, you are not

905
00:47:58,400 --> 00:48:03,000
Speaker 2: a master of your money. And so don't have a software,

906
00:48:03,239 --> 00:48:06,520
Speaker 2: don't have a program, don't have an app take over that.

907
00:48:06,600 --> 00:48:10,480
Speaker 2: Don't abdicate your responsibility to something like that, because you

908
00:48:10,520 --> 00:48:14,120
Speaker 2: will never get the fine too feeling that natural, that intuition,

909
00:48:14,320 --> 00:48:20,960
Speaker 2: that deep connection to your cash flow. If you don't

910
00:48:21,000 --> 00:48:25,120
Speaker 2: put in the work. And also they're clunky, they're just

911
00:48:25,160 --> 00:48:26,640
Speaker 2: not going to do it as well as you can

912
00:48:26,680 --> 00:48:32,440
Speaker 2: do it yourself. And then finally, here what to do

913
00:48:32,560 --> 00:48:35,960
Speaker 2: for fun, because this is something that you know a

914
00:48:36,000 --> 00:48:39,920
Speaker 2: lot of people who are in the situation of, you know,

915
00:48:40,239 --> 00:48:42,879
Speaker 2: it's you know, you're a schopaholic, you're spend a holic,

916
00:48:42,920 --> 00:48:45,359
Speaker 2: you spend too much money, like it's it's addicting, it's fun.

917
00:48:45,360 --> 00:48:45,759
Speaker 1: I get it.

918
00:48:45,800 --> 00:48:49,400
Speaker 2: I love spending money, and so it can be hard

919
00:48:49,440 --> 00:48:52,120
Speaker 2: to rain that in and pull that back. And by

920
00:48:52,160 --> 00:48:54,719
Speaker 2: the way, this isn't the only time we've had to

921
00:48:54,760 --> 00:48:57,239
Speaker 2: do this. We did this so that we could get

922
00:48:57,239 --> 00:49:00,600
Speaker 2: out of debt. We got pregnant, we had a kid.

923
00:49:00,880 --> 00:49:04,120
Speaker 2: Then my wife stopped working, so we had to go

924
00:49:04,640 --> 00:49:06,480
Speaker 2: so we spent no money while we were getting out

925
00:49:06,520 --> 00:49:07,920
Speaker 2: of debt, and then we had a little bit of

926
00:49:07,960 --> 00:49:10,840
Speaker 2: time to save and spend money. And then when my

927
00:49:10,880 --> 00:49:13,080
Speaker 2: son was born, my wife stopped working and so we

928
00:49:13,120 --> 00:49:16,520
Speaker 2: went right back to having no money again because her

929
00:49:16,560 --> 00:49:19,040
Speaker 2: income went away, so it was just my income and

930
00:49:20,120 --> 00:49:22,799
Speaker 2: so I was still at that time not making any money.

931
00:49:22,800 --> 00:49:25,600
Speaker 2: I was making forty thousand dollars a year, so we

932
00:49:25,600 --> 00:49:28,040
Speaker 2: were living off of twenty two hundred dollars every month.

933
00:49:28,239 --> 00:49:30,640
Speaker 2: So because we had put in the practice before, we

934
00:49:30,719 --> 00:49:34,200
Speaker 2: had the discipline we needed to pull back again and

935
00:49:34,360 --> 00:49:37,280
Speaker 2: spend less when we needed to and not getting ourselves

936
00:49:37,280 --> 00:49:39,719
Speaker 2: into trouble again. And then I started making a ton

937
00:49:39,760 --> 00:49:42,799
Speaker 2: of money as I worked my way up and in

938
00:49:42,880 --> 00:49:45,200
Speaker 2: my company, became a stockbroker, mood into sales and started

939
00:49:45,239 --> 00:49:47,719
Speaker 2: making more money, have more success. So we had the

940
00:49:47,760 --> 00:49:51,200
Speaker 2: freedom to start spending more money again. And then I

941
00:49:51,239 --> 00:49:53,120
Speaker 2: hated my life and I quit my job so I

942
00:49:53,120 --> 00:49:55,440
Speaker 2: could start a business. And then guess what, we were

943
00:49:55,520 --> 00:49:57,719
Speaker 2: back to where we were before. But we had done

944
00:49:57,760 --> 00:50:01,040
Speaker 2: this twice already. So we pulled back our spending, we

945
00:50:01,080 --> 00:50:03,960
Speaker 2: stopped spending, we reined it in, and guess what, we

946
00:50:04,120 --> 00:50:06,080
Speaker 2: had the discipline to do that and the ability that

947
00:50:06,120 --> 00:50:07,800
Speaker 2: the muscle memory to do that because we had already

948
00:50:07,840 --> 00:50:11,239
Speaker 2: done it twice before when we chose to, and so

949
00:50:11,280 --> 00:50:13,000
Speaker 2: then when we had to, when I quit my job

950
00:50:13,040 --> 00:50:16,040
Speaker 2: so I could start the business, we were able to

951
00:50:16,080 --> 00:50:22,160
Speaker 2: do that. And so this isn't something that.

952
00:50:20,280 --> 00:50:20,920
Speaker 1: That I know.

953
00:50:20,960 --> 00:50:23,000
Speaker 2: I'm speaking number one, just telling the story of what

954
00:50:23,040 --> 00:50:25,200
Speaker 2: we did and how it worked for us, and how

955
00:50:25,200 --> 00:50:29,080
Speaker 2: it helped us. But number two, this isn't something that

956
00:50:29,320 --> 00:50:31,439
Speaker 2: is you know, so far removed. Just to one off,

957
00:50:31,440 --> 00:50:33,040
Speaker 2: it was like you know, hey, we just you know,

958
00:50:33,080 --> 00:50:35,040
Speaker 2: we just did this once and now now it's all

959
00:50:35,080 --> 00:50:37,799
Speaker 2: hunky dor. It's like, no, we've actually done that three

960
00:50:37,880 --> 00:50:43,000
Speaker 2: times now. And you may have a situation where you

961
00:50:43,040 --> 00:50:45,440
Speaker 2: don't like the job you do. Maybe you don't like

962
00:50:45,600 --> 00:50:48,319
Speaker 2: the work you do, but you're trapped and you're a

963
00:50:48,320 --> 00:50:50,160
Speaker 2: slave to money and you're a slave to your job

964
00:50:50,200 --> 00:50:53,400
Speaker 2: because of this financial situation you're in. If you can

965
00:50:53,440 --> 00:50:56,560
Speaker 2: get yourself to a situation where you've saved up enough,

966
00:50:56,600 --> 00:50:58,800
Speaker 2: you've invested a little bit, you've gotten out of debt,

967
00:50:59,160 --> 00:51:01,280
Speaker 2: that could give you the freedom you need, the courage

968
00:51:01,320 --> 00:51:03,680
Speaker 2: you need, the little boost that you need to be

969
00:51:03,719 --> 00:51:06,000
Speaker 2: able to take that jump. Now you have the discipline

970
00:51:06,000 --> 00:51:07,560
Speaker 2: that you need to be able to have our runway

971
00:51:07,840 --> 00:51:10,000
Speaker 2: and you can start that business. You can go apply

972
00:51:10,080 --> 00:51:11,680
Speaker 2: for that job, you can learn that skill, you can

973
00:51:11,719 --> 00:51:13,480
Speaker 2: do that thing that you are always trying to do,

974
00:51:13,680 --> 00:51:16,960
Speaker 2: you go live in that location, whatever it is. And

975
00:51:17,040 --> 00:51:20,480
Speaker 2: so building this discipline, these habits are things that are

976
00:51:20,480 --> 00:51:23,680
Speaker 2: going to give you the ability to choose and chase

977
00:51:23,719 --> 00:51:25,560
Speaker 2: the life that you want and not be stuck in

978
00:51:25,560 --> 00:51:30,160
Speaker 2: the one that you have that you don't want. So lastly,

979
00:51:30,239 --> 00:51:32,399
Speaker 2: what to do for fun? Because this was a big thing.

980
00:51:32,440 --> 00:51:34,279
Speaker 2: Like people always told us we were crazy. We never

981
00:51:34,280 --> 00:51:37,200
Speaker 2: spent any money on things like on clothes and on

982
00:51:37,680 --> 00:51:39,719
Speaker 2: travel and on events and like going and doing things.

983
00:51:39,719 --> 00:51:41,840
Speaker 2: It was like people are always telling us to light up,

984
00:51:41,920 --> 00:51:44,319
Speaker 2: lighting up, like, man, just one month, just do this,

985
00:51:44,400 --> 00:51:47,759
Speaker 2: and it's like, no, like you're telling us to do that.

986
00:51:48,000 --> 00:51:50,400
Speaker 2: But your average and you're broke, and you're normal, and

987
00:51:50,440 --> 00:51:52,400
Speaker 2: you're miserable, and we don't want your life and so

988
00:51:52,480 --> 00:51:53,759
Speaker 2: we're not going to do what you think we should

989
00:51:53,800 --> 00:51:56,200
Speaker 2: do because then we'll be just like you. And so

990
00:51:56,960 --> 00:51:58,560
Speaker 2: but there is the element of like what to do

991
00:51:58,640 --> 00:52:01,120
Speaker 2: for fun? Right, because if if you listen to this

992
00:52:01,160 --> 00:52:03,640
Speaker 2: whole story, you're probably thinking like, oh, man, like what

993
00:52:03,760 --> 00:52:07,520
Speaker 2: in the world did you guys do. So the first

994
00:52:07,520 --> 00:52:10,760
Speaker 2: thing is I was on I was on night shift.

995
00:52:11,040 --> 00:52:12,920
Speaker 1: Uh when we were you know, getting out.

996
00:52:12,760 --> 00:52:16,040
Speaker 2: Of debt and uh, and so that was that was

997
00:52:16,120 --> 00:52:18,279
Speaker 2: kind of actually, you know, I hated it, but it

998
00:52:18,320 --> 00:52:22,160
Speaker 2: was a blessing in disguise because for most of our

999
00:52:22,560 --> 00:52:25,280
Speaker 2: week we were not awake when everybody else was awake,

1000
00:52:25,680 --> 00:52:28,720
Speaker 2: and so there were less pressures on us to spend

1001
00:52:29,000 --> 00:52:31,239
Speaker 2: money on the things that other people are spending money on.

1002
00:52:33,239 --> 00:52:37,719
Speaker 2: Number number two, there was less stuff like open to do.

1003
00:52:37,840 --> 00:52:39,840
Speaker 2: So it wasn't like, you know, somebody on their weekend

1004
00:52:39,880 --> 00:52:41,160
Speaker 2: they might be like, oh, I really want to go

1005
00:52:41,239 --> 00:52:43,279
Speaker 2: see that movie, but it's going to be you know, now,

1006
00:52:43,320 --> 00:52:46,359
Speaker 2: tickets are you know, twenty dollars a piece, and if

1007
00:52:46,400 --> 00:52:48,160
Speaker 2: you get you know, popcorn, it you could easily spend

1008
00:52:48,160 --> 00:52:49,680
Speaker 2: one hundred bucks by going to the movie. So it's

1009
00:52:49,719 --> 00:52:51,800
Speaker 2: like you got the temptation to spend you know, forty

1010
00:52:51,840 --> 00:52:54,040
Speaker 2: to one hundred bucks just to go to a movie,

1011
00:52:54,080 --> 00:52:55,480
Speaker 2: and then maybe if you go to dinner after that.

1012
00:52:55,520 --> 00:52:58,160
Speaker 2: It's like, man, we just we just you know, went

1013
00:52:58,200 --> 00:53:02,840
Speaker 2: backwards two months. We didn't really have that temptation. But

1014
00:53:02,960 --> 00:53:04,640
Speaker 2: on the other side, it's like, okay, well then what

1015
00:53:04,800 --> 00:53:08,000
Speaker 2: did you do? Like that's crazy because not only did

1016
00:53:08,000 --> 00:53:09,239
Speaker 2: you not have the pressures to do those things, but

1017
00:53:09,280 --> 00:53:11,600
Speaker 2: you didn't have the ability to do those things. So

1018
00:53:13,040 --> 00:53:17,759
Speaker 2: number one, here's where the library comes in comes in.

1019
00:53:17,880 --> 00:53:22,680
Speaker 2: Really andy DVD players like renting DVDs from the library.

1020
00:53:22,680 --> 00:53:24,520
Speaker 2: I'm sure they actually have digital versions of it now,

1021
00:53:25,080 --> 00:53:29,960
Speaker 2: but reading books, we actually started reading a lot. We

1022
00:53:30,200 --> 00:53:37,080
Speaker 2: uh we did borrow our friends and families streaming service accounts,

1023
00:53:38,160 --> 00:53:41,400
Speaker 2: which is frowned on by some and now by the

1024
00:53:41,400 --> 00:53:43,239
Speaker 2: streaming services they're trying to crack down on that, so

1025
00:53:43,280 --> 00:53:45,680
Speaker 2: that I might not be available for much longer. But

1026
00:53:46,440 --> 00:53:51,600
Speaker 2: library libraries have have things to watch. Number Number two,

1027
00:53:51,600 --> 00:53:57,000
Speaker 2: playing games like board games and card games. Basically did

1028
00:53:57,040 --> 00:53:59,440
Speaker 2: a lot of things that like put yourself Like what

1029
00:53:59,480 --> 00:54:01,839
Speaker 2: did people do like a hundred years ago when there

1030
00:54:01,920 --> 00:54:06,560
Speaker 2: wasn't all this like modern entertainment available. People just built

1031
00:54:06,640 --> 00:54:10,040
Speaker 2: lives and relationships together. We we we weren't spending a

1032
00:54:10,080 --> 00:54:11,520
Speaker 2: ton of money and so we had to like cook

1033
00:54:11,640 --> 00:54:13,160
Speaker 2: all of our all of our food. So there was

1034
00:54:13,200 --> 00:54:16,320
Speaker 2: a lot of meal preparation that we ended up doing together.

1035
00:54:16,320 --> 00:54:18,200
Speaker 2: It's like, you know, it is cleaning. It was you know,

1036
00:54:18,280 --> 00:54:20,560
Speaker 2: going out and doing the uh, doing the things that

1037
00:54:20,600 --> 00:54:25,279
Speaker 2: we weren't paying for, and so there's uh, there is

1038
00:54:25,280 --> 00:54:27,759
Speaker 2: an element of like, hey, you do need to have

1039
00:54:27,800 --> 00:54:30,879
Speaker 2: fun and still enjoy each other, but that doesn't mean

1040
00:54:30,920 --> 00:54:32,840
Speaker 2: you have to blow your budget. That doesn't mean you

1041
00:54:32,840 --> 00:54:34,560
Speaker 2: have to spend a ton of money and set yourself

1042
00:54:34,600 --> 00:54:37,279
Speaker 2: back from achieving your goals. It's like, get creative with

1043
00:54:37,320 --> 00:54:39,480
Speaker 2: it and actually get to know each other and actually

1044
00:54:39,480 --> 00:54:41,120
Speaker 2: talk to each other and build a relationship and do

1045
00:54:41,239 --> 00:54:46,040
Speaker 2: things that will force you to uh you know, uh,

1046
00:54:46,360 --> 00:54:47,640
Speaker 2: you know, be in a little bit of a different

1047
00:54:47,680 --> 00:54:51,680
Speaker 2: situation than other people because you don't want to be

1048
00:54:51,800 --> 00:54:55,200
Speaker 2: like them. And so there are plenty of creative things

1049
00:54:55,239 --> 00:54:58,320
Speaker 2: that you can do for for fun and for entertainment

1050
00:54:58,360 --> 00:55:01,480
Speaker 2: and for leisure time that don't necessarily cost an arm

1051
00:55:01,520 --> 00:55:04,879
Speaker 2: and a leg, even in today's day and age when

1052
00:55:04,920 --> 00:55:08,680
Speaker 2: prices have gotten outrageous or maybe even more so, you know,

1053
00:55:08,760 --> 00:55:13,160
Speaker 2: going out on walks, going on bike rides and hikes,

1054
00:55:13,320 --> 00:55:17,919
Speaker 2: and you know, gas is expensive, but having a little

1055
00:55:18,239 --> 00:55:20,160
Speaker 2: you know, day trip where you drive a couple hours

1056
00:55:20,160 --> 00:55:22,560
Speaker 2: outside of the city, that's probably going to be cheaper

1057
00:55:22,680 --> 00:55:26,080
Speaker 2: in terms of gas than doing something like you know,

1058
00:55:26,320 --> 00:55:29,799
Speaker 2: a date night with dinner and drinks. And so it's

1059
00:55:29,840 --> 00:55:33,040
Speaker 2: okay to get creative and to do abnormal things and

1060
00:55:33,680 --> 00:55:35,919
Speaker 2: to have fun doing it. So that's what we did,

1061
00:55:36,000 --> 00:55:37,399
Speaker 2: and like I said, we were able to get out

1062
00:55:37,400 --> 00:55:40,560
Speaker 2: of debt in nine months. It was thirty grand and

1063
00:55:41,160 --> 00:55:44,160
Speaker 2: it was very helpful that we did that because very

1064
00:55:44,160 --> 00:55:49,480
Speaker 2: soon after my wife got my wife got pregnant, and

1065
00:55:49,800 --> 00:55:52,000
Speaker 2: that meant we were prepared now to be able to.

1066
00:55:52,840 --> 00:55:53,319
Speaker 1: Have a kid.

1067
00:55:53,360 --> 00:55:57,400
Speaker 2: And if we hadn't done that, then it would have

1068
00:55:57,400 --> 00:56:02,200
Speaker 2: been much more difficult, and potentially my wife wouldn't wouldn't

1069
00:56:02,239 --> 00:56:05,279
Speaker 2: have been able to completely stop working because we would

1070
00:56:05,280 --> 00:56:08,560
Speaker 2: have had the extra bills from the extra debt. And

1071
00:56:08,640 --> 00:56:13,920
Speaker 2: so the sooner you can attack progress towards your goals,

1072
00:56:14,440 --> 00:56:18,440
Speaker 2: the better off life will be. And so especially in

1073
00:56:18,480 --> 00:56:20,920
Speaker 2: today's day and age, with interest rates and the leverage

1074
00:56:20,920 --> 00:56:22,560
Speaker 2: and the system and the deals that are coming up

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00:56:22,600 --> 00:56:24,719
Speaker 2: with asset prices, it is more important than ever to

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00:56:24,760 --> 00:56:26,960
Speaker 2: get out of debt. That's the way that we did it.

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00:56:27,160 --> 00:56:29,240
Speaker 2: That's what I believe is the fastest and the easiest

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00:56:29,239 --> 00:56:31,440
Speaker 2: and the best way to do it. Take from that

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Speaker 2: what works best for you. Thanks so much for listening,

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00:56:35,200 --> 00:56:36,279
Speaker 2: and we'll talk next time.