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