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. Tough choices. Reducing debt requires making some tough choices, what to get rid of or quit paying for which services, this is key if money is not available, then it will be difficult to reduce that. tough choices is doing away with the services that you've been paying them for, that you really do not need. That is what I'm referring to. I have a link in my show notes for an article that gives you tips on how to save money. But I'm gonna be more detailed than that. So let's start with the article. I assume that you started your tracking, you got an app online, or download it. And when I say an app, I mean a program that can help you track your spending, through your checking your savings and all your credit cards that I use count about that comm because it's easy to learn, easy to use, and it's only less than $10 a month. And you got to mainly enter all the information, don't link it to your bank accounts or your credit cards. The purpose of tracking is so that you are aware of where your money is going. And makes you aware of how much you're paying. And when you're paying so that you have better control over your finances. That's the main reason you do it manually. And once you do that, in you create a budget, he can get a report off your tracking app. That's why you have it as you can get a report by categories for one full month. And then you can use that as your budgeted amount. And then you can start tracking the current month as your actual amount. I've talked about this and detail and past episodes. So go back and look. We're focusing on now the toughest part of getting started on reducing your debt is quit using credit. Quit using debt. Put those credit cards away. And in this article, it has we'll make a budget . Decide how much you can save which right now it's zero. Pay yourself first, don't worry about that. Number four in the article is pay as you go for regular expenses. This is what I'm talking about. If you make a rule that you use cash checks or debit cards, instead of credit for all your expenses, he mean more than likely to control spending on those items. food, fuel, utilities, clothing, my qualify for that list, I'm saying you're paying cash for everything. If you don't have the money, don't buy it. So we start out with your needs. You pay rent, you're gonna pay all your utilities, whatever insurance you may have, you got your transportation, you pay a car loan, you're gonna pay for your fuel, and any cars repair, like oil changes I'm referring to, you're gonna use cash or your debit car because that's the same as cash. You're not using those credit cards. Even if you intend to pay it off, or pay that exact amount. You got to quit doing that. Because if you have a debt problem, that's how you probably got there in the first place. And then you got to be a discipline shopper. They can support your savings or your goals as being a disciplined shopper. For example, before making a grocery list before going to the supermarket can cut down on impulse purchases. Studies show that cutting down on em Paul supermarket purchases can save a family hundreds of dollars annually. Don't treat shopping as entertainment. Heading the mall just for fun of shopping often leads to unplanned spending, the best choices to show up only when you have unnecessary purchase. If you simply can't resist shopping us fun. Take only a small amount of cash and leave credit cards, debit cards and checks at home. downsize your purchases rather than supersize them. Do you really need those top of the line premium line name brand sneakers or sportswear? Rather than a more moderate line from the same manufacturer? How much could you save if you bought a mid range vehicle, rather than a luxury nameplate for your next car truck. Also do not buy new cars buy used cars, which may be tough nowadays because there's a shortage of used cars. But generally speaking, buy yourself a used car because a new car depreciates so quickly when you buy it and you'll get behind on it on even if you make timely payments. You won't be able to get rid of it because you're gonna owe more on it than what it's worth. I view it having an economical car instead of gas Gallen guzzling SUV. How about carpooling to work or taking public transportation, a one on one or two days a week. Bout brown bagging lunch rather than buying it out can rarely save about $5 per day or more. These are tips on how you cut down your spending. That's what we're focused on. Pay your bills on time, not only not paying your bills and with credit accounts in a timely manner, hurt your credit rating if your pay late, or paying late incurs late fees which can quickly mount to sizable amounts of money. Bouncing a check or overdrawn your account with a debit card. We're also incur fees, naturally millions of consumers monthly pay millions of dollars in these fees, manage your credit accounts and money wisely to avoid these unnecessary drains on your money. Very important. Of course, what we're heading to is pay off high interest rate debt and credit cards and make a long term savings investment plan that's down the road. Right now we're focused on your budget or your control center. Where is your money going? And if you look at the detail, what can you do without you read? Do you really need to have that NFL package? Do you really need to have that NBA package, you gotta get rid of anything extra that you're paying for, and watch it on public TV, that's free, all free watch those games that doesn't cost you any money to watch. Granted, it may be cheaper than actually going into a game, maybe you can see multiple games. But unless you're making money by using that service, you don't need to have it, cut it out. Because you have a spending problem. That is part of your spending problem. We need to cut back your spending to the very bare bones, those things that you absolutely have to pay for housing, rent, mortgage, utilities, any internet, internet connection services. Other than that, you're not gonna need it. You can have one or two streaming services. You got to limit your streaming, if you got 10 different streaming services, are you using them, get rid of them, limit yourself to two streaming services. If you're paying for cable TV, and it's more than $100 a month, he need to get rid of it and get one or two streaming services that's gonna cost you 30 to $60 a month, that will be probably less than half of what that cable TV is. These are way you cut back on your spending and you're cutting back on your spending. Why because one we need to get our checking account up to zero or higher available balance so that when we pay our all the bills that are due, we still have some money in the checking account. When I say all the bills I mean all those monthly bills whether it's rent, or loans and utility These, but also gasoline for the automobiles and food for your self and family. Those are the bills that you have to pay it day in and day out. And once you get them all paid for each has a little bit of money left, whether it's $100, minimum balance in your checking account$300, I personally have it as$600. In case something pops up, I'm unaware of which very rarely happens. I have some money to cover it without having to worry about it. This is the tough part. He got to make those tough decisions, he got to cut back your spending to the bare bones. If you have more than two cars, do you really need more than two cars in need to look at things that have a payment attached to them? Can you sell that item, pay off the loan and get rid of that payment. That's what you should be thinking about doing. So if you have three car payments, and you're only using one car, you need to sell at least one of them, if not two of them. If you're using two of them, that's fine. But you do you really need three. And if you got three car payments, as a lot of money that's going out that you've got tied up, you need to start getting rid of those assets that got a loan attached to them, and pay off that loan. If you can't, well, you can't sell it unless you pay off the loan and get rid of that loan. That's how you're gonna speed up getting this problem under control? Do you have anything around the house? Do you no longer need that has value? Can you sell it? Can you sell it on eBay or wherever, maybe you can have a garage sale in the spring or, and just start liquidating stuff for cash. And all that money is gonna go into your emergency fund it first you got to get your checking account under control. And once that happens, you're gonna build up your emergency fund to a minimum of $1,000. So now we have a minimum of 1000 in your savings, and a lease of $100 in your checking. So that's $1,100 You have put away that you're not going to ever use again. And then we're going to build from that. And then any extra that we have, we're gonna build that savings account up to, let's say 3000. So that's 2000 over your minimum. And then once we have over 3000 If we don't have any big expenses upcoming. For me, it was real estate taxes that would pop up twice a year, about$2,500. So I had to make sure that got paid first. So I never pay down any debt until after my real estate taxes were paid that check clear. Everything was looking good. I still have enough money. Yes. Now let's apply it to debt. And I decided to pay off the smallest balance first. Then after that one got paid off, I started paying off the highest interest rate from that point for the rest of the time. Because the quicker you can get out of those high interest rate loans, the more money is gonna be applied to principal, the faster you're gonna get out of debt. That's the tough choices. So you got to make these choices in order to get ahead. Now what type of savings should you have? When you're just getting started, you need to have a savings account at your local bank or the same bank where you have your checking account. Because you want it to be liquid II needed to be accessible. Because you're going to do you're going to transfer money from your checking to your savings maybe more than once a month. But you're only allowed to take money out of your savings account six times a month. If you do it more than six times a month. You're gonna be penalized because that's the FYI that's the rules. Six withdrawals a month from any savings account. Pretty much the rule as the federal rule, why I don't know, they want you to save your money. But they're not giving you any incentives because they're not paying you any interest. So once your while we're paying down this debt, while we're trying to get our life back under control, that local bank at that savings account is fine, is not going to pay you interest. Whatever interest you get will be minimal. But just stick with it. Once you get your credit cards paid off, once you get couple of your debts, and you get more, you're building up your savings faster and faster and faster. And now you have you want to build up your emergency fund to say $5,000. Now you got enough money, you can look at a high yield savings account, which basically is the online bank, or a money market account, where you'll get a higher rate of interest, and you can start putting your money to work for you. That's going to be down away. So we look at our tracking, we've done our budget, we looked at everything that we are paying for. And we have a lot of cable TV expense, we guys streaming next brands, and he just got to cut that stuff out, he just got to nail that back, pick the two or three items in that category, cable TV streaming services that you watched the most, get rid of the rest of it. And you're gonna cut back your spending. If you're not going to increase your income, eat only other way to succeed at reducing your debt is to cut back your spending on every thing you can. Because right now your priorities should be reducing debt. Once that priority is taken care of. Now we can then increase our savings, increase our investing, and then gradually pay for services that we may use more often and start adding them back in to our lives. But now you're struggling his paycheck to paycheck, he can't make ends meet, you're using credit to pay some of your bills, your credit, your checking account has a negative balance on it because you got overdraft. Credit through the bank, you're just it's bad, the whole situation is not good. So you need to make that tough choice. Do you want to be out of debt? Or do you want to have all the services that you're paying for? If you want all those services, then you're going to have a lot of debt, and you're never going to make headway on it. And you're going to be working the rest of your life and not having much you're going to be working for the banks. That's what I always felt like when I was in that situation, you got to put the money working for you. And the only way you can do that is reducing your debt. I'll be back in one moment with my final thoughts. If you're interested in 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 in 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 wealth@gmail.com. And I'll send you the information about this online software that worked great for me. Okay, you get through some of the tough choices, you eliminate some of the spending, you've been done. You got rid of say cable TV, you eliminate all but two or three of your streaming services. Now what are the only other way to free up some money so you can apply it to your debt would be to reduce what you're using. So for utilities and a good example, there was two things I always hate Pam for always hate taxes, and I always hate utilities. And both of them We're pretty much out of my control, you have to pay them when they are due. But on utilities, least, you can use less utilities. So if you make your home more efficient, like what I did was I insulate it, I bought this house when I moved into it, one of the first things I did was put more insulation in the ceilings in the roof. Tying the last things I did, which should have been a first thing was I put in new windows that are more efficient, the cold air wouldn't come in hot air one coming in, it's much more quiet. Now that I can have the furnace not run constantly. And it really helped my utility budget. Another way with that you can you reduce your utilities without spending money is just turn your your heating, turn the thermostat lower. If your air conditioning, turn the thermostat higher. A goal here is to use less. Make sure your water, nothing is dripping. You have no drip free faucets, or a commode that content is running continuously, you need to fix all these little things because they're costing you money in the long term. Once you get all that under control, you'll get used to it. In the wintertime, I wear a sweatshirt in the house all the time. And if I don't go anywhere, I wear sweat pants and a pair of socks. When I'm sitting in my family room, which is a lower level that's a little bit cooler, I got a blanket I put over out. That's what everybody does in the north. It's different when you're in the south, and it's hot, and you're trying to cool it. But I guess you can sit in your boxer shorts, or your underwear and be cooler run some fans, instead of the air conditioning of electric fan, it's cheaper to run than the compressor on your air conditioner. You know, it's this little things like that. Look for ways to save money to reduce your spending, where do you cut back a lot or cut back a little at all gonna add up over time. And that's what we're talking about. We're not saying you're going to save $10 a day by cutting utilities. But if you can save 50 cents a day, over a year, it adds up. And that's money you can use to pay down your debt. I've talked about a little bit about getting rid of stuff you no longer need. sell stuff you no longer need or use, try to get rid of it. You can't sell it, make a donation to the Goodwill or local thrift store and get a receipt. Because that can help you reduce your income taxes. The other thing, I never like pan, so I use every opportunity I could to make sure that whatever I did, I'm gonna get some type of tax advantage from it. paying the mortgage on my home paying the mortgage interest. There was a tax advantage. Not a good one. But it was a tax advantage bank and charitable contributions, whether it's stuff I no longer use, and get rid of it. That's just as good as giving cash sometimes. And it was a tax advantage when I put my windows in. And was there a credit for putting in and high efficiency winners? Well, my case it wasn't but it could be today. You need to check the tax code, talk to your tax preparer, your tax advisor and find out what kind of credits are available out there. If I make improvements to my own, that's energy efficient, can I get a tax credit for it? You got to be thinking ahead before you do these things. So only way you're gonna get ahead. We're focused here on reducing your debt. Another category that you can save money on is your cell phone bill. Maybe you're paying for services you don't really need, such as data. And if you're always in a place where you got Wi Fi, whether it's at home or work, you can connect to the Wi Fi at work, or wherever you're going and not costing you anything. You don't really you're not using that much data. You need to look for a plan where you're taking less data and quit paying for so much. Even you can get get unlimited data. But if you go over a certain amount, they're gonna slow it down. So you need to keep that on our consideration. There is no such thing as unlimited data, if you use a whole lot that you need look for ways to save money on your cell phone bills. Now a lot of times you can change companies and get a better rate for a short period of time. But if you would just contact your local provider and try to find out a better because they come out with new plans all the time. Maybe you have an old plan that's two or three years old, maybe there's a new plan, that's cheaper, that gives you all the same stuff, they're not going to tell you about it. Unless you call them up and say, Do you have any better plans I can save some money on because I'm thinking about leaving to this elder hairier because they got the same thing for less money, and see if they can match it for you. At an area you could cut down your spending on a move as$5 a month or $10 month, it all adds up. Nothing is too little to be overlooked. Another area who trying to think of we got utilities, we got cell phone, we got rid of cable TV, now really can't do anything about our loans unless we consider refinancing. But right now with mortgage rates going up. And if you have a mortgage loan, under 3% or less, you're probably better off sticking where you are, until you get it paid down. Because the if you make extra payments on it, your monthly payments not changing, but you may owe a whole lot last time. That's a subject for future service, take loans out of it. If you got any credit cards that you can pay off somehow, or maybe get a part time job or a part time gig or do something to make more money, even changing jobs as what I did was, I was a truck driver, I want I quit one job because I wasn't making that great of income and the whole job change, I no longer liked it. And I moved to a new employer. And my income almost doubled, just like that. And that really helped. So if you enter a job category or a career, where you can change employers, and make a whole lot more money, you need to do that. You cannot be loyal to any one employer because they don't care. Maybe they pretend they care. But in the grand scheme of things, if they're not paying you what you can get somewhere else, they probably don't really care, and they don't want to spend the money. So you need to move on. Look for a better paying job, or even a better paying career. If you can do so that's the best way to increase your income. Sell things you no longer need or use, create some cash flow, put that in your checking account in your checking account under control, get your emergency fund build up, and keep building up that savings account so you can start applying money to your debt. Everything counts. If you see a penny on the road, stop and pick it up. I one time stopped the pickup a quarter. And it was in some ice. And when I picked it up, I noticed there was something underneath it. And I dug out the ice I found a $5 $5 bill, I stopped to pick up a quarter and I picked up $5.25 It's worth your effort. never overlook any opportunity to gain anything, no matter how low because in the whole grand scheme of things, it all adds up. And the main thing we're trying to do is get your debt covenants under control. Keep your spending under control, make more money available to apply to that debt. So you can get out of debt quicker. And you're gonna create a lifestyle for yourself that's going to continue on. Even when you're out of debt. You're going to continue doing this, which is then you're gonna increase your savings, which now instead of working the money working against you, that your gang get the more money work for you. Investments, whether it's a high yield savings, a CD, a money market, or invested in the stock out market or however you choose to invest your money is gonna be working for you. If you do all this and stay focused and stay tuned to what you're doing, you're gonna be much better off and you're going to be glad you did so