1 00:00:00,680 --> 00:00:04,880 Speaker 1: Hello, my name's Santasha Nabananga Bamblet. I'm a proud yor 2 00:00:04,960 --> 00:00:08,639 Speaker 1: the Order Kerni Whalbury and a waddery woman. And before 3 00:00:08,680 --> 00:00:11,160 Speaker 1: we get started on She's on the Money podcast, I 4 00:00:11,160 --> 00:00:14,319 Speaker 1: would like to acknowledge the traditional custodians of the land 5 00:00:14,400 --> 00:00:17,680 Speaker 1: of which this podcast is recorded on a wondery country, 6 00:00:18,120 --> 00:00:22,240 Speaker 1: acknowledging the elders, the ancestors and the next generation coming 7 00:00:22,320 --> 00:00:26,960 Speaker 1: through as this podcast is about connecting, empowering, knowledge sharing 8 00:00:27,080 --> 00:00:30,120 Speaker 1: and the storytelling of you to make a difference for 9 00:00:30,240 --> 00:00:33,080 Speaker 1: today and lasting impact for tomorrow. 10 00:00:33,320 --> 00:00:34,200 Speaker 2: Let's get into it. 11 00:00:34,360 --> 00:00:53,640 Speaker 3: She's on the Money, She's on the Money. 12 00:00:57,200 --> 00:00:59,640 Speaker 2: Hello, and welcome to She's on the Money, the podcast 13 00:00:59,720 --> 00:01:01,840 Speaker 2: that's here to remind you that, no matter what's happening 14 00:01:01,880 --> 00:01:04,720 Speaker 2: in your bank account, your self worth is more important 15 00:01:04,760 --> 00:01:07,680 Speaker 2: than your net worth. My friends, if we haven't met before, 16 00:01:07,680 --> 00:01:10,039 Speaker 2: my name is Victoria Devine, and today I wanted to 17 00:01:10,160 --> 00:01:13,160 Speaker 2: use my solo Saturday episode to talk to you about 18 00:01:13,200 --> 00:01:16,560 Speaker 2: something a little bit personal. The D word, No, not 19 00:01:16,640 --> 00:01:19,080 Speaker 2: that D word. I am talking about debt. And it's 20 00:01:19,160 --> 00:01:22,000 Speaker 2: one of those topics that can feel like a little 21 00:01:22,000 --> 00:01:24,360 Speaker 2: bit of a dirty word, right but here's the thing. 22 00:01:24,520 --> 00:01:27,399 Speaker 2: Debt is so common. In fact, I got in a 23 00:01:27,400 --> 00:01:29,600 Speaker 2: lot of debt. And I mean, I've been thinking, I 24 00:01:29,640 --> 00:01:32,959 Speaker 2: know plenty of incredibly successful people who have dealt with 25 00:01:33,080 --> 00:01:35,520 Speaker 2: debt at some point or another in their lives, right 26 00:01:35,560 --> 00:01:39,360 Speaker 2: including me. I at one point got myself into some 27 00:01:39,440 --> 00:01:43,199 Speaker 2: pretty serious personal debt. I was in more than forty 28 00:01:43,240 --> 00:01:46,399 Speaker 2: thousand dollars worth of personal debt between a personal loan 29 00:01:46,440 --> 00:01:49,440 Speaker 2: that I probably shouldn't have been approved for and a 30 00:01:49,720 --> 00:01:52,520 Speaker 2: credit card. And the reason I did was because I 31 00:01:52,600 --> 00:01:54,880 Speaker 2: was living beyond my means and at the time I 32 00:01:55,000 --> 00:01:58,640 Speaker 2: was so ashamed of it. I was so overwhelmed by it. 33 00:01:58,760 --> 00:02:02,080 Speaker 2: I literally would like to my housemates at the time 34 00:02:02,120 --> 00:02:03,560 Speaker 2: about it. And I can tell you now, it was 35 00:02:03,600 --> 00:02:06,440 Speaker 2: eight hundred and fifty three dollars each and every single 36 00:02:06,480 --> 00:02:07,800 Speaker 2: month that I had to pay back. That was the 37 00:02:07,880 --> 00:02:10,960 Speaker 2: minimum amount, and at that point in time, like I 38 00:02:11,040 --> 00:02:13,920 Speaker 2: was earning just over that amount. So I was earning like, 39 00:02:13,960 --> 00:02:16,160 Speaker 2: I think about sixty thousand dollars a year, and it 40 00:02:16,240 --> 00:02:20,280 Speaker 2: was absolutely financially crippling. I just I couldn't see a 41 00:02:20,320 --> 00:02:23,440 Speaker 2: way out of it, and I judged myself and was 42 00:02:23,600 --> 00:02:27,040 Speaker 2: so ashamed of how I got here. I thought it 43 00:02:27,080 --> 00:02:29,120 Speaker 2: was a reflection of who I was as a person. 44 00:02:29,200 --> 00:02:31,760 Speaker 2: I thought that it made me a terrible human being. 45 00:02:31,800 --> 00:02:33,880 Speaker 2: And I mean, at that time, I lacked a lot 46 00:02:33,919 --> 00:02:36,639 Speaker 2: of financial literacy and I just didn't understand it. And now, 47 00:02:36,680 --> 00:02:39,120 Speaker 2: looking back, I just want to scoop up past me 48 00:02:39,280 --> 00:02:41,480 Speaker 2: and go, well, you were just doing the best that 49 00:02:41,480 --> 00:02:43,280 Speaker 2: you could with the tools and the resources that you 50 00:02:43,360 --> 00:02:45,240 Speaker 2: had at the time, and you made some decisions. They 51 00:02:45,240 --> 00:02:47,800 Speaker 2: weren't bad decisions, but you made some decisions that weren't 52 00:02:47,840 --> 00:02:50,760 Speaker 2: in line with your values because you didn't know how 53 00:02:50,800 --> 00:02:53,280 Speaker 2: to live life in line with your values, because you 54 00:02:53,320 --> 00:02:56,640 Speaker 2: didn't have the financial literacy you deserved. And to me, 55 00:02:57,320 --> 00:03:01,639 Speaker 2: looking back on past Victoria, all she did was spend 56 00:03:01,840 --> 00:03:04,400 Speaker 2: more than she earned. That didn't ever make me a 57 00:03:04,440 --> 00:03:07,640 Speaker 2: bad person. That didn't ever mean I wasn't smart or intelligent. 58 00:03:07,760 --> 00:03:10,920 Speaker 2: It didn't have anything to do with myself worth. But 59 00:03:11,240 --> 00:03:14,160 Speaker 2: that's how it felt, right. And I mean, you're probably 60 00:03:14,200 --> 00:03:16,760 Speaker 2: thinking at the moment, like vuhy, you're ruining my Saturday 61 00:03:16,800 --> 00:03:20,160 Speaker 2: with a story about debt and you historically not being 62 00:03:20,280 --> 00:03:22,840 Speaker 2: very good at money. But debt is not exactly a 63 00:03:22,880 --> 00:03:25,600 Speaker 2: feel good topic, right, But I want to flip the 64 00:03:25,680 --> 00:03:28,399 Speaker 2: narrative on that today, I want to empower you when 65 00:03:28,400 --> 00:03:30,520 Speaker 2: it comes to debt. I'm not saying go get you more. 66 00:03:30,560 --> 00:03:33,480 Speaker 2: But debt isn't just a financial weight, right. It can 67 00:03:33,600 --> 00:03:36,160 Speaker 2: weigh heavily on your emotions, and it can weigh really 68 00:03:36,200 --> 00:03:40,320 Speaker 2: heavily on your self worth. And as I said before, 69 00:03:40,400 --> 00:03:42,880 Speaker 2: I have been there. Debt has this way of making 70 00:03:42,960 --> 00:03:46,280 Speaker 2: us feel like we have messed up. But here's the 71 00:03:46,320 --> 00:03:51,400 Speaker 2: real truth. Debt does not define your worth. Repeat after me. 72 00:03:51,520 --> 00:03:55,880 Speaker 2: Debt doesn't define your worth. And also wealth doesn't define 73 00:03:55,920 --> 00:03:59,880 Speaker 2: your worth. Right Like, rich people or people with heaps 74 00:04:00,000 --> 00:04:02,000 Speaker 2: the money in their bank are not worth more than 75 00:04:02,040 --> 00:04:05,520 Speaker 2: other people, So why would people in the opposite position 76 00:04:05,640 --> 00:04:09,400 Speaker 2: be worthless? Debt can feel, I guess, really heavy because 77 00:04:09,400 --> 00:04:12,280 Speaker 2: of the emotional baggage that it often carries. It's more 78 00:04:12,280 --> 00:04:14,400 Speaker 2: than just a number in your bank account. It's more 79 00:04:14,440 --> 00:04:16,400 Speaker 2: than just like that debt statement that you get in 80 00:04:16,400 --> 00:04:19,240 Speaker 2: the mail or in your emails. It can feel, genuinely, 81 00:04:19,400 --> 00:04:21,920 Speaker 2: and I say this from an empathetic point of view, 82 00:04:22,240 --> 00:04:25,800 Speaker 2: it can feel like a personal failure, especially when society 83 00:04:26,600 --> 00:04:29,680 Speaker 2: loves to put so much pressure on us being financially perfect. 84 00:04:29,800 --> 00:04:33,160 Speaker 2: But spoiler rella. Literally, nobody is perfect. We all are 85 00:04:33,160 --> 00:04:36,159 Speaker 2: on our own financial journeys, and if debt is a 86 00:04:36,160 --> 00:04:38,560 Speaker 2: part of that, that's cool. That's fine. I feel like 87 00:04:39,160 --> 00:04:41,640 Speaker 2: we go through seasons in life, and right now, if 88 00:04:41,680 --> 00:04:44,119 Speaker 2: you're in debt, that's just a season of your life 89 00:04:44,160 --> 00:04:46,320 Speaker 2: that you are going through. And that's cool because if 90 00:04:46,360 --> 00:04:48,400 Speaker 2: you're in the middle of winter and it feels really cold, 91 00:04:48,720 --> 00:04:50,359 Speaker 2: you can zoom out a little bit, as you know, 92 00:04:50,440 --> 00:04:51,920 Speaker 2: I love to say when in doubt, zoom out, but 93 00:04:51,920 --> 00:04:53,200 Speaker 2: you can zoom out a little bit, and you just 94 00:04:53,279 --> 00:04:56,720 Speaker 2: know that someone's coming. And like, if there's no rain 95 00:04:57,080 --> 00:04:59,800 Speaker 2: during the winter, the flowers aren't going to bloom in summer. 96 00:05:00,760 --> 00:05:05,000 Speaker 2: There have been numerous studies that have highlighted the undeniable 97 00:05:05,120 --> 00:05:08,800 Speaker 2: connection between debt and mental health. I don't know why 98 00:05:09,480 --> 00:05:12,400 Speaker 2: more people aren't talking about this, and the results are 99 00:05:12,520 --> 00:05:18,240 Speaker 2: consistently painting a very upsetting picture. Right Financial debt doesn't 100 00:05:18,279 --> 00:05:21,440 Speaker 2: just impact your wallet or your ability to create wealth 101 00:05:21,520 --> 00:05:24,080 Speaker 2: or buy a house or move in with your partner. 102 00:05:24,440 --> 00:05:27,720 Speaker 2: It seeps into every single corner of your life with 103 00:05:27,880 --> 00:05:32,520 Speaker 2: significant impact on your mental and physical health. So whether 104 00:05:32,560 --> 00:05:35,760 Speaker 2: it is stress or anxiety or even depression, the weight 105 00:05:35,800 --> 00:05:39,599 Speaker 2: of debt can be overwhelming, and research across the board 106 00:05:39,640 --> 00:05:43,720 Speaker 2: says that the more debt people seem to accumulate, the 107 00:05:43,760 --> 00:05:47,640 Speaker 2: worse off their mental health outcomes seem to be. So 108 00:05:47,760 --> 00:05:50,360 Speaker 2: let me give you an example. In twenty nineteen, there 109 00:05:50,400 --> 00:05:53,839 Speaker 2: was a study that found that individuals with high levels 110 00:05:53,839 --> 00:05:58,360 Speaker 2: of debt reported significantly higher levels of stress and anxiety. 111 00:05:58,800 --> 00:06:01,839 Speaker 2: Another study was done at about the same time showed 112 00:06:01,839 --> 00:06:05,080 Speaker 2: that unmanageable debt often led to depression, and it highlighted 113 00:06:05,080 --> 00:06:07,920 Speaker 2: that it's actually not just the amount of debt, but 114 00:06:08,200 --> 00:06:11,599 Speaker 2: help people perceive their ability to manage it that can 115 00:06:11,680 --> 00:06:15,320 Speaker 2: actually trigger serious mental health issues. So debt doesn't just 116 00:06:15,400 --> 00:06:18,600 Speaker 2: impact your mood either. It can disturb your sleep. And 117 00:06:18,839 --> 00:06:21,000 Speaker 2: I can attest to this, like literally, when I was 118 00:06:21,040 --> 00:06:24,240 Speaker 2: in debt, I used to stay up all night and 119 00:06:24,600 --> 00:06:27,880 Speaker 2: I didn't know why at the time, Like obviously I 120 00:06:27,920 --> 00:06:29,640 Speaker 2: was thinking about my debt, and I was stressed about 121 00:06:29,640 --> 00:06:31,600 Speaker 2: my debt, and I was wondering how I was going 122 00:06:31,640 --> 00:06:33,120 Speaker 2: to pay it off, and like if I wanted to 123 00:06:33,120 --> 00:06:34,720 Speaker 2: do something, I was like, oh my gosh, how am 124 00:06:34,720 --> 00:06:36,839 Speaker 2: I going to afford my debt payment? And this, But 125 00:06:36,920 --> 00:06:40,440 Speaker 2: there was a study in twenty twenty that linked financial 126 00:06:40,440 --> 00:06:45,920 Speaker 2: stress to disrupted sleep patterns, which often worsen anxiety. I mean, 127 00:06:45,960 --> 00:06:49,599 Speaker 2: everything's worse at three am. Right. Relationship strain is also 128 00:06:49,680 --> 00:06:51,960 Speaker 2: really common when you are in debt. It's the number 129 00:06:51,960 --> 00:06:55,360 Speaker 2: one thing that couples fight about, right because emotional struggles 130 00:06:55,360 --> 00:06:59,360 Speaker 2: can actually lead to being emotionally distant and even fighting 131 00:06:59,400 --> 00:07:02,360 Speaker 2: with your partner. And some people that are in debt 132 00:07:02,480 --> 00:07:07,000 Speaker 2: actually turned to very unhealthy coping mechanisms. They might get 133 00:07:07,040 --> 00:07:10,360 Speaker 2: involved in substance abuse. And it was actually highlighted in 134 00:07:10,400 --> 00:07:14,640 Speaker 2: a study that linked financial stress to an increased likelihood 135 00:07:14,760 --> 00:07:17,200 Speaker 2: of using alcohol and drugs and all of this. It 136 00:07:17,480 --> 00:07:20,920 Speaker 2: actually just shows us and distills down the relationship between 137 00:07:20,960 --> 00:07:23,360 Speaker 2: debt and mental health, and it shows us that it 138 00:07:23,480 --> 00:07:25,320 Speaker 2: is a very in vicious cycle, and it's one that 139 00:07:25,360 --> 00:07:28,360 Speaker 2: affects more than just the dollars in your bank account. Right. 140 00:07:29,040 --> 00:07:31,800 Speaker 2: But let me tell you right now, as I said before, 141 00:07:32,320 --> 00:07:34,720 Speaker 2: debt does not define you. And I know that if 142 00:07:34,760 --> 00:07:36,560 Speaker 2: you're listening to this, you're like, yeah, but why do 143 00:07:36,640 --> 00:07:38,840 Speaker 2: I still feel like trash about it? V? I get it, 144 00:07:38,880 --> 00:07:41,720 Speaker 2: I've been there. Having debt actually doesn't make you an 145 00:07:41,720 --> 00:07:45,200 Speaker 2: irresponsible human being. It doesn't mean that you're bad with money. 146 00:07:45,240 --> 00:07:48,640 Speaker 2: I think there's a massive misconception that if you are 147 00:07:48,760 --> 00:07:51,960 Speaker 2: in debt, you must be bad at managing money, and 148 00:07:52,440 --> 00:07:54,680 Speaker 2: that is actually not the truth. Like for some people 149 00:07:54,720 --> 00:07:57,760 Speaker 2: it might be let's be honest, but it's not actually 150 00:07:57,800 --> 00:08:00,680 Speaker 2: the truth. It's not a reflection of your car. It's 151 00:08:00,760 --> 00:08:04,160 Speaker 2: just a financial tool. And if you haven't been good 152 00:08:04,200 --> 00:08:06,520 Speaker 2: at using those tools, because no one taught you how 153 00:08:06,560 --> 00:08:08,880 Speaker 2: to use the tools, I can teach you how to 154 00:08:08,960 --> 00:08:11,240 Speaker 2: use the tools and you can get back in control 155 00:08:11,360 --> 00:08:14,400 Speaker 2: and you can control your life instead of that feeling 156 00:08:14,440 --> 00:08:17,320 Speaker 2: of being in debt controlling your life. So let's talk 157 00:08:17,320 --> 00:08:19,800 Speaker 2: about some numbers for a hot second. Did you know 158 00:08:20,080 --> 00:08:24,960 Speaker 2: that here in Australia, consumer debt is actually in the trillions, 159 00:08:25,040 --> 00:08:30,240 Speaker 2: not billions, trillions. That's credit cards, personal loans. Obviously mortgages 160 00:08:30,280 --> 00:08:32,880 Speaker 2: fall into a part of that. Honestly, debt is a 161 00:08:32,920 --> 00:08:35,840 Speaker 2: part of life for most Australians. So if you're feeling 162 00:08:35,960 --> 00:08:38,000 Speaker 2: like you're the only ones struggling with it, and you're 163 00:08:38,000 --> 00:08:39,920 Speaker 2: a bit like past Victoria and you're like I don't 164 00:08:39,960 --> 00:08:43,920 Speaker 2: want to talk about this, you're definitely not alone. Life happens, right, 165 00:08:43,960 --> 00:08:45,640 Speaker 2: and we can't control it. And I mean over the 166 00:08:45,679 --> 00:08:49,160 Speaker 2: last few years going through COVID, we literally have seen 167 00:08:49,200 --> 00:08:51,960 Speaker 2: it play out for us, whether it's medical bills or 168 00:08:52,000 --> 00:08:54,600 Speaker 2: trying to put yourself through university to give yourself the 169 00:08:54,640 --> 00:08:57,640 Speaker 2: best possible chance to create the life that you deserve 170 00:08:57,760 --> 00:09:00,640 Speaker 2: or you wanted to, you know, invest in homes you've 171 00:09:00,640 --> 00:09:05,120 Speaker 2: got a mortgage debt is often just part of that journey. Debt. 172 00:09:05,720 --> 00:09:09,400 Speaker 2: It's not actually good or bad. It's actually very neutral. 173 00:09:09,760 --> 00:09:12,440 Speaker 2: It's a tool, and it's a bit like a hammer, right, 174 00:09:12,679 --> 00:09:15,600 Speaker 2: and what you do with that tool is what matters. 175 00:09:15,679 --> 00:09:19,120 Speaker 2: So think about, like I guess, your hex debt or 176 00:09:19,160 --> 00:09:21,600 Speaker 2: you know, any debt you went into to study and mortgages. 177 00:09:21,640 --> 00:09:24,120 Speaker 2: These are often called and I often refer to them 178 00:09:24,120 --> 00:09:27,040 Speaker 2: as good debts because they're actually helping you build something. 179 00:09:27,120 --> 00:09:30,040 Speaker 2: So whether that is your education or it's your home, 180 00:09:30,160 --> 00:09:33,360 Speaker 2: you're kind of investing in your future. And these are 181 00:09:33,840 --> 00:09:37,440 Speaker 2: what I would call, I guess examples of debt that 182 00:09:37,600 --> 00:09:39,720 Speaker 2: is opening doors for you. I mean it might feel 183 00:09:39,760 --> 00:09:43,040 Speaker 2: all consuming and overwhelming, but like skip ahead thirty years. 184 00:09:43,080 --> 00:09:45,560 Speaker 2: If you have a really good education, it is very 185 00:09:45,840 --> 00:09:48,120 Speaker 2: likely that you are going to have a higher income. 186 00:09:48,400 --> 00:09:49,960 Speaker 2: It's not to say that you have to have a 187 00:09:50,320 --> 00:09:53,240 Speaker 2: really good education to have a high paying job. We 188 00:09:53,360 --> 00:09:56,319 Speaker 2: see on money diaries all the time people absolutely killing 189 00:09:56,320 --> 00:09:59,760 Speaker 2: it without an education. We also see people purchasing homes 190 00:10:00,000 --> 00:10:02,760 Speaker 2: and their mortgages stressing them out of their brains. But 191 00:10:02,920 --> 00:10:05,760 Speaker 2: if they've bought in a really good area and they 192 00:10:05,800 --> 00:10:08,520 Speaker 2: pay off their mortgage over you know, a thirty year period, 193 00:10:08,559 --> 00:10:10,520 Speaker 2: they're not paying it off earlier, but like that thirty 194 00:10:10,600 --> 00:10:13,120 Speaker 2: years of paying back a mortgage is really stressful. They 195 00:10:13,160 --> 00:10:16,160 Speaker 2: pay it back, they're in a really secure financial position. 196 00:10:16,200 --> 00:10:19,719 Speaker 2: They own the roof over their heads. Right. But sometimes 197 00:10:19,760 --> 00:10:23,000 Speaker 2: we take on debt that we have to take on 198 00:10:23,120 --> 00:10:25,200 Speaker 2: because we're going through a really rough patch. So maybe 199 00:10:25,200 --> 00:10:28,400 Speaker 2: there was a whole heap of unexpected costs, or you 200 00:10:28,480 --> 00:10:31,520 Speaker 2: really needed a credit card to cover an emergency. That's 201 00:10:31,559 --> 00:10:34,400 Speaker 2: actually okay, Like I get it. There is no such 202 00:10:34,440 --> 00:10:38,920 Speaker 2: thing as being financially perfect. It doesn't make you any 203 00:10:39,000 --> 00:10:43,000 Speaker 2: less capable or any less responsible. Life happens, and sometimes 204 00:10:43,200 --> 00:10:46,880 Speaker 2: debt is just part of life happening, And it's actually 205 00:10:46,960 --> 00:10:49,480 Speaker 2: our plan to deal with debt that is going to 206 00:10:49,559 --> 00:10:53,000 Speaker 2: change the trajectory of our lives, not necessarily whether we 207 00:10:53,080 --> 00:10:55,440 Speaker 2: have it or not. I mean, I don't want to 208 00:10:55,559 --> 00:10:57,960 Speaker 2: talk about myself too much, but I was in forty 209 00:10:57,960 --> 00:11:01,400 Speaker 2: thousand dollars worth of personal debt. It felt all consuming, overwhelming, 210 00:11:01,720 --> 00:11:04,160 Speaker 2: and I think if you look at what I've done, 211 00:11:04,200 --> 00:11:06,839 Speaker 2: obviously I am an absolute outlier and what I have 212 00:11:06,960 --> 00:11:09,600 Speaker 2: done is very different to the norm. But like, I 213 00:11:09,720 --> 00:11:12,640 Speaker 2: managed to get myself out of that hole with good 214 00:11:12,679 --> 00:11:17,600 Speaker 2: financial literacy, and at that time I had still a 215 00:11:17,679 --> 00:11:20,080 Speaker 2: sixty thousand dollars income. I did get a pay rise 216 00:11:20,080 --> 00:11:21,840 Speaker 2: at that point. I think I was earning clusive at 217 00:11:21,880 --> 00:11:24,040 Speaker 2: eighty thousand dollars. But I got out of that debt. 218 00:11:24,559 --> 00:11:27,440 Speaker 2: I saved up for my first home deposit with my partner, 219 00:11:27,679 --> 00:11:29,640 Speaker 2: having not made any of the money that I've made. 220 00:11:29,640 --> 00:11:33,360 Speaker 2: Throusella and Cheese on the money, Like, life happens, and 221 00:11:33,440 --> 00:11:35,079 Speaker 2: we can create a plan that puts you in the 222 00:11:35,160 --> 00:11:37,800 Speaker 2: best possible position. You don't have to have something that 223 00:11:38,400 --> 00:11:42,199 Speaker 2: is life changing to change your life. Right, And let's 224 00:11:42,200 --> 00:11:44,320 Speaker 2: talk a little more about this idea of good versus 225 00:11:44,360 --> 00:11:47,480 Speaker 2: bad debt. Right, So a mortgage that helps you to 226 00:11:47,480 --> 00:11:50,280 Speaker 2: build equity in your home, or like your hex debt 227 00:11:50,320 --> 00:11:52,559 Speaker 2: that sets you up for a better career in the future, 228 00:11:52,640 --> 00:11:54,840 Speaker 2: are really good examples of good debt because they lead 229 00:11:54,880 --> 00:11:57,400 Speaker 2: to I guess, long term gains. But on the other hand, 230 00:11:57,400 --> 00:12:00,559 Speaker 2: you've got bad debt, I suppose, so those high interest 231 00:12:00,559 --> 00:12:03,640 Speaker 2: credit cards where you're purchasing things that you don't really 232 00:12:03,679 --> 00:12:07,040 Speaker 2: need and you have the ability, and a lot of 233 00:12:07,040 --> 00:12:10,160 Speaker 2: people do to spiral out of control if you're not careful. 234 00:12:10,200 --> 00:12:12,480 Speaker 2: And I mean I have not met one person, and 235 00:12:12,559 --> 00:12:15,000 Speaker 2: there are hundreds of thousands of you in our shoes 236 00:12:15,040 --> 00:12:17,679 Speaker 2: on the money community. I've not met one person that said, 237 00:12:17,800 --> 00:12:20,400 Speaker 2: Victoria Devine, I got a credit card because I just 238 00:12:20,520 --> 00:12:23,360 Speaker 2: really liked the idea of spiraling out of control and 239 00:12:23,400 --> 00:12:25,800 Speaker 2: spending beyond my means. I just one day wanted to 240 00:12:25,840 --> 00:12:27,880 Speaker 2: wake up with an amount of debt that's dropped me 241 00:12:27,920 --> 00:12:30,760 Speaker 2: from sleeping well, enjoying life and you know, having a 242 00:12:30,760 --> 00:12:33,200 Speaker 2: good relationship with money. Not one person says that no 243 00:12:33,240 --> 00:12:37,440 Speaker 2: one gets a credit card with the intention of misusing it, right, 244 00:12:37,760 --> 00:12:40,840 Speaker 2: No one does that. But even if you ended up 245 00:12:40,840 --> 00:12:42,840 Speaker 2: in that position, there's usually a reason for it, and 246 00:12:42,880 --> 00:12:44,480 Speaker 2: the best way to get back on top of that 247 00:12:44,679 --> 00:12:48,600 Speaker 2: is to deep dive into why, when, where, how, and 248 00:12:48,720 --> 00:12:51,880 Speaker 2: not judge yourself for it, because even if you have 249 00:12:52,160 --> 00:12:54,480 Speaker 2: bad debt, It's not the end of the world. It's 250 00:12:54,520 --> 00:12:58,000 Speaker 2: just that other chapter in your financial story. And with 251 00:12:58,080 --> 00:12:59,800 Speaker 2: the right plan, you can manage it. We can get 252 00:12:59,840 --> 00:13:02,120 Speaker 2: out of debt. We can, you know, create a plan. 253 00:13:02,320 --> 00:13:03,880 Speaker 2: We can see the light at the end of the 254 00:13:03,920 --> 00:13:06,760 Speaker 2: tunnel together. But I think so many times when you 255 00:13:06,840 --> 00:13:10,160 Speaker 2: are spiraling out of control, you just overlay this idea 256 00:13:10,200 --> 00:13:11,920 Speaker 2: that you are terrible at money and that you're not 257 00:13:12,040 --> 00:13:13,880 Speaker 2: very good at it, and what you need to do 258 00:13:14,160 --> 00:13:16,880 Speaker 2: is just bury your head in the sand and not 259 00:13:16,960 --> 00:13:19,200 Speaker 2: deal with and that's actually the worst thing that you 260 00:13:19,240 --> 00:13:21,880 Speaker 2: can do. So we've talked about debt and how it 261 00:13:21,960 --> 00:13:24,520 Speaker 2: doesn't define your worth, and I hope that you listen 262 00:13:24,559 --> 00:13:26,960 Speaker 2: to me about that, but don't get it twisted. It 263 00:13:27,040 --> 00:13:30,560 Speaker 2: is just a financial tool. Money is neutral. And I 264 00:13:30,600 --> 00:13:34,040 Speaker 2: guess people in our community and you, my friend, you 265 00:13:34,120 --> 00:13:36,120 Speaker 2: are not going to let debt define you. And if 266 00:13:36,160 --> 00:13:38,160 Speaker 2: you feel like it is defining you right now, we 267 00:13:38,200 --> 00:13:40,000 Speaker 2: are going to change that narrative and we're going to 268 00:13:40,040 --> 00:13:42,520 Speaker 2: change it today. So I guess the question now is 269 00:13:42,600 --> 00:13:45,479 Speaker 2: what do you do when you've got debt that feels overwhelming. 270 00:13:45,520 --> 00:13:47,760 Speaker 2: I don't just want a motivational talk from victoria that 271 00:13:47,800 --> 00:13:49,920 Speaker 2: says it doesn't define me, that it's neutral. That doesn't 272 00:13:49,960 --> 00:13:52,680 Speaker 2: help anybody, right, I mean it might get you interested 273 00:13:52,720 --> 00:13:55,600 Speaker 2: in changing, but like, we need some tools, So stick around. 274 00:13:55,640 --> 00:13:57,120 Speaker 2: I'm going to go to a really quick break and 275 00:13:57,160 --> 00:13:59,520 Speaker 2: on the flip side, I'm going to tell you exactly 276 00:13:59,600 --> 00:14:07,360 Speaker 2: how to change that narrative. Welcome back, my friends. Now 277 00:14:07,520 --> 00:14:10,240 Speaker 2: let's have a chat about managing debt without the shame, 278 00:14:10,360 --> 00:14:13,480 Speaker 2: because that's seemingly where a lot of us end up 279 00:14:13,480 --> 00:14:17,320 Speaker 2: getting stuck. When debt feels overwhelming and all consuming. It 280 00:14:17,440 --> 00:14:20,760 Speaker 2: is so easy to feel so powerless. But my friends, 281 00:14:20,840 --> 00:14:24,440 Speaker 2: here's the thing. Tackling debt can actually be, or I 282 00:14:24,480 --> 00:14:28,000 Speaker 2: think it can actually be really empowering because you're not 283 00:14:28,120 --> 00:14:30,760 Speaker 2: just managing I guess a responsibility that you have, your 284 00:14:30,800 --> 00:14:34,320 Speaker 2: taking control of your financial journey. You are putting few 285 00:14:34,360 --> 00:14:36,880 Speaker 2: to you in the best possible position, and I promise 286 00:14:36,960 --> 00:14:39,840 Speaker 2: she's gonna thank you for that. Like, can you imagine 287 00:14:39,880 --> 00:14:42,760 Speaker 2: if today you're looking back on your journey and you're 288 00:14:42,800 --> 00:14:45,560 Speaker 2: like far out, Like I cannot believe that I was 289 00:14:45,920 --> 00:14:48,760 Speaker 2: so good to current me because I paid off all 290 00:14:48,760 --> 00:14:50,720 Speaker 2: that debt and I'm not in it right now. That's 291 00:14:50,760 --> 00:14:53,720 Speaker 2: such a win, and you're putting yourself in that position. 292 00:14:54,320 --> 00:14:56,840 Speaker 2: I would say, and I've said it before on the podcast, 293 00:14:56,960 --> 00:14:59,920 Speaker 2: I believe that looking after your finances is the highest 294 00:15:00,080 --> 00:15:03,800 Speaker 2: form of self care that can exist. So taking steps 295 00:15:03,840 --> 00:15:06,920 Speaker 2: to handle your debt, whether it is small steps like 296 00:15:07,080 --> 00:15:10,600 Speaker 2: creating a budget, or big steps which feel overwhelming, like 297 00:15:10,680 --> 00:15:14,960 Speaker 2: negotiating with creditors, or just being really proactive, it's a 298 00:15:14,960 --> 00:15:18,840 Speaker 2: way of looking after yourself and looking after your future. 299 00:15:19,000 --> 00:15:23,600 Speaker 2: Because I promise once you take that step, you'll realize 300 00:15:23,640 --> 00:15:26,920 Speaker 2: it's not as big and scary as it currently feels. 301 00:15:27,280 --> 00:15:29,280 Speaker 2: And I know that you've got this. I know that 302 00:15:29,400 --> 00:15:33,080 Speaker 2: you are able to do this, and I'm here, our 303 00:15:33,080 --> 00:15:35,720 Speaker 2: community is here. You're not alone in this process. You're 304 00:15:35,760 --> 00:15:39,080 Speaker 2: not doing it by yourself. So if it is feeling 305 00:15:39,240 --> 00:15:40,600 Speaker 2: like if you're listening to this and you're like V 306 00:15:40,800 --> 00:15:43,520 Speaker 2: it's actually insane, Like I actually can't deal with this, 307 00:15:43,520 --> 00:15:45,840 Speaker 2: this is all too much, you know what I do? 308 00:15:46,200 --> 00:15:49,280 Speaker 2: I'd start by calling our friends at the National Debt Helpline. 309 00:15:49,320 --> 00:15:52,680 Speaker 2: I'll obviously put their number in the show notes. It's 310 00:15:52,720 --> 00:15:55,320 Speaker 2: a not for profit service that I have worked with before. 311 00:15:55,560 --> 00:15:58,440 Speaker 2: I love them. I think that they are absolutely incredible. 312 00:15:58,480 --> 00:16:01,800 Speaker 2: They are people just like you and me. They provide free, 313 00:16:01,800 --> 00:16:06,080 Speaker 2: independent and confidential support to help people tackle their debt problems. 314 00:16:06,400 --> 00:16:09,680 Speaker 2: I promise they are not lenders and they don't have 315 00:16:09,760 --> 00:16:12,120 Speaker 2: anything to sell or they don't make money from you. 316 00:16:12,200 --> 00:16:15,560 Speaker 2: They are legitimate professional financial counselors that are there to 317 00:16:15,600 --> 00:16:18,880 Speaker 2: offer you guidance and practical advice on managing debt, and 318 00:16:19,120 --> 00:16:22,280 Speaker 2: they have seen it all. I promise going to them 319 00:16:23,120 --> 00:16:25,760 Speaker 2: it shouldn't be embarrassing going to them and laying it 320 00:16:25,800 --> 00:16:27,760 Speaker 2: all out on the table. They'll go, yep, no worries, 321 00:16:27,800 --> 00:16:30,680 Speaker 2: what else? And when you say no, that's it, you'll 322 00:16:30,680 --> 00:16:32,200 Speaker 2: be like, oh, it's not as bad as I thought 323 00:16:32,200 --> 00:16:35,360 Speaker 2: it was going to be. So don't be afraid of them. 324 00:16:35,440 --> 00:16:37,560 Speaker 2: I promise. They are just like you and me, and 325 00:16:38,080 --> 00:16:40,040 Speaker 2: you know what, they're probably better than me. They spend 326 00:16:40,080 --> 00:16:44,040 Speaker 2: their entire life working for a company that helps people 327 00:16:44,200 --> 00:16:46,880 Speaker 2: just like you get out of debt. Like they're on 328 00:16:46,920 --> 00:16:49,760 Speaker 2: your side. They're not going to crucify you for where 329 00:16:49,760 --> 00:16:51,960 Speaker 2: you've been. They're just going to help you create a 330 00:16:52,000 --> 00:16:55,000 Speaker 2: bright future. The other thing I would say here, which 331 00:16:55,080 --> 00:16:58,120 Speaker 2: can feel really overwhelming, is don't be afraid to reach 332 00:16:58,160 --> 00:17:00,000 Speaker 2: out to creditors. I mean, at the end of the 333 00:17:00,320 --> 00:17:03,480 Speaker 2: what's the worst they can say no, feeling intimidated. I 334 00:17:03,560 --> 00:17:06,960 Speaker 2: get it, But many creditors are very willing and very 335 00:17:07,000 --> 00:17:09,760 Speaker 2: able to work with you on new payment plans that 336 00:17:09,840 --> 00:17:12,600 Speaker 2: are way more manageable. Or if you're struggling with a 337 00:17:12,640 --> 00:17:15,080 Speaker 2: heap of debts, you might want to consider, and you've 338 00:17:15,119 --> 00:17:18,600 Speaker 2: probably heard about this before, debt consolidation, and this can 339 00:17:18,640 --> 00:17:21,920 Speaker 2: really simplify things by pulling all your debts together into 340 00:17:22,000 --> 00:17:26,080 Speaker 2: one payment, often with a lower interest rate, that feels 341 00:17:26,359 --> 00:17:29,320 Speaker 2: less overwhelming. One of the key things I want you 342 00:17:29,359 --> 00:17:31,600 Speaker 2: to tackle when it comes to your debts is also 343 00:17:31,760 --> 00:17:34,920 Speaker 2: to understand the different types of debts you have. It's 344 00:17:35,000 --> 00:17:37,359 Speaker 2: so often that I talk to people and I'm like, oh, 345 00:17:37,359 --> 00:17:39,119 Speaker 2: are you in debt? They're like, yeah, it's so bad. 346 00:17:39,480 --> 00:17:41,199 Speaker 2: And then I hear they've got a mortgage, and I'm like, 347 00:17:41,359 --> 00:17:44,520 Speaker 2: that is a wealth creating debt. Not all debts, my friend, 348 00:17:44,640 --> 00:17:47,840 Speaker 2: are created equally, So things like credit card debt with 349 00:17:47,960 --> 00:17:51,560 Speaker 2: high interest rates are very different to a mortgage, which 350 00:17:51,600 --> 00:17:54,320 Speaker 2: could have a lower interest rate over a long period 351 00:17:54,320 --> 00:17:57,120 Speaker 2: of time. That helps you create wealth. And understanding what 352 00:17:57,160 --> 00:17:59,840 Speaker 2: you owe and why is going to help you make 353 00:18:00,200 --> 00:18:03,640 Speaker 2: much better decisions moving forward. So one of the things 354 00:18:03,640 --> 00:18:05,600 Speaker 2: I also wanted to talk to you about was interest 355 00:18:05,640 --> 00:18:07,960 Speaker 2: free loans, and I have spoken about them on the 356 00:18:07,960 --> 00:18:11,160 Speaker 2: podcast before, but often they could seem like a great deal. 357 00:18:11,320 --> 00:18:13,320 Speaker 2: I have met so many people and spoken to so 358 00:18:13,359 --> 00:18:15,879 Speaker 2: many people in our community who think that this is 359 00:18:15,920 --> 00:18:17,439 Speaker 2: going to be the answer to their problems. You can 360 00:18:17,480 --> 00:18:19,600 Speaker 2: take all of your credit cards with high interest rates 361 00:18:19,640 --> 00:18:22,240 Speaker 2: and you can transfer them to this, you know, interest 362 00:18:22,280 --> 00:18:25,280 Speaker 2: free loan. But more often than not, there is a 363 00:18:25,320 --> 00:18:29,680 Speaker 2: catch because even though you're only making minimum repayments set 364 00:18:29,720 --> 00:18:32,880 Speaker 2: by the lender, you might not be in a position 365 00:18:32,960 --> 00:18:35,680 Speaker 2: to clear the debt before the interest free period ends, 366 00:18:35,760 --> 00:18:38,080 Speaker 2: and then they're literally setting you up for failure in 367 00:18:38,119 --> 00:18:40,600 Speaker 2: the long term. And even though you might be like me, 368 00:18:40,840 --> 00:18:43,520 Speaker 2: but like my interest rate's seventeen percent, if you read 369 00:18:43,520 --> 00:18:46,160 Speaker 2: the fine print on a lot of these interest free loans, 370 00:18:46,680 --> 00:18:49,200 Speaker 2: after twelve months or after twenty four months, it jumps 371 00:18:49,200 --> 00:18:53,000 Speaker 2: to like twenty two percent interest and that's worse for you, Like, 372 00:18:53,040 --> 00:18:56,040 Speaker 2: that's going to absolutely cripple you. So what I would 373 00:18:56,119 --> 00:19:00,120 Speaker 2: be doing is everything literally to avoid surprise interest charge, 374 00:19:00,680 --> 00:19:03,840 Speaker 2: and I would take control. So let's have a look 375 00:19:03,840 --> 00:19:07,600 Speaker 2: at debt consolidation. Maybe we can actually use an interest 376 00:19:07,640 --> 00:19:10,840 Speaker 2: free loan to our advantage. But please make sure that 377 00:19:10,880 --> 00:19:13,040 Speaker 2: you're either able to pay off the balance before the 378 00:19:13,080 --> 00:19:17,520 Speaker 2: period closes, or you're able to increase your monthly contributions 379 00:19:17,560 --> 00:19:20,680 Speaker 2: to that debt to wipe them in time. And when 380 00:19:20,840 --> 00:19:23,160 Speaker 2: it comes to borrowing any type of money, I think 381 00:19:23,240 --> 00:19:26,600 Speaker 2: my biggest call out here is please, please please always 382 00:19:26,720 --> 00:19:30,240 Speaker 2: read the fine print. Now let's talk about by now, 383 00:19:30,240 --> 00:19:32,400 Speaker 2: pay later. You guys know how I feel about this. 384 00:19:32,840 --> 00:19:35,480 Speaker 2: Say you're using after pay to buy a two hundred 385 00:19:35,640 --> 00:19:37,639 Speaker 2: dollar handbag that you've got your eye on. It's on 386 00:19:37,680 --> 00:19:40,439 Speaker 2: the iconic and you're all over it. In most of 387 00:19:40,480 --> 00:19:42,919 Speaker 2: our brains, the math is, all right, well, that's actually 388 00:19:42,960 --> 00:19:45,719 Speaker 2: just like four payments of fifty dollars, and that's so 389 00:19:45,920 --> 00:19:49,760 Speaker 2: much more palatable. But your brain actually, and this is 390 00:19:49,800 --> 00:19:54,159 Speaker 2: scientifically proven, your brain actually anchors to the smaller amount 391 00:19:54,160 --> 00:19:56,880 Speaker 2: of fifty dollars and it makes you feel like that's 392 00:19:56,920 --> 00:20:00,040 Speaker 2: all you're spending. And if you have been in the 393 00:20:00,200 --> 00:20:03,439 Speaker 2: after pay traps before, I can almost guarantee that if 394 00:20:03,520 --> 00:20:05,840 Speaker 2: I asked you what that dress you bought was, or 395 00:20:05,880 --> 00:20:08,280 Speaker 2: what that bag was, or whatever you put on after pay, 396 00:20:08,800 --> 00:20:11,040 Speaker 2: I can almost guarantee you don't remember the full price. 397 00:20:11,080 --> 00:20:13,920 Speaker 2: You just remember what payment came out, and that's what 398 00:20:13,960 --> 00:20:17,600 Speaker 2: anchoring is. And before you know it, you add another 399 00:20:17,680 --> 00:20:19,960 Speaker 2: cute top to the cart as well, because what's the 400 00:20:19,960 --> 00:20:22,920 Speaker 2: difference between fifty and seventy dollars? Right? So only seventy dollars. 401 00:20:23,000 --> 00:20:26,280 Speaker 2: That's not that much. And after pay his own website 402 00:20:26,480 --> 00:20:29,200 Speaker 2: actually brags. So if you go to the after pay 403 00:20:29,240 --> 00:20:31,920 Speaker 2: website and then go to like I'm a small business 404 00:20:32,200 --> 00:20:35,520 Speaker 2: and have a look, they literally brag to potential merchants 405 00:20:35,960 --> 00:20:40,439 Speaker 2: that work with them, the average order increases by eighteen percent. 406 00:20:40,960 --> 00:20:44,000 Speaker 2: They know that you're going to spend more because you're 407 00:20:44,040 --> 00:20:47,600 Speaker 2: not spending your own money. So while this might be 408 00:20:47,800 --> 00:20:50,240 Speaker 2: interest free and you might go this is a really 409 00:20:50,240 --> 00:20:54,040 Speaker 2: good tool for MeV where a costs more is actually 410 00:20:54,080 --> 00:20:56,720 Speaker 2: in the amount that you're justifying to spend. And I 411 00:20:56,760 --> 00:20:59,600 Speaker 2: think that just understanding these things can help you make 412 00:20:59,640 --> 00:21:02,639 Speaker 2: better choices. And some people might be listening to this 413 00:21:02,720 --> 00:21:05,680 Speaker 2: and going the I'm actually really good at after pay. 414 00:21:05,720 --> 00:21:07,320 Speaker 2: I use it as a cash flow tool, and I've 415 00:21:07,320 --> 00:21:09,399 Speaker 2: also spoken about this as a lot before as well. 416 00:21:09,800 --> 00:21:11,840 Speaker 2: Then the great this tip is not for you, and 417 00:21:11,880 --> 00:21:14,600 Speaker 2: that is fine. But there are people who don't know this, 418 00:21:15,040 --> 00:21:17,640 Speaker 2: and there are people in our community who after pay 419 00:21:17,720 --> 00:21:20,199 Speaker 2: just doesn't work for And I'm one of those people. 420 00:21:20,560 --> 00:21:24,080 Speaker 2: I know that anchoring works very well on me. I 421 00:21:24,080 --> 00:21:27,480 Speaker 2: think it's very related to being a little bit neurospicy, 422 00:21:27,920 --> 00:21:30,320 Speaker 2: where that's the first number I saw, that's all I'm 423 00:21:30,359 --> 00:21:33,160 Speaker 2: going to remember and moving forward, that number actually makes 424 00:21:33,160 --> 00:21:35,720 Speaker 2: me feel a lot better about myself than two hundred. 425 00:21:35,920 --> 00:21:38,679 Speaker 2: So I know what I'm going to anchor too, and 426 00:21:38,720 --> 00:21:42,119 Speaker 2: I know that to have the best financial health personally, 427 00:21:42,640 --> 00:21:45,320 Speaker 2: something like after pay or any by now pay later 428 00:21:45,480 --> 00:21:48,040 Speaker 2: is just not going to fit into my financial plan 429 00:21:48,240 --> 00:21:51,320 Speaker 2: or my financial modeling. Right. The other thing we need 430 00:21:51,359 --> 00:21:54,040 Speaker 2: to get really real about is your finance habits or 431 00:21:54,040 --> 00:21:57,679 Speaker 2: your money habits. And I'm actually here talking about just 432 00:21:57,680 --> 00:22:00,960 Speaker 2: being brutally honest with yourself and be really hard. Like 433 00:22:01,000 --> 00:22:03,359 Speaker 2: I remember coming to the conclusion that I'm just not 434 00:22:03,400 --> 00:22:05,399 Speaker 2: good at money and debt, and this is before I 435 00:22:05,440 --> 00:22:08,720 Speaker 2: became a financial advisor. I wasn't good at handling money. 436 00:22:08,800 --> 00:22:12,359 Speaker 2: And how do you handle money? Are you super self 437 00:22:12,400 --> 00:22:15,280 Speaker 2: aware about how you make money choices or are you 438 00:22:15,320 --> 00:22:18,320 Speaker 2: a bit head in the sand, Like, are you able 439 00:22:18,359 --> 00:22:21,240 Speaker 2: to avoid going further into debt and start gaining control 440 00:22:21,280 --> 00:22:22,879 Speaker 2: of your life? And that can be a big shift 441 00:22:22,960 --> 00:22:26,720 Speaker 2: because often that involves complete lifestyle shift. So if you're 442 00:22:26,760 --> 00:22:28,800 Speaker 2: going into debt because you're spending more than you earn, 443 00:22:29,200 --> 00:22:33,160 Speaker 2: often that is reflective of you living a lifestyle that's 444 00:22:33,200 --> 00:22:35,720 Speaker 2: actually beyond your means. You might go there. I don't 445 00:22:35,720 --> 00:22:37,679 Speaker 2: really want to change that, Like I love brunch with 446 00:22:37,720 --> 00:22:40,800 Speaker 2: my girlfriends, like I love going and buying new activewear, 447 00:22:40,960 --> 00:22:42,840 Speaker 2: Like this is just for me. I'll work it all 448 00:22:42,880 --> 00:22:47,359 Speaker 2: out later. Like it does involve being brutally honest with yourself, 449 00:22:47,440 --> 00:22:49,800 Speaker 2: and that can sometimes be a little bit painful, but 450 00:22:49,840 --> 00:22:53,000 Speaker 2: I promise by doing that, you're putting yourself in the 451 00:22:53,040 --> 00:22:57,040 Speaker 2: best possible situation. Let's talk about credit card debt as 452 00:22:57,080 --> 00:23:00,720 Speaker 2: an example. So, like a zero percent balance trans to 453 00:23:01,480 --> 00:23:04,640 Speaker 2: somebody who is like me might seem like a golden ticket, 454 00:23:04,720 --> 00:23:08,479 Speaker 2: but it only works if you transfer the balance and 455 00:23:09,359 --> 00:23:11,840 Speaker 2: take to that card with a pair of scissors and 456 00:23:11,960 --> 00:23:14,680 Speaker 2: stick to that repayment plan and pay it off during 457 00:23:14,680 --> 00:23:17,800 Speaker 2: that interest free period. And people in our community have 458 00:23:17,800 --> 00:23:20,240 Speaker 2: done that. It's been a brilliant strategy for them. But 459 00:23:20,320 --> 00:23:22,960 Speaker 2: if you're prone to spending and you're just gonna justify 460 00:23:23,040 --> 00:23:25,200 Speaker 2: to yourself, which we've all done, like, oh my gosh, 461 00:23:25,200 --> 00:23:28,080 Speaker 2: actually I I'm going to keep this card in my 462 00:23:28,160 --> 00:23:31,160 Speaker 2: wallet just in case, for just in case splurges. This 463 00:23:31,240 --> 00:23:33,679 Speaker 2: is I promise you, this is going to spiral you 464 00:23:33,840 --> 00:23:37,080 Speaker 2: out of control. And I know that this sounds a 465 00:23:37,080 --> 00:23:39,520 Speaker 2: little bit lame, but maybe if you're not ready to 466 00:23:39,560 --> 00:23:43,080 Speaker 2: cut the credit card up completely, you do that thing 467 00:23:43,240 --> 00:23:45,439 Speaker 2: where you put it in a container of water and 468 00:23:45,520 --> 00:23:47,560 Speaker 2: chuck it in the freezer, so the card still exists 469 00:23:47,560 --> 00:23:49,640 Speaker 2: but you can't really access it. Maybe that would work 470 00:23:49,680 --> 00:23:51,800 Speaker 2: for you, so that the card still exists but you 471 00:23:51,840 --> 00:23:54,439 Speaker 2: can't really use it, and if you want to use it, 472 00:23:54,440 --> 00:23:56,720 Speaker 2: it's going to take you some serious thought about how 473 00:23:56,760 --> 00:23:59,040 Speaker 2: to get back to it at some point. All right, 474 00:23:59,119 --> 00:24:02,080 Speaker 2: let's pivot away from that and talk about two of 475 00:24:02,119 --> 00:24:05,040 Speaker 2: the most popular methods for paying down debt. Right, so 476 00:24:05,080 --> 00:24:07,159 Speaker 2: you've probably heard about them in our community. It's the 477 00:24:07,240 --> 00:24:09,919 Speaker 2: snowball and then the avalanche methods, and both can be 478 00:24:09,960 --> 00:24:13,639 Speaker 2: super effective, but they work in completely different ways and 479 00:24:13,680 --> 00:24:16,800 Speaker 2: are actually suitable for different people. And I think this 480 00:24:16,840 --> 00:24:18,639 Speaker 2: is where you need to know yourself you need to 481 00:24:18,680 --> 00:24:21,159 Speaker 2: know your personality type and who you are and what 482 00:24:21,280 --> 00:24:23,560 Speaker 2: might work now. I don't think it will come as 483 00:24:23,560 --> 00:24:27,639 Speaker 2: a surprise. I am an instant gratification girly at heart, 484 00:24:27,920 --> 00:24:29,760 Speaker 2: which is why this first method that I'm going to 485 00:24:29,800 --> 00:24:33,640 Speaker 2: talk about, the Snowmall method, that's for me, so let's 486 00:24:33,680 --> 00:24:35,800 Speaker 2: talk about it. It's all about quick wins and it 487 00:24:35,880 --> 00:24:39,000 Speaker 2: is perfect for people who need a little extra motivation 488 00:24:39,400 --> 00:24:42,560 Speaker 2: to stay in the game. The idea is relatively simple. 489 00:24:42,760 --> 00:24:45,200 Speaker 2: What the plan is is you focused on your smallest 490 00:24:45,200 --> 00:24:48,040 Speaker 2: debt first and then just throw every extra dollar that 491 00:24:48,080 --> 00:24:49,880 Speaker 2: you have at it. So we're not going to worry 492 00:24:49,880 --> 00:24:52,359 Speaker 2: about our interest rates for now. We're actually going to 493 00:24:52,400 --> 00:24:55,320 Speaker 2: think about psychological wins or the fact that you're going 494 00:24:55,400 --> 00:24:58,359 Speaker 2: to get instant gratification, because what you're going to do 495 00:24:58,480 --> 00:24:59,760 Speaker 2: is you're going to take your debts and then you're 496 00:24:59,760 --> 00:25:03,080 Speaker 2: going to list them in smallest balance to largest balance, 497 00:25:03,400 --> 00:25:05,119 Speaker 2: and then you're going to make minimum repayments on all 498 00:25:05,160 --> 00:25:06,640 Speaker 2: of them. So we're not going to stop paying back 499 00:25:06,640 --> 00:25:09,840 Speaker 2: our debts, but we're not going to make just minimum 500 00:25:09,880 --> 00:25:12,360 Speaker 2: repayments on the smallest one. For the smallest one, you're 501 00:25:12,359 --> 00:25:14,800 Speaker 2: actually going to take any additional money that you have 502 00:25:15,240 --> 00:25:17,920 Speaker 2: and pay it off as quickly as you possibly can. 503 00:25:18,280 --> 00:25:20,840 Speaker 2: And then once that first stet is gone, you're going 504 00:25:20,880 --> 00:25:23,160 Speaker 2: to take that money that you were using to pay 505 00:25:23,359 --> 00:25:26,159 Speaker 2: that debt off and you're going to pay the next 506 00:25:26,200 --> 00:25:28,919 Speaker 2: smallest debt. And it's kind of like building a snowball 507 00:25:29,000 --> 00:25:31,960 Speaker 2: of momentum, and bit by bit you keep adding what 508 00:25:32,080 --> 00:25:34,400 Speaker 2: you were paying before to the next one in line, 509 00:25:34,440 --> 00:25:37,640 Speaker 2: and boom, your debt actually starts disappearing bit by bit. 510 00:25:37,760 --> 00:25:41,159 Speaker 2: And for me, it's such a satisfying feeling that every 511 00:25:41,240 --> 00:25:43,080 Speaker 2: time you pay something off, it's kind of like a 512 00:25:43,160 --> 00:25:45,480 Speaker 2: victory lap that keeps you going. Like I'm the type 513 00:25:45,480 --> 00:25:49,640 Speaker 2: of person that instant gratification works for, So if you're 514 00:25:49,680 --> 00:25:53,120 Speaker 2: somebody who like me, I just thrive on seeing results 515 00:25:53,200 --> 00:25:57,040 Speaker 2: quickly and I need a consistent sense of accomplishment to 516 00:25:57,040 --> 00:26:00,000 Speaker 2: stay on track. This snowball method, my friend, is for you. 517 00:26:00,359 --> 00:26:03,480 Speaker 2: I think it's actually perfect if you're just really overwhelmed 518 00:26:03,520 --> 00:26:07,280 Speaker 2: by debt, because knocking out those smaller balances I think 519 00:26:07,320 --> 00:26:10,560 Speaker 2: really builds confidence. But it's also not too technical, like 520 00:26:10,560 --> 00:26:13,480 Speaker 2: there's no maths involved. You just look at which one 521 00:26:13,600 --> 00:26:16,520 Speaker 2: is the smallest and start paying that off aggressively. But 522 00:26:16,800 --> 00:26:19,280 Speaker 2: if you're a bit more of an efficiency girly and 523 00:26:19,320 --> 00:26:22,080 Speaker 2: you're all about cutting costs and putting yourself in arguably 524 00:26:22,119 --> 00:26:25,639 Speaker 2: the best possible position, then the avalanche method might be 525 00:26:25,760 --> 00:26:28,960 Speaker 2: more on your page. So this one actually focuses on 526 00:26:29,080 --> 00:26:31,760 Speaker 2: paying off the debt with the highest interest rate first, 527 00:26:31,960 --> 00:26:34,159 Speaker 2: which is obviously going to save you the most amount 528 00:26:34,160 --> 00:26:36,560 Speaker 2: of money in the long run. As I said, this 529 00:26:36,600 --> 00:26:40,560 Speaker 2: one is arguably the quote better method. But for me 530 00:26:40,840 --> 00:26:43,520 Speaker 2: when I was paying back my debts, the snowball method 531 00:26:43,560 --> 00:26:47,119 Speaker 2: worked better for me because again, instant gratification curly. So 532 00:26:47,560 --> 00:26:49,280 Speaker 2: how do you do the avalanche method? What you're going 533 00:26:49,359 --> 00:26:51,600 Speaker 2: to do is, instead of focusing on what the smallest 534 00:26:51,600 --> 00:26:53,560 Speaker 2: debt is, you're actually going to list your debts from 535 00:26:53,600 --> 00:26:56,480 Speaker 2: the highest interest rate to the lowest interest rate, and 536 00:26:56,520 --> 00:26:59,520 Speaker 2: we're going to go after the most expensive debt first. 537 00:27:00,080 --> 00:27:01,760 Speaker 2: So once you've got your list, you're going to make 538 00:27:01,760 --> 00:27:04,240 Speaker 2: minimum payments again on all your debts. We're not going 539 00:27:04,320 --> 00:27:06,800 Speaker 2: to not pay any off except for the one with 540 00:27:06,880 --> 00:27:09,440 Speaker 2: the highest interest rate, and that one you're going to 541 00:27:09,480 --> 00:27:12,080 Speaker 2: throw all your extra cash at it until it has gone. 542 00:27:12,359 --> 00:27:14,880 Speaker 2: It might take a little bit longer to get that 543 00:27:14,960 --> 00:27:19,280 Speaker 2: first debt knocked out completely. But financially, this one actually 544 00:27:19,320 --> 00:27:21,359 Speaker 2: makes the most sense because you're cutting down on all 545 00:27:21,359 --> 00:27:24,880 Speaker 2: of those sneaky interest charges. When that I guess first 546 00:27:24,960 --> 00:27:27,639 Speaker 2: high interest debt is paid off, then you're going to 547 00:27:27,680 --> 00:27:29,280 Speaker 2: take the money that you were using to paid off 548 00:27:29,359 --> 00:27:31,600 Speaker 2: and roll it into the next high interest debt and 549 00:27:31,640 --> 00:27:34,520 Speaker 2: you just keep going from there. It might not feel 550 00:27:34,520 --> 00:27:37,439 Speaker 2: like you're making progress as fast as the snowball method, 551 00:27:37,640 --> 00:27:40,040 Speaker 2: but you'll be saving a lot more over time. So 552 00:27:40,080 --> 00:27:43,040 Speaker 2: if you're somebody who is more motivated by saving money, 553 00:27:43,160 --> 00:27:46,160 Speaker 2: and you know, having the most control you could say, 554 00:27:47,000 --> 00:27:49,240 Speaker 2: and you can actually handle the patients it takes to 555 00:27:49,320 --> 00:27:51,320 Speaker 2: focus on the long game, then I would say this 556 00:27:51,400 --> 00:27:54,320 Speaker 2: one's definitely for you. It's also the best option if 557 00:27:54,320 --> 00:27:57,520 Speaker 2: you've got a really high interest debt, like maybe a 558 00:27:57,560 --> 00:28:00,960 Speaker 2: big credit card balance, because that interest up really fast. 559 00:28:01,000 --> 00:28:02,680 Speaker 2: But when you're picking the method, I think the most 560 00:28:02,680 --> 00:28:05,080 Speaker 2: important thing that you do is actually think about you 561 00:28:05,119 --> 00:28:07,960 Speaker 2: and your personality and what's going to motivate you. So, yes, 562 00:28:08,040 --> 00:28:10,719 Speaker 2: you might save a bit more interest in the avalanche method, 563 00:28:11,160 --> 00:28:14,200 Speaker 2: but even the fact that you are considering a method 564 00:28:14,240 --> 00:28:16,800 Speaker 2: to pay off your debt means that you're going to 565 00:28:16,840 --> 00:28:19,440 Speaker 2: save money in the long term. For me, the Stoneball 566 00:28:19,480 --> 00:28:21,399 Speaker 2: method made sense. I'm sure if I went back and 567 00:28:21,440 --> 00:28:24,520 Speaker 2: calculated it, I could have saved some interest charges. But 568 00:28:24,720 --> 00:28:27,760 Speaker 2: like I see that as the payment for actually finding 569 00:28:27,800 --> 00:28:30,320 Speaker 2: the motivation and getting it done. Like, I don't think 570 00:28:30,359 --> 00:28:32,119 Speaker 2: I missed out on that. And if you wanted to 571 00:28:32,119 --> 00:28:34,679 Speaker 2: get technical, yes I could have left out money. The 572 00:28:34,680 --> 00:28:37,359 Speaker 2: Avalanche method might have been better. But at the end 573 00:28:37,359 --> 00:28:39,000 Speaker 2: of the day, I got out of debt and that 574 00:28:39,200 --> 00:28:41,360 Speaker 2: was the main goal, and that is what I'm most 575 00:28:41,400 --> 00:28:44,960 Speaker 2: proud of. I'm running out of time here really quickly, 576 00:28:45,400 --> 00:28:47,560 Speaker 2: so I just wanted to, I guess touch on something 577 00:28:47,600 --> 00:28:49,440 Speaker 2: a little bit fluffier, and it's more of like a 578 00:28:49,480 --> 00:28:52,600 Speaker 2: little reminder for you. You are more than your debt. 579 00:28:52,960 --> 00:28:55,320 Speaker 2: It is actually just a number on a piece of paper. 580 00:28:55,640 --> 00:28:58,239 Speaker 2: It doesn't define who you are or what you're capable of, 581 00:28:58,640 --> 00:29:00,880 Speaker 2: or your thoughts, your feelings, you're belief your values. It 582 00:29:00,880 --> 00:29:03,840 Speaker 2: doesn't define who you are or what you're going to 583 00:29:03,920 --> 00:29:07,840 Speaker 2: create with this life that you've been given. Every single 584 00:29:07,920 --> 00:29:12,920 Speaker 2: person's financial journey is so different, and having debt doesn't 585 00:29:12,960 --> 00:29:15,920 Speaker 2: take away from your value or your potential or the 586 00:29:15,960 --> 00:29:19,840 Speaker 2: ability to be successful in the future. I was forty 587 00:29:19,960 --> 00:29:23,880 Speaker 2: thousand dollars in debt. I was up to my eyeballs. 588 00:29:23,960 --> 00:29:26,200 Speaker 2: I would cry about it all the time. Eight hundred 589 00:29:26,200 --> 00:29:28,560 Speaker 2: and eighty three dollars I was paying back each and 590 00:29:28,600 --> 00:29:32,680 Speaker 2: every single month, and I had nothing extra Like that 591 00:29:32,840 --> 00:29:36,360 Speaker 2: was a chapter for me, a chapter that was really sad, 592 00:29:36,480 --> 00:29:39,280 Speaker 2: and I didn't feel my best, and I felt like 593 00:29:39,320 --> 00:29:42,080 Speaker 2: it defined me. But I feel like I'm a very 594 00:29:42,080 --> 00:29:45,680 Speaker 2: good example of coming out the other side. So does 595 00:29:45,760 --> 00:29:48,320 Speaker 2: being in debt define who you are? Absolutely not. I 596 00:29:48,320 --> 00:29:50,600 Speaker 2: think what matters the most is actually how you're planning 597 00:29:50,640 --> 00:29:54,760 Speaker 2: on moving forward. It's not about perfection or creating a 598 00:29:54,800 --> 00:29:58,200 Speaker 2: debt free life tomorrow. It's actually about understanding that debt 599 00:29:58,720 --> 00:30:01,760 Speaker 2: is just part of your financial story to chapter, and 600 00:30:01,920 --> 00:30:04,800 Speaker 2: you actually have the power, like the complete power to 601 00:30:04,840 --> 00:30:08,560 Speaker 2: write the next chapter in a different font. So be 602 00:30:08,680 --> 00:30:12,240 Speaker 2: kind to yourself, show yourself some compassion, and know that 603 00:30:12,480 --> 00:30:16,640 Speaker 2: tackling your debts, I would say it's very brave, but 604 00:30:16,760 --> 00:30:19,840 Speaker 2: it's also a really important step and one going in 605 00:30:19,840 --> 00:30:22,959 Speaker 2: the right direction. I think that being in debt it 606 00:30:23,000 --> 00:30:25,719 Speaker 2: can be overwhelming and all consuming, but I promise it 607 00:30:25,760 --> 00:30:29,360 Speaker 2: doesn't define who you are. I have run out of 608 00:30:29,400 --> 00:30:32,160 Speaker 2: time now, so I'm going to stop going on about it. 609 00:30:32,240 --> 00:30:34,600 Speaker 2: But I think that you are brilliant. I think that 610 00:30:34,640 --> 00:30:37,000 Speaker 2: if you have listened to this entire episode, hopefully it 611 00:30:37,040 --> 00:30:39,920 Speaker 2: resonated with you. And if it did strike a chord 612 00:30:40,080 --> 00:30:42,960 Speaker 2: with you, please don't forget to subscribe because it helps 613 00:30:43,000 --> 00:30:46,000 Speaker 2: me to continue to bring this content to you on 614 00:30:46,040 --> 00:30:48,920 Speaker 2: a weekly basis. And I hope you have a beautiful 615 00:30:48,920 --> 00:30:51,320 Speaker 2: weekend and I will see you bright and early on 616 00:30:51,480 --> 00:31:00,960 Speaker 2: Monday for a money diary. Bye. 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