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Speaker 1: Joel, how's it going, buddy, I'm good man. How are you?

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Speaker 1: I'm doing pretty good. But I want to go ahead

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Speaker 1: and quickly say Merry Christmas to you, Merry Christmas to

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Speaker 1: all of our listeners out there. We are releasing an

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Speaker 1: episode on Christmas Day. We have not forgotten about you.

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Speaker 1: But it's not a brand new episode and it's also

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Speaker 1: not a Friday Flight episode, and we wanted to quickly

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Speaker 1: address that with folks. It's kind of like getting some

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Speaker 1: coal in your podcast, getting a best best e htm episode.

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Speaker 1: It's like it's there, but it's not quite what you wanted,

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Speaker 1: although I don't know maybe you did. Maybe you wanted

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Speaker 1: to skip listening to UH and How to Money episode

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Speaker 1: just because it's Christmas. But um, either way, we're glad

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Speaker 1: you're you're tuned in. And before we get to the

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Speaker 1: best episode, we did want to mention really quickly that UH,

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Speaker 1: for for a lot of people, some good news came

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Speaker 1: Christmas week and and basically it's because of this nine

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Speaker 1: billion dollar stimulus plan that Congress just passed. Um, Matt

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Speaker 1: and I were gonna share more in depth on next

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Speaker 1: Friday's episode because this bill really does have a lot

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Speaker 1: going on inside of it. Yeah, but real quick, it's

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Speaker 1: got a six h dollar stimulus payment that will be

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Speaker 1: going out as part of this new release bill. Individual

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Speaker 1: adult making up to seventy five dollars a year would

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Speaker 1: receive a six hundred dollar payment. In a couple earning

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Speaker 1: up to a hundred and fifty thousand dollars a year

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Speaker 1: would get twice that amount, And if they have dependent children,

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Speaker 1: they're gonna receive six hundred dollars per child. Those are

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Speaker 1: some of the quick highlights regarding the direct payments to individuals,

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Speaker 1: and the Treasury Secretary said that if you've got a

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Speaker 1: direct deposit last time, your stimulus funds can actually be

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Speaker 1: in your account as soon as next week, which is

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Speaker 1: good news for so many Americans who have had a

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Speaker 1: tough time through through COVID and for a lot of

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Speaker 1: our listeners who have continued to do well. If you're

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Speaker 1: getting any of this stimulus money again, it presents an

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Speaker 1: opportunity for you to use it in your neighborhood, at

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Speaker 1: small businesses around you and restaurants around you that have

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Speaker 1: been suffering. I think that can be a great use

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Speaker 1: of these funds. Also too, for folks who are unemployed

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Speaker 1: there's gonna be three hundred dollar a week federal benefit

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Speaker 1: half of the level of what it was in the

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Speaker 1: Cares Act, in addition to your state unemployment benefit through

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Speaker 1: March fourteenth of next year. Yeah, and so there are

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Speaker 1: other elements of this new bill, like a simpler fassa.

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Speaker 1: Parents of high school or seniors can breathe a sigh

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Speaker 1: of relief. But we'll cover more on this giant relief

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Speaker 1: bill next week on the show. But for now, you

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Speaker 1: can enjoy this best the episode on debt snowballs uh

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Speaker 1: and the debt avalanche hopefully uh new loads of debt

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Speaker 1: aren't something that you are experiencing this holiday season, but

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Speaker 1: if you are, uh, this episodes for you, or if

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Speaker 1: you just have some lingering debt that you've got laying around,

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Speaker 1: this is definitely gonna be a helpful episode for you. Yeah.

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Speaker 1: So appropriate to on Christmas Day to have a snow

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Speaker 1: themed episode, even though here in Atlanta we pretty much

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Speaker 1: never get snow on Christmas. Um. But yeah, we hope

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Speaker 1: you're enjoying a good one with your family and hopefully

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Speaker 1: to this stimulus news, Matt, some people can use some

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Speaker 1: of that money potentially to get jump started in their

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Speaker 1: debt payoff plans. But for more info on how to

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Speaker 1: do that, here's our Bestie episode on debt snowballs versus

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Speaker 1: debt avalanches. Welcome to How the Money. I'm Joel and

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Speaker 1: I am Matt, and today we're discussing the debt snowball

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Speaker 1: versus debt avalanche approach to paying down your debt. Yeah, Joel,

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Speaker 1: we are talking about the hotly debated topic of how

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Speaker 1: you should pay down your debts, that avalanche versus the

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Speaker 1: debt snowball, and obviously the debt snowball. A lot of

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Speaker 1: folks have heard about that through Dave Ramsey. He's pretty

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Speaker 1: big in the personal finance space. Heard of that guy.

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Speaker 1: You've heard of that guy. We're coming for you, Dave.

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Speaker 1: Dave's got some good things to say, right. I don't

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Speaker 1: I definitely don't wanna tear Dave down. Um there's there's

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Speaker 1: actually an article in Money magazine recently that kind of

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Speaker 1: was going after him. And I will say, Dave not

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Speaker 1: my favorite personality, not my favorite person and I disagree

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Speaker 1: with him on a lot of things. So disagree with

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Speaker 1: him on things except for this one thing that he does. Okay, Yeah,

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Speaker 1: but no, I feel like he has helped so many people, yes,

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Speaker 1: and in particular to get out of debt quickly, that

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Speaker 1: I would think twice before speaking harsh words against him,

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Speaker 1: just because of how much of a good effect he

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Speaker 1: has had in a lot of people's lives. I think

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Speaker 1: tackling this topic of how do you pay down your

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Speaker 1: debt quickly and which of these methods is most effective

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Speaker 1: is gonna be good. It's gonna be good for us

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Speaker 1: to talk about. Yeah. Dave Ramsey, he's like the godfather

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Speaker 1: for personal finance for me, man, he basically ushered me

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Speaker 1: into this entire space like ten years ago. So oh Hill,

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Speaker 1: maybe at least a little tip of the cap kind

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Speaker 1: of launching my financial journey to a certain extent. And

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Speaker 1: sometimes there's a teacher that's really great for for a

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Speaker 1: while and then you kind of move past, you know

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Speaker 1: what they have to offer. But yeah, I'm really interested

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Speaker 1: to tackle this topic today. It should be fun, Matt.

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Speaker 1: Before we get to that, I wanted to frugal versus cheap? Yeah,

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Speaker 1: I kind of want to ask you a question. I

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Speaker 1: see that written down here. So is it frugal or

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Speaker 1: cheap for me to forego buying my kids school pictures? Mm, well,

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Speaker 1: most folks know that I'm a photographer, right, So I'm

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Speaker 1: curious what most folks think, you know, Like, do they

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Speaker 1: think I'm gonna fall on the side of no, No,

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Speaker 1: you're being weight too cheap, you gotta get those pictures.

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Speaker 1: Or if I'm like, well, I'm a photographer, I can

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Speaker 1: just take my own pictures. I'm frugal. Uh. That being said,

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Speaker 1: I think you are being frugal because I'm with you.

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Speaker 1: We we only rarely purchased the pictures if they're just outstanding. Otherwise,

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Speaker 1: when we get the little link and they say that

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Speaker 1: you can go look at the pictures, you know, I

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Speaker 1: look at them and then I screenshot them, and I'm

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Speaker 1: able to preserve the memory that that picture was taken,

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Speaker 1: and you can see a little bit of it, and

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Speaker 1: they got the water mark. It's got the watermark on it,

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Speaker 1: so I'm never going to print it out, but I

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Speaker 1: can still save it in photos on my computer, and

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Speaker 1: I can still go back and see the cute smiles

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Speaker 1: and kind of bring back all these feelings without having

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Speaker 1: to actually pay thirty bucks for an eight by ten.

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Speaker 1: You know, you know what I'm saying. The school pictures

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Speaker 1: are crazy expensive. Yeah, and obviously, like someone comes out

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Speaker 1: and spends a lot of time and and they do

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Speaker 1: a good job. They take good photos, and sometimes we

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Speaker 1: do buy them though, I mean if they're really good.

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Speaker 1: I mean we've purchased them before because I'm like, I

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Speaker 1: gotta have that. You know, it's just just too cute.

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Speaker 1: The same here too, Yeah, we have to I've got

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Speaker 1: We've definitely bought school photos in the past, but this

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Speaker 1: year we were like, you know what're we're not gonna

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Speaker 1: do it. And part of the reason was because the

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Speaker 1: girls had just been in a wedding and they're the

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Speaker 1: just super adorable pictures that we just recently had both

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Speaker 1: of them, and so we're not going to spend the

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Speaker 1: extra sixty bucks to get this picture package. It's not

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Speaker 1: because I don't love them. I mean, obviously I went

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Speaker 1: through to look at the pictures and they were freaking adorable.

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Speaker 1: It was really hard. I was like, oh, maybe it's

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Speaker 1: worth the money. I want it, But yeah, we decided

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Speaker 1: to forgot it because we've got pictures from a lot

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Speaker 1: of other events, and you know, phones have gotten so good.

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Speaker 1: I kind I'm taking good picture of my kids all

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Speaker 1: the time. So plus, you know, a good photographer, and

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Speaker 1: anytime our families get together and I bring along the camera,

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Speaker 1: we always try to get a decent family shot or

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Speaker 1: trying to get all the girls together, get them smiling,

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Speaker 1: looking in the right direction, and that works pretty well. Yeah,

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Speaker 1: So I think if you're not sitting there between the

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Speaker 1: ferns like looking all perfect, but it's a little more

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Speaker 1: real life when they're kind of screaming on each other

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Speaker 1: in in mid slap. Yeah yeah, I know, right, get

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Speaker 1: the lifelike poses of just crazy things happening. But yeah,

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Speaker 1: I think for people that get that email about getting

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Speaker 1: their kids school pictures, certainly sometimes you want those little

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Speaker 1: wallet sized pictures and you want to be able to

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Speaker 1: hand them out to your friends and family members. And

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Speaker 1: we've gotten them too before and they make great gifts.

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Speaker 1: Oftentimes the four by six is put them in a frame,

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Speaker 1: give them to grandma, that kind of thing. But just

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Speaker 1: don't feel obligated like you have to, especially if you

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Speaker 1: already have good picks of your kids from other outings. Yeah,

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Speaker 1: and a quick tip if you do want to go

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Speaker 1: ahead and purchase those pictures is to see if you

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Speaker 1: can purchase the digital file. A lot of times they'll

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Speaker 1: charge a certain amount, maybe even five bucks more than

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Speaker 1: than one of the more expensive prints. So like an

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Speaker 1: eight by ten might be like thirty bucks, like I mentioned,

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Speaker 1: but you can get the file for thirty five bucks.

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Speaker 1: Always opt for that because you can spend a little

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Speaker 1: bit more and then you have that file and you

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Speaker 1: can obviously do whatever you want with it. But then

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Speaker 1: go to a website like m picks dot com. That's

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Speaker 1: m p i x dot com and they're a fantastic

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Speaker 1: lab where you can get some really high quality prints

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Speaker 1: at a consumer price point. But at the same time

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Speaker 1: that lab is it's really good. They've got an entire

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Speaker 1: professional line, and a lot of the professional photographers that

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Speaker 1: I know use them for their professional fancy prints that

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Speaker 1: they're able to up charge and obviously make a profit.

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Speaker 1: I don't want to give away all the secrets, but yeah,

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Speaker 1: check out m picks dot com. Good to get some

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Speaker 1: of that insider knowledge. All right, I like it. Okay,

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Speaker 1: let's quickly mention the beer that we're having on the

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Speaker 1: show today, Matt. This is Maple Vanilla Copra Kai, another

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Speaker 1: one by Southern Grist Brewing Company, and thanks to Jamie

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Speaker 1: for sending users yet again. This is the second one

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Speaker 1: this week, what's the deal with Copra Kai? So like

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Speaker 1: Cobra Kai, like that's a karate kid. Yeah, and so

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Speaker 1: it's like the do they do copra with a p

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Speaker 1: just so that they don't get sued? Probably? Okay, that's

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Speaker 1: my assumption that was the case or what or I

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Speaker 1: didn't know if Copra Kai was an actual thing, like

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Speaker 1: something different, not that I know of, But you know what,

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Speaker 1: I reach back around to Jamie and ask him why

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Speaker 1: they named it. That you should also ask him how

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Speaker 1: he made this delicious beer because it smells like an

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Speaker 1: entire dessert in my glass right here. So I'm excited

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Speaker 1: for us to talk about this at the end of

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Speaker 1: the episode. Yeah, Bouquet flavors. Alright, Matt, now onto the

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Speaker 1: topic at hand, and we're discussing the best way to

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Speaker 1: pay down debt. We're debating the debt snowball versus debt

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Speaker 1: avalanche approach. And the problem is that Americans are in

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Speaker 1: debt and lots of it student loan debt, our loan debt,

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Speaker 1: credit card debt, mortgage debt, and it can be overwhelming

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Speaker 1: and acting that debt in your life takes a toll,

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Speaker 1: not only off of your money issues, but it takes

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Speaker 1: a massive weight off your mind. And there was a

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Speaker 1: study that they did in Singapore recently that found that

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Speaker 1: folks who had massive mortgage, utility and municipal debt paid

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Speaker 1: down by a charity, they performed better in cognitive function tests.

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Speaker 1: Anxiety disorders massively decreased, and the ability to forego instant

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Speaker 1: gratification also increased. So not having this debt in your life,

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Speaker 1: not only does it make your finances stir dear, it

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Speaker 1: makes your brain function better. And I just thought that

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Speaker 1: was like fascinating that having a lot of debt in

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Speaker 1: our lives has terrible effects on our brains. Yeah, Joel.

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Speaker 1: One of the things they mentioned was that how the

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Speaker 1: real cost of being in substantial amounts of debt, like that,

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Speaker 1: how it's not completely reflected in the numbers. It's not

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Speaker 1: completely reflected. And how much you owe or how much

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Speaker 1: you make or your net worth you see it as well,

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Speaker 1: like like you said, in your mental health. And it's

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Speaker 1: unfortunate that that total effects is oftentimes overlook because it

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Speaker 1: is mental. But fact is, you know, no one in

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Speaker 1: all likelihood is gonna be showing up to pay off

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Speaker 1: your debt. And we don't take the stance that all

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Speaker 1: debt is bad. But if you are rolling in consumer

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Speaker 1: debts and that's stressing you out, assessing which of the

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Speaker 1: different strategies to take can be helpful. Yeah, because the

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Speaker 1: quicker you can eliminate even just one debt out of

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Speaker 1: your life, right, there's that breathing room, it's gonna lessen

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Speaker 1: your overall anxiety in relation to your debt. And first

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Speaker 1: we want to mention that if you're in overwhelming amounts

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Speaker 1: of debt, well, it's really important to consider getting credit

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Speaker 1: counseling from a place like NFCC and you can check

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Speaker 1: them out at NFCC dot org. And if your debt

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Speaker 1: exceeds fift of your annual income, well that is in

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Speaker 1: all likelihood the best place for you to head to

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Speaker 1: get some free credit counseling from your local NFCC affiliate.

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Speaker 1: One other thing to consider before you know, we kind

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Speaker 1: of dive into the different approaches to paying down debt,

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Speaker 1: But let's talk for a second to about your interest rate.

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Speaker 1: If you have a good amount of debts, you want

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Speaker 1: to consider a balanced transfer. Credit cards will oftentimes offer

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Speaker 1: a zero percent for a elemented amount of time transferring

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Speaker 1: your debt over to a new card like that will

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Speaker 1: allow you some breathing room, give you some time to

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Speaker 1: kind of figure out your approach and how you are

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Speaker 1: going to pay down your debt. If you can't find

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Speaker 1: a good balance transfer, consider calling your credit card company

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Speaker 1: directly and see if you can get your interest rate lowered.

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Speaker 1: From that same point, it's good to kind of go

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Speaker 1: into those conversations with some knowledge. You want to do

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Speaker 1: your homework ahead of time. But we've talked about this before, Joel,

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Speaker 1: but it never hurts to ask, and you're not going

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Speaker 1: to get that lower interest rate uh and pay less

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Speaker 1: unless you ask for it. So in a minute, we're

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Speaker 1: gonna talk about the debt snowball. We're gonna talk about

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Speaker 1: the debt avalanche, some pros and cons to both. But

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Speaker 1: first we're gonna take a quick break. All right, Matt,

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Speaker 1: let's get right into it. First. We'll talk about the

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Speaker 1: debt snowball approach. And this approach is all about psychology,

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Speaker 1: not as much about math, but psychology, as it turns out,

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Speaker 1: is crucial when it comes to how we handle our money.

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Speaker 1: In fact, it's often more important than just the nuts

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Speaker 1: and bolts and knowing how the math works, and in fact,

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Speaker 1: just like we talked about with that Singapore study that

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Speaker 1: we mentioned at the beginning of the show, it's pretty

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Speaker 1: obvious the debt has a clear effect on our psyche,

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Speaker 1: and the debt snowball approach is actually an attempt to

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Speaker 1: kind of maximize positive psychological impact of debt paid down

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Speaker 1: as opposed to the mathematical and financial best approach to

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Speaker 1: paying down your debt. Yeah, this is the Dave Ramsey approach.

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Speaker 1: And the argument often goes is that if it's all

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Speaker 1: about the math, then you wouldn't be in debt in

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Speaker 1: the first place. You know, if you're paying attention to

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Speaker 1: the numbers, the interest rates the debt, you would know

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Speaker 1: from the very outset that going into debt isn't going

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Speaker 1: to work out for you. And so let's go ahead

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Speaker 1: now and talk about the way it works and the

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Speaker 1: debt snowball approach. You are going to pay the minimums

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Speaker 1: on all your balances, but then you're going to attack

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Speaker 1: and pay off your debt with the smallest balance first.

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Speaker 1: Once that debt is eliminated completely, you get to roll

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Speaker 1: those payments that we're going to that small debt to

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Speaker 1: the debt with the next smallest balance, and so it's

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Speaker 1: called the debt snowball effect because essentially, think of you know,

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Speaker 1: you start off with a small balance and then you

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Speaker 1: roll it over to the next largest balance and it

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Speaker 1: gets bigger and bigger and bigger, not unlike a snowball

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Speaker 1: that you're rolling down the hill. It makes sense, Yeah,

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Speaker 1: it's I mean really psychologically that makes a lot of sense,

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Speaker 1: right because let's say you have seven overall debts that

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Speaker 1: you're looking to pay off, and you get a quick

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Speaker 1: win by paying the first one off because the balance

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Speaker 1: is super low. It feels good, It feels good, and

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Speaker 1: then you're motivated to do just a little bit more

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Speaker 1: and you actually have a little bit more money then

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Speaker 1: to put towards that second debt because that the other one,

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Speaker 1: that first one, it's gone. Now, yeah, you don't just

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Speaker 1: have more money to put towards it, but you have

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Speaker 1: more steam, like you've got that momentum rolling too. Yeah. Completely,

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Speaker 1: So I think this path can provide winds more quickly

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Speaker 1: along the way, can keep you motivated, and interestingly enough,

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Speaker 1: the most studies actually show that the results are more

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Speaker 1: favorable with a debt snowball approach than the debt avalanche approach,

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Speaker 1: which makes sense because when we're factoring in the psychology

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Speaker 1: of how we approach our money and our debts, I mean,

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Speaker 1: this is the kind of strategy that keeps someone engaged

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Speaker 1: towards paying down their debts as quickly as possible, whereas

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Speaker 1: the debt avalanche, which we're gonna talk about in just

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Speaker 1: a second, doesn't quite have that same effect. Yeah, those

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Speaker 1: are the legit studies to like Harvard, you know, all

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Speaker 1: the good schools, not the not the crappy schools. And

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Speaker 1: when my Kansas State University coming out with that, you know,

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Speaker 1: how don't you hate k s U. Dog? That's a

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Speaker 1: good spot. So the debt snowball it makes the most

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Speaker 1: sense from my psychological standpoint, but it doesn't when it

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Speaker 1: comes to the number's jole. And that's when sort of

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Speaker 1: the math nerds will jump all over your case. And

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Speaker 1: what they would propose is for you to look at

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Speaker 1: the debt avalanche. So why don't you tell us about that?

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Speaker 1: All right? So the debt avalanche is all about math

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Speaker 1: and not psychology, so kind of the complete opposite of

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Speaker 1: the debt snowball approach. When you take the debt avalanche

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Speaker 1: approach again, you're still paying the minimums on every single

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Speaker 1: balance except for one. But the debt that you're prioritizing

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Speaker 1: paying off is the debt that has the highest interest

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Speaker 1: rate as opposed to your debt that has the lowest

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Speaker 1: overall balance. And there's certainly a chance that your highest

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Speaker 1: interest rate debt could also be your lowest balance, in

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Speaker 1: which case win win. You're kind of tackling both methods

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Speaker 1: at the same time. But yeah, the debt avalanche approach

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Speaker 1: is for the math nerds out there that can still

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Speaker 1: be just as focused paying off debt without that psychological

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Speaker 1: benefit of paying off certain debts more quickly. All right, Joel,

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Speaker 1: quick question for you. Then the snow metaphor with this,

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Speaker 1: That snowball makes sense, right, Like you've got your quickly

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Speaker 1: gaining steam starting off with a small little snowball, and

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Speaker 1: it rolls over and gets bigger and bigger and bigger.

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Speaker 1: That equates to the size of the debt that you're attacking.

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Speaker 1: But how does it work with the avalanche? Then? I

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Speaker 1: guess like you're starting off big. Yeah, I guess so.

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Speaker 1: I don't necessarily think that that that perfect metaphor. No,

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Speaker 1: it's definitely an imperfect metaphor, that's for sure. And I

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Speaker 1: don't know where if there's like any like yellow snow

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Speaker 1: involved in this metamore or anything like that. I think

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Speaker 1: those are like tidle loans, completely away from the gotcha.

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Speaker 1: I think we could probably come up with some other

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Speaker 1: really cool metaphors when it comes to snow for paying

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Speaker 1: down your debt. But yeah, I think someone just kind

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Speaker 1: of tried to come up with a cute alternative to

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Speaker 1: the debt snowball. But with avalanche, I guess you're kind

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Speaker 1: of focusing on the large interest rates, kind of going

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Speaker 1: after the big impact stuff first, and then by the

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Speaker 1: end of it, you're kind of focusing you know, I

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Speaker 1: guess the end of the avalanche, there's just a little

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Speaker 1: bit of snow trickling down the mountain at the very end,

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Speaker 1: and maybe that's your smaller interest rate loans that kind

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Speaker 1: of dies out right. Yeah. Yeah, So really, the debt

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Speaker 1: avalanche approach, it could prevent you from attacking your debt

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Speaker 1: as intently as you might otherwise be inclined to do.

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Speaker 1: But if you are a really good planner and you

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Speaker 1: can stay the course, well, the debt avalanche, or sometimes

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Speaker 1: it's also called debt laddering, Well, that's likely the best

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Speaker 1: approach for you, because you're going to pay off your

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Speaker 1: debts in a little bit less time, and you're gonna

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Speaker 1: pay less overall in interest to your creditors. So Joel overall,

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Speaker 1: if I had to pick like one over the other,

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Speaker 1: I think I'm gonna end up on like on team

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Speaker 1: snowball because for most belie, even though it doesn't make

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Speaker 1: the most sense from a financial standpoint when you're only

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Speaker 1: looking at the numbers. Like we said earlier, it's not

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Speaker 1: all about the numbers. There's so much psychology involved, and

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Speaker 1: I think for a lot of people, in particular, if

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Speaker 1: you're struggling with debt and you've been working for a

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Speaker 1: while at trying to pay down your debt, I think

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Speaker 1: in those cases specifically, that the debt snowball is where

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Speaker 1: it's at. Yeah. I think up until probably last year,

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Speaker 1: I would have been team Avalanche all the way, and

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Speaker 1: I would have about the numbers, I would have completely

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Speaker 1: disagreed with you, because I do think, like, why would

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Speaker 1: you pay more in interest than you have to? I

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Speaker 1: don't like that idea. I don't like the idea of

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Speaker 1: paying down a five percent debt first when you have

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Speaker 1: a ninetent credit card chilling there like that. That doesn't

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Speaker 1: make any sense to me, And so I think I

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Speaker 1: still probably reside a little bit more on team avalanche

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Speaker 1: side and paying off your highest interest rate debts as

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Speaker 1: quickly as possible and then moving onto those lower interest

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Speaker 1: rate debts. But yeah, recently, one of the loan balances

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Speaker 1: on one of my rental properties is getting pretty low,

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Speaker 1: and it's are you feeling the itch? I am? Keep

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Speaker 1: paying off, I am. But the thing is, the interest

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Speaker 1: rate is so low that it really doesn't make sense

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Speaker 1: for me to prioritize the payoff. And so I'm just

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Speaker 1: having to kind of sit on my hands and forget

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Speaker 1: about it and not even remind myself that we're getting

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Speaker 1: to that point, because there are other priorities in my life.

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Speaker 1: I don't want to focus on that at this point

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Speaker 1: in time. It would make more sense for me to

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Speaker 1: put my hard earned dollars towards the market. Yeah, towards

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Speaker 1: in the market, or towards a higher interest rate loan

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Speaker 1: that I have on another rental property. But I completely

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Speaker 1: understand the itch, right, especially as you get close to

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Speaker 1: paying something off, it just kind of, oh, you want

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Speaker 1: to just finish it off. I think it is a

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Speaker 1: difficult decision, but really picking your path and sticking to

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Speaker 1: it makes a whole lot of sense. Yeah, and I'll

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Speaker 1: argue in favor of the debt avalanche because I think

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Speaker 1: there's are some situations where it does make sense, because

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Speaker 1: the argument will go against it that well, if you're

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Speaker 1: paying attention to the numbers, right, you like you would

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Speaker 1: have never ended up in debt in the first place.

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Speaker 1: But I think there are a lot of folks who

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Speaker 1: for a period in their life, maybe when they were younger,

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Speaker 1: they didn't they didn't pay attention to numbers. They didn't

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Speaker 1: pay attention to how much they're spending, how much debt

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Speaker 1: they were accruing, and there's a moment where they wake up.

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Speaker 1: They kind of have an enlightening, whether that be uh,

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Speaker 1: they're getting married, or they read a great book, or

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Speaker 1: they see maybe what their friends are doing with their money,

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Speaker 1: and all of a sudden they're realizing that, oh, wait

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Speaker 1: a minute, I'm doing some terrible things with my money.

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Speaker 1: And in those cases where there's a switch, like when

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Speaker 1: something happens like that and the the lights kind of

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Speaker 1: turn on in their head, if they can be disciplined

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Speaker 1: and stick with their plan. I think the debt avalanche

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Speaker 1: makes total sense in those scenarios. Matt. That's a good point.

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Speaker 1: And you know what, I think there might actually be

429
00:19:33,119 --> 00:19:36,439
Speaker 1: a third option here for people something to consider. And

430
00:19:36,480 --> 00:19:38,360
Speaker 1: I don't think I've ever heard anyone else ever talk

431
00:19:38,440 --> 00:19:40,480
Speaker 1: about this, and we should kind of come up with

432
00:19:40,480 --> 00:19:43,320
Speaker 1: our own name for it, maybe the debt snow lanch

433
00:19:43,920 --> 00:19:47,120
Speaker 1: uh snow cone method. So it's kind of a little

434
00:19:47,119 --> 00:19:49,119
Speaker 1: more hybrid approach. And we will tell you what we

435
00:19:49,200 --> 00:20:00,159
Speaker 1: mean by that right after the break. All right, in

436
00:20:00,200 --> 00:20:03,040
Speaker 1: a second, we're going to talk about how to actually

437
00:20:03,160 --> 00:20:06,119
Speaker 1: begin these methods, how to implement them into your lives

438
00:20:06,280 --> 00:20:09,040
Speaker 1: in order to kind of start crushing that debt. But

439
00:20:09,080 --> 00:20:10,920
Speaker 1: first let's kind of talk about this hybrid approach that

440
00:20:10,960 --> 00:20:13,400
Speaker 1: we think might make a lot of sense for folks. Yeah, Joel,

441
00:20:13,560 --> 00:20:15,520
Speaker 1: you know, it is a sort of a hybrid approach,

442
00:20:15,560 --> 00:20:17,720
Speaker 1: and you know, I don't think we're original thinkers here.

443
00:20:17,960 --> 00:20:19,800
Speaker 1: Sure a lot of folks have done this, but paying

444
00:20:19,840 --> 00:20:21,919
Speaker 1: off that really high interest rate debt first and then

445
00:20:21,960 --> 00:20:26,000
Speaker 1: prioritize those balances that have the smaller balances next, for instance,

446
00:20:26,119 --> 00:20:28,080
Speaker 1: high interest rate credit card debt, that you might have,

447
00:20:28,400 --> 00:20:31,000
Speaker 1: that's what you're gonna want to cut most quickly. In

448
00:20:31,040 --> 00:20:33,720
Speaker 1: a car note at five percent isn't a priority in

449
00:20:33,760 --> 00:20:35,800
Speaker 1: the same way. But once you have those credit cards

450
00:20:35,800 --> 00:20:38,880
Speaker 1: out of the way, you can then work towards paying

451
00:20:38,880 --> 00:20:40,679
Speaker 1: off your car just to kind of be rid of

452
00:20:40,720 --> 00:20:43,639
Speaker 1: it once that balance starts getting lower, even if you

453
00:20:43,760 --> 00:20:46,800
Speaker 1: have student loan debts, say at seven percent. So I

454
00:20:46,840 --> 00:20:48,960
Speaker 1: thinking this hybrid approach. What you're doing is you're saying,

455
00:20:49,280 --> 00:20:52,760
Speaker 1: what's the disparity and interest rate between that and the

456
00:20:52,800 --> 00:20:54,960
Speaker 1: rest of my debts, And if it's a big disparity,

457
00:20:55,000 --> 00:20:56,760
Speaker 1: like if you have that one credit card that's at

458
00:20:56,800 --> 00:21:01,719
Speaker 1: nineteen interest, you're going to want to prioritize that first,

459
00:21:02,080 --> 00:21:04,399
Speaker 1: no matter what if all the rest of your debts

460
00:21:04,560 --> 00:21:07,879
Speaker 1: fall in that five to seven percent range. Exactly. Basically,

461
00:21:07,920 --> 00:21:10,840
Speaker 1: you're looking for an outlier that you want to eliminate first. Yeah,

462
00:21:10,880 --> 00:21:13,480
Speaker 1: and then it doesn't really matter what your order is

463
00:21:13,680 --> 00:21:15,879
Speaker 1: after you pay that one off first, right, it doesn't

464
00:21:15,880 --> 00:21:18,080
Speaker 1: matter if you then tackle the five percent debt instead

465
00:21:18,080 --> 00:21:21,639
Speaker 1: of the seven percent debt. That's okay, that's less meaningful

466
00:21:21,680 --> 00:21:23,920
Speaker 1: in the grand scheme of things. But paying off that

467
00:21:24,200 --> 00:21:26,679
Speaker 1: really high interest rate debt as quickly as possible. That's

468
00:21:26,720 --> 00:21:28,640
Speaker 1: going to help move the needles that you pay less

469
00:21:28,640 --> 00:21:32,160
Speaker 1: interest overall. Yeah. What those same studies with that same

470
00:21:32,200 --> 00:21:34,800
Speaker 1: research show though, is that it does matter for you

471
00:21:34,880 --> 00:21:38,359
Speaker 1: to make sure and focus on a single debts. Those

472
00:21:38,400 --> 00:21:40,760
Speaker 1: who try to kind of spread out their payments not

473
00:21:40,800 --> 00:21:43,560
Speaker 1: just the minimums, but kind of additional payments across a

474
00:21:43,600 --> 00:21:46,520
Speaker 1: whole sort of portfolio of debts that they had were

475
00:21:46,600 --> 00:21:49,359
Speaker 1: much less likely to successfully get out of debt versus

476
00:21:49,960 --> 00:21:54,000
Speaker 1: paying towards a specific debt with laser light focus. Regardless

477
00:21:54,000 --> 00:21:55,879
Speaker 1: of the approach, so you could be paying towards the

478
00:21:55,880 --> 00:21:58,000
Speaker 1: balance that was the smallest, or you could be paying

479
00:21:58,040 --> 00:22:00,639
Speaker 1: down the balance that had the high it's interest rate

480
00:22:00,680 --> 00:22:02,960
Speaker 1: doesn't really matter. As long as you were focusing on

481
00:22:03,000 --> 00:22:06,800
Speaker 1: that one singular debts, you had a much higher chance

482
00:22:06,920 --> 00:22:09,600
Speaker 1: of getting out of debt altogether. And this again goes

483
00:22:09,600 --> 00:22:11,439
Speaker 1: back to that same study, Joel. But the weight and

484
00:22:11,480 --> 00:22:14,080
Speaker 1: the impact that multiple debts like that can have on

485
00:22:14,160 --> 00:22:16,439
Speaker 1: you mentally, it's just draining. It's it's it's you know.

486
00:22:16,440 --> 00:22:18,280
Speaker 1: One of the things they mentioned the article as well

487
00:22:18,400 --> 00:22:21,439
Speaker 1: was that how it's a bandwidth tax that kind of

488
00:22:21,480 --> 00:22:24,800
Speaker 1: SAPs on your mental energies and your ability to think

489
00:22:24,840 --> 00:22:28,320
Speaker 1: straight to perform normal tasks effectively. And certainly we've seen

490
00:22:28,320 --> 00:22:29,719
Speaker 1: this in other areas in our life as well. When

491
00:22:29,760 --> 00:22:32,080
Speaker 1: we try to multitask do multiple things all at once,

492
00:22:32,280 --> 00:22:34,800
Speaker 1: chances are you're not gonna do any of those things

493
00:22:34,840 --> 00:22:37,200
Speaker 1: that well. But the interesting thing is, we all think

494
00:22:37,240 --> 00:22:39,239
Speaker 1: we know how to do it. It's true, we all

495
00:22:39,240 --> 00:22:42,080
Speaker 1: think we're good multitaskers, but most of us actually are terrible.

496
00:22:42,080 --> 00:22:43,760
Speaker 1: We're terrible at it. But if you can just focus

497
00:22:43,800 --> 00:22:45,560
Speaker 1: on that one thing and does knock it out of

498
00:22:45,560 --> 00:22:47,639
Speaker 1: the park, it's just gonna be way more effective and

499
00:22:47,640 --> 00:22:50,440
Speaker 1: you're gonna see a lot more progress happen sooner. Yeah. Man.

500
00:22:50,480 --> 00:22:52,800
Speaker 1: Interestingly enough, when you kind of crush the numbers and

501
00:22:52,800 --> 00:22:54,760
Speaker 1: you look at how long it takes people to pay

502
00:22:54,760 --> 00:22:57,960
Speaker 1: off their debts and how much overall interest they pay

503
00:22:58,000 --> 00:23:02,320
Speaker 1: in the debt snowball versus debt avalanche method, it really

504
00:23:02,359 --> 00:23:04,640
Speaker 1: doesn't end up being that big of a disparity. Which

505
00:23:04,720 --> 00:23:06,760
Speaker 1: that was really interesting. Sounds like you're about to cross

506
00:23:06,800 --> 00:23:10,720
Speaker 1: over to the team debt snowball side. Yeah. I feel

507
00:23:10,760 --> 00:23:13,720
Speaker 1: like with psychology being such a major impact on people's

508
00:23:13,760 --> 00:23:17,080
Speaker 1: continued ability to keep going down that path of paying

509
00:23:17,119 --> 00:23:20,359
Speaker 1: down their debt. Well, yeah, I mean, debt snowball actually

510
00:23:20,400 --> 00:23:22,280
Speaker 1: really does make a lot of sense, and it's interesting.

511
00:23:22,640 --> 00:23:25,200
Speaker 1: Just doing more research for this episode, I was kind

512
00:23:25,200 --> 00:23:28,800
Speaker 1: of struck by the fact that that psychology factor is way, way,

513
00:23:28,840 --> 00:23:32,040
Speaker 1: way more important than even I gave it credence for

514
00:23:32,280 --> 00:23:34,560
Speaker 1: in the beginning, because I mean, I know that's important.

515
00:23:34,560 --> 00:23:37,160
Speaker 1: I know that's important in personal finances, the way people think,

516
00:23:37,440 --> 00:23:39,439
Speaker 1: and just kind of those strongly held beliefs that we

517
00:23:39,480 --> 00:23:40,720
Speaker 1: have in the back of our brain that we don't

518
00:23:40,760 --> 00:23:43,760
Speaker 1: even know exist. They're huge in the way we approach

519
00:23:43,840 --> 00:23:46,600
Speaker 1: paying off debt or spending or all of those things. Right,

520
00:23:46,880 --> 00:23:50,159
Speaker 1: But I didn't realize that it's as powerful as it is.

521
00:23:50,280 --> 00:23:52,919
Speaker 1: It's kind of jarring how much power our brains have

522
00:23:53,040 --> 00:23:55,280
Speaker 1: over us when it comes to, you know, how we spend,

523
00:23:55,280 --> 00:23:57,040
Speaker 1: but then also how we paid on our debt. So

524
00:23:57,080 --> 00:23:59,320
Speaker 1: at this point, what we're saying is to have some

525
00:23:59,400 --> 00:24:03,200
Speaker 1: self away earness, know yourself enough to know which these

526
00:24:03,240 --> 00:24:05,960
Speaker 1: approaches would work the best for you, because it doesn't

527
00:24:06,000 --> 00:24:07,879
Speaker 1: matter all that much when it comes to the numbers.

528
00:24:07,920 --> 00:24:10,720
Speaker 1: But what does matter is that you actually do the deed.

529
00:24:10,880 --> 00:24:12,960
Speaker 1: Right like that you finished the drill and that you're

530
00:24:13,000 --> 00:24:14,840
Speaker 1: able to get out of that debt. Both of these

531
00:24:14,880 --> 00:24:18,040
Speaker 1: approaches can be helpful, and so what's most important to you, though,

532
00:24:18,080 --> 00:24:20,400
Speaker 1: is that you prioritize paying down your debts at all

533
00:24:20,520 --> 00:24:23,600
Speaker 1: and getting started. Yeah, just a really quick thought on that, Matt.

534
00:24:23,800 --> 00:24:26,960
Speaker 1: Let's say you want to start running, but you've lacked

535
00:24:26,960 --> 00:24:29,399
Speaker 1: a little bit of the motivation. Well, there are all

536
00:24:29,440 --> 00:24:32,080
Speaker 1: these kind of little tricks that you can do in

537
00:24:32,200 --> 00:24:35,000
Speaker 1: order to make yourself more likely to actually get out

538
00:24:35,040 --> 00:24:37,880
Speaker 1: there and and run your first mile. If you lay

539
00:24:37,880 --> 00:24:41,040
Speaker 1: out your shoes and your running gear ahead of time,

540
00:24:41,320 --> 00:24:44,040
Speaker 1: before you even go to bed, well, when you wake

541
00:24:44,119 --> 00:24:47,000
Speaker 1: up and you stare at it, there's a huge chance

542
00:24:47,000 --> 00:24:48,800
Speaker 1: that you're actually gonna put it on and maybe go

543
00:24:48,880 --> 00:24:51,080
Speaker 1: for a jog. But if you say no, I'll you know,

544
00:24:51,080 --> 00:24:53,000
Speaker 1: I'll get it out of the drawer in the morning, Well,

545
00:24:53,040 --> 00:24:55,160
Speaker 1: there's a good chance that you're going to sleep in.

546
00:24:55,560 --> 00:24:57,600
Speaker 1: And I think the same is true when it comes

547
00:24:57,600 --> 00:25:00,000
Speaker 1: to debt repayment. If you can get fully on board

548
00:25:00,000 --> 00:25:03,360
Speaker 1: ward with one strategy and actually get the ball rolling, well,

549
00:25:03,400 --> 00:25:05,439
Speaker 1: the likelihood is you're gonna stick with this and you're

550
00:25:05,440 --> 00:25:07,760
Speaker 1: gonna make progress, and once you see progress, it's going

551
00:25:07,800 --> 00:25:09,959
Speaker 1: to be a self fulfilling prophecy that you are going

552
00:25:09,960 --> 00:25:12,320
Speaker 1: to continue down that path and you're gonna crush your debt.

553
00:25:12,600 --> 00:25:14,840
Speaker 1: And so yeah, let's go through kind of helping people

554
00:25:14,880 --> 00:25:16,879
Speaker 1: figure out how to get started going down one of

555
00:25:16,880 --> 00:25:19,080
Speaker 1: these paths. So, Joel, the first step is that you

556
00:25:19,119 --> 00:25:21,680
Speaker 1: want to get organized. Go ahead and write down all

557
00:25:21,680 --> 00:25:25,240
Speaker 1: the debts that you owe. So start with the minimum payments,

558
00:25:25,520 --> 00:25:27,080
Speaker 1: but then we'll go ahead and right down your interest

559
00:25:27,160 --> 00:25:29,439
Speaker 1: rate and the total balances due for each of those debts.

560
00:25:29,560 --> 00:25:32,600
Speaker 1: Because regardless of which approach that you're gonna take, you

561
00:25:32,640 --> 00:25:34,760
Speaker 1: need to know, well what which one has the actual

562
00:25:34,800 --> 00:25:37,160
Speaker 1: smallest balance, or you need to know which one has

563
00:25:37,280 --> 00:25:40,240
Speaker 1: the largest interest rate. You gotta be organized, and Joel,

564
00:25:40,320 --> 00:25:41,800
Speaker 1: just like you mentioned kind of setting out the shoes,

565
00:25:41,840 --> 00:25:43,919
Speaker 1: setting out your gym shorts, you gotta line everything up

566
00:25:43,920 --> 00:25:46,200
Speaker 1: and have it sitting there so that you can attack it. Yeah,

567
00:25:46,200 --> 00:25:48,160
Speaker 1: and so either way you slice it, whether you're going

568
00:25:48,240 --> 00:25:51,960
Speaker 1: debt snowball or debt avalanche or that kind of hybrid approach.

569
00:25:52,000 --> 00:25:54,520
Speaker 1: The snow lanch that we talked about, create a repayment

570
00:25:54,560 --> 00:25:57,800
Speaker 1: schedule that funnels all of your extra money towards that

571
00:25:57,880 --> 00:26:00,959
Speaker 1: debt that you're targeting under your favor it strategy. You're

572
00:26:01,000 --> 00:26:02,520
Speaker 1: gonna want to make sure that all of the other

573
00:26:02,560 --> 00:26:05,199
Speaker 1: debts in question that you're paying the minimums on, and

574
00:26:05,240 --> 00:26:08,760
Speaker 1: then as much extra cash as you have in your budget,

575
00:26:08,920 --> 00:26:11,680
Speaker 1: you're funneling that straight towards that debt that you hate

576
00:26:11,680 --> 00:26:13,920
Speaker 1: the most that you're planning to crush. Yeah, man, knock

577
00:26:13,960 --> 00:26:17,120
Speaker 1: that thing out. And then after maybe each of those

578
00:26:17,160 --> 00:26:19,720
Speaker 1: debts that you knock out completely, it might be worth

579
00:26:19,760 --> 00:26:23,720
Speaker 1: considering rewarding yourself at that point. Don't let little mistakes

580
00:26:23,760 --> 00:26:26,160
Speaker 1: completely derail you. You want to make sure that you're

581
00:26:26,200 --> 00:26:29,240
Speaker 1: able to see some forward progress. Like That's the problem

582
00:26:29,240 --> 00:26:30,800
Speaker 1: with that is that a lot of times it can

583
00:26:30,840 --> 00:26:34,720
Speaker 1: be this invisible thing that's really tough to quantify, and

584
00:26:34,960 --> 00:26:37,800
Speaker 1: in reality, like as a human being, what you experience

585
00:26:38,440 --> 00:26:40,399
Speaker 1: is that you're depriving yourself of the things that you

586
00:26:40,480 --> 00:26:42,879
Speaker 1: used to spend money on, and you don't really feel

587
00:26:42,880 --> 00:26:45,760
Speaker 1: that you're doing anything. So sometimes having these little small

588
00:26:45,800 --> 00:26:48,840
Speaker 1: rewards is a tangible way for you to remind yourself

589
00:26:48,920 --> 00:26:51,400
Speaker 1: physically that oh, yeah, I'm paying down my debt right

590
00:26:51,480 --> 00:26:53,479
Speaker 1: because so much of our currency, so much of our

591
00:26:53,480 --> 00:26:56,960
Speaker 1: money today is digital, and it's not like you have

592
00:26:57,040 --> 00:26:59,680
Speaker 1: a stack of cash that's growing on your dresser and

593
00:26:59,760 --> 00:27:01,480
Speaker 1: you're able to see that and feel like you're you're

594
00:27:01,560 --> 00:27:04,160
Speaker 1: becoming better off or that you're handling your money better.

595
00:27:04,520 --> 00:27:06,560
Speaker 1: It's just digital. It's just number that shows up on

596
00:27:06,560 --> 00:27:08,800
Speaker 1: your phone. And it can be tough sometimes that to

597
00:27:08,880 --> 00:27:11,480
Speaker 1: feel the actual impact of that. Yeah, some sort of

598
00:27:11,640 --> 00:27:15,159
Speaker 1: little reward can I think help you stay engaged in

599
00:27:15,400 --> 00:27:18,480
Speaker 1: the fight to pay off your debt. Whether it's a

600
00:27:18,600 --> 00:27:21,000
Speaker 1: latte on a Saturday morning at your favorite coffee shop

601
00:27:21,359 --> 00:27:24,359
Speaker 1: or a new pair of Chuck Taylor tennis shoes that

602
00:27:24,440 --> 00:27:26,719
Speaker 1: would probably be mine, But yeah, I think something like

603
00:27:26,760 --> 00:27:30,040
Speaker 1: that can actually provide that boost, like, okay, cool, I

604
00:27:30,040 --> 00:27:32,440
Speaker 1: can't wait till my next little reward when debt number

605
00:27:32,440 --> 00:27:34,679
Speaker 1: two gets paid off. And I think it's really helpful,

606
00:27:34,720 --> 00:27:37,320
Speaker 1: Like we need a little we need moments of feedback

607
00:27:37,640 --> 00:27:39,440
Speaker 1: in these areas of our lives, and if if you're

608
00:27:39,480 --> 00:27:42,320
Speaker 1: not able to share it with somebody in particular, providing

609
00:27:42,359 --> 00:27:46,520
Speaker 1: little rewards, little benefits, little boosts for yourself or reminders. Yeah,

610
00:27:46,560 --> 00:27:49,119
Speaker 1: it's so helpful, right, and you mentioned sharing it with

611
00:27:49,160 --> 00:27:50,720
Speaker 1: someone else as well. I mean, and I think that's

612
00:27:50,760 --> 00:27:54,080
Speaker 1: another great way of moving forward with pain down your

613
00:27:54,080 --> 00:27:55,960
Speaker 1: debt is have somebody else who might be in a

614
00:27:56,000 --> 00:27:59,000
Speaker 1: similar life stage as you or has similar goals that

615
00:27:59,040 --> 00:28:01,120
Speaker 1: you're trying to achieve, because you can again, you can

616
00:28:01,160 --> 00:28:04,440
Speaker 1: remind each other not through just these little treats and rewards,

617
00:28:04,520 --> 00:28:07,720
Speaker 1: but also through encouragement and spurring each other on. Joel,

618
00:28:07,720 --> 00:28:09,920
Speaker 1: I mean, going back to your your running analogy. Even

619
00:28:09,920 --> 00:28:11,840
Speaker 1: though you don't run, no way, you're never gonna see

620
00:28:11,840 --> 00:28:13,840
Speaker 1: me running. Man, I stay, I stay on two wheels.

621
00:28:14,520 --> 00:28:16,120
Speaker 1: But when you're running with a buddy, that is going

622
00:28:16,160 --> 00:28:18,679
Speaker 1: to be a much more effective way to train and

623
00:28:18,720 --> 00:28:21,520
Speaker 1: to stick to a training schedule or hitting a specific

624
00:28:21,520 --> 00:28:23,080
Speaker 1: time if you're trying to set like a new personal

625
00:28:23,080 --> 00:28:25,639
Speaker 1: record for yourself, that's another way that will allow you

626
00:28:25,680 --> 00:28:28,440
Speaker 1: to stick with it and to stay motivated. And as

627
00:28:28,440 --> 00:28:31,520
Speaker 1: you're on this path to paying that your debt as

628
00:28:31,680 --> 00:28:34,760
Speaker 1: quickly as possible, you know, like we said, these are

629
00:28:34,800 --> 00:28:38,480
Speaker 1: all great approaches, but the biggest thing, the biggest thing

630
00:28:38,680 --> 00:28:41,360
Speaker 1: that you have to be aware of is that you

631
00:28:41,440 --> 00:28:44,840
Speaker 1: can't start creating new debt again in the process or

632
00:28:44,920 --> 00:28:47,120
Speaker 1: at the end of this process. You can't pay off

633
00:28:47,120 --> 00:28:49,720
Speaker 1: a credit card and then start working on your next debt,

634
00:28:49,960 --> 00:28:52,560
Speaker 1: and then, you know what, start charging that first credit

635
00:28:52,560 --> 00:28:54,960
Speaker 1: card that you paid off, start charging it up again.

636
00:28:55,400 --> 00:28:58,240
Speaker 1: That defeats the purpose and puts you in a very

637
00:28:58,240 --> 00:29:00,560
Speaker 1: similar bind. You have to take a hard look at

638
00:29:00,560 --> 00:29:02,720
Speaker 1: the root causes of what led you to getting into

639
00:29:02,760 --> 00:29:04,600
Speaker 1: this debt in the first place. And Joel, for a

640
00:29:04,640 --> 00:29:06,720
Speaker 1: lot of people like that root cause might be having

641
00:29:06,800 --> 00:29:08,680
Speaker 1: a credit card to begin with. Right Like you and I,

642
00:29:08,720 --> 00:29:11,320
Speaker 1: we talk a good bit about credit card bonuses. I

643
00:29:11,360 --> 00:29:13,880
Speaker 1: love those sign of bonuses and getting the big rewards

644
00:29:13,920 --> 00:29:16,280
Speaker 1: that way. But for a lot of folks that might

645
00:29:16,280 --> 00:29:19,520
Speaker 1: be temptation to overspend and consume on a scale that

646
00:29:19,560 --> 00:29:22,120
Speaker 1: doesn't fit with their budget, and so in that case

647
00:29:22,200 --> 00:29:23,760
Speaker 1: it might be wise for them to not have a

648
00:29:23,800 --> 00:29:26,520
Speaker 1: credit card. There are some different benefits like that that

649
00:29:26,640 --> 00:29:28,960
Speaker 1: you can use to your advantage that can work for you,

650
00:29:29,320 --> 00:29:32,640
Speaker 1: but just don't allow the same tools to work against

651
00:29:32,680 --> 00:29:35,479
Speaker 1: you and cause you more harm than good. Yeah, if

652
00:29:35,520 --> 00:29:38,800
Speaker 1: you know the credit cards in your possession don't end well.

653
00:29:38,920 --> 00:29:41,080
Speaker 1: If if you know that it ends with a shopping

654
00:29:41,080 --> 00:29:44,160
Speaker 1: spree online or you go to your local mall, or whatever.

655
00:29:44,200 --> 00:29:46,200
Speaker 1: I don't know, the mall still exists. I feel like

656
00:29:46,240 --> 00:29:48,840
Speaker 1: millennials are killing malls, right, that's what I hear. But

657
00:29:48,880 --> 00:29:52,160
Speaker 1: if you Amazon shopping spree, Yeah yeah. However you use

658
00:29:52,200 --> 00:29:54,959
Speaker 1: your credit card, however you use it poorly, you need

659
00:29:55,000 --> 00:29:56,680
Speaker 1: to be aware of that. And if you feel like

660
00:29:56,720 --> 00:30:00,200
Speaker 1: you can't handle credit card usage, well, well then you

661
00:30:00,200 --> 00:30:01,880
Speaker 1: need to cut them out of your life because it's

662
00:30:01,920 --> 00:30:04,280
Speaker 1: just not worth the potential harm that could befall you

663
00:30:04,760 --> 00:30:08,360
Speaker 1: from using your credit cards frequently and often, landing you

664
00:30:08,480 --> 00:30:12,120
Speaker 1: in more and more debt. So true, Let's now go

665
00:30:12,160 --> 00:30:14,280
Speaker 1: ahead and get back to our beer. Yeah, man, So

666
00:30:14,400 --> 00:30:17,640
Speaker 1: this was maple vanilla Copra Kai that we had from

667
00:30:17,720 --> 00:30:20,320
Speaker 1: Southern Grist Brewing Company. Thanks to Jamie over there for

668
00:30:20,360 --> 00:30:22,760
Speaker 1: sending this one over to us, dude, this was one

669
00:30:22,760 --> 00:30:24,280
Speaker 1: of the best beers we found on the show in

670
00:30:24,360 --> 00:30:28,680
Speaker 1: a while. This beer was harmonious. I would say it

671
00:30:28,760 --> 00:30:32,960
Speaker 1: had the elements of maple and vanilla perfectly blended into

672
00:30:33,000 --> 00:30:35,240
Speaker 1: this milk stout, and in my opinion, it was the

673
00:30:35,320 --> 00:30:39,600
Speaker 1: absolutely perfect specimen of what a milk stout should taste like.

674
00:30:40,120 --> 00:30:42,960
Speaker 1: This was fantastic. Yeah, and this is only a seven

675
00:30:42,960 --> 00:30:45,200
Speaker 1: percent beer. A lot of stouts that have a lot

676
00:30:45,240 --> 00:30:47,959
Speaker 1: of flavor like this tend to be boozier and bigger,

677
00:30:48,200 --> 00:30:50,720
Speaker 1: which makes them a little more difficult to drink, and

678
00:30:50,960 --> 00:30:53,040
Speaker 1: this one was not that way. It's it's really easy

679
00:30:53,080 --> 00:30:55,720
Speaker 1: to drink a lot of amazing flavors. Since I'm holding

680
00:30:55,760 --> 00:30:57,440
Speaker 1: the can right now, I can, I'm kind of sniffing

681
00:30:57,480 --> 00:31:01,120
Speaker 1: it and it almost has this cake batter quality to it.

682
00:31:01,160 --> 00:31:04,440
Speaker 1: Smells really sweet, really delicious. You almost had like a

683
00:31:05,000 --> 00:31:08,120
Speaker 1: like one of those maple doughnut kind of vibe going on.

684
00:31:08,520 --> 00:31:12,400
Speaker 1: Like like there's this concept of the pastry stout where

685
00:31:12,440 --> 00:31:15,000
Speaker 1: people are putting donut kind of additions into their souths

686
00:31:15,000 --> 00:31:17,800
Speaker 1: brownie additions, all these kind of interesting, funky dessert like

687
00:31:17,880 --> 00:31:20,720
Speaker 1: factors into their stouts, and this one kind of had, like, man,

688
00:31:20,840 --> 00:31:24,560
Speaker 1: some really cool elements, some really tasty notes. But it

689
00:31:24,640 --> 00:31:27,560
Speaker 1: wasn't overwhelming in your face either. It was like these

690
00:31:27,560 --> 00:31:30,840
Speaker 1: awesome flavors and perfect balance. Yeah, like you said, harmonious

691
00:31:31,080 --> 00:31:34,240
Speaker 1: with it being a milk stout, It's just got that smooth, creamy,

692
00:31:34,720 --> 00:31:37,160
Speaker 1: milk shake like nature to it. You know what I'm saying.

693
00:31:37,360 --> 00:31:39,959
Speaker 1: Fantastic beer. We're kind of gushing all over this thing.

694
00:31:40,040 --> 00:31:41,880
Speaker 1: So we should probably ahead and cut it short. But

695
00:31:42,160 --> 00:31:45,240
Speaker 1: fantastic brewery, Southern Grist. I looked them up as well

696
00:31:45,280 --> 00:31:47,120
Speaker 1: because since we had them on the last episode, I

697
00:31:47,120 --> 00:31:49,360
Speaker 1: wanted to see what other beers they had, man, and

698
00:31:49,400 --> 00:31:52,200
Speaker 1: they have such an amazing variety. A lot of places

699
00:31:52,200 --> 00:31:54,720
Speaker 1: will just rock the I pas really hard, or they'll

700
00:31:54,800 --> 00:31:56,959
Speaker 1: have tons of sours. So the risk kind of had

701
00:31:56,960 --> 00:31:59,000
Speaker 1: it all. They had I p as, they had sours,

702
00:31:59,000 --> 00:32:01,600
Speaker 1: they had some some German styles that you don't see

703
00:32:01,600 --> 00:32:03,200
Speaker 1: a lot of hip new breweries made. But then they've

704
00:32:03,240 --> 00:32:05,360
Speaker 1: got some awesome big stouts like this as well, and

705
00:32:05,440 --> 00:32:08,000
Speaker 1: so yeah, props to Southern Grist. That just means we're

706
00:32:08,000 --> 00:32:10,440
Speaker 1: gonna have to try more Southern Grist beers. We just

707
00:32:10,440 --> 00:32:11,760
Speaker 1: need to go up there. Have you been up to

708
00:32:12,040 --> 00:32:14,080
Speaker 1: Nashville anytime for like a day trip or something. It's

709
00:32:14,080 --> 00:32:15,800
Speaker 1: been a while. Man, it's a great town. But it's

710
00:32:15,800 --> 00:32:17,600
Speaker 1: been a minute that's I've been there. But yeah, I

711
00:32:17,600 --> 00:32:19,720
Speaker 1: feel like there's some really good breweries up there now,

712
00:32:20,000 --> 00:32:22,080
Speaker 1: and it's just like a really fun town to be in,

713
00:32:22,200 --> 00:32:25,600
Speaker 1: good live music. I just remember hanging out on Broadway

714
00:32:25,640 --> 00:32:27,720
Speaker 1: in Nashville going to see some kind of old school

715
00:32:27,720 --> 00:32:30,680
Speaker 1: country music with like pedal steels and upright basses and stuff.

716
00:32:30,880 --> 00:32:33,160
Speaker 1: I mean that's totally my jam. Go buy some boots

717
00:32:33,200 --> 00:32:37,000
Speaker 1: or something something southern country. Now. I still wear my Chucks,

718
00:32:37,000 --> 00:32:40,120
Speaker 1: but as Nashville is that like day trip territory for Atlanta. Yeah,

719
00:32:40,120 --> 00:32:41,840
Speaker 1: it's about four hours from where we are. Okay, it's

720
00:32:41,840 --> 00:32:43,520
Speaker 1: not bad at all. I might have to do it, dude,

721
00:32:43,560 --> 00:32:46,400
Speaker 1: let's do it all right, I'm in alright, quick snowball

722
00:32:46,440 --> 00:32:50,680
Speaker 1: avalanche recap debt snowball. It is all about the psychology,

723
00:32:50,720 --> 00:32:53,400
Speaker 1: it's not about the math. You're gonna prioritize pain down

724
00:32:53,400 --> 00:32:55,480
Speaker 1: the debts with the smallest balance if you're in it

725
00:32:55,520 --> 00:32:58,520
Speaker 1: for the quick wins and gaining that momentum versus the

726
00:32:58,560 --> 00:33:01,720
Speaker 1: debt avalanche, where you're gonna be focused on the math,

727
00:33:02,000 --> 00:33:05,840
Speaker 1: not the psychology. And in this case, you are prioritizing

728
00:33:05,880 --> 00:33:08,160
Speaker 1: pain on the debts that have the highest interest rate

729
00:33:08,240 --> 00:33:11,840
Speaker 1: because you're a nerd and you can't get past those numbers. Yeah, Matt,

730
00:33:11,920 --> 00:33:15,640
Speaker 1: that debt avalanche strategy particularly good for robots and extreme

731
00:33:15,640 --> 00:33:19,240
Speaker 1: planners and those that have a lot of discipline, right, Yeah,

732
00:33:19,240 --> 00:33:22,240
Speaker 1: you gotta know yourself exactly. Yeah, And so the last

733
00:33:22,240 --> 00:33:24,960
Speaker 1: thing that we need to note real quick is the

734
00:33:25,000 --> 00:33:28,280
Speaker 1: most important part of both of these strategies is focusing

735
00:33:28,280 --> 00:33:30,600
Speaker 1: on paying down one debt at a time to the

736
00:33:30,600 --> 00:33:33,240
Speaker 1: exclusion of all the others. You're gonna pay the minimums

737
00:33:33,320 --> 00:33:35,680
Speaker 1: on every single debt, but there's only one debt that

738
00:33:35,720 --> 00:33:38,960
Speaker 1: you're going to prioritize highly. And so either way you go,

739
00:33:39,360 --> 00:33:41,200
Speaker 1: make sure you're taking that approach. That's going to be

740
00:33:41,280 --> 00:33:43,760
Speaker 1: the most motivating factor. That's going to kind of give

741
00:33:43,800 --> 00:33:45,760
Speaker 1: you that tunnel vision and it's gonna help keep you

742
00:33:45,840 --> 00:33:49,840
Speaker 1: motivated because you're targeted in specifically on that one debt

743
00:33:49,920 --> 00:33:53,640
Speaker 1: and you're going after obliterating it at all costs. Joe,

744
00:33:53,720 --> 00:33:56,480
Speaker 1: you cannot underestimate the power of focus when it comes

745
00:33:56,480 --> 00:34:00,160
Speaker 1: to your debt. Do not try to multitask your debt payments.

746
00:34:00,440 --> 00:34:02,240
Speaker 1: But that is going to be it for this episode.

747
00:34:02,440 --> 00:34:04,440
Speaker 1: You can find our show notes up on our website

748
00:34:04,480 --> 00:34:07,040
Speaker 1: at how some money dot com. Yeah, and if you're

749
00:34:07,040 --> 00:34:09,880
Speaker 1: into leaving reviews for awesome podcasts, totally feel free to

750
00:34:09,880 --> 00:34:12,719
Speaker 1: do that for us. We would greatly appreciate it. And

751
00:34:12,760 --> 00:34:14,680
Speaker 1: if you think Matt and I have room for improvement,

752
00:34:14,760 --> 00:34:16,799
Speaker 1: please drop us a line. You can go to how

753
00:34:16,880 --> 00:34:19,239
Speaker 1: to money dot com slash do Better. We would love

754
00:34:19,239 --> 00:34:21,480
Speaker 1: to hear from you, all right, buddy, until next time,

755
00:34:21,880 --> 00:34:39,239
Speaker 1: best friends out, best friends out, Best friends out,