Taking debt off the table

• Welcome to the show, I’m Steve your host and today I wanted to talk about a story I’ve heard way too often lately: Debt Consolidation 
• Client named “Kay” (names are changed to protect the guilty)
• Kay’s story goes something like this… She racked up over $85000 in debt
   
  • Normal type debt, like credit cards, personal loans, car loan etc. Normal stuff
• Stress was killing her - actually it was keeping her up at nights. 
• One sleepless stressed night she saw a commercial for a debt consolidation loan and thought this was the answer
• She called bank scheduled an appointment.
• Heard all the right things and signed up.
• 4 years later, Kay found herself another $25K in credit card debt. Frustrated and back into the sleepless - stress filled nights. 
• Why is that? Have you ever heard of the Hippocratic Oath?
• It's an overview of the behaviors of a doctor to their patient. Today, we kind of simplify it with just three words. Do no harm.”
• What in the world does that mean for finance or money,

You Can’t climb out of a hole if you're still digging the hole. When I tell you to take the “oath” to do no harm when it comes to your money, what I’m really telling you is to never go into debt again Period, end of story. 

• Kay was the perfect example of this. 
• Consolidated her debts but didn’t change her behavior.
• If your debt was a simple math problem, we wouldn’t be in debt. 
• If you don’t stop the digging, You’re just going to fill it all back up again. You have to take the time to change your behavior otherwise you’re just going to get deeper in debt. 

• Ever hear of the Biggest looser?
   
  • Very overweight contestants compete to see who can loose the most weight
• Some, 300, 400,and over 500lbs
• During the show, they worked out 2-3 times a day, restricted calories severely. I was just reading a study that said not only did the majority of the contestants gain the weight back, but it severely affected their metabolism so it’s harder to keep off the weight.
• If they want to get back to the weight loss they had, they need to reset their mindset and metabolism.

• Just like weight loss, there is a better way that’s more sustainable. Trust me, I come to you today to tell you not to consolidate the loans, not to try and move things around, because this zero interest credit card will help me, and I can move this over here, and I can jumble these things around, and the more you jumble things around, the more complicated you make things. And it doesn't need to be complicated. Money does not need to be complicated.

How to stop using debt? 

1. Declare I HAVE HAD ENOUGH!
2. Save $1000 baby/starter emergency fund 
3. List all debts smallest to largest - pay minimum on all and attack the smallest, once that is paid put that minimum payment and any extra toward the next one. Keep rolling the payments over until you have all your debts paid.
4. Go back to your starter emergency fund and fully fund it with 3-6 months of expenses.

If you want to talk with us, here’s a link to schedule a Quick Audit.

#budget #moneymindset #debtfree #debtsnowball