The Weight Of Money Podcast
The Weight of Money Podcast is about breaking down the principles of being productive individuals. We will be discussing various topic of different areas pertaining to financial lifestyle, building Foundations & more. The overall goal is to become better than you were previously so provoking the thought of that is my gift to the world.
The Weight Of Money Podcast
Tell Debt We Need To Talk...
Drowning in debt? You're not alone. Financial freedom might seem like a distant dream when you're buried under credit card bills, loans, and mounting interest, but there's a way out.
This episode walks you through proven strategies to systematically eliminate debt and rebuild your financial foundation. We start with the crucial first step that many overlook – sitting down with your family to create a transparent budget that reveals exactly where your money goes each month. Only then can you make informed decisions about debt repayment.
Ready to break the chains of debt? Subscribe, like, and share this episode as we work toward 1,000 downloads by year's end. Your financial transformation begins with the first step – pressing play.
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Welcome back to the episode of the Weighted Money Podcast, and I'm your host, dantes, and today we'll be talking about how to get out of debt. Whether you're deep in debt or just struggling, analyzing your situation is the first logical move. Take a hard look at what you owe and to whom. This is especially important if you have a family with multiple spenders in a household and you ask the question how does a family chisel away the day to become debt-free? The first recommendation that I have is for a family to sit down. Discuss the monthly budget. Without knowing how much is being spent monthly is very hard to determine where what can be allocated towards the family debt. Debt is a difficult subject to talk about for any families, especially young families who just got out of school. Inflation at an all-time high since early 1980s and increased gas prices we all are potentially racking up some additional deal.
Speaker 1:Number two consider going to a credit counseling service. A credit counseling service can be useful if you believe you can pay off your debts, if you only just had a little professional assistance, which is nothing wrong with help. Credit counseling agencies can help, for instance, negotiate lower interest rates with credit cards, or you will want to work with a non-profit credit counseling agency that is affiliated with the National Foundation of Credit Counseling or the Financial Counseling Association of America, which these people will give you the tools and utilizations of how to maneuver through certain credit problems, help you develop a budget, help you get a copy of your credit report scores and offer free educational materials and workshops and, most importantly of all, organize a debt management plan to help you pay down your deeds. So, even if you don't know how to go about doing it, when you go to a credit counselor, they make it more efficient and more easy for you to understand the breakdown of the debts that you have, so you can become debt free. And here we go to our next reason Prioritize the debts you need to pay.
Speaker 1:If you're really struggling and can't pay out each debt every month, it's important to prioritize the entity that you're paying. It's important to prioritize the entity that you're paying. Prioritize debts secured by a house or car, necessities like utilities such as light gas, water, debts that can't be discharged, including the student loans and unpaid federal taxes. Be a focus on the unsecured debts, such as credit cards. The credit card company may not love hearing that, but if you choose between making payments on your home and car should absolutely come before your credit card did, which is highly this, let's go without saying. People, you have to pay. You have to pay what you. You have to pay your house and car because you need a place to stay and you need a place to go when you don't have work, when you have work to commute to. So it's always important to weave out the unnecessary financing that you need and actually tackle the biggest problem. Then you go to the smaller ones, and this is another reason. I feel like this is something that goes without saying as well. This is something I feel like a lot of people need to go towards. Firstly, this is something that you need to take an account to when analyzing your situation pay off this with the highest interest rate first. If you're not working with an attorney to get credit card, this discharge or credit card counseling to get them paid off, you may want to adopt this debt elimination strategy.
Speaker 1:The elevation method of paying out debts. Work this way. Excuse me, for example, let's just say you have three credit card accounts, all of them with a lot of revolving debt. With the evidence debt killing strategy, you would take two of those credit cards accounts and make monthly minimum payments on them. The third card, the one with the highest interest rate. You will pay them off with as much money as feasibly possible without hurting your ability to pay bills and buy food and so on. Once that third card is paid off, you then can take the money that you were spending on that third card and you'll put that money towards the next card with the highest interest rate. After they pays off, you will put that money towards the last card.
Speaker 1:In other words, people, this is called the snowball myth. It's like a continuous cycle, and you know what a snowball do is it trickle down the mountain. It gets bigger and bigger and bigger the farther it goes down. The easier way to plan out doing the cards is tackling one by one. You can't hurt yourself by paying these credit cards out, because you do need to pay bills and food and everything else, and I feel like this.
Speaker 1:The avalanche method makes more sense mathematically, but it can take a while to see results because you're only just paying off the minimum payment, but because of that, many financial experts instead recommend focusing on the credit card with the smallest amount of revolving debt. It's why still making minimum payments on the rest of your credit card Once the card with the smallest amount have been paid off. Then you focus on the card with the snake smallest amount. There's some evidence that the snowball method, where you prioritize by the smallest balance first, help some people, but it creates the potential for quick wins that help maintain momentum. It matter list. What method did you pick? Then you pick something and stick to it. So, regardless of whatever you stick to or whatever you feel like, what method will work for you, as long as you develop a method to actually tackle your debt and actually pay it off, this is what matters the most, regardless of whether whoever may see you transfer your credit card balance. This is another thing that goes into within making your desk model.
Speaker 1:And we're back on the issue of credit cards. A lot of credit cards will offer zero percent interest rate on balance transfer deals for the period of 12 to 18 months as a way to attract new customers. It can be a useful way to kill off debt. You put save $3,000 onto a credit card that charges no interest for about a year and you spend that year or so paying it off. But there also are a lot of caveats that go with this strategy. For starters, you generally only get credit card with you. 0% interest on balance transfer if you have stellar credit, credit card is basically in good standing. Have stellar credit credit card basically in good standing. You will also want to pay attention to the balance transfer fee, which is usually three percent to five percent of your balance. It will also, if you buy a bunch of things on that old credit card and don't pay down on the balance you transfer to the new credit card, you can soon wind up doubling your debt, which is counter productive to what you were trying to do, because now you can put yourself more into the hole.
Speaker 1:And another strategy that we can look at is refinancing debt and be a formidable strategy to reducing what you owe. While it can take time to receive approval, refinancing can help you lower your monthly payments long term. Of course, keeping that in mind, with some types of refinancing you may be looking at extra costs or extending loans, so the loan is more expensive in the long run. But people like I have a friend now. He owes a certain amount on a car or a vehicle but, as I told him, he has to maneuver it in a way that allows him to pay down less when you refinance. You have to. You have to basically pay your debt down to a good amount to where now you can go to the table and negotiate your pricing to the people that you owe the money to, whether it's a car or whatever you can be able to sit down and refinance your debt. Okay, so I paid this much off and I have this much left. Let's get my payment lower now, since I'm in the correct standard that I need to be to where I can actually be able to pocket more money and keep more money in my pocket. Therefore, I can go on other stuff and not just solely on paying off a loan contract or a continuous cycle of me giving long-term payments and it's still being expensive.
Speaker 1:So, with all that being said, people make sure if you paying off your debt and you feel like you should be able to get an award, you should be able to go negotiate prices. You consult with somebody that's like a debt expert, or if it involves with your credit or whatever, you get somebody, you get with a credit counselor and speak to them on what you should do, because me, I am not a financial expert. I give the information to y'all that I intake to help better y'all, to help better the situation, that we all in get somebody else up. It takes more for us to pull one of us out the ground. So it can't happen if we never extend a hand. If what needs to be taught to the kids, to the parents, it just not needs to go to everybody, because if we did know these type of things early on and they were drilled into us, like a lot of other stuff is, we would be a way better society.
Speaker 1:And, with all that being said, having extra cash, of course, can be quite a hat trip when inflation is still high. Accelerating payments can end your debt faster, but there's no rules that says you only have to make one monthly car payment or one house payment or one payment to a credit card balance if you're trying to wield it down, if you can, if you do have extra funds that you do pay your bills off and everything else is, finally, is taken care of. If you have enough money, try to pay it at least twice a month. Therefore, you'll be okay, you'll be. You'll less pay, and the more money that you pay towards your debt, the less interest you'll have, the less interest charges that you'll have for your next payment and you keep paying it down until you eventually have no more. And people? This is common sense, and I feel like this is something that a lot of people do not take seriously. This is the main rule that people break when they come down to getting out of debt.
Speaker 1:Stop creating new debt. You cannot dig yourself out of debt if you continue to allow credit cards for any expenses. Stop accruing new debt. Focus on a cash only lifestyle. Lock up credit card and hand them over to a trusted friend or family member to hold them for you and this might sound out of character or bizarre, but it does. Some people really don't have the financial tenacity to actually stop spending. They see, oh, I have money on my credit card, let me just use it. And knowing they can't pay it out, they know they can't suffice already, with the living condition that they're probably in and all that, you're building up more debt just for you to pay in a long time. So it's just like let them know your goal is to get out of debt and ask for their encouragement and support. Sharing your goals with someone who can hold you accountable is a powerful tool to make changes that stick. Yes, let people know that you're going through a tough time.
Speaker 1:Don't try to pretend, going out oh yeah, I got it, I got it, my bills are, are paid, my this and that and you go to every party and every function and buying food and you have no money. You have nothing to sit on for real. But at the same time but this is what we do a lot of people who engage just say, for instance, if you going out with your friends or y'all going to a concert, at the eat or whatever the case may be yes, if you see a lot of people giving into the that group temptation of being like, even though I ain't got it, I'm gonna spend it so I can make it look like that I don't have a lot of money, or either I'm gonna go with the last that I got and just try to go, have a good time and think about it later, and that's not the way to live and it's a lot of young adults and people doing it and it starts from being a teenager and being an adult and then you having to work 57 years or 37 years at a job that you don't want to be in. It sucks that people even have to go through the certain stuff that they have to go through, but they put themselves in a position to actually trickle down. And so, with all that being said, we talked about what we need to do when we're talking to people have people to help us with it, keep our credit cards and stuff like that. What can you do more on a personal level? Maybe not involve calling the person or whatever the case may be, or have people to basically do an intervention, create an emergency fund.
Speaker 1:Unexpected events, like a car breaking down, can destroy your finances. Like car breaking down can destroy your finances can say, for instance, you having to get a tire that may cause like. Tires now are very expensive. They cost almost two hundred dollars just to get a pair of tires replaced. So it's a lot of money when your car starts breaking down on you. And then you have bills, you have other things that need to be taken care of, or, whether you're a school student, you have books that need to be bought, you have tuition that needs to be paid. It's a lot of stuff that goes in between it, and now it hurts your pockets to do that and then now you're in a whole situation to where you can't even pay for the smallest inconveniences. This habit is the key because it will build you on to prevent yourself from getting into more debt in the future.
Speaker 1:After all, why did you go into debt in the first place? You didn't have enough in savings, so you rely too much on credit cards, and that's the worst place you'll want to end up. People and I didn't heard the excuse of people going to leave in jobs or leave leaving areas to go get more money, or but at the same time, as a person, I know people who may enlisted them and still paid off their debt, still paying off. So it's all about how dedicated and how willing you are to put your finances to work for you. How bad do you really want to get out of that situation? So, and if you never had money to draw upon for purchases that you know are coming, like holiday gifts, birthday presents, or one-off like paying for your kids school photo you'll probably find yourself on relying more on credit cards. Doing that, of course, can put you farther in debt. So one of the things that you should do if you want to get out of there is getting in a habit of saving money.
Speaker 1:When I tell you, this is probably one of the hardest things. This is probably one of the topics that people make hard for themselves. This is one of the topics that I have heard people say the most about. It's hard for them to save money, it's hard for them to keep back, but at the same time, they go out, they partake in drinking, they buy clothes, they buy shoes, high-end shoes. This is the problem. If you set it up through your bank so that the moment that the red deposit hits your checking account, some of it is diverted to a savings account for a few months, you will now have a small pile of money on your own that can raid and instead of turning into a credit card meaning you can already you can have your little next egg boom, while everything else your personal funds or your bills all that can be going out through your personal account. And that's another thing too. When it comes down for people doing debt management and trying to build emergency funds, all their money is in one place. So even the money that they're supposed to be putting it in their account, they don't have an account to put in. So make sure people, when you're trying to create an emergency fund, get a high yield, saving interest account. Two, put yourself in a better predicament later on because that money there's. Like the stock market, it's the long game the more you put in, the more you can possibly get out, and it's all about what you're envisioning and how you partake in your time and use the money that you do have to further yourself and get yourself out of that bad predicament.
Speaker 1:Use cash as much as possible. People Paying in cash isn't practical for a lot of expenditures, but with some purchases, using cash can be a practical and smart way to manage your money. My number one tip is for people paying off a lot of high interest debt is to adopt a cash budget for groceries and fun money. Using cash forced me to realize how seemingly small purchases add up. I had to become more intentional with my spending and plan ahead for things like birthdays and events. Safe and easy right.
Speaker 1:You make hundred dollars well, every two weeks, so you take about three hundred dollars out every month let's just say that's your fun money and spend like one. And you spend like let's just say, ninety dollars on fun going out to eat, drinking, whatever you may partake in. So that only leaves you like what? Seventy or eighty dollars all you can really do is go fill up your car with gas and that's it. That's probably enough for one door to ash meal. But you see how fast you just blow money. Imagine if it was on your car along with your other money, you seeing like I got $900. Then we go speed. That's the problem. You're not looking at the cost efficiency of like, okay, what if I would kill that $200? I just mean what if I would kill the money that I put into this certain thing? I'll be able to take care of my tire, I'll be able to pay my bills, I'll be able to do this in there and you can't.
Speaker 1:So, people is good to adopt ways it's putting the ways to save money but, people, you got to be actually intentional and prioritize ways to actually do it and not sit up here and just say you're going to, you fall off from doing it and then you stop. Money is not gonna save by itself. Sometimes it's say it takes a while because it depends on how big the dead hole is. For you the dead hole is bigger, you have less to save and it's hard for for, certainly, but it is possible. So always remember that, people. It may be hard now. But it's always possible for you to come out that hole and actually become something greater for yourself. And just putting yourself out there to know to be like okay, I know, I need to get this done, I need to do the adult thing and put myself out there to be able to maneuver through this debt, I can't get through it. I want a house, I want a life that is furnished, because I don't want my kids see this is what I represent, this is the, the debt I got myself into. So you just have to take account of where you messed up and, like I said, this also plays a part too on actually taking accountability and making sure you pay your bills on time.
Speaker 1:When you're deep in debt and you're struggling to get out, it's so easy to fall into a habit of making payments when you can rather than when they are due. Better late than never, but late fees do a lot of damage. Late fees for your mortgage payments is your car payment, your utility bill, phone bill, student loans and credit cards can add up. If you can manage to pay them all on time for a month, you'll probably have a quite a bit of extra money to go toward the savings or day-to-day expenses and what it means. People credit cards if you are late, your credit card can drop to the. I think the most in hand drop is like a hundred and eight. Your credit score will literally shoot down dramatically people with if you don't pay it on time. This is the problem that I feel like a lot of people don't see until they see their number. They, until they see that number, hit that credit card because it's scary. It gets to their point, to where you don't think it's going to. It's not that bad, but it is.
Speaker 1:Credit cards are not nothing to play with. They are not for the irresponsible. You will have to take responsibility because the old people want their money. If not, the debt is going to just keep getting bigger and bigger and bigger and you're going to get in a bigger hole. There are some people out here now with 300, 200, 400 credit score. They were late paying the car. They didn't have no type of responsibility about themselves. They were out here just living up a dream and not taking accountability. This is what happens when you don't take accountability and gesture yourself to be able to okay, let me buckle down and take care of my debt. This is what happens when you don't take accountability and gesture yourself to be able to okay, let me buckle down and take care of my dick. This is what happened. You can't even pay for nothing.
Speaker 1:I'm pretty sure, having a 200 credit score, you couldn't even get approved for apartment, because that shows your credit score, shows how trustworthy you are with your money. People may think, oh, credit scores don't mean nothing. Yet yeah, if you're irresponsible, of course you know how many millionaires that said they went broke six, seven, eight times and I don't understand who would want to do that. How would you even want to just sit up and say you went broke that many times, you didn't learn the lesson, you didn't like what's going on and that just shows you how irresponsible a lot of times is. Because you get tired of feeling People get tired of getting set back. People get tired of being at the bottom but at the same time, people, you got to take initiative. That's all it takes people.
Speaker 1:If people just took initiative and actually seen the progress and how good it feels to be debt-free and not having to worry about nothing, it's way funner than being full of debt. It's way better. And that's what we come in there to just budgeting and managing our expenses, to how we look at our money, and a budget that I feel like that's kind of strictly straight to the point is a bare-bones budget. This is a much fun as it sounds. Still, it should be effective.
Speaker 1:One key strategy to cut back to a bare-bones budget which frees up more funds to devote to the vote to paying down D. This means a budget focus on just the basic housing, food utilities, transportation and be you. Eliminate all discretionary spending such as entertainment, travel, clothing and use. Prepare our meals at home, keep them close eye on when and how you water and electricity, and try to negotiate lower rates for essential services such as insurance. If you start feeling discouraged, remember your bare bones. Lifestyle won't last well, it's only temporary, and I understand people like oh, I can't do that, that's way too extreme for me, and they're like don't panic. It sounds like a trite of life, but it's still worth saying. It can be scary if you're truly deep in debt and you can see that the math is showing that you can't pay everything on time. But there are options from you talking to credit council professionals, talking to the places that you owe money to, or even declaring bankruptcy, which is the last thing, people, I urge you not to do. But if you have to, then I feel like, if you feel like there's no other way, then I feel like that's what you have to do.
Speaker 1:Bankruptcy I would want to explain what bankruptcy. Bankruptcy is a legal proceeding initiated when a person or business cannot repay outstanding debts or obligation. It offers a fresh restart for people who can no longer pay their bills. The bankruptcy process begins with a petition filed by the debtor, which is most common, on behalf of creditors, which is less common. All of the debtor's assets are measured and evaluated and the assets may be used to repay a portion of the outstanding debt. Bank real estate offers an individual in theory. The ability to file. Bank real estate benefits to the overall economy by allowing people and companies a second chance to gain access to credit and anytime that you do a bank roster case. All cases bankruptcy cases in the united states go to the federal courts. A bank roach judge makes decisions, including whether the debtor is eligible to to file and whether they should be discharged or their debts, and you have administrations over bankruptcy cases, often handled by a trustee, which is an officer that is appointed by the United States Trustee Program of the Department of Justice that represents the debtor's estate in a proceeding.
Speaker 1:So, people, with all that being said, it's a lot that bankrolls that you will even want your name to be tied to. Even though you do get a fresh start, your credit goes. Your credit goes to a place that you don't even. You can't even imagine how low your credit drop no credit drops. A lot is literally none existing. You might be at a 100 or maybe lower. It's scary when you do bankruptcy. You get a fresh restart in life but just know it's hard to come back from it because all that is with you. You can't go get no more loans because if you go back and get into that at the bankruptcy, you gotta SSL. Can you even be trusted with money? Just tell me that it gets to a point to where you're. You're gonna get the client everywhere you go because you have bank versus behind your name. That's a big no-no, as people say now. That's a red flag. That's a big red flag because they see you as a liability. You're not going to pay me back what I need to be paid and why should we even deal with you? And that'll be the end of this episode.
Speaker 1:People, and I wanted to thank you all for watching and tuning in. For all you know, for all the episodes that y'all been I've been showing support y'all been downloading. Make sure y'all keep downloading the episodes. We are almost at 500 downloads. We try to be at 1,000 by the end of this year. Subscribe to the YouTube page, go like, go comment. Let me know what y'all want to see. I'm on Apple Podcasts, google Podcasts, amazon Music, spotify, go follow. Turn your notifications on on YouTube so you can see when I post and I'll see y'all in the next episode.
