Charles McDonald : 0:00

Welcome together, we're gonna explore our personal finances and figure out how to improve them. Whether you're just getting started in life on your finances, or you may already have a home and a car payment and you're struggling to get credit cards under control, are you getting a later start in life on saving for retirement, Reduce Debt Increase. Wealth.com is a podcast to educate those to improve personal finances, whether it's eliminating debt, or making smart investments. So let's now get started. This week we're going to talk about what causes debt found an article that has some reasons that I never even thought of my number one reason for what causes debt is unemployment. But there's more to it than that. And we're going to read the article. And my second topic this week is why is it hard to reduce debt? And guess what I found an article Why is it hard to reduce debt and we'll go over both of those articles. Now, a quick word from my sponsor, isotonic, I said tonic is a vitamin. It's a way you take a vitamin it's how your body is built to take vitamins with isotonic rapidly is sorted by the body highly concentrated of vitamins and minerals and maximum results. I've been taking isotonic vitamins for the last six years and I rarely get sick. I highly recommend taking isotonic vitamins. With standard tablets you have minimal absorption and diluted

Unknown Speaker : 2:00

nutrients I take the daily essential kit which is all the daily essential vitamins that you need for your body on a daily basis. Go to my website Reduce Debt Increase Wealth.com, upper right hand corner click on the heart go to the website, let us show you the future of vitamins.

Charles McDonald : 2:27

Seven causes people get into debt. This is from life hat.org by Anna Bennett. Have you ever thought of why you're in debt? Have you ever scrutinize the reasons behind your debt problems? We know that debt can lead us to disastrous consequences in our lives. It can consume our assets, bring on mental stress, and even hurt our relationships. Here are multiple factors to compel people into debt. This is because many are not aware of the causes behind It though there are effective debt elimination programs like debt consolidation, that can settlement etc. We must be aware of the causes that lead to great financial errors so we can avoid, be consumed by debt. Understand the cause of debt below to make sure it doesn't take over your life in the future. One reduced income, often your expenses exceed your income. If you delay and taken care of handling your life with lower income, then you are sure to start to take on debt. Make sure that you understand you're charged income and create a budget and a plan as soon as possible to divorce. More than half of American marriages end up in divorce and with its comes strain on personal finances, the laws in America govern what should be done when a couple's money during a divorce settlement. When one party demands too much the other will be forced to go into debt to pay for attorneys as well as their own Partner deems necessary as part of the settlement. Three, poor money management. Most of the time poor budgeting involves debt, you must have a monthly budget. Without proper budget, you will not be able to track your expenses. If you write down your spending for an entire month you can see exactly where your money ends up. This is the best way to learn where you can cut some unnecessary expenses and help yourself avoid debt for underemployment. People often feel that underemployment is temporary, but it can be a lasting effect on your life, especially if you have to go into debt to make ends meet. If you're underemployed, calculate your expenses and start looking for a second job. This might eliminate your chances of falling in debt. Five gambling is one of the most beloved forms of entertainment for Americans. However, in reality, it's just a guaranteed exchange of money from you to the house. As loans are easy available today. One becomes easily addicted to idea of winning big and striking it rich. In fact, gambling can lead you to effortlessly mortgaging your future to the house. As you tried to win back what you have lost six medical expenses, lab policies and expensive medical treatments make this one of the easiest way to fall into debt. Everything to do in the medical realm cost money and usually lots of it on top of what doctors and hospitals become a more and more impatient with people that don't pay their bills on time. Because of this they turn to they tend to turn in patients that don't have the money to collection agencies. When you don't have money to pay for your doctor visit you can be easily put on the bill on a credit card even take out a loan to avoid collections. Seven little savings. If you want to avoid unwanted debt tried to be prepared for unexpected expenditures by saving some money. If you have to. Decent savings in place you can use it for emergencies like Seville illness, a job loss or divorce without increasing your debt Believe me No one ever regrets saving money for emergencies. the above mentioned causes of debt are very common for Americans can be easily to fall into. However, if you develop good money management and budgeting skills, you can avoid them. Another thing to remember is that it is important to spend within your means which further prevent the reduction of your wealth. By taking prudent steps towards financial responsibility, you will greatly reduce the probability of sinking into and accrue in more and more debt. Okay, that's the article and I'd like to make a few comments on it. I think a couple of those items are related to each other item one overspending, it could be related if you're underemployed or at an also poor money management. So I think there Kind of stretching it on collina seven different reasons why people go in debt. I think some of them are related to each other. One helps you with the other. But you know, I'm not the writer. So what do I know? I said earlier that unemployment was probably the number one cause of getting increase in your debt. But that wasn't even mentioned in this. They mentioned underemployment and I was wondering what really is underemployment. So I looked it up. Unemployment, it's a situation in which your workers employed, but not in the desired capacity, whether in terms of compensation, hours or level of skills and experience. While not technically unemployed, the underemployed are often competing for available jobs. So let's say you train as a medical doctor, but you're working at the local 711 Definitely would be an unemployment because your your skill level is much higher than working then nothing against 711 people, but you definitely if you're trained as a medical doctor, your skill levels definitely much higher. So that's an extreme example. overspending, I say that I would agree that's the number one cause. And it says, and that's also related to no money management, and that's what I'm focusing on on this podcast. If you keep track of your money, money management, then you get a better control of what's going on in your life. And if you quit reducing, or quit re creating new debt, start building up your savings, which was number seven, you know, have a emergency savings plan. So when somebody Then happens like illness and you have doctor bills, he can have some money to pay for enough of it. Were they gonna not turn you into a credit union? or credit union? I'm sorry, credit bureau credit collection agency. So I think it's all kind of interrelated to each other. But you can one, take care of it by having a savings account, building up your emergency fund, quit creating new debt. And if you do that, now, before you have a illness, or an emergency, or an unemployment, or had to be under employed, you're not gonna have too much of a problem. Now gambling, yes, that a lot of people look at gambling as a entertainment. But then somewhere in that when they're doing That they kind of lose that sight of it's entertainment. I was, well, I kind of still am a dice player. I like to play craps. The only reason I don't play it is because where I live in Ohio that can see no, the minimum bet is way higher than what I'm willing to risk. So I don't do it. Now if I go to Vegas, I'll definitely play craps. But I just didn't play craps without learning about it. I bought books. I even got took a course in Las Vegas, went to a dice, coach, learn some tips and tricks and I practice my throw. I mean I did everything I could to learn about the game. All aspects of the game to improve my game to make smarter bets and have a better technique on throw in the dice Guess what, I won money. But it wasn't a whole lot. But it was entertainment, but entertainment where I educated myself, so don't gamble unless you're educating yourself on the game you're playing. And guess what, you don't need to be educated when you play slots, but that is pure luck. And you know the casino is in business to take your money. And that's what they do best. So, good luck if you're a slot player. So that's about all I have on what causes debt, basically poor money, poor money management, which is a cause of overspending which could be caused by underemployment and could be caused by a Seville severe illness. So now I'm gonna move on to the next topic. Why is it Hard to reduce debt. Well, if you don't do money management, it's going to be hard. So I'll just start at bat and go to the article next. Now a quick word from my sponsor, isotonic, I said tonic is a vitamin. It's a way you take a vitamin. It's how your body is built to take vitamins with isotonic, rapidly is sorted by the body highly concentrated of vitamins and minerals and maximum results. I've been taking isotonic vitamins for the last six years and I rarely get sick. I highly recommend taking isotonic vitamins. With standard tablets you have minimal assumption and diluted nutrients. I take the daily essential kit which is all the daily essential vitamins that you need for your body on a daily basis. Go to my website Reduce Debt Increase Wealth.com dot com up for right hand corner click on the heart go to the website. Let us show you the future of vitamins. This article is in I found that the balance.com managing your debt reducing debt seven reason it is so hard to get out of debt by Latoya Irby paying off debt is not without challenges. If you tried or even thought about getting out of debt, you're probably already realized how hard it is. Here are a few reasons that getting out of debt is so hard one, you have to change your lifestyle. To get out of debt, you have to make some major changes to your financial lifestyle. When you went into debt, you're likely spending more money than you were bringing in relying on credit cards and loans to buy things you couldn't afford. You have undoubtedly gotten used to the lifestyle elite, but you must change your habits. If you want to pay off debt For example, you have been accustomed to eating out seven times a week or month, you had to cut way back. And it's even better if you stop completely. It isn't easy to make lifestyle changes that are necessary to get out of debt. But you can adjust to life without the things you can't afford to have to sacrifice. For now, paying off debt requires constant sacrifice. It's hard to do since we're continually flooded with advertisements for goods and services we don't need as long as you're paying off debt. You have to say no to things vacations, like tronics and jewelry, and that will hinder your debt repayment process. Even when you're done repaying your debt, you need to keep out the habit of resisting temptation less you fall back into debt. Three high finance charges take much of your payment. The higher your interest rates, the longer it will take you to pay off your debt. because much of your monthly payment goes towards pan expensive finance charges, you'll have to increase your monthly payment or talk to your creditor and to lower the interest rate if you want to make real progress, paying off the credit card balance or loan for everyone else's spending money to their heart's content, that repayment can be extremely difficult when you're making huge sacrifice to get rid of the debt. While everyone around you buys borrows and spends whatever they want. that spark of jealousy might tempt you to reconsider paying off your debt. Especially as you think back on the carefree life you live when you also had an and cautious approach towards spending, the joy of buying things is short lived, especially when your borrowing power runs out and you're forced to repay all the money you borrowed. Occasional endles is our Okay, just keep your purchases small and Franklin and meaningful five others may not support your debt repayment. If you're married in a serious relationship or have kids, you need those people support your decisions to get out of debt. Not only do you need their encouragement, we also need them to understand your financial decisions, your family will also have to adjust to lifestyle changes. For example, if you decide to cut out cable television, the family will have to find other ways to entertain themselves. Six, unexpected expenses will arise. Although you may do what you can do to safeguard yourself from unexpected expenses, you sometimes have to deal with something you can't plan for. That's why it's important to have an emergency fund you can withdraw from when unexpected expenses arise. Emergency Fund softens the blow from unexpected expenses and keeps you from having to borrow money. You have to rebuild your emergency fund. From your debt repayment funds, so you have money available next time something unexpected happens. Seven, it can take a long time. paying off your debt can take several years. Depending on the amount of debt you have and amount you're able to put towards it every month. It will take even longer if you add more debt or you just pay the minimum, you might just get discouraged after months or years of paying debt with minimal progress. Go into debt repayment with the idea of how long would it take to pay off your debt. Every few months. Use a debt calculator to figure out how much longer you need to repay your debt with your current monthly payment. That check in will give you an idea of where you stand and keep you from feeling like you're wandering around in a debt repayment tunnel with no end in sight. This article pretty much complements the first article what causes debt, and then why is it hard to reduce debt and again, it's You're overspending, you're not doing proper money management. You're trying to keep up with the Joneses as my generation used to say. So you got to cut all that out, you got to focus on yourself. You got if you have a spouse, you need your spouse to be on board with the you got to do it together. So with that says you need a plan, and I'm gonna do my weekly reminder coming up next, and I'm going to come back with some more comments. Do you know how much is in your checking account? Have you projected your expenses forward for at least one to two weeks in advance or pay periods whichever is greater? How's your budget coming along? Have you been updating your budget every month trying to get a better average so you have a better projection going forward? That's a key thing to do. And trying to reduce your debt. Also have you reviewed What you're paying, have you called your providers and try to get a better plan or lower amount. That's an ongoing thing. I mean, you got to do at least once a year for everybody. Some things you can adjust down some things you can't fix your heating and air in the house or your apartment, the only thing you do is set the thermostat up or down depending on the season, you set it down in a winter, so you use less. You set it up in the summer, so you use less. So just a reminder, you got to keep at it. If he hasn't listened to the previous episodes, you probably need to go back and listen to at least Episode Four, where I go over in detail about the plan and a couple other episodes so that you can get a better idea what I'm talking about because I discussed it pretty good, but he never can do it enough. So I try recommend Now keeping in mind Mind that debt reduction plan or trying to get out of debt debt that you're going to have no matter what you do like a home house payment, line of credit, maybe an auto loan, but you need to keep that stuff under control. Try not to spend more than what you can afford your house payment or your rent, if you're in apartment should not be more than 30% of your gross income. So you'd look at your monthly income for a month. What's the gross that's before taxes, try to keep it under 30% 25% would be better. If you can go lower, that's even better. You get a little bit higher, but the higher you go, the more you're gonna struggle. Quit creating new debt. Put your money into a savings account, build up an emergency fund. Once you get all that stuff done and under control, and pay the minimum on all your credit cards. All your debt and then once you get your emergency fund built up, and you accumulated some extra money say three to $4,000 you take that extra money out of your savings and you apply it to one of your debts, like you pay off one credit card or you may pay off two credit cards depending on the bounces up on them. And then you don't use that credit card he you your quit creating a new debt Aereo never get out of this cycle. work for yourself, quit working for somebody else like the banker. That is the focus of my plan. And I'm here to help Yeah, so I do give tips and tricks and whatever as we go along the way. Go back and you know, try to renegotiate. I just found this last week. On streaming I stream all my TV now I gave up the cable bill and why pay the cable bill when you get a free, you can get free TV, Pluto TV, you can stream it, they got a lot of content. It's like watching regular, like a regular cable. And some of that stuff might be older. But it don't cost you anything other than your internet provider bill, what you're already paying for anyway, so maximize your thing that you're paying for, and try to minimize by usage, and then minimize what you're spending money on. That's the end of another episode. I hope you found it useful. And if you'd like to share this episode with your friends, please do so. I'm open for any suggestions for improvement, or for information that you would like to talk about in future episodes. You can go to my Facebook page and leave me a message more than glad to comply. To find my Facebook page go to Reduce Debt Increase Wealth.com

Unknown Speaker : 23:01

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