Breaking Free: Smart Debt Elimination Strategies

What Are Smart Ways To Pay Off All Your Debts?

Feeling crushed under the weight of debt? You're not alone. The burden of financial obligations keeps countless Americans awake at night, affecting everything from their mental health to their family relationships. But there's a path forward that combines practical wisdom with spiritual guidance.

In this enlightening conversation, Cody Stansell breaks down a systematic approach to eliminating debt while honoring faith-based principles. The journey begins with establishing a proper emergency fund before tackling consumer debt – credit cards, student loans, car payments, and personal loans. Only after these are addressed should you focus on your mortgage, which comes as step six in the financial freedom journey.

The podcast explores two primary debt elimination strategies: the avalanche method (paying highest interest rates first) and the snowball method (tackling smallest balances first). Rather than declaring one superior, Cody emphasizes choosing the approach that resonates with your personal convictions. "Getting into debt wasn't a numbers issue; it was a spending issue," he reminds listeners. The spiritual dimension receives equal attention as Cody references Proverbs 22:7 – "the debtor is slave to the lender" – highlighting how financial freedom aligns with biblical teachings.

For practical application, Cody recommends a specific debt payoff sequence based on his extensive financial advising experience: first credit cards (with their shocking 23.9% average interest rate), then personal loans, followed by auto loans (to avoid being "upside down"), and finally student loans.

 Throughout the episode, the message remains clear: freedom from debt isn't just about mathematical optimization; it's about creating a life where you "owe nobody nothing" and can live with purpose rather than obligation. Ready to break free from financial bondage? This episode provides your roadmap to debt freedom with faith as your foundation.

To learn more about Stansell Wealth Planning visit:
https://www.StansellWealth.com
Stansell Wealth Planning
5550 Granite Pkwy, STE 270
Plano, TX 75024
469-606-2040

Episode Transcript

Speaker 1 (00:04):
Welcome to the Steadfast Wealth Planning
Podcast, where faith andfinancial wisdom come together.
Hosted by Cody Stansel, ownerand senior wealth advisor, we
provide comprehensiveChristian-based financial
planning to help families,individuals and business owners
build a life they're proud tolive.
From investment management andtax planning to preparing for

(00:25):
retirement, we're here to guideyou with clarity, integrity and
purpose.
Let's get started.

Speaker 2 (00:37):
Debt doesn't have to be a lifelong burden.
Cody Stansel shares practical,faith-aligned strategies so you
can move toward financialfreedom with purpose.
Welcome back everyone.
I'm Sophia Yvette, co-host andproducer, back in the studio
with Cody Stansel, senior wealthadvisor for Steadfast Wealth
Planning.
Cody, how's it going today?

Speaker 3 (00:59):
Hey, Sophia doing well.
It is officially footballseason.
College football kicked off.
Nfl is going to start this nextweek.
Not too optimistic in my DallasCowboys this year, but you
never know.
I'm a seasoned veteran andbeing disappointed by this team,
so I don't think this year willshake me anymore, but looking

(01:20):
forward to the football seasonoverall.

Speaker 2 (01:23):
Awesome, Cody.
Well, it is definitely great tohave you back on today.
Now let's talk about somethingthat weighs heavy on a lot of
hearts Smart ways to pay off allyour debts, including mortgage.

Speaker 3 (01:38):
Yes, so debt is a.
It's a huge topic, right.
It's probably the onlyfinancial planning topic that we
get into.
If you think of investments,taxes, estate planning, debt
management, it's the only onethat truly causes people to stay
up at night to lose focus.
To really get stressed out iswhen it's an avalanche right,

(02:02):
and that's what compoundinterest is.
Compound interest is great whenit's on your team and you're
investing right and your money'sdoubling and doing great.
But the same effect when itcomes to debt if it's not on
your team.
A financially sound life rightafter having an adequate cash

(02:27):
emergency fund, right.
So once you have good cash inplace.
But once you achieve that, thenit's moving on to paying off
all your debts.
So not all debt is created thesame, whether it's interest rate
, how important it is to yourcash flow, how important it is
to having it paid off in acertain time period.
It's all a little bit differentthat we'll get into here in a
second, but yeah, it all has thesame effect.

(02:49):
We all want to be debt free,that's for sure.

Speaker 2 (02:53):
Most definitely.
Now, how do you prioritizebetween high interest debt and
long term loans like mortgages?

Speaker 3 (03:02):
Yes.
So how we view it?
Have a good cash position inyour emergency fund.
Pay off all your consumer debt,everything besides the mortgage
.
So when I say consumer debtcredit cards, student loans, car
payment, personal loans, all ofthose things that's really
where we want to focus our cashflow as the second step in our

(03:22):
financial journey.
Number three is save enough forretirement.
Four save enough for college.
Five is save enough in abrokerage account for other
goals.
And then number six is actuallypay off your mortgage.
So number two is paying offeverything but your mortgage.
Six is actually paying off yourmortgage.
So when you're looking at yourdebt load, it's not, you know,

(03:42):
don't be as aggressive payingoff your mortgage if you still
have credit cards, car loans,those kind of kinds of things.
So, um, how should we pay themoff?
Right, there's a lot ofdifferent methods that we'll get
into here in a second.
That really depends on interestrate and what your personal
goals are.
Everyone's debt situation is alittle bit different.
Take student loans Some arefederal loans, some are private

(04:06):
loans, and that definitelydetermines when and how
aggressive to pay those off.

Speaker 2 (04:11):
Most definitely.
Now can you explain thedifference between the snowball
and avalanche methods and whichyou prefer?
I know I've heard of thesnowball, but I don't think I've
heard of the avalanche.

Speaker 3 (04:23):
Yeah, avalanche is a little bit more, which I'll back
up here a little bit.
There are, no matter yourstrategy.
So a lot of different options.
You know, pay.
A lot of people say pay offyour high interest rate loans
first.
Right, line them up.
What's your highest interestrate?
Try to pay that one off first,and that is true.

(04:47):
That will save you the mostmoney, the save you most dollars
and interest doing it that way.
And then there's the snowballeffect, right Common in the
industry, dave Ramsey has kindof coined that one.
And that's where line up all ofyour debts, smallest to largest
.
So if you owe 500 bucks on apersonal loan here, and then
1200 bucks on a random thinghere, then 8,000, they want he
wants you to line them upsmallest to largest, and there's

(05:08):
pros and cons of that too.
I always advise clients go withthe strategy that you feel
convicted in and that you thinkwill work for you and do it.
It doesn't matter if it's theone that saves you most interest
or okay, that gets this paidoff.
It's something matter if it'sthe one that saves you most
interest or okay, that gets thispaid off.
It's something that you feelconvicted in.
Because even Dave Ramsey has asaying getting into debt wasn't

(05:30):
a numbers issue, it was aspending issue, right?
So until you take it seriouslyand you say, if you're married,
you look to your spouse and sayI've had enough, let's not keep
adding to our debt.
We need to start paying thisoff.
Sitting down with clients andreally going over, I'll present
those two options lining upinterest rate and then the

(05:52):
smallest to largest, andsometimes they feel really
convicted oh, that makes sense.
Let's do smallest to largestbecause of X, y and Z, and I'm
like great, let's do it, I loveit.
Smallest to largest because ofx, y and z and I'm like great,
let's do it, I love it.
Then the other ones are no,we've had enough.
We want to save the most ininterest.
Let's line them up.
Interest right now.
That sounds great too.
It's deciding between those twois a good problem to have,

(06:13):
compared to ah, I'm not worriedabout my debt, let's go buy
another sea dew or somethingcrazy.
Right, it's like a good problemto have deciding which one of
those two most definitely now.

Speaker 2 (06:26):
How does faith-based financial planning influence
your approach to debt reduction?

Speaker 3 (06:32):
yes, uh, great question.
So in proverbs 22, 7, thedebtor is slave to the lender.
It's even in the bible.
Lord doesn't want you to borrowa lot of money, right?
And that's a slippery slopebecause, oh, what about a
mortgage?
And what about a house?
And American capitalism isblended into that and there's a
lot of what about this, whatabout that?

(06:53):
But in its core, I think, debtkind of like what we talked
about.
Just open the podcast with theburden and the blanket that it
feels on your life and on yourfinances.
The Lord never, you know, younever created mankind to feel
that kind of heaviness, right,something that you've created on
your own.
So, using that as our tool.

(07:16):
Once again, we're a faith-basedfirm.
We don't want you to be in debt.
We want you to be debt-free,especially mortgage-free,
especially mortgage-free by thetime you retire, because of the
cashflow and I tell this toclients all the time when
they've just paid off theirmortgage and that's the last
piece of debt that they've everhad, and just you can tell the
weight on their shoulders itjust feels good to owe nobody.

(07:39):
Nothing is what I say, and theyjust nod their head and say
you're exactly right, even if itwas costing them only 300 bucks
a month.
Just having I'm not relying onanybody else's debt load for my
life is a great feeling, and Iknow that's the Lord wants us to
feel that way as well.

Speaker 2 (08:00):
Most definitely feel that way as well.
Most definitely Now.
Are there any tools or apps yourecommend when it comes to
tracking progress and stayingmotivated along the way, or do
you just open your Bible and getthe motivation from there?

Speaker 3 (08:14):
I will never say that opening your Bible or praying
is not a good strategy becauseit is in any aspect of your life
.
But if you need a little helpwith apps or your own flow, I
think just a budget tool ingeneral is the best way.
What's the way that we're goingto get out of debt?
Is spending less than we make.

(08:35):
There's nobody that's going toget out of debt by still
spending more than what's comingin right.
So we have to know our budget.
We have to know what we'respending, and that $200 a month
or $2,000 a month that we'resaving, that we can throw at
some of these debts, is going tohelp you out a lot more in that
realm.
So there's a lot of apps outthere for budgeting tools.

(08:57):
I would just Google budgetingtools, ynab.
So Y-N-A-B is you need a budget.
It's a very popular one, veryeasy, low cost.
Intuit has a good one.
I've seen a lot of clients useIntuit and a lot of things
payroll taxes but they do havetheir own budgeting tool.
But honestly, a spreadsheet goodold fashion.

(09:19):
I'm obviously a numbers guywith my profession and I just
have a spreadsheet and I gothrough okay, where's my money
going?
And everyone.
What I want to warn clientsdon't fall into the trap of oh,
I Googled it and Google says Ishould be spending 10% of my
money on groceries and we'respending 15.

(09:39):
I would say use that as ahelpful guide, but don't
necessarily feel convicted,because everyone is different.
My family we have three kidsOur grocery budget is probably a
lot more than some of myclients who are 20 years older
than me and don't have kids.
So don't worry so much ifthat's 10% of our income or 15.

(10:00):
It's just, at the end of theday, what are we able to save,
because everyone's different.
Some people love the travel.
Some people don't reallytravel's not their big thing,
it's just where their money isgoing, not necessarily how much
is going to those particularones.

Speaker 2 (10:14):
So, cody, can you sum up all of those points that we
covered today for us before wewrap up?

Speaker 3 (10:19):
Yes, so there's a lot of methods out there.
Should I do the high interestrate first?
Should I line it up smallest tolargest?
What I've seen, once againsitting down with clients and
not to give a generic answer ofdepends, but honestly sitting
down with the client, goingthrough their particular debt
load and just seeing what makessense for their personality type

(10:40):
, for their cash flow.
But in general I've been doingthis 13 years In general,
without knowing your particularsituation, what I see most often
is we always want to pay thecredit cards off first.
Most likely it's your highestinterest rate and credit card
debt is the worst.
The national average creditcard interest rate.
What do you think it is, sophia?

(11:03):
Oof I have to put you on thespot.

Speaker 2 (11:08):
Numbers are not my thing.

Speaker 3 (11:11):
It's 23.9%.
So if you put a thousand, ifyou buy something for $1,000 and
don't pay it off in a year,that's $239 of interest.
So you basically just paid$1,239 for that $1,000 item,
right?
So, once again, if we can havethe credit cards at the top of

(11:34):
the list of paying off first,that usually makes sense for a
lot of clients.
The second one is any personalloan from a bank.
Hey, cody, I just got engaged.
I took a $10,000 personal loanto buy an engagement ring or
whatever it may be.
Those usually their interestrate levels, those usually the
second one we recommend payingoff.
Third one is paying off yourcar.
So we mostly because we neverwanna be upside down on a car is

(11:59):
what it's called.
That's where you owe more thanit's worth.
You still have 20 grand on yourcar, but you could probably
only sell it for 13 grand.
That $7,000 difference is notgood, especially if you're going
to wreck or some reason.
You needed to sell it.
Oh, now we have to make up thatseven grand difference, right?
So getting on a plan to payingthat off is really big too.
And then, last one, what we seefor clients are those student

(12:22):
loans, right, usually interestrates a little bit more
reasonable Usually, the terms alittle bit more forgiving, but
we do want those definitely tobe paid off.

Speaker 2 (12:32):
Wow, Cody.
Well, thank you so much forthat incredibly encouraging and
practical ways for showing ushow to approach debt with wisdom
and hope.
We'll catch you next time onthe Steadfast Wealth Planning
Podcast.

Speaker 3 (12:46):
Thanks, Sophia.

Speaker 1 (12:52):
Thanks for joining us on the Steadfast Wealth
Planning Podcast.
Ready to take the next step inyour financial journey, visit
steadfastwealthplanningcom for acomplimentary consultation or
call 469-606-2040.
Smart planning, christianvalues, a life well lived.
We'll see you next time.