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. The basic rules of staying debt free how to go about getting high interest debt gone. Not an easy task, but can be done once the rules are applied consistently. It starts with knowing there's a problem and a plan to get the problem under control. This identify the problem, too much debt, what is too much debt, it depends on each individual. And it also depends on how much income you have. The lower your income level, the lower the debt at when can become a problem. If you're spending all your money, paying your monthly bills, and trying to keep your credit card and minimum payments down timely, and you're coming up short for groceries and maybe gas for the car. So you have to maybe use a credit card to pay for something with the option of I'm gonna pay that back as soon as I can. He probably have too much debt, if you have more than two credit cards you carry any balance on or if you have any credit cards, one that you consistently carry a balance and a large balance, say a more three or $4,000. Or even greater than that you have too much debt, there is a potential problem. I have links in my show notes. For two articles I'm going to refer to there, okay. But there's some parts in there I don't like and I'm going to talk about my plan and why I do it. If you find this podcast, she was filling in like to make a contribution and my show notes, he can find a contribution, a contribution link where you can do so if you're interested in the software I talk about later on, that I use to get out of debt, there is a link in my show notes for that also at the bottom, you need to copy and paste because it's not going to take you right to where you need to go. So let's get started. The first is identifying the problem and knowing how bad the problem is. So you need to get all your credit card bills in line. If you don't get the paper bills, you need to go online, write down on a piece of paper or in a spreadsheet, the name of the credit card, outstanding balance, the rate of interest you pay, and the date you're supposed to pay it and the minimum balance he needed. Do that for all your debt and total it up. How much do you owe, I'm talking about everything, your mortgage, your line of credit against your house, your auto payments, auto loans, personal loans, payday loans, added up. And that is gonna be something that might surprise you, you might be carrying more debt than what you realize. And that's why you're living paycheck to paycheck. That's why you don't have that extra money to do something with or to put into savings. We're gonna talk about that later on. This is a general overview. Then my next episodes I'm gonna work through in more detail each individual step you need to take, but this is step one, identifying the problem, finding out how big the problem is, and start getting things under control. take account of your accounts, check your credit reports, how bad is your credit rating, if you're making late payments, because you have a lot of debt, your credit is probably gonna be on the hurting on the downside you need it gets us stuff under control, and you need to pay everything as timely as possible. And this article says look for opportunities to consolidate, it's a little early for that now, you'll do that down the road once you get everything under control. Because credit cards are a higher rate of interest. I understand that and you maybe get another loan where you can pay those off at a lower rate of interest. I understand that. Overall, it may be a good thing. But the bad side of that is if you don't quit using your credit cards, you're just gonna be back into a wall was placed in you are currently. So put this off, don't consolidate your loans. Now, let's get down the road three or six months before, because we have other options that might be better than that be honest about your spending. The reason why you're having all this credit card debt is because you're buying too much stuff, and you don't have the income on hand to pay for it. So you're spending more money than what you make. The only two exceptions to that is your housing and transportation, houses costs a lot of money, the I don't expect you to save all your money for 30 years and buy a house for Ash. That's not practical. But look at the payment, the monthly payment for your home should not be more than 35% of your total income. But your expenses related to the house, you got utilities, you have maintenance, you have entertainment, you got internet, you got streaming, you got all these other things that are kind of connected to your home, that's going to be under housing. And the same thing with automobiles, you got your loan payment, and then you got gas and repairs and maintenance for the each individual automobile. So it's more than that one monthly payment that you have to consider. So if you want to live a more comfortable life, and not be stretched on your income, your budget, or you're living paycheck to paycheck, and you're not paying bill A, you're putting it off, so he can pay bill b and then the next month you flipping it around, he shouldn't have to do that. If you're managing your money correctly, you should know how much you have, you shouldn't be buying things you cannot afford to pay for. Even though it's only $89 a month, for three years, sounds cheap, to maybe you can't afford $85 a month, because you're already stretched to your limit, figure out how much how much extra you can budget, I'm not really sure what they're talking there. What you need to do is go through your spending, identify the things that you're paying for that you no longer need or use, cancel it, that's gonna save you money right on the gate, get going through that first thing, determine your debt reduction strategy. Well, yeah, we're gonna quit using debt, that's your strategy, we, you're not going to be able to pay off these credit cards, if you keep putting new charges on him. I hope that makes sense. It makes sense to me, if you keep using them, and you keep trying, you're trying to pay them off how you gonna pay it off, if you keep adding to the problem, you keep adding to the problem that you're not gonna ever get them paid down, where you can get your life back under control. The second article is how to reduce debt, it tells you how to do it, organize your monthly bill taking control of your fine, create your debt reduction plan, I'm going to talk about a debt reduction plan. And that's going to be in my very next episode. But before we do that, you have to know how much debt you have, how much the minimum payment is on all this debt, what's your monthly bills? What's your rent? What's your mortgage payment? What's your utilities how much you pay out every month? And how much income do you have to cover that income I mean is your take home pay the amount of money being deposited into your checking account, that's the amount of money you have to work with. And if you're taking the check and you're taking cash off the top and not putting 100% in there, you're not being honest with yourself because your spending is still out of control, just that you don't see it. Because you're paying cash for things. We have to identify everything. And that's where it's called a budget. I call it a control center. But the easy way to do a control center and the ferry first thing once you identify you have a problem. Once you identify how big or little The problem is, doesn't matter. It could be that you only have $1,000 in credit card debt, that minimum payment or your pet trying to pay $250 A month towards it and you never make any progress because one you're you got some monthly bills that keeps going on there. So that $1,000 come down a little bit it goes up a little bit it goes down and you're not really getting that pay down to zero. He should only be using your credit card for your monthly bills if you're paying it off in full to zero every month. That's a basic rule. Remember, we're trying to control our spending, we're trying to control our finances. Why? Because the easier, the better your finances at home, the better life you're gonna have, the happier, less worries less stress, everything is just much better. So trying to live within your means don't buy things because your neighbor did or your boss did or whoever, whatever, buy things that you like and want and can afford, if you can afford it and save up your money. One of the very first things that you identify all these things, he identify your monthly payments, he may be you write it down, it'd be a good idea. How much is your rent your mortgage, your utilities, get an idea. That's the starting point. I call that tracking. To make it even easier. If you have a computer, there's a lot of app applications out there that you can use will help you do these things. Part of the tracking is to identify what it's for as color category, you're gonna categorize thanks. A lot of these apps come with categories are already in them. So one thing I do is look at a list and select it and boom, put that payment in there, put that bill in there, put this bill in that category, whatever they do most of the work for you and just be consistent when you're entering things. But it makes it even easier is while you're gonna you're putting in your electric bill the first time, you know you pay that every month. So go to the reoccurring part of the application, or market reoccurring meaning it happens on a regular basis, put in the information put in your payment. Now the payment can change and you know, we know the dates going to change and the payment can change. Put in the electric company put in all your information, set it up with monthly set it recruit reoccurring every month, do you want to approve it or not? Does he just want it automatically be posted to your checking account, I say approve it because you have to change the date. And you might have to change the dollar amount. If you don't know what I'm talking about, you will if you have an application he actually looking at in using it, then every month that will pop up, you'll know it's gonna come due, I'd say always set my to pop up about five days before they're due. So I know I have the money available to pay for it. I approve it, I know how much it was I changed the date I changed the dollar amount I'm done. So the first time the first month, it's gonna take a little bit longer. But then as you go, it's gonna get quicker. If you don't set up a reoccurring entry. The next time you start typing in the description, the description is going to pop up and it's going to select a category for you. So you get a scan, make change the date and put enough so it gets faster. Either way you do it. I like to reoccurring stuff, because why work harder when you really don't have to. You do this for 30 days or put go back 30 days and put in your information from your checking account. Put the information in from your credit cards for the last 30 days. Now you have a history of your spending of what you're paying for. You can do a report by category. And it's gonna give you some totals for the for that particular month from the beginning to the end of the month, it will report by category printed out Wow, geez, now you know your numbers. How easy was that? Took you maybe 20 minutes. And every week you keep updating this, you keep updating it on a regular basis so that you know how much is in that checking account at all times how much you owe on all your credit cards at all times. What payments you need to make what payments are coming Do you have your finances under control, you have it right there in front of you. The next step after tracking you get that report by category is to do a control center. And only thing that is you're going to rearrange these categories to gather and group them any way you want. But this is how I do it. I put all my housing together. Okay, when you do a budget it starts out with your income you list your income at the top total. Now we have what am I going to pay every month. Okay. My needs comes first housing, transportation food. After that you can expand your needs to savings insurance now Not included anywhere else, because housing, you're gonna put your mortgage payment there, you can put all your utilities, I put my cell phone, phone bills in there, I put my internet service there, because it's pretty much connected to the house, any cable, entertainment, that's all under housing because it's basically at your home, then transportation is your automobile your loans, he can break it down by each individual auto if you'd like. It'd be your auto loan, gasoline repairs, maintenance, maintenance, like oil change, new windshield wipers, light bulbs, you know, little odds and ends stuff, maybe you do yourself, maybe you don't, I do it myself, because it's not that difficult. And I saved some money, basically a lot of money. The more you do things on your own, the less you pay somebody else, the more money you gotta keep for yourself. Go down. And we have been while you have debt, I've kind of forgot about that. So we have housing, transportation, food, that because you had to pay it every month, savings, insurance, not anywhere else, six items that your needs. Anything else is a want. clothing, entertainment, that's not included in housing, like tickets for ballgame, concert, those type of stuff that's down below and your wants that necessary your needs, your needs are things you're going to pay every month, is really what you need to focus on. If you're struggling to pay off debt, you need to look at things that you're paying for today that you no longer need, want, or use. And then cancel it and get out from those payments. And a good example, is these anti virus programs. Maybe you bought a new computer but you had an old computer? Did you just put the old subscription on your new computer? Or did you buy a new subscription, you might have two subscriptions for your computers, maybe that old computer you're not even using anymore? Cancel that anti virus subscription on that old machine. Don't let it renewal go in, find out what it is and take care of it gym memberships feeling go to gym two months out of the year, why are you paying for 12 months of the year, try to avoid things like that. I'm not saying not to do it, we're focusing on reducing your spending. So we can save some more money so we can reduce our debt. So reduce spending has gone to reduce 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 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 reduce debt increase wealth@gmail.com. And I'll send you the information about this online software that worked great for me. So remember the basic rules, don't spend more than you make with two exceptions, housing and transportation, where you finance it, obviously, because of the cost of them are so great. Your monthly bills eat on a pay every month is something you shouldn't be putting on credit cards, or financing says simple You can't keep up, they will get to a point where you have so much debt, you won't even be able to make a payment on anything because he'll just be flat out broke and bankrupt. So identify a problem. Are you spending too much, maybe you don't have enough income, that something happened in your life to where your income got reduced. Everything is a possibility. But we need to adjust our financial life based on our income and for income goes down. We need to reduce our spending. And if our income goes up, you need to save more. Because we're going to talk about how to go about paying off debt but the first thing you need to do is identify you have a problem. Try to figure out how to solve the problem. And one of the things is Maybe the problem is you have a lot of debt. And maybe it's because you're spending too much money. So we got to reduce our spending is step one. And then step two is, quit using credit, quit using credit. That's part of my debt reduction plan. In fact, that's the number one thing you have to do, quit using credit and start paying for all your monthly bills. That's why it's so important to have a control center, know how much is due each and every month, know when and the month is it due. So you have an idea of how much money you need, so you don't spend it before you need it. There's a lot of programs out there that helps you solve these basic problems. And it's willing of how much are you willing to spend, I don't get paid by any of them. But one of the better ones I've seen is you need a budget that tackles all these problems for you a lot more. You need a budget, that's an app, it's I think it's kind of expensive, thinking around$14 $15 a month, but you can do this with I use an app for my tracking cost me $10 a year, I use a spreadsheet for my budget that I've already paid for boom Ghazi anything No, nothing extra anyway, I already have it. So I'm set $10 A years all I'm spending. But it once you start tracking the you have to know what you're doing. And the first thing you do is we have to start I was thinking about this, a lot of them want you to put in your starting bank balance and then work for a while you could do that, go back 30 days, because remember, we want to see a history so that in order to speed up the process, go back to previous month, it could be more than 30 days. Or if you're close to the end of the month, start the beginning of the current month, figure out what your bank balance is plugin number, put in all your transactions and deposits and all the withdrawals, all the way up to the current date, maybe you have to do a month in a few weeks, that's the most time consuming part of this whole process is getting started. And once you get all caught up, then you should be able that balance, then that program should match the balance in your checking account. And if it doesn't, that means you entered something wrong, you gotta find your mistake and fix it. That's one way to do it. Another way is to start with a zero balance. Go back 30 days, put your beginning balance zero, enter all your transactions, get the ferry and take the difference between what does your program app shows and what your bank shows and take the difference in that your beginning bank balance and it should match. But you're not going to find any mistakes that way, but it will match. And then we can go forward and keep it matching the bank. So if there was mistakes in the past this 6090 days, it's going to work as south through and be no longer a problem if it ever was a problem. That's a couple tips I just gave you on the easiest way to do it. Once you got it up to the current date as if you update it on a weekly basis of 10 minutes a week or less. Because if you use the reoccurring entries, it's going to be almost done for you. Once you start entering, if you go to the same grocery store to saying gas stations, once you've gone through 30 or 60 days, you've gone to about every place you go to on a regular basis. So they're gonna pop up, the only thing that's not going to pop up instantly, or the new places go online shopping places or whatever. But if you always type in Amazon is going to pop up. And it's going to have some type of category. So like Amazon, your categories could be all over the bit. It could be groceries, it could be home supplies, could be lawn supplies, it could be almost anything. So you just need to be aware of what you're buying. And you want to be consistent on the categories they use them because that's information, good information going in is going to give you good information coming out. You got to be able to look up how much am I spending and give you an example. I don't have a printer for my computer I haven't had and for years. I've been going to FedEx Office and what I do is send a file print and Go and then I get my gives you a code, you go to the FedEx Office, you put in the money, then you put in the code, and you can print off what you need to print. I select black and white 99% of the time, because that's all I need. I'm not printing anything and color. So why pay for something you don't need? Always have that type of mindset. So I went into my app, I went back two years, I'm looking at buying a printer, because it's it's a hassle doing all that. For the last two years, I've only spent $88, at FedEx Office. And most of that was in the last two months because of something new I'm doing. And that will go away, eventually, the printer I'm looking at is $200 will take me like five years to break even on that printer if I never buy ink for Who am I gonna buy it? I might, I might not. Because it's kind of a hassle. But I drive by it almost every other couple of days anyway. So I can always stop there. But that's just an example of I got myself a report I make I can make an informed decision before I spent $200. Maybe I'm not going to do it, maybe I will. But it's going to come down convenience in this particular case, but I might look for a cheaper printer, but I go to a different printer than the cost of the ink is gonna be a lot more and I'm not saving anything in the long run. So I probably won't do that either. But you get the idea. So we need to identify the problem. And we need to look at the problem. And you need to get your monthly bills in front of you so you know how much you owe, how much is coming in, get all that information in front of you. And next episode, I'm going to talk about you once we identify the problem. And what we do it looked for things you can cut back on your spending in the next week or so try to get an app, get that information in there. Try to get yourself a report by category so that you know how much you spend on a monthly basis. We can start figuring averages, and the average is getting better the longer time we have because we can get a better average. We're coming up to Thanksgiving so your groceries might skyrocket. But then we got Christmas, your groceries could skyrocket again. But then you got six months of no holiday all day. So we'll have an average. I'm gonna talk about the next episode a debt reduction plan. He identified it you know how much no one it's Do you know how much you have to pay, you know the interest rate. Go ahead and put it in order by whatever you want. The highest and gerade on top, the lowest on bottom, or the lowest balance to the highest bounce, it doesn't much matter. Whatever you want to do. And we're going to focus the next episode on how you're going to put together a plan that you're going to follow consistently month in and month out. That's going to pay off that debt and you'll be debt free. Before you know it