The Rachel Cruze Show - 28% of Credit Card Users Have This Problem

Starting point is 00:00:01 Hey, you guys. So a recent survey found that 28% of credit card users are still paying debt off from last Christmas. Yeah, those are still carrying their balance from Christmas of 2023. Now, I know the holidays that can come with a lot of stress and expectations, but whether you're stuck with maybe some Christmas debt or maybe you're just craving a new start here in the new year, I want to share three simple steps to get rid of debt fast and avoid. being part of that statistic in the future. Okay, before we dive in, make sure to subscribe and send this episode to a friend. All right, first, I want to talk to those of you who are currently in this boat of credit card debt. Listen, do not beat yourself up, okay? I mean, I think it can be easy to get caught in this, like, shame spiral of like, oh, my gosh, can't believe I did this, or we did spend too much, now I'm regretting it, whatever it may be, you're okay. You are okay. People that have credit card debt can pay it off. I'm telling you, you can do something different. And if you're not happy with where you are financially, that change

Starting point is 00:01:09 can occur. I'm telling you that, you know, I talk to so many people and they decide that they become someone completely different when it comes to their money and they get different outcomes. And Christmas and the holidays, it is a stressful time. So you are not the only one racking up credit card debt. And a lot of people don't have a lot of margin either when it comes to their money. So going into credit card debt for a lot of people, that is their reality. It's what happened. So just want to give you some encouragement. You can do something different if you don't like where you were. All right. Let's talk about how to get out of debt. So if your pain is greater than the inconvenience of changing your habits, that's where you're going to see change. Meaning a lot of people just kind of maintain credit card debt. They just kind of pay the minimum payments and it's on autopilot. It's not a big deal. And they don't really have a lot of pain to it. It's a, you know, they're kind of numb to it. Again, they run some numbers, do some calculations. And they're just kind of like, yeah, we're fine. So if that's you, there's probably not going to be a lot of change.

Starting point is 00:02:05 But if you find yourself realizing, oh, my gosh, we are paying so much in debt. Maybe it's car payments and credit cards and a personal loan and a Helock and a student loan. Like, it just keeps going. You feel like we are running so fast in life and we are making no progress when it comes to our money. And our spending is out of control because we don't know what we're spending. We're just charging everything on a credit card. And I'm tired. I'm tired of working so hard and having nothing to show for it.

Starting point is 00:02:29 Or maybe you're losing sleep at night. maybe your stress is so high. Like whatever that pain is that happens, that usually has to hit first in order for change to occur. Ron Ramsey, we call it the I've had it moment. It's like this moment of, I'm done. I'm so tired of what I've been doing. I need to do something different.

Starting point is 00:02:47 So that is really key to all of this when it comes to paying off debt because it's going to take some sacrifice, which leads us to number two. The way to pay off debt, this method is so crucial. It is the method of the debt snowball way of paying off debt. So some people pay off the highest interest rate first, but we have found that it is way more effective when you start with the smallest debt first because you will realize that in order to change your behavior like we were talking about, you have to have some quick wins. You have to have that motivation to say, oh, yeah, what I'm doing is working.

Starting point is 00:03:18 So by paying off that smallest debt first, that's what happens. You realize, oh, I can do it. Maybe it's a $700 credit card payment, you know, debt that you have a bill. You pay it off and you're like, okay, I did it. and then you go over to the second smallest debt. And as you keep going too, what happens is you're freeing up the minimum payments on all the debts that you've already paid off, which leave you more margin to put more of that money towards the next debt. So it is powerful.

Starting point is 00:03:43 So list out all of your debts, smallest to largest, regardless of the interest rate, pay minimum payments on everything, and pay that smallest one off first. So that is how to get out of debt if you want to. Your paying has to be pretty great because it's going to take some sacrifice. and then number two, start with the method of paying the smallest one off first. And also, I'll throw in there, you know, get an extra job, get a side hustle, you know, add an extra 800 bucks a month or more to your monthly budget in order to throw this at the debt. Cut expenses, do a budget and say we're not eating out, we're not going shopping, we're not doing any of this.

Starting point is 00:04:15 We are taking all of our money we have and throwing it at this debt. All right, before I share the next step, I want to tell you about one of our sponsors, delete me. I saw a headline recently that really caught my attention. one-third of the U.S. population's background info is now public. So for a 115 million of us, data breaches mean that our info is out there for anyone to find. And this is stuff like our names, addresses, phone numbers, and even more. And this is why I love and use Delete Me, because they find and remove your information from hundreds of data broker websites that buy, sell, and trade your personal data. So take control of your online privacy with Delete Me.

Starting point is 00:04:56 Individual Delete Me plans start as low as $9 a month. Sign up today at join deleteme.com slash Rachel for 20% off or click the link in the description. All right. Number three is to avoid future debts, especially around this time of year, by thinking ahead. So in order to not go deeper into debts, you have to plan, you guys. And this can be planning for times like this with the holidays, right? So a lot of people put a lot of Christmas on their credit cards and they're still paying it off a year later. So start planning for that.

Starting point is 00:05:33 We all know Christmas is in December every single year. And maybe you start buying gifts on Black Friday, right, in November. Like, you know this stuff is coming. So just put a reminder on your phone in May to set some money aside, right? Or even July. That gives you six months until December to plan and set aside some money. So when December comes, you start shopping, you have the money. you have the money for it. So this is kind of sinking fund when you look ahead for large expenses

Starting point is 00:06:00 coming up in the future and you do, you know, you save a little bit every single month. And so this is really, really helpful. So I would say planning for that is big. And then also planning for emergencies. This is why the emergency fund is key. I want you to start off with a $1,000 emergency fund. And then once all your debt is paid off, you can bump that up to three to six months of expenses. But being able to plan knowing that things are going to happen, things are going to come up. and instead of going deeper into credit card debt for those things, you have money and the bank saved. And that's really, really key. So planning for the future is really, really important. So you can do all of this, saving for Christmas next year, even having the goal for an emergency fund.

Starting point is 00:06:38 You can do all of this in the every dollar app. So the every dollar app is a fantastic because it's helping you budget every single month. And I'll put a link in the description to check it out, but you can build your first budget for free. And I love this app because it goes with you everywhere you go, because your phone is always attached to you. And you're able to see, okay, what money do we have left in each category? We're able to plan ahead. You're able to do these sinking funds within it. It's really, really great.

Starting point is 00:07:02 It's a very, very helpful tool. So make sure to check it out. Now that you know how to get out of debt, if you are curious about how to pay it off even faster, I have an episode all about that. You can check it out right here. Or if you're listening on podcast, click the link below. All right, you guys, remember to take control of your money

Starting point is 00:07:20 and create a life you love.

The Rachel Cruze Show - 28% of Credit Card Users Have This Problem

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