July 7, 2024 • 24 mins
Having a plan to reduce debt makes paying off debt much easier. Planing to reduce debt take commitment and determination to succeed.
Please support the show by subscribing, can cancel at any time. Thanks for the support.
- Subscription page: https://www.buzzsprout.com/961804/support
- Contact: ReduceDebtIncreaseWealth@Gmail.com
- Wanting Budget Spreadsheet Place Spreadsheet as Subject
- https://Happygiraffe.org/live
- https://www.shopfinancial.com/lantianbaiyu/
All other inquires place topic into Subject.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Unknown (00:03):
Hello, I'm your host, Mr. Chuck, a retired accountant
turned truck driver, I reduce mydebt in a relatively short
period of time, debt reductionto achieve financial freedom
takes commitment, confidencedetermination.
plan to reduce debt, having aplan to reduce that makes paying
(00:26):
off that much easier. Planningto read to reduce that takes
commitment and determination tosucceed. So let's review the
little bit of paths, you got toidentify the problem. And this
particular case, the problem isyou may have too much debt. But
maybe you're not really sureabout that. So over the process
(00:51):
of trying to determine theproblem, you should be thinking
of ways to solve the problem. Solet's say if you have too much
debt, how are you going toreduce it? Let's assume that's
the case.
What was the problem was justspending too much were you
(01:12):
unemployed and had to live off acredit card that was or an
accident to something happen,you have to charge up your
credit cards, it doesn't matter.
If you just know yourself whatthe cause was, or is now we need
to focus on solving the what'scausing the problem and get rid
(01:35):
of that. And then we need totake take care of the problem.
By having a plan.
I'm starting with identifyingthe problem,
and then finding some type ofsolution. And that's where we're
(01:56):
now we're in, we're going tofind a solution for the problem.
But this is step one of threesteps. So the plan to reduce
your debt is worry have gottento today. But how are you going
to do that? Maybe you beenpaying extra on some of your
(02:17):
credit cards, but you don't everseem to make any progress. And
when you start to make some typeof progress, something bad
happens. And you have to usethose credit cards again,
because you don't have anysavings, you do not have an
emergency fund. So as part ofsolving your debt problem, we
(02:40):
need to work along the way tosolve some other problems. And
the other problems may be you'rejust spending more than what you
make, you don't have anemergency fund of any type. And
you throw an extra money at somedebt, but you never seem to make
any progress. So let's take thatas one big problem, and focus on
(03:05):
a plan to solve all that. Sohere is what you should do for a
debt reduction plan. Number one,is quit using your credit. When
I say that I'm saying quit usingyour credit cards, I'm not
saying quit using your debitcard, we got to start paying for
(03:30):
everything on a monthly basiswith the money you earn. And
that's gone to take care ofspending more than what you
make. Because you got to focuson your needs first, what's your
needs, your housing, andeverything related to that, your
transportation and everythingrelated to that food and
(03:53):
everything related to that someclose, I'm not saying you're
going to skimp and save on thissand, we need to prioritize
where your money is going. Yougot to take care of your needs
first, then once that's done,then you got to take care of
your too much debt problem. Thenonce we got that taken care of,
(04:17):
then we can look at what yourwants are. So we're gonna quit
using credit. We're gonna paycash for everything or the cash
equivalent, which would be adebit card. And that's our step
one. That may take you a whileto achieve it might be two,
(04:37):
three months before you're ableto cut back enough to only live
on what you make. And that'simportant.
So, keep that in mind. It's notsomething you can do in a week
or two, or a couple pay periods.
That might take it two or threemonths it could be the hardest
partI have the whole reducing your
(05:00):
debt solution, that's numberone, then number two is we're
going to make the minimumpayment on all your debt, quit
putting that extra 5025 or $100,towards any of your debt, pay
the minimum payment. And there'sa reason for that. The reason
is, it's gonna free up somecash, or you can help you one
(05:23):
quit using credit, and to getthat emergency fund established,
because number three is createan emergency fund, and you got
to start putting money into anemergency fund and start saving
it up. Your first goal here foryour emergency fund, is to get
(05:45):
up to a minimum of $1,000, youremergency fund should always
have a minimum of $1,000.
They've done all bunch ofsurveys and they say 80% of the
people United States couldn'tafford an emergency if it was
(06:07):
$400. So nobody has savingsaccount. So you got to get that
savings account established. Iknow your local bank, you're not
gonna make any interest on it.
So why don't you just leave itin your checking? Well, if you
do that, you might spend itbecause what have you been doing
in the past, take it out of yourchecking account, put it in your
(06:28):
savings account, set it aside,because this is a important step
of getting rid of that debt, hegot a minimum of 1000. So while
you're trying to keep yourspending within what you make,
you're also trying to increaseyour emergency fund, go to your
(06:50):
bank, find out what the minimumis set up a checking account or
savings account, if you don'thave one, it should be with the
same bank you have your checkingaccount with. For now, we're
just getting started.
So that's the third thing yougot to do. The fourth thing you
(07:12):
got to do, once you met thatminimum $1,000. You got to keep
building it to a maximum of4000. I like the 4000. And why
are you doing that when it'slike that don't make and when am
I going to pay off my debt, I'llmake them in a minimum payment,
I'm not paying any extra I'llnever get this debt paid off.
(07:36):
Well, that's not true becausevery have a plan and we're
working on that plan. And theplan is to build up your
emergency fund to $4,000. Whileyou're doing that your emergency
fund it says bigger and biggerand bigger. If it takes you six
months to get up to that $4,000,you've had that money set aside
(08:00):
as an emergency, an emergency issomething that's unforeseen
event that happens, whether it'san accident or an injury, or
illness or unemployment, it'ssomething you had not plan on.
So the more we have in thatemergency fund, the better off
(08:22):
you're gonna be to take care ofthat unexpected event that may
happen without using yourcredit. That's the key here
we're trying to quit usingcredit. So once we have that
4000 build up, remember, you gotto keep a minimum of 1000 We got
(08:45):
a maximum of 4000. We got allour monthly bills paid up, we're
doing pretty good things arelooking good. Okay. Now take the
access to $3,000 and apply it toone of the debt you're trying to
pay off. So let's assume you gotthree or four credit cards
(09:07):
you've been trying to pay off.
You've been paying the minimumpayment for the last six months
while you've been building upyour emergency fund. Now you
have this $3,000 Which one areyou going to pay off first? That
is an important question. If youhave this is how I personally
did it. If you have one creditcard that maybe have a balance
(09:30):
of 3000 or less or close to 3000Or is your lowest balance, apply
that money to that credit cardfirst. The next time you get
there, it may be paid offbecause you're gonna keep making
the minimum payment might takeyou another four months or so.
(09:55):
So that credit card could getpaid off. That once is paid off.
You don'tOn canceling you keep it, you're
not gonna use it, but you're notgonna cancel it. Now, if the
credit card company cancels itfor you, because you have bad
credit, there's nothing you cando about that. But the goal here
is, you don't want to cancel thecredit because that would hurt
(10:16):
your credit score, because youhave less available credit
compared to your income, andit's gonna hurt your credit
score and two down the road,they may make you an offer to
transfer debtfor a three or 4% or 5% transfer
fee, and have an 1218 month timeperiod of enters free to pay
(10:45):
that off. And that's what we'regoing to use to our advantage to
help reduce our debt. Onceyou've done that, you just start
over, you start building up yoursavings or your emergency fund
to get back up to a maximum of$4,000. You do that over and
(11:08):
over and over. And as thebeginning, it will be a long,
slow process because you'refighting a couple things. You're
not used to paying cash or painliving within your means. So
that's the first thing we got toovercome, you're not used to not
(11:29):
using credit cards, that's thesecond thing we have to
overcome. He never had anemergency fund, or a savings
account was any significant, saymore than $500 in it, that can
help you in case of anunforeseen event happened. So
you have that to overcome. Sothe first three of those blocks,
(11:50):
it's gonna take you a while, itmay take you three months, six
months or a year, it might betwo years. But at the beginning,
this pay down process is gonnabe a long, slow tedious. That's
why I say you have to becommitted. And you have to be
(12:10):
determined, if you got tosucceed at paying off your debt,
and you got to want to do it.
And if you don't want to do it,it will probably never happen.
So you have to plan to reduceyour debt, you have to know
where the problem is, he gotidentify the problem, and you
(12:34):
need a plan, write it down. Ifyou don't remember it, write it
down and review it and post iton a bulletin board or put it in
your office on the wallsomewhere where you can see it.
Look at it every day. Don't usecredit, make the minimum
payment, save it, build youremergency fund, keep a minimum,
(12:59):
the maximum, repeat.
Apply some to debt once you hitthe maximum and repeat. It's not
that difficult. Just knowingthat you're wondering, Well, how
am I God to know how much moneyI have
available to transfer into mysavings account. You don't want
(13:24):
to transfer $1,000 in savingsaccount and a week later
transfer $1,000 out of it. Hedid want to put the money in
there and leave it there. Nowonce you put it in a savings
account, the bank has federalrules, he can only make six
withdrawals a month. So you wantto put in bare minimum, if it's
(13:49):
$10, a pay start with $10 of payor some small amount. And then
if you can put that in there,and then stays there, then
increase it to $20 at pay andthen $30 A pay and then $40. And
but once you get to a pointwhere you have to suck some back
out, that's where you stop alittle bit less than that. So
(14:12):
that you know you cancomfortably put in $50 a pay
every pay period and you got toconsistently build up your
savings.
But we're going to add to thatover time. Because over the next
two episodes, I'm gonna explainto you how you can get your
(14:35):
personal finances under controlhow you can see what's happening
with and your personal finances.
And you can have a controlcenter to review and see the
areas were you maybe spendingtoo much or didn't plan enough
(14:55):
for and didn't look out forthanks. So those are the
The next two episodes, the nextone's gonna be tracking. And
then the one after that iscontrol center, or how to make a
simple budget. But you got to doyour tracking first before you
can do your budget. And that'sgoing to be explained in the
(15:18):
next couple episodes. So let'sreview this debt reduction plan,
one, quit using credit to makethe minimum payment on all your
debt. That's every debt, that'seven debt that you're not trying
to pay off or your mortgage,your second mortgage your line
of credit, that's we're not justtalking about your credit card,
(15:42):
we're talking about all the debtthat you owe your car payments,
make the minimum payment oneverything. Now, you might have
been making $25 Extra on a carpayment to get a paid off
earlier, or whatever the casequit doing that we more
important to make the minimumpayment and put that money into
(16:04):
a savings account and build thatemergency fund, the faster you
can build it and get it up tothe maximum amount, the sooner
you can apply it to one of yourdebt. And then the sooner we can
start over the process again. Sothen have the minimum in your
mercies font of 1000. Build itup to the maximum of 4000, apply
(16:29):
it to one of your debt, we'regoing to talk more about that in
these other episodes, apply itto a debt, at least the one at
the very first one to have thesmallest balance, because we
want to get one of them paidoff. So sometime down the road,
we can use it to our advantage,then after that, you're probably
should be focused on the creditcards or the debt that has a
(16:52):
highest rate of interest. Now,if you have payday loans and
personal loans, things likethat, you probably should focus
on those things first, becausethey get out of hand much
faster. And then the creditcards, believe it or not. So
let's focus on which is theworst, the worst debt being the
(17:15):
highest rate of interest withthe most often payments. So
let's keep focus, and you haveyour plan, write it down and
post it on the wall.
I'll be back in one moment withmy final thoughts
are the articles are referred toin my episodes, have a link in
(17:35):
my show notes. If you'reinterested in checking out the
software that I personally useto get my dead oh control, it's
in my show notes under shopfinancial, you need to copy and
paste the link. And it will takeyou to the website can any
questions, you can just contactme through that particular
(17:57):
website. If you value thispodcast and I like to make a
contribution, I have acontribution link in my show
notes also, give whatever youfeel is appropriate for the
information I am providing. Ithank everyone for listening to
my podcast. Okay, just to knowfor those of you that looks in
(18:19):
the shownotes, I have no linksto any articles this week for
this episode. So if you want analternative method to reduce
your debt, check out happydraft.org For slash live, he has
some spreadsheets there that canhelp you with your debt problem.
(18:42):
And he has some tutorials andsome classes if that's what you
need. So just an overview. Andthen I'll be wrapping it up.
You've over the process of timefigure it out that maybe you
have some type of problem. Maybeyou identify the problem as you
have too much credit card debt.
(19:03):
You need to go a little bitdeeper than that. And why do you
have too much credit card debt?
What cause the problem to havetoo much credit card debt.
That's the first problem youneed to solve. And then what I'm
gonna solve is what's your planto get rid of that credit card
(19:24):
debt, maybe all your debt? Maybeyou decided you want to pay off
all your debt because you'regonna retire in 10 years, you
want to be debt free, becauseyou're gonna have income that's
60% of what you're currentlymaking. It could be even less
than that. That was my primaryreason it took me three years
and four months and only had topay off $135,000
(19:52):
And that was car payments. Thatwas mortgage of line of credit
on the house, too.
With three credit cards,granted, they weren't a large
amount, but I had them. And Iknew that if I went into
retirement, even with just themortgage, I would be a struggle
(20:15):
to live and pay my bills,because I had this loan, my
mortgage on the house with then40% of my income, maybe even
higher, and we know, yourmortgage should only be 30 35%
(20:35):
of your total income. So I knewI was gonna have a problem, so I
took care of it. And that'swhatever your reason, whatever
reasons you have, and if youdon't think you need to pay off
your debt, let's just thinkabout it. How much money would
you have, on a monthly basis? Ifhe didn't make any debt
(21:00):
problems? No mortgage, no carpayments, no credit cards, no
student loans, whatever it is,if he didn't have to pay all
those loans back? How much moneywould you have? And what could
you do with that money if yousaved it up over a period of
(21:20):
time, and you're able to put abigger downpayment, whether it's
buying a car, paying cash for aused car, or putting 50% down on
a home, if you want to downsizeyour home, in a way you could
pay off your mortgage of yourcurrent home, sell it, have 100%
(21:43):
of the money, less commissions,of course to buy your
replacement home, plus the extramoney you could save, because he
was able to stash them away overa period of two years or three
years, how much could you save,and maybe your saving for
retirement is not large enough,he can never have too much
(22:07):
money. So you bet you can havenot enough money. But you can
never have too much money goinginto your retirement years,
because you don't know what'sgonna happen. But we do know
your medical expenses are gonnago up, we know that maybe you
have to have some type of systemliving and that's not cheap. We
know whatever you want to do for10 or 15 years after you retire,
(22:31):
watch travel or start a businessor part whatever the case would
be, it's gonna take some money.
So if we can get it undercontrol today, and be better off
or tomorrow, you'll be muchbetter. So you got to quit using
credit, make the minimumpayment, start your emergency
fund, have a minimum of 1000,build it to a maximum of 4000
(22:56):
Apply the difference to one ofyour debt, and repeat. But how
do you know how much money whento transfer into your savings
account? How much do are yougonna know? Where are you
spending too much money or notspending? You know? How do you
know what your current livingcosts are if you don't ever
(23:20):
track and do a control center,control center being a budget.
So that's what we're going totalk about. Tracking is an
important part. It's your lifeblood lifeline to your personal
finances. And your controlcenter is just that it controls
where all your money is going.
(23:43):
And it helps you see where it'sgone. So that you can identify
potential problems and take careof it before you have a debt
problem and get back to whereyou are today. We're trying to
solve that and it's gonna be amultiple things. You got to be
determined and you have to becommitted if you want to reduce
(24:05):
your debt and keep it reduced.
Hello, I'm your host, Mr. Chuck, a retired accountant
turned truck driver, I reduce mydebt in a relatively short
period of time, debt reductionto achieve financial freedom
takes commitment, confidencedetermination.
plan to reduce debt, having aplan to reduce that makes paying
(00:26):
off that much easier. Planningto read to reduce that takes
commitment and determination tosucceed. So let's review the
little bit of paths, you got toidentify the problem. And this
particular case, the problem isyou may have too much debt. But
maybe you're not really sureabout that. So over the process
(00:51):
of trying to determine theproblem, you should be thinking
of ways to solve the problem. Solet's say if you have too much
debt, how are you going toreduce it? Let's assume that's
the case.
What was the problem was justspending too much were you
(01:12):
unemployed and had to live off acredit card that was or an
accident to something happen,you have to charge up your
credit cards, it doesn't matter.
If you just know yourself whatthe cause was, or is now we need
to focus on solving the what'scausing the problem and get rid
(01:35):
of that. And then we need totake take care of the problem.
By having a plan.
I'm starting with identifyingthe problem,
and then finding some type ofsolution. And that's where we're
(01:56):
now we're in, we're going tofind a solution for the problem.
But this is step one of threesteps. So the plan to reduce
your debt is worry have gottento today. But how are you going
to do that? Maybe you beenpaying extra on some of your
(02:17):
credit cards, but you don't everseem to make any progress. And
when you start to make some typeof progress, something bad
happens. And you have to usethose credit cards again,
because you don't have anysavings, you do not have an
emergency fund. So as part ofsolving your debt problem, we
(02:40):
need to work along the way tosolve some other problems. And
the other problems may be you'rejust spending more than what you
make, you don't have anemergency fund of any type. And
you throw an extra money at somedebt, but you never seem to make
any progress. So let's take thatas one big problem, and focus on
(03:05):
a plan to solve all that. Sohere is what you should do for a
debt reduction plan. Number one,is quit using your credit. When
I say that I'm saying quit usingyour credit cards, I'm not
saying quit using your debitcard, we got to start paying for
(03:30):
everything on a monthly basiswith the money you earn. And
that's gone to take care ofspending more than what you
make. Because you got to focuson your needs first, what's your
needs, your housing, andeverything related to that, your
transportation and everythingrelated to that food and
(03:53):
everything related to that someclose, I'm not saying you're
going to skimp and save on thissand, we need to prioritize
where your money is going. Yougot to take care of your needs
first, then once that's done,then you got to take care of
your too much debt problem. Thenonce we got that taken care of,
(04:17):
then we can look at what yourwants are. So we're gonna quit
using credit. We're gonna paycash for everything or the cash
equivalent, which would be adebit card. And that's our step
one. That may take you a whileto achieve it might be two,
(04:37):
three months before you're ableto cut back enough to only live
on what you make. And that'simportant.
So, keep that in mind. It's notsomething you can do in a week
or two, or a couple pay periods.
That might take it two or threemonths it could be the hardest
partI have the whole reducing your
(05:00):
debt solution, that's numberone, then number two is we're
going to make the minimumpayment on all your debt, quit
putting that extra 5025 or $100,towards any of your debt, pay
the minimum payment. And there'sa reason for that. The reason
is, it's gonna free up somecash, or you can help you one
(05:23):
quit using credit, and to getthat emergency fund established,
because number three is createan emergency fund, and you got
to start putting money into anemergency fund and start saving
it up. Your first goal here foryour emergency fund, is to get
(05:45):
up to a minimum of $1,000, youremergency fund should always
have a minimum of $1,000.
They've done all bunch ofsurveys and they say 80% of the
people United States couldn'tafford an emergency if it was
(06:07):
$400. So nobody has savingsaccount. So you got to get that
savings account established. Iknow your local bank, you're not
gonna make any interest on it.
So why don't you just leave itin your checking? Well, if you
do that, you might spend itbecause what have you been doing
in the past, take it out of yourchecking account, put it in your
(06:28):
savings account, set it aside,because this is a important step
of getting rid of that debt, hegot a minimum of 1000. So while
you're trying to keep yourspending within what you make,
you're also trying to increaseyour emergency fund, go to your
(06:50):
bank, find out what the minimumis set up a checking account or
savings account, if you don'thave one, it should be with the
same bank you have your checkingaccount with. For now, we're
just getting started.
So that's the third thing yougot to do. The fourth thing you
(07:12):
got to do, once you met thatminimum $1,000. You got to keep
building it to a maximum of4000. I like the 4000. And why
are you doing that when it'slike that don't make and when am
I going to pay off my debt, I'llmake them in a minimum payment,
I'm not paying any extra I'llnever get this debt paid off.
(07:36):
Well, that's not true becausevery have a plan and we're
working on that plan. And theplan is to build up your
emergency fund to $4,000. Whileyou're doing that your emergency
fund it says bigger and biggerand bigger. If it takes you six
months to get up to that $4,000,you've had that money set aside
(08:00):
as an emergency, an emergency issomething that's unforeseen
event that happens, whether it'san accident or an injury, or
illness or unemployment, it'ssomething you had not plan on.
So the more we have in thatemergency fund, the better off
(08:22):
you're gonna be to take care ofthat unexpected event that may
happen without using yourcredit. That's the key here
we're trying to quit usingcredit. So once we have that
4000 build up, remember, you gotto keep a minimum of 1000 We got
(08:45):
a maximum of 4000. We got allour monthly bills paid up, we're
doing pretty good things arelooking good. Okay. Now take the
access to $3,000 and apply it toone of the debt you're trying to
pay off. So let's assume you gotthree or four credit cards
(09:07):
you've been trying to pay off.
You've been paying the minimumpayment for the last six months
while you've been building upyour emergency fund. Now you
have this $3,000 Which one areyou going to pay off first? That
is an important question. If youhave this is how I personally
did it. If you have one creditcard that maybe have a balance
(09:30):
of 3000 or less or close to 3000Or is your lowest balance, apply
that money to that credit cardfirst. The next time you get
there, it may be paid offbecause you're gonna keep making
the minimum payment might takeyou another four months or so.
(09:55):
So that credit card could getpaid off. That once is paid off.
You don'tOn canceling you keep it, you're
not gonna use it, but you're notgonna cancel it. Now, if the
credit card company cancels itfor you, because you have bad
credit, there's nothing you cando about that. But the goal here
is, you don't want to cancel thecredit because that would hurt
(10:16):
your credit score, because youhave less available credit
compared to your income, andit's gonna hurt your credit
score and two down the road,they may make you an offer to
transfer debtfor a three or 4% or 5% transfer
fee, and have an 1218 month timeperiod of enters free to pay
(10:45):
that off. And that's what we'regoing to use to our advantage to
help reduce our debt. Onceyou've done that, you just start
over, you start building up yoursavings or your emergency fund
to get back up to a maximum of$4,000. You do that over and
(11:08):
over and over. And as thebeginning, it will be a long,
slow process because you'refighting a couple things. You're
not used to paying cash or painliving within your means. So
that's the first thing we got toovercome, you're not used to not
(11:29):
using credit cards, that's thesecond thing we have to
overcome. He never had anemergency fund, or a savings
account was any significant, saymore than $500 in it, that can
help you in case of anunforeseen event happened. So
you have that to overcome. Sothe first three of those blocks,
(11:50):
it's gonna take you a while, itmay take you three months, six
months or a year, it might betwo years. But at the beginning,
this pay down process is gonnabe a long, slow tedious. That's
why I say you have to becommitted. And you have to be
(12:10):
determined, if you got tosucceed at paying off your debt,
and you got to want to do it.
And if you don't want to do it,it will probably never happen.
So you have to plan to reduceyour debt, you have to know
where the problem is, he gotidentify the problem, and you
(12:34):
need a plan, write it down. Ifyou don't remember it, write it
down and review it and post iton a bulletin board or put it in
your office on the wallsomewhere where you can see it.
Look at it every day. Don't usecredit, make the minimum
payment, save it, build youremergency fund, keep a minimum,
(12:59):
the maximum, repeat.
Apply some to debt once you hitthe maximum and repeat. It's not
that difficult. Just knowingthat you're wondering, Well, how
am I God to know how much moneyI have
available to transfer into mysavings account. You don't want
(13:24):
to transfer $1,000 in savingsaccount and a week later
transfer $1,000 out of it. Hedid want to put the money in
there and leave it there. Nowonce you put it in a savings
account, the bank has federalrules, he can only make six
withdrawals a month. So you wantto put in bare minimum, if it's
(13:49):
$10, a pay start with $10 of payor some small amount. And then
if you can put that in there,and then stays there, then
increase it to $20 at pay andthen $30 A pay and then $40. And
but once you get to a pointwhere you have to suck some back
out, that's where you stop alittle bit less than that. So
(14:12):
that you know you cancomfortably put in $50 a pay
every pay period and you got toconsistently build up your
savings.
But we're going to add to thatover time. Because over the next
two episodes, I'm gonna explainto you how you can get your
(14:35):
personal finances under controlhow you can see what's happening
with and your personal finances.
And you can have a controlcenter to review and see the
areas were you maybe spendingtoo much or didn't plan enough
(14:55):
for and didn't look out forthanks. So those are the
The next two episodes, the nextone's gonna be tracking. And
then the one after that iscontrol center, or how to make a
simple budget. But you got to doyour tracking first before you
can do your budget. And that'sgoing to be explained in the
(15:18):
next couple episodes. So let'sreview this debt reduction plan,
one, quit using credit to makethe minimum payment on all your
debt. That's every debt, that'seven debt that you're not trying
to pay off or your mortgage,your second mortgage your line
of credit, that's we're not justtalking about your credit card,
(15:42):
we're talking about all the debtthat you owe your car payments,
make the minimum payment oneverything. Now, you might have
been making $25 Extra on a carpayment to get a paid off
earlier, or whatever the casequit doing that we more
important to make the minimumpayment and put that money into
(16:04):
a savings account and build thatemergency fund, the faster you
can build it and get it up tothe maximum amount, the sooner
you can apply it to one of yourdebt. And then the sooner we can
start over the process again. Sothen have the minimum in your
mercies font of 1000. Build itup to the maximum of 4000, apply
(16:29):
it to one of your debt, we'regoing to talk more about that in
these other episodes, apply itto a debt, at least the one at
the very first one to have thesmallest balance, because we
want to get one of them paidoff. So sometime down the road,
we can use it to our advantage,then after that, you're probably
should be focused on the creditcards or the debt that has a
(16:52):
highest rate of interest. Now,if you have payday loans and
personal loans, things likethat, you probably should focus
on those things first, becausethey get out of hand much
faster. And then the creditcards, believe it or not. So
let's focus on which is theworst, the worst debt being the
(17:15):
highest rate of interest withthe most often payments. So
let's keep focus, and you haveyour plan, write it down and
post it on the wall.
I'll be back in one moment withmy final thoughts
are the articles are referred toin my episodes, have a link in
(17:35):
my show notes. If you'reinterested in checking out the
software that I personally useto get my dead oh control, it's
in my show notes under shopfinancial, you need to copy and
paste the link. And it will takeyou to the website can any
questions, you can just contactme through that particular
(17:57):
website. If you value thispodcast and I like to make a
contribution, I have acontribution link in my show
notes also, give whatever youfeel is appropriate for the
information I am providing. Ithank everyone for listening to
my podcast. Okay, just to knowfor those of you that looks in
(18:19):
the shownotes, I have no linksto any articles this week for
this episode. So if you want analternative method to reduce
your debt, check out happydraft.org For slash live, he has
some spreadsheets there that canhelp you with your debt problem.
(18:42):
And he has some tutorials andsome classes if that's what you
need. So just an overview. Andthen I'll be wrapping it up.
You've over the process of timefigure it out that maybe you
have some type of problem. Maybeyou identify the problem as you
have too much credit card debt.
(19:03):
You need to go a little bitdeeper than that. And why do you
have too much credit card debt?
What cause the problem to havetoo much credit card debt.
That's the first problem youneed to solve. And then what I'm
gonna solve is what's your planto get rid of that credit card
(19:24):
debt, maybe all your debt? Maybeyou decided you want to pay off
all your debt because you'regonna retire in 10 years, you
want to be debt free, becauseyou're gonna have income that's
60% of what you're currentlymaking. It could be even less
than that. That was my primaryreason it took me three years
and four months and only had topay off $135,000
(19:52):
And that was car payments. Thatwas mortgage of line of credit
on the house, too.
With three credit cards,granted, they weren't a large
amount, but I had them. And Iknew that if I went into
retirement, even with just themortgage, I would be a struggle
(20:15):
to live and pay my bills,because I had this loan, my
mortgage on the house with then40% of my income, maybe even
higher, and we know, yourmortgage should only be 30 35%
(20:35):
of your total income. So I knewI was gonna have a problem, so I
took care of it. And that'swhatever your reason, whatever
reasons you have, and if youdon't think you need to pay off
your debt, let's just thinkabout it. How much money would
you have, on a monthly basis? Ifhe didn't make any debt
(21:00):
problems? No mortgage, no carpayments, no credit cards, no
student loans, whatever it is,if he didn't have to pay all
those loans back? How much moneywould you have? And what could
you do with that money if yousaved it up over a period of
(21:20):
time, and you're able to put abigger downpayment, whether it's
buying a car, paying cash for aused car, or putting 50% down on
a home, if you want to downsizeyour home, in a way you could
pay off your mortgage of yourcurrent home, sell it, have 100%
(21:43):
of the money, less commissions,of course to buy your
replacement home, plus the extramoney you could save, because he
was able to stash them away overa period of two years or three
years, how much could you save,and maybe your saving for
retirement is not large enough,he can never have too much
(22:07):
money. So you bet you can havenot enough money. But you can
never have too much money goinginto your retirement years,
because you don't know what'sgonna happen. But we do know
your medical expenses are gonnago up, we know that maybe you
have to have some type of systemliving and that's not cheap. We
know whatever you want to do for10 or 15 years after you retire,
(22:31):
watch travel or start a businessor part whatever the case would
be, it's gonna take some money.
So if we can get it undercontrol today, and be better off
or tomorrow, you'll be muchbetter. So you got to quit using
credit, make the minimumpayment, start your emergency
fund, have a minimum of 1000,build it to a maximum of 4000
(22:56):
Apply the difference to one ofyour debt, and repeat. But how
do you know how much money whento transfer into your savings
account? How much do are yougonna know? Where are you
spending too much money or notspending? You know? How do you
know what your current livingcosts are if you don't ever
(23:20):
track and do a control center,control center being a budget.
So that's what we're going totalk about. Tracking is an
important part. It's your lifeblood lifeline to your personal
finances. And your controlcenter is just that it controls
where all your money is going.
(23:43):
And it helps you see where it'sgone. So that you can identify
potential problems and take careof it before you have a debt
problem and get back to whereyou are today. We're trying to
solve that and it's gonna be amultiple things. You got to be
determined and you have to becommitted if you want to reduce
(24:05):
your debt and keep it reduced.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations.
The Clay Travis and Buck Sexton Show
The Clay Travis and Buck Sexton Show. Clay Travis and Buck Sexton tackle the biggest stories in news, politics and current events with intelligence and humor. From the border crisis, to the madness of cancel culture and far-left missteps, Clay and Buck guide listeners through the latest headlines and hot topics with fun and entertaining conversations and opinions.