2676: Climb Out Of Massive Debt with These 10 Life Changing Steps by Andy Hill of Marriage Kids And Money

[00:00:00] This episode is brought to you by Shopify, whether you're selling a little or a lot.

[00:00:06] Shopify helps you do your thing, however you chitching. From the launch your online shop stage,

[00:00:12] all the way to the, we just hit a million orders stage. No matter what stage you're in,

[00:00:17] Shopify's there to help you grow. Sign up for a $1 per month trial period at Shopify.com

[00:00:22] slash special offer, all lower case. That's Shopify.com slash special offer.

[00:00:30] Dreaming of a better sleep, tossing and turning is not your destiny. And Ali is here to help.

[00:00:36] Ali invites you to sink into sweet, sweet slumber to improve your mental and physical health

[00:00:42] and overall wellness. More than just melatonin, Ali's ingredients help you

[00:00:47] wind your mind for a delightfully dreamy drift off.

[00:00:51] Sleep is on the way at Ali.com that's olly.com

[00:00:58] This is Optimal Finance Daily, episode 2676. Climb out of massive debt with these 10 life changing steps

[00:01:07] by Andy Hill of MarriageKidsInMoney.com

[00:01:10] and I'm your host and personal finance enthusiast, Diana Merriam.

[00:01:14] This is the show where I serenade you with the sweet sounds of personal finance knowledge

[00:01:19] from some of the best blogs on the planet with the author's permission of course.

[00:01:24] And we're going to get right to today's post as we optimize your life.

[00:01:31] Climb out of massive debt with these 10 life changing steps by Andy Hill of MarriageKidsInMoney.com

[00:01:39] When someone has a large amount of debt, finding a way out can feel impossible.

[00:01:44] The scattered accounts, the interest rates and the stress of keeping up with the day-to-day expenses of life

[00:01:50] are enough to drive us crazy. After interviewing around 100 individuals who have conquered their debt

[00:01:56] and moved onto building wealth, I've learned what it takes to say goodbye to debt forever.

[00:02:02] Here are the 10 life changing steps that came up repeatedly throughout my interviews.

[00:02:08] Number one, fully commit to debt freedom. When you've simply had enough of your giant pile of debt,

[00:02:15] it's time to truly declare that you're ready to clean it up. Tell your spouse, proclaim it to your

[00:02:21] friends or even shout it out loud on an awesome podcast. Most importantly, commit to yourself

[00:02:28] that you will make a change today. Like any other monumental moment in your life,

[00:02:33] declaring your intention is the first step towards making the impossible possible.

[00:02:39] Commit to doing something incredible today. Number two, analyze your debts. Gather all the

[00:02:46] information about your current debts and lay it all out on the table. You want to understand

[00:02:50] two important details, your current balance and your interest rate. Number three, create a budget.

[00:02:58] When you have your income and your expenses all laid out in a budget for the first time,

[00:03:02] you get a sense of control that you've never had before. This simple action will put you in charge

[00:03:09] of your money instead of the other way around. I've used Mint for over five years to manage

[00:03:14] my family's budget. It's helped my wife and I do some amazing things like communicate openly

[00:03:20] about our finances, plan our future together and even destroy our mortgage in less than five years.

[00:03:27] If you're more into spreadsheets than online systems, check out Tillor. It helps you easily track

[00:03:32] your spending and even syncs up your accounts to make the budgeting process simple.

[00:03:38] Number four, choose your debt destruction method. Once you understand your debts and how much you

[00:03:44] owe, it's time to destroy the enemy. Sorry, debt, you're the enemy. When you're combating

[00:03:51] your enemy, you need a good battle strategy. Here are three to consider.

[00:03:56] Debt snowball. How does it work? Line up your debts from smallest balance to largest balance.

[00:04:02] Pay off the smallest one first then move on to the next until you're debt free. Why does it work?

[00:04:09] This is a proven method that keeps you motivated to press on. By getting a quick win,

[00:04:15] you'll be excited to continue crushing your debt. Debt avalanche. How does it work?

[00:04:21] Line up all your debts from the largest interest rate to the smallest interest rate.

[00:04:25] Pay off the debt with the largest interest rate first then move on to the next one until you owe no

[00:04:31] one a single dime. Why does it work? Where the debt snowball is more emotionally driven,

[00:04:38] the avalanche works best for those of us who see the benefit of paying less interest immediately.

[00:04:45] Debt hatred. How does it work? Line up all your debts from the one you hate the most to the one

[00:04:50] you hate the least. Pay off the debt that makes you the angriest then move on to the next one until

[00:04:56] you're debt free and happy. Why does it work? Paying off a boatload of debt is going to be an

[00:05:03] emotional marathon for you. By clobbering your biggest debt villain first, the ones that follow

[00:05:09] won't seem so tough to beat. Number 5. Decrease your expenses. You might be saying this all sounds

[00:05:17] well and good, but based on my budget, I'm spending more than I'm making. Congratulations!

[00:05:22] You've uncovered your first major problem to solve. If you're spending more than you're bringing in,

[00:05:27] it's time for a gut check. Do you care more about Amazon Prime or insert any other unnecessary

[00:05:33] expense than your debt freedom? No. Then it's time to get rid of it. Here are 10 quick areas

[00:05:40] that you could consider trimming. Grocery spending, cable package, cell phone plan,

[00:05:47] entertainment subscriptions, gym memberships, expensive hobbies like golf, etc., alcohol and cigarettes,

[00:05:55] eating at restaurants, non-essential shopping like for decor or extra clothes and Amazon gadgets.

[00:06:04] Number 6. Learn to say no. When you're working on becoming debt free,

[00:06:09] you're simply going to have to say no more. You won't be able to buy as many things and you

[00:06:14] may have to miss out on some potentially fun upcoming events. Realize though, when you're saying

[00:06:19] no to some things, you're saying yes to debt freedom. You're saying yes to less stress,

[00:06:24] less worry and more control. Number 7. Increase your income. If spending isn't your issue,

[00:06:31] then perhaps income is. It's time to become a magnet for money. Increasing your income is not

[00:06:38] only a great way to eliminate debt in the short term but long term it's the way of the wealthy.

[00:06:44] You might as well start practicing being a millionaire now because that's where you'll be

[00:06:48] headed if you keep it up. One of the best ways to make quick money is with your current employer.

[00:06:54] If you're exceeding expectations at work, ask for a salary increase. If you're not exceeding

[00:07:00] expectations, you should start. Additionally, consider a side hustle that brings in money during

[00:07:05] your free time before work, after work and on weekends. If you have a hobby that you're passionate

[00:07:11] about, that could be a great place to start. Number 8. Realize this is temporary. Will you always

[00:07:18] need two jobs? Will you never ever get to play golf again? No. This time of lack or season of

[00:07:25] hustle will last only as long as your debt's around. Once you're debt free, you can bring back some

[00:07:31] of those expenses you've always enjoyed. Just be sure it's in the budget. Number 9. Celebrate your

[00:07:37] wins. Every time you pay off a debt, be sure to celebrate like you just won the lottery. You are

[00:07:43] doing something incredible here. With my wife and I paid off my student loan in her car loan,

[00:07:49] we popped open a nice bottle of champagne and binge-watched breaking bed. Yeah, that's how we celebrate.

[00:07:56] After we paid off our mortgage, we let our kids whack a pinata made from our debt papers. It was epic!

[00:08:02] Find your special way to celebrate and then get ready for your next challenge. Be careful. You might

[00:08:08] just start to have fun with this crazy personal finance stuff. Number 10. Drink the wealth building

[00:08:14] coolade. Once you start clobbering all your debt, you may just realize how fun this is. Building wealth,

[00:08:20] growing your net worth and creating a strong legacy for your family may just be one of the best

[00:08:25] things you've ever done. Without any consumer debt in your life, what would you be able to do?

[00:08:30] Think bigger. If you were financially independent and didn't have to worry about your daily expenses

[00:08:35] anymore, what would your life look like? How would this change your family tree? How could your

[00:08:41] debt freedom allow you to make a difference in your community? When you start to answer questions

[00:08:46] like this for yourself, a fire starts to burn inside. Your slight motivation begins to turn into

[00:08:52] a passionate desire for change. This is when you start to realize how much fun it would be to be

[00:08:57] a master of your money. You just listen to the post titled Climb Out of Massive Death with these

[00:09:07] 10 life-changing steps by Andy Hill of MarriageKidsAndMoney.com and I'll be right back with my commentary.

[00:09:15] If you've been using Mint to manage your finances, I've got some bad news. Mint is shutting down.

[00:09:20] But now for the good news. There's a better alternative. Our sponsor Monarch Money. Mint users are

[00:09:27] turning to Monarch Money and loving it. Maybe you're saving for a down payment, a wedding,

[00:09:32] a dream vacation, your kids college? I've found that Monarch makes it so easy to help you reach

[00:09:37] your financial goals, whatever they are. I definitely wouldn't be able to allocate my finances or

[00:09:43] plan as clearly without help from Monarch. In fact, Monarch is the top-rated all-in-one personal finance

[00:09:49] app. It gives you a comprehensive view of all of your accounts, investments, transactions,

[00:09:53] and more. Create custom budgets, set goals, and collaborate with your partner.

[00:09:58] And now get an extended 30-day free trial when you go to MonarchMoney.com slash OFD.

[00:10:04] After trying out Monarch for myself, I understand why it's a top-rated personal finance app.

[00:10:09] And right now get an extended 30-day free trial when you go to MonarchMoney.com slash OFD.

[00:10:15] That's m-o-n-a-r-c-h-m-o-n-e-y.com slash OFD for your extended 30-day free trial.

[00:10:25] This episode is brought to you by ShipStation. If you run an e-commerce business,

[00:10:30] you know how much work it takes to produce something great while dealing with complicated

[00:10:35] shipping issues. That's why over 130,000 companies have turned to ShipStation.

[00:10:40] An innovative tool that allows you to focus less on shipping and more on building your brand.

[00:10:46] With ShipStation, you can manage orders, label printing, reporting, and customer service on one

[00:10:52] easy-to-use dashboard. You'll reduce warehouse costs with reliable enterprise solutions

[00:10:57] and save thousands on shipping costs with discounts up to 89% off. Plus, you can effortlessly import

[00:11:04] orders from everywhere you sell online. So, turn your shipping challenges into opportunities

[00:11:09] for growth. Go to ShipStation.com and use CodePod to sign up for your free 60-day trial.

[00:11:16] That's ShipStation.com CodePod. For me, the key to getting out of debt was a deep mindset shift.

[00:11:25] When I discovered the fire movement and started devouring blogs about money,

[00:11:29] I realized that I've been brainwashed by consumerism my whole life.

[00:11:34] I had to intentionally undo that brainwashing by building a desire for debt freedom.

[00:11:41] How did I do that? I did a little brainwashing of my own by reading about personal finance

[00:11:46] and expanding my view of what was possible with my money. And when you tune in every day

[00:11:52] to optimal finance daily, you're doing the same thing. I heard a powerful quote the other day

[00:11:57] from a manual achoe who said quote, the reason why most people fail is that they give up what

[00:12:04] they want most for what they want now. End quote. Getting in touch with what you want most

[00:12:11] like financial freedom or peace of mind or full autonomy over your time can be the weapon

[00:12:16] you use to fight off your consumerist conditioning. I completely agree with Andy that analyzing debts

[00:12:23] and creating a budget are super important for anyone trying to get out of debt.

[00:12:27] If you're like me and got into debt due to mindless spending, the cure for that is awareness.

[00:12:33] Allow yourself to really see the full picture of your debt and your spending habits

[00:12:39] and this will enable you to come up with a plan to get out of debt. Tracking every dollar you spend

[00:12:44] may sound annoying but it's not nearly as annoying as being buried in debt.

[00:12:50] And that's another addition of optimal finance daily in the books,

[00:12:53] have a great rest of your day and I'll be back tomorrow where your optimal life awaits.