Episode 185: Fireside Chat - Recast: Managing Debt with Alissa Locke

So the big question is this: how do small business owners like us grow our leadership, develop our teams, and scale our business in a way that allows us to get our products and services out to the world yet still remain profitable? That is the question, and this podcast will give you the answers. I'm Bradley Hamner, and this is the Club Capital Leadership Podcast. Hey, before we get into today's episode, did you know that Club Capital is the largest accounting advisory firm for insurance agency owners in the country, providing monthly accounting, CFO services, and tax preparation. Check them out at club.capital. This podcast is brought to you by Autopilot Recruiting. Join over 1,200 State Farm agents in putting your recruiting on autopilot. Any successful insurance agent will tell you how important team is. Finding those rockstar team members doesn't happen when left to chance. It happens through consistent recruiting. You never know when you're going to lose a team member. And the key to an incredible team is constantly searching for the best talent. Autopilot Recruiting is a continuous recruiting service where you'll be assigned a recruiter that has been trained to recruit on your behalf every business day. This recruiter will take over and revamp your CareerPlug, send out assessments, do pre-screen phone interviews, and schedule your in-office interviews. All you need to do is to show up and give a thumbs up or a thumbs down. This ongoing service is extremely affordable and a no-brainer for taking your insurance agency to the next level. Listeners of the Club Capital Leadership Podcast, go to autopilotrecruiting.com and use the code Club Capital to get started. Again, autopilotrecruiting.com and use the code Club Capital to get started.

So we will go ahead and get started, especially since this is going to be recorded. Uh, we can have this sent out, uh, to everybody as well. It'll be sent out to people in a recap email. As well as be located on, uh, on our website. Um, so as quick introductions, uh, my name is, uh, Mikey Cannon. So thank you guys for, for being here. I'm one of the founders and partners, uh, of Club Capital. Um, I'm excited, uh, to be here today with Alyssa Locke. Um, she's a financial consultant with Money Mentor Group, um, and is here today to talk about, uh, managing your debt and how to finally get rid of your debt. And so why she's here today, Alyssa and I and the company, we've known each other for quite some time, and Alyssa's got a really good background that I'll let her tell you all about in a minute. But she's also been a guest on our podcast. And so ever since I've gotten to know her, She just does incredible work with a lot of small business owners and primarily a lot of insurance agents across the country and works with some of our clients and things like that on managing their money, right? And managing their money. And so a lot of people might say, well, wait, that's what we work with Club Capital for. So you do, you work with us on a certain extent, and normally a lot of it is is centered around the agency and the business. We handle taxes as well. But outside of that, there's the personal finance side of things and taking a hold of the finances of your personal life and things that might entail. So that's a lot where Alyssa gets involved, a little bit of both on the business and a lot on the personal side. And she's been doing this for quite some time and has not only an entire program and a company around this, but, you know, a lot of what she'll share today, there's a ton of, call them like tips and tricks that we went through this presentation a couple of weeks ago and I learned a ton from it. And so I'm really excited to be able to bring it to all of our clients and to be able to introduce Alyssa to all of our clients as well. In case you might need some additional assistance from her and her team down the line. So Alyssa, without further ado, I'm really excited to be able to have you with us today and host this webinar with you. So I'll turn the floor over to you now.

Well, thank you. Thank you. I'm happy to be here. So let's get started. Welcome to Mastering Your Debt. My name is Alisa Locke, and as he said, I'm a financial coach with Money Mentor Group. I'm also a former State Farm agent and former sales leader at State Farm, and I'll share with you kind of my financial journey as to how I became a financial coach a little later on in our session today. But I will tell you, to be completely transparent, that I went from being a broke single mother in my early 30s to being able to retire early in my early 50s and become what I call work optional. And I'll share with you some of how I did this, but the bottom line is that I really transformed my mindset around money and my behavior around money, and that is what helped get me to this work optional place. I am a financial coach now. I am a Certified Financial Coach as well as a Certified Financial Literacy Educator, and I work with entrepreneurs across the country to to help them with any kind of struggle that they have around money mindset and money behavior. So that means things like figuring out how to pay off debt and not get into new debt. It means earning good money but still living paycheck to paycheck. It means not having any money left over at the end of the month to invest or to save, or it's not being able to stick to a budget. And so I help them become more financially confident and with all of these things that they struggle with. Club Capital and I have collaborated to help you in a number of different ways. Whereas Club Capital really focuses and helps you manage your business finances, I bring resources to you through Club Capital to help you with your business— excuse me, with your personal finances. This webinar is going to focus on debt, and we're really going to kind of focus on 4 areas. One, you're going to learn about how debt is impacting your personal life and your business in ways you may not even have realized. I am going to share with you a couple secrets around debt that creditors don't want you to know. We're going to talk about 4 methods of debt repayment and then the 2 best ways to stay out of debt. So let's get going. All right, I want to take a quick temperature of the room. I want you to think of one word that would represent how you're feeling about your debt right now. So think about one word or one emotion, right, that would represent how you feel. And I want you to type that into the chat. So if everybody could mute, that would be really great, because we're hearing somebody. So everybody type in the chat What's the one emotion that you're feeling right now? I'll give you a minute to do that. Okay, I'm not seeing anybody putting anything in the chat. One word that represents the emotion that you're feeling. Micah, are— oh, there we go. Okay, overwhelmed, anxious, queasy. Oh yeah, those are all very common ones. All right, who— what else, what else? These are all super common. Anxious, yeah, okay. Frustrated, yeah. Oh, these are all super common. Okay, good. Well, thank you for everybody who participated in that. So my goal today is to, from the time that we spend together learning and exploring the topic of debt, my goal is to help you turn whatever negative emotion your feeling around your debt right now and help you turn that around so that by the end of our time today, you feel a little more confident and optimistic about your debt. So I have to tell you that when I tell people I'm a financial coach, a lot of times what they say is, what is that? Is that like a financial advisor? Like, what is a financial coach? And when I first heard about financial coaching, I had the exact same reaction. I was like, is, is that a thing? So let me help you understand a little bit what a financial coach actually is. A financial coach works with people who are struggling in some way with both their mindset around their money and their behavior with their money. You know, a lot of people who earn really good money still struggle with debt, still struggle living paycheck to paycheck, still trouble— struggle trying to stick to a budget. It's really a very common thing, and I like to say that a financial coach is what a personal trainer is for your health and fitness. A financial coach is that for your money. So here's what I mean by that. If you are on a journey for health and fitness, like, you would know what to do inherently, right? Eat less, eat healthy, exercise more, get your butt to the gym, right? Like, you know what to do but it's really hard to do yourself, right? It's so much easier when you have a coach, you have a support system, you have a mentor, you have somebody to guide you. And that's the same thing that I do with your money. You know what you should be doing with your money, right? Avoiding debt, investing for your future, sticking to a budget, but it's really hard to do by yourself. And so a financial coach helps you understand why you do what you do with your money, which is the mindset part, the relationship part, and then we help you to change your money behaviors so that you can achieve your financial goals. The lady in green in the picture next to me is Jane Helm. She's actually the founder of Money Mentor Group. She's now my business partner, and at Money Mentor Group we offer one-on-one coaching, group coaching, all different kinds of workshops like we're doing today, all kinds of online courses and master classes. So a little bit more about me. How did I get here? So as I said before, I went from being a broke, divorced single mom to being work optional in my early 50s. I was a serial entrepreneur my entire career. Being a State Farm agent was actually my 4th business that I ever had, and I have to say that I really credit a lot of what I learned about money management, both on the business side and the personal side, with my success as an agent. I was an agent in Northern Virginia for 3 years, and then I went into what they call State Farm Leadership. Um, I was an agency field consultant. I worked in the zone administrative office back when they had zones, and then became a sales leader in 2013. I was a sales leader until I retired from State Farm at the end of 2019 and became a financial coach shortly after. But I have to say that I wasn't always good with money. When I was that divorced single mom, I left that marriage with $60,000 of debt and zero savings and really was living paycheck to paycheck. And it was a really scary time for me. I can remember staring at the ceiling night after night thinking, how am I ever going to be able to give my daughter the life that I want for her? Right? How am I ever going to be able to send her to college? How am I ever going to be able to save for retirement? And it was really— I felt defeated and I felt hopeless and I just felt like, how am I ever going to get out of this mess? And I realized that if I didn't change my mindset around money, I would never change my behavior. So the first thing I did was I decided to become a real student of personal finance. I went to the library and I read every book I could possibly think of on credit and investing and real estate and starting a business and anything having to do with personal finance. I then put together a plan to pay off my debt. I put together a budget for myself, or as I like to call it, a spending and savings plan, because the budget, like the word budget, just didn't sound good to me. And I started to invest aggressively. And somewhere along the line, I got it in my head that if I could continue to do these things, I could actually retire early and enjoy life, and that became a personal goal of mine. So that's how I kind of got where I am today. So here's what I find as a financial coach when I work with entrepreneurs. Entrepreneurs are smart, savvy, intelligent, people who know about personal finance, right? You know about money, right? You know what you should be doing, saving for emergencies, living below your means, avoiding debt, investing for the future. But why is it so hard to actually do, right? And I love this quote from Mike Tyson, "Everybody has a plan until they get punched in the face," right? When you started your agency, you had a plan, right? You wrote a business plan, you had a plan for how it was all going to be, and then you know what, somewhere along the way it all went awry, right? And it's very, very typical. So here's what agents tell me time and time again. I hear from agents, my income is unpredictable and it's constantly changing, as are my expenses, right? I never know what my paycheck is going to be, right, every 2 weeks from the company, and it makes it really hard to manage cash flow for my business and to budget my personal finances for my household. I also hear, you know, I'm a new agent and I have to spend way more than I ever thought I was going to be on marketing and internet leads and team turnover, and the money just seems to be flying out the window. I also hear, every time I make more, I just seem to spend more, and I can't quite seem to get ahead. This is actually called lifestyle creep, and it's a real thing, and it's very, very common. I very often will hear, well, I'm not even worried about my debt. I mean, it belongs to the business, right? It's not really my debt. Really? Maybe, right? And I'm going to show you how no matter what the legal entity of your agency is, your debt is hurting your business. And I'm going to go into that in a lot more detail in a little bit. And then lastly, what I hear is, I have all this debt, especially from the early days of my agency, and I can't ever seem to get this debt paid off. There's just never enough money to go around, and the debt lingers and grows, and I'm just left feeling hopeless and defeated. So why is debt so bad anyway? I mean, isn't it the American way to kind of finance everything, right? I mean, we finance our homes, we finance our cars, we finance our college educations, we finance our vacations, we finance braces for our kids. We finance, finance everything, right? Isn't that just kind of like what we do? Well, we're gonna explore why debt is actually hurting you in more ways than you might even think about. So these are the 5 ways that we're gonna dive into where debt is actively negatively impacting your life. It has a negative impact to your credit score. We're gonna talk about the true cost of debt. We're going to talk about how, because you have debt, you're missing a lot of opportunity to invest for your financial future. We're going to talk about the stress that it causes you and how no matter what the business entity structure, structure of your business is, it's hindering your business growth. So if you look at the chart on your screen, this is a chart from an organization, a nonprofit called the Credit Literacy project. And if you look at the chart on the right, you'll see that the red, which is your debt, is responsible for a third of your credit score. So you may not have known this, but I want to tell you a couple of things that you probably did not have any idea about when it comes to the relationship between debt and your credit score. So here's the first thing: the higher your credit card balances relative to the amount of credit you're allowed, the more it negatively impacts your credit score. So here's an example. Let's say you owe $5,000 on a credit card, and that credit card has $7,000 limit. That's going to have a significantly more negative impact on your credit score than if you owed $5,000 but you have a $20,000 credit limit on your credit card. So the amount of debt in relation to how much credit you're allowed is going to impact that credit score. The second thing I wanted to kind of educate you on is when it comes to installment debt, how close you are to the loan balance, um, to the original loan balance, impacts your credit score. So if you have an installment loan, which could be a mortgage or it could be a car loan, At the beginning, when you're just starting to pay off that installment loan, it's going to have a pretty negative impact on your credit score. As you get closer, right, to the paying off the amount that you owe, it's going to lessen the negative impact on your credit score. And as you know, your credit score impacts not only the interest rate that you're going to pay when you go to do things like apply for a mortgage or apply for a car loan, but it can also impact where you live. So for example, if you're renting a house or an apartment, they may check your credit, so that could impact where you have the privilege of living. And, um, you— most of you probably know Your credit score can have an impact on your car insurance, right? So it impacts you in a lot of different ways. Okay, number 2, the true cost of debt. So let's look at an example here. Okay, let's say hypothetically, um, you have a credit card balance of $15,000. Not unheard of, and your credit card interest rate is 21%. Again, not unheard of. The minimum payment on a credit card balance of $15,000 is going to be between 1% and 2%, so that's going to translate to between $150 as a minimum payment and $300 as a minimum payment. But let's say this person is even paying more than the minimum balance, and this person is paying $400 a month, right? Well, if you look at the bottom of your screen, even if you don't put one more purchase on that credit card, you're gonna end up paying over $8,000 in interest. To pay off that debt. So that $15,000 credit card balance is actually gonna cost you over $23,000. Everything you just bought became more expensive. So think about everything that you financed, your mortgage, your car loans, your student loans, your credit cards. Everything just is, became a lot more expensive. and that's pretty scary. I have a lot of clients who, as we're working together on their spending and savings plan that we're putting together for them, you know, I'll hear things like, I bought something because it was buy one, get one free, or BOGO as they call it, or I found this amazing sale, 75% off, so I bought it. And I'll say to them, okay, but you put it on the credit card that you're not paying off. So it's actually costing you way more than that sales price because it's just ending up on the credit card. So you've got to be aware of the true cost of debt. All right, this is a big one, the missed opportunity to invest. So let's dive into this a little bit. So one of the things that I did in my journey to be able to retire early was live debt-free with the exception of a mortgage. Never had a car payment, always paid my credit card in full, all of that. So debt-free, and that gave me money to invest aggressively for my financial future and ultimately retire early. Now I know what you're thinking. You're thinking, well, but financing a car, like, that's kind of the American way. Everybody finances a car. But what if you could invest that money instead? So let's look at this example, right? So let's say we have somebody who for 40 years, from the time they're 25 to 65, they take $450 a month, which is the average car payment, and they invest that in a high-quality mutual fund or ETF, they would end up with almost $2.5 million. That's huge, right? So when you are tied to all of these payments, our mindset very often is, well, I can afford the item because I can afford the payment. And that may be true, but then we're handcuffed to these payments and we don't have the money left over to invest. When you have debt, you're feeding that debt instead of feeding your investment account or your financial future. 61% of millionaires drive a Ford a Honda or a Toyota. Think about that for a second. What does that tell us, right? It tells us that when you have a mindset of modesty or frugality, you then have the money to invest. Okay, quick little quiz, right? What do you think the average car value a millionaire is? What do you think the average car value of a millionaire? Okay, put it in the chat quick. What do you think it is? Let's, let's have people chime in. I'm not seeing the chat. There we go. Okay. Oh, all over. $20,000, $70,000, $40,000, $25,000. Okay, all right, well, the answer is $31,000. $31,000, $88,000. So see, we have very often a perception that if you're a millionaire, you're driving, right, a fabulous luxury car. But as we know, 61% of millionaires drive a Ford, a Honda, or a Toyota. and the average car value is $31,000. So interesting to think about, right? Okay, number 4, okay, debt impacts your stress level in ways you might not even realize. It is a mental health issue. Did you know that people with debt are 3 times more likely to take their own lives? Now, I know that's extreme. I know, right? That's poof. We're not talking about taking our own lives here, but debt is one of the leading causes of stress in the United States. We also know that Financial trouble is one of the leading causes of divorce in the United States. Your debt is impacting you mentally and physically with sleep issues and depression and anxiety, all of which are not good things if you're a small business owner. And then the last way— oops— Where am I? There we go. The last way that debt is negatively impacting your life is that it's hindering your business growth. When you have tons of debt, whether it's personal debt or business debt, you come to— you have a mindset of scarcity. So what is a scarcity mindset when it comes to money? This is when you have a mindset of always thinking, I don't have enough money, or I'm not saving enough, or I'm not earning enough. And when this is your mindset, what do you think happens when you have to make business decisions that cost money? Right? What do you think happens if you're of a scarcity mindset and you think about, do I want to spend more on marketing? Do I want to spend more on team? Do I want to spend more on growth strategies? What happens then is you stop spending and you stop growing. So I'm going to share with you two secrets. And I call them secrets because they are kind of secrets that creditors don't want you to know. But with this knowledge, this is going to help you in your journey to pay off your debt. The first is how this whole concept of minimum payments really traps the consumer. And the second is the impact of splitting your payment into two. So let's dive into this a little bit. Okay. So first, let's define the minimum payment just to make sure everybody's on the same page. You get your credit card bill, and on the credit card bill, it shows you the total amount that you owed, and then it also shows you the minimum payment that you have to pay that particular month in order to, you know, keep the credit card company happy. So first we need to understand how minimum payments are actually calculated. So there are two different ways that credit card companies will actually calculate what the minimum payment is that you are required to pay. One is just a flat percentage of the balance that you owe, typically 1% to 2%. The second way is a percentage plus a fee of some kind. Okay, and you probably also know that these minimum payments fluctuate depending on the balance that you have. The lower the balance, the lower the minimum payment, and vice versa. But what you may not know is all of the factors that can dictate, um, what the minimum payment is. So here's some examples. If you're late on a payment, the credit card company can change the percentage that they charge for the minimum payment, and your minimum payment might be more. If you exceed your credit limit, same situation, and they can change your, um, percentage at will, as well as changing your interest rate at will. And so here's why it's a trap. When we see a number on our statement saying that we should pay X, our brain is wired to automatically think we should pay X. And so if the minimum payment is only 1%, right, and then we pay a little bit more we think we're doing great, when in reality, we're really never getting ahead because we're paying, you know, so limit, so, you know, such a small amount. And so by suggesting this minimum amount, it's a trap because even when we pay a little bit more, we're not paying enough. And so they condition us to pay a small amount. It only benefits the credit card company and not the consumer. Okay, here's a little brain teaser. If you have a $10,000 credit card balance and you only make the minimum payments each month, how many years do you think it will take you to pay off the debt? Put your guess in the chat. All right, how many years would it take you to pay off a $10,000 credit card balance if you just make the minimum payments? Okay, let's see, let's see what people are saying. How many years? Put it in the chat. No guesses? Come on, make a guess. 18? It's a good guess. What else? You guys are a quiet group. All right, I'll tell you the answer. It's 7 years. 7 years. Yikes. All right.

Well, it's better than 18.

Yeah, it's better than 18. There you go. That is true. That is true. Okay, here's the second secret: the case for splitting your payment in two. So here's what I mean by splitting your payment in two. What do you think the impact would be of taking whatever you felt the month— your monthly payment could be that you could afford? Let's just say in this case it's $500 towards your credit card, and instead of making one $500 monthly payment, you make two $250 payments twice a month. So it's the same amount that you're allocating, you're just making it the payments with twice the frequency. Well, I'll tell you, you will pay off your credit card faster and with less interest. So you paying the same amount, but by simply by splitting it up you're going to save a ton of money. So why is this? It all comes down to how creditors calculate something called the average daily balance. So what is this average daily balance? Okay, put your math thinking caps on now. Here we go. It's the daily balance each day in the billing cycle multiplied by the finance charge divided by the number of days in the billing cycle. Oh my gosh, I'm okay. Let me tell you something. This kind of math makes my head spin, right? But I will tell you this. What they do is the interest from one day is added to the balance of the next day. So who does this benefit? Not you. It benefits the credit card company because this daily compounding generates more interest than if it was calculated monthly. But let's get back to how it helps you if you were to split up your payments. Let me show you a real-life example. Okay, all right, so person number 1, right, there's a $1,000 credit card balance and they say, okay, all I can afford to pay this month is $600 toward my balance. So person number 1 makes a $600 payment on the due date. Well, their average daily balance that the interest is going to be calculated on is $980. But now let's look at person number 2. Same thing, $1,000 balance. They can afford to make a $600 payment. Now what they do is they make their payment early. So they make it 21 days into the cycle. Huh, now the average daily balance is $800. So they're only being charged interest on $800. But look at person number 3. Okay, same thing, $1,000 balance. They can only afford $600 in that month and they make a lot of payments. They make 3 payments of $200 each, right? Same thing, right? $600. But they make one on the 7th, on the 14th, on the 21st. Their average daily balance is only $660. So they're only being charged interest on $660. So when you make these more frequent payments, right, and you could do it every week, you do it every other week, you could do, you know, whatever. But when you make these more frequent payments, your average daily balance goes down. And so that's a secret, and that's one of the tricks of paying off your debt faster and with less interest. All right, let's get into a couple methods of debt repayment. So which do you think is better? Let me take a quick poll of the audience here. Do you think it's better to put a little extra money towards each debt every month, right? A little extra towards your car payment, little extra towards your mortgage, little extra towards your student loan, or to pick one debt and put all your extra money there and just pay the minimums on everything else. Which do you think is better? Put it in the chat. Let's see. Which do you think is better? Oh my gosh, this is the quietest group. Here we go. Pay one, then attack the others. Pay one, but I've been wrong on everything else. Okay, 2 votes for pay one. Who thinks it's the other way? Anybody? All right, interesting, interesting. Let me close this. All right, well, I'm gonna show you how. It's actually better— oops, let me go back here. It's actually better— studies have overwhelmingly shown that the best way is to pick one that you wanna work on, put all your money towards that one, and pay the minimum payments on all of the other ones. And studies have shown, I mean, every single study, that this makes the most sense, not only from a mathematical point of view, but from a psychological point of view as well. And so we're gonna explore this a little bit deeper. So the first thing you're gonna wanna do is you're gonna wanna get naked with your debt. So here's what I mean by getting naked with your debt. You gotta be 100% transparent and 100% honest with yourself about all your ugly debt, right? All you need to do to do this exercise is make a list of all your debt, right? You can do it on a piece of paper, you can do it on a spreadsheet, doesn't really matter. But you want to write down how much you owe for each debt, the monthly required payment, how many more payments you have to go, what your interest rate is, and if there's any penalties for early payoff. Okay, and now we're going to talk about the 4 debt strategies, the 4 debt payment methods, um, that are out there. I will tell you that I'm going to go kind of quickly through these. I do have a course that I'll tell you about a little later called Mastering Your Debt where I go into a lot more detail, but we're going to go through these quick so at least you get a taste of it. Okay, method number 1 is called the Snowball Method, and this is where you focus on the smallest debt that you have first. So why is it called the small Snowball Method? Okay, think about how you make a snowball, right? You start with like this tiny little snowball, right? And then what do you do? Little by little, you pack on more snow, right? Until you have a really solid, strong, larger snowball, right? But it's bit by bit adding to it, right? And so when you look at all your debt and you pick the smallest one first, in other words, the smallest amount that you owe, here's what happens, right? You get a quick win, right? You quickly see momentum. It boosts your confidence. And so this might not be the best way from purely a mathematical point of view, But this is by far, hands down, the best method from an emotional or psychological point of view, because you immediately, um, get that quick win and you feel like you're making progress and you're like, I got this, and it propels you forward. The snowball method is actually the most popular method of debt repayment, again, because of how it makes you feel. Psychologically and emotionally. The second one is called the Avalanche Method, and the Avalanche Method is where you focus on the debt with the highest interest rate and you work on that one first. So you put all your extra money towards that and you just pay the minimums on everything else. So think about an avalanche, right? What happens with an avalanche is it starts off at the very top of the mountain, is, you know, just a little bit of snow maybe coming down the mountain, and By the end where it gets, you know, towards the bottom, it is a powerful thing that you cannot stop. And that's what happens when you work on the debt with the highest interest rate and put all your extra money there. From purely a mathematical standpoint, this is by far the best method because this is the debt that is technically costing you the most per borrow, per dollar borrowed. Okay, next we have the hangover method. Now I, of course, would never admit to having a hangover, but I've heard, wink wink, that it's awful, right? You wake up, right, the next morning after having too much to drink and what happens? All you can say to yourself is, oh my gosh, why did I drink so much, right? Why did I have like one more shot or one more glass of beer or whatever? Right? And all that happens is you are filled with regret. So now let's relate this to your debt. Is there a certain debt that every time you make that payment, all you can say to yourself is, why did I do this? Right? Why did I buy that luxury car? Because now I'm stuck with this humongous payment every month. Why did I buy that really huge house? Because now I'm stuck with this huge mortgage every month, right? So pick the debt that is causing you like the most stress, the one that you regret the most, and work on that one, because that's the one that's going to alleviate the most stress for you. And then the last one is what I call the Goliath method. Okay, so if you remember the Bible story of David and Goliath, right? So David was this young boy and he, you know, there was this big giant, this mean giant that was like, you know, wreaking havoc on the residents, the Israelites, whatever. And if you remember the story, like David, this boy, he takes a rock and a slingshot and he slays the evil giant, right? Y'all probably remember the story, right? So the Goliath method is where you work on slaying your giant, your biggest monthly payment, right? The debt that has the biggest monthly payment. And you work on this one first because this is the debt that's having the greatest impact on your ability to do other things with your money. Tying up your money. And so those are the 4 debt repayment strategies. So which one is the best? I get this question a lot, right? My clients ask me, which is the best method? And I will tell you, there is no best way. There is no one right way that is the best. What's important is for you personally to delve into your relationship with your money, your money mindset. And that's what a coach can help you do. That's what my course helps you do. And then once you understand your money mindset, you can pick the debt repayment method that works best for you, because the best method is the one that resonates the most with you, because that's the one that you're going to be able to stick with. All right. To of the best ways to stay out of debt once you've actually gotten your debt paid off. First is to have an emergency fund. Now you all know this, right? You all know that you should have an emergency fund, but you'd be shocked how many people I run into and they don't have one. And Karen Insurance, you know, it's not, you know, if if an emergency is gonna happen. It's when an emergency happens, so that, that car repair, right, that you didn't expect. If you don't have an emergency fund, you know that that car repair is gonna go on your credit card and it's gonna end up costing you more because you don't have money set aside to pay for that. That medical bill that you didn't expect, same thing, right? You have to buy plane tickets to go to a funeral. It's gonna end up on your credit card, right? Any of those situations, you've gotta have an emergency fund, which is a certain amount of money set aside, and it's sacred money. You don't touch it except for true emergencies. Now, people will often say to me, I don't need an emergency fund 'cause I have investments, right? If I ever have an emergency, I could pull money from my investments. Investments. That is a terrible strategy. The reason it's a terrible strategy is one, depending on how long you've had that money in that type of investment or your age, you could end up paying penalties if you have to pull money out of investments. The other thing is you could end up having to pull money out of your investments when your investments are way down, like, you know, our current environment, and then you're really losing money. So I can't stress enough the importance of having an emergency fund. The second best way to stay out of debt is to have a budget. You need a budget, and don't be afraid of the word budget because all a budget is is a plan for your money. It's you telling your money where to go and what to do. As opposed to the other way around. It's just a spending and savings plan. If you've tried to budget and you couldn't stick with it, you are not alone. 85% of people who start to budget have completely abandoned the process by the 90th day. And when you're an entrepreneur and your, uh, income fluctuates all the time, it is almost impossible for you to budget in a typical way because you're not a salaried person who has the exact same amount of money coming in every single month, even if you pay yourself a set amount. And so that's one of the reasons why a financial coach can really help you. So let me tell you a little bit more about this course I alluded to. It's called Mastering Your Debt Um, it is $97, so under $100. And I will tell you that the majority of people who get this course give me feedback and tell me that they have saved way more in interest than they ever spent on the course. What you'll learn in the course is shifting your money mindset around debt, how we often get a false set of what we can afford We're going to do a deep dive into the differences between installment debt and revolving debt and how they actually work. Learn a lot more about the 4 debt repayment strategies. I'm going to give you 5 additional debt repayment strategies to help you pay off your debt faster and with less interest, and lots of strategies on how to avoid new debt. You're also going to get 6 exercises that you can do for you personally to help you slay your debt once and for all. Plus you get what we call our Budget Busters worksheet, which is a worksheet we use with our paying one-on-one coaching clients that allows you to predict, um, what I call budget busters, which are things that are not part of your normal budget that we all forget about but if you don't predict them, we know they're going to end up on a credit card and they're not emergencies. So if you are interested in that course, here's a link to the course. You can take a snapshot of it and then, you know, do the link on your phone, or you can email me at Elisa@moneymentorgroup.com and I will send you the link to the course. Elisa@moneymentorgroup.com. Because of your work with Club Capital, as a benefit to you because of our collaboration, I'm also going to send anybody who wants it free of charge an exercise that again we do with our private coaching clients to help you evaluate your financial decision-making. And when you do this exercise, you start to see some patterns of how you make financial decisions. Just text me the word money. I'll send this to you. There is my cell phone, 571-419-4770. Text me the word money and I'll get this exercise out to you. Some other resources for you, just so you are aware, we do one-on-one financial coaching. We do group coaching. We've got a ton of online courses. You can go to our website and take a look at all of those. We can help you with putting together a budget that respects how you want to live, helping you pay off your debt. If you feel like maybe you have a problem with overspending or you have a problem with your spouse or partner and you're always fighting around money, these are ways that we can help you. We do business money coaching, um, although Club Capital does a fantastic job really in that space. And we also have a monthly newsletter that you can subscribe to to get more resources. Please follow us on LinkedIn, Instagram, and Facebook. And again, there is our website so you can see all of our resources. And with that, I just want to say thank you. This was a lot of fun. And, um, Maika, I'll turn it back to you.

Awesome. Thanks so much, Alisa. Thank you so much for your time. I know it was— it's certainly valuable information. I hope everybody enjoyed it that was able to be on today. And we'll— again, we will post this on our website on the webinars page. It's under resources. And then we'll send an email out to just let everybody know about it as well. While we're here, if anybody— I know most people are on mute and maybe we have to take you off, but you can do the raise hand feature. If anybody does have a question, for Lisa while we're here. I just want to make sure, so either unmute yourself or raise your hand and we can unmute you if you have any questions for her now.

And if anybody has a question also, they can even email me. Happy to, you know.

Absolutely. Yeah. And so we will include the information on how to touch with Alisa again in her— in an email out to everybody. But at least thank you so much again for this. I know this will not be the last time that we have you on. And I think a teaser— I think we might have some additional content that Alisa and Money Mentor Group might be able to provide in the future within some of the knowledge base of Club Capital as well. Um, all right, everybody. Well, thank you, uh, for joining today. Bye, everyone.

Thanks for having me. Hey, everybody, take care. Bye.

So the big question is this: how do small business owners like us grow our leadership, develop our teams, and scale our business in a way that allows us to get our products and services out to the the world yet still remain profitable? That is the question, and this podcast will give you the answers. I'm Bradley Hamner, and this is the Club Capital Leadership Podcast. Hey, before we get into today's episode, did you know that Club Capital is the largest accounting advisory firm for insurance agency owners in the country, providing monthly accounting, CFO services, and tax preparation? Check them out at club.capital.