Breaking Free from the Credit Card Blues

The episode explores the challenges of credit card debt and the importance of establishing positive financial habits. Michael emphasizes the need for self-reflection, open communication, and careful spending to avoid falling into the trap of unnecessary debt.

• Discussion on the importance of maintaining a positive outlook 
• Understanding the psychological factors behind credit card spending 
• Impulse buying and its long-term effects on finances 
• The social pressure to keep up with others and its consequences 
• Insights into the statistics of Americans with holiday debt 
• The significance of planning and budgeting in financial habits 
• The value of communication in relationships regarding finances 
• Encouragement to learn from experiences to avoid debt pitfalls 
• Tips for intentional financial planning and saving 
• Closing reminders for setting realistic financial goals

Transcript

Credit Card Blues

Speaker 1 0:00

This is Living your Success 24-7 with yours truly . Michael Caine , how are you doing ? Happy New Year . Everyone Hope the two weeks into this new year is causing you to set the foundation of a prosperous , healthy year .

Speaker 1 0:25

Okay , and so , wherever you are , listeners around the world , I thank you for taking the time to listen to me and supporting my podcast , and it's been a challenging road . It's tough out there , but I'm always optimistic and the sun is shining on me . That's how I see it . Even when it's dark , rainy clouds pouring down . At some point the sun is going to shine again , right , so rosy outlook for sure . I'm going to make that a habit to be positive . That actually is . It's a habit to look at things in a positive outlook , but recognizing issues , problems , challenges and failure . Yeah , they have to work . Yeah , I said it , they have to work .

Speaker 1 1:18

We all go down that path where things aren't working out , but you got to stop , stop and evaluate , review , reflect , meditate and plan and then , after you plan , you have to act and do . See . A lot of times we do all that other stuff preparation but we don't do it . Because what fear ? Another F word Failure and fear . Okay , that's what we're scared of . But you can't grow and you can't experience the good things without some level of risk . Right , and fear , and courage is not the absence of fear , no , no , no , no . You can have fear and still do courageous acts and courageous things , and so I'm asking you then , you know , just put that left foot forward and the right foot , left foot , and then also , all of a sudden , you're moving forward down your path .

Speaker 1 2:20

So what do I want to talk about today ? Let's talk about credit card debt . Uh-oh , sensitive , I know it's a sensitive subject credit card debt . Let's informally call this episode Credit Card Blues . Got the blues . You know what the blues man ? You heard the style Got the blues . You know what the blues man ? You heard the style of music blues . Dogged in ate my homework . The door not fell off , the car ain't starting Right . Things happen , bad things happen to good people , and good people do things that may not be as good as they should be . So we're going to Although this show isn't about habits , it's a byproduct of what habits Will do for you good habits and we want to get rid of those negative habits .

Speaker 1 3:21

Now let's talk . What about credit cards ? Let me get to the point . You find yourself , year after year , negative habits . Now let's talk . What about credit cards ? Let me get to the point .

Speaker 1 3:32

You find yourself , year after year after year after year especially 2024 , being overextended , weeks and months into the new year . Raise your hand . Most of us can raise our hand , most of us can raise our hand and we find ourselves in unnecessary debt and a lot of debt that we encumber ourselves with . We did it voluntarily . Nobody coaxed us . Maybe some did . Hey , just buy it . You can pay it off in three years . Just do it . Just live today . You know what I'm all for living for today , living in the present .

Speaker 1 4:10

But you do have to consider the future too . Where is that going to leave you if you're drowning in credit card debt ? Now , when you sign up for a credit card , of course they're not going to tell you that . They're not going to tell you and give you a lesson or preach to you that you better be careful . You could destroy yourself Self-destruct mode . So when the credit card companies do that not all of them it's with the asterisks , okay , and you do have free will where it's a choice .

Speaker 1 4:51

Now , sometimes people are taken when they're most vulnerable , and I know you want to give your family , especially if you have kids . You want to give them things . You want to show your appreciation and give them nice gifts . You want to take them on nice vacations . You want to give them things . You want to show your appreciation and give them nice gifts . You want to take them on nice vacations . You want to buy them nice clothes . You want to get them nice toys , all the latest electronic gizmos , the Android or iPhone you want to give them stuff . I get that . Some people probably were great to you . You want to give back return the favor . Some people probably were great to you . You want to give back return the favor .

Speaker 1 5:27

However , but asterisk coming , you got to consider what the impact will be on your present to the future . Are you going to struggle ? Are you going to just be drowning in a sea of red ? Are you ? Are you going to be sacrificing your future , not for weeks , not just for months , but years ? Look , I'm raising my hand .

Speaker 1 5:58

I was a credit card addict . I just do stuff on credit card to oh , I'll pay it off later . Card addict , I'd just do stuff on a credit card to oh , I'll pay it off later . And then the monthly , the minimum monthly payment got so large that I couldn't pay that off . So I couldn't keep up with that hard . So you do want to plan on being humble to what you can afford and people that really are supporting you and really your real family , real friends . They'll understand . If you can't give them a Gucci bag or whatever bag , a Rolex or you know whatever fancy $500 toy . And if they don't understand , well , maybe they don't really care as much as you think . So , and I know you're trying to keep up what they say keep up with the Joneses Sorry , joneses , you got the bad rep with this phrase here , but it's and I don't think it's a well .

Speaker 1 7:04

Some of the debt , I believe , is a sense of entitlement where you think I deserve just as much and stuff as Johnny and Susie down the street . Yeah , we deserve it too . We work at the same place , make the same kind of money . Why do they have all this stuff and don't seem to be hurting ? Well , maybe they are . Maybe they're not what it appears . Maybe they are having money arguments in a relationship , maybe they are a brink of divorce .

Speaker 1 7:38

You don't know people . They're not going to tell you all their business . Do you really want to join that negativity ? I'm not going to tell you all their business . Do you really want to join that negativity , the outcome , the result of being overextended from the holidays ? And so I understand .

Speaker 1 7:53

What do we have ? We have Christmas , birthdays , anniversaries , graduations , special occasions , whatever that is , and we celebrate , we buy gifts . Someone buys a house , we bring a gift when we come over for the first time . We do those things . It's kind to do those things , it's nice to do those things , but what you have to consider is what can you afford ? What can you comfortably afford where you're not screwing yourself , for the next year , the next six months ?

Speaker 1 8:27

And you know people , let's say this last Christmas , december 2024 , people were announced , two weeks later , of course , the people in debt billions of dollars , probably hundreds of millions , probably a billion worldwide , and they're probably not going to pay it off until what , april or May at best . Many people and many people . We're talking next year , because the longer you pay those minimum monthly payments or not at all , the interest is accruing , penalties are accruing as we speak , by the minute , by the second , by the minute , by the hour , by the day , by the week , by the minute , by the second , by the minute , by the hour , by the day , by the week , by the month , by the year , with some people , and so CNBC , to quote them , lending trade . They said 36% of Americans took on holiday debt . 36% , that's the ones that told the truth on the survey . You know that . And the average balance was $1,181 .

Speaker 1 9:38

Okay , it could be worse , could be Thought it would be worse actually , but it's still debt that a lot of people will struggle with and the interest will continue to accrue . At 24 , 28 , 29 percent and , of that number , 40 , 40 , 400 , 44 percent I need to get my glasses , my gosh . 44 percent plan to be in debt . Can you imagine ? Okay , I plan . In a way , I can see that because , let's say , you're budgeting another bad word , the B word . You're planning okay , we're going to put $1,200 , this , and the plan is to pay half it off this month , the other half next month . I can deal with that . I can deal with that , but what probably is worse is 56% didn't plan to .

Avoiding Financial Ruin

Speaker 1 10:32

It just came upon them . Call it impulse shopping , guilt shopping , call it what you want . They knew , they probably had some kind of clue they were going to be bad and do it , but probably wasn't fully committed to overextending themselves Possibly only they and God know , and so it's important . I don't want to be preachy , I really don't , but I want to raise the stop sign , the red flag and say be careful , folks , don't rob your future financial freedom , your future self . Do you have to make trade-offs ? Do you have to consider not having that ? Whatever it is , that gizmo , that boat , that car , that $50,000 vacation , that fancy , luxurious watch , necklace , gemstone , whatever it is , maybe not this year , maybe plan and save and invest for it . But don't impulse shop , don't just throw it on a carry-on without any plan , saying I don't know how I'm going to pay it off , but it'll have to happen .

Speaker 1 11:53

So many people are in self-destruct mode and get destroyed . Now that's what you don't see People being destroyed , their family , their divorce rate . People argue about what money . Money is one of the number one things people get divorced over financial infidelity , not telling your spouse you're throwing this on a credit card or probably using their credit card , and some people and lie about it . You don't necessarily go down with the problem , but the lying part and you feel ashamed and all this stuff . You can avoid all of this .

Speaker 1 12:33

I know we want our kids to have the best , but you know , I grew up in an era where you did whatever you can do , and people yeah , people may make fun of you . Don't give a damn about those people . Yeah , they're going to maybe call you names . Oh , look at them the way you dress . You don't give a damn about those people . Yeah , they're gonna maybe call your names . Oh , look at them the way you dress . They . You don't have the latest this , the latest that screw that , screw anybody that . Put you down of that . You don't need them . I don't care who they are , what title they are in your family or friends , or late , uh , work friends for frenemies . Whatever you got , you got to do you , you got to be you . And what do I want for you ? A prosperous future , a healthy future .

Speaker 1 13:17

Why I keep saying health , though ? Because you know what , without the health , the game is over , and money stress , other stress , can cause your health to falter . It could put you in a bad situation . That's why you need to take care of your emotional , psychological and psychological and physical health that Trinity , they are of health . You got to take care of all sides of that triangle . Otherwise , yeah , it can't get worse , because if your health is messed up or your finances are messed up and you owe everybody money . This could be end game here . You know where you're just destroyed just nothing , homeless , you know , don't think bad things can't happen to good people . They can . If we make too many foolish decisions or inappropriate decisions , yeah , it could be bad news for you and your family . Scare tactics no , I don't think so , absolutely not . But teach his own .

Speaker 1 14:20

Some people say , hey , mike , you don't know what you're talking about . Well , you do , you Do you , we do each other right . You do what you got to do . But just credit card blues . Be cautionary and save and invest for the future . Don't live all for the future and sacrifice today and not have fun . I'm not saying not to have fun , but perhaps you can't , like someone did I heard like put $80,000 on a credit card for vacation . I mean , oh my God , and you don't have that kind of income . The person didn't have that kind of income and job to warrant that . If you're making $300,000 , $400,000 , maybe $80,000 is not too bad . If you're making $300,000 , $400,000 , you know you'll deal with it , spending 10 , 15% of your income on a vacation , whatever . But if you make a hundred thousand or less , oh my God , you're kind of screwed there and I'm being polite when I say kind of .

Speaker 1 15:24

So guess what other happens when you're encumbered over , encumbered on credit cards . Goals are not met . You could have things planned out . There are significant other Hopefully your spouse and when he turns right , the other turns left OK , disharmony , disagreement . One of you turns right , the other turns left Okay , disharmony , disagreement . And goals not met . It could be opportunity costs because you're so indebted to the credit card companies where you miss something , a good deal on something Like how about a down payment on a house or that car ? That is a crazy price tag that you could have bought outright . Opportunity costs Can't spend to help your children , nicer clothes , vacations not made because the debt you can't afford , it now , before the debt you could have .

Speaker 1 16:26

You can't help others in need . There may be people that helped you when you're down and out before and you can't help them when they're down and out Now . You're down and out again . If you can't help them , joy and happiness is raw . Life doesn't look so good at this point because you're in a dismal situation because of a heavy debt load . So all these things come out of just well , let's put it on a card . And again , I'm preaching to the choir , because I've been there , done that , where I put things on a credit card , boom , $40,000 on a credit card . How are how you can get out of that . Forty thousand dollars , man , making like 70 , 60 , 70 , 000 . Wow , how's that work out ? Well , it doesn't work out and I know you heard not just me , other people out there in the world saying this , preaching and saying what you should be cautious about .

Speaker 1 17:32

So it's important that you plan and be intentional with your spending , with your saving and investing . And another thing you can't invest in your 401k or IRA or whatever Roth IRA or investments . If you straddle with debt . You can't do it . So you're literally robbing your future . So I encourage you highly encourage you to come up with a financial plan to save , invest and spend and be wise about your decision and communicate that with your significant other . So you're on the same page , but in a good way . Now I don't want both of you to be on the same page , but in a good way now . I don't want both you be on the same page and fly off the cliff either . Remember the movie thelma and louise ? They jumped right into the grand canyon . Spoiler alert movie's been out so long . You should know about it . If you don't . Well , I just gave the ending .

Speaker 1 18:40

So it's important that , um , you really consider every time you take that plastic out and I mean that credit card plastic before you throw some on there , unless you intend to pay it off within 30 days where you don't accrue any interest . Some people do that and they can master that . It took me years to master that when , literally , pay it off and before our discharged interest , and that's something people can do . That I I had to learn the hard way and however you learn , do learn off of other people's experience . By the way , it doesn't have to be your experience , because some people were almost near total destruction before they got it . Like me , I had another chance , another chance , another chance .

Speaker 1 19:28

Like a cat with nine lives . You don't know when that ninth life is coming and you run out of lives . You don't want to go there . I tested that theory . It's not pretty . So live the life you always wanted , as Michael Caine says in his book .

Speaker 1 20:02

Live the life you always wanted , as Michael Caine says in his book , this podcast . Back to video . You know , like YouTube , something like that . I have probably nine videos on YouTube from 2023 . And I said , oh man , I said I more want to be like a radio person , you know , just podcast . At this point will you hear my voice ? But I at some point probably go back to podcasts on a video . Probably will do that , but not now .

Speaker 1 20:37

And but life is interesting , okay , and it's meant to have fun , and everything I'm saying today isn't to rob your fun but to put you on that path of financial freedom . I'm telling you the things you shouldn't do , but I have a lot of podcasts for a hundred that do talk about investing and talk about saving and emergency funds and what you should do . I'll make a lot more of what you should do and some of the things maybe we shouldn't or should be thinking about . You know , not doing possibly , ok , any negative habits Of course we shouldn't do those . Any negative habits ? Of course we shouldn't do those

Creating Positive Financial Habits

Speaker 1 21:24

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Speaker 1 21:24

And so positive habits to start , with your spirit and your mind and your body saying , oh , it's a good day today and maybe things didn't work out that day , but don't drown your self-pity into spending money or , to you know , buying things you shouldn't . Ok , so perhaps you need to see a counselor , and I encourage that . And I don't give investment advice I'm giving you , sharing my experiences and observations of other people's experiences , and you know so . Just plan your life and be intentional , is my point , and don't get straddled with unnecessary debt . So that's it . I wish you well this year , this new year . Take advantage , it's a new year , new beginnings , new starts , restarting , resetting , and so that's it . Be safe , be careful , be happy . So this is Michael Caine , with Living , your Success 24-7 . Until next time , my friends , adios .