Speaker 1: Welcome to How the Money. I'm Joel and I am Matt,
Speaker 1: and today we are discussing creating a debt payoff plan.
Speaker 1: Joel Man, we are talking about debt. Everybody's got it.
Speaker 1: A lot of people do people not everybody. A lot
Speaker 1: of people do, though, and the amount of debt that
Speaker 1: we as a country have us as individuals, there is
Speaker 1: just so much debt going around. We know that we
Speaker 1: want to get rid of debt, but we don't necessarily
Speaker 1: know what steps to take in order to get rid
Speaker 1: of that debt. But a plan can help a whole yes, exactly.
Speaker 1: So that's what we're gonna talk about this episode. We're
Speaker 1: gonna talk through what it actually takes to paid on debt. Yeah.
Speaker 1: But before we get to that, Matt, real quick, I
Speaker 1: wanted to talk about guilt and money, and I think,
Speaker 1: especially this time a year, maybe a lot of us
Speaker 1: are feeling guilt over how we've spent and some of
Speaker 1: that might be warranted. Right. We might have in November
Speaker 1: December and the lead up to the holidays, we might
Speaker 1: have bought too many gifts for other people. We we
Speaker 1: probably could have done just a little bit better in
Speaker 1: how we thought through a spending plan, right, and we're
Speaker 1: gonna talk about a debt plan, but we could have
Speaker 1: thought through our spending a little bit better. But I
Speaker 1: think ultimately this show and how we talk about money,
Speaker 1: we don't want people to feel guilty all the time
Speaker 1: about how they're spending. And I think certain folks in
Speaker 1: the personal finance space that's kind of their main tactic
Speaker 1: is to make people feel guilty about how they do spend,
Speaker 1: versus motivating folks to help them spend less and to
Speaker 1: save more. And so I think, you know, as we
Speaker 1: get further and further into this new year, I just
Speaker 1: want to let people know that this podcast that what
Speaker 1: we do, it's all about helping people prioritize the right
Speaker 1: things and it's not about shaming them for the for
Speaker 1: the move that they've made, for the things that they
Speaker 1: haven't done as well as they could have done. Yeah,
Speaker 1: totally do I completely agree. I think you said shame,
Speaker 1: which totally may think of something else as well as
Speaker 1: I'm gonna go there in one second, but I think
Speaker 1: a guilt trips for you know, based on your spending,
Speaker 1: that's a bad idea. If you have identified what it
Speaker 1: is that you want to spend your money on Like,
Speaker 1: if you have a plan, if you know where your
Speaker 1: priorities lie, then it's okay to spend money. And yes,
Speaker 1: you do not need to feel guilty. I do think though,
Speaker 1: that a little bit of guilt can be a good thing, right,
Speaker 1: Like to me, be proud a little bit at time, exactly. Yeah. Like,
Speaker 1: to me, guilt is basically knowing that you could have
Speaker 1: done something better but you didn't. It basically calls attention
Speaker 1: to the fact that you're responsible for your actions. And
Speaker 1: when it comes from money, I think there's definitely a
Speaker 1: need for more responsibility when it comes to you know,
Speaker 1: personal finances. But interestingly, like you mentioned shame, and I
Speaker 1: think that's so clutch because there's a big difference between
Speaker 1: guilt and shame. Have you read any of Burnet Brown.
Speaker 1: She's like, she's a she's she has ted talks and
Speaker 1: she's written books. She's an author. I'm familiar with her
Speaker 1: just because my wife talks about her a lot. I
Speaker 1: haven't read any of her book. She she's I think
Speaker 1: she's really great, But she talks about shame, and one
Speaker 1: of the ways she characterizes it is that like, shame
Speaker 1: is well for let's start with guilt. Guilt is knowing
Speaker 1: that you did something bad and so you feel bad
Speaker 1: for that action, right, Whereas shame is like you identify
Speaker 1: as being a bad person, and so we want to
Speaker 1: focus on the behavior. You know, you're not a terrible
Speaker 1: person because you know, you blew your budget one month
Speaker 1: or maybe didn't quite put enough towards retirements that year. Right,
Speaker 1: But when you identify with being a poor saver, like
Speaker 1: if that's who you feel you are, well, that's when
Speaker 1: it can become negative versus a positive effect. It can
Speaker 1: almost be become a self fulfilling cycle. Oh yeah, if
Speaker 1: we identify ourselves as a certain way, we're going to
Speaker 1: act accordingly, and so we have to kind of break
Speaker 1: that psychological barrier of feeling shame with how we've handled
Speaker 1: our money. And I completely agree, I think a little
Speaker 1: bit of guilt can help drive us in the proper direction.
Speaker 1: But if we completely identify as being someone who doesn't
Speaker 1: know how to handle money, well, well, then hopefully this
Speaker 1: show can help people this year to learn some of
Speaker 1: those tools and then to kind of help break those
Speaker 1: chains of potential shame that's associated with how they handle
Speaker 1: money totally. Um, that's that's what we want to be here.
Speaker 1: We don't want to be here to use a stick
Speaker 1: to beat you over the head because you haven't done
Speaker 1: things properly. Well. We want to do is encourage you,
Speaker 1: motivate you, give you the tools to create a more
Speaker 1: positive outlook on your relationship with money, and then specifically
Speaker 1: give you the proper approaches to how you can handle
Speaker 1: your money well so that you can make changes moving forward,
Speaker 1: so that whatever cycle maybe you've become accustomed to living
Speaker 1: in relationship to your money just isn't the case anymore. Yeah, totally.
Speaker 1: I think if you feel a tiny little bit of
Speaker 1: guilt when you learn something new or maybe you hear
Speaker 1: something that you haven't done, I think that can be
Speaker 1: okay if you respond positively to that. Right. It's just
Speaker 1: like constructive criticism or feedback that you receive on a
Speaker 1: project or something that you're working on. If you take
Speaker 1: that feedback and you then modify your behavior and that
Speaker 1: allows you to grow. What's It's a positive thing. It's
Speaker 1: about gaining knowledge and learning from our mistakes. And yeah,
Speaker 1: like you said, you hopefully that's what folks can do
Speaker 1: from listening to this podcast. Yeah, man, I think I
Speaker 1: used to feel guilt over buying really nice beer, and
Speaker 1: now I just don't anymore. It's because it's something that
Speaker 1: I've prioritized highly and something that I've made an important
Speaker 1: line item and my budget, and so I think that's
Speaker 1: another way that people can approach it. And so, Matt,
Speaker 1: speaking of beer, the beer that we're having on the
Speaker 1: show today is barrel aged Yetti Imperial Stout by Great
Speaker 1: Divide Brewing and the kind folks at a Great Divide
Speaker 1: in Denver, Colorado, they sent this beer our way. I'm
Speaker 1: really excited to have the barrel aged version of their
Speaker 1: Yetti Imperial Stout on the show with you today, my friend. Yeah,
Speaker 1: this is our last one by them. We've had them
Speaker 1: for the past few episodes now. So man, Great Divide,
Speaker 1: y'all are fantastic. You make some awesome beers like you
Speaker 1: always have. And yeah, we'll get to our tasting notes
Speaker 1: on this one at the end of the episode. All right, Matt,
Speaker 1: let's get into the topic at hand. We're talking today
Speaker 1: on the show. We're talking about creating a debt payoff plan.
Speaker 1: And let me ask this question to our listeners at
Speaker 1: the very beginning of the episode. And it might be
Speaker 1: a little awkward. How's your debt situation? And does that
Speaker 1: question itself cause a lump to rise in your throat? Well,
Speaker 1: personal levels of indebtedness are a major issue in our country,
Speaker 1: but lots of folks feel like they're stuck in quicksand
Speaker 1: up to their midsections, and they don't know how to
Speaker 1: navigate themselves out of the problem that they put themselves in.
Speaker 1: We need a plan to help us get out of
Speaker 1: debt and to get our feet set in the right
Speaker 1: direction this year. And so when we see headlines Matt,
Speaker 1: like we've seen lately eight six percent of millennials overspent
Speaker 1: on Christmas gifts, Well, we know what that means. That
Speaker 1: means that a lot of those folks have put that
Speaker 1: extra spending on plastic on credit cards, and this time
Speaker 1: a year they're getting that statement in the mail and
Speaker 1: they're a little shocked. They didn't know that they spent
Speaker 1: that much, and they didn't realize that they wouldn't be
Speaker 1: able to afford the bill, and now they need some
Speaker 1: help to tackle that debt, not to mention the other
Speaker 1: death they might be caring right now, so it doesn't
Speaker 1: get even further out of hand. Well, Joe, you're talking
Speaker 1: about debt. And I feel like I'm super a d
Speaker 1: D today because you mentioned quicksand and I started thinking
Speaker 1: about quicksand why is why is like why would we
Speaker 1: When we were kids, everything was quicksand like Mario Brothers
Speaker 1: to head quicksand like even as kids playing, it's like
Speaker 1: watch out for the quicksand like quicksand was this real thing,
Speaker 1: like this real problem that we had to watch out for.
Speaker 1: When I think about quicksand I think about the Princess Bride,
Speaker 1: you know, I mean to me that's strongly correlated. Yes,
Speaker 1: Like late eighties, early nineties, quicksand was everywhere. Now everything's lava,
Speaker 1: like the kids have moved on to lava, like it
Speaker 1: used to be quicksand now it's lava. Alright, Well, sorry,
Speaker 1: a little side we go with old school reference. We're
Speaker 1: gonna stick with quicksand floor's lava, all right. Let's get
Speaker 1: back to debt a little bit though. Here's the thing.
Speaker 1: Here's a fact for your outstanding student loan debt, Joel.
Speaker 1: It has reached an all time high last year. We
Speaker 1: hit one point four one trillion dollars of Americans have
Speaker 1: credit card debt, and the average outstanding balance is just
Speaker 1: over six thousand dollars, while consumer debt as a whole
Speaker 1: stands at fourteen trillion. It's not just I covered my
Speaker 1: ears there because it just got so horrendous. Way can
Speaker 1: you say it again, dude, it's terrible. And not only
Speaker 1: is it just an incredible amount of money, but it's
Speaker 1: also how we're going about getting this debt. Car loans
Speaker 1: they've gotten longer, with some folks not just taking out
Speaker 1: sixty months of payment, but seventy two and eighty four
Speaker 1: month long loans, and then you know, they end up
Speaker 1: trading their cars and while they're upside down. We're taking
Speaker 1: out debt for smaller and smaller purchases as well. Everyone
Speaker 1: out there, like all the different retailers, offer a payment
Speaker 1: plan now, and it spans from you know, services at
Speaker 1: home like your h VAC, to urban outfitters if you
Speaker 1: just want to, you know, pick up some shoes. We
Speaker 1: are funding our lifestyles through the accumulation of more and
Speaker 1: more as well as riskier debt. It's just become easier
Speaker 1: to take on debt for anything now, Like you go
Speaker 1: to the dentist and you can take out a payment
Speaker 1: plan on that new artificial tooth or whatever. Surgery you
Speaker 1: had to undergo. Yeah, I gotta think that is the
Speaker 1: absolute least fun loan to pay on. Yeah, paying on
Speaker 1: my root canal. Still, I'll give you a three loan
Speaker 1: on that root canal. Matt, But that's just the kind
Speaker 1: of day and age we live in, easy access to
Speaker 1: debt for almost anything. Yeah, your local small business electrician
Speaker 1: probably has the ability to offer you alone on that
Speaker 1: new age fact. I mean, it's just kind of almost
Speaker 1: gotten preposterous. And then we end up sinking ourselves in
Speaker 1: a hole, even if it's zero percent, Even if it's
Speaker 1: zero percent for multiple years, we'll take out the debt
Speaker 1: and then ultimately we just don't have the money to
Speaker 1: meet those obligations. So we have to change our relationship
Speaker 1: to debt and how we consider taking it on. But
Speaker 1: Matt also too, I think it's important to mention before
Speaker 1: we get into the specifics of creating a debt payoff plan,
Speaker 1: that we don't think all debt is terrible, Like we're
Speaker 1: not anti every single kind of debt out there. Not
Speaker 1: all debt is bad debt. Some debt can be used effectively,
Speaker 1: and there are reasons worth accruing debt. For example, going
Speaker 1: to get an education, or starting a business or buying
Speaker 1: a home, and we kind of discussed that in more
Speaker 1: detail and episode. But just because you're considering one of
Speaker 1: those good debts doesn't give you a free pass to
Speaker 1: blindly take out loans in order to go to a
Speaker 1: fancy school, or to pursue your dream of owning your
Speaker 1: own restaurant, or to buy more house than you can afford.
Speaker 1: You still have to take value into the equation when
Speaker 1: you're thinking about what debts you take on. Yes, we
Speaker 1: we need to take value into account because you know,
Speaker 1: not having massive amounts of debt is important, and so
Speaker 1: I mean, I'll not note you might be asking like, well, well,
Speaker 1: why is getting out of debt? Why is that actually important?
Speaker 1: The biggest reason that we're gonna share that getting out
Speaker 1: of debt is so stinking paramount is because debt is expensive.
Speaker 1: In the moment, it doesn't feel expensive to pay with
Speaker 1: a credit card or maybe to take out a loan.
Speaker 1: If anything, it feels like free money, right And it's
Speaker 1: really easy to gain access to that credit, which is
Speaker 1: why in a recent episode Maut we talked about cashed
Speaker 1: up in or credit like how we spend using credit
Speaker 1: cards is in particular, the biggest downside is the ease abuse,
Speaker 1: and that's what causes us to use them more frequently.
Speaker 1: Even though it's a smooth transaction. Even though we like
Speaker 1: credit cards, it can be away for us to spend
Speaker 1: money that we don't have exactly. Yeah, but here's the
Speaker 1: thing at the core of it, though. Like using your
Speaker 1: credit cards as a tool, that's not the problem because
Speaker 1: it really is just a tool. It's when we don't
Speaker 1: pay off the balances and the interest begins to accrue.
Speaker 1: It's when we use these tools incorrectly, and so when
Speaker 1: we're paying interest on a balance, we're paying way too
Speaker 1: much money for the things that we likely shouldn't have
Speaker 1: purchased in the first place. So, for example, if hitting
Speaker 1: thousand dollar car like that could easily end up costing
Speaker 1: you closer to twenty dollars because you took out a
Speaker 1: car loan and you're paying interest, and so effectively you're
Speaker 1: paying way more than you should have for that vehicle.
Speaker 1: And it's hard to reach your financial goals when you're
Speaker 1: constantly over paying for things. Yeah, Matt, having a lot
Speaker 1: of debt puts you on just not solid footing. It
Speaker 1: put you in this kind of quick sand thing, right,
Speaker 1: I mean, let's get back to the quick sand. It
Speaker 1: puts you in this scenario where you're not as financially
Speaker 1: flexible you could be if you didn't have that debt
Speaker 1: in your life. The more debt you have, the weaker
Speaker 1: position that you're in and the less freedom you have.
Speaker 1: And when we're constantly overpaying for pretty much everything in
Speaker 1: our lives, it's also it's hard to get ahead and
Speaker 1: to reach any of those financial goals that we have.
Speaker 1: The going is slow when we have interest payments working
Speaker 1: against us. It feels like all the cards are stacked
Speaker 1: against us, and that can be really discouraging. And instead,
Speaker 1: we want to be on the receiving side of interest,
Speaker 1: and that means like having a high interest savings account.
Speaker 1: That means our investments essentially making money for us while
Speaker 1: we sleep. Instead of interest working against our money, it's
Speaker 1: working for us, and it's allowing us to quickly achieve
Speaker 1: our goals. That's when it allows us to build wealth.
Speaker 1: We're using interest in the positive frame. We're using returns
Speaker 1: in the positive sense, as opposed to everything we buy
Speaker 1: having a much larger price tag based on the fact
Speaker 1: that we have interest payments going alongside of it. Yeah,
Speaker 1: that's the difference between paying interest versus receiving interest. Right,
Speaker 1: And I got a quick illustration for you. Imagine, have
Speaker 1: you ever been to a store where there's like a
Speaker 1: second floor, or maybe eve been to a mall, a
Speaker 1: movie theater, perhaps right where there's an escalator. So imagine
Speaker 1: you're on level one and level two. That's where you're
Speaker 1: trying to get to level two, Joel, that's where your
Speaker 1: financial dreams and hopes are in front of you. You've
Speaker 1: got two escalators. You've got one that's coming down. At least,
Speaker 1: it's not like a sky skyscraper that I have to
Speaker 1: climb up, you know. Yeah, But on one side you've
Speaker 1: got an escalator coming down. On the other side, you've
Speaker 1: got an escalator going up. And when you have debts,
Speaker 1: that is when interest is working against you, right. That
Speaker 1: is you trying to get to the second level by
Speaker 1: going up the side of the escalator that's coming down.
Speaker 1: When you're doing that, you're working crazy hard. It takes
Speaker 1: way longer, and you know what, at some point you
Speaker 1: might even actually give up because it's too hard. I
Speaker 1: probably could have done it really easily when I was
Speaker 1: twenty five Matt, but even still, like, yes, I agree, right,
Speaker 1: like I've I've done that before as a kid, But
Speaker 1: it's still a lot harder versus when you have interest
Speaker 1: working for you. When you're receiving interest, it's like you're
Speaker 1: getting on the correct side and you're you know, you're
Speaker 1: writing that interest up if you want, you can only
Speaker 1: rely on that interest and you can just stay in there.
Speaker 1: But if you can do need to work a little bit.
Speaker 1: Imagine how quickly you're gonna get to that next level
Speaker 1: walking while you're on an escalator. It's like the best
Speaker 1: feeling I know. I mean, how quickly do you get
Speaker 1: from like one level to the next just by doing that.
Speaker 1: It's amazing. And so the next time you're thinking about
Speaker 1: taking out a car loan or some other consumer debt,
Speaker 1: some credit card debt, picture that illustration, because like that
Speaker 1: truly is what it's like. It's like, like you said,
Speaker 1: being in quicksand and you're trying to trying to hop
Speaker 1: out of that quicksand it's so difficult to do that.
Speaker 1: It's so difficult to make any progress when we're bogged
Speaker 1: down with that interest working against us. Yeah, no doubt,
Speaker 1: And we have to get to these specifics for folks
Speaker 1: that are writing that down escalator and they want to
Speaker 1: get off, they want to get out of debt, and
Speaker 1: they want to make their money work for them. Well,
Speaker 1: let's get to the specifics of how to create a
Speaker 1: debt payoff plan right after this break. All right, Joe,
Speaker 1: we're back and we're talking about creating a debt payoff plan.
Speaker 1: By the way, did you like my my little illustration
Speaker 1: about the escalator. That was a great illustration. Another one
Speaker 1: I was thinking of too. I was just like, Okay,
Speaker 1: what about like headwinds and when is that you're back?
Speaker 1: I'm like, I was gonna say an example of you know,
Speaker 1: when you're up at the tea box and you're playing
Speaker 1: disc off and you're getting ready to throw your driver,
Speaker 1: but you've got that strong headwind, it's gonna be a
Speaker 1: lot harder than if you had to win at your back, right. True,
Speaker 1: that's true. Yeah, that's another great illustration and one that
Speaker 1: makes sense to me. But I feel like most folks
Speaker 1: have probably been on escalators more often than they've actually
Speaker 1: thrown a disc off. That's probably true for most folks
Speaker 1: out there, sadly, because disc golf is a great sport
Speaker 1: all right, we're gonna talk now though about what steps
Speaker 1: that you need to take when it comes to creating
Speaker 1: a debt payoff plan. These are the steps that we're
Speaker 1: going to actually help you to make real substantial progress
Speaker 1: this year. The first thing that you need to do
Speaker 1: is to make a list of all your debts. The
Speaker 1: first step in any plane of action is to get organized,
Speaker 1: and so making sure that you're aware of all the
Speaker 1: debts that you oh is a really important for step
Speaker 1: on your path to crushing debt. Yeah. Man, I mean
Speaker 1: we've used this illustration before, but if you're planning a
Speaker 1: road trip, you're going to make the dots along the
Speaker 1: wave where you want to stop. You kind of want
Speaker 1: to know the layout, How long is it gonna take
Speaker 1: me to get here and there, especially if you got kids,
Speaker 1: Like where are we gonna stop to pete? Where we're
Speaker 1: gonna stop to eat? There's all these questions that come
Speaker 1: with a big, major trip, right, And so I think
Speaker 1: the same thing, like paying off your debt is this
Speaker 1: big trip, and you want to plan the points along
Speaker 1: the way you want to You want to know exactly
Speaker 1: what's in store so that nothing hits you terribly by surprise. Yeah,
Speaker 1: you don't just throw everybody in the car and just
Speaker 1: start driving. That's a terrible plan. Like lick your fingers
Speaker 1: sticking up in the air, decide which way then we're
Speaker 1: gonna go east. Let's do it. We'll see where we
Speaker 1: end up. Yeah. Yeah, that's not a good way to go.
Speaker 1: So yeah, making a list of all your debts helps
Speaker 1: you at least get the lay of the land, and
Speaker 1: then you need to pick your approach. And then we've
Speaker 1: talked before about the debt snowball approach versus the debt
Speaker 1: avalanche approach and which one people should consider, and we
Speaker 1: went into a lot of detail on how you decipher
Speaker 1: which plan is better for you in episode eighty six.
Speaker 1: But do you need or just want some more emotional
Speaker 1: rewards along the way, or do you just want to
Speaker 1: pay these debts off as quickly as humanly possible while
Speaker 1: paying as a little interest as you can. Either way,
Speaker 1: he'll focus hard on completely obliterating one debt while paying
Speaker 1: the minimums on the others in both approaches. Maintaining a
Speaker 1: high level of focus is the key to success because
Speaker 1: once you know that lay the land, Matt, it's really
Speaker 1: important to kind of choose which approach you're going to
Speaker 1: take and then sticking to it. If you've come up
Speaker 1: with a strategy, do you think it's going to work
Speaker 1: for you? Looking at the strategies that might potentially work
Speaker 1: for you and then picking one and sticking to it
Speaker 1: is going to be crucial to your probability of success. Yeah, Joel,
Speaker 1: you know. And one thing I'll say is that I
Speaker 1: think for folks especially who are listening to this podcast,
Speaker 1: they're thinking, no, man, debt avalanche, that's the way to go.
Speaker 1: Look at the numbers, do the math. But the older
Speaker 1: I get, I realized that so much of our money
Speaker 1: is not just knowing the correct information, isn't just seeing
Speaker 1: the numbers right. Because we don't operate as robots, we
Speaker 1: don't always make the rational decision. Our emotions play such
Speaker 1: a huge role when it comes to how we handle
Speaker 1: our money. And because of that, I think the debt
Speaker 1: snowball needs to be considered by way more people than
Speaker 1: it actually is. Because you are receiving that feedback more quickly.
Speaker 1: You're able to quickly pay off a debt and then
Speaker 1: quickly move on to the next one, and that feels good.
Speaker 1: And when it feels good, that's something that you'll continue
Speaker 1: to do exactly. The best plan that we can create
Speaker 1: is the plan that we can stick to. It's not
Speaker 1: just the best plan in theory, it's the one that
Speaker 1: we can actually accomplish in real life. And just quick example, Matt,
Speaker 1: for me, for a lot of years, I wasn't fully
Speaker 1: funding my wrath I RA and I was just investing
Speaker 1: a lot more in my four own K because it
Speaker 1: was a lot easier for me to click the button
Speaker 1: that up the percentage point coming out of my paycheck.
Speaker 1: I barely felt it than it was to actually increase
Speaker 1: that automatic draft amount from my bank account into Vanguard
Speaker 1: to fund my wrath. And so it literally took more
Speaker 1: work for you to up your wrath I RA versus
Speaker 1: your four own K. Yeah, and really the work is
Speaker 1: the same. It's the mental It's a mental hurdle I
Speaker 1: couldn't overcome. And so I think that's a huge thing
Speaker 1: that we do need to consider. What what what's the
Speaker 1: easiest mental mental hurdle for us to overcome? And again,
Speaker 1: the plan that we can stick with is the one
Speaker 1: that we need to commit to. So true, man, all right,
Speaker 1: so now you've made a list of all your debts,
Speaker 1: you've gotten organized, you've picked your approach. You know, you
Speaker 1: thought about which strategy is gonna work for you. The
Speaker 1: next step is we want you to look at your
Speaker 1: timeline a little bit. This is when you are going
Speaker 1: to do some math and you want to calculate how
Speaker 1: much monthly income you can put towards your debts and
Speaker 1: and actually figure out how long it will take you
Speaker 1: to be rid of it all. It is important to
Speaker 1: know how long this will take in order to manage
Speaker 1: your own expectations. If you don't take the step, you
Speaker 1: might think you'll knock out your debt let's just say
Speaker 1: by the end of the year, and then maybe October
Speaker 1: rolls around and you realize that you're not even close.
Speaker 1: If you are not realistically approaching your debt payoff plan,
Speaker 1: it can be easy to lose hope and basically just
Speaker 1: burn and fizzle out. Yeah. It reminds me of our
Speaker 1: conversation with J. D Roth not too long ago, and
Speaker 1: he specifically mentioned he gave a very vivid picture of
Speaker 1: his when he was in the bathy. Okay, he was like,
Speaker 1: this is how I came up with my debt payoff plan.
Speaker 1: I was in the shower, I had this epiphany. He's like,
Speaker 1: I ran out, I didn't dry off, I had a
Speaker 1: towel around me, and I sat at the table for
Speaker 1: hours and I came up with this debt payoff plan.
Speaker 1: What a madman? I know, Yeah, I know, I totally picture.
Speaker 1: I can totally picture it was. It was maybe too vivid.
Speaker 1: And he said he realized it was gonna take thirty
Speaker 1: six months for him to pay off his debt after
Speaker 1: kind of calculating it out, and this timeline helped him
Speaker 1: track his progress. Knowing that timeline helped him have a
Speaker 1: realistic expectation in mind for how long it was going
Speaker 1: to take him to be rid of all his debt.
Speaker 1: And that's really important stuff for us to take in
Speaker 1: this process, is to map out the length of time
Speaker 1: that it's going to take us to go from a
Speaker 1: bunch of debt to no debt, because that can help
Speaker 1: us stick with it. If we know that it's going
Speaker 1: to take three years, well there's light at the end
Speaker 1: of the tunnel. If we have no idea and we
Speaker 1: just are aimlessly attempting every month to put more money
Speaker 1: towards our debt, but we don't have a time frame
Speaker 1: in mind, well then it can just be a little
Speaker 1: more difficult to actually stick with it. It's like the
Speaker 1: difference between running a marathon versus like a sprint, Like
Speaker 1: you need to know the distance because if you start
Speaker 1: running a marathon, like you're running a four ndre meter sprint, well,
Speaker 1: guess what, You're gonna burn out and you're gonna completely
Speaker 1: give up. And so yeah, having that and goal in
Speaker 1: mind and knowing that time frame is is so important.
Speaker 1: And there are tools that can help, by the way,
Speaker 1: and we link to those in the show notes. Whether
Speaker 1: you're taking the snow ball approach or the avalanche approach,
Speaker 1: well link to a tool that can kind of help
Speaker 1: you as you plug in your information. It can give
Speaker 1: you that time frame so that you're not just doing
Speaker 1: pen and paper. You can actually plug it into a
Speaker 1: spreadsheet and then you've got breadsheets. You can share it
Speaker 1: with your significant other or your partner, and it's this
Speaker 1: kind of perfect opportunity to be on the same page,
Speaker 1: to be looking at the same numbers, and it can
Speaker 1: kind of just kind of help you plot your path.
Speaker 1: So you know, I'm all about the spreadsheet. I know
Speaker 1: you are, buddy. Yeah, And so another step we want
Speaker 1: you to take is essentially to create a debt slaying identity. Basically,
Speaker 1: what I want you to do if you're in debt
Speaker 1: and you're looking to get out of it, is I
Speaker 1: want you to say to yourself this year, I am
Speaker 1: all about paying off that debt. It's like your alter ego. Yes,
Speaker 1: like that, that's just who you are. What this means
Speaker 1: is not saving for a vacation, not saving for that
Speaker 1: new car that maybe you wanted. Instead, it means throwing
Speaker 1: all of your weight behind that one singular goal. This
Speaker 1: is a crazy powerful approach, and anyone who has paid
Speaker 1: off large amounts of debt quickly will attest to the
Speaker 1: power of this type of focus. And again, you want
Speaker 1: to make sure to prioritize that top debt while you
Speaker 1: pay minimums on everything else, regardless of what approach you take,
Speaker 1: whether you take the debt snowball or whether you take
Speaker 1: the debt avalanche. All right, we've referenced Batman in this
Speaker 1: podcast before, Matt, but so basically Batman is this perfect
Speaker 1: representation of creating an alter ego. It's it's not that
Speaker 1: he has these special powers. I mean, sure, he's got
Speaker 1: a cooler vehicle and like a grappling hook or whatever,
Speaker 1: but he can't actually fly or do anything super duper special.
Speaker 1: He's just creating an alter ego that helps him to
Speaker 1: fight crime. It's almost like when he puts on the suit,
Speaker 1: he becomes a different person. And I think that's kind
Speaker 1: of how we need to approach paying off debt in
Speaker 1: our lives, is to create this alter ego, to put
Speaker 1: ourselves in this new state of mind, in this new
Speaker 1: superhero suit, if you will. And I think that that
Speaker 1: just kind of mental shift in telling ourselves that we
Speaker 1: are someone who can pay off a large amount of debt,
Speaker 1: who can make a change in our life, who can
Speaker 1: shift our habits. That's a that's a really powerful thing
Speaker 1: for us as we step up to the plate in
Speaker 1: order to vanquish the debt that has become the bane
Speaker 1: of our existence. That's a nerd bad guy reference. I
Speaker 1: love it. The next step is basically to move on
Speaker 1: to debt number two. Once you've done all of that
Speaker 1: and you've crushed that first debt, move onto the next
Speaker 1: debt on the list. Again, regardless of which method that
Speaker 1: you're taking. After that first debt is eliminated, you're gonna
Speaker 1: have more money. It's a blast that next debt on
Speaker 1: your on your list, you might notice that it's a
Speaker 1: little bit easier to attack that next debt that you
Speaker 1: have on your lists. Right, Like interest, it's still working
Speaker 1: against you because you still have debt, but it's not
Speaker 1: working against you quite as hard. Going back to the
Speaker 1: escalator analogy, like you're still going up the wrong escalator,
Speaker 1: but maybe the escalator has slowed down a little bit.
Speaker 1: And not only has this slow down, Jill, you've also
Speaker 1: gotten stronger because now you have more money to throw
Speaker 1: into attack that next debt with. Yeah, it's incredible how
Speaker 1: this process, the debt payoff plan becomes easier after that
Speaker 1: first debt is removed, whether you're going avalanche or snowball,
Speaker 1: having one fewer debt, it just increases your ability to
Speaker 1: attack debt number two. It's a beautiful thing. Yeah, you've
Speaker 1: got more money and it's just easier to focus as well.
Speaker 1: But is guess what if you've got six different debts
Speaker 1: that you know that you want to pay down. It
Speaker 1: might take a lot of mental capacity to focus on
Speaker 1: that one debt when you know you've got these other
Speaker 1: ones that you're just paying minimums on. Right, But guess
Speaker 1: what you knock out one of those and now you've
Speaker 1: only you've only got five, so you're paying against one
Speaker 1: of them, and there's just four of them that that
Speaker 1: are kind of sitting there, and then you know, the
Speaker 1: number just gets smaller and smaller. There are so many
Speaker 1: reasons why focusing on a singular debt is so the
Speaker 1: way to go. Yeah, and Matt, I think another important
Speaker 1: thing to say on when we move on to another
Speaker 1: debt is that it's important to give ourselves a little
Speaker 1: reward along the way with each major milestone that we achieve.
Speaker 1: We discussed this recently in the gamification episode, but small
Speaker 1: rewards along the way can give us a renewed hope
Speaker 1: to pause and realize that we're doing it well, that's huge,
Speaker 1: and then we can start to rent and repeat and
Speaker 1: kind of continue along in the process. But once we've
Speaker 1: appropriately celebrated knocking out a credit card debt or a
Speaker 1: car loan, then start sending your sights on the next
Speaker 1: debt to crush. Maybe student loans are next on the
Speaker 1: hit list. But however you're doing it, make sure that
Speaker 1: you do give yourself like a little reward along the way.
Speaker 1: It can really increase that positivity and continue to fuel
Speaker 1: you in that superhero esque pursuit of paying your debt off. Yeah. Man,
Speaker 1: we're emotional creatures and to have that positive feedback is
Speaker 1: so important. And I think that's one way too that
Speaker 1: we can reward ourselves, not even by spending money, but
Speaker 1: there's ways that we can reinforce that behavior, even just
Speaker 1: with sharing it with others. If you've told some friends
Speaker 1: about your financial journey or like your plan to pay
Speaker 1: down some debt, and you tell them, hey, guess what,
Speaker 1: you know those three credit cards that I'm planning to
Speaker 1: knock out, one of them is completely done with. Like,
Speaker 1: that's huge, and hopefully you know, if you've talked about
Speaker 1: your money with these folks, these are friends who can
Speaker 1: then celebrate with you and encourage you and they become
Speaker 1: like your cheerleaders, like encouragingly. And if you don't have
Speaker 1: these these type of friends, we would encourage you, you know,
Speaker 1: a to talk about money with your friends and family,
Speaker 1: but also check out Facebook. Within our group, folks are
Speaker 1: often posting their winds and then how they're succeeding with
Speaker 1: their money, and we would suggest jumping in there encouraging
Speaker 1: those folks. And then when the time comes for you
Speaker 1: to knock out some of your big debts or meet
Speaker 1: some of your financial goals, you can share that in
Speaker 1: there as well, and it'll be folks in there who
Speaker 1: will be pumped for you. And guess what that costs you? Nothing? Yeah, man,
Speaker 1: sharing those wins with other people that you don't even
Speaker 1: have to like treat yourself to something super fancy. But honestly,
Speaker 1: even just that encouragement from people around you that are
Speaker 1: rooting for you, that's enough of a reward oftentimes for
Speaker 1: us to keep going. That can really be a big
Speaker 1: motivation for us and Matt. Now, if we are kind
Speaker 1: of in this debt slaying superhero mindset, a question pops up, Well,
Speaker 1: how can we accelerate this debt payoff plan process? Well,
Speaker 1: there are ways that we can potentially earn extra money
Speaker 1: and then other ways that we can cut back in
Speaker 1: our spending, and those things can accelerate the amount that
Speaker 1: we're able to put towards that debt to kind of
Speaker 1: make that thirty six month plan let's say a thirty
Speaker 1: three month plan. And that's kind of fun too. Yeah,
Speaker 1: that's right. We need to address both sides of the equation, right.
Speaker 1: We talked about this last week on our episode on frugality,
Speaker 1: how frugality doesn't always cut it, but we need to
Speaker 1: address our big expenses as well as some of the
Speaker 1: big ways that we increase or income. Yeah, totally. So
Speaker 1: on the note of cutting back, we'll choose a specific
Speaker 1: few areas that are meaningful for you to be able
Speaker 1: to still enjoy life. Don't stop drinking craft beer altogether necessarily,
Speaker 1: but make it maybe a special treat. And that act
Speaker 1: of cutting back, well, it can help you to achieve
Speaker 1: this quote unquote no bad debt status far more quickly.
Speaker 1: And if you can continue it after this debt payoff
Speaker 1: plan is complete, it's gonna help you build savings and
Speaker 1: have money to invest for your future at the same time. Yeah, Joe,
Speaker 1: So that's addressing expenses, right, like if we're able to
Speaker 1: cut back. And on Money's episode, we talked about earning
Speaker 1: more money, you know, through entrepreneurship, through starting your own
Speaker 1: small business. We had an interview there with Vincent, So
Speaker 1: we'd recommend checking that one out if you're looking to
Speaker 1: address that side of the equation. But either way, you
Speaker 1: can accelerate the process by focusing on your expenses, by
Speaker 1: focusing on your income. You want to make sure that
Speaker 1: you're doing both of those. We're gonna continue to talk
Speaker 1: about creating a debt payoff plan, and after the break,
Speaker 1: we're gonna talk specifically about some different practical advice and
Speaker 1: some different tactical steps that we can take in order
Speaker 1: to pay down our debt faster. We're gonna get to
Speaker 1: those right after the break. All right, now, we're back
Speaker 1: to the break, and we do have some practical and
Speaker 1: tactical things that we have to share, and they're galactical.
Speaker 1: In this part of the show about how people should
Speaker 1: approach their debt payoff plan, we kind of went through
Speaker 1: all the steps, but there are a lot of other
Speaker 1: things to consider, some tips, some hacks, as the kids
Speaker 1: like to say, on how to approach this plan that
Speaker 1: can help accelerate it. Beyond just the ideas of earning
Speaker 1: more money, there are specific things that we can take
Speaker 1: advantage of in order to help us lower the interest
Speaker 1: rate or find the help that we need in order
Speaker 1: to achieve our debt payoff more quickly. So, Matt, I
Speaker 1: think one of the first things that needs to be
Speaker 1: noted is we really need to think long and hard
Speaker 1: about the things that led us to to this state.
Speaker 1: Of debt in the first place. One of the major
Speaker 1: things we need to come to grips with is to
Speaker 1: think about our triggers, like what caused us to spend
Speaker 1: money that we didn't have in the first place. Knowing
Speaker 1: those triggers is the first step to changing our habits,
Speaker 1: and that's a really crucial process in this whole plan. So,
Speaker 1: if your credit cards or your arch nemesis and you
Speaker 1: just don't know how to stop using them, will cut
Speaker 1: them up or freeze them, put them in a freezer
Speaker 1: bag inside of your freezer, like literally put them in
Speaker 1: a ziploc bag, fill it with water, and stick it
Speaker 1: in your freezer. Put that junk on ice exactly. Like,
Speaker 1: if that's your trigger, you have to figure out how
Speaker 1: to make that stop, because even as you're paying off
Speaker 1: your debt, you might be accruing more along the way,
Speaker 1: and you're just kind of it's a zero sum game
Speaker 1: if we don't know the things that are actually triggering
Speaker 1: us to spend in the ways that are hurting our finances.
Speaker 1: And real quick you mentioned like putting your credit cards
Speaker 1: in a block of ice. Let's clarify, because that is
Speaker 1: literally one way to freeze your credit cards. But there's
Speaker 1: I think sometimes some confusion when people say I've freeze
Speaker 1: my credit. Well, that's not freezing your credit. That's literally
Speaker 1: freezing your credit cards to curb your behavior. But then
Speaker 1: you can actually freeze your credit by going to Trains,
Speaker 1: Union Experience and Equifax, and that actually puts a lock
Speaker 1: on your credit it that way, nobody including yourself, is
Speaker 1: able to take out new credit, new credit cards unless
Speaker 1: they go on their first and unfreeze it, typically temporarily. Yeah,
Speaker 1: And that's something that we recommend, is is for folks
Speaker 1: to freeze their credit so that other people can't take
Speaker 1: out credit lines in your name. But freezing your credit
Speaker 1: card definitely a step to take if that credit card
Speaker 1: has become this problem in your life, this thorn in
Speaker 1: your side. Yeah, man. And another thing to note on
Speaker 1: at since we're speaking about your credit score and freezing
Speaker 1: your credit, well, your credit score is this awesome thing
Speaker 1: to monitor along the way while you're involved in this
Speaker 1: debt payoff plan. And we really like the website credit Carma.
Speaker 1: There are other sites out there as well that can
Speaker 1: help you stay in touch with your credit score. Discover
Speaker 1: has one as well, credit score card dot com. If
Speaker 1: you check out sign up for one of those services,
Speaker 1: and you're staying familiar with what's going on with your
Speaker 1: credit score. Well, as you're paying your debt off, it's
Speaker 1: going to have a direct positive benefit on your credit score,
Speaker 1: and that is motivating as you see that credit score
Speaker 1: balloon over time as it continues to rise from let's
Speaker 1: say it's at six a d now you know over
Speaker 1: six months you might be at seven thirty. And that
Speaker 1: is going to help you achieve these other goals of
Speaker 1: being able to potentially take out a mortgage. Right if
Speaker 1: you want to buy a house and you have a
Speaker 1: really low credit score because you have an overwhelming amount
Speaker 1: of debt, well, attacking that increases your score and not
Speaker 1: only means you have less debt weighing you down, but
Speaker 1: also means the possibilities of taking out positive future debt
Speaker 1: right something like a house are just greatly increased. Yeah,
Speaker 1: seeing that credit score boost like that, that's an amazing
Speaker 1: secondary benefit of paying down that debt. Let's also talk
Speaker 1: about where not to go if you're in debt over
Speaker 1: your head, if you're not able to handle the payments
Speaker 1: currently on your debt, do not sign up with a
Speaker 1: debt consolidation company. They charge big money, and they rarely
Speaker 1: live up to their claims. Often you'll end up paying them,
Speaker 1: you know, a lot of money, and they do little
Speaker 1: or nothing to help you in your debt payoff pursuit. Uh.
Speaker 1: In that case, you're often better off on your own
Speaker 1: because at least then you could toss more of that
Speaker 1: money towards your debt and not going to the service
Speaker 1: that's not actually providing any value. Yeah, if you hear
Speaker 1: an advertiser or someone specifically tells you, yeah, if you
Speaker 1: just pay these people a couple of thousand dollars, three
Speaker 1: or four thousand dollars, they can help you consolidate your debt,
Speaker 1: they can work with your creditors, they'll help you achieve
Speaker 1: your own debt payoff plan. Well upfront payment for someone
Speaker 1: to do that for you. When most of the things
Speaker 1: that these debt payoff companies say they're gonna do, they
Speaker 1: either don't do or you can do yourself. That's just
Speaker 1: not a smart way to go. Yeah, that money upfront
Speaker 1: huge red flag. So what you do want to go
Speaker 1: if your debt is overwhelming is going to be your
Speaker 1: local affiliate of the n f c C, which is
Speaker 1: the National Foundation for Credit counseling. They are a nonprofit
Speaker 1: and they are full of helpful financial services like debt
Speaker 1: and budget counseling. They have the power to help and
Speaker 1: kind of counsel you along your debt journey. They do
Speaker 1: the things that many of the debt payoff firms say
Speaker 1: that they'll do, but then they don't in actuality. Yeah,
Speaker 1: that's true. The NFCC is the only place I would
Speaker 1: tell someone who is up to their eyeballs in debt
Speaker 1: and doesn't know where to go and can't afford their
Speaker 1: debt payments. That is the only place I would send
Speaker 1: them to. And so yeah, NFCC dot org, find your
Speaker 1: local affiliate, meet with someone there. That is your best
Speaker 1: path forward if you're in debt that you can't manage.
Speaker 1: And Matt, let's talk quickly about apps. There are apps
Speaker 1: popping up all over the place that claim to help
Speaker 1: people with their debt payoff. And there are some apps
Speaker 1: that I think could potentially be helpful, but they come
Speaker 1: with a caveat. There's one called coins q O I
Speaker 1: n S and there's one called Tally that offer to help,
Speaker 1: but they charge you to do so as well. So
Speaker 1: you know, you and I we prefer the d i
Speaker 1: Y no fee approach. But these apps can be helpful
Speaker 1: for the right person who has a tough time actually
Speaker 1: sticking to something. And if these apps are gonna help
Speaker 1: basically make the process smoother for you, and that fee
Speaker 1: is basically going to prevent you from defaulting on your debt,
Speaker 1: well then what we would say is use one of
Speaker 1: those apps, use it to its full potential, because yeah,
Speaker 1: paying a fee is is better than not doing it
Speaker 1: all together. If that's gonna get you motivated, if that's
Speaker 1: going to be the thing that helps you to actually
Speaker 1: stick to a debt payoff plan, well then that's great.
Speaker 1: And those are two worth considering. Yeah, man, those are
Speaker 1: some of the the different apps. And there's also some websites
Speaker 1: that can help as well. I'm thinking of unbury me
Speaker 1: and undebt it. And by the way, those are unburied
Speaker 1: dot me and undebt dot it. I guess that's in Italy,
Speaker 1: the i T. I love how the different websites are
Speaker 1: using the different I don't know what you call it,
Speaker 1: like the dot com, dot net, like the postscripts or whatever,
Speaker 1: but they're working them into the name of their site,
Speaker 1: which is I love it. That's why we're changing the
Speaker 1: u r L for our website from how the Money
Speaker 1: dot Com to how the Money dot Listen to our
Speaker 1: podcast now how the Money dot Beer. Actually I legit
Speaker 1: think there is a dot Yeah, I was gonna say
Speaker 1: that that's really oh my gosh. Either way, though, let's
Speaker 1: talk about these websites unbury me and undebt it. They
Speaker 1: are both similar and they can offer some help creating
Speaker 1: a debt payoff plan. If you prefer a more digital interface,
Speaker 1: definitely give one of these shot with the different graphs
Speaker 1: and you know, the digital feedback it might help you
Speaker 1: to visualize your progress and and you know, for that
Speaker 1: reason it can be really valuable. But at the same time,
Speaker 1: we don't want tech to keep you from actually getting
Speaker 1: a plan together at all. Pen and paper can be
Speaker 1: really valuable, especially when it comes to just tracking your progress.
Speaker 1: You know, like it is pretty easy to create a
Speaker 1: little graph and a little chart and you kind of
Speaker 1: fill it in as you work your way up that
Speaker 1: notebook paper. Just know yourself and participate in any of
Speaker 1: these different little tips and strategies that you know will
Speaker 1: resonate the most with you. Yeah, man, I agree. I
Speaker 1: think part of it comes down to knowing yourself and
Speaker 1: knowing the ways that you're best going to be able
Speaker 1: to stick to a debt payoff plan. And and and
Speaker 1: some people they're in a computer all day and using
Speaker 1: a website like Unburied dot me or on debt dot
Speaker 1: it is is going to be a massive help in
Speaker 1: the way they approach paying off that debt. And for
Speaker 1: other people, you know what, a pen and some paper
Speaker 1: that's gonna be motivation enough. They don't need some sort
Speaker 1: of really cutee graph and interface to help them tackle
Speaker 1: their debt. So just kind of know your tendencies and
Speaker 1: that can help you. And Matt I feel like there
Speaker 1: are a few more hacks that we really should mention
Speaker 1: to help folks actually save more on interest payments and
Speaker 1: potentially pay off their debt even more quickly once they
Speaker 1: have a clear plan in place. A zero percent credit
Speaker 1: card transfer can be a game changer for folks, especially
Speaker 1: if they're on the fast track to eradicating debt. And
Speaker 1: this is particularly useful map for folks that have a
Speaker 1: good credit score if they can qualify for a credit
Speaker 1: card with a zero percent intro period of like let's
Speaker 1: say fifteen or eighteen months, and they're ready to to
Speaker 1: pay off their debt quickly. Well, this can mean no
Speaker 1: interest payments on the majority of that debt for a
Speaker 1: long period of time. And so we just wrote an
Speaker 1: article about the best balanced transfer credit cards. It's up
Speaker 1: on our site at how to money dot com for
Speaker 1: folks that specifically are interested in a card like that,
Speaker 1: and we outline the ones that are going to charge
Speaker 1: the fewest fees so that when you make that transfer,
Speaker 1: your payments are working to pay off your debt, they're
Speaker 1: not going towards the bottom line of the credit card companies.
Speaker 1: And if you currently have a credit card and that's
Speaker 1: one of the major debts that you're looking to pay off, well,
Speaker 1: another hack that you can do is to call your
Speaker 1: credit card company and ask for help. Whether it's a
Speaker 1: credit card company or another credit or they're often procedures
Speaker 1: in place for people they call and ask for help. Matt,
Speaker 1: we've talked about asking for a discount before. This is
Speaker 1: asking for potentially a lower interest rate on your debt,
Speaker 1: which is going to help you to be able to
Speaker 1: pay it off more quickly. And Matt, one example I
Speaker 1: wanted to mention is, let's say you've got a student
Speaker 1: loan through a company like so Far, and one of
Speaker 1: the coolest benefits that they offer is help if you
Speaker 1: lose your job. Not only will they provide actual assistance
Speaker 1: for you looking for employment, but what they'll do is
Speaker 1: they'll say, you know what, you don't have to pay
Speaker 1: your loan for the next six months while you're looking
Speaker 1: for employment and so stuff like that. It's out there,
Speaker 1: depending on who you're doing business with and what sort
Speaker 1: of programs are in place. It's just worth it to
Speaker 1: ask whoever you have debt with to see if there's
Speaker 1: some sort of way that they can can help you
Speaker 1: along in the process. Yeah. On the note of lower
Speaker 1: interest rates as well, Man, we would recommend for folks
Speaker 1: to consider checking out maybe some alternatives to credit cards.
Speaker 1: If you have a home, you can consider a helock
Speaker 1: home equity line of credits. You're going to be able
Speaker 1: to get a lower rate. Obviously, there's going to be
Speaker 1: some risks associated with that. You're taking your debt and
Speaker 1: you're tying it to your property. That debt is now
Speaker 1: a secure debt because your home is collateral. So if
Speaker 1: you are really really sure that you're going to knock
Speaker 1: out that debt, then that might be something that you
Speaker 1: can do. But this does not need to be something
Speaker 1: that you you take on lightly. Yeah, because it's one
Speaker 1: thing to not be able to pay off a credit card.
Speaker 1: There are certain rights that you have. You're not gonna
Speaker 1: lose your house or get thrown in prison for not
Speaker 1: being able to pay your credit card debt. But if
Speaker 1: you tie it to your home, if you refinance, or
Speaker 1: you take out a helock, that car that homes on
Speaker 1: the line, dude, Yeah, exactly. And so if you're gonna
Speaker 1: have trouble paying it off with a helock, even if
Speaker 1: it lowers your interest rate, don't do it because you
Speaker 1: don't want to lose your home over credit card debt
Speaker 1: you are unable to pay. That's right. And another option
Speaker 1: to consider is you can always borrow money, maybe from
Speaker 1: a family member. This is something that it just depends
Speaker 1: on who you are and what your relationships are with
Speaker 1: your you know, those in your family, because it can
Speaker 1: get awkward. In many cases, it isn't worth the possible
Speaker 1: harm that could come to you that relationship. But if
Speaker 1: your credit score is really low, that might be your
Speaker 1: only option for lowering any super high interest rates that
Speaker 1: you might have, So definitely consider that. Yeah, Matt. If
Speaker 1: someone submitted and ask htm question for the shows where
Speaker 1: we answer listener questions and said, hey, should I loan
Speaker 1: money to a family or friend, I think we would
Speaker 1: probably say don't do it, or if you do, know
Speaker 1: that there's a good chance that you don't get paid
Speaker 1: back altogether. Just kind of go into that loan situation
Speaker 1: knowing that's the case. But if someone has a really
Speaker 1: low credit score, if they don't have that many options,
Speaker 1: this might be the best option for them, if they
Speaker 1: have a good relationship with a friend or family member
Speaker 1: that is willing to help them out in this way. So, yeah,
Speaker 1: those are some ways that you can approach lowering potentially
Speaker 1: your overall rate of interest, some moves that you can
Speaker 1: make to help accelerate that debt payoff plan, and yeah,
Speaker 1: crush that debt once and for all. Yeah, And it's
Speaker 1: important to keep in mind as well that these are
Speaker 1: things that you want to consider after you have a
Speaker 1: solid plan in place, like these are these are the
Speaker 1: little tweaks, right. Like last week we talked about frugality
Speaker 1: and how we need to focus on the big things. Well,
Speaker 1: in this case, the big thing is creating that plan
Speaker 1: and really getting after it. These these little tips and tricks,
Speaker 1: These are the little tweaks. This is the frugality aspect
Speaker 1: of paying down your debt. They are certainly things that
Speaker 1: could make a pretty big impact and really help you
Speaker 1: along and provide some encouragement and make it possible for
Speaker 1: you to pay down that debt. But first you do
Speaker 1: need to have a solid plan in place for these
Speaker 1: additional pieces to kind of slot in. Yeah, I completely agree.
Speaker 1: And you know what, for anybody out there who is
Speaker 1: it's experiencing a load of debt that is uncomfortable, well,
Speaker 1: best of luck to you in creating a debt payoff plan.
Speaker 1: I feel like having this plan sometimes can help you
Speaker 1: at least have this target to aim at, and it
Speaker 1: can make a huge difference and in helping you actually
Speaker 1: achieve being rid of it as opposed to kind of
Speaker 1: feeling like you're in this quicksand scenario and you don't
Speaker 1: know how to get out. The plan is like the
Speaker 1: rope in Princess Bride that helps you get out of
Speaker 1: the quicksand it is right, that's exactly what that debt
Speaker 1: payoff plan is. As you win, all right, and it's
Speaker 1: it's beer time. Let's take it back to the beer.
Speaker 1: This episode, you and I shared a Berrell aged YETI
Speaker 1: Imperial Stouts. I want to say this can it's it's
Speaker 1: brown and gold and it's like perfect for for the
Speaker 1: way this beer tastes. And I want to mention to
Speaker 1: you the way it poured, and it poured pitch black
Speaker 1: and at the same time it had this amazingly dark
Speaker 1: brown head. It looked like krema, like if you've ever
Speaker 1: gotten an espresso where you know the the espresso bubbles
Speaker 1: like the little cream at the top. They call it krema.
Speaker 1: Little insider knowledge for yet exactly, but I couldn't get
Speaker 1: over how richly brown that head was on his beer.
Speaker 1: And every time I kind of swirled it, it it almost
Speaker 1: had like some red notes in it looked amazing. But yeah,
Speaker 1: what were your thoughts on how this bear taste? Man?
Speaker 1: This beer was so good. It had these nice boozy
Speaker 1: barrel notes. Aren't an already delicious stout? I felt like
Speaker 1: the stout was chock full of bitter, dark chocolate vibes
Speaker 1: and that paired so well with the sweetness coming through
Speaker 1: from the whiskey barrel that it was aged in. So
Speaker 1: in my mind, if you get the dark chocolate, bitter
Speaker 1: stout combined with aging in whiskey barrels. It's a perfect pairing.
Speaker 1: It's that perfect marriage. And that's what that's what this
Speaker 1: beer was. It was so it. Yeah, it's really good.
Speaker 1: It's Asian whiskey barils, and I feel like you could
Speaker 1: tell that it wasn't Asian and bourbon barrels because typically
Speaker 1: I think when you get bourbon, it's a little bit sweeter,
Speaker 1: and this stout drink a little dryer to me, like
Speaker 1: it had a ton of flavor, but it wasn't. It
Speaker 1: wasn't overly sweet, a little bit on the dry side,
Speaker 1: And so it kind of reminds me of like that
Speaker 1: fancier chocolate where it's like caw cow or is that
Speaker 1: how you say it, you say calco cocoa. I don't know.
Speaker 1: It's abelled like cal cow, and I don't think I
Speaker 1: use that word very often. I don't know either, But
Speaker 1: you know, the fancy chocolate where it's there's zero sweetness
Speaker 1: going on at all. That's what I picked up out
Speaker 1: of it. It just had incredibly deep flavor notes and
Speaker 1: I really enjoyed it. All right, man, Well, is that
Speaker 1: going to be it for this episode? That's gonna do it.
Speaker 1: Let's wrap it up, all right. For folks that want
Speaker 1: more money information, well you can go to our website
Speaker 1: at how to money dot com and we'll also have
Speaker 1: show notes up for this episode. All right, man, Well,
Speaker 1: that's gonna do it, Joel. Until next time, Best Friends Out,
Speaker 1: Best Friends Out, m