Shownotes
In this episode, Tiffany Grant, your money nerd and financial coach, answers a crucial question from a listener: "Tiffany, I have over $50,000 in credit card debt. What do I need to do to get out of this?"
Tiffany provides a comprehensive response, delving into the emotional and mental burden of debt, understanding the root cause, and actionable steps to take. She emphasizes the importance of setting achievable goals, building a support network, and staying consistent in your debt repayment journey.
Dive into the episode to gain valuable insights and practical tips to tackle massive credit card debt. Don't miss out on these empowering strategies to take control of your financial future.
Timestamps
[00:00] - Tiffany's podcast answers questions about personal finance.
[05:31] - Learn budgeting, reducing debt, and debt consolidation.
[06:44] - Analyze debt before considering consolidation, set goals.
[10:24] - Seek professional help, connect with similar experiences. Celebrate frugally.
[14:11] - Show notes link to resources, encouragement given.
Key Takeaways
- Emotional burden of debt: Acknowledge and understand feelings.
- Identifying the root cause of debt: Unchecked spending, job loss, medical bills.
- Debt repayment methods: Avalanche vs. snowball method.
- Importance of budgeting: Track expenses and prioritize debt payments.
- Debt consolidation options: Assess suitability and benefits.
- Setting achievable goals and celebrating milestones.
- Building a support network and staying consistent.
Additional Links & Resources
- Methods to Tackle Debt
- Emotions & Money: 3 Things To Avoid And 3 Things To Do More
- Does Debt Consolidation Hurt Your Credit? Here’s What You Need To Know
- Tiffany’s Take: Goal Setting | Ep. 187
- Tiffany’s Take: Smart Goals | Ep. 190
- Goal Implementation: How To Actually Accomplish Your Goals | Ep. 196
- How To Stick To Your Goals When You Don’t Feel Like It | Ep. 198
- The Most Effective Way To Tackle Your Financial Goals | Ep. 193
- Twitter Post About Net Worth
- Breaking Free From Financial Shame And Guilt | Ep. 296
- Want To Achieve Financial Wellness? Get Support From An Accredited Financial Counselor
Want your question answered on the podcast? Submit your question here
Looking for support toward your financial goals? Book a consultation
Copyright 2024 Money Talk With Tiff
This podcast uses the following third-party services for analysis:
Chartable - https://chartable.com/privacy
Transcripts
You know what it is. That's right. It's time to talk money with your
Speaker:money nerd and financial coach. Now tighten those purse
Speaker:strings and open those ears. It's the money talk with TIFF
Speaker:podcast. Hey, hey, and welcome to
Speaker:Tiffany's take, where I answer your questions right here on the podcast.
Speaker:If you would like your questions answered, just go to ww
Speaker:moneytalkwitht.com forward Slash x, Tiffany,
Speaker:and I'll be more than happy to answer. Think of it like a one on
Speaker:one session before everybody to listen to, but nobody knows
Speaker:who you are. But anyway,
Speaker:today I wanted to talk about a question that I received, and
Speaker:someone asked Tiffany, I have over $50,000 in
Speaker:credit card debt. What do I need to do to get out of this?
Speaker:Okay, so I wanted to focus on this question
Speaker:because, actually, I've had quite a few conversations lately with
Speaker:people in quite a bit of credit card debt, which is not
Speaker:surprising, honestly. You have to realize that
Speaker:it has been the perfect storm for credit card debt to
Speaker:continue to rise. And if I'm not mistaken, I would have
Speaker:to check my stats on this. But I think we're at or
Speaker:almost at a record breaking amount of debt,
Speaker:not just as a country, but also as consumers. Right?
Speaker:So if this is something that you're going through, I know it's a
Speaker:tough situation, and it weighs heavily on many of our listeners
Speaker:hearts, but just know that you are not alone,
Speaker:okay? And so that's why I wanted to do this episode. So maybe I can
Speaker:help a few other people that may be going through this situation,
Speaker:because I know that it's out there. So, first,
Speaker:you want to acknowledge the emotional mental burden that comes with this level
Speaker:of debt. So it's important to understand that the stress you're feeling is completely
Speaker:normal. Behavioral finance tells us that our relationship with
Speaker:money is complex, and it's tied to our emotions, our upbringing, and our
Speaker:experiences. You hear me talk about that all the time. So you're
Speaker:not just dealing with numbers here. You're also dealing
Speaker:with feelings, too. So you need to acknowledge those feelings.
Speaker:And it's even good to maybe even write down how
Speaker:you're feeling about this debt. And one thing that I worked with my
Speaker:therapist on was using a feelings wheel, and you can
Speaker:just google one because that's what I did, and I printed it
Speaker:out. And I use that occasionally to say,
Speaker:how am I really feeling? Because we usually default
Speaker:to, like, okay, stressed or mad
Speaker:or sad. But feelings are a little more
Speaker:complex than that. There are different levels to med. There are different
Speaker:levels to said there are different levels to stressed. And
Speaker:so when you have a feelings chart, you can kind of see,
Speaker:okay, I'm mad, but what is beyond that
Speaker:mad? Are you feeling disappointed? Are you
Speaker:feeling betrayed? What is
Speaker:behind that mad? So I highly recommend getting a feelings wheel
Speaker:because that might help get to the root of how you're feeling about
Speaker:this. Then next, you want to start digging deep and
Speaker:understand how you got into this debt in the first place. So was it due
Speaker:to an unexpected medical bill? Was it job loss?
Speaker:Unchecked spending habits? Did you have a
Speaker:pet that needed care? What was the reason
Speaker:that you got into this debt? So, identifying what the root cause
Speaker:was can help us create a little more effective plan to tackle
Speaker:it. Because remember, this is not about blame. It's about
Speaker:understanding and learning if it was something medical
Speaker:related. Okay, cool. That just comes up every now and
Speaker:again. And so when we develop our plan, that's not something we have to take
Speaker:into consideration too much. But if it was job
Speaker:loss or if it was like, unchecked spending habits, that's something that
Speaker:we need to consider as well because that'll affect how we
Speaker:develop our plan later on. So I hope that makes sense.
Speaker:So now that we got those two things out the way, because those are super
Speaker:important to start with, let's dive into some actionable steps
Speaker:you can take. So let's say you checked your emotions, you
Speaker:checked your mental around this, you understand how you got into this
Speaker:debt. What's the first thing you need to do? So first,
Speaker:list all of your debts in their interest rates.
Speaker:Prioritize paying off the ones with the highest interest rates first. This
Speaker:is known as the avalanche method. Now, this method will save you
Speaker:more money. So that's why that one is preferred.
Speaker:But if this is something where you find yourself
Speaker:continuously in debt and it's something that you need more of, like a
Speaker:psychological boost, then you can always do the snowball method, which
Speaker:is listing the debts in order from least amount to
Speaker:greatest amount. And then starting with the smallest one and
Speaker:working your way up. That'll give you a psychological boost and
Speaker:help you keep on the journey. Sometimes if you do
Speaker:the avalanche method, which is the highest interest rates, first, it
Speaker:can feel overwhelming. Because what if your highest interest rate
Speaker:debt is also the highest amount? You'll feel like you're working on that
Speaker:forever. So I'll make sure I put in the show notes, a
Speaker:link to my methods to pay off debt article because that'll
Speaker:be helpful to go into more detail about what I'm talking about. With these two
Speaker:methods, and then I also do another method with my
Speaker:client, which is kind of like a combination of both. So I'll make sure I
Speaker:have that in the show notes. Make sure you check out that if you're interested
Speaker:in learning the different methods to pay off debt, the second
Speaker:thing you need to do after you got everything laid out is to create
Speaker:a budget. And I know y'all are probably like, Tiffany, I'm tired of you talking
Speaker:about budgets, but if you hear me talking about it, you
Speaker:see how crucial it is to your financial
Speaker:wellness. And so knowing where your money is going
Speaker:each month can help you identify where you can cut back and
Speaker:put more towards your debt. This is actually what me and
Speaker:my clients go through, so we kind of go through all of these things
Speaker:in order. So you're getting like, a free session right now,
Speaker:but when you are able to see where your money
Speaker:is going, we can go line by line and see. Okay,
Speaker:does this need to stay the same? Can we cut out a little bit of
Speaker:this? Can we add more here? You can kind
Speaker:of start playing with the money and moving it around to reach your
Speaker:goals. Number three, you may need to
Speaker:consider debt consolidation options. So if you have
Speaker:multiple sources of high interest debt, maybe
Speaker:consolidating them into one lower interest loan can save you money
Speaker:and simplify your repayment. And this is also why
Speaker:I went over number one first and listing out all the debt, because
Speaker:then you'll get a better understanding of if debt consolidation
Speaker:will help you or not. Sometimes it doesn't help everyone.
Speaker:Okay? And it makes no sense if you are
Speaker:to consolidate into a loan where you'll be paying more
Speaker:interest or it's a monthly payment that you can't afford.
Speaker:So it's good to know all your debt and really
Speaker:take an analytical look at it. And if you're interested in debt
Speaker:consolidation, I'll also put that link in the show notes as
Speaker:well. I actually have an article for all of these
Speaker:things that I'm going over, so I'll make sure I'll put all of
Speaker:that in the show notes so you can read a little more in depth because
Speaker:that kind of expands beyond the purpose of this episode.
Speaker:So if you're interested in debt consolidation, check that out next,
Speaker:you want to set small, achievable goals. So people come
Speaker:to me and they're like, tiffany, I want to get out of credit card debt.
Speaker:I owe like 70, 80, sometimes even 100 plus
Speaker:thousand in credit card debt. I get it and I understand,
Speaker:and we will get there. But it's important that
Speaker:you set small, achievable goals. So don't just aim for that final
Speaker:zero balance. Celebrate smaller milestones along the way.
Speaker:So maybe every $5,000 you pay off, make
Speaker:sure you celebrate. This way you can keep your motivation
Speaker:high. That's one thing that I did that was really helpful
Speaker:for me when I was on my debt repayment journey. I mean, I still am.
Speaker:Don't get me wrong, I still have debt as well, but
Speaker:it really helps to keep my motivation. So when I used to
Speaker:get those little paid in full letters, every time I would pay off a student
Speaker:loan or pay off a car, whatever, you get these
Speaker:little letters in the mail and I'm like, oh, yay. And then
Speaker:even when I go and I update, because sometimes I update my net
Speaker:worth numbers, too, it made me realize that, oh, I'm
Speaker:making a lot of progress. I actually just posted about this over the weekend because
Speaker:I updated my numbers on Twitter and I'll have a link to
Speaker:that post as well if you want to check it out. But I was five
Speaker:figures in the negative when it came to my net worth back in 2017.
Speaker:And I started this journey. And when I looked over the weekend,
Speaker:guess where I met you all. Almost to multiple six
Speaker:figures in net worth. And so not only did I turn my
Speaker:ship around to get out of the negative, but I'm also
Speaker:six figures plus. And so that's why it's
Speaker:important to check on your progress and celebrate those small, achievable
Speaker:goals. Am I at no debt?
Speaker:Absolutely not. That is a goal that I would like to have. But in the
Speaker:meantime, in between time, I celebrated getting to zero
Speaker:net worth. I celebrated when I got to five
Speaker:figures net worth. And now I'm celebrating at over six
Speaker:figures net worth. So set those small achievable goals so that
Speaker:way you can get those extra boosts of motivation.
Speaker:Number five, make sure you reach out and build a support network.
Speaker:So talk to people that have been in your shoes or consider seeking
Speaker:professional advice. There's no shame in asking for help. And if you
Speaker:listened to the episode last Tuesday, I talked about financial shame
Speaker:and guilt. If you haven't listened to it yet, highly recommend listening to that
Speaker:one as well. But it's important to talk with people that
Speaker:are in the same shoes or talk to people that have seen
Speaker:it before, like myself, and have the
Speaker:tools that are able to help you, whether it's
Speaker:psychological, mental, or just tactical. Some people,
Speaker:they already have tapped into the psychological side. Maybe they already have a
Speaker:therapist or what have you and so now they just need the tactical steps to
Speaker:take. Right. So talk to someone that's a professional
Speaker:or see if there's someone in your community or in your network
Speaker:that are going through the same thing. I can almost guarantee
Speaker:that if you have a lot of credit card debt,
Speaker:there's probably someone in your circle that does as
Speaker:well. It's just that nobody talks about it, right? So
Speaker:it's hard to know. But once we start having these conversations
Speaker:openly and more frequently with our loved ones, friends, family,
Speaker:whoever, then we'll understand that we're more alike
Speaker:than we are different. Number six,
Speaker:when you do celebrate those milestones, like I said in number four,
Speaker:make sure you do it frugally, because I want you to
Speaker:celebrate. But remember, do it in a way that doesn't involve excessive
Speaker:spending, because that's how we got here in the first place. So a small treat,
Speaker:a dance in your living room, or even just taking a moment to acknowledge your
Speaker:progress can be enough. And that's one thing that I do with my clients
Speaker:in our meetings. Whenever we have a meeting and they've
Speaker:implemented our plan and they've took the next steps, I'm like,
Speaker:let's take a moment and let's just acknowledge that
Speaker:it's easy to glaze over it. Like, okay, I did this. I did this, I
Speaker:did this. What's next? But I'm like, no, let's pause on that
Speaker:real quick. Let's celebrate that. Let's talk about how we feel about
Speaker:that, and then we can talk about what's next. Because if you
Speaker:tap into that instead of being on autopilot, and the same goes
Speaker:for when, let's say you're dieting,
Speaker:right? There's a lot of information out there
Speaker:about being mindful about when you eat and how that plays a
Speaker:role in lowering your calorie
Speaker:intake. Well, it's the same here. If you're mindful about the progress that
Speaker:you make, then you can use that
Speaker:motivation to get you to the next step. So
Speaker:definitely celebrate those milestones, but do it in a way where it's
Speaker:frugal, because think about it this way, too,
Speaker:y'all. The least money you spend on celebrating, the more you can
Speaker:put towards that debt. Okay? All right.
Speaker:And then number seven, my last thing, well, second to
Speaker:last, is to stay consistent. So paying down debt is a marathon,
Speaker:not a sprint. So stay consistent with your payments, no matter how small
Speaker:they might seem. There have been times where I was paying only the minimum payment
Speaker:on all of my debts because that's all I had at the moment. But I
Speaker:stayed consistent with that. And even if you do that, you don't
Speaker:make too much headway too fast, but you are making some headway,
Speaker:believe it or not. So you can pay a significant
Speaker:amount just by doing the minimum payment over
Speaker:time. But if you wanted to put pedal to the metal, of course you would
Speaker:have to pay more than that. But as long as you're doing what you
Speaker:can, you're keeping up with your payments. Sometimes you hit rough spots, and
Speaker:it's okay to pay the minimum balance. I mean, pay the minimum payment,
Speaker:it's okay. But when things get back good, just bump those
Speaker:payments up and get back on track. So remember that
Speaker:the most important thing, and this is the last thing, is to take
Speaker:action. So start today, even if it's just one tiny step,
Speaker:like creating a budget or calling your credit card company to negotiate your
Speaker:interest rates or figuring out what your goals
Speaker:are for your financials. Take one step
Speaker:today, because every step you take is a
Speaker:step closer to being debt free. And once you're there, let's work together
Speaker:to make sure you stay there. So learn from your past
Speaker:experiences, build good financial habits, and
Speaker:maintain a healthy relationship with money to avoid
Speaker:falling back into the same debt cycle. So I am here with
Speaker:you every step of the way. I will make sure that I have all the
Speaker:links in the show notes to all the articles about all of these points
Speaker:because I have one for pretty much all of them. So that way, wherever
Speaker:you are in those steps, there's some
Speaker:resources for you. Okay? So thank you so much for
Speaker:listening to today's episode. And if you are in massive amount of debt, don't
Speaker:worry, you are not alone. I am right there with you
Speaker:actually, and we are going to work through this together. Now,
Speaker:if you enjoyed this episode, be sure to share it with your family,
Speaker:friends, whoever you think might need it. But also rate, review
Speaker:and subscribe to the podcast so you don't miss another one. Until next
Speaker:time. Bye. Thank you for
Speaker:listening, joining and being a part of the money talk with TIFF podcast this
Speaker:week. You can check Tiff out every Thursday for a new money talk
Speaker:podcast. But if you just can't wait until next week, you can listen to
Speaker:previous podcast
Speaker:episodes@moneytalkwitht.com
Speaker:or follow TIFF on all social media platforms at
Speaker:moneytalkwitht. Until next time, spend wise
Speaker:by spending less than you make a word to the moneywise is
Speaker:always sufficient.
