The Truth About Debt: Why It’s Tricky and How to Simplify the Journey

Why Is Debt So Tricky To Pay Off—and How Can I Simplify It?

Debt doesn’t just drain your bank account; it drains your focus, confidence, and momentum. We brought clarity to a messy topic by breaking down why balances keep coming back, how to separate growth-focused borrowing from costly consumption, and what simple routines actually keep you paid off for good. Jason Taylor, CFP and creator of MyPocketFP, joins Julie Schwenzer to unpack delayed gratification, the psychology of spending, and the cash flow habits that make financial discipline feel easier, not harder.

We get specific about the difference between good and bad debt, with a plain-English framework: use borrowing for assets that grow or skills that raise income, and avoid loans on things that shrink in value. You’ll hear when rules of thumb fail, why interest rates dictate your next move, and how to prioritize payments without getting overwhelmed. Jason walks through two proven strategies for multiple debts—knock out the smallest balance for quick wins or attack the highest interest to save the most—and explains how to choose the method you’ll stick with over time.

We also tackle car decisions many people regret. Leasing can look sleek, but mileage caps, depreciation, and higher total costs can wreck cash flow. Jason lays out a practical path for staying out of the trap, plus no-nonsense credit habits: pay when you get paid, automate the essentials, and keep utilization naturally low. To keep motivation high, try his favorite mindset tools—visual cues tied to your goals, weekly money check-ins, and accountability that nudges action without shame.

If you’re ready to simplify debt, protect your cash flow, and build real traction toward a home, education, or entrepreneurship, this conversation gives you the steps to start today. Subscribe, share this with a friend who needs a nudge, and leave a quick review to help more listeners take control of their money.

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Transcript

Welcome And Show Setup

SPEAKER_00 0:03

Welcome to My Pocket FP, the podcast where your wallet finally meets its financial planner and they actually get along. Join your host, Jason Taylor, certified financial planner, money sensei, and your guide to financial freedom. Whether you're planning for retirement or just trying to figure out where all your money went last weekend, we've got you covered. Get ready to take control of your financial life with smart tips, surprising insights, and yes, an app that fits right in your pocket. This is My Pocket FP, because your future deserves more than guesswork.

SPEAKER_02 0:46

Managing debt feels overwhelming, but there are ways to make it simpler and less stressful. Welcome back, everyone. I'm Julie Schwenzer, co-host and producer in the studio with Jason Taylor, certified financial planner and the creator of My Pocket FP. Jason, it's great to be back with you. Thank you for joining us.

SPEAKER_01 1:04

Thank you, Julie.

SPEAKER_02 1:05

So let's dive in. A big question for so many people. Why is debt so tricky to pay off and how can we simplify it?

SPEAKER_01 1:14

Yes, that is uh something I deal with quite often and have throughout my career. Um, and you know, it all boils down to delayed gratification. Um something that I've seen, you know, a continuous theme in these conversations. Um, you know, the actual paying down of it's not a problem, it's letting it grow back that becomes the big issue.

SPEAKER_02 1:37

Yeah, and are you talking about good versus bad debt and what is okay and and what builds our credit? And then, like you mentioned, immediate purchases. Is that the the immediate gratification? Is that the bad debt?

SPEAKER_01 1:52

Yes, that's the the one we have the most difficult time getting rid of is the you know the credit card debt and the things that we want. Um, you know, that that nice new purse, the new pair of shoes, or the the new golf clubs, or the brand new toy that we want. Um, and that you know it goes for you know car loans and motorcycle loans and those things as well, the things we just can't wait to build our cash up to buy.

SPEAKER_02 2:17

And when we talk about good debt, because this is something that can be hard for people to digest, there's good debt, and I think about an investment in my future, even though, right, and that's like buying a home. I mean, what other examples of good debt that you as a planner are okay with with your clients?

SPEAKER_01 2:38

Yeah, in my mind, good debt is anything that will grow. Um, you know, like your house, um, a business loan, um, things that will that will grow, you know, you know, consumer goods, like uh once again, you know, boats, cars, and things like that, they depreciate. So you don't want to spend or get a large amount of loan for those type of things.

SPEAKER_02 2:58

Yeah, and it's amazing too, like, you know, mortgages and the the house purchase, such a huge, you know, huge acquisition for anybody. And um, it's it's interesting though, it's still considered a good debt as long as you don't wreck your house, right?

SPEAKER_01 3:13

And yeah, when you when you say good debt, you still don't want a lot of it.

SPEAKER_02 3:17

Is there a ratio that you have or a number that you like to look at? I know each client's different and has a different circumstances, but are there any guidelines you have for us about?

SPEAKER_01 3:27

I I try to stay away from those guidelines because it is case by case. And there's so many little nuances like student loans and things that don't get calculated in some of those standard equations that can really mess people up if they go straight from the guidelines.

Interest Rates And Credit Habits

SPEAKER_02 3:45

And what about like interest? Because it differs you know very much depending on what the loan is. Um, we know credit card interests needs to be astronomical.

SPEAKER_01 3:55

Yes.

SPEAKER_02 3:55

Um, what about managing debt like for clients and looking at what they owe per whatever it is, per loan?

SPEAKER_01 4:04

Right. Yeah, I mean we definitely try to knock away those credit cards and keep them in zero balance month to month. Uh and if you can't do that, you need to start getting rid of the credit cards.

SPEAKER_02 4:14

And then when is it good to have debt? Because you're trying to build a credit history or maybe improve your score. That one has always been a little bit of a gray area, I think, for a lot of people, because you know, you sometimes debt isn't bad, right?

SPEAKER_01 4:31

Yeah, you know, unfortunately, the credit score does promote debt. Um, and more than anything, it wants to show that you can pay that debt off. Um, that's what people need. People sometimes you know build up you know credit just because they want a higher credit score, but they forget about the side where they actually have to be able to pay it off as well to build that credit score.

SPEAKER_02 4:51

Is it a good idea to pay it off before the I mean, obviously, you know, pay it by the due date, paid ahead of the due date, what uh however long it takes for the companies to process that payment. But is there a a point and I've read about this and I don't know if it's true. So I'm asking you for help, Jason. Is it is there a good time to pay like before it's due that could help your credit score?

Paying Strategies And Mindset

SPEAKER_01 5:12

Yeah, I don't dive into you know credit score planning really. Um, it's mainly cash flow planning they look at. So if you get paid on the 15th and you have the money on the 15th, that's when you should pay it. Not wait you know until the due date, you know, five days later when some of that money might be gone. When you have the money, you pay it.

SPEAKER_02 5:31

It's good. Just get it off, get it off the table, rip the band-aid off, and just heal the wound, right? Um and what about managing multiple debts? Like, I mean, is there a way that you recommend um clients to approach that when maybe it's a bit overwhelming? Like have a plan, what do they do each month?

SPEAKER_01 5:53

Yeah, we definitely do a debt uh pay down plan where we actively you know go after one and kind of let another one slide and then go after the next one just to hammer those out. And you know, it can get very overwhelming and daunting for people if they've got you know too many items of debt.

SPEAKER_02 6:11

Yeah, and I can imagine at what stage in their life and if their kids are going to college, it's uh so many things happen. And like we're gonna talk about in the next episode if they're starting a business. That's a right. Oh boy. Um, and can you tell us a difference between debt snowball and debt avalanche methods?

SPEAKER_01 6:28

Uh you know, I don't know the specific terminology, um, but I know there are I I don't know debt avalanche, but I know the two different ways of paying it off is either you pay the lowest one off first to get rid of it, or you attack the one with a higher interest. Um, and that's once again case by case to really see how you can knock it out. Those are the two main uh philosophies is you knock out the lowest um balance or the highest interest rate. And each planner has their own methodology of dealing with that.

SPEAKER_02 6:58

And I imagine sometimes that isn't a bad thing, too, when let's say that you're choosing to lease a car instead of doing the whole payment at once. And I know you talked about depreciation, but that frees up your cash to do other things like investments. Is that something you have to look at too, like case by case?

Leasing Cars And Cash Flow Traps

SPEAKER_01 7:16

Oh, I would say most people should avoid leasing a car.

SPEAKER_02 7:21

Oh, can you tell us why? Because we got a lot of car leasures listening.

SPEAKER_01 7:27

Yeah, I mean, it's it's usually costs more than buying the car. Um, because you still deal with depreciation, and um, most people go over the mileage that's allotted for the lease. The lease companies are very smart and they set it just you know below the mark of the average driver. And then they they charge you more if you go over that mileage.

SPEAKER_02 7:49

Uh absolutely, and it's almost guaranteed now, too, because so many people are um you know relying on their cars for many things.

SPEAKER_01 7:57

Um exactly.

Motivation, Accountability, And Closing

SPEAKER_02 7:59

And what about helping clients kind of get over the hump? I mean, I imagine that this is another, you know, challenge for you is that you have to get them to budget possibly to simplify their debt. And like you mentioned, how important planning is. How hard can the conversation be at first when people realize the actual numbers that they might need to pay and at what time?

SPEAKER_01 8:25

It can be very hard, but it's that whole, you know, you you know, how do you eat an elephant one bite at a time? You know, how do you run 20 miles, you know, one mile at a time? Uh, it's really all about getting started. Um, and there's a lot of psychological tricks I use with clients to kind of get them um motivated and moving the right direction.

SPEAKER_02 8:44

Ooh, can you give us some examples of how you help shift that mindset and motivate them to just let's take care of this, just pay it off.

SPEAKER_01 8:53

Yeah. So, you know, a lot of times the debt is what holds them back from you know reaching a certain financial goal. And so what I'll do is I'll take a picture of that financial goal, whether it's buying a house or buying a new car or something like that, and put it on their credit cards, an actual picture of their goal. So every time they pull their credit card out or you know, even on their computer if they're shopping online, if every time they go to buy something, their big goal pops up, it makes them rethink spending that money.

SPEAKER_02 9:22

I like it. You're the voice of accountability, reason.

SPEAKER_01 9:25

Accountability, yes.

SPEAKER_02 9:27

That's very important. Um, I think we all need someone like you in our life, at least in our adult life. It's good for kids too, but yes. Well, that Jason, thank you so much for breaking down a tough topic and you brought in the clear steps, and we really appreciate it. Awesome.

SPEAKER_01 9:43

I hope it helps.

SPEAKER_02 9:44

Thank you. It did.

SPEAKER_01 9:45

Thank you.

SPEAKER_00 9:50

Thanks for tuning in to My Pocket FP, where we believe small monthly changes can make big positive changes in your financial end game. If you're ready to level up your money game, head over to mypocketfp.com and download the app today. Your financial planner is now officially pocket sized and doesn't charge by the hour. Until next time, keep your goals high, your debt low, and your pockets smart.