Reduce Debt Increase Wealth

Getting Started into Reducing Debt

January 14, 2024 MIsterchuck Season 4 Episode 200
Reduce Debt Increase Wealth
Getting Started into Reducing Debt
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Show Notes Transcript

This is a overview of my life why doing a podcast to help others with debt. There more to life than just working and being broke all the time, thinking working for the bank. This is the 200th episode  of Reduce Debt Increase Wealth a review and reflection of the past. 

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Charles McDonald:

Hello, I'm your host, Mr. Chuck, I retired accountant turned truck driver, I reduce my debt in a relatively short period of time, debt reduction, to achieve financial freedom takes commitment, confidence, determination. Getting Started into reducing debt, this is an overview of my life, why I'm doing a podcast to help others with their debt problem. There's more to life than just working and being broke all the time. And thinking that you're working for the bank. This is my 200th episode of reduced that increased wealth, and a review and reflection of the past. But I'm going to give you reasons and what I did to get out of debt. And the reason why I made those choices, this go in my beginning, I was a certified public accountant. I worked for the government about 14 years, I had my own business for 14 years. Apparently, I like doing things for 14 years. And then I sold my business and became a truck driver, which happened to be an over the road truck driver. And I've done that fro about 18 years. Now, right reason I worked so long is because my pension when I worked for the government, I didn't pay into Social Security. So I had to get 30 years of income under Social Security. So I wouldn't be penalized for having a government pension. And believe me, it's not all that much, 14 years, you're not getting much of a government pension, and has no health insurance, no nothing. So it's just, you know, basic, oh, I needed to work. So I worked longer. But as I was getting closer to retirement, I came to realize that I needed to get my debt under control, if not paid off. Because I was since I knew I had a Social Security problem and my benefits being reduced. I downloaded an app that SOS Kirti provided and I put in all my information, I was keeping an update every year. So wants to see how you know, another year would affect my amount of income. And I would play with it and put in future income didn't work that great to see what happened. And I read some of the rules. And I know I needed 30 years. And I counted up my years and I only had like 2728 Some of the years I witnessed significant income, so means I have to work a little bit more. So that's why I just kept on working. I realized I needed to get my debt paid off, or I wouldn't have enough money from my Social Security, my government pension, to pay all my bills and to live a more comfortable life. So I started focusing on reducing my debt. I had two or three credit cards that I owed. i At the time, when I got started, I had a line of credit on the home, I had my first more each and I did refinance the mortgage. Earlier, when I was making a whole bunch of money being a truck driver, I was making pretty good income, and things happen and I changed jobs, my income went down. So it was more of a struggle. But since I was working, and if I was always working, everything was completely much paid for. I was able to slide by and keep making those mortgage payments and make my debt payment and minimize my spending as much as possible. After doing that for a while I thought it's gonna take me forever Hunter, something I'm not doing right now. I mean, I've always been tracking things going through my check register, but I never really tracked my credit cards. I kind of did a half effort type of budget and never worked for me the numbers I really didn't know that well. I was always struggling. I felt like I was working for the bank. That's how bad it was most of the time. And I wanted to get out of that debt cycle. That's what I learned now what they call that you get trapped into this debt cycle and you're always making these payments. And what I would do is I would make extra payments on my credit cards to try to pay am off, and then something would happen and I would come up short. And then I would need to use their credit card again, because I had no savings to take care of what happened, whether it was retires for the car or appliance, whatever was happening, that was always something going wrong at the wrong time. And I was coming up short on my cash. So then I was cutting back on how I was eating food, you know, eat as cheaply as I possibly could, so I could pay my bills. And it was never ending, if that's where you are today, you can get out of that. You can make steps to improve your lifestyle, what I did, then I got married, in the meantime, I change jobs. But before I change jobs, I found a program that I was really interested in, but it was really kind of expensive. So I put it off for like six months, I couldn't really justify it, thinking, how would that program help me get out of debt, when I have to go deeper in debt to buy it, guts how expensive was out had to put it on a couple of credit cards. And I had a hard time justifying it. And finally, one day I decided, I'm just gonna do it. Hopefully it works out for the best. And believe me was probably the best decision I ever made. As far as getting myself out of debt. But what did it do, it did the tracking, which I was already doing, but it had its own tracking. And, and, and it had its own budget. But the budget was kind of different. As far as I was used to. I went through and I put in my income and how often I got paid. If since I was weekly income, and it was always different, I figure it out on average, I plugged the number. And over time, over six months a year, I got these numbers closer and closer to what the real number really was. So the closer I got to getting my numbers correct, the better this program was working for me. So I started with the income I got that in there. And then I just do all my bills. So I started with my house, the mortgage, my utilities, and all those types of things. And I just worked my way down through the program and setting everything up and plugging in numbers. And then it would tell me, you know, you put it in, what it is the dollar amount and when it's due. And then when it comes due, it comes up in this other area where it kind of keeps your check register. And then when coming Do you wait to a clears your bank was that's kind of thought and that's not good. But you wait to a clears your bank and then you post that for the correct date and the correct dollar amount. And it keeps the running register for your checking account. But you do it with your credit cards, you do everything you have. If you're gonna pay bills with credit cards, you set it up that way. So I started doing that. And I was you know, it was still I mean, I was making progress, but it was really slow. And that's what I talked about at the beginning. You got to quit using credit, getting yourself off of using credit cards to pay your normal monthly bills and paying out your checking account and buying and paying cash for food and your and your gasoline for your car. That took the longest amount of time but over time and remember I was at a job where I wasn't really making all that much. It was probably in the low 30,000 and this was about eight or nine years ago. It was decent money but it's not great money. And then I got tired of that job I got mad at my employer that kept making changes so I thought I'm gonna go find a better job. So I started looking around I found a job that was closer to home I didn't have to drive 100 miles to go to work well that's the problem was being a truck driver. Sometimes the employer is a long ways away. I didn't have any place to park the truck so I had to park at the shop and then drive home 100 miles and and drive 100 miles back which was costing me money. I didn't really realize how much it was only one round trip a week but still. That was really cost me some money. I found a job that was 20 miles away. I was home every other day and paid more money. At the time, I didn't realize how much more so I quit my job game. I gave them a one week notice I gave the new employer a two weeks and I'm gonna start in two weeks, gave a one week notice. And I wasn't I'm taking a vacation for a week now cuz I hadn't had any time off for five or six or seven years. It's been a long time. Wow, about halfway through that week, that second week, when I was getting close to when I was supposed to start, the new boss calls me and say, Would you like to do this run on Friday, you'll be back on Saturday. And as what time I leave Friday, we know noon or so. And you'll be back Saturday afternoon or evening is not not too bad. And he said, If you wait till Monday, then you'll might not get a load until later in the week. So if you do this, and then you get your time off, and then you'll get a look. I said, Okay, I'll do it, what the hell and then that gave me a paycheck one week earlier also. So I did it. And I started working for this company. And they put me on this ruined and nobody liked to do and I thought, well, this is great. It's nine hours there, I take a 10 hour break, it's nine hours back, I take a day and a half off, I had nine hours, then I do it three times a week. And I did that for like three years. And I made more than double the money. So I was making in the 60 1000s, mid 60,000. I never made that kind of money from an employer before. And I thought wow. And that really speed off my paying off my debt process. I got them credit cards paid off, I got my line of credit starting to pay down. Then as we was gone, the wife wanted a car. So I had a buy a car for the wife. And then she wrecked it and I had to buy another one. She wrecked out one another once You wrecked out when my insurance goes up, it's still I still pay a lot insurance today. And it's been a while. But I had to borrow money for three different cars. And I paid them all off actually was four because I bought a new car for myself. So there was three cars for the wife, and one from myself. I paid them all off, paid off all my credit cards, I paid off my line of credit on the home, I paid off my first mortgage. And then I had I was still working. And point I was following the Social Security thing, how long they want to work, I really can't quit working until the wife 65 Because I can afford to health insurance just for her. So I need to have them insurance through their employer and has all kinds of variables in there. So I just kept working. And it turned out when I decided I was going to quit working was on December a year ago. December of 2022 was December 31, my last day of work. And I've been retired since almost a year. And I claim my SOS kurti starting in January. So I was like my age plus my full retirement age plus an extra four months, which put me right at 30 years of income, sizeable income for Social Security. So I was able to get my maximum benefit without had been reduced because of my government pension. And that made the downs like $500 a month more. And it made a big difference. Now I have no debt, my source kurti income is much higher. Everything is going good. But this program I'm still using it today. I hadn't had debt for two or three years. But you have to end the program, set it up that Italia you have that for it to work. So you have your budget. And then it tells you when to pay things and when to transfer money into your savings account. And then it tells you when to pay extra money on your debt. But what I like most about it is you can look forward, up to I think two and a half months, maybe three months, but it's at least two and a half months. He can scroll down through it and you can see the bills there's gonna come due and if your checking account is gonna be negative at any time during that process. You We'll show you how to transfer money from your savings back in your checking. So it really keeps an eye on everything. I what I like is I learned to look forward, when you're budgeting, you always looking backwards and looking at what happened. But you need to start thinking, you have to look forward. What is coming do when do it, when is it due? And how much do I have to pay? How much money do I have today? How much money will I have, when I get to the point that that bill may be due, whether it's your monthly rents, your monthly mortgage, your loan payments, twice a year insurance payments, all that kind of stuff. And that takes everything into consideration. Okay, that took me at least six months, before I hummus, I had everything in there that I pay on a regular basis. And then occasionally, something would pop up that I didn't have in there. But I set up a miscellaneous category and put a two $300 number in there to cover things that might become a surprise. And I just keep doing it. That's why I say you need to have an emergency fund. So that if something bad would happen, you don't have to use credit, especially when you're struggling to pay off credit. And that's what this program pretty much taught me. It didn't really teach me that. But that's what I had learned from how the program was working, and what it was doing. Now they that does a lot more than when I'm really Tanya. But this is the basic kind of stuff. If you're able to project forward on your monthly budget, that's why it's important to know everything that you have to pay all your needs. And that should always come first. And then your wants should come second. I'm not saying that you got to cut everything out of your life, and quit doing things to pay off debt. If you do that, you can get paid off that much faster. But you don't really have to. If you've been stuck in the debt cycle, and you feel like you're working for the bank, you need to do these things, you need to track all your transactions, and all your accounts, your checking account, your savings account all your credit cards, not necessarily in loans, because that should be a one way going down every month because you're making a payment. Hopefully you're making timely payments, you need to have a budget or you know what's coming up. And when it's gonna come to where you can look forward, wherever you just put a master counter. And you write on the day it's do rent, do utility, gas, water, sewer, whatever the case is, if you write on that calendar that you can look at, you have an idea what's coming up, put your paydays on there, so you know when you're getting paid. And you can plan ahead. That's the key to keeping your personal finances under control. You need to know what you got, you need to know what's gonna happen. And you need to plan ahead on how you're gonna handle paying for things. If there's a big bill come and do you don't go out and spend $1,000 for something you really don't need, but something you want, you got to avoid those types of spending at certain times, especially when you're struggling to pay off debt. Now, if you follow this at any length of time, you know that my debt reduction plan is quit using credit. Start yourself emergency fund a savings account and make the minimum payments. And we're gonna use that minimum payment to save some cash at the beginning so that you can put it in that savings account and you're put in the savings account. So it helps you not use credit sometime in the future. When something bad happens bad meaning some unforeseen event happen, and it's gonna cost you some money with all that consider. The reason why I started doing this was one day, I was driving in my truck, and I was thinking, what am I gonna do when I retire? And I thought I'll do a podcast. I didn't know any Think about it. So that's the start of this process. I started learning, I taught myself, I bought the equipment I needed, I learned how to edit the audio, and I went on from there. I'll be back in one moment with my final thoughts. If you're interested and learning about an online software that helped myself get out of debt, it does tracking, budgeting, and keeps track of all your assets and all your debt, and even tells you how much and when to transfer money into your savings account, and how much and when to transfer money to your debt, and which debts to pay off and order. First. It's not cheap. It's a one time payment. But it will definitely be an investment, something and yourself and an investment in your personal financial life. If you're interested, send me an email at reduced debt increase And I'll send you the information about this online software that worked great for me, I taught myself how to do a podcast. While I was working full time as a truck driver, and being a truck driver, that's 60 to 70 hours a week. So I spend most of my free trial, especially in the winter, trying to learn how to do a podcast and evolved over time. And I admit my first 20 episodes, as far as quality of the sound subject matter and whatever, is pretty bad. That's why I'm redoing this. That's why I told you over about what I did, I paid off 134,000, some$100. Over three years and eight months, it was just a discipline that I had to do, because I was planning for my retirement. And there was no way I could go into retirement with that much debt with the income. Now the income I turned out is wasn't as bad as I thought my retirement income is gonna be, it's a lot better. But it's still less than what I was making work in full time. So as I learn on how to do a podcast, the first thing I did was use the microphone in my laptop to see if it would work. And wow, how do you record something? Where do you record it? What program do you use? And it wasn't good. So I bought yourself a cheap microphone. And it was much better, but still not the best. I just sat down one day and said I'm gonna talk about everything I know about how to reduce debt. And that was done in five minutes. It's everything I did to reduce my debt. And I did it in five minutes. How am I gonna do these multiple episodes for 30 plus minutes, and keep people interested? Well, I'm not claiming I'm keeping people interested. But I'm claiming that I can rattle on for 25 to 30 minutes now. So I started doing research online. And that's where I started learning more things in terms like the debt cycle and all kinds of stuff. I know there's other people out there that are helping people pay off debt. And the big thing is how fast you can get out of debt. It's not how fast you can get out debt is high works for you to get out of debt. Not everybody can do it the same way. I try to present this in a way that makes it easier for people to understand, to follow. And to stay focused. I know it's hard to stay focused because basically this podcast is four years now. I've been talking about the exact same thing for four years. 30 minutes a week. You tried doing that. It does get a little boring. I mean, you don't have to listen, but I still have to keep recording to keep this podcast going. So that's what happened. I upgraded my equipment. I got it I found the software that works best for me. I took hours to learn this this auditing software for audio. It works really great that I only learn how to use it for what I need to use it I don't know I couldn't master music or anything like that on here. It's just I can edit my podcast and that's the about it, learn how to set up the extra tracks for my introductory music and for my exit music. All that took time. And if you listen from the beginning, you probably notice how things improved over time on that saying to go back and listen, because I don't want to torture anybody. When you're trying to get out of debt. There's things that you got to do to reduce your spending. But then you're still living life, and you still need to enjoy yourself. So instead of enjoying yourself every day, enjoy yourself once a week, twice a month, once a month. The more debt you have, the more you should be cutting back. So the quicker you can get out of this problem. Then once you get out of the problem, you have to continue doing the same thing. Or you'll fall back into that debt cycle. Again, you need to do your tracking, you need to do your monthly budget, you need to know what's coming up ahead. You need to know how much you have today, how much you need for tomorrow. and on we go. We need to cut back on your wants. So whether it's a hobby, whether it's just entertainment, you need to cut back in those areas so you can pay for your needs, especially in times where there's higher rates of inflation. So stay tuned. I'm gonna start all over again. My next episode, probably heard about it, called tracking, go more detail. And we're gonna go through that whole cycle again.