September 8, 2025 • 31 mins
Overwhelmed by debt and don’t know where to start? In this episode, I’ll break down simple first steps and show you how to choose the best strategy—so you can finally move toward freedom.
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Episode Transcript
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(00:00):
Paul, Welcome to Catholic moneytalk, where we talk about all
things money and finance, and wetry to do it through a lens of
being Catholic, where ourultimate goal is to one day be
in Heaven with the Lord. I amyour host. Paul Scarfone, thank
you for being here today.
(00:21):
Welcome to Catholic money talk.
You know, if you've ever openedyour credit card statement and
maybe felt your stomach drop,you're not alone. Debt is one of
the biggest financial burdensAmericans face, and today we're
going to talk about paying offdebt. Where do I start? But
(00:42):
before we do that, let's say aprayer in the name of the Father
and of the Son and of the HolySpirit. Amen, Heavenly Father.
We thank you for this day. Wethank you for all the ways you
love and bless us. Lord. We knowthat you have an awesome plan
for us and that you love us somuch allow us to yield to your
Holy Spirit. Come Holy Spirit.
Just reveal your will to us sothat we can pursue you in
(01:04):
everything we do. We ask thisall in Jesus name, amen, in the
name of the Father and of theSon and of the Holy Spirit.
Amen. All right, so my openingline, if you've ever opened your
credit card statement and feltyour stomach drop. You're not
alone. You aren't my firstexperience with debt like this
(01:26):
was so I was 21 I was incollege. I was getting serious
with my girlfriend, Taryn, who Iwanted to find a way to ask her
to marry me, and I had beenrunning a bit of up a bit of a
credit card balance, and the Iforgot to pay it, and I actually
(01:53):
I remember where I was. I'mdriving, and my cell phone
rings, and I pull over, and Iflip open my phone, and I answer
it, and it's the credit cardcompany, and they said, Hey, you
didn't pay your bill. We'recharging you. It was $35 or $50
late fee. And that sent a panicthrough me. I had a I might have
(02:15):
had $1,000 balance and I didn'thave any money. And I said,
Well, what do I need to do? Theysaid, Well, you have to give us
your account number and routingnumber so that we don't have to
wait on you to pay your bill.
You have to, like, we'll justtake the money and and I freak
(02:39):
I'm like, I don't have $1,000you can't take the money. They
said, No, we're just going totake the amount of the payment
that's due, the minimum payment.
And he said, If you want to payanything extra, you'll have to
do that, write a check and mailit in, but this way you'll avoid
having late payment fees. And Ithought that's probably a smart
thing to do, so I did that, andI just didn't even think about
(03:02):
anymore. And stupid me, I keptusing my credit card, and I'm
gonna mail the check in, youknow, 100 bucks here and there,
but I never opened thestatement. I was scared to and I
I got to the point where I wasgoing to get engaged, and it was
(03:22):
about that time where I said Igot to look at this credit card
statement. I opened the creditcard statement, and my stomach
dropped because I had owed 1000and now it was about four or
5000 it was significant, and Ilooked at the minimum payment
they were taking. It started atmaybe $100 a month, but now it
was like $200 a month, and itwasn't paying anything off. It
(03:50):
wasn't even paying all theinterest. So it was like, I
remember looking at this, it was$250 of interest, or something
like that, and my payment was,like $198 and my stomach was so
upset, and I start looking atthis and doing some quick math,
(04:13):
and I'm thinking, oh mygoodness, half of this might be
interest. And I called them up,and I was freaking out, and they
said you just got to startpaying more. Like this is the
deal that you signed up for whenyou got the credit card. We're
not changing the deal. And Ithink I was crying at this
point. Maybe I'm 22 years oldand I'm crying. I was freaking
(04:36):
out. So if you've ever openedyour credit card statement and
felt your stomach drop, you'reyour stomach drop, you're not
alone. I did that. I did that along time ago, half my life ago.
Oh, my goodness, half my lifeago. So that's the that's the
starting point for this. Sothen, so where do you start? If
you're in this spot today, wheredo you start? Well, here's. The
(04:58):
deal, the first step. Stepnumber one, you have to know
what you owe, right? If you pluga destination into your GPS,
into your phone, Google Maps, orWaze, or whatever you're doing,
if you plug a location and thenyou're like, Hey, what are the
directions? The next thing itasks, it's like, well, that's
fine. You want to get there, butwhere are you? Like, we can't
(05:20):
give you directions if we don'tknow where you're starting from.
And so we might want to pay offour debt. Right? That stomach
drives we want that credit cardto go away. But if we don't know
where we are, we we don't knowwhere to go, like, we don't have
a starting point, so we need tofigure out our starting point,
and that is, know what you owe.
So if this is you the firststep, you're going to gather
(05:41):
every, every bit of debt. You'regoing to get your credit cards,
your credit card statements,your student loan statements,
your car loans, medical bills,mortgage, home equity, personal
loan, payday loan, like whateverit is, the sofa, the fridge, the
appliance, the car, whatever,and you're going to write
(06:03):
everything down, or you can usea spreadsheet like a Google
sheet, but you're going to writedown the balance, you're going
to write down the interest rate.
You can write down the minimumpayment, okay? And if it's a
loan that has a term, write thatdown too, right? So a credit
card doesn't have a term, butsomething like a car loan. If
it's like 60 months, that's aterm. So you'd write down the
term, or at least the termthat's remaining. And so why?
(06:24):
And I'll tell you, this could bescary. This could be scary. So I
just told my story 22 years ago.
Well, go 10 years into it rightnow. We were married. We're
still using a credit card. Hadmore credit card debt. We had
student loans, two car loans,lots of that. I've explained
this in the on the podcastbefore, but what got me started
(06:47):
on this, like I need to learnhow to better handle money, was
when I got the letter from thefederal loan, you know, federal
student loan department from mymaster's degree, and I opened it
up, and it was set and it said,Hey, you owe $40,000 you're
going to start paying nextmonth, 600 bucks. I was like,
There's no way I can pay that.
Like, we don't have any money.
(07:08):
And I remember calling them,being like, I need to figure and
I was panicking at this point,Taryn and I weren't working
together, so this was, this wasmy problem. I called up and I
said, Hey, I can't pay 600 amonth. I don't make that much.
We have young kids. They said,Well, you can fill out the form
and send us a copy of your lastyear's tax returns, and we can
come up with a Income BasedRepayment strategy, because I
(07:31):
had also explained my situation.
Said you don't qualify fordeferment or hardship, but, but
we can try income based so Isend the income based in I get a
email that says, All right,you're gonna start next month,
and your monthly payment is $770I was like, that's insane. And I
called them up, and they'relike, oh, yeah, no, based on the
income analysis, you canactually pay more than the 600
I'm like, No, I can't. Andthat's because the student loan
(07:54):
department doesn't take into howmany kids you have if you're
sending your kids to Catholicschool, what your grocery bill
is, or if you're tithing oranything like that. It was
tough, so I got them to acceptthe 600 but there I was freaking
out, and I had to tell Tara, andthat's when we were like, we
can't breathe. We need to figureout a new way to do it. And we
(08:16):
did, but that fear, I'll tellyou after I we laid everything
out, as scary as it was, once wesaw it and knew we were creating
a plan for it, we started tohave more calm and more peace,
and that increased as we madeheadway, right? But, but clarity
that reduces fear and what feelslike a monster, it's so much
(08:39):
more manageable once it's onpaper and you can look at it. So
step one, know what you owe.
Step two, so as you're going towork through paying
this off, let's say credit cardsfor Tara and I. Credit cards
were where we went if there wasan emergency, well, it was that
or a stupid 401, k loan. We'renot even going to get into that
(09:02):
today, but that's where we went.
We didn't have cash. We didn'thave money available in a bank
account that was just earmarkedfor emergencies. We would go
into debt if there was anemergency. So as you start this,
if you're if you were like that,if you would go to debt in
emergencies, one of the firstthings you need to do is scrape
together a small emergency fund,you know. And depending on your
(09:24):
your state and life, if you're asingle person, if you're
married, you got kids, oneincome, two incomes in the
house, like, maybe it's, maybeyou can get buying $500
emergency fund, right? Likefixing a flat tire type of
thing, or repairing arefrigerator. But depending on
what it is, if you've if you'vegot larger family, maybe you
know potential medical bill orsomething, you might have to
have closer to $2,000 but pick anumber that you can scrape
(09:47):
together quickly, and youearmark it, you stick in a
separate account. You just like,that's just for an emergency,
right? Break glass if there's anemergency, because you don't
want to slip into debt. Debtagain and use a credit card,
right? The best way to stay outof debt is to never borrow. So
you don't want to give yourselfpermission to ever borrow again.
(10:10):
One of the ways to do that is tocreate a plan for if there's an
emergency, right, have somemoney, because if you don't have
a plan, you're not going to havesuccess, right? If an emergency,
you're trying to pay off debt,an emergency comes, you don't
have a plan to tackle anemergency, you're not going to
be successful. So the plan totackle an emergency is set some
money aside, right? So it mightbe 500 might be all the way up
(10:32):
to two grand, depending on yourstate, but you don't want it
like $10,000 that would take along time to get that together
before you tackle the debt. Soyou want something you can pull
together, probably within thatfirst month, right? And a quick
win, right? If you're trying tofigure out how to get the money,
try, try for a quick win, youcould Facebook marketplace
something, maybe cancel somesubscriptions. Well, sometimes
(10:55):
when I'm working with couples,I'll challenge them. Have a have
a no spend week, like, otherthan putting gas in the car, but
just raid the fridge, pantry,freezer, whatever for food this
week, and don't buy anything andsee what you can pile up. Maybe,
maybe do a no spend every otherweek for the first month. Like,
you find different ways. Cutsubscriptions, sell some stuff.
(11:15):
Maybe you can even go, you know,show you know, if it's the
winter and snowing, shovelsomeone you know falls coming
up, maybe go blow some leaves.
Rake some leaves for someone.
Maybe scrape a couple 100 buckstogether real quick. So step
one, know what you owe. Write itall down so you can see it. Step
two, get that little starteremergency fund. You got to build
that. That is your defense fromgoing back into debt. Step
(11:38):
three, you're going to chooseyour repayment strategy. So
there's two popular ones outthere, if I'm sure, if you
Googled, you could find more,but there's two that you can
quickly identify. There's theDebt Snowball, and that's the
process where you list all yourdebts, smallest, first to
biggest, last, last, and youjust start working on on the
(12:01):
smallest one first and like soeach month you'll pay the
minimum payments, or therequired payments on each one,
but any extra money every monthgoes towards the smallest debt
first, and knock that off. Andthen, you know, so let's say you
had 10 debts, right? Let's say,you know, if you were Taryn and
I, when we started, we had,let's see, I'm going to do this
(12:22):
real quick. We had two carloans, we had a home equity
loan, we had a credit card, wehad, like, five student loans,
and then we had a a personalloan, which had been a 401 k
loan. Like a long story there.
So, so that's 10. So if this wasyou, if you have 10 loans, you
(12:44):
got them all lined up, smallestbalance to biggest balance.
You're making payments everymonth in each one any extra
money every month, and you'recutting things out of your
budget to create more, to createsome excess. It all goes at the
first debt. So let's say that'sgone after month two. Now you
only have nine debts left. See,I'm saying maybe three or four
months in now, you only haveeight debts left, right, and
(13:04):
then a few more months and maybethere's just seven debts left.
So that's the idea. You just youtackle them. It's like a
snowball, because all the moneythen just rolls over to the next
debt, and you tackle it. So DebtSnowball is a very popular one
Dave Ramsey, that's the one thathe talks about. That's the one
that Taryn and I that we used,we used the Debt Snowball. The
other one that people talkabout, and this is more
(13:25):
probably, if you're a nerd, youlike numbers, is the Debt
Avalanche. The way that works isyou list all your debts, but the
highest interest rate to thelowest interest rate. So let's
say you have some type of maybeit's a family loan and it's 0%
yo, your dad 20 grand orsomething in a Debt Avalanche,
(13:47):
that might be your last oneyou're paying off because it's
0% your first one you're payingoff might be your 25% interest
rate credit card balance, right?
And it works the same way as adebt snowball, where every month
you're paying all the monthlypayments, but everything extra
you throw at the one with thehighest interest rate, right?
And technically, if you do themath on it, the Debt Avalanche
will save you money, becauseyou're getting rid of the
(14:10):
largest interest rates first,however, and this is what we
experienced doing, the DebtSnowball Method, going smallest
to largest debts, regardless ofinterest rate, you your brain
feels like you're moresuccessful because you're having
wins more quickly, right?
Because you're getting rid ofthose smaller ones, and you feel
(14:33):
like you're making headway morethan you might if it was the
Avalanche method. So, but whichone's the best method?
Obviously, it's the one. Ifyou're married, it's the one you
and your spouse agree to. That'stop but it's the one that you're
actually going to stick to.
Right? When people ask me, Hey,what's the best budgeting
software out there? It alldepends which one you're going
(14:55):
to use and stick with. That'sthe best one. For you, so you
have your choice. There might bemore than this, but these are
the two most popular DebtSnowball or Debt Avalanche. So
step one was know how much youowe. Step two, build a small
starter emergency fund. Stepthree, choose your payment
strategy. Now here is step four.
(15:20):
But step four is not so much astep as much so it's not so much
a step as much as it's a kind ofa mindset, and that is, you want
to avoid the common pitfalls. Sowhat are the common pitfalls?
One common pitfall is peoplemaking only minimum payments,
right? If all you do, if you ifyou lay out your debt snowball,
(15:42):
Your Debt Avalanche, you justline out all those minimum debt
payments, and you don't getaggressive, you don't trim the
budget, you don't sell somestuff, you don't generate excess
to throw extra money at theprincipal of these loans. If all
you do is just pay the minimumpayments, I promise you, you
will be in debt forever. Youwill because, and you might
(16:03):
think, Well, no, it's a six yearcar loan. Once six years is up,
like, I won't have that paymentanymore, yeah, but all your
money will have gone to loans.
And then when you do need to buya new car, what are you going to
do? Are you going to get anothercar loan? Right? The idea is to
go after this stuff as fast aspossible, so we can start saving
money and building up money tomake future purchases and to pay
(16:24):
for things, whether it be, youknow, things that we've talked
about in here, retirement, kids,college, a new car, a new home,
an addition, a renovation, arepair, A you know, replacing a
roof, replacing a vehicle, anyof those things that you'd want
money for, any of those thingsthat you look at those debts you
(16:45):
had, and you said, Oh, what havewe borrowed for before? It's
like, oh, future me isn't goingto do that anymore. I'm going to
get rid of all this debt as fastas I can. I'm going to be
aggressive with it so I canstart to save money in a pile so
that I can pay for these thingsin the future and off to borrow
again, right? So common pitfall,number one, making only minimum
payments. Don't do it, generatesome extra money, sell some
(17:08):
stuff. The other, anotherpitfall, consolidation loans or
balance transfers. So Iregularly get calls from
friends, from people that knowme, know what I do. Maybe it's
current clients, past clients.
(17:28):
Sometimes it's my future clientswill call me with a question,
and they'll say, Hey, should Ido this consolidation loan I
just got to, you know, I'mtrying to pay off this credit
card, and this other credit cardjust sent me a balance transfer
deal, like, Should I do that?
And my answer to them is it'susually, well, well, what's your
plan for tackling it right now?
(17:49):
Like, where, how did you createthe debt? And what's your plan
for paying it down and notborrowing again if you didn't
change your behaviors, if youdidn't change your habits, then
just moving your debt, whetherit's a consolidation loan or a
balance transfer, isn't going tohelp you at all. Honestly, it
(18:10):
will not help you at all if youdon't address the problem, which
is you and your money behaviors,right? Or your you and your
spouse and how you handle moneythat was tearing in my
challenge, right until weaddress the habits and how we
handled money and work together,we weren't able to get rid of
the debt, so consolidation loansand balance transfers from a
(18:31):
number standpoint, yeah, itmight save you some interest
over time, but this isn't a mathproblem. Paying off debt isn't a
math problem. It's a behavioralproblem, and you need to
generate new behaviors and stopthe old behaviors if you want to
see change in your life.
So don't, don't fall for theease of a consolidation loan or
(18:54):
balance transfer, thinking yousomehow magically fix something.
You didn't address the habits.
All right, so don't do justminimum payments. Make sure
addressing your habits. Anothercommon pitfall is continuing use
credit cards while trying to paythem off. Like, that's, that's
the word, like, how are yougoing to get out of a hole if
(19:14):
you keep digging down right ifyou're paying off credit cards?
Because you've run into problemswith credit cards in the in the
past, cut them up and don't usethem, and as you pay them off,
close them. Taryn and I don'tuse credit cards. When we were
trying to figure out how to getout of debt, and we realized
that we need to change. We needto drastically change the way we
(19:37):
look at and handle money. Wesaid, Let's like we would use
credit cards for everything wewe got pots and pans. We got all
these wonderful things fromcredit cards, right from the
points, from all these coolthings. But studies prove that
people who use credit cards justspend more money. So you can
argue with me all you want.
(19:58):
Start Googling all the studies,you'll see that I'm. Right? But
for us, just stopping you likeone of the first steps is we're
just never gonna use a creditcard again. And we haven't,
right? We decided that in 2013and so this is 12 years later,
we don't use credit cardsanymore, and life's been great.
I was just talking to someoneabout this today. Earlier,
(20:18):
credit card bills when we'reusing them when we're using
credit cards every month. Creditcard bill was our biggest bill.
Now that's gone, right? Westopped using them. That's gone
on my podcast I mentioned a fewmonths ago. We paid off our
house. That was the secondbiggest bill every month. Now
that's gone like this is prettycool, right? We're moving in the
right direction. So anotherpitfall people who continue to
(20:39):
use credit cards while trying topay them off, stop, get rid of
credit rid of credit cards. Youdon't need them. And then the
final pitfall to avoid, a commonone, there's there's several
others, but these are the mostcommon, is not adjusting your
lifestyle, right? That goes backto the behaviors, like thinking
that nothing needs to change.
Oh, we just got all this debt.
(21:00):
We'll just pay it off, and thenwe'll be good. Know what? What
created that debt, right? Maybeit was your plan. If there's an
emergency, we're just going toborrow. Well, you need to create
a new plan so that when you havean emergency, you're not
borrowing. You already havemoney set aside for emergencies.
And maybe you've been going on,you know, vacations every year,
or maybe you've been going onexpensive vacations every year.
(21:22):
Do it less. Do everything down anotch. Maybe you never had a
budget for Christmas. You'realways spending $5,000 on
Christmas. Maybe spend $1,000 onChristmas, right? Like, cut back
different areas in your life,whether it be and it doesn't
need to be, the needs. Like,typically, it's not like having
to sell our house and downsize.
No, just stop eating out, cutback, maybe eliminate most or
(21:44):
all your subscriptions and stopthe impulse buys, right? And
another great behavior is createa budget and stick to it right.
So those are the commonpitfalls, making only minimum
payments. Thinking consolidationloans or balance transfers are
helping in some way, continuingto use credit cards while trying
to pay them off or not adjustingyour lifestyle All right. Now,
step five, and this is probablythe biggest piece, right? So you
(22:10):
lay out this plan, everything Ijust talked about, you sit down.
Let's say you could do all ofthose things tonight, right? You
could sit at a table and figureall this out tonight and figure
out a plan for, hey, when will Ihave my 500 or 1000 or $2,000
emergency fund set up and maybego to execute it this month and
feel like, oh yeah, this isgreat. But here's the problem,
(22:31):
if you're like me and Taryn,when we first started doing and
trying to pay off our debt, wefirst sat down that first night,
looked at everything it wasgonna take seven years. And I
remember looking at my childrenand thinking about our marriage
and our family and thinkinglike, what, what will it look
like in seven years? Like I hadno idea,
(22:56):
right? We had, at that point, wehad
four kids, and Taryn was a stayat home mom. I was working at
the bank like crazy hours or No,I might have just changed jobs.
I went to the business bankingbut, but I was like, it scared
(23:16):
me seven years. It's gonna takea long time. And so what I want
to encourage you with is itmight look like it's going to
take a long time, and so this isstep five. You need to find a
way to build accountability,support and encouragement for
yourself, right? It's unlikeanything else, right? If I'm
(23:38):
trying to lose weight right now,I've got an app I'm using. I
talked to my wife about it, andI've mentioned it to few other
people. If I'm trying to loseweight and exercise regularly, I
like to tell people about thatso that they can help hold me
accountable, right? So samething, we're trying to pay off
debt. Tell the people in yourlife that you care about
especially if they're peoplethat maybe might influence you,
like, hey dude, we're all goingout to lunch. Like you want to
(24:00):
lunch. Just tell them, Look No.
When I was at the bank, we usedto love to go out to lunch. Go
out to lunch with a bunch ofbuddies that I worked worked
with, and I remember a coupletimes guys like, Hey, we're
gonna go lunch. I'm like, Ican't, like, or just trying to
pay off debt, I can't spend themoney. And sometimes they'd be
like, Dude, come on. Like, Ireally want to go to this place.
You know what? I'll pay for you.
(24:21):
I was like, Fine, I will takecharity, right? I will totally
take charity. They I'm not. I'mworried about my financial
situation, not yours. So you canbuy me lunch if you really want
to sit at a restaurant with me,but, but you want to encourage
that. You want to tell thepeople around you what you're
doing so they can be encourageyou, and not like a detriment or
(24:42):
an obstacle for you. So, youknow, 78% of people in the US
are living paycheck to paycheck,right? That means most of them
have debt. Okay? So you're inthe majority. If you say I'm
trying to pay off my debt, mostpeople that hear that are going
to go, wow, I should probablyreally do. That, right? So don't
you know you're swimmingupstream, right? You're going
(25:04):
against the flow, like, ifanything, you're probably going
to be a motivation other people.
They're not going to think likeless of you. They might think
you're a little weird, but weirdto school this kind of weird.
That's cool, all right. So shareyour plan with others, and
you're going to do this withyour spouse. If you're married,
you're doing this with yourspouse, so that accountability
is built in. But also tell, tella trusted friend, if you're not
married, tell a trusted friend,not your shopping partner, not
(25:27):
your shopping buddy, but someonewho can really help and mentor
you through this. Get some greattool. There's great tools out
there. There's budget apps,there's different visual
tractors. You can make awhiteboard, something that can
help you mark your progress.
And, you know, just like whenyour church is fundraising and
they got the thermometer andthey're coloring it in, right,
it's fun to see that thinggrowing week after week, right?
(25:48):
Create those types of things foryourself when you're paying off
the debt. For us, when it firststarted, we had our debt
snowball, and I made just aGoogle Sheet, and every month,
Tara and I would update it, andwe would try to guess where
we'll be on certain things, youknow, six months from now, 12
months from now, like, createmile markers for ourselves to
see as as we were doing that andour kids were getting a little
(26:09):
bit older, we actually made agrid for the fridge. And it was
a very simple, you know, like,you know, squares across, I
don't know, I forget how manywere on there, but maybe it was
like five rows of eight squaresor something, maybe 40 grand.
And when we started, it was 80,but by the time we put the chart
on the fridge, maybe was 40, andeach square was $1,000 so every
month we'd color in however manywe paid off. And I remember we
(26:32):
were letting the kids color itin. I remember my oldest, Josh.
He's probably like, I don'tknow, at that time, 10 or 11,
and I remember him coloring in asquare one month. And he goes,
Dad, why? Because we'd use adifferent color each month. He
was like, Dad, why am I onlycoloring one square? Last month,
we colored in three squares. Andthat was like a good challenge
and motivation to me to be like,yeah. Like, I want to keep
(26:56):
trying to do better every month,not taking steps back, right? It
was just, it just added fuel tothe fire. That's a way your kids
can can get involved, too. Whenwe bought the house we're in
now, and I've mentioned thisbefore, we bought this house,
the plan when we bought it wasto pay it off as quickly as
possible. And you know, insteadof getting a 30 year mortgage,
(27:17):
we got a shorter mortgage, andwe hope to pay it off in at
least 15 years. But as we paidmore and more and more, we
actually were able to pay it offin less than seven years, right?
And here's the cool thing, too.
I mentioned, when we were firsttrying to get pay off our
consumer debt, our mortgagewasn't involved in that, right?
All of this, I would say, tryingto get a debt, put your mortgage
to the side for now, right? Lookat all the everything but the
(27:40):
mortgage, right? Everything butthe mortgage. So that's student
loans, car loans, personalloans, 401 K loans, credit
cards, all that, right, but notthe mortgage. Leave that to the
side. That's a whole nother ballgame. But when we're first
trying to pay off our our nonmortgage debt, that first time
in 2013 we first sat down to doall this, it was like $82,000
(28:03):
and it was gonna take sevenyears, but we got motivated and
we went after it, and we wereable to pay it off in four.
Like, that's pretty cool, right?
So that's it was like four and ahalf years. So that's we saved
two and a half years ofinterest, basically, which is a
(28:25):
lot. That was a lot. So Socreate a way to build
accountability, support andmotivation, all right? And when
we think about, like, why are wetrying to pay off debt? Oh, my
goodness, just look at Proverbs,22 verse seven, it's so true,
the borrower is slave to thelender.
Paying off debt is aboutreclaiming freedom
(28:49):
so that you can serve God andyou can serve those around you
with your money, right? Why doWhy did God create us to know
Him, love Him, and serve Him inthis life so we could be happy
with him forever in the next howdo we do that with our money? We
don't do it through loanpayments. We don't we do it
through putting all of ourmoney, everything we have right,
(29:10):
our will, our possessions,everything we have, our time
at the service of God. And wesay, Lord,
what do you want us to do today?
So, so that's it.
This is my starting point forpaying off debt. Right? Want to
(29:30):
pay off debt. Where do I start?
First thing, know what you owe,right? Step one, know what you
owe. Step two, build a smallemergency fund, right? 500 to
$2,000 depending on your lifesituation. Step three, choose
your payment strategy. It's mostlikely going to be a Debt
Snowball or Debt Avalanche. Weuse the debt snowball and loved
(29:51):
it. I think you get the mostemotional and mental wins by
using the Debt Snowball that thewins Come quick. Lee, step four,
avoid the common pitfalls,right? And what were those
pitfalls, making minimumpayments, making only minimum
payments, relying onconsolidation loans or balance
transfers instead of addressingthe spending habits, continuing
(30:13):
use credit cards. What's wrong?
To pay them off. And then thelast common pitfall, just not
adjusting your lifestyle. Cutthings out of your budget. Make
a change. Step five, buildaccountability and support. Find
people, surround yourself withpeople. Talk to your wife, your
spouse, your husband,to get encouragement.
(30:39):
So that's it. Debt Free. Livingis possible. Taryn and I, we are
finally there, and it isawesome, but takes one step at a
time.
So if you're ready to take thatfirst step today,
grab a notebook. Sit down, lookup, write down everything you
owe. That's your starting line.
That's where this thing starts.
(31:03):
And just pray. Say, Lord, giveme the strength to do this. I
promise you, once your all yourdebts paid off, you're not going
to miss it. You won't regret it.
So I'll be praying for you. Iencourage you. Hopefully you can
come back here for moreencouragement as you go. Thank
you for joining me today. Godbless Thank you for listening to
Catholic money talk. I hope youjoin us again next time, please
(31:29):
click Subscribe on your podcastapp to get notified of new
episodes. God bless you and havea great day. You. You.
Paul, Welcome to Catholic moneytalk, where we talk about all
things money and finance, and wetry to do it through a lens of
being Catholic, where ourultimate goal is to one day be
in Heaven with the Lord. I amyour host. Paul Scarfone, thank
you for being here today.
(00:21):
Welcome to Catholic money talk.
You know, if you've ever openedyour credit card statement and
maybe felt your stomach drop,you're not alone. Debt is one of
the biggest financial burdensAmericans face, and today we're
going to talk about paying offdebt. Where do I start? But
(00:42):
before we do that, let's say aprayer in the name of the Father
and of the Son and of the HolySpirit. Amen, Heavenly Father.
We thank you for this day. Wethank you for all the ways you
love and bless us. Lord. We knowthat you have an awesome plan
for us and that you love us somuch allow us to yield to your
Holy Spirit. Come Holy Spirit.
Just reveal your will to us sothat we can pursue you in
(01:04):
everything we do. We ask thisall in Jesus name, amen, in the
name of the Father and of theSon and of the Holy Spirit.
Amen. All right, so my openingline, if you've ever opened your
credit card statement and feltyour stomach drop. You're not
alone. You aren't my firstexperience with debt like this
(01:26):
was so I was 21 I was incollege. I was getting serious
with my girlfriend, Taryn, who Iwanted to find a way to ask her
to marry me, and I had beenrunning a bit of up a bit of a
credit card balance, and the Iforgot to pay it, and I actually
(01:53):
I remember where I was. I'mdriving, and my cell phone
rings, and I pull over, and Iflip open my phone, and I answer
it, and it's the credit cardcompany, and they said, Hey, you
didn't pay your bill. We'recharging you. It was $35 or $50
late fee. And that sent a panicthrough me. I had a I might have
(02:15):
had $1,000 balance and I didn'thave any money. And I said,
Well, what do I need to do? Theysaid, Well, you have to give us
your account number and routingnumber so that we don't have to
wait on you to pay your bill.
You have to, like, we'll justtake the money and and I freak
(02:39):
I'm like, I don't have $1,000you can't take the money. They
said, No, we're just going totake the amount of the payment
that's due, the minimum payment.
And he said, If you want to payanything extra, you'll have to
do that, write a check and mailit in, but this way you'll avoid
having late payment fees. And Ithought that's probably a smart
thing to do, so I did that, andI just didn't even think about
(03:02):
anymore. And stupid me, I keptusing my credit card, and I'm
gonna mail the check in, youknow, 100 bucks here and there,
but I never opened thestatement. I was scared to and I
I got to the point where I wasgoing to get engaged, and it was
(03:22):
about that time where I said Igot to look at this credit card
statement. I opened the creditcard statement, and my stomach
dropped because I had owed 1000and now it was about four or
5000 it was significant, and Ilooked at the minimum payment
they were taking. It started atmaybe $100 a month, but now it
was like $200 a month, and itwasn't paying anything off. It
(03:50):
wasn't even paying all theinterest. So it was like, I
remember looking at this, it was$250 of interest, or something
like that, and my payment was,like $198 and my stomach was so
upset, and I start looking atthis and doing some quick math,
(04:13):
and I'm thinking, oh mygoodness, half of this might be
interest. And I called them up,and I was freaking out, and they
said you just got to startpaying more. Like this is the
deal that you signed up for whenyou got the credit card. We're
not changing the deal. And Ithink I was crying at this
point. Maybe I'm 22 years oldand I'm crying. I was freaking
(04:36):
out. So if you've ever openedyour credit card statement and
felt your stomach drop, you'reyour stomach drop, you're not
alone. I did that. I did that along time ago, half my life ago.
Oh, my goodness, half my lifeago. So that's the that's the
starting point for this. Sothen, so where do you start? If
you're in this spot today, wheredo you start? Well, here's. The
(04:58):
deal, the first step. Stepnumber one, you have to know
what you owe, right? If you pluga destination into your GPS,
into your phone, Google Maps, orWaze, or whatever you're doing,
if you plug a location and thenyou're like, Hey, what are the
directions? The next thing itasks, it's like, well, that's
fine. You want to get there, butwhere are you? Like, we can't
(05:20):
give you directions if we don'tknow where you're starting from.
And so we might want to pay offour debt. Right? That stomach
drives we want that credit cardto go away. But if we don't know
where we are, we we don't knowwhere to go, like, we don't have
a starting point, so we need tofigure out our starting point,
and that is, know what you owe.
So if this is you the firststep, you're going to gather
(05:41):
every, every bit of debt. You'regoing to get your credit cards,
your credit card statements,your student loan statements,
your car loans, medical bills,mortgage, home equity, personal
loan, payday loan, like whateverit is, the sofa, the fridge, the
appliance, the car, whatever,and you're going to write
(06:03):
everything down, or you can usea spreadsheet like a Google
sheet, but you're going to writedown the balance, you're going
to write down the interest rate.
You can write down the minimumpayment, okay? And if it's a
loan that has a term, write thatdown too, right? So a credit
card doesn't have a term, butsomething like a car loan. If
it's like 60 months, that's aterm. So you'd write down the
term, or at least the termthat's remaining. And so why?
(06:24):
And I'll tell you, this could bescary. This could be scary. So I
just told my story 22 years ago.
Well, go 10 years into it rightnow. We were married. We're
still using a credit card. Hadmore credit card debt. We had
student loans, two car loans,lots of that. I've explained
this in the on the podcastbefore, but what got me started
(06:47):
on this, like I need to learnhow to better handle money, was
when I got the letter from thefederal loan, you know, federal
student loan department from mymaster's degree, and I opened it
up, and it was set and it said,Hey, you owe $40,000 you're
going to start paying nextmonth, 600 bucks. I was like,
There's no way I can pay that.
Like, we don't have any money.
(07:08):
And I remember calling them,being like, I need to figure and
I was panicking at this point,Taryn and I weren't working
together, so this was, this wasmy problem. I called up and I
said, Hey, I can't pay 600 amonth. I don't make that much.
We have young kids. They said,Well, you can fill out the form
and send us a copy of your lastyear's tax returns, and we can
come up with a Income BasedRepayment strategy, because I
(07:31):
had also explained my situation.
Said you don't qualify fordeferment or hardship, but, but
we can try income based so Isend the income based in I get a
email that says, All right,you're gonna start next month,
and your monthly payment is $770I was like, that's insane. And I
called them up, and they'relike, oh, yeah, no, based on the
income analysis, you canactually pay more than the 600
I'm like, No, I can't. Andthat's because the student loan
(07:54):
department doesn't take into howmany kids you have if you're
sending your kids to Catholicschool, what your grocery bill
is, or if you're tithing oranything like that. It was
tough, so I got them to acceptthe 600 but there I was freaking
out, and I had to tell Tara, andthat's when we were like, we
can't breathe. We need to figureout a new way to do it. And we
(08:16):
did, but that fear, I'll tellyou after I we laid everything
out, as scary as it was, once wesaw it and knew we were creating
a plan for it, we started tohave more calm and more peace,
and that increased as we madeheadway, right? But, but clarity
that reduces fear and what feelslike a monster, it's so much
(08:39):
more manageable once it's onpaper and you can look at it. So
step one, know what you owe.
Step two, so as you're going towork through paying
this off, let's say credit cardsfor Tara and I. Credit cards
were where we went if there wasan emergency, well, it was that
or a stupid 401, k loan. We'renot even going to get into that
(09:02):
today, but that's where we went.
We didn't have cash. We didn'thave money available in a bank
account that was just earmarkedfor emergencies. We would go
into debt if there was anemergency. So as you start this,
if you're if you were like that,if you would go to debt in
emergencies, one of the firstthings you need to do is scrape
together a small emergency fund,you know. And depending on your
(09:24):
your state and life, if you're asingle person, if you're
married, you got kids, oneincome, two incomes in the
house, like, maybe it's, maybeyou can get buying $500
emergency fund, right? Likefixing a flat tire type of
thing, or repairing arefrigerator. But depending on
what it is, if you've if you'vegot larger family, maybe you
know potential medical bill orsomething, you might have to
have closer to $2,000 but pick anumber that you can scrape
(09:47):
together quickly, and youearmark it, you stick in a
separate account. You just like,that's just for an emergency,
right? Break glass if there's anemergency, because you don't
want to slip into debt. Debtagain and use a credit card,
right? The best way to stay outof debt is to never borrow. So
you don't want to give yourselfpermission to ever borrow again.
(10:10):
One of the ways to do that is tocreate a plan for if there's an
emergency, right, have somemoney, because if you don't have
a plan, you're not going to havesuccess, right? If an emergency,
you're trying to pay off debt,an emergency comes, you don't
have a plan to tackle anemergency, you're not going to
be successful. So the plan totackle an emergency is set some
money aside, right? So it mightbe 500 might be all the way up
(10:32):
to two grand, depending on yourstate, but you don't want it
like $10,000 that would take along time to get that together
before you tackle the debt. Soyou want something you can pull
together, probably within thatfirst month, right? And a quick
win, right? If you're trying tofigure out how to get the money,
try, try for a quick win, youcould Facebook marketplace
something, maybe cancel somesubscriptions. Well, sometimes
(10:55):
when I'm working with couples,I'll challenge them. Have a have
a no spend week, like, otherthan putting gas in the car, but
just raid the fridge, pantry,freezer, whatever for food this
week, and don't buy anything andsee what you can pile up. Maybe,
maybe do a no spend every otherweek for the first month. Like,
you find different ways. Cutsubscriptions, sell some stuff.
(11:15):
Maybe you can even go, you know,show you know, if it's the
winter and snowing, shovelsomeone you know falls coming
up, maybe go blow some leaves.
Rake some leaves for someone.
Maybe scrape a couple 100 buckstogether real quick. So step
one, know what you owe. Write itall down so you can see it. Step
two, get that little starteremergency fund. You got to build
that. That is your defense fromgoing back into debt. Step
(11:38):
three, you're going to chooseyour repayment strategy. So
there's two popular ones outthere, if I'm sure, if you
Googled, you could find more,but there's two that you can
quickly identify. There's theDebt Snowball, and that's the
process where you list all yourdebts, smallest, first to
biggest, last, last, and youjust start working on on the
(12:01):
smallest one first and like soeach month you'll pay the
minimum payments, or therequired payments on each one,
but any extra money every monthgoes towards the smallest debt
first, and knock that off. Andthen, you know, so let's say you
had 10 debts, right? Let's say,you know, if you were Taryn and
I, when we started, we had,let's see, I'm going to do this
(12:22):
real quick. We had two carloans, we had a home equity
loan, we had a credit card, wehad, like, five student loans,
and then we had a a personalloan, which had been a 401 k
loan. Like a long story there.
So, so that's 10. So if this wasyou, if you have 10 loans, you
(12:44):
got them all lined up, smallestbalance to biggest balance.
You're making payments everymonth in each one any extra
money every month, and you'recutting things out of your
budget to create more, to createsome excess. It all goes at the
first debt. So let's say that'sgone after month two. Now you
only have nine debts left. See,I'm saying maybe three or four
months in now, you only haveeight debts left, right, and
(13:04):
then a few more months and maybethere's just seven debts left.
So that's the idea. You just youtackle them. It's like a
snowball, because all the moneythen just rolls over to the next
debt, and you tackle it. So DebtSnowball is a very popular one
Dave Ramsey, that's the one thathe talks about. That's the one
that Taryn and I that we used,we used the Debt Snowball. The
other one that people talkabout, and this is more
(13:25):
probably, if you're a nerd, youlike numbers, is the Debt
Avalanche. The way that works isyou list all your debts, but the
highest interest rate to thelowest interest rate. So let's
say you have some type of maybeit's a family loan and it's 0%
yo, your dad 20 grand orsomething in a Debt Avalanche,
(13:47):
that might be your last oneyou're paying off because it's
0% your first one you're payingoff might be your 25% interest
rate credit card balance, right?
And it works the same way as adebt snowball, where every month
you're paying all the monthlypayments, but everything extra
you throw at the one with thehighest interest rate, right?
And technically, if you do themath on it, the Debt Avalanche
will save you money, becauseyou're getting rid of the
(14:10):
largest interest rates first,however, and this is what we
experienced doing, the DebtSnowball Method, going smallest
to largest debts, regardless ofinterest rate, you your brain
feels like you're moresuccessful because you're having
wins more quickly, right?
Because you're getting rid ofthose smaller ones, and you feel
(14:33):
like you're making headway morethan you might if it was the
Avalanche method. So, but whichone's the best method?
Obviously, it's the one. Ifyou're married, it's the one you
and your spouse agree to. That'stop but it's the one that you're
actually going to stick to.
Right? When people ask me, Hey,what's the best budgeting
software out there? It alldepends which one you're going
(14:55):
to use and stick with. That'sthe best one. For you, so you
have your choice. There might bemore than this, but these are
the two most popular DebtSnowball or Debt Avalanche. So
step one was know how much youowe. Step two, build a small
starter emergency fund. Stepthree, choose your payment
strategy. Now here is step four.
(15:20):
But step four is not so much astep as much so it's not so much
a step as much as it's a kind ofa mindset, and that is, you want
to avoid the common pitfalls. Sowhat are the common pitfalls?
One common pitfall is peoplemaking only minimum payments,
right? If all you do, if you ifyou lay out your debt snowball,
(15:42):
Your Debt Avalanche, you justline out all those minimum debt
payments, and you don't getaggressive, you don't trim the
budget, you don't sell somestuff, you don't generate excess
to throw extra money at theprincipal of these loans. If all
you do is just pay the minimumpayments, I promise you, you
will be in debt forever. Youwill because, and you might
(16:03):
think, Well, no, it's a six yearcar loan. Once six years is up,
like, I won't have that paymentanymore, yeah, but all your
money will have gone to loans.
And then when you do need to buya new car, what are you going to
do? Are you going to get anothercar loan? Right? The idea is to
go after this stuff as fast aspossible, so we can start saving
money and building up money tomake future purchases and to pay
(16:24):
for things, whether it be, youknow, things that we've talked
about in here, retirement, kids,college, a new car, a new home,
an addition, a renovation, arepair, A you know, replacing a
roof, replacing a vehicle, anyof those things that you'd want
money for, any of those thingsthat you look at those debts you
(16:45):
had, and you said, Oh, what havewe borrowed for before? It's
like, oh, future me isn't goingto do that anymore. I'm going to
get rid of all this debt as fastas I can. I'm going to be
aggressive with it so I canstart to save money in a pile so
that I can pay for these thingsin the future and off to borrow
again, right? So common pitfall,number one, making only minimum
payments. Don't do it, generatesome extra money, sell some
(17:08):
stuff. The other, anotherpitfall, consolidation loans or
balance transfers. So Iregularly get calls from
friends, from people that knowme, know what I do. Maybe it's
current clients, past clients.
(17:28):
Sometimes it's my future clientswill call me with a question,
and they'll say, Hey, should Ido this consolidation loan I
just got to, you know, I'mtrying to pay off this credit
card, and this other credit cardjust sent me a balance transfer
deal, like, Should I do that?
And my answer to them is it'susually, well, well, what's your
plan for tackling it right now?
(17:49):
Like, where, how did you createthe debt? And what's your plan
for paying it down and notborrowing again if you didn't
change your behaviors, if youdidn't change your habits, then
just moving your debt, whetherit's a consolidation loan or a
balance transfer, isn't going tohelp you at all. Honestly, it
(18:10):
will not help you at all if youdon't address the problem, which
is you and your money behaviors,right? Or your you and your
spouse and how you handle moneythat was tearing in my
challenge, right until weaddress the habits and how we
handled money and work together,we weren't able to get rid of
the debt, so consolidation loansand balance transfers from a
(18:31):
number standpoint, yeah, itmight save you some interest
over time, but this isn't a mathproblem. Paying off debt isn't a
math problem. It's a behavioralproblem, and you need to
generate new behaviors and stopthe old behaviors if you want to
see change in your life.
So don't, don't fall for theease of a consolidation loan or
(18:54):
balance transfer, thinking yousomehow magically fix something.
You didn't address the habits.
All right, so don't do justminimum payments. Make sure
addressing your habits. Anothercommon pitfall is continuing use
credit cards while trying to paythem off. Like, that's, that's
the word, like, how are yougoing to get out of a hole if
(19:14):
you keep digging down right ifyou're paying off credit cards?
Because you've run into problemswith credit cards in the in the
past, cut them up and don't usethem, and as you pay them off,
close them. Taryn and I don'tuse credit cards. When we were
trying to figure out how to getout of debt, and we realized
that we need to change. We needto drastically change the way we
(19:37):
look at and handle money. Wesaid, Let's like we would use
credit cards for everything wewe got pots and pans. We got all
these wonderful things fromcredit cards, right from the
points, from all these coolthings. But studies prove that
people who use credit cards justspend more money. So you can
argue with me all you want.
(19:58):
Start Googling all the studies,you'll see that I'm. Right? But
for us, just stopping you likeone of the first steps is we're
just never gonna use a creditcard again. And we haven't,
right? We decided that in 2013and so this is 12 years later,
we don't use credit cardsanymore, and life's been great.
I was just talking to someoneabout this today. Earlier,
(20:18):
credit card bills when we'reusing them when we're using
credit cards every month. Creditcard bill was our biggest bill.
Now that's gone, right? Westopped using them. That's gone
on my podcast I mentioned a fewmonths ago. We paid off our
house. That was the secondbiggest bill every month. Now
that's gone like this is prettycool, right? We're moving in the
right direction. So anotherpitfall people who continue to
(20:39):
use credit cards while trying topay them off, stop, get rid of
credit rid of credit cards. Youdon't need them. And then the
final pitfall to avoid, a commonone, there's there's several
others, but these are the mostcommon, is not adjusting your
lifestyle, right? That goes backto the behaviors, like thinking
that nothing needs to change.
Oh, we just got all this debt.
(21:00):
We'll just pay it off, and thenwe'll be good. Know what? What
created that debt, right? Maybeit was your plan. If there's an
emergency, we're just going toborrow. Well, you need to create
a new plan so that when you havean emergency, you're not
borrowing. You already havemoney set aside for emergencies.
And maybe you've been going on,you know, vacations every year,
or maybe you've been going onexpensive vacations every year.
(21:22):
Do it less. Do everything down anotch. Maybe you never had a
budget for Christmas. You'realways spending $5,000 on
Christmas. Maybe spend $1,000 onChristmas, right? Like, cut back
different areas in your life,whether it be and it doesn't
need to be, the needs. Like,typically, it's not like having
to sell our house and downsize.
No, just stop eating out, cutback, maybe eliminate most or
(21:44):
all your subscriptions and stopthe impulse buys, right? And
another great behavior is createa budget and stick to it right.
So those are the commonpitfalls, making only minimum
payments. Thinking consolidationloans or balance transfers are
helping in some way, continuingto use credit cards while trying
to pay them off or not adjustingyour lifestyle All right. Now,
step five, and this is probablythe biggest piece, right? So you
(22:10):
lay out this plan, everything Ijust talked about, you sit down.
Let's say you could do all ofthose things tonight, right? You
could sit at a table and figureall this out tonight and figure
out a plan for, hey, when will Ihave my 500 or 1000 or $2,000
emergency fund set up and maybego to execute it this month and
feel like, oh yeah, this isgreat. But here's the problem,
(22:31):
if you're like me and Taryn,when we first started doing and
trying to pay off our debt, wefirst sat down that first night,
looked at everything it wasgonna take seven years. And I
remember looking at my childrenand thinking about our marriage
and our family and thinkinglike, what, what will it look
like in seven years? Like I hadno idea,
(22:56):
right? We had, at that point, wehad
four kids, and Taryn was a stayat home mom. I was working at
the bank like crazy hours or No,I might have just changed jobs.
I went to the business bankingbut, but I was like, it scared
(23:16):
me seven years. It's gonna takea long time. And so what I want
to encourage you with is itmight look like it's going to
take a long time, and so this isstep five. You need to find a
way to build accountability,support and encouragement for
yourself, right? It's unlikeanything else, right? If I'm
(23:38):
trying to lose weight right now,I've got an app I'm using. I
talked to my wife about it, andI've mentioned it to few other
people. If I'm trying to loseweight and exercise regularly, I
like to tell people about thatso that they can help hold me
accountable, right? So samething, we're trying to pay off
debt. Tell the people in yourlife that you care about
especially if they're peoplethat maybe might influence you,
like, hey dude, we're all goingout to lunch. Like you want to
(24:00):
lunch. Just tell them, Look No.
When I was at the bank, we usedto love to go out to lunch. Go
out to lunch with a bunch ofbuddies that I worked worked
with, and I remember a coupletimes guys like, Hey, we're
gonna go lunch. I'm like, Ican't, like, or just trying to
pay off debt, I can't spend themoney. And sometimes they'd be
like, Dude, come on. Like, Ireally want to go to this place.
You know what? I'll pay for you.
(24:21):
I was like, Fine, I will takecharity, right? I will totally
take charity. They I'm not. I'mworried about my financial
situation, not yours. So you canbuy me lunch if you really want
to sit at a restaurant with me,but, but you want to encourage
that. You want to tell thepeople around you what you're
doing so they can be encourageyou, and not like a detriment or
(24:42):
an obstacle for you. So, youknow, 78% of people in the US
are living paycheck to paycheck,right? That means most of them
have debt. Okay? So you're inthe majority. If you say I'm
trying to pay off my debt, mostpeople that hear that are going
to go, wow, I should probablyreally do. That, right? So don't
you know you're swimmingupstream, right? You're going
(25:04):
against the flow, like, ifanything, you're probably going
to be a motivation other people.
They're not going to think likeless of you. They might think
you're a little weird, but weirdto school this kind of weird.
That's cool, all right. So shareyour plan with others, and
you're going to do this withyour spouse. If you're married,
you're doing this with yourspouse, so that accountability
is built in. But also tell, tella trusted friend, if you're not
married, tell a trusted friend,not your shopping partner, not
(25:27):
your shopping buddy, but someonewho can really help and mentor
you through this. Get some greattool. There's great tools out
there. There's budget apps,there's different visual
tractors. You can make awhiteboard, something that can
help you mark your progress.
And, you know, just like whenyour church is fundraising and
they got the thermometer andthey're coloring it in, right,
it's fun to see that thinggrowing week after week, right?
(25:48):
Create those types of things foryourself when you're paying off
the debt. For us, when it firststarted, we had our debt
snowball, and I made just aGoogle Sheet, and every month,
Tara and I would update it, andwe would try to guess where
we'll be on certain things, youknow, six months from now, 12
months from now, like, createmile markers for ourselves to
see as as we were doing that andour kids were getting a little
(26:09):
bit older, we actually made agrid for the fridge. And it was
a very simple, you know, like,you know, squares across, I
don't know, I forget how manywere on there, but maybe it was
like five rows of eight squaresor something, maybe 40 grand.
And when we started, it was 80,but by the time we put the chart
on the fridge, maybe was 40, andeach square was $1,000 so every
month we'd color in however manywe paid off. And I remember we
(26:32):
were letting the kids color itin. I remember my oldest, Josh.
He's probably like, I don'tknow, at that time, 10 or 11,
and I remember him coloring in asquare one month. And he goes,
Dad, why? Because we'd use adifferent color each month. He
was like, Dad, why am I onlycoloring one square? Last month,
we colored in three squares. Andthat was like a good challenge
and motivation to me to be like,yeah. Like, I want to keep
(26:56):
trying to do better every month,not taking steps back, right? It
was just, it just added fuel tothe fire. That's a way your kids
can can get involved, too. Whenwe bought the house we're in
now, and I've mentioned thisbefore, we bought this house,
the plan when we bought it wasto pay it off as quickly as
possible. And you know, insteadof getting a 30 year mortgage,
(27:17):
we got a shorter mortgage, andwe hope to pay it off in at
least 15 years. But as we paidmore and more and more, we
actually were able to pay it offin less than seven years, right?
And here's the cool thing, too.
I mentioned, when we were firsttrying to get pay off our
consumer debt, our mortgagewasn't involved in that, right?
All of this, I would say, tryingto get a debt, put your mortgage
to the side for now, right? Lookat all the everything but the
(27:40):
mortgage, right? Everything butthe mortgage. So that's student
loans, car loans, personalloans, 401 K loans, credit
cards, all that, right, but notthe mortgage. Leave that to the
side. That's a whole nother ballgame. But when we're first
trying to pay off our our nonmortgage debt, that first time
in 2013 we first sat down to doall this, it was like $82,000
(28:03):
and it was gonna take sevenyears, but we got motivated and
we went after it, and we wereable to pay it off in four.
Like, that's pretty cool, right?
So that's it was like four and ahalf years. So that's we saved
two and a half years ofinterest, basically, which is a
(28:25):
lot. That was a lot. So Socreate a way to build
accountability, support andmotivation, all right? And when
we think about, like, why are wetrying to pay off debt? Oh, my
goodness, just look at Proverbs,22 verse seven, it's so true,
the borrower is slave to thelender.
Paying off debt is aboutreclaiming freedom
(28:49):
so that you can serve God andyou can serve those around you
with your money, right? Why doWhy did God create us to know
Him, love Him, and serve Him inthis life so we could be happy
with him forever in the next howdo we do that with our money? We
don't do it through loanpayments. We don't we do it
through putting all of ourmoney, everything we have right,
(29:10):
our will, our possessions,everything we have, our time
at the service of God. And wesay, Lord,
what do you want us to do today?
So, so that's it.
This is my starting point forpaying off debt. Right? Want to
(29:30):
pay off debt. Where do I start?
First thing, know what you owe,right? Step one, know what you
owe. Step two, build a smallemergency fund, right? 500 to
$2,000 depending on your lifesituation. Step three, choose
your payment strategy. It's mostlikely going to be a Debt
Snowball or Debt Avalanche. Weuse the debt snowball and loved
(29:51):
it. I think you get the mostemotional and mental wins by
using the Debt Snowball that thewins Come quick. Lee, step four,
avoid the common pitfalls,right? And what were those
pitfalls, making minimumpayments, making only minimum
payments, relying onconsolidation loans or balance
transfers instead of addressingthe spending habits, continuing
(30:13):
use credit cards. What's wrong?
To pay them off. And then thelast common pitfall, just not
adjusting your lifestyle. Cutthings out of your budget. Make
a change. Step five, buildaccountability and support. Find
people, surround yourself withpeople. Talk to your wife, your
spouse, your husband,to get encouragement.
(30:39):
So that's it. Debt Free. Livingis possible. Taryn and I, we are
finally there, and it isawesome, but takes one step at a
time.
So if you're ready to take thatfirst step today,
grab a notebook. Sit down, lookup, write down everything you
owe. That's your starting line.
That's where this thing starts.
(31:03):
And just pray. Say, Lord, giveme the strength to do this. I
promise you, once your all yourdebts paid off, you're not going
to miss it. You won't regret it.
So I'll be praying for you. Iencourage you. Hopefully you can
come back here for moreencouragement as you go. Thank
you for joining me today. Godbless Thank you for listening to
Catholic money talk. I hope youjoin us again next time, please
(31:29):
click Subscribe on your podcastapp to get notified of new
episodes. God bless you and havea great day. You. You.
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