353. Adopt These Seven Debt-Busting Habits

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Feeling stuck in your debt journey? In this episode, Brad Nelson, founder of Debt Free Dad, shares the seven crucial habits that can help you achieve financial freedom. Learn how tracking your spending, budgeting, avoiding credit, building an emergency fund, staying resilient, celebrating small wins, and seeking support can transform your financial life. Brad also discusses his personal journey to debt freedom and the importance of community and accountability in maintaining financial health. Tune in to discover how you can start implementing these habits today and join the wait list for the Roots of Personal Finance program for step-by-step guidance. 

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Episode Transcript

Brad Nelson (00:00):
So if you've been trying to pay off debt but feel
like you're stuck, you're onrepeat, you make some progress,
then you fall backwards.
Right, if you feel that way,you're not alone.
Most people don't fail atgetting out of debt because they
don't want it bad enough.
They fail because they neverlearn the habits that actually
lead to success, and in today'sepisode, I'm going to be sharing

(00:21):
the seven habits that I've seentime and time again in people
who win and get out of debt,including how I used all of
these to pay off all of my debtand now been debt-free for over
12 years.
Let's get into it.
Hey guys, welcome to today'sshow.
My name is Brad Nelson, thefounder of Debt-Free Dad, so I

(00:42):
want to break down these crucialdebt elimination habits for you
, and I can promise you, if youstart using these, your finances
are drastically going toimprove over time.
So here it is.
Habit number one they tracktheir spending, even when it's
ugly.
Now here's the thing I rememberthe first time I wrote down

(01:04):
every dollar I was spending andI got to tell you it was
embarrassing.
It made me sick to my stomachwhen I actually seen where all
my money was going Things likefast food, all the random
impulsive store runs and thingsI was buying I didn't need, or
the gas station snacks andbeverages because I didn't plan
ahead right.

(01:25):
I had no idea how much I wasactually wasting, but once I saw
it on paper I could finallystart to change it.
Highly effective debt payers.
They don't avoid the numbers,they face them.
And guys, I get that.
It's scary.
But once you do this, you aregoing to be eyes wide open.

(01:45):
You're going to start tounderstand that you have dollars
sitting right at your feet thatyou could use to start
improving your financial liferight away.
Habit number two they budgetevery single month and we do it
on purpose right Now.
Here's the thing I used to hatebudgeting.
I used to hate the word budget.
I thought it meant I couldn'thave any fun or it was like this

(02:06):
whip or this punishment, right.
But once I started giving mymoney a job, once I started
creating some short-term andlong-term goals and I was
starting to put money towardsthat stuff, everything started
to shift for me.
Amazingly.
I started to build a savingsaccount.
Amazingly, I was starting to beable to make progress in paying
down debt.
A good budget, remember itisn't a punishment, it's

(02:26):
permission to have fun and spendthe money the way that you want
.
And people who succeed, theydon't just make a budget, they
actually use it and they followit.
Habit number three they stopusing credit to cover the gaps.
This one was really tough forme.
At first, I used credit cardsall the time to survive, to get
by.

(02:47):
When I overspent and spent allthe actual money I had Groceries
, obviously I was swipingUnexpected bills.
I was swiping, going out andhaving fun.
I was constantly swiping.
But here's the thing you can'tdig out of a hole while you're
still digging that hole.
And I know that that's like no,no, duh, brad.

(03:07):
But you know how many peoplethat say I want to get out of
debt, but they never stop usingdebt.
Right, they were just like meand I continue to swipe.
So my turning point came when Iactually caught up and broke up
with my credit cards and madethe decision to figure it out
with what I had.
That's when things began tochange and I was started to be
able to fill in that hole andstart to get out of debt.

(03:29):
Habit number four we build astarter emergency fund.
Now, one of the biggest reasonspeople use credit is because
they don't know how to save.
They don't have a savings, andI get that.
I don't feel bad because I wasthe same exact way.
In fact, upwards of over 60% ofthe population in the United
States can't survive a $500emergency without going into

(03:52):
debt.
But here's the thing when Isaved my first, say, 500 bucks,
something clicked.
That little bit of money.
It gave me much more breathingroom and I could feel less
stress.
It helped me stop relying oncredit every time life threw me
a curveball.
So effective debt payers.
They build a savings account,even if it's small.
To start Habit number five,they don't let setbacks derail

(04:16):
them.
Now let's be honest.
I messed up a lot.
Even today, I'm debt-free and Istill mess up.
I'm human, right, we're allhuman.
We're gonna make mistakes.
But I'd blow my budget, I'dforget about some bills, I would
spend money on things that Ishouldn't have, but I didn't let
that be the end.
I say you know, it's okay.
What can I learn from this?

(04:37):
Then I would just reset andjust keep going.
Remember, the only way to learnis to fail, and you are going
to fail when getting out of debt.
There is no linear path.
You're going to have setbacks.
They are going to happen, butyou just got to stick with it.
So the people who win withmoney they don't need to be
perfect.
They know that they're notperfect, they just refuse to

(04:59):
quit.
Habit number six they celebratethe little wins.
Now, I remember when I paid offmy very first credit card.
It was a very small balance,but it felt like I had climbed
Mount Everest because I wasterrible with money.
So getting that win, it feltamazing and that momentum, that
stuff really matters.

(05:19):
Highly effective debt payers.
They keep their energy up byrecognizing their progress and
celebrating all of the smallwins, no matter how big or small
they actually are.
And then, habit number sevendon't do it alone.
Now, I got to be honest with youguys.
I didn't follow this one.
I got out of debt all by myself.

(05:40):
I didn't have a coach, I didn'thave an accountability group, I
didn't have a Debt-Free Dadpodcast, I can tell you that
much.
I didn't have a communitycheering me on, which we are
very big on here at Debt-FreeDad.
And yeah, I still managed to doit.
But here's the thing it took meway longer than it had to and it
was a heck of a lot harder thanit needed to be, and that's

(06:03):
exactly why Debt Free Dad nowexists.
That's why Roots of PersonalFinance, our community group and
our accountability group.
That's why this stuff allexists now, because I know
firsthand how powerful it is tohave that kind of support.
In fact, most people come to us.
That's what they're looking for.
I need accountability andsupport.
They want to be surrounded bypeople who get it, who are on

(06:23):
the same journey and who cankeep them motivated when things
get tough.
So remember that highlyeffective debt payers.
They don't isolate themselves,they plug themselves into
something bigger.
They get that encouragement,they ask questions and
ultimately, they stayaccountable to their goals.
So you might think you can gofaster alone, but if you want to

(06:44):
go really far, you got to gotogether.
All right, quick recap.
Here's a rapid fire list ofthese seven habits again.
So, number one track yourspending.
Number two stick to a realbudget.
Number three stop using creditcards and debt.
Number four is build a smallemergency fund.
Number five is don't letsetbacks stop you.

(07:05):
Number six celebrate those wins.
And last but not least, themost important one guys, don't
do it alone.
Start with just one today.
You don't need to fixeverything overnight.
Build these habits, work onthese habits, and the results I
promise you guys they're goingto come.
Now, if you're ready to stopspinning your wheels and
actually start making progressthe kind that lasts, like we

(07:27):
talked about here today I wantto invite you to jump on our
wait list for Roots of PersonalFinance.
Now, roots is a closedmembership, meaning we only open
it up a few times a year and welet new members in.
Roots is our step-by-stepmembership program.
It's where I teach youeverything that I use to get out
of debt and stay debt-free nowfor over 12 years.
It's also what's helpedthousands of people that have

(07:49):
gone through this program saveand pay off debt, reduce stress
and finally really get thecontrol that they want when it
comes to their finances.
Now again, the doors only open afew times a year and when you
join the wait list, you're gonnabe the first to know when that
enrollment opens and you're alsogonna get some access to some
great bonuses and huge savingson your membership.

(08:09):
So all you gotta do is headover to debtfreedeadcom, click
on the wait list to join.
Otherwise you can also clickthe link in the top of the show
notes.
Hey, thanks for joining ustoday.
Remember, you don't need to beperfect, you just need to keep
showing up and doing the nextright thing.
You've got this and we're goingto catch you guys on an

(08:30):
upcoming episode.