Speaker 1: Episode on two, how to pay off debt Faster. Welcome
Speaker 1: to the Frugal Friends podcast, where you'll learn to save money,
Speaker 1: embrace simplicity, rice and liver with your life. Here your
Speaker 1: host Jen and Jill. Welcome to the Frugal Friends podcast.
Speaker 1: My name is Jen, my name is Jill, and today
Speaker 1: we are talking about how to speed up your debt
Speaker 1: payoff or just start on it or whenever you listen
Speaker 1: to this episode, yes, how to really just knuckle down
Speaker 1: and get this thing gone baby. Yes, you paid off
Speaker 1: your student loans. I paid mine off in so I
Speaker 1: feel like we have enough perspective now that we can
Speaker 1: talk about this again with deeper conviction. Absolutely well and
Speaker 1: from the standpoint of yeah, the freedom is amazing, do
Speaker 1: what you can do to get there. Yes, so that
Speaker 1: is what we're getting into today. But first our sponsors.
Speaker 1: Today's episode is brought to you by drum Roll. Please.
Speaker 1: Three secrets for creating a debt payoff plan you'll actually
Speaker 1: stick to. Does that sound exciting? That sounds lengthy. Yes,
Speaker 1: it's a lengthy ad over at modern frugality. My goal
Speaker 1: this year is to help people stick to their debt
Speaker 1: free journey and make it as short as possible. Modern Frugality,
Speaker 1: for those who don't know, is um my Gen's personal
Speaker 1: blog and YouTube channel. So I want you to pay
Speaker 1: off your debt as fast as possible, but I want
Speaker 1: you to do it in a way that you don't
Speaker 1: feel suffocated by frugality. So that is my goal, and
Speaker 1: I am kicking off that initiative with free live class
Speaker 1: this Sunday, January tenth, at eight pm Eastern Standard Time,
Speaker 1: with three strategies you can implement this week or immediately
Speaker 1: to create a debt payoff plan. That's more than just
Speaker 1: a New Year's resolution, but it is a plan you
Speaker 1: can sustain. And I don't hear many people talk about
Speaker 1: it or how important it is, so I'm calling them secrets.
Speaker 1: It also just sounds cooler. So if you want to
Speaker 1: learn the three secrets for creating a debt payoff plan,
Speaker 1: you'll actually stick to head to Modern frugality dot com
Speaker 1: slash training to register and even if you can't join
Speaker 1: us live, still register. I'll send the replay the next morning.
Speaker 1: That's Modern frugality dot com slash training, and I will
Speaker 1: see your face, well you'll see my face Sunday. I
Speaker 1: probably won't see your face it sounds fun, but I'll
Speaker 1: talk to you three secrets. Yes, juicy also brought to
Speaker 1: you by going Fast. If you've got the need for speed,
Speaker 1: this sponsor is for you. Going Fast wants to remind
Speaker 1: us that wallet is exhilarating to feel the wind in
Speaker 1: our hair. There are some things to consider before you
Speaker 1: jump on that merry go around and start yelling faster.
Speaker 1: Are you buckled in? Are you belonging secure? Are you
Speaker 1: aware of the risk of injury? Going fast when you're
Speaker 1: prepared for it, it's almost always better than going slow.
Speaker 1: Oh that is so real. That's made me think of
Speaker 1: when I was pregnant and I couldn't go on any
Speaker 1: roller coasters. Are you pregnant? Maybe you can't ride? Might
Speaker 1: you become pregnant? Might might you become pregnant on the ride?
Speaker 1: I don't know what people say, like, are you pregnant? Nursing?
Speaker 1: Might you become pregnant? Then medication? You've got those mixed
Speaker 1: up in your weird world. It is a weird world
Speaker 1: I'm living in over here is okay? I'm living in
Speaker 1: it all right. So let's get into our headlines. The
Speaker 1: first article that you might find when you google how
Speaker 1: to pay off your debt faster? Is this really great
Speaker 1: one for money under thirty? And I love the title
Speaker 1: for it to kick debts, but how to get out
Speaker 1: of debt on your own? It was just of the
Speaker 1: articles that you could find on Google. Was my favorite
Speaker 1: on the front page. Yes, it is a good one,
Speaker 1: and I think highlights some really helpful components. I will
Speaker 1: say this is my own caveat, this is maybe a problem.
Speaker 1: I might be a little jaded. Okay, let's face it,
Speaker 1: I am. I am a little jaded. This is written
Speaker 1: from the perspective of a young, single Caucasian male telling
Speaker 1: us that anybody can make more money and get out
Speaker 1: of debt quickly. So let's just recognize who's talking in
Speaker 1: the perspective that it's coming from, and please hear from
Speaker 1: my mouth that I recognize we are all in a
Speaker 1: variety of different circumstances, in marriages, with kids, with various
Speaker 1: types of debt, with various types of income levels. So
Speaker 1: while yes, the principles are fantastic and I really enjoy
Speaker 1: the motivation that's present in this article, if you do
Speaker 1: read it, definitely recognize just the context from which it's
Speaker 1: being written, because I think sometimes it can come across
Speaker 1: as like, oh what am I doing wrong? When you
Speaker 1: hear people make these intense statements like everyone should be
Speaker 1: able to do this, see I did it, and it's like, well, okay,
Speaker 1: but there's a variety of factors that are present that
Speaker 1: made this possible for him to do it so quickly.
Speaker 1: For sure, So all the principles are true. But that's
Speaker 1: my little caveat for this article. You should take everything
Speaker 1: you find on the internet with a grain of salt,
Speaker 1: way to bring in big picture. Yes, yeah, that's probably
Speaker 1: the rule. And if you do that and you have
Speaker 1: a healthy level of skepticism about everything on the internet,
Speaker 1: but I think you'll be really pleased with the advice
Speaker 1: he gives. So the first one on this list is
Speaker 1: to confront it. So how much debt do you have?
Speaker 1: And this one kind of hit home because before I
Speaker 1: was paying off debt, I avoided looking at my student
Speaker 1: loan balance. I avoided my debt, and when I had
Speaker 1: credit cards, I would avoid looking at it and just
Speaker 1: set up the minimum payment on auto pay. So confronting
Speaker 1: it seems so small, but in order to gain the
Speaker 1: initial momentum, initial speed needed to pay off debt, it
Speaker 1: is so necessary to take that big scary step and
Speaker 1: get it out all on the table. Yeah, and it
Speaker 1: seems like, well, yeah, obviously you have to know this
Speaker 1: to move forward. But I do think that this is
Speaker 1: the biggest barrier to entry for most people is what
Speaker 1: are we even looking at? But I also have heard
Speaker 1: in our what nearly three years of doing this together Jen,
Speaker 1: anybody who has shared a debt payoff story with us,
Speaker 1: they did describe a fear and anxiety and overwhelmed to
Speaker 1: looking at the numbers. However, without fail, everybody describes that
Speaker 1: once they looked at the numbers, it provided motivation of Okay,
Speaker 1: now what do I got to do to solve this problem?
Speaker 1: Once looked at it no longer held that mystery and anxiety.
Speaker 1: It just allowed for steps to be taken. So recognize
Speaker 1: that the fear and anxiety that you might experience a
Speaker 1: about confronting it will immediately go away once you confront it.
Speaker 1: Those are just emotions that you deal with. Anxiety is
Speaker 1: going to be present of like, okay, this is a lot,
Speaker 1: but typically it provides you with the motion that you
Speaker 1: need to then respond and take action. The next thing
Speaker 1: on this list that would need to happen is to
Speaker 1: change the behaviors that got you there another somewhat obvious one,
Speaker 1: but to recognize that just saying Okay, I'm going to
Speaker 1: get out of debt is one thing, but we also
Speaker 1: need to look at what were the propelling factors that
Speaker 1: got me in this position? For him, for the author
Speaker 1: of this article, he was in consumer debt, so he
Speaker 1: certainly had to take a hard look at his own
Speaker 1: spending and change that. So I know for a lot
Speaker 1: of us it might have been student loan debt. And
Speaker 1: he does address that, and I did appreciate this. You'll
Speaker 1: hear this of change the behaviors that got you there,
Speaker 1: It's like, well, it's schooled debt, so what am I
Speaker 1: going to do about that? Well, it's a real reality
Speaker 1: that a lot of us consider going back to school.
Speaker 1: So recognizing this is weady. Yep, you might have gotten
Speaker 1: yourself into debt to get a degree and it might
Speaker 1: ultimately pan out and be worth it. But before you
Speaker 1: look at getting that masters or sinking another hundred k
Speaker 1: into a PhD, don't let's look at paying off our
Speaker 1: debt first. Not don't do it, but just like let's
Speaker 1: think of ways to cash it. Like jil you cash
Speaker 1: flown your masters before your bachelor's was paid off, And
Speaker 1: it's interesting and I'm realizing some of the value of
Speaker 1: that too. And I think I've always approached this as
Speaker 1: a well, that's me, and that still is the case.
Speaker 1: Not everybody's circumstances are going to be my circumstances. But
Speaker 1: I'm starting to see that there is a bit of
Speaker 1: a key in that that I think is replicable of
Speaker 1: taking it that seriously. If debt feels that overwhelming, and
Speaker 1: if the amount of debt you're in, even if for
Speaker 1: school loans, is massive, then the steps we need to
Speaker 1: take to recover from that are quite massive. And so
Speaker 1: I did take some drastic and maybe extreme steps to
Speaker 1: be able to get my master's degree without going into
Speaker 1: more debt. I think that's how intensive I was about it.
Speaker 1: I knew that I wanted my masters, and I knew
Speaker 1: I wanted to get it within a certain amount of time.
Speaker 1: But I also knew, no way, no how am I
Speaker 1: going to do this by acquiring more debt. And I
Speaker 1: do think that there are ways if we're willing to
Speaker 1: do some extreme things to kind of commit to that
Speaker 1: of here's the debt level that I do have, but
Speaker 1: I am committed to not getting into further debt. For me,
Speaker 1: the extreme thing was moving into a motor home, really
Speaker 1: cutting our living expenses, which for most of us is
Speaker 1: where most of our paychecks go. Most people spend about
Speaker 1: twenty of their income on housing, and so we cut
Speaker 1: that to the bare minimum. And it is what allowed
Speaker 1: me to not go on a further debt from my
Speaker 1: master's degree. So I know that that's not everybody's circumstance,
Speaker 1: but I think this is an incredible point that even
Speaker 1: if it is school, that we can look at changing
Speaker 1: those behaviors so that we don't acquire more debt in
Speaker 1: the process. Yeah, and it forces you to get creative,
Speaker 1: to think outside the box. And maybe you do have
Speaker 1: to take out a little bit of school debt, but
Speaker 1: way less than if you had just taken the easy
Speaker 1: road and signed on the dotted line for all of them.
Speaker 1: So we're not saying that there is one way to
Speaker 1: do it, but there is more than one way to
Speaker 1: do it. The third is to earn enough to get
Speaker 1: out of debt. So this is kind of the one
Speaker 1: that I see the most. Is like when I ask
Speaker 1: people what would make it easier for you to pay
Speaker 1: off debt, like what would be the most beneficial like, literally,
Speaker 1: the first answer is always more money, So it's not
Speaker 1: always a save money problems. Sometimes there is an income
Speaker 1: issue that you have to address in order to be
Speaker 1: able to pay off debt faster. For us, when we
Speaker 1: started paying off our debt, my husband Travis was unemployed.
Speaker 1: We had just gotten married, so we'd spent all of
Speaker 1: our savings on our wedding, which was still very affordable.
Speaker 1: But we didn't have a lot of savings and I
Speaker 1: was only able to get twenty five hours a week
Speaker 1: at my full time job, like that's max amount I
Speaker 1: could get. So we had an income problem, and we
Speaker 1: did everything we could to raise our income. And so,
Speaker 1: long story short, that eventually led me to stress out,
Speaker 1: get shingles, and realize I also had to couple that
Speaker 1: with saving money. But it is very often that earning
Speaker 1: more income is the fastest route to getting out of debt.
Speaker 1: This was such a mindset shift for me that I'm
Speaker 1: so grateful for, and I really do think doing this
Speaker 1: podcast for me personally has helped in that mind set shift.
Speaker 1: I think I previously had this idea of well, I'm
Speaker 1: just kind of capped, or this is the profession that
Speaker 1: I've chosen and I'm not super money motivated, and so
Speaker 1: I thought, this is what I make as a social worker,
Speaker 1: So this is just what I need to become accustomed to.
Speaker 1: And I think I started to see permission in saying no. Actually,
Speaker 1: as I gain in my skill set and knowledge and
Speaker 1: wisdom and financial goals, I am able to find ways
Speaker 1: to earn more, whether that is within my profession or
Speaker 1: getting side hustles or raises or you name it. I
Speaker 1: think sometimes not for everybody, but I was definitely in
Speaker 1: the pool of this never totally occurred to me. I
Speaker 1: kind of imagined that as I went throughout the decades
Speaker 1: of life, I might start to make a little more,
Speaker 1: but I never had my sights on actually aiming at
Speaker 1: that and finding ways to make more. So I just
Speaker 1: want to encourage people who might find themselves in that
Speaker 1: position that there is freedom and permission to figure out
Speaker 1: what do I need to do. There is a bit
Speaker 1: of a mindset shift necessary, whether that's get a second job,
Speaker 1: negotiate raises, find work that does pay you more. There
Speaker 1: is permission to do this. We don't just have to
Speaker 1: resign ourselves to the way life currently looks. Absolutely. So
Speaker 1: from there we want to start talking about tools. So
Speaker 1: those are the three tips that this article gives on
Speaker 1: kind of what we need to do to kind of
Speaker 1: really buckle down. And now now we want to jump
Speaker 1: into all right, what are some of the hammers and
Speaker 1: screw drivers that we would use to make this possible.
Speaker 1: So one of the things that he recommends is utilizing
Speaker 1: balance transfers. So we're talking about credit cards with this
Speaker 1: that there are oftentimes credit card companies who will offer
Speaker 1: a balance transfer a k A transferring over the debt
Speaker 1: that you owe to another credit card with a zero
Speaker 1: percent a p R. So he gives the example of
Speaker 1: let's say you've got a balance of two grand on
Speaker 1: one credit card with a p R, and you're able
Speaker 1: to transfer that to zero percent a p R. For
Speaker 1: twelve months, you could save up to three hundred dollars
Speaker 1: in interest. Now, it is important to recognize the pitfalls.
Speaker 1: Certainly for those who don't have credit card debt, then
Speaker 1: this is not useful information. But for those who do,
Speaker 1: recognize some of the pitfalls in this that you still
Speaker 1: need to be able to pay off the money. Ultimately,
Speaker 1: I think This just buys you more time, which is great,
Speaker 1: but there can also be the element of carrying a
Speaker 1: credit card might be temptation, So we definitely need to
Speaker 1: make sure that we're not spending more, that the credit
Speaker 1: card continues to be paid off at intensive rates wherever possible.
Speaker 1: But it can be useful just for buying you more
Speaker 1: time and cutting out some of that interest and ultimately
Speaker 1: only save about three in interest in this example. So
Speaker 1: the amount of interest you save is not life changing,
Speaker 1: but it does help if you're trying to pay off
Speaker 1: your debt faster and you're already committed. But sometimes it
Speaker 1: can be a little hard to qualify for these. For
Speaker 1: the good bounce transfer cards, you oftentimes need excellent credit.
Speaker 1: There's only a few for people with good credit, so
Speaker 1: it doesn't actually help the people that it's probably trying
Speaker 1: to help unless you do have excellent credit, and then
Speaker 1: this is something you can utilize. So the second one
Speaker 1: is debt consolidation loans. It's becoming a lot easier to
Speaker 1: find unsecured personal loans made for paying off debt, and
Speaker 1: so this is one of the things that he used.
Speaker 1: So he said he had too much debt to get
Speaker 1: new credit cards, and the balance transfers wouldn't work for
Speaker 1: him because of the transfer would he would just spend
Speaker 1: again on the old credit card that was his habit.
Speaker 1: So that is a very common habit. So balance transfer
Speaker 1: credit cards are definitely not my favorite. So the author
Speaker 1: consolidated his credit card debt with a personal loan because
Speaker 1: personal loans often the average interest rate is about half
Speaker 1: less than half maybe of what a credit card interest
Speaker 1: rate would be. So if you have a lot of
Speaker 1: high interest loan debt that it's going to take you,
Speaker 1: possibly multiple years to pay off, then this would be
Speaker 1: a good option. If you're going to be able to
Speaker 1: pay off your credit card debt within like six months
Speaker 1: or around there, I don't think you should bother with either.
Speaker 1: I think you should just pay it off because doing
Speaker 1: a hard credit inquiry and getting the loan, it's all
Speaker 1: just extra stuff onto your credit, lowers your credit stree length,
Speaker 1: all this stuff, so it's just not worth it. But
Speaker 1: if you have debt that can be consolidated and it's
Speaker 1: going to take you multiple years to pay that off,
Speaker 1: this could be something to look into. The next thing
Speaker 1: he mentions is credit counseling and debt management certainly we're
Speaker 1: talking about some more extreme cases where it will take
Speaker 1: you what looks to be many many years to pay
Speaker 1: off debt or kind of what's seemingly insurmountable amounts of
Speaker 1: debt when you look at your debt to income ratio,
Speaker 1: and so this could be an option. And the benefit
Speaker 1: of going this route is that you can work with
Speaker 1: third party companies who are experts at negotiating and lowering
Speaker 1: interest rates and helping you figure out where you might
Speaker 1: be able to consolidate. However, be where there are debt
Speaker 1: settlement scams out there, and while the government has cracked
Speaker 1: down a little bit on this, you definitely need to
Speaker 1: be eyes and prudent about this. There's a couple of
Speaker 1: organizations out there that are listed. The National Foundation for
Speaker 1: Credit Counseling is a nonprofit organization that is reputable. They
Speaker 1: provide credit counselors. There's also another reputable organization called Accredited
Speaker 1: Debt Relief. All linked to both those inner show notes.
Speaker 1: If this feels like potentially the route that you need
Speaker 1: to take, but ultimately these are organizations who will assist
Speaker 1: to work towards some negotiation and figuring out payment plans
Speaker 1: for you. If you need some of that extra help.
Speaker 1: I would recommend that you try to do like figure
Speaker 1: out a plan on your own, try to see what
Speaker 1: is possible for you. But if you are finding okay,
Speaker 1: I have already set my hands to that and it's
Speaker 1: not working, this then would be the next step. Mm
Speaker 1: hmm yeah, definitely. So we will move on to our
Speaker 1: next article, and it is from every Dollar, one of
Speaker 1: favorite budgeting apps, and it is how to pay off
Speaker 1: debt faster than ever, and it's got an encouraging little
Speaker 1: picture that says you can do it. I love encouragement.
Speaker 1: But yeah, what did you think of this one, Jill?
Speaker 1: This was I guess my second favorite article in Google
Speaker 1: on this seems it seems practical. Yeah, it is the basics.
Speaker 1: This is ultimately what Ramsey solutions. The way that they
Speaker 1: recommend going about paying off debt, which is a lot
Speaker 1: of our gateway into the financial freedom world, is the
Speaker 1: concepts that that they put up put forth. So I
Speaker 1: think a lot of it is really great reminders, but
Speaker 1: in a really simplified format that is I don't want
Speaker 1: to say fool proof, but you follow this pathway and
Speaker 1: you can become debt free. The length of time that
Speaker 1: it takes will vary person to person, But I do
Speaker 1: think that if it's like, well where do I start?
Speaker 1: What do I do here? It is here's a pathway forward.
Speaker 1: Do these things you will be definitely And I feel
Speaker 1: like these steps are a little easier to digest than
Speaker 1: maybe what we normally hear from Dave. So the first
Speaker 1: one is right down all your debt. We heard that
Speaker 1: in the last article, but I think it just bears
Speaker 1: repeating that transparency is key to health, to being healthy,
Speaker 1: with relationship, with finances, with everything. To be open and
Speaker 1: honest about that with yourself. You don't have to broadcast it,
Speaker 1: but you need to be open and honest about where
Speaker 1: you're at with yourself. Yeah. And the next one, oh boy,
Speaker 1: you all are gonna love here in this because it's
Speaker 1: always coming out of my mouth. Number two, make a budget. Yes,
Speaker 1: there's no way around this. Like the and especially when
Speaker 1: you're in the debt payoff phase and you really want
Speaker 1: to just get serious about this, you have got to
Speaker 1: make a budget. There's all different kinds of ways to
Speaker 1: make a budget, there's different ways of approaching it, so
Speaker 1: find what works for you. But you do need to
Speaker 1: know what you're spending how much you have to spend
Speaker 1: so that you can rein it in as much as
Speaker 1: possible and put as many dollars and cents towards your
Speaker 1: debt as possible. Yeah, and hopefully you caught our last
Speaker 1: episode last week on Minimalist budgeting. There is a reason
Speaker 1: that our Minimalist Budgeting episode is still one of our
Speaker 1: most popular episodes because you know you need to make
Speaker 1: a budget, but it is difficult to stick to one,
Speaker 1: and so finding a way to budget that fits with
Speaker 1: your lifestyle is important. But also changing your lifestyle i'll
Speaker 1: to fit with regularly tracking and sticking to your budget
Speaker 1: is equally important, So put equal weight on both of
Speaker 1: those things. The next is to save a thousand dollar
Speaker 1: safety net against debt. So I like that this said
Speaker 1: safety net in this one because typically when we think
Speaker 1: of Dave Ramsey, we think of the thousand dollar emergency fund,
Speaker 1: and for people on a variable income, the emergency fund,
Speaker 1: especially in a thousand dollars can seem very low, and
Speaker 1: so a lot of people will save a bigger emergency fund.
Speaker 1: But so what we did is we had our thousand
Speaker 1: dollar emergency fund, but we also had a quote unquote
Speaker 1: safety net in our regular checking account for expenses that
Speaker 1: we were not anticipating, so that we would not have
Speaker 1: to put money onto a credit card. Because we were
Speaker 1: making such large debt payments so frequently, that budget was
Speaker 1: always zero based. So I really like the idea of
Speaker 1: in addition to having an emergency fund, and I know
Speaker 1: that's not what the article is saying, but I like
Speaker 1: the idea of also having a little extra safety net
Speaker 1: for those almost like a sinking fund, but for a
Speaker 1: regular expenses that are maybe are too big to be
Speaker 1: caught by your miscellaneous fund, but you can anticipate so
Speaker 1: they're not emergencies. So just having a safety net against
Speaker 1: debt that's somewhere in the middle of emergency and miscellaneous,
Speaker 1: I think is a really good way to protect yourself
Speaker 1: against debt, also to protect your mind against the discouragement
Speaker 1: that you feel if you have to go into your
Speaker 1: emergency fund or if you break your budget. It can
Speaker 1: protect you against that, and that in itself will keep
Speaker 1: your momentum going and so you don't slow down. Nice.
Speaker 1: The fourth thing on this list is to create a
Speaker 1: debt payoff plan. So once you've done those first three
Speaker 1: stuff ups, now it's time to consider how am I
Speaker 1: going to do this? What's the methodical way in which
Speaker 1: I'm going to approach this debt? And there are some
Speaker 1: key components to this. Certainly, you want to look back
Speaker 1: at your budget and find ways to tighten up your spending,
Speaker 1: meaning cut out the extras, get rid of subscriptions, cut
Speaker 1: back on maybe you're eating out an entertainment spending. You
Speaker 1: know where your money goes. If you've budgeted and you've
Speaker 1: started to look at your spending and track your spending,
Speaker 1: so then figure out where might I be overspending or
Speaker 1: spending more than what I need to and cut that
Speaker 1: out so that you can free up more money to
Speaker 1: put towards debt forever. Ah, that feels so good to say,
Speaker 1: and then figure out, okay, what's the method that I
Speaker 1: want to use. Of course, they recommend the snowball method,
Speaker 1: where you find your smallest debt, you make payments on
Speaker 1: that smallest debt, and then once that's paid off, you
Speaker 1: put what you had been paying towards that debt towards
Speaker 1: the next smallest debt while you're also making payments on those.
Speaker 1: So eventually the idea is that the amount of money
Speaker 1: that you're able to put towards debt. As each one
Speaker 1: gets paid off is bigger and bigger and bigger and bigger.
Speaker 1: Certainly look up the debt snowball method if this is
Speaker 1: not familiar to you, but it can be a really
Speaker 1: effective method. It's not the only method, but certainly can
Speaker 1: be quite useful if you've got a lot of different
Speaker 1: loans or debts that you're not quite sure how to tackle.
Speaker 1: I certainly think interest rates come into play. How much
Speaker 1: in interest you're paying to each one. That could factor
Speaker 1: into the timing in which you seek to pay off
Speaker 1: different loans. Yeah, we personally used a combination of the
Speaker 1: debt snowball and the interest based plan. The debt avalanche
Speaker 1: where the dead snowball is psychologically keeps momentum going faster,
Speaker 1: and so that is kind of what we're talking about here.
Speaker 1: If you want to go faster and further, then the
Speaker 1: debt snowball psychologically is a better option if you want
Speaker 1: to save more money and you're not motivated by quick
Speaker 1: winds and other psychological tricks than the debt avalanches for you.
Speaker 1: But we used a combination because my interest rates for
Speaker 1: my student loan were double what travises were. But my
Speaker 1: debt was also double the size, So because there were
Speaker 1: smaller loans in each of our student loans, we were
Speaker 1: able to start with mine and then snowball the smaller
Speaker 1: loans within it, so we still got those psychological quick
Speaker 1: winds with the advantage of saving some on our interest rate.
Speaker 1: And then when that was done, then we went to
Speaker 1: Travis's and did the same thing within his loans. So
Speaker 1: you should make it what you want. You should make
Speaker 1: it what works for you. But knowing that just because
Speaker 1: the debt avalanche may save you a couple hundred bucks
Speaker 1: doesn't always mean it's the best route. I mean, the
Speaker 1: best math answer isn't always the right answer for life.
Speaker 1: Well said, So the fifth one is to never go
Speaker 1: back to debt, which I think is important, but I
Speaker 1: think it's also important to be flexible on this. So
Speaker 1: knowing a lot of people who have paid off debt,
Speaker 1: being in this industry, I think everybody has their debt
Speaker 1: free story, and I know a lot of people. And
Speaker 1: getting to the end of your debt free journey is
Speaker 1: not just financially changing, it is life changing. And once
Speaker 1: you get out of debt once then you are motivated
Speaker 1: to not go back. You are armed with information you
Speaker 1: didn't have before, wisdom and a lifestyle you didn't have before,
Speaker 1: and you are much less prone to the lifestyle that
Speaker 1: got you into debt. And so if for some reason
Speaker 1: and you are debt free and something happens where debt
Speaker 1: maybe the path of least resistance, then I don't see
Speaker 1: it as a horrible thing to maybe take out a
Speaker 1: car loan to keep up your retirement investing rate, or
Speaker 1: to take out a small personal loan if you have
Speaker 1: medical bills that otherwise would go on a credit card.
Speaker 1: So you will have more wisdom and knowledge about that
Speaker 1: to discern the right answer once you are out of debt,
Speaker 1: but you don't really get that wisdom until after you
Speaker 1: complete the journey. I became debt free and then we
Speaker 1: bought a house, So yeah, technically I'm in debt, but
Speaker 1: it made sense for us based on what our living
Speaker 1: situation was, and not putting money towards a rental situation
Speaker 1: but putting money towards our home. So yeah, yes, there
Speaker 1: is freedom. You've heard us say this before. There is freedom,
Speaker 1: and this frugal journey to figure out what we're works
Speaker 1: for you, but ultimately there is great freedom and becoming
Speaker 1: debt free, especially in the way that makes most sense
Speaker 1: for you. And with that number six. This is my
Speaker 1: favorite and I love that it's on here, and I
Speaker 1: love the permission it provides celebrate every win along the way.
Speaker 1: So we're not just talking about waiting until the day
Speaker 1: that you become debt free to pull out the kazoos.
Speaker 1: We are talking about celebration along the way at every
Speaker 1: small or even large win in your journey to debt freedom.
Speaker 1: So while this definitely does not mean spending thousands of
Speaker 1: dollars on a nice vacation after paying off a thousand
Speaker 1: dollar loan, this does mean treating yourself in small ways.
Speaker 1: They give examples of getting a nice coffee drink, or
Speaker 1: doing a pizza and with the family, or you name it,
Speaker 1: small things that you know you enjoy. To give yourself
Speaker 1: that space to recognize the accomplishment, the work that it took,
Speaker 1: the intentionality that it took, sometimes even the sacrifice. Again,
Speaker 1: it helps to feed motivation. It helps us to feel
Speaker 1: accomplished and to recognize that there are even small things
Speaker 1: that we're working towards in this journey, not just the
Speaker 1: final end goal. Little small steps and small winds are
Speaker 1: worth celebrating. Yeah, I think when you're first starting out,
Speaker 1: if your loans aren't set up in the snowball to
Speaker 1: give you a win every month or two, then make
Speaker 1: your own milestones to give yourself those quick winds sooner.
Speaker 1: So it's different based on everybody's income and amount of
Speaker 1: debt and how the debt is distributed across loans, so
Speaker 1: kind of try to reverse engineer what your debt path
Speaker 1: plan is and figure out what your milestones should be
Speaker 1: to get you a win every one to two months
Speaker 1: for maybe the first six months, and then beyond that
Speaker 1: every two to four months. It's very important to celebrate
Speaker 1: accomplishments along the way. We are so good at remembering
Speaker 1: when we mess up, when life hits us, when we
Speaker 1: bust our budget. We're so good at remembering those things,
Speaker 1: and we are not as good at realizing the progress
Speaker 1: that we made and patting ourselves on the back for
Speaker 1: our accomplishments. Do you know what is an amazing weekly celebration?
Speaker 1: Oh my gosh, I am always patting myself on the
Speaker 1: back for these people's accomplishments. It's the Yeah, that's right,
Speaker 1: it's time for the best of your entire week. Maybe
Speaker 1: a baby was born and his name is Williams. Maybe
Speaker 1: you paid off your mortgage, maybe your car died, and
Speaker 1: you're happy to not have to pay that bill anymore.
Speaker 1: That's bills, Buffalo bills, Bill Clinton, this is the bill
Speaker 1: of the week. Hi for gool friends. I love acme
Speaker 1: to your podcast. I am Brittany, and my bill of
Speaker 1: the week is I was able to pray my entire
Speaker 1: six months insurance up front, so it saves me twenty
Speaker 1: months overall in like five bucks and months they would
Speaker 1: have charge for like a bill. See, so I paid
Speaker 1: it all at once, but I saved that money than Yes, Brittany,
Speaker 1: you I love that. That's a double win because I think,
Speaker 1: not only is it all covered, did you have the
Speaker 1: money to pay it all up front, but then you
Speaker 1: also save money for being able to pay it all
Speaker 1: up front. Many insurance companies do give these incentives for
Speaker 1: paying in lump sums, and I think it's incredible when
Speaker 1: we're able to do that. Awesome Bill, Brittany. Yes, I
Speaker 1: think it's unfortunate that companies reward people with money instead
Speaker 1: of helping people without, but it is a way to
Speaker 1: save money. So sometimes you have to play the game.
Speaker 1: In order to to win. And you have done that, Brittany.
Speaker 1: I am proud of you. Well done. If you want
Speaker 1: to submit your bill of the week, whether it has
Speaker 1: to do with a bill that you paid off in
Speaker 1: full or saved money on, or you know the drill,
Speaker 1: even just a person named Bill, visit Frugal Friends podcast
Speaker 1: dot com slash Bill. Leave us what you got, yes,
Speaker 1: and now it's time for round cool. All right, Today
Speaker 1: we are sharing what's the one thing no one told
Speaker 1: you about paying off debt? So one thing you couldn't
Speaker 1: find on Google, So go for it. I will go
Speaker 1: first because this is my question. My friendships changed, so
Speaker 1: I realized I wouldn't be able to go out with
Speaker 1: my friends as much. But I did not realize that
Speaker 1: my friends would still want to go out without me.
Speaker 1: So on the weekends, they were still living their lives.
Speaker 1: They did not want to pay off debt with me,
Speaker 1: and I was at home without friends, so that was
Speaker 1: pretty isolating. But I didn't let that keep going. For
Speaker 1: our debt path journey, I found new friends that wanted
Speaker 1: to hang out at home, play games, watch movies, go
Speaker 1: to free things in the park. So my friendship has
Speaker 1: changed during that season. And a lot of my friends
Speaker 1: from before we're still friends now. I didn't lose friends,
Speaker 1: but I did gain some really great relationships and memories
Speaker 1: that I would not have if I had not been
Speaker 1: through that season. Yeah, I do appreciate you talking about
Speaker 1: this quite often, not all the time, honviously, but on
Speaker 1: the podcast, because I don't think many people do address
Speaker 1: this of some of the ways that it shifts our lifestyle,
Speaker 1: which impacts other aspects of our personhood. Definitely relationships, and
Speaker 1: that's definitely not a reason to not pay off debt,
Speaker 1: but it does impact all aspects of who we are,
Speaker 1: and particularly if we're looking at ways to not get
Speaker 1: into more debt. If a lot of the reason for
Speaker 1: our being in debt or not are having trouble saving
Speaker 1: is because of what we choose to do with social
Speaker 1: events and gatherings, then yeah, we're gonna have to make
Speaker 1: some shifts which will inevitably impact relationships. So it's not
Speaker 1: talked about often, and there are ways to still care
Speaker 1: for ourselves relationally in that, but yeah, it is a
Speaker 1: good thing to speak about and make people aware of.
Speaker 1: So thank you, You're welcome. I think for me, I
Speaker 1: never heard from people that I could pay off debt
Speaker 1: that it sounds so silly, but I don't even totally
Speaker 1: remember where my desire to pay off debt originated. But
Speaker 1: in the community and environment that I was in, this
Speaker 1: isn't something that people were doing or talking about doing.
Speaker 1: I think I did take a financial peace university course
Speaker 1: my husband and I shortly after we got married, and
Speaker 1: I think that that's partly what sparked my interest in this,
Speaker 1: But certainly no one said that it would be possible
Speaker 1: to do before the projected dates of payoff. You know,
Speaker 1: with the amount of debt that I had and the
Speaker 1: income that I was making and the minimum payments that
Speaker 1: my debt required, it would have taken me thirty years
Speaker 1: if I did the bare minimum to pay off my debt.
Speaker 1: I didn't have a massive amount of debt. It was
Speaker 1: just the fact that, like they were only requiring because
Speaker 1: my income was so low, like around a hundred dollars
Speaker 1: a month, so it would have taken very, very long.
Speaker 1: So I think I just never really heard from anybody
Speaker 1: this is a worthwhile goal and you can do it
Speaker 1: even though you don't make a lot of money. And
Speaker 1: I think once I decided for myself that this is
Speaker 1: something I want to do, and I think I'm going
Speaker 1: to try whatever I can to do it despite my
Speaker 1: low income. I'm so glad I did, holy smokes, not
Speaker 1: just taking the path of least resistance of paying the
Speaker 1: minimum and having this thing looming over me for decades.
Speaker 1: There's a lot of changes that needed to come into place,
Speaker 1: but I just didn't have a community that was even
Speaker 1: had their sights on this. I know it's super common.
Speaker 1: There was no one trying to pay off their debt
Speaker 1: when we were paying off our debt, and I think
Speaker 1: a lot of people feel isolated by it. And I
Speaker 1: think another thing is that people will say, like, Okay,
Speaker 1: I'll start paying off my debt once I get this raise,
Speaker 1: or I'll start paying off my debt once I get
Speaker 1: this other job, or once I move, YadA, YadA. But
Speaker 1: there's no good time to start paying off debt. If
Speaker 1: you start from a good place, you're inevitably going to
Speaker 1: have something happened to you that's gonna like bring you down,
Speaker 1: and then you're just gonna feel discouraged and you're gonna stop.
Speaker 1: The best is to start at the way way bottom,
Speaker 1: because you can't go down from there. Like when we
Speaker 1: I was underemployed. Travis was unemployed. Like literally, there was
Speaker 1: no worse place we could have been at to start
Speaker 1: paying off debt. And we didn't realize this at the time,
Speaker 1: but I'm glad we didn't realize this, But yeah, it
Speaker 1: just made every accomplishment feel like that much more of
Speaker 1: a win. Yeah, what we did hear from people is, oh,
Speaker 1: that's good debt. You know my debt was student loans,
Speaker 1: or oh it's not a ton of debt, or you know,
Speaker 1: there's plenty of things you do here when you're in
Speaker 1: this journey, but yeah, there's a lot that you don't
Speaker 1: hear as well. I never would have thought I could
Speaker 1: pay off the debt in the amount of time that
Speaker 1: we paid it off, and that just kind of came
Speaker 1: as a surprise as life happened, you know, I was
Speaker 1: kind of just like, as soon as we can, but
Speaker 1: recognizing it was probably going to take about ten years,
Speaker 1: and I think all said and done, really it was
Speaker 1: maybe six years, which I'm so grateful for. Yeah, and
Speaker 1: literally right before pandemic. Yeah hit a fan, great timing. Yeah,
Speaker 1: we became debt free in February. I think I've mentioned
Speaker 1: that on another podcast episode. Holy smokes. I didn't even
Speaker 1: know what was coming, but because we had been diligent
Speaker 1: prior to we didn't have to worry about those debt
Speaker 1: payments and it did free up some money for us. Man,
Speaker 1: thank you guys so much for listening, and I hope
Speaker 1: that we can bring you another really solid year of
Speaker 1: helpful podcast episodes. Every year that we do this, we
Speaker 1: feel more and more encouraged by how much this has
Speaker 1: helped you, and so this is what we're here for.
Speaker 1: We're here to only bring you stuff that either helps
Speaker 1: you or makes you laugh. And if it doesn't do
Speaker 1: one of those two things, you probably won't hear it
Speaker 1: on this podcast. So thank you for listening. Thank you
Speaker 1: for your kind reviews that let us know what is
Speaker 1: most helpful so that we could do more of it
Speaker 1: like this one. It's from Alicia K eighty and it
Speaker 1: just happens to be five stars. She says. My soul
Speaker 1: sisters who do this. These two are my sisters from
Speaker 1: other misters. I recently stumbled across this podcast while looking
Speaker 1: for frugal tip podcast to listen to while door dashing
Speaker 1: my side hustle. My husband and I recently started our
Speaker 1: journey in August to pay off our fifty eight thousand
Speaker 1: in debt. I live outside Philly, so I love listening
Speaker 1: to Jill talk about when she lived up north outside
Speaker 1: of Philly, and her voice and laugh always make me smile.
Speaker 1: I feel like I could sit and look through missed
Speaker 1: connections on Craigslist with Jen for hours. Either way, these
Speaker 1: two keep me laughing the entire time I am listening.
Speaker 1: I get to learn lots of new tips and ideas
Speaker 1: while enjoying their banter. Kudos to you, guys for keeping
Speaker 1: us entertained while giving advice. Keep these episodes coming. We will.
Speaker 1: This is a fun review referencing inside jokes. Even who
Speaker 1: Did was a Bill of the week phone call that
Speaker 1: came in to us probably accidentally and has become our
Speaker 1: big joke. And also, I love that you love how
Speaker 1: much I hate Philly. That's great. That's great for all
Speaker 1: of us. So we also want to thank our friends
Speaker 1: who share these episodes on social media. When you share
Speaker 1: the latest episode and tag us on Facebook or Instagram,
Speaker 1: we're adding you to our monthly drawing. So for every
Speaker 1: five tags and reviews we get each month, we're giving
Speaker 1: away a copy of The Frugal Friends workbook, So keep
Speaker 1: leaving us reviews on iTunes or Stitcher and sending those
Speaker 1: screenshots to Frugal Friends podcast at gmail dot com. Don't
Speaker 1: forget to tag us on social and don't forget to
Speaker 1: head to Modern frugality dot com slash training to enter
Speaker 1: into the lovely training that We've got going on this Sunday.
Speaker 1: It's gonna be real fun, it's gonna be a lot
Speaker 1: of frugal friends, and I'm stoked on it. I'm just stoked.
Speaker 1: See you next week. Frugal Friends is produced by Eric Sirian.
Speaker 1: So in addition to this live training on Sunday, I
Speaker 1: wanted to leave this to the after show because this
Speaker 1: is this is exclusive, secret secret, yeah, secret secret. So
Speaker 1: my new course, financial Freedom Fast Track is open for
Speaker 1: the next seven days. It is something I've been working
Speaker 1: on for months and months and it is literally all
Speaker 1: about how to set up the foundations for your debt payoff,
Speaker 1: to sustain the journey, get it done faster, and then
Speaker 1: also what comes next, because I feel like I was
Speaker 1: super lost when we got to the end of our
Speaker 1: debt payoff and there was some advice, but there wasn't
Speaker 1: advice for that bridge for those like several months of
Speaker 1: that bridge from debt to debt freedom. So I am
Speaker 1: super super excited to share that with the world. It
Speaker 1: is my second baby. You're doing so much in January
Speaker 1: doing live calls and free things. Yeah, it's so much.
Speaker 1: People can have so much access to tips through you.
Speaker 1: This is the time when people care most about their
Speaker 1: finances and so I am here for it. So true,
Speaker 1: I am here. I'm here for you and all of it.
Speaker 1: And so if anybody wants to check out the Financial
Speaker 1: Freedom fast Track before people that enter the live train
Speaker 1: and get access to it, you can check it out
Speaker 1: at modern frugality dot com slash fast Track. I'm super
Speaker 1: proud of what's in it. I'm super super excited to
Speaker 1: enter into this journey with people for for a month
Speaker 1: at school, joone even more access to me, like four
Speaker 1: weekly coaching calls and off Facebook community group. We're going
Speaker 1: to have a lot of time together, so much more
Speaker 1: from gen. Yes, if you're not sick of me already,
Speaker 1: I'm going to be here for you more. If you
Speaker 1: want more of me, I'm here for it. I'm very
Speaker 1: excited me too. Okay, Bye,