so let's say for example you have right now a $5,000 credit card okay that's the balance on this card you're paying 25% interest annually and that's about a $100 minimum payment every single month you're actually responsible for paying now all of a sudden by Magic you actually get an offer in the mail from a balance transfer credit card and you're like yo it must have been my luck it's not luck it's marketing your information has been sold thus the company knows about it and thus now they're sending you offers Direct offers to you now the offer says this we're going to give you 21 months to transfer your debt over to us and you get to pay it off in 21 months and we won't charge you any interest whatsoever for those first 21 months and you might say well this sounds like a great deal over here I'm paying for example a 100 bucks per month in interest but over here I'm going to be paying Z in interest for the first 21 months this saves me a bunch of money and the only catch is you have to pay a 3% fee for the entire balance transfer now that's not a big deal because right now you're paying $100 as a minimum payment and when you take 3% of 5,000 that's only about $150 or so so it's really not a big deal so why is this attractive what is the problem with it and what exactly is a balance transfer credit card I'm going to go into all the details in this video now do me a favor guys and ask you smash the like button I appreciate it a ton now the first thing is this guys okay a balance transfer credit card I'm not going to complicated it's basically just a credit card that is designed to actually get people that are in debt in some way to transfer their debt over to this credit card and potentially that company be the one that's actually going to get all that interest from you going further it's kind of like a long-term investment okay they're actually betting that you're not going to to pay it off in that introductory period and the TR going to keep the balance and you're going to continue to pay them and pay them and pay them and yes it could actually turn against them if you actually pay but for the most part they get 3% outright and if you don't pay them well you might become a customer for something else you might get another credit card with them or another product or a loan or a mortgage whatever it is okay they have a customer a prospect to get other things that is what a balance transfer is actually good for it now what is the problem here Tommy I still don't understand okay they're giving me an offer if I'm smart and I take advantage of it I walk away without paying any interest isn't that great well the answer is this okay you might think that you're actually going to walk away dilly dally free okay but what happens is usually this what's actually going on when you actually open up a Balan transfer credit card whether it's an offer whether you've been pre-approve approval whatever you just basically you basically just opened up another line of credit that is what's actually going on so let's say for example you have credit card a you owe $5,000 a year and now you actually get pre-approved for a balance for a credit card and then you basically apply and then say hey we're actually going to give you a balance of or a credit line of $7,000 and you say well that's awesome that's more than I had over here so now you say I want to transfer the balance from credit CR card a over to credit card B your new card the balance transer card and by the way it doesn't have to be a credit card it could also be for example Hospital loans it could be any debt overall even Collections and they could actually just basically pay that off by sending them a check and basically now you're in here and the debt is over here that's the whole idea okay so what happens is this okay you say I want to transfer balance from this card over to here they say okay just pay us a 3% fee you pay the 3% fee that's $150 they sent over a check to your credit card okay now that's fully paid off the balance on credit card a is basically zero the balance on your new balance crit card is basically um $5,000 or whatever the balance here basically was that's the idea now what actually happened here okay you went from having a credit line of $5,000 to having a credit line of basically $122,000 remember so if you got in value so far I'm going to ask for a favor subscribe to the channel because only like 20% of the people that watch or actually subscrib so go ahead and subscribe right now cuz I have a lot more content and having a credit line of basically $112,000 remember they actually gave you $7,000 and you have 21 months to pay that off okay without any interest and you might think this is awesome okay what I'm going to do is basically pay this off and never look back but what usually happens is this and I'm sad to say this okay but what usually happens is this okay you have credit card a now which is basically empty and you have credit card B all right and what happens is basically you say well this one is free you start using it again okay and before you know it this goes right back up to 5,000 or 3,000 or 4,000 and this one you're barely making any real payments or any Dent to it remember they gave you 5,000 the balance transfer credit card is still a credit card you can still use it to buy stuff and it still gave you $2,000 extra dollars and you actually need it so now you might use that for some things else okay and before you know it the 21 months have gone by and now you owe over $110,000 overall you owe credit card a you also go owe credit card B credit card B is saying yep we got them now we're actually collecting interest payments every single month from you and credit card a is saying well he paid it off but now he's back to pay now so I guess we win also so what is the right way to go about this and Tommy how have you ever done this the answer is I owed about wait for it $133,000 in credit card debt and I actually used balance transfer credit cards to actually help me clear all the debt now I was not one of the people that actually went ahead and basically clear credit card a transfer to credit card B and then build up a balance back in credit card a what I did was this I follow this three step system okay the first step is you want to set for yourself some really real istic goals based on how long they're actually going to give you interest free so overall let's say I actually owe $5,000 right that's how much I actually owe I'm going to divide this number by how many months you're actually going to give me so divided by 21 in this in this case by the way what credit card am I actually talking about I'm actually talking about the city Simplicity balance transfer credit card that offer 21 months to pay interest free 0% APR and even 12 12 months to actually buy things and not get charged any interest obviously they're doing this for a reason you transfer the balance over you get 21 months to pay it off but you also get 12 months to buy other crap and actually build up even a bigger balance don't be stupid don't fall for that okay so now I know that per month I need to pay about $240 to be debt free in21 months okay that's the idea and that's how I would actually do it now for me personally I would say well if if this is actually very doable I would stick to it if it's actually a little bit less than I can basically do I would actually lower it and basically even if I end with the balance okay at least I was actually realistic okay now for me personally I actually paid more towards it to be able to pay it off a lot faster I actually paid off $133,000 in credit card debt in 12 months okay because I actually fell for that trap where discover sent me a credit card and they were like Hey we're going to give you I think 18 months of purchase free interest and I went crazy okay I went crazy and what happened is I maxed out everything then it was like um I think it was 18 months right so I spent like 6 months doing some crazy stuff and then I had 12 months and I was like yo I need to pay all this in 12 months and I basically was able to cover everything in 12 months I think at a point I to transfer balance over to the balance transer card but I was actually able to do it which actually saved me a ton of money but it was only because I was smart so step number two is basically once you transfer the balance well close credit card a all right close it because you don't want to be at risk at rebuilding this actual um credit line and to actually get into double the debt you actually want to clear that and then lastly all right the balance CH credit card don't use it to get into more debt only use it to actually pay off the debt fast and be done with it and once you're done with all the debt my advice would be a 100% just close to to credit cards overall and don't get back into those problems okay ever since I became debt free and I don't have any credit cards I have no method no way of getting into debt anymore so it's not something I worry about but as long as you have that possibility that availability to watch you say I'm going to use this credit card for this or that for this emergency or that emergency you're always going to be going back into debt and going right back into where you landed I think the Bible says a dog is always going to return to his vomit and that's just disgusting okay so if debt is actually getting you into trouble over and over again and you're going back to it well that's just stupid and nonsense okay you actually want to avoid that so yes okay understand what they're trying to do they're trying to get you to bring your balance over to hopefully spend more money to be trapped with them and to pay them a bunch of interest but if you're smart what you're actually going to do is say I'm going to use you and I'm going to take advantage fully I'm going to close credit card a and once I'm done with you I'm also going to close you and I'm going to be done with it so set for yourself achievable goals so you're actually able to do this as fast as possible guys thanks for watching as always like subscribe hit the Bell sh notified there are obviously other balance of credit cards out there so if you know a few of them comment them down below if you want a full video on the offers out there let me know and I'll actually get to work up here is another video and this video is actually made possible by the supporters over at patreon here is a list of their names I appreciate it a ton if you actually want to join us on patreon support the channel the link is going to be down below thanks for watching as always like subscribe hit the Bell so you get notified peace
so let's say for example you have right now a $5,000 credit card okay that's the balance on this card you're paying 25% interest annually and that's about a $100 minimum payment every single month you're actually responsible for paying now all of a sudden by Magic you actually get an offer in the mail from a balance transfer credit card and you're like yo it must have been my luck it's not luck it's marketing your information has been sold thus the company knows about it and thus now they're sending you offers Direct offers to you now the offer says this we're going to give you 21 months to transfer your debt over to us and you get to pay it off in 21 months and we won't charge you any interest whatsoever for those first 21 months and you might say well this sounds like a great deal over here I'm paying for example a 100 bucks per month in interest but over here I'm going to be paying Z in interest for the first 21 months this saves me a bunch of money and the only catch is you have to pay a 3% fee for the entire balance transfer now that's not a big deal because right now you're paying $100 as a minimum payment and when you take 3% of 5,000 that's only about $150 or so so it's really not a big deal so why is this attractive what is the problem with it and what exactly is a balance transfer credit card I'm going to go into all the details in this video now do me a favor guys and ask you smash the like button I appreciate it a ton now the first thing is this guys okay a balance transfer credit card I'm not going to complicated it's basically just a credit card that is designed to actually get people that are in debt in some way to transfer their debt over to this credit card and potentially that company be the one that's actually going to get all that interest from you going further it's kind of like a long-term investment okay they're actually betting that you're not going to to pay it off in that introductory period and the TR going to keep the balance and you're going to continue to pay them and pay them and pay them and yes it could actually turn against them if you actually pay but for the most part they get 3% outright and if you don't pay them well you might become a customer for something else you might get another credit card with them or another product or a loan or a mortgage whatever it is okay they have a customer a prospect to get other things that is what a balance transfer is actually good for it now what is the problem here Tommy I still don't understand okay they're giving me an offer if I'm smart and I take advantage of it I walk away without paying any interest isn't that great well the answer is this okay you might think that you're actually going to walk away dilly dally free okay but what happens is usually this what's actually going on when you actually open up a Balan transfer credit card whether it's an offer whether you've been pre-approve approval whatever you just basically you basically just opened up another line of credit that is what's actually going on so let's say for example you have credit card a you owe $5,000 a year and now you actually get pre-approved for a balance for a credit card and then you basically apply and then say hey we're actually going to give you a balance of or a credit line of $7,000 and you say well that's awesome that's more than I had over here so now you say I want to transfer the balance from credit CR card a over to credit card B your new card the balance transer card and by the way it doesn't have to be a credit card it could also be for example Hospital loans it could be any debt overall even Collections and they could actually just basically pay that off by sending them a check and basically now you're in here and the debt is over here that's the whole idea okay so what happens is this okay you say I want to transfer balance from this card over to here they say okay just pay us a 3% fee you pay the 3% fee that's $150 they sent over a check to your credit card okay now that's fully paid off the balance on credit card a is basically zero the balance on your new balance crit card is basically um $5,000 or whatever the balance here basically was that's the idea now what actually happened here okay you went from having a credit line of $5,000 to having a credit line of basically $122,000 remember so if you got in value so far I'm going to ask for a favor subscribe to the channel because only like 20% of the people that watch or actually subscrib so go ahead and subscribe right now cuz I have a lot more content and having a credit line of basically $112,000 remember they actually gave you $7,000 and you have 21 months to pay that off okay without any interest and you might think this is awesome okay what I'm going to do is basically pay this off and never look back but what usually happens is this and I'm sad to say this okay but what usually happens is this okay you have credit card a now which is basically empty and you have credit card B all right and what happens is basically you say well this one is free you start using it again okay and before you know it this goes right back up to 5,000 or 3,000 or 4,000 and this one you're barely making any real payments or any Dent to it remember they gave you 5,000 the balance transfer credit card is still a credit card you can still use it to buy stuff and it still gave you $2,000 extra dollars and you actually need it so now you might use that for some things else okay and before you know it the 21 months have gone by and now you owe over $110,000 overall you owe credit card a you also go owe credit card B credit card B is saying yep we got them now we're actually collecting interest payments every single month from you and credit card a is saying well he paid it off but now he's back to pay now so I guess we win also so what is the right way to go about this and Tommy how have you ever done this the answer is I owed about wait for it $133,000 in credit card debt and I actually used balance transfer credit cards to actually help me clear all the debt now I was not one of the people that actually went ahead and basically clear credit card a transfer to credit card B and then build up a balance back in credit card a what I did was this I follow this three step system okay the first step is you want to set for yourself some really real istic goals based on how long they're actually going to give you interest free so overall let's say I actually owe $5,000 right that's how much I actually owe I'm going to divide this number by how many months you're actually going to give me so divided by 21 in this in this case by the way what credit card am I actually talking about I'm actually talking about the city Simplicity balance transfer credit card that offer 21 months to pay interest free 0% APR and even 12 12 months to actually buy things and not get charged any interest obviously they're doing this for a reason you transfer the balance over you get 21 months to pay it off but you also get 12 months to buy other crap and actually build up even a bigger balance don't be stupid don't fall for that okay so now I know that per month I need to pay about $240 to be debt free in21 months okay that's the idea and that's how I would actually do it now for me personally I would say well if if this is actually very doable I would stick to it if it's actually a little bit less than I can basically do I would actually lower it and basically even if I end with the balance okay at least I was actually realistic okay now for me personally I actually paid more towards it to be able to pay it off a lot faster I actually paid off $133,000 in credit card debt in 12 months okay because I actually fell for that trap where discover sent me a credit card and they were like Hey we're going to give you I think 18 months of purchase free interest and I went crazy okay I went crazy and what happened is I maxed out everything then it was like um I think it was 18 months right so I spent like 6 months doing some crazy stuff and then I had 12 months and I was like yo I need to pay all this in 12 months and I basically was able to cover everything in 12 months I think at a point I to transfer balance over to the balance transer card but I was actually able to do it which actually saved me a ton of money but it was only because I was smart so step number two is basically once you transfer the balance well close credit card a all right close it because you don't want to be at risk at rebuilding this actual um credit line and to actually get into double the debt you actually want to clear that and then lastly all right the balance CH credit card don't use it to get into more debt only use it to actually pay off the debt fast and be done with it and once you're done with all the debt my advice would be a 100% just close to to credit cards overall and don't get back into those problems okay ever since I became debt free and I don't have any credit cards I have no method no way of getting into debt anymore so it's not something I worry about but as long as you have that possibility that availability to watch you say I'm going to use this credit card for this or that for this emergency or that emergency you're always going to be going back into debt and going right back into where you landed I think the Bible says a dog is always going to return to his vomit and that's just disgusting okay so if debt is actually getting you into trouble over and over again and you're going back to it well that's just stupid and nonsense okay you actually want to avoid that so yes okay understand what they're trying to do they're trying to get you to bring your balance over to hopefully spend more money to be trapped with them and to pay them a bunch of interest but if you're smart what you're actually going to do is say I'm going to use you and I'm going to take advantage fully I'm going to close credit card a and once I'm done with you I'm also going to close you and I'm going to be done with it so set for yourself achievable goals so you're actually able to do this as fast as possible guys thanks for watching as always like subscribe hit the Bell sh notified there are obviously other balance of credit cards out there so if you know a few of them comment them down below if you want a full video on the offers out there let me know and I'll actually get to work up here is another video and this video is actually made possible by the supporters over at patreon here is a list of their names I appreciate it a ton if you actually want to join us on patreon support the channel the link is going to be down below thanks for watching as always like subscribe hit the Bell so you get notified peace
So paying off debt, it's
gonna sound stupid, give me a chance. Paying off debt is
not just about having some money and sending it
over to pay off debt, right? It kind of sounds
like that is what it is, but paying off debt is
also about staying out of debt. Having a system so
when you pay things off, you pay them off
efficiently because a lot of folks, they pay something
off, they go back into debt. They start paying things off and then
they'll be like, "Hey, it's not going down.
I'm not understanding it. I pay this, this, this, this, but the balance every month
is going up and up and up." And it doesn't make sense, okay? So in this video, I'll
teach you how I was able to pay off $13,000 in credit
card debt in about 12 months, okay? And not just that, I
paid off a total amount in my debt-paying career
of about $70,000, all right? So in this video, you
know exactly all the techniques I used to be able to pay
that off as fast as possible. And if you guys don't
know me, my name is Tommy Bryson. If you know me,
welcome back to the channel.
Now, as always, do me a
favor and also smash the like button. Now, the very first
thing, guys, is going to be this. If you want to pay off
debt, it's not just about grabbing the extra money you have left
over and putting it towards debts. No, it's about budgeting and finding
all the money possible to pay the debt off. And here's what I mean, you know? A lot of folks, they
live paycheck to paycheck.
I get paid $3,000, I spend $3,000. Next month, I
can't wait for that paycheck. And if I can find $100 or
$200, I'll send that over to my debt payments, but that's
why you never actually finish. So what you actually want
to do is you want to get a budget. The budget is
going to help you find money to actually pay the debt off even faster. Here's what you want to do. You want to open up or
start up right now a baseline budget. It's my little budget
that I actually made up and it's very functional
and it makes a lot of sense. Okay. You want to have
basically, write this down. You want to have an account for
your shelter costs, utilities, groceries, transportation, healthcare, and also fun. Those are usually going
to be the six most important expenses and the ones
you can't really negotiate on. But it's not just that, okay? Because that would just
basically liberate you from saying, and justify, because I spend
so much money on rent or whatever.
No. You want to limit your shelter
expense to 33% of your monthly income. On top of that,
utilities, only gas, water, electricity, internet
bill, and also your phone bill. Your phone bill should not be more
than 30 bucks per month and your internet bill should not be more
than 80 bucks per month. Okay. That is it. Tell me how. I pay $6 for my phone bill. They exist. I have a video on it. The link is going to be down
below or just search up on YouTube. Tommy Brice and phone
bill, and you will find a video. When it comes to food, no
more than 200 to 250 per person max. How do you do this? You cook at home and you don't
spend money on trash on the streets. Tragitation. If you have a car,
make sure it's paid off. If it's not paid off, well, you
consider selling it because that's important, but you're only paying for
gas, insurance, and maintenance. And some car washes every now and then. Those are going to be your core expenses. Then you also have health insurance. If you have that,
if you don't consider it.
And on top of that, you're
also going to have your fun expense. Okay. Take at least five to 10% of your money every time you get
paid and have fun with it. Tommy, I'm trying to pay off debt. I don't have fun for this. I want it to be exciting every time
you get paid because you look forward to it because you get money
for fun, but you also look forward to it because
you're actually getting debt free. It will be slower. You can cut this out,
but I highly recommend you don't because it actually helps
make the whole journey a lot more bearable.
So basically, if you make 3000, now
you're only spending about $2,000 with this budget and you
have $1,000 left, that's the money you're going
to use to pay off debt. But obviously, I'll
give you the system later. Number two is going to be this guy's. Okay. You actually want to
get extra cash or paying off debts by selling things
you don't need around your home. This is the most fun I had. And it's also the most
embarrassing part of this entire system. Okay. Because so if you got a value
so far, I'm going to ask for a favor. Subscribe to the
channel because only like 20% of the people
that watch our actions scribe. So go ahead and subscribe right now
because I have a lot more content and it's also the most embarrassing
part of this entire system.
Okay. Because for me, my identity
for a long time was what I wore. The sneakers I
had, the clothes I had, and when I wanted to get
debt free, I sold everything. I sold, I had 23 pairs of sneakers. At the end of it, I
kept about like nine to eight pairs and I sold my
consoles, my gaming consoles. I sold basically everything I had and
I use all the extra money to pay off debt. That's how I did it. Okay. So if you can sell the things around
your home and you can keep, for example, 500 or 200 bucks, that's money
you're going to use to pay debt.
And by the way, going back up when I
told you about that baseline budget, whatever is not included in that,
you obviously want to cut it out. If you want to buy,
for example, something that you don't need, use your
fund money to actually do it. I think that's clear, but I
wanted to make it even crystal clear. Now, number three guys is you want to
get extra cash to pay off debt by hustling. Now, the good thing is
I'm only asking you to get a job or hustle with a minimum
pay of at least $15 per hour. Okay. If you can't get
that, then try to find someone else, but I recommend
like at least 15 bucks per hour.
And you might say, Tommy, I
don't have the time, but you do. And here's how you sleep eight hours. You work eight hours. You spend on showering food
and driving about three hours a day. That's a total of about 19 hours a day. You still have a free
five hours every single day. So if you do the math, okay, if
you're able to actually make $15 an hour and you work five extra hours per day, I
don't let you know, like a hustle or whatever. The answer is about like 75 bucks a day. Time is five, only
like five times a week you actually do this because
you rest on Saturdays and Sundays. The answer is going
to be every single month. That's an extra $1,500 to pay off debt. I mean, that is awesome. That is a lot of money to pay that off. You can basically be done with 10K
in a short amount of time, just with this. Okay. $10,000 divided by 1,500. That's going to be like in
six months, you're almost debt free. That's the idea. Now here's the fourth part.
Tommy, okay. I budgeted, I sold things, I'm hustling. How do I pay the debt off? There are two methods. One I did, and I don't recommend. What I did not do, and I do recommend, sounds strange,
sounds crazy, but it's very true. The one I did was
basically the avalanche method. Okay. Avalanche method says this, okay. You want to organize your debt from the highest interest rate
to the lowest interest rate. You want to pay
the minimum balance on all of your debts and
grab all the extra money you actually have and pay the
debt with the highest interest rate.
Tommy, how do I
find out my interest rates? You call the debt people. Okay. Who do you owe money to? Call them and ask
them what is my interest rate? Okay. Why do you do this one, Tommy? Because it saves you the most money mathematically because
you're paying the debt that's costing you the most money. Okay. Why don't you recommend it? Because it can take a long time to see progress because your
highest interest debt could be the one with the highest balance and it can take a long
time to actually pay that off and it can feel like
you're not making progress. That's why I recommend the one I
didn't do, which is basically the snowball method. This method says this, okay. You organize your debt from the
lowest balance to the highest balance, not the interest rate,
doesn't matter, and you pay the minimum on all
the debts and you put all of the extra money towards
the debt with the lowest balance. Okay. That means on your first run, your first month, you can
easily be debt free on one of these accounts.
You can pay something
off and you will build momentum. That's why I recommend it because
you're more likely to keep going as you're seeing progress. Okay. Now it doesn't save you money like
it does, for example, with the Alan's method mathematically, but it does
build momentum and it can get you there. And that's what I'm interested in. Okay. I'm not worrying about you saving money because you'll do
that anyways, but I'm more worried about it. You actually get
into the goal in the end. All right. So that's why I say I
recommend the snowball method. Now in the end, if
you made it all the way to the end of this video, and if you make it all the way to the end of this
entire journey of paying off your debt, the next question is going to be, tell me,
what do I do once I'm actually debt free? Once I paid off $10,000 in 12 months or six months, you
know, you can use this whole formula, this whole strategy to pay off a lot more money, a
lot less money, a lot more time or a lot less time.
It doesn't matter. But what happens when
you actually get to the end goal? The answer is very simple. What I did was this. The first time around,
I kept my credit cards open. I kept some debt that
was actually low interest around. That was a mistake because I eventually went back into some
more credit card debt and I still had debt that I
carried around like a puppy or whatever. Okay. My second time around when I paid off all my debt again,
which was like last year, I paid off about $40,000 in debt. I went ahead and I closed down
every single credit card I actually have. So I only deal right now on a cash
basis or a debit basis, which is also just cash. I don't have any credit cards. Now there is a benefit to this
and there is a disadvantage to this.
Okay. Benefit is you don't have any debt. You can't go into debt because you
don't have any way of getting into debt and you actually have a lot more peace. Um, the, the disadvantage in the
senses that you're no longer making, for example, two to 3% on cash back and all this
other stuff, but in reality, those are just incentives for you
to actually get into debt.
So it's like a little hook you
sent to a fish and you are wishing you actually get hooked on it. Okay. So I don't worry about it. Okay. But for the most part, that's my system. That's how I got debt free. And that's how I was able to pay off
$13,000 in about less than 12 months or so. I think it was like about six months. Okay. Cause I was very crazy. Um, so yeah, there's that guys. Good luck around your journey and
do me a favor before you ask you leave this video, not just
smash the like I do want that. Okay. I do appreciate it, but
it's also comment down below this. Okay guys, what
method are you going to use? Avalanche or snowball? How much money do you ask you? Oh, okay. And how much money were you
able to free up from your budget? How much money do you plan on
making and how much money do you plan on making from selling all
the stuff you don't need? Okay. And once you sum up all those
things together, well, tell me what's your deadline? Okay.
And it's very simple. It means basically if you owe
about $10,000 and you have basically a thousand dollars, basically pay
off your debt, just divided by 10, well, a thousand dollars, basically
it means that, Hey, in about 10 months, you're going to be debt free. That's the idea. Okay. So comment down below. Let me know. It's not just for the algorithm,
although it does help with the algorithm, but it's also because I want you to leave
this video with actions that you actually took and you know
what you're going to do next. Okay. And come back to this video in six months or four months or
two months or one month. We were done with it. And I want to hear some success stories. Okay. That's why I do this for, right? So thanks for
watching as always, like subscribe. Hit the bell straight
notified up here in another video. And thank you for everyone on
Patreon that helps with the channel.
Here you guys are. I appreciate you guys a ton. If you want to join us on
Patreon, the link is going to be down below. Peace..
38 years ago my wife sharon and i got married and we were stupid we didn't know anything if we'd have known half of what we know now we'd have known not to get married because it was a mess i was a beer drinking hellraising hillbilly and i talked her into marrying me and we moved to nashville and started off our lives and about of course nashville y'all know about nashville right it's the buckle of the bible bell there's more baptists there than people and so we we moved to nashville and about two weeks after we were brand new married my wife who had never discussed god or jesus or anything else with me prior to marriage remembered that she was a baptist and she gets up on sunday morning and said we're going to church and i said we are not doing anything it is sunday morning i will be here watching football and drinking beer like all good rednecks well that didn't go well she got really upset and she cried and she was mad and i didn't care and she went storming out of the house and it didn't take her long to find her tribe because those baptists are everywhere and so she wanders in the back door there's a little baptist church and they prayed at the end of service for her heathen husband and this scene repeated itself every week for quite a while it wasn't going so good and so i decided i was going to get rich and i got in one of these multi-level things you know those things where you make all your friends mad and so we me and my beer drinking buddy we get in this thing together and this is how bright daryl and his other brother daryl were we would we would go to happy hour and then go make sales calls and couldn't figure out why we couldn't grow the business dumber than a rock right so then we heard that they were having one of their big rah-rah things and if we went to this meeting we could learn how to do it and have a yacht and a big house and all the stuff we were supposed to be having and we weren't getting any of it so we drive from nashville down to birmingham alabama to the alabama theater and have you ever gone back to something in your past and it shrunk in my mind's eye the alabama theater holds 10 000 people we did an event there a while back it holds 800.
[Applause] but me and daryl were in the back of the balcony up there all day long with these guys telling us how to get rich and the stuff we should be doing and all these kinds of things and it's a great sales conference or whatever in this thing and the big guy gets up at the end he's the closer and he's the one we wanted to hear because he was who we wanted to be when we grow up and whatever he said we were going to do and we had written down five things on the drive down there that if we learned these five things we could be ready to do the business and he was a great speaker and it was as if he had our five things as his talk outline he had credibility before but by the time he finished answering all our questions about life he owned us you know what i'm talking about and then he says there's one more thing and we went no we had five that's it one more thing if you don't know god you need to meet him because if you think business is about monetary transactions you're going to fail and you need to learn that people are important and god's son jesus will teach you that their the people are important and you will not succeed in business until you understand people are important and i looked at my buddy and i said has he been talking to my wife so he goes i don't know he says what to do so we got to do that and i said well i don't know what to do you know what to do no i don't know what to do we go back to the hampton inn or wherever it was we were staying we get the gideon's bible out of the nightstand we open it up it's king james shakespeare and jesus the chances of these two hillbillies getting through this is zero close that puppy up put it in the nightstand but i did go home i told my wife i said we're going to church and she said who are you and what have you done with my husband and we started visiting churches and we went to some of those churches where people aren't happy y'all have been one of those churches where people look like they were weaned on a pickle [Applause] not having fun and then we went back door this little church this is 30 40 years ago right so we go in the back door this little church and it was kind of stuff happening in there about 400 people it had something in the air you know and and the people in the choir they were like moving and stuff and we're like this is dangerous and then one woman in the choir raised her hand like she knew the answer to some question and so and then they all started raising their hands and i told sharon you know how you do when you're visiting churches we're on the back row sneak out right and so we're on the back row i said they get snakes out i'm out of here i'm just saying [Applause] we kept being drawn back to that little church and that old pastor about as good as you can get he would stay say wonderful things from the pulpit like this is what the bible says and then if you don't agree with that you're what's known as wrong i love that like somebody because i thought christians were kind of wimpy and he was like a man you know and and his wife you know they his old school church they stand at the back when everybody left and shake everybody's hand and give everybody a hug on the way out is a little church anyway you could do that right and she's a big squishy woman so she'd give you a big old grandma hug you know and you get that big grandma hug and his manliness and that woman and his talks led me to jesus changed my life and i i do everything backwards most people meet god at the bottom of a crisis of some kind i met him on the way up and i started buying i left that little multi-level thing i started buying and selling real estate and i got rich at least for by a kid from antioch tennessee standards by the time i was 26 i had 4 million worth of real estate a little over a million dollar net worth and i was making 250 000 a year in the early 80s that's 20 000 a month and i don't know what neighborhood you grew up in but where i grew up we called that rich and it was fun too sometimes i hear these people say all those rich people are miserable we were having fun fun fun i mean i had that car i always wanted you know that car if you ever got some money i'd get that car you know that car car i always wanted was i wanted a jaguar because no one in the neighborhood i grew up and could spell jaguar much less knew what it was or how much it cost so it was exotic i got me a jaguar and maybe within 90 days i was a jaguar you know it's like right you know i was having fun man we went to hawaii and we loved it that water is so blue we went back and then we went back again we loved it we were having fun now i'm not here to tell you money will make you happy and i'm certainly not a quote-unquote prosperity gospel guy but money's not evil either it's not in scripture the bible doesn't say that money is the root of all evil it says the love of money is the root of all evil what i have discovered now 30 years later is that money makes you more of what you already are it magnifies the good and exposes the bad brightly if you have a temper and you get money lord help the people around you you will be a rage-a-holic tyrant i mean you you will be out of control if you are generous and give and you get money you'll become what the world calls a philanthropist and you will impact entire communities with the wealth that god allows you to manage you become more of what you are and some of the people around you when you get money become more of what they are like the crazy in your family gets crazier and listen let me just tell y'all every family has crazy and if you think there's not crazy in your family that means it's you [Applause] this is how it works you guys and so we were blowing and going everything was so good we were cooking and i had done some stupid stuff how many of y'all ever do something stupid with money how many of you that didn't raise your hand have a problem with lying all of us have done some stupid stuff with money and i had borrowed too much money i had four million dollars with real estate but three million dollars worth of debt on it it was on short-term notes because i was flipping this house flipping these houses before there was cable tv to tell you how and and so we're just chugging along chugging along the bank gets sold to another bank and a guy in another city looked down and said there's a kid 26 years old owes us millions of dollars let's limit this relationship which is banker talk for ruin his life and they called our notes the short version of the story is we spent the next two and a half years of our life losing everything we owned we were sued we were sued so much we're on a first name basis with the guy with the sheriff's department bringing the lawsuit papers a little pink slip thing and sharon's like making him cookies hey harold how's it doing today just good miss sharon here's your another one and so we were just it was just like coming at us like crazy we had a brand new baby and a toddler our marriage was hanging on by a thread because you could have some money fights now you can have fights but in a marriage you can have some money fights number one cause of divorce number one cause of disagreement in america today money fights now we didn't get a divorce we held on to each other but sometimes it was just to get a better grip you all know what i'm talking about right she she's from east tennessee the hills of east tennessee and frying pan throwing there's an olympic event finally after standing in the shower was so hot in my face i could hardly stand i would just stand there and cry because i was so scared i couldn't breathe year after year month after month finally we were bankrupt so i met god on the way up but i got to know him on the way down and it changed everything i had an i surrender all moment and i'm not talking about a baptist altar call i'm talking about i surrendered we're doing it your way and i don't care what anybody else thinks you're it you are the lord you are in charge and this is your instruction manual we're doing it this way and i don't care what the other books say and i don't care if somebody's mad and i don't care if somebody's sad we're doing it this way period and there's a lot of stuff in here i mean i'm gonna raise my kids this way my kids are like dad what's this rod stuff and i'm like come here baby i'll show you i'm gonna run my marriage this way submit yourselves one to another oh no that means i gotta draw dishes 2500 scriptures on how to handle money and possessions god's concerned about teaching us how to manage his stuff his way for his glory he's really concerned about that and i said okay god apparently i'm an ignoramus when it comes to money i've got a degree in finance and all these letters and licenses after my name but here i sit broke so there's a problem with the knowledge base i was operating from something's got to change what does it say about money and it's all in here it's crazy y'all i'm still learning stuff 30 years after i first started studying this subject and it's it's it's crazy how in-depth and detailed and nuanced the instruction is it's all there but you just carry it you gotta open it and read it i mean it's the osmosis thing running up your arm doesn't work you gotta really get you gotta and man it's hard it's hard so i got a bunch of young people working on my team there's about 964 folks on our team right now and give or take one and um a bunch of youngins on my team and i came in the day and one of these young guys was doing the stuff wrong that he's supposed to be doing and i was like hey i'll do it that way do it this way huh i said no that's wrong there's a right way to do it wrong way to do it you're doing it wrong this is the right way do it this way and he's like okay okay i come back two days later he's doing it wrong again the same way i'm like hey again one more time this is the way don't do it that way do it this way i come back two weeks later he's doing it wrong again i'm like boy we're going to set you free in jesus name okay this is ridiculous and he looks at me and he says i'm not like you and i said you don't have to be like me you just got to do it the right way and to the extent you're not like me and the way you do it you need to change when you're doing it wrong you need to change when you're walking the wrong way in christianity god says stop you're doing it wrong when we change that's called repentance in our world i got a lot of stuff i get to repent for every day because i do so much stuff wrong but this money stuff i studied it and studied it and studied it and i've been doing it right for decades now and it works and i'm i'm believing i'm a lot better husband than the one the guy that that woman married 38 years ago and i'm a lot better daddy than i was when i started and matter of fact i got grandbabies now and if i don't know how great grandkids are going to be i've been nicer to their parents and so i mean it's my my kids are like who are you you want this one back okay so this is this one smells you can have it and so oh man it's you get better if you change the technical theological term will be called sanctification over time we get better if we change so let's talk about the five things that the bible says we should do with money now there's a whole bunch of them but if you do these five over a couple decades a hundred percent of the time you will get results that will blow your everlasting mind a hundred percent of the time because let me just tell you if you plant corn don't be shocked if corn grows as you sow so shall you reap if you plant nothing and wait on the government don't be surprised if you have mud this is how it works you are in charge of planting he is in charge of sunshine and rain and there's this dance that we do with god between our works and his blessings and provision and protection that causes this thing where his children the heirs to the throne a royal priesthood are blessed and this is how we do it the first thing is you get on a written plan we call it a budget in the financial world jesus said don't build a tower without first counting the cost lest you get halfway up and you're unable to finish and all who see you begin to mock you and say this man began to build and was unable to finish don't build a tower without first counting the cost my friend zig ziglar used to say if you aim at nothing you will hit it every time my friend john maxwell says a budget is people telling their money what to do instead of wondering where it went winning is an intentional act when the super bowl is over and the little reporter runs over and says how did you win the guy never goes i don't know i just got off the bus and this thing happened getting to the super bowl is an intentional act over decades of developing your skill [Music] no one accidentally grows a bumper crop unless it's weeds no one so plant something control the process control the controllables write it down this is my plan thank you lord i'm gonna do this i'm gonna manage your stuff i'm gonna take care of my own household first it's in there remember and we're gonna live this plan out and we're gonna do this thing it changes everything the second thing is you need to get out of debt now we knew dave ramsey was gonna say this that's a fairly predictable thing coming out of my mouth but here's the deal the borrower really is slave to the lender the ritual is over the poor and the borrower is slave [Applause] to the lender i've experienced that i lost everything because i let other people have control over my life you know what that's called a master well dave i don't know if i agree with all your theories about debt it's america you have the right to be wrong [Applause] my old pastor used to say a man with an experience is not at the mercy of a man with an opinion i've led more people out of debt and into wealth than anybody breathing on the planet today and i'm not bragging i just showed them how to do it god's ways i didn't make up any of this i stole it all from god and your grandmother and so we're going to get out of that because it's no fun trying to be married like this right knock your glasses off doing that this is crazy you guys we're walking through our lives where all the money comes in all the money goes out and only the names are changed to protect the innocent we make tons of money and we have none and we can't figure out why i know why you gave it all to a financial system that's designed to take it from you you surrendered it and we've got to stop so i quit borrowing money period for anything for any reason and this weird thing happened when i didn't have any payments and i made an income i had money it was so strange and then when i got money and i bought an asset that created income that i paid cash for i got to keep all that there was no payment except for what the government takes but i mean there was no payment and it was it was an amazing experience and the first few years were tough because you know other stuff i wanted to do and i didn't have the money and i had to learn this magic ancient word called no most people don't know this word you press your tongue towards the roof of your mouth you release there no it's tough you're not allowed to say it in our world anymore it's politically incorrect so you know what i did was we got the scissors out and we said no more i'm not going to play you guys game anymore it's time for a plasectomy it's time for plastic surgery citibank what's in your wallet money american distress thank you discover bondage bank of america oh my gosh you don't have any credit cards no not for 38 years well 30 years that's when i went bankrupt they wouldn't give me one at first and then later after they would give me i didn't want it because i had learned this stuff from the bible and this is my wallet green president's faces four pieces of plastic my debit card on my business my debit card for my home my driver's license and my handgun carry permit um oh rednecks in oklahoma i see okay i had a guy call me on the radio and he's like you're gonna kill me my truck payment i said how much is your truck payment 763 dollars you have a 700 truck payment yeah i said how much is your house payment i live in a double wide 550.
oh man i said dude if your truck payment is bigger than your house payment you might be a redneck the borrower is slave to the lender you got to sell that truck dude it don't you you don't own it it sounded good at the time and you and i both know the reason you called me is you just wanted somebody else to say it out loud with you who's also done stupid because i know what stupid looks like son that's stupid that truck's got to go you're saying i gotta sell my truck what'd you just say of course i said you sell your truck and stutter thing owns you man this is crazy get you a truck that you can own instead of it owns you this is just crazy the third one surprises people and that's foster high quality relationships the bible says be not deceived evil company corrupts good habits did you know you become who you hang around with i was up north of the day and you know all those people talk alike they got accents they thought i had one but they had a group accent thing going i saw it and when they moved down south they stayed there long enough we teach them how to talk right and they're fun i love yankees they're awesome but um it's fun there's a couple in here right now but they um we can have all the phone we want you know you become who you hang around with studies say that your 10 closest friends over the next decade your income will be within 10 to 15 of the average of your 10 closest friends and some of you're going i need some new french [Applause] well maybe i mean you don't let your little son your little johnny run around with the weed head down the street because you know if you do he's going to turn into a wheathead right he comes home talking language we don't talk in our house you go where'd you pick that up because you didn't pick it up in here so where'd you you know oh yeah okay you become who you hang around with be not deceived evil company corrupts good habits so hang out with generous people and you will be generous people hang out with people who read the bible you'll end up reading the bible you can't keep yourself from doing it hang out with people who treat their wives with respect men and you will find men who treat their wives with respect and you'll start treating yours that way it's an amazing thing that happens it's a weird thing that happens so choose carefully now i'm not talking about being nice to someone or snubbing other people i'm nice to anybody i love people i love people that are wrong even i love people okay but i'm talking about my crew the men in my life that shape my language the men in my life that impact my spiritual wealth my generosity my thinking in business and my acumen who are the men in my life that are doing that ladies the same thing for you you're going to become who you hung around with now the next one is save and invest see if you don't have any payments and you got a plan the first thing you're going to want to do is save and invest because in the house of the wise are stores of choice food and oil and the rest of that proverb says and a foolish man devours all he has if you spend everything you make biblically speaking you're a fool i didn't say it god dad don't get mad at me but i have been a fool big red arrow fool full full i know i know what being a fool feels like it feels like being broke because i spent everything i made because i've always been able to make money i just weren't able to keep it i always thought i could out earn my stupidity and i tried it for a long time it doesn't work save and invest you're saving for an emergency fund first save three to six months to get ready for maybe something like a a what a rainy day visual aid 2020 right man i mean what if you had no payments and a big 20 000 emergency fund in 2020 happen or what if you had 20 000 in payments and no money for emergencies in 2020 happen do you have two different results the answer is yes in the house of the wise are stores of choice food and oil and then that leads you to the position to be incredibly outrageously generous it's hard to be generous when you're broke you can be generous and smile and open the door for somebody but i'm talking about writing a check to feed hungry babies i'm talking about buying a single mom a car i'm talking about you can reach over and pay somebody who's struggling light bill through the end of the year i'm talking about outrageous even sometimes spontaneous generosity and you can do that if you're not broke and you've got your stuff taken care of at home if my life bill is paid i can help somebody if i'm still threatened over here i don't even see them god loves a cheerful giver he loves a cheerful giver so i want you to try this next time there's a holiday maybe easter or thanksgiving or something like that and you're driving to grandma's house with the kids now you're gonna go have a big feast that day but on the way i want you to do something crazy i want you to stop at the waffle house leave the kids in the car motor running pull up in front of the window so you can see inside and the people in your car can see inside i want you go inside by yourself leave them out there they'll be running their mouth anyway kids put the screens down watch this go in there have a cup of coffee at the counter she'll come to the counter she'll pour your coffee this is thanksgiving morning and who's working on thanksgiving morning at waffle house pay for your coffee and i want you to take three or four of these uncle benjamin franklin pictures 100 bills and i want you to slide them on the cup and slip out go out in the car tell the kids hey watch god work watch what god does when he shows off she'll come over she'll pick that stuff up and she'll look at it she wonders if it's a trick because in her life it's been so long since anything good has happened to her and then when she realizes it's real and then even if she was in church that sunday or hadn't been in church in 20 years of sundays a hundred percent of the time the human spirit can smell god's spirit she knows what's going on and a hundred percent of the time after she does this she'll go thank you and then she looks one more time when she realizes no one's looking and she has no idea there's a family with a six-year-old sitting in a van watching her inside whose dad or mom just pulled this idea off the six-year-old's life is being permanently changed while he watches this then she goes into and does a snoopy dance because that's the whole difference in her month now i want you to go spend 300 with your spouse on a really nice night out and enjoy yourself if we being evil know how to give good gifts how much more so our father in heaven i want you to learn to enjoy money but i dare you to have more fun with 300 bucks than that so to the extent you're not outrageously generous because you're in debt and haven't saved money you're not on a plan and you hang out with selfish people who are worried about their instagram photo any one of those five things that's not there or any five of those five things is not there it's time for all of us to get a little better and change makes god smile when you do he loves you he's crazy about you god we thank you for this day thank you for this incredible church we thank you for pastor craig thank you for his friendship over all these decades the incredible work you've allowed him to do and the work you've done through him and this unbelievable holy spirit team god thank you thank you thank you for work that matters we ask you bless people help them have the power to change their lives holy spirit speak to them speak through them help them change in jesus name amen as you keep praying today at all of our different churches uh those of you uh who say oh i i feel the same thing that waitress would feel there's something in my spirit that bears witness with this but you may say i'm not really a committed follower of jesus when dave talked about debt there's another type of debt in the bible it's called a sin debt and you know it when we look at money we all know we've done stupid things with money we feel guilty sometimes but when you look at life we recognize that we've all done stupid things in life and we feel guilty we've sinned there's really really really good news that god loves you so much that he became like you he became one of us in the person of jesus who never sinned jesus the innocent one gave his life died and god raised him from the dead he shed his blood to pay for our sin debt because of the grace of god because of the risen christ anyone who calls on that name that is above every name the name of jesus your sins would be forgiven your debt your sin debt would be erased and you would change you would become brand new today wherever you're watching those of you who say i need his grace i need his forgiveness today i turn around i turn from my sin i repent i turn to jesus i give him my life that's your prayer would you lift your hands right now just lift them up all of our churches say yes i give my life to jesus as we have hands going up in all of our churches if you're watching online just type in the chat i'm giving my life to jesus and now because of the goodness of god his presence would you pray with those around you pray out loud pray heavenly father forgive my sins erase my debt jesus save me change me make me new fill me with your spirit so i could follow you thank you for new life i give you mine in jesus name i pray because somebody celebrate big worship god [Applause]
– Hello my dudes, my name is Tiffany, and today's video is about
how I paid off $10,000 in credit card debt in six months. I am so excited, and this really hasn't even hit me yet. You know how mobile banking is. Money doesn't even seem real. It's all numbers on a screen. So in this video I'm going to
explain how I got into $10,000 of credit card debt as well
as how I got out of it. Let's jump right in. First of all, this has been the best
year for me financially, and this is my first year
being a full time YouTuber, where this is the only
job that I am working. It's been that way since January so it's still relatively new, and I have been earning small
amounts of money from YouTube since about 2012, but this is not a YouTube
get rich quick scheme. It has taken a lot of time, and work to get to the point
where this is my full time job, and of course I want to mention how grateful I am for this job, because it has given me the
flexibility to work while I am still a full time college student.
And of course it's not only allowing me to earn enough to pay my bills, but also to be able to throw large amounts of money at my debts. If I were working a minimum wage job like I have in past years, I would not have been able
to do this in this timeframe. Of course, I still would
have been making payments, but it wouldn't have been possible to pay this much, this fast. So first of all, thank you to everyone watching my channel, and supporting my videos.
Keep doing it, please. No, but really I don't want
anyone to directly compare their situation to mine. I think when it comes to personal finance, it's important to remember that it's all about concepts, and strategies. Everyone's income, and expenses, and situations are very different. Those amounts will vary wildly, but when it comes to debt pay off. The strategies are all
pretty much the same. If you are trying to get out of debt, I hope that this video is somehow helpful, or maybe a little inspiring for you, and if you're not in
debt, congratulations. Maybe this video will help
you learn from my mistakes.
Anyway, let me give some
backstory into my situation. How did I get into $10,000
of credit card debt? So I made this video back in March to publicly announce my
debt pay off journey, and specify exactly how much money I owe. In addition to my credit card debt, I also owe now about
$18,000 in student loans. By the way, I chose to tackle
credit card debt first, because the interest rates are higher. My credit card interest
rates averaged about 20% while my student loan
interest rates are about 4%. so I'm 24 now, and I have considered myself
to be financially independent pretty much from age 19 when
I moved out of the house, and went to college. But even before that, since I was 16 I've been working, I bought my own first car, paid for insurance, gas,
everything, paid my phone bill, Ms. 16 year old independent. Once I got to college though, my biggest problem was that I just was not making enough money to keep up with my expenses, and that is when I started
to rely on credit cards to kind of bridge that gap, and obviously we know those balances can grow really quickly.
I used to work regular minimum wage jobs, you know, in food service, childcare, work study jobs on campus. I made about $15,000 in 2016, and then in 2017 I studied
abroad, and couldn't work, and then that summer I
worked at a summer camp, which did not pay much. It's more of an experience, and in 2017 I only earned $5,000. I honestly don't even know how I survived. So while studying abroad, my room, and board was covered by student loans, and I got a small stipend, but I did end up adding about
$1,400 to my credit card by the end of my semester,
and time traveling. Shortly after that summer, I also had to spend $2,000
on emergency dental work, yay to being uninsured. No, that was not fun, and I also decided to drop
$2,000 on SmileDirectClub to straighten my teeth.
I definitely did not have the
money for that at the time, but I was just sick of being
insecure about my teeth, and honestly now very worth it to me. I'm glad I did it then, but then of course studying
abroad was amazing, but it also costs a lot of money, and it definitely added
to my student loan debt, and my credit card debt, but again, I think it was worth it. I mean, I would not regret
that experience ever. So yes, looking back about $5,500 of my $10,000 credit card debt happened in just 2017, I had always been conscious of my debt, and I always made my payments
on time every single month, but by like early 2018 I was 22, and I just still wasn't
earning very much money. Actually before this year, I had never earned more than
$22,000 in a year before taxes, and my credit card payments were annoying, of course, but I was kind
of used to just paying them, and I had no idea how much
money I was actually wasting.
I did the math just
recently, and in 2018 alone, I paid $1,587 in interest
across four cards. Want to know how much I earned that year? Just about $20,000 before taxes. So the amount of interest that
racked up on my credit cards was over 12% of my entire annual income. That is insane. Clearly I needed to pay this off, and I knew that I was not gonna
live with this debt forever. So now I'm gonna tell you a
few basic steps for paying off credit card debt, and what my actual process was like. Step one, you've got to
get serious, and commit. This is honestly the hardest part. A lot of us can live with debt. Why is my shirt doing this? That's really annoying. A lot of us can live with debt, and kind of push it to the back
of our minds, and ignore it, but it is so important to finally realize that
you are done with this, and you are gonna start
seriously working to pay it off.
The reality is debt pay off
does not happen passively. You know, making minimum
payments for years is going to cost you so
much more in interest. The best way to pay off
debt is to pay it off as aggressively as you can. So I think it's important
to let your friends, and family know that
you're on this journey, and maybe they can help
hold you accountable.
Maybe you just want them to understand why you'll probably be saying no to spending money in certain ways. It helps to have people around
you supporting your process. For me, I just announced it publicly, which you definitely don't have
to do if you don't want to, but you know, I'm a YouTuber, and I like to share my life
with the world, and overshare, and that's what this
video is doing as well. Next, I would definitely
recommend balance transfers. Use those to take advantage of lower, or 0% interest rates for a
certain number of months, sometimes up to like 18 months. Using balance transfers
wisely will obviously save you a lot in interest. Plus it kind of gives
you like a target date to encourage you to pay
that off before the lower, or zero interest rate ends.
By the way, I don't have time to explain everything in detail, so if there's anything in this video that you are confused about, or want to learn more about, I will be linking some educational resources in the description. So yes, I did do a few balance transfers, so I did benefit from
lower interest rates, and sometimes zero interest
for a limited time, but it's crazy that I've still racked up that amount of interest,
even with balance transfers, I don't want to do the math on
how much it would've cost me if I didn't, but it would not be pretty.
Second major tip, you
must track your income, and expenses religiously. So I actually made
another video about this. I was talking about what it's
like being self employed, and paying taxes yourself, and what my kind of budgeting,
and tracking routine is. So if you're interested, check it out, but the thing is I actually
enjoy this process now. Like I used to be one of
those people who was scared to even look at my bank account, and now I check it like weekly at least. I always know what I have spent, and I know what I'm gonna
spend in the next month, and that makes me feel more secure, and I don't feel like I'm drowning. Third tip, of course you have
to pay more than the minimums.
They're kind of two main strategies when it comes to paying down debt. There's the debt snowball,
and the debt avalanche. The debt snowball, basically you would list all of your debts from smallest to largest. You would pay the minimum
on everything of course, but then any extra payments would go to the smallest amounts, and then once you pay that off, you would move on to the
next smallest amount. It's like a snow ball. This one is satisfying, because you at least get to start off, and get the ball rolling,
knocking things out, even if they are your smallest accounts, and then the debt avalanche
would be focusing on the highest interest rates first, knock out whichever account
has the highest interest rate, and then move on to the
next highest interest rate. So I actually think I did
kind of a combination of both. Obviously, generally I chose
just credit cards first, because of the higher interest rates rather than my student loans, and then I did pay off
some smaller accounts, like if I had an account with just a few hundred
dollars in the balance, I pay that off, but then I basically ended
up with two credit cards that each had about $4,000
to $5,000 on their balances, but anyway, the most important
thing in paying off debt is that you need to
somehow find extra money to be able to throw out those payments, whether it's an extra $50, $100, $500, whatever you can spare, you need to put it
towards your debt first.
Basically, if I ever had a certain amount in my checking account,
say over like $2,000, I would take everything over that amount, and put it toward debt. So where do you find that extra money? Well, there are two basic strategies. Either you can cut your spending, or you can make more money, and of course you could do both. For me, I've definitely gone
down the make more money route. I explained that in the past, I simply was not making enough
money to cover my expenses, let alone have extra
money to pay towards debt. So I knew that one way or another, I would need to make more money. I'm still of course very
mindful of my spending, but I do not have like a strict budget. I still travel, because I have to fly across
the country to see my family, and that's kind of non-negotiable for me, and I do like to treat myself
in other kind of smaller ways, but there are some financial
gurus who will tell you that you need to cut out
everything in your life that is not a necessity.
Like Dave Ramsey will tell
you to eat beans and rice, rice and beans. Other gurus will tell you
that your $5 daily coffee is ruining your finances. The thing is for some people being extra, strictly frugal can work, but for me, I knew that if I cut out
everything that brought me joy, and tried to live on
a super strict budget, I would just end up miserable, and I would hate the process, and if anything that
might cause me to fail, I definitely could have
cut down on certain things, but I probably would have
only paid off my credit cards like a month early, and to me that just
wouldn't have been worth making the whole process less enjoyable.
I mean, let's face it, paying off debt is not fun. You've got to get through it somehow, and you've got to make it
something that you can sustain in the long run. Like I like my Regal unlimited movie pass. I like gonna Starbucks a
couple of times a week, but at the same time I don't like go out. So I save a lot of money that I otherwise would spend on entertainment, or drinks. This is why it's important
to look at your spending, and look at your budget, and figure out what works for you.
What are your priorities, what are the things that you're
willing to spend money on that make you happy, and what things are you
willing to cut back on? But anyway, yes, in my
situation, increasing my income was a hugely essential element. Make more money. It's that easy, isn't it? No, YouTube is definitely unpredictable, and I'll admit that a lot of
my increased income this year has come from just being lucky, and a couple of videos
doing really well randomly. So if you want to support me, you can like, and comment on this video so that the algorithm will bless me. And if you're enjoying this video, I mean you could subscribe. Seriously though. Having YouTube be like my only source of income is interesting, because it does fluctuate wildly. Some months my only paycheck is my big Google AdSense payment, and then other months I'll get AdSense plus maybe
sponsorship paychecks.
So based on my earnings in the first few months of this year, I had estimated that I was gonna make maybe $40,000 this year, which is about $3,000
a month before taxes. And remember I have to pay taxes
plus self employment taxes. So my taxes are higher
than if you had a job that takes your taxes out for you, but I have had some better
than average months, which have raised my income,
and now I'm estimating that I'm gonna make
over $60,000 this year, which averages to about $5,000
a month again before taxes. Overall, it's very cool. I mean, again, I've never made more than like $20,000 a year. So I'm like, wow, making that coin, throwing it to the banks. I love it. I should never dance again. Here's the big question a lot of you guys asked on Instagram. Of course, this depended on how much money I made each month, because it fluctuated. Some people can do what's
called a zero sum budget where literally every
dollar in your paycheck is accounted for, but because I don't get regular paychecks of the same amount, I can't
really do a zero sum budget.
I have to look at not
only this month's income, but next month's income, and try to make sure that I will have enough
money to pay my bills. So I've brought up some examples for you. If I were to make it $3,000 pretax, that would be about $2,250 after taxes. My regular expenses like rent, other discretionary spending bills come out to about $1,800 a month, and my minimum payments
of debts earlier this year when they were at their largest, we're about $285 for student loans, and then $300 for credit
card minimum payments. So that's about $600 in debt payments, but if you do the math on
that $2,550, minus $1,800, minus $600, that wouldn't be enough. So in months like that, what I would have to do is underpay, or under save for my quarterly taxes, and then hope that I'd be
able to make it up in a month where I made more money. So if I were to make $5,000, I would pay approximately
25% toward taxes. I don't know my exact tax rate, but I use QuickBooks, and it just tells me how much
I need to pay each quarter.
So then after taxes I would have $3,750, and then after my bills, and discretionary spending, I would have about $1,800 left, which is about half of
my after tax income. So then I would pay again those minimum debt payments about $600, and then I would still
have about $1,200 extra to put toward a credit card that month. I hope this is making sense. So I've reviewed all of my
tracking, and everything, and I've tried to figure out
kind of what my trajectory of debt payments was like. Basically, most of my
debt payment progress has happened since June, and I've been able to make
a few big chunk payments to slowly knock down my
balances month by month.
These were my total credit
card balances by the end of each of these months, June was still at $10,000
so even from March when I made that first video to June, I didn't really make any progress. Then July I was at
$4,100 so I made a huge, huge, huge chunk that month, somehow. August $3,100, September $2,965,
and finally October, zero. That's still very surreal for me to say. Like I'll see it when I believe it, or I'll believe it when I see it, and I have seen it, and I guess I still don't believe it. I'm not making sense. So anyway, that pattern of debt payment probably looks quite erratic, but what happened was I was
so excited about paying more toward my debts that I was
kind of neglecting my taxes, my quarterly estimated taxes.
So I was paying too much toward my debt, and not saving enough for my taxes, and I realized that about
halfway through the year I was like, okay, I've got to pause the extreme payments, focus on catching up on my
taxes, and then continue. So that's what I did. It's so hard to pay
your own taxes yourself. Like when it's taken out of your paycheck, you're like, okay, fine,
but to do it yourself, to get that money in your
bank account, look at it, and go bye to 25% to 30% of you.
Kind of breaks your heart every time, but you got to do it. You don't want to be screwed
when it comes to tax time. We are responsible tax payers here, and by the way, from now on I am actually going to put aside, or just send a payment every single month rather than waiting until
the actual quarterly due date just because it'll be a lot easier on me, and of course now my
credit card debt is gone.
Every time I say that I could
like tear up a little bit, because it's just, it's
been with me for so long. My debt and I have just
been so interconnected. No, really it's, I'm very proud of myself. Can I tell you guys a secret? My hype song regarding
my debt payoff journey is "Gimme" by Banks. Listen to it. It's about getting what
you want, what you deserve, and I've listened to it a
shameful amount of times fantasizing about this
moment, and here I am, $10,000 in debt lighter,
and it feels great, and I just cracked my hip. (distorted music) Oh yes, I did the math again on how much interest I have paid so far in 2019 for my credit cards, and that amount is $838
just January to September. That's insane. It is so nice to know that
I will no longer be wasting about $100 a month just
on credit card interest. So now I have more questions
that I got on my Instagram.
Oh my God, I'm gonna, this shirt. Am I sweaty? Is that sweat? Yeah, it is. I'm unraveling. I'm supposed to look put together. I have questions for my Instagram. Let's continue. How do you resist lifestyle inflation? Basically, when you
start to earn more money, it is very, very, very
tempting to spend more money. How do you resist? Especially when you've been on a budget, you're like, oh, now I have
a little bit more money. Maybe I can go shopping. Maybe I can buy that thing I've wanted. It is so tempting, and it's honestly so easy
to spend that money away, rather than putting it toward your debt. So obviously for me, something that's helpful again
is when my paychecks come in, a portion goes to taxes, a portion goes to debt, and then I only leave myself with the amount that I actually need.
So I'm kind of taking my
own money away from myself before I can spend it on anything else, but also, I will admit I have
been spending a little bit more than I used to. I have still been traveling, I've bought some more clothes, usually only about $100 a month, or less. You know, it's fall. I had to buy new things, but again, generally, my spending has not increased too much, and my income has increased substantially. Maintaining of that bigger gap
between what my expenses are, and how much money I'm making
is obviously the difference. How do you stay motivated
during your debt payoff journey? For me, I love to watch, and consume a lot of financial content, and of course tracking
my spending does help me. In terms of financial content, I watch The Financial Diet, Aja Dang for her college
debt payoff journey. Sarah Nourse makes a lot
of finance related videos about how to be responsible, how to save, great stuff. Occasionally I'll watch a
little bit of Dave Ramsey if I want some, like honestly, if I want to see people who
are in like a much worse situation than me.
That's when I watch Dave Ramsey. I also watch a lot of those
like Millennial Money, like how people spend
their money type of videos, because now I have become obsessed. I want to know how much money people make, how much money they spend
on different things. Do you have debt? What kind of debt? How are you handling your debt? I've become incredibly nosy when it comes to personal finance. I wish I had x-ray vision just
to see into people's budgets, but yeah, mostly I stay motivated just by keeping my financial goals in the forefront of my mind. Constantly thinking about them, constantly seeing how I'm doing, and of course every time that
I paid off a credit card, or another balance, it's
a satisfying feeling, and it keeps you motivated to continue. What did you find was the most
helpful way to think about the process of paying off debt? To me, I just had to remind myself that the longer I take to pay this off, the more it's going to cost me.
It is not fun to throw
thousands of dollars at debt, but I have to remember I've
already spent that money, and now that spending is
costing me this amount of money in interest every month. So I'd like to stop wasting that, and just get it over
with a rip the bandaid. Don't put this onto future you, okay? Because past you already did that, and think about how mad we are at her. No, I like her. I'm really getting lost. Big question, am I saving
wow paying off debt? No, I am not. To me it just doesn't make
sense for me to try to save while I'm paying interest.
I would rather put as much money as possible toward those debts, get rid of them, and then
focus this hard on saving. It is important though to
have an emergency fund. So I really should, you know, take some time to build up a few thousand dollars for that, but I'm not gonna be
starting my retirement fund, or any serious saving until
my student loans are gone, or at least mostly gone. We'll see. I don't know. I feel like I just want to get rid of the
student loans altogether, and then move onto the next thing. It feels like a clean break. What is next? I was just saying exact same strategy, but with my student loans, and specifically I'm gonna try to pay off my parent plus loans first, just to help my parent's credit, so that they don't have
to worry about it anymore, and then I will focus on my own loans.
So I've got updates on that too. I've actually already paid a good amount of my total student loan balance off, and I didn't even really realize it, and my current school, because I transferred, my current school's financial aid package covers the entire cost of my tuition, and fees, and everything. So I have not had to take
out additional loans, and that has been major. If I had stayed at my first university, I would have graduated last year, but I also would have graduated
with over $40,000 of debt.
So progress, I did actually specifically pay off a Perkins loan. It only had about $500
left on the balance, and it was like a separate
thing to the rest of my loans, so I just wanted it gone. So I paid that off. The total for all of my
student loans were $27,405. Back in March the total was $20,747. So now I'm at $18,606, hell yeah. It seems a little bit crazy to cheer for that amount of debt. It's still a lot, but seeing that I've already just paid off $10,000 in credit card debt, and that I've almost
already paid off $10,000 of my student loans is amazing to me. That is really exciting, and I do want to be proud of myself, and see how far I've come, and I'm just gonna keep on trucking.
How has your credit score changed? I literally just paid off
the last balance of my cards like two days ago, so I
don't think my credit score has been updated since then. But I did use the Credit
Karma simulator thing, and it says that my score
will go up to about 750-ish, and I can't actually remember
what my credit scores have been in the past. I feel like they were in the good range, so I think maybe it's gone
from like a 650 to like 750. I'm very happy with that. I'm a big geek about my credit score. I want excellent. I want to hit 800 baby. We're gonna get there someday. Did you still use credit
cards while paying them down? Yes, I did. It sounds kind of counterintuitive. I have a Starbucks card, and I have an Amazon
card, so I did use those, because they're only for
like small purchases, and the rewards are
kind of worth using it, but no, for most of this year, I pretty much paid everything
with my debit card.
And now, recently I've actually gotten a new airlines reward credit card, so I'm trying to transition
to using credit cards, the smart way where you use
them to max out rewards, and then pay them off in full every month, and don't pay interest. So yeah, some people when they
pay off their credit cards, kind of want to cut them
all up, and burn them, and never use them again. I can see how people
might need to do that, or might feel like that's
better for them, but for me, I think I can responsibly use them, and not get carried away.
I want to take full advantage of the possible rewards, you know? But I do find it intimidating to think of paying off an entire month's spending all at once. So what I like to do is I
kind of pay off my credit card balance like every week, or two. That might seem like overkill,
but to me that's easier, and then what I look
at my checking balance, it's more realistic rather than having a lot
of money in my checking, and be like, oh cool, I have money, and then looking at my
credit card balance, and being like psych, that's
all go into my credit card. So yeah, and last question, what do you recommend for younger people regarding credit cards, and student loans? So I have given a good bit of
advice to my younger brother, because he's currently
a sophomore in college, and generally I would recommend
that like 18 year olds get their first credit card.
I know some people are scared of it because they think
they're gonna max it out, or I don't know, you might, but I think that for the sake
of your average credit age, it's best to get a credit
card as soon as you can as an adult just to
start aging that credit. But also I think it is important to learn how to use it responsibly, learn about credit, understand how you can
use it to your advantage, and then of course I would
recommend if young people are getting credit cards to actually pay them off, unlike myself, don't make my mistakes, but again, I don't really
regret a lot of my spending, because so much of it was
just necessary for me.
I had no other options. When you're 19, and not making much money, and you need to pay for bills, and you need to buy food, and you're not relying on your parents, and you're not taking any
money from your parents. I mean, what can you do? Sometimes you're desperate. So that's what I did, and I don't know what I would've done if I couldn't have used my credit cards. I wouldn't have had any
other options really. But that is why as soon as I was able to, I started this journey of
aggressively paying them off. So rather than ignoring my credit cards for another five years, I have taken these steps to make up for my past
irresponsibility, or mistakes. Hello? I know there would be
some people who'd be like, why would anyone ask for your advice if you're the one who was the idiot who got into $10,000 of debt? And my response to that is like, I think everybody makes
financial mistakes.
If you don't, I guess you're lucky, and maybe you have a lot of guidance, but a lot of us don't
have a lot of guidance, or we are in desperate situations, people who are in poverty, or who are living paycheck to paycheck, they don't have a lot of options, and that's why a lot of people
have to rely on credit cards, and other things that are not
the best financial decision, but sometimes it's all that you have. Yeah, but my point was just that just, because you've been bad
with money in the past doesn't mean that you cannot learn, and ended up really good with money. So Chelsea from The Financial
Diet would be a great example.
She used to be terrible with
money, and now she's a boss, and she's leading a literal
financial company, so… So then when it comes to student loans, I've actually started
a whole list of tips, and things that I would recommend
when it comes to students making choices about their loans. Should you take them out? How much is okay to take out, et cetera. So if you guys are interested in a video about student
loans, let me know. I would probably make it
like a hybrid of this video, and Internet Analysis. Make it more like student
loan facts, and information, and plus tips, not the
title, but you know. Anyway, wow, here we are. Thank you guys so much for watching. Again, if you want to
continue supporting me, and my channel, and my
debt pay off journey, just keep watching my videos, give me likes, give me comments.
It helps the algorithm like me, and recommend me a bit more. If you want to follow me on Instagram for some mediocre pics, you can do that. If you want to follow me on Twitter for some political Tweets, and occasional memes, you can do that, and just stay tuned for my next video. Okay, thanks, bye. (upbeat cheerful music).
seven thousand dollars is not a
fantastic balance no 125 interest rate so the installments are paid off completely
that so Apple had a thing going on if you want to get a product they will have you pay
over 12 months with no interest on it but so I already have all of that paid off that's that
does not contribute to the debt hold on okay okay but the rest is no you know it's you are past due
a thousand 133 past due why are you not making your payment so at least minimum monthly payments
on this okay I don't have any money okay so I mean in order for the past due to get that high that
means you must have been missing payments for a very long time very long time I'd say maybe
up to like a year a year of not paying on
– 80% of Americans are
living paycheck to paycheck because of debt. So, let's talk about how
to free up your finances and your future. (upbeat music) All right, this year we are doing a series on each of the Baby Steps. So, if you missed last episode, we talked about Baby Step 1, which is saving a $1,000 emergency fund. In this episode, we're gonna
talk about Baby Step 2, which is getting out of debt. So, we're gonna bring
on my dad, Dave Ramsey, who came up with the Baby Steps and has been walking people through them for the last 25 years.
And then we're gonna talk to a couple who are working their way
through the debt snowball, and they're in the middle
of their debt-free journey. It's great, because they're just starting to feel the freedom in getting
control of their lives, and best of all you guys,
they have hope again. Now, a lot of people think
that debt is not bad. Like, it's just a normal way of thinking. That's what society tells us. And in fact, 80% of Americans are living with some form
of consumer debt right now. Listen, you cannot create a life you love while you're in debt. When you are in debt, it forces you to live life looking
through the rearview mirror because you are chained
to stuff in the past.
So, how do you get rid of debt? Well it all starts with the debt snowball. Okay, this is the best way, the most effective way, to get out of debt. And this is the debt snowball: where you list out all of your debts smallest amount to largest amount, regardless of the interest rate, pay minimal payments on everything, and pay off the smallest debt first. And once that's paid off,
you roll all the payments, all the money you were
throwing at the smallest debt, to the second smallest debt. Then once that's paid off, you have the minimal
payments of the smallest debt and the second smallest debt to roll over to the third smallest debt. So it gets bigger, and bigger, and bigger. You're money continues to expand to start knocking down each debt. And I love this because what
this takes is motivation. And once you pay off that smallest debt, motivation comes.
Your
behavior starts to change. Now, some of you might
be thinking, "But Rachel, shouldn't you pay off the
highest interest rate first?" Yes, technically that would
be mathematically correct, and that method is what they
call the debt avalanche, which is terrible by the way. I mean, avalanche or snowball? Okay, snowballs are way more fun. I don't want to be caught in
an avalanche. No, no, no, no. So, stick with the debt snowball. But again, mathematically speaking, yes, the debt avalanche could
save you a few hundred bucks, mathematically speaking, but when studies have been done of people who do the debt snowball versus the debt avalanche, they actually get out of debt faster using the debt snowball.
Again, because it's all
about your motivation, it's all about your behavior change. And a debt snowball, it has worked for millions
and millions of people, and I promise, it can work for you. But up next, I wanna talk
about something that you need no matter which Baby Step you're on. (light piano music) So, earlier this year
I was at a live event, and before some of our live events we do these backstage experiences. So you can purchase these tickets and me and the other speaker will go back, and answer questions, and
meet people backstage. And during one of these
backstage experiences, this man came up to me, and he
was like six foot something, like huge, he was tall,
big, big, big beard. I mean just like this burly man. And he asked me if he could
talk to me for a second. And I was like, "Yeah, sure." And so he pulled me aside,
and he just started crying. And it took him a second to kinda console himself
to even get his words out.
But he began to tell me that him and his wife were on
the journey of the Baby Steps. And they were working their way through, and she actually watched
The Rachel Cruze Show for motivation, which is obviously so fun
to hear, I always love that. And I could still see though, obviously the sadness from his tears and the way he was talking
that something happened. And so, as he began to tell me his story, three months prior to that live event, him and his wife, they got in a car wreck, and she actually ended up passing away, leaving him with their
three young children. And so, at the time I was newly pregnant, and I mean, you just put
yourself in that situation and I'm like, that's the
absolute worst thing that could possibly happen, and that happened to him and his family. I mean, it's unimaginable. And then he began to tell me though that he had purchased term life insurance, him and his wife, and
they had it in place.
And so, he was saying, "Rachel, this is not the way to
get to Baby Step 7, but because of term life insurance, I don't have to work,
our house is paid for, everything's taken care of. And if we had not gotten that, this entire grieving process
would look so different." And in that moment, I was like, man, that's why we do it, you guys. We talk about term life insurance
all the time on this show, and you know that Winston and
I, we use Zander insurance, I talk about it all the time. And you might be thinking,
"Okay, that's great. Maybe I'll get it one day." But listen, stuff happens you guys, and you want to make sure that you and your family
are taken care of.
And I was so thankful
for him and his story that money didn't have to play a role in their grieving process.
Like, all of that was taken care of. And again, that's not the way you want to get to Baby Step 7. But man, how much more
stress, and heartache, and life heaviness would be on that family if they didn't have life insurance. So, if you do not have
term life insurance, go to zander.com, get
started on a quote today, because they will find you the best rates, and they're going to take
care of you and your family.
Again, if something were to happen, having term life insurance is
one of the best safety nets that you can have for your family. All right, up next I wanna
bring on my dad, Dave Ramsey, and we're gonna get back to talking about getting out of debt because this is one place that can free up your family as well. But debt in general, it's changed,
you guys, over decades now. And so, we're gonna hear all
from big Dave's perspective when it comes to that. (musical tone) All right, you're back. – I am. – Here you are at "The Rachel Cruze Show". – Almost like I work here. – (laughs) Almost, sort of. You're
sort of connected, I guess. Okay, so this episode's
all about Baby Step 2, and you've been known as
the get-out-of-debt guy for decades now. So I'm curious from you, you take calls on the radio everyday, what has changed about debt in 25 years? Like, peoples questions,
have you seen a difference from 25, 30 years ago with debt to today? – I think there's different, we've gone through different ebbs and flows of which kind of debt is
the crisis of the day, the flavor of the day.
When we first started, everybody was talking
about credit card debt, how evil and how horrible
credit card debt is, and we still think it is. – Do you find that people
are in more credit card debt, it's become more normalized
than even 30 years ago? What do you see around
that subject specifically? – 30 years ago people wrote checks. – Yeah. – And so, it was a big deal. – The chunk-chunk of the credit card. – You would run across the thing. – You know what I always
think about? Home Alone 2, when he's lost in New York, and he has to give it to the guy, and they pull it out, and they chunk-chunk, and he
gets into The Plaza Hotel. That's always my thought
of credit cards back then. – It's like pulling out the
cell phone in Jerry McGuire that's this big. Same thing. It shows you the age of the movie, right? So credit cards are,
what's happened with them is, the debit card has
eclipsed first the check, and now checks have
just about disappeared.
And then the debit card
has become so normalized, and we've helped with this.
We've made it very, very popular as an alternative to the credit card. So the credit card kinda looks like the dirty, crazy cousin
of the debit card now. – The crazy thing is that
Millennials, studies are showing, are actually getting into
less credit card debt than their parents were. – Because they have this option,
and it's been put forward.
I mean, people are starting to realize the credit card is the cigarette
of the financial world. It used to be cool, and
all the movies had it, in 1950's everybody's
smoking everything, right? And then people start talking about, hey this stuff kills you. And then the surgeon general came out. And then we put it in
the elementary schools and said, "Oh children, don't
smoke.
It will kill you". – D.A.R.E. programs popped up everywhere. – And that's what's happening gradually with the credit card, only
in a more adult level, to where the Millennials
are coming along going, hey, this credit card didn't
work for our boomer parents. They got screwed by
this. We're not playing. But it's not at the forefront
of society's mind today. Then we kinda went through this thing where we went from car
payments to car leases. Car companies realized they could make a lot more money on leases than they could on regular
payments on regular car loans, and so they start pushing. And today, 78% of the cars
that roll off a new car lot are car fleeces, and the reason is they
make more money on them, but we went through a phase because it was kinda
new and it was faddish.
And then of course we moved into the
student loan epic plague, because it has grown. It's exploded. – But the difference though, of 30 years ago with
students loans and today, is massive, probably
more so than car loans and credit cards combined. – Because of just the volume
of it, the number of dollars. And there's a little
bit of a stigma shift. You know, my generation
to the next generation, those are two previous to today. If they took out a student loan, they kinda did it holding their nose. And now everybody's like,
well that's just what you do. And so, the stigma has gone away from it.
The fear around it has gone away from it. But now this epic plague
is bringing the fear back. Which is good news because
it's waking people up going, this is not working. – So, debt has somewhat changed, shifted the conversations
around it in 30 years. But the way to get out and the mindset around it hasn't changed in the sense of the things you need to do. So, we talk about budgeting
all the time on the show about being intentional, and it's the best step you can take to not just get in control of your money, but to get out of debt. So, do you still find that to be true, that budgeting is still a key
part of getting out of debt? – Well, because you have to
control the fuel that you have to get out of debt with, and the fuel is the money. And the money, the way you
control the fuel, is the budget.
It's you turn it up,
turn it down. And you go, okay, we'll turn this one down, this one down, this one down,
so that more comes over here. And so we're cutting back lifestyle because we're sick and tired
of being sick and tired. We're really angry. We're really scared. We really have had it. We're
really going to change. And we're not going on vacation. And we're not going to a restaurant. And we're gonna dress the
kids in consignment clothes. And we're really, for the next 18 months, the next 36 months, whatever it is, we're really gonna sacrifice deeply, and that shows up in the written plan. That is not just a random
series of decisions. – Yep, so good. And then also, taking responsibility.
When you look at your life
and the mess you've caused, not to put shame, but to say, okay, I've done this. But then at the same time, I have the power to be
able to clean up this mess. Do you see that as still a huge
step in getting out of debt? – Absolutely, the power and the dignity to make their own decision. And, you know, and really the realization that no one's coming. The Lone Ranger's not coming.
Whatever's happening, the
pioneers are all surrounded, they're being attacked, or whatever, and the calvary is not coming. And so, you are the problem
and you're the solution. And that's both wonderful
news, and it's scary news. – Yes, absolutely. And then, the third is a tool that you've been teaching for decades now, is Financial Peace University. And we talk about this,
but getting signed up, going through that course,
being around like-minded people, this is a huge step to help
accelerate your journey. – In a much more intense situation, if you're dealing with
someone who has an addiction there's two things that they do. One is, they quit hanging out
with their friends who drink, if they've got a drinking problem, because you're gonna become
who you hang around with, it's just nature. And you know this because you don't let your
kids hang around people, the kids that are misbehaving, because they're gonna
misbehave like that kid. And so, you can't hang out
with your drinking buddies if you want to quit drinking because you have a drinking problem.
And guess what else you do? You get in a group of
people who are solving this, called 12 Step. And so, you go to Alcoholics Anonymous, and you sit down, and you go, "My name is David, and I've got a problem". Now that's a much more extreme situation. That's a heavier burden than just simply changing
your behaviors on money, but it's exactly the same
equation, only on a lighter form.
And so, you can't hang out
with your broke friends who are putting stuff in your
face on Instagram all the time that you can't afford, and
that they can't afford either, and you can't keep hanging out
at the bar, if you're a drunk, with drunks. And you need to get in the group of people who are positive peer
pressure in your church and in your 12 Step that are gonna turn this around with you. And so, you get around a
bunch of people who are going, hey, this is now, in this
group, being weird is normal. – Yes, and walk with it. So you guys, if you haven't
checked it out, do it. Because again, those are the things, besides just the debt snowball and the tactical side
of getting out of debt, that's really gonna help the mindset shift while you're in Baby Step 2.
– It's a very unusual person
that has enough backbone and enough chutzpah to completely change
their lives by themselves and not have people
like-minded around them, and not have continual content and input from new lessons coming at them. If you can just sit in
the corner, in the dark, and change your life, you would've probably already done it. – That's a good point, so good. Always wonderful. (hand clap) Thanks for coming in. – Good times. – So fun, so fun.
All right, coming up next,
Micah and Chelsea are here. They're on Baby Step 2, and we get to see what life
is like for them on this step. (musical tone) – Before we decided to get out of debt, we stayed frustrated with our finances, frustrated with each other constantly. – I was really confused
about how much we had, neither of us knew. – Every time we got a
check it was a relief because we thought, okay, finally, another band-aid to
kinda fix the problem.
We both grew up with money
being a huge stress always, and to start our family,
when we get married, I didn't want that same environment. I didn't want the inheritance
to be frustration. – Especially for our marriage,
and thus for our kids. – I'd heard about Dave
Ramsey when I was early 20s and knew he had written some
books, and that was about it. Something about pay something off and then roll that money to the next. – I had found the app through a friend, but didn't know it was
the Dave Ramsey app, a few years back. And I had shown him, but we had looked at so
many budget apps together, I think I caught him at the wrong time and he was just like, yeah, we're not gonna
do an app right now. It took him finding it and
being like, look at this, and us sitting down together
and really playing with it.
– I think the ah-ha moment for us was probably the same as most people when they do the budget
for the first time, is you see what's left over. She showed me, and I said, "No, that's not
right, you miscalculated". And there is an
unbelievable amount of peace to having every dollar, and
having every thing in control, and you're in control of it. – I tell people all the time,
I think it's actually freeing. It keeps us on the same page all the time. We don't have to fight,
I don't have to ask. – It's good for your finances, but it's also good for your
marriage, and teamwork. There's a transparency there that is necessary in a marriage. It's not just when you're debt-free, but it's while you're
in debt and budgeting. It's brilliantly titled Financial Peace.
It is a really comforting thing. – All right, Micah, Chelsea, thank
you so much for being here. – Thanks for having us. – So we always talk about how you can wander your way into debt, but you cannot wander your way out. And Baby Step 2 is tough because you have to be fully committed. And you can't just be on the plan-ish. We call that ish people. And so, you would say that
you were kind of ish people before being fully committed. So kinda tell me your story around that. – Yeah, so before we really dove into it, I guess we were as ish as it could be. I knew how to spell Dave
and that was about it. – There you go. – I knew Dave Ramsey.
I knew he had written a book, and that was about what I knew. We had some friends that
were hosting FPU, and we went to their house one night and got a cute little folder, and we were like, great, we'll order water
when we go out to eat. And we went to one class
and didn't go back. And also didn't realize it was
a regular thing you attended.
So it was, that started
Daveish, and we always knew, at least I always knew,
that credit cards were bad and snowballs were a thing. And so, we said we snowballed, but we might had done it once or twice. So we don't count out debt-free journey until we really started the budget. We just wandered in darkness and was confused and frustrated. – Yeah so, Chelsea, what
did marriage look like when you guys were in that season? – It was okay, but we just either avoided and/or I wouldn't even say argued as much as just constant frustration and miscommunication.
– Yeah, so were you guys, so you felt like you
didn't really have a plan, it was kinda just like here and there. So what was the catalyst? What was the point that you were like, okay, something has to change, something has to be different? – Every time she grocery shopped it was— – Those were arguments. – Okay, okay. – We felt good because
we had good intentions, but we didn't follow through
with any kinda budget. So we felt like, it's almost like, I think I'll start a
diet, and feeling like, good for me, I thought
about having a diet. (Rachel laughs) I feel thinner already. – I think I'm gonna be a
runner, that feels good. (group laughs) – So that was kind of the
mindset. We just stayed frustrated because there was always confusion. But as income increased, we start to see, I'm making more so we can
pay more, we can do more. And that was a hard part
when we initially started and thought we were gonna go at it, I had gotten laid off,
she had gotten pregnant.
And I started a job, and I
was getting $800 a month, and that's what we had, and there was no way of surviving. – The income was the
problem at that situation. – And so, just promotions and job changes, it kind of led and grew quickly, and then we saw we have enough to where we can really go at it. And that's always a Dave thing. If it's not a debt problem,
it's an income problem. And it was initially. – So what was the one thing that really helped you guys
get out of debt, would you say? – The budget app. – The budget app, EveryDollar, okay. So tell me about that? How was that, doing it for the first time? – I mean, it took us a few
months to really get in the groove and really start seeing, but even just the first
month he was like, what? I got done and it was like, we can put this much towards debt.
He was like, no, I don't
even make that much. Are you sure you did everything? And it was really freeing to see how much we could get
done as quick as we could. – And when we had started or
knew about Financial Peace, I kept thinking, financial
peace is when you're debt-free, but part of that peace
is having structure. – Even in the process, yeah. – And that budget brought peace. I mean, we're gonna be
doing our budget meeting on the way home, and that
was the turning point. – So compare your budget conversations before doing EveryDollar,
and all of that, to after, because it sounds like night and day.
– Oh yeah. It used to be, I would write
it down on a piece of paper, and sometimes he would, and
we do math really differently, so he'd show me what he did
and I'd be like, what? – How did you get there? – And vice versa, we'd
do the exact same thing, and neither of us even understood the way each other did math.
And then we'd end up not talking about it because you'd be like, you
know what? No, we can't. Either we're gonna argue or we're just not gonna talk about it, so a lot of times we didn't talk about it. – And so now, it's so opposite because you're on the same page. So would you say, we talk
about, especially with couples, that working together and doing a budget eliminates so many money fights and money problems within a marriage, would you say that's true for you guys? – [Micah] Oh yeah. – And not even just that, I think it's relationship building. It's more than just taking
out something. It's adding. It's changed so much of the
way that we think about it. – Within marriage, and then also, obviously,
with paying off debt, because doing a budget is a
big part of Baby Step 2, getting out of debt.
So what did you guys start with? How much debt did you start with? – Well, we didn't really know, and that was a terrible
feeling, is not knowing. And unfortunately for about a year we would get another letter
in the mailbox saying, hey, your ADS loan has
been bought out by so-and-so, and now you owe us this
with this interest. So ultimately, overall,
once we figured it all out, it was about $80,000–85,000. – Okay, and how much
do you guys have left? – $5,000. – $5,000. You're like, right there. How does it feel? Because, I mean, I know you're
technically not debt-free, you've got one more month, you've got to get that paycheck in, but emotionally it's there. So like, how do you feel? – It feels good to know that our money's going toward the green, it's going towards something, something that's really in the positive. And that alone is exciting. – So good. Okay, so what encouragement do
you have for people watching that are like, okay, I've
got my $1,000, I'm about to embark on Baby
Step 2 on this journey, and I think I'm
committed, I might be ish.
But what encouragement would you say to be fully committed to this process? – I would just say,
especially if it's a couple, just really be open to talking about it, and getting started, and
trusting each other with it. It just helps so much
to get on the same page, and you'll be shocked at
how much you can get done, even if you have a fairly small income. – I had a friend ask me,
how are you doing this? And my response, he took it as an insult, but I just said, well, self-control. And that's what we
don't have as Americans, as just people blessed
with so much that we have. If we wanna get it, we can go get it. Ultimately, I think it's just
self-control and patience. And that's the hardest
thing to have, to pray for, and to just manage. – Well you guys are incredible, I mean, seriously, the
amount that you've paid off, and that you're so close, and that you guys are
working together as a team. I mean, it just transformed, I know, so many different parts of your lives.
And so, I'm so thankful that
you came and shared your story. – Thank you. – Thank you guys so much, and I can't wait for you
to be debt-free next month. – Yeah, thank you. – So exciting, so exciting. Thanks for coming on. – Appreciate it. (upbeat music) I just love their story. And for you guys, I'm so rooting
for you to get out of debt. And so, I hope that this episode
motivated you to do that. Thank you so much to all of my guests for coming on this episode, and
thank you guys for watching.
Now to get everything that we
talked about in this episode, make sure to click the
link in the description. And I always want to hear from you and answer your questions. So, I set up a new voicemail just for you. You can call, leave your message, and I may answer your question in a future episode of
the show or the podcasts. So, just call 844.944.1075 and ask. If you haven't subscribed
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And as always, make sure to
take control of your money and create a life you love. (musical tones).
