Debt
MONDAY MONEY TIP PODCAST: 8 Ways to Speed Up Debt Elimination
This week on the Monday Money Tip Podcast, we’ll be sharing eight ways that you can speed up your debt elimination process this year. If you made a New Year’s resolution to pay off debt, this information can help you make some significant headway! I’ll also check in on your other resolutions that you made at the beginning of the month and share how your daily habits can help you accomplish these goals. We also have a success story from one of our Savings Challenge participants who saved $6,000 in their annual budget!
It’s our goal at the end of each episode that you gain hope and encouragement in your financial journey, you’re equipped to take a next step, and that you’ve had FUN with us!
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Email info@iwbnin.com to ask questions or share success stories.
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Show Notes
About the Episode:
- I share how you can carry your New Year’s resolutions throughout the year by focusing on your daily habits.
- Megan and I discuss eight specific things you can do to gain significant traction in your debt payoff journey.
- Hear a success story from participants of our last Savings Challenge who saved $6,000 in their annual budget.
Resources:
0% Balance Transfer Credit Cards
Annual Plan Tools
Budget Challenge
Savings Challenge
Episode 26
Episode 27
Salary.com
Quote of the Day: “I’ve never seen anyone achieve financial freedom by obtaining lots of credit card points and airline miles.” – Joe Sangl
Debt Payoff Spectaculars
Did you make a resolution this year to finally off that debt that has been hanging over your head? Once that debt is gone, that payment will be freed up for you to start making progress towards your plans, hopes and dreams. If you need a visual tool that can help you gain traction in your debt freedom journey, you should check out our Debt Payoff Spectaculars found HERE on our website.
These spectaculars are incredibly easy to use and can give you a visual representation of your debt being paid off. All you have to do is take the amount of debt you owe, and divide that by the number of squares on the payoff spectacular. This will give you the amount of debt that each square represents. Each time you make a payment in that amount, color off a square!
While it may sound simple, there is something cathartic about visually marking that debt out of your life. If you’re paying off a truck, you can physically see the amount of that truck that you now own and you will find yourself wanting to color more and more squares. You might even go crazy and adjust your budget to cut your spending and allocate more towards debt!
Check out our Debt Payoff Spectaculars HERE!
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Pulling Money Out Of Retirement Accounts Early
As people take off on their debt freedom journey, so many times they are tempted to withdraw money from their retirement accounts in an attempt to speed up their debt elimination process. We get questions all the time from people who want to know whether or not we think this is a good idea.
I do not think it is ever a good idea to take money out of a retirement account in an effort to pay off debt. Many people feel like retirement is so far away that they have plenty of time to begin saving. And while you may have plenty of time to start saving, you will never regret starting as early as possible. The key is to start investing early and invest consistently. In all likelihood, no matter when you begin saving for retirement, you will wish you had started sooner.
When you get started on your debt freedom journey, it can seem like the end is so far away. But I would encourage you to stay the course. Get a budget using one of our FREE tools, calculate your debt freedom date using our FREE calculator and slowly but surely, you will see those debts drop off. And once they are all gone, not only will you be debt free but you will also still have your money working for you in your retirement accounts.
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Want more tips like this one? Subscribe to the Monday Money Tip Podcast HERE.
Early Pay-Off Calculator
Do you have debt that you are really trying to get rid of? Are you interested to see how much time and money you could gain by paying off that debt earlier? If so, check out our Early Debt Payoff Calculator HERE. This tool allows you to enter the interest rate, outstanding loan balance, the principal & interest monthly payment, and the additional amount that you want to pay towards the loan each month. Once you have entered this information, the calculator will tell you how many months you will gain back of no payments and how much money you will save in interest payments. It is time to break up with that student loan debt and pay off that home mortgage. Check it out today!
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Good vs. Bad Debt
If you have been following my posts for a while, you probably know that I talk a lot about reducing and eliminating debt. So it might come as a shock to you that I do not think all debts are created equal and there is a such thing as good debt! I actually break debt down into four different categories ranging from terrible to good.
- Terrible Debt: This debt is the worst type of debt you can have. This debt includes payday loans and pawn shop loans. These loans typically have a VERY high interest rate. When I say very high, I mean that I once saw one that was 640% interest! I think we can agree that is terrible.
- Bad Debt: This debt may not be terrible but it is still pretty bad. This includes your credit card debt, unsecured signature loans, car loans, etc. Yes you read that correctly, car debt is not considered good debt. The average new car drops in value $100 per week during the first four years.
- Better Debt: I only classify one type of debt as better debt and that is home mortgage debt. Every time you make a payment some of this money is going into home equity so hopefully when you go to sell it, it will have gone up in value and you will have made money.
- Best Debt: If you are going to have debt, business debt is the best debt you can have. This is where I would categorize rental properties, buying franchises, buying into a small business, etc. This type of debt will allow you to scale your business and make more money.
All debts are not created equal and there are some that are way, way worse than others. Make sure you take this into consideration any time you are contemplating going into debt so that you can make the right financial decision.
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Want more tips like this one? Subscribe to the Monday Money Tip Podcast HERE.