A live YouTube conversation (host Bunny Young) with Kristen Bonamante on practical strategies for living debt-free. Kristen outlines steps to manage and inventory debts and assets, discusses distinguishing good vs. bad debt (examples: student loans, credit cards, home equity, car loans), and points viewers to a worksheet and a private group for deeper help.
Chapters
All right, we are going to talk about debt free living tonight and having a debt free life and get some tips from the debt free queen herself, Kristen Bonamante. And we also get to have a special guest with in addition to Kristen and that is baby Ariana. Hopefully we get baby Ariana. I think if we behave and we act kind and nice then maybe Kristen will give us a baby fix tonight. So here she comes into the live broadcast which is awesome so that we can see her and we can hear her because she is fantastic and she can tell us a lot. Not only get control of our financial station but also get out of debt.
Hey, hello. There's a light on my face here. How are you doing tonight? I am wonderful. Actually. The baby is sleeping right now. So she wakes up, then I will introduce you and if not then I will post lots of pretty pictures in the comments.
It's okay. I'm thrilled that she's sleeping. Like that's a thing. So that is nice. Happy. Almost one month of new motherhood.
Thank you.
Can you believe that she's going to be one month old?
I wanted to throw a party for her and he told me that was a little ridiculous.
I'll come.
Well, thank you.
So tell me a little bit about debt.
Debt. I guess the first thing that comes to mind when I think about it is how overwhelming it is. And I remember playing plenty of nights literally not being able to sleep or shut my brain off. And I think as women we kind of do that anyway. But just being overwhelmed and waking up and thinking about the bills that I had to pay and thinking about the debt that I had and it really just creeps into every area of your life. You always have that in the back of your mind.
Hi, Keith, by the way. Keith is watching so I'm making sure Keith get some love. So Keith, do you have any specific questions about debt? Because you can put them in the comments and 20 seconds later Kristin will answer them if she can remember what she was talking about 20 seconds before. Because I have that problem and I don't have a one month old. So with debt, what is, I'm sure this is a loaded question, but what is the best approach week by week, month by month to getting out of debt?
I think the first step for everybody. So you have to break it down. You can't try to attack, you know, if you have 30, 40, 60, $100,000 in debt, you can't try to attack all of it at one time because that in itself is overwhelming and you're going to feel like you're failing every day and just sliding a little bit more. So it's really understanding what you have is the first step. And so I have a worksheet that I ask people to do and it's basically you just list out all of your debts, all of your assets. And I think it's important to do both so that you can see that you are building on one side. You know, it's not just this one sided coin that everything is horrible. You do have assets. So listing those out and getting an idea for what your interest rates are and what the terms are around those debts, that's the first step in kind of putting that puzzle together and making it work the best way that you can.
So the last question I'm going to ask you on this page before we are hopping over to the difference makers where we can spend a little bit more time because that's an exclusive a better place group is tell me what the difference is between good debt and bad debt. And if you can give me some examples, that would be awesome.
Yeah. So some of it's in perspective, right. And one thing that I like to point out there is student loans. So this is a loaded topic and we could have a whole hour long conversation on that. People are very passionate one way or the other. So some people consider that good debt, some people consider it bad debt. It's not terrible. Typically you, your interest rate is going to be somewhere around 3 or 4%. If it's higher than that, then we should probably evaluate that and look at some other options. But you know that that may have led you to your career or whatever. But typically when you think about bad debt, the biggest one that comes to mind is credit cards. So people know you have 20, 18%, whatever that interest is on there. And I actually, it's funny that you brought this up yesterday because I got one of the pre qualified notifications in the mail for $40,000 loan, whatever and they highlighted that if you were to put that $10,000, just 10,000 of it on a credit card in three years, you would pay $12,000 in interest on a typical credit card versus whatever their loan was. Yeah. So it's extremely bad. And that's usually the first thing that we attack. The other one when we talk about bad debt that I see that's fairly common is people taking from their future to pay for right now. And what I mean from that is borrowing from IRAs or 401ks and using that as leverage because you end up paying back about the same amount as you would for a credit card. So typically I think that that's bad debt as well. Good debt, of course, is home equity. There are different schools of thought around that. But your, it's, it's like a forced savings account. And usually your interest rate is really low, especially if you've done anything in the past five, six, seven years. You know, so cars, brand new cars and I did a video on this not too long ago, but brand new cars can be really bad debt. You get people that get, you know, 12, 15% interest at for something that loses so much value as soon as you drive it off. So kind of navigating those situations and trying to figure out, you know, there's not a one size fits all for every situation, which is why it's important to really look at the assets and the debt and figure out where you are as a person.
Awesome. Well, I know we're going to head over to the difference makers group right now, which Keith, you can definitely join us in the difference makers group if you've already answered those questions. And I'll see those and take a second if you hop over there right now and answer them so you can. And hear Kristen's thoughts on debt consolidation as well as your number one tip for raising your credit score, which I know is going to be a loaded question, but at the same time, I think filling out that worksheet for individuals just to have a really clear picture, you know, in business, that's what I always recommend. And so I think with finances and with wealth and with debt, that's a good idea as well. And so we'll make sure below this video that people can get that information to get that worksheet from you. And you and I will head over to difference makers and talk to some starfish. And thank you everybody for being on here and making the world a better place and welcoming Kristen back to the land of us. And we'll see Ariana next time.
