How To Feel Grateful For Your Debt While Getting Out Of It

Foreign. This is Busy Getting Better, the podcast for women who are committed to prioritizing their own personal growth. I'm your host, Madison J. A mindset and money coach, a first generation wealth builder and a woman on a mission to help you master your finances and live your best life. Money is not all we are covering though, because in order to live your best life, you have to become your best self. So we are diving deep into all things personal development and bringing you the mindset shifts, money, tips and inspiration. You need to go out there, be bold and build the life you can't stop daydreaming about. It's time to get busy, babe. Busy getting better. What is up you guys? Welcome to the podcast. Today I want to talk about the boogeyman of personal finance and I'm talking about debt. Debt is something that weighs so heavily on so many people and I have my own experience with debt, so I can definitely relate with just the weight that it feels like on your shoulder and how it can sometimes feel impossible to get out of and like there's just no light at the end of the tunnel. Debt is something that has come to be just something that is looked at so negatively in the world and is carried around almost like, I don't know, like shamefully. And I think that in order to really work through debt and in order to be able to build a plan to get out of debt, I think there needs to just be a bigger conversation around shifting the perspective around debt. A lot of the reasons why people don't prioritize getting out of debt or go get help with getting out of debt is because there's just a lot of shame around it. And I have definitely resonated with those feelings. And I think that in order to really make progress in this space, we need to just make it more common knowledge about how many people are are in debt. I think we live in a society where we see people on social media living this crazy life, and for some reason we might sit here and just think, how are they doing it? How are they figuring out a way to have all of these nice clothes or this new car or this beautiful house and do all these things. And I'm over here just figuring out how the heck to pay off my credit card statements or get out of student loan debt or whatever it might be. And I think there's a really important mention here of just we don't know people's situations. And I think what we need to realize is that a lot more people are in debt than we probably recognize and we might think that everybody has their finances together, but There are over 340 million people that have consumer debt and that consumer debt adds up to almost $17 trillion. Like I don't even know if I can conceptualize $17 trillion. So when we talk about debt, it's not something that we should be shameful of. And I just want to share some things that can maybe help you shift your perspective about where you're in in debt and some mindset shifts that can help you build a plan to get out of debt and do it with a positive mind and do it happily and do it excitedly. I also want to share some perspective around different types of debt and how not all debt is created equally, as well as just some tactical things that you can do to actually start making a dent in your own debt. And so let's go ahead and get into it. First, I want to kick off with just sharing a little bit about my own journey with debt because I think that I can resonate with that feeling of being shameful about debt that I've incurred. So I have shared before. I moved out of my house at 17 when I was finishing up up my senior year of high school. And from that point forward I was financially responsible for myself. And so I was working and opening up credit cards and taking out student loans in order to go to college. And so by the time I graduated college I had, I had student loan debt and credit card debt. And I felt very embarrassed about both of those things. See, when I started this journey, I was very resentful for the fact that I was responsible for paying for everything on my own when I got to college was a really eye opening experience for me because I at that point became very aware of just how unwealthy I was when I was growing up. Like I never really thought we had a lot of money by any means, but I didn't realize how much money other people had. And I didn't realize that other people's families were paying just tuition for their kids and other people's parents were paying for their student accounts and paying for their living expenses and giving them money for food every single month. Like that was something that wasn't even on the table for me. And I didn't realize how much money other people were getting in order to get funded and be supported while in college. And I became really resentful and very like victim mentality for a little bit of time during college because of this. And I eventually worked through it and, and was able to shift my perspective but that story I was telling myself and that feeling of guilt and shame around the debt was still very prevalent when I graduated college. So much so that I had it in my mind that I didn't want to get married with all of the debt that I had. I wasn't even in a relationship yet, I wasn't even engaged yet to get married. And I was motivated by this idea of. Of not bringing debt into a marriage because I felt like it was embarrassing. I felt like it was shameful to bring debt into a marriage. I didn't want someone to look at my financial situation and look down on me for it. That was how I had viewed it at the time. And so I was really motivated to get out of credit card debt and to start paying off my student loans. But I wasn't so motivated to get out of debt that it stopped me from getting a brand new car when I turned, like, I think 23, three or so when I went and got a brand new car. I had again, not no financial literacy at this point. I wasn't really understanding what I was getting myself into. My car that I was driving, to be fair, I rode that thing into the ground like I got into. This is actually a funny story. I got into a car accident in college where someone T boned me. It was not super dramatic. Everybody was fine, but my side of my car was dented in. And so I could barely open up the back seat of my passenger side or the backseat door behind my driver's side. And the window on my driver's side window was impacted from it. And it would either get stuck up or stuck down. And I live in Arizona, so that window getting stuck down in the middle of summertime was not ideal. But I got money from insurance from that. And I was so broke at the time that I just used it to pay my bills. I never fixed the car. And so I continued to drive that car post college into my first job. And the car was. It was rough looking. Like I. When I drove that thing in to finally buy a new car, the guy that was selling me a car, and this might have been a sales tactic, but he was like, if you were my daughter, I would not let you drive off the lot with this car. Which I think helped me justify going out and buying a new car. But I bought a brand new car. I got this in 2018. And it was. I was the first person to own this baby. And so I loved it and I love my car, but I didn't realize that I was taking on all this Other debt. And I did not need to go buy a brand new car. But again, no financial literacy. And I probably would have made a way different decision a couple years later. But I now had student loan debt, credit card debt and a new car loan. And so I really know what it feels like to have this weight of wanting to get out of debt. And one of the things that really, really helped me, a really big mindset shift for me as I was on my journey of starting to pay off some of this debt was a couple of things. One was adopting a gratitude practice. So I had said I was very negative about my debt. I felt like it was shameful, I felt embarrassed by it. I didn't want anyone to know that I was maxed out on all my credit cards and all of this stuff, which is really interesting because I wear the fact that I put myself through college by myself as a badge of honor. Like I was very proud of myself for that accomplishment. But the resources that it took for me to actually be able to accomplish that goal, I was very shameful about. It's an interesting thing when you really look at it and break it down because it's like, okay, I'm really proud of the goal that I accomplished, but I'm upset about the way that I was able to get that goal accomplished. Like those things just don't make sense. If I'm going to be proud of what I did to get there, I need to be proud of what resources I use to be able to accomplish that. And so I started to shift my perspective and I started to be really grateful for my debt. And if you are somebody that's in debt and you're somebody that is trying to pay off credit cards or student loans or cars or whatever it might be, I want to encourage you to really think about this because this is something that is going to help you pay off your debt and do it happily. So what I want you to think about is what that debt was able to provide for you. So for in the example of my car, while I did not need a brand new car, and again, I probably would have made a different decision now than I did back then because I didn't know 23 year old needs just a brand new spanking car. But I love my car. When I get in that car and I do this still, I've had the car for six years now. When I get in that car, I. I think about how much I love that car. I think about how grateful I am for that car getting me all around the state and Taking me on road trips and getting me to and from my job and getting me to and from hanging out with people in my car. Oh, it's got this really cute white leathery seat vibe, and it just feels luxurious. And when I get in that car, I feel luxurious. And so I just started being so grateful for what that car was providing me. Not only was that car providing me stability and transportation, but it was making me feel like a bad. Like I was such an upgrade from my other car. So I was feeling good driving around in this thing, and I was super happy with the. The vibe that it was putting me in. And so I just started being so grateful. Instead of being resentful for this car payment that I had or once I realized how this wasn't a really great financial decision, I was not mad at myself for getting the car. I was just really grateful for what it was providing me. So this, this same practice goes for student loans. I could have been mad about the student loans that I had acquired and how now I was paying all this money every single month to pay them off. But what I started to do was flip the script, and I started to really continue to wear that badge of hon. Like, yeah, I did put myself through college. And in order to do that, I had to leverage resources like student loans and credit cards. But I'm so excited and grateful for the lessons that I learned and the person that I grew into while I was at school and the network of people that I got to meet and the way that my mind got expanded for what was possible and for helping paint a picture for how I wanted to support my kids one day when they were going through school. And I just became incredibly grateful for. For that opportunity. And I think this is really, really important when we're talking about education, especially with how expensive school is and how much loans people are taking out. You've got to be able to stay grateful for what you gained from that experience, to be able to pay it off. And so now when you're going to pay off your student loan payments and your payments every single month, thank you so much for what you provided me. I'm so grateful to be able to be spending this money on the education, on the knowledge, on the network, on whatever it is. And then we get into credit cards, you can apply the same concept. Credit card debt is obviously different. Credit card debt is really high interest debt. Credit card debt is what I would consider the least liked debt that you want to have in your life. But those credit cards are probably providing something for you. You know, for me, in my example, I wouldn't have been able to keep up with life and bills if I didn't have those credit cards to lean on. So just being really grateful for what they can provide you. I have an example of a client I work worked with who bought a. I think it was like a $3,000 couch and financed it on a credit card. And then was kind of feeling, like, resentful and regretting that decision to do that. And instead of just being so negative about the payment every single month, it's like, okay, what good can we take away from this? That couch gives you a place to relax and unwind at the end of the day. That couch gives you a place to sit and cuddle up with your dog and feel loved and be able to just decompress. That couch gives you a place to sit and your favorite TV shows and, I don't know, maybe hang out with friends and have people over for a wine night. That couch is providing you an environment. It's providing you something positive if you let it. And then the other lesson that we can take from this is, okay, we learned that we don't like financing big purchases on credit cards. That's a lesson that you learned from that experience that is going to help you make your financial decisions differently moving forward. And when you can start to look at it from what is this giving me? From a positive perspective. Perspective. And also, what am I learning from this experience? I don't like the way that this debt makes me feel cool. Let's not inquire any more of this debt then moving forward. So I think adopting this type of gratitude practice and just changing your perspective around what debt can provide you and what it has provided you is really critical to being able to move forward positively and also just to be able to learn from your lessons. And we can't change the past. All we can do is learn from a situation and apply it moving forward. So be grateful that you learned this lesson now on a $3,000 couch as opposed to learning it on a $50,000 purchase later. Right? So that's a really important takeaway here. Next, I want to talk about how not all debt is created equal, because again, I think we just put everything in this blanket world of debt and all debt is bad. And that's not true. Again, we are grateful for what debt can provide us. Like, a college education is really beneficial for you to get new skills and get a degree in an area that you want to go down. Like, if you want to be a doctor you definitely need to go to school and learn how to become a doctor, and you need to be able to get there through an education. There are just different levels of debt when we're talking about wanting to get out of it and just understanding that all debt is not created equal. And so the biggest thing that you want to look at when you're looking at all the debt that you have, the key factor is not actually the amount of debt that you have, but it's going to be the interest rate that is tied to the debt. So in my example of the car loan, the student loan and the credit card debt, all of that debt might not be created equal. If I add up the sum of all of that debt, it feels like a big scary number. So I was in around $70,000 worth of debt if you were to add it all up. But if you look at all of the different interest rates that were tied to that debt, some of them were significantly more impactful than others. So, for example, if you're looking at your credit card debt, credit card debt lately is astronomical. High interest rates, we're talking like over 20% interest. That means you're paying 20% more on the balance of your credit card every single month. If you're not paying that off at the end of every single month, that's huge. That's. That is a very high interest rate. So when we're wanting to get out of credit card debt, that's your priority. You want to stack rank based on the interest rate that you're in and then start to apply extra money to those different buckets of debt based on the interest rate. And I think this is important to note because again, when we're looking at the student loans and the car loans, car loans nowadays are higher. I think I just had a friend who got a car and she was able to get an interest rate around 4%, but then someone else got one around 6 or 7%. So these ones are more like midterm interest. And then you have something like student loans. For most people, student loan interest rates are actually really low. And so even though that's likely your biggest balance, it's also probably your lowest interest rate. And so it's not something that you need to stress about as much. You want to prioritize interest rates. So starting with credit card debt and then moving downwards through your highest interest until you get to your lowest interest. But what I also want to make sure I get across in this is that there is also something to think about when you're paying off Your debt. And that's going to be the second concept of opportunity cost. And so what a lot of people decide to do is to wait to start their investment journey until they pay off all of their debt. They're like, I need to be debt free before I start investing. And unfortunately, you do lose opportunity cost with that strategy. So what do I mean by opportunity cost? Let's say that you have your student loans and your student loans are at an interest rate of 3%. And you can either put all of your extra money towards paying off those student loans and getting that balance down to zero, or you could be paying down that balance while also investing some of your money into an index fund that is going to grow and appreciate over time. And so if we look at the average rate of return for the S&P 500, you're looking at an average rate of return about, of about 10% a year. And so if you are going to be investing your money into that and gaining 10% a year, or paying off your debt to save 3% a year, there essentially is a difference of about 7% there. You're looking at losing the opportunity cost of, of investing and gaining that 7% difference. And so I think that this is really important to look at when you're looking at debt. So obviously you want to prioritize getting out of credit card debt as soon as possible. And once you get out of that high interest debt, it is a really great time to start looking at starting your investment journey. And this is a big gap that I think people, and one I fell into as well was like, I need to get out of debt before I start investing. And if I would have done that and waited until I was completely out of debt before investing, I would have missed out on so much compound interest for those years that I was paying off the debt. Now what I also want to add is that I could have waited a lot longer and just been paying way less on my debt and invested more money. But I understand that there's also an emotional tie. I still had this negative belief around wanting to get out of debt. And so I did hit a point where I was like, you know what, it's more important for me to just wipe my hands of the student loans. I understand that I might be losing interest by not paying off or by paying off my student loans and just getting that done versus just starting to invest, but it was important to me. So this is the other note that I want to make is that everyone's personal finance journey is different. And this is why there's no one size fits all. There is recommended pathways to take, and there is obviously just the knowledge around making sure that you understand what your opportunity cost is. But you want to build a plan that makes sense for you, but the biggest takeaway is just that you don't need or you don't need to wait to invest until you're completely out of debt. You just want to get to a point where your high interest, your credit card debt is taken care of. You have a nest egg set aside so that you can avoid going into credit card debt again. And then you really can start investing. You can start your investment journey. And so I think that that is really helpful to know because this was another mindset shift that I went through is that I, when I was sitting at the bottom of my $70,000 of debt and I was like, I'm going to take this very seriously. I want to get out of this as soon as possible. I was looking at the mountain of debt like it was Mount Everest and like I was going to be climbing this mountain for the rest of my life. That's what it felt like. At one point I felt like I was just at an impossible bottom of a mountain. And I know that other people feel the same way when they're looking at their pile of debt. But what I want you to be able to do is to zoom out on this pile of debt and realize that it is just a hill. And once you learn the skills to get up that hill, you are able to climb the other hills. And the other hills are your investment journeys. And so all you're learning on your debt payoff is many fundamental habits that are going to help you parlay into starting your investment journey. And so it feels like this big Mount Everest, but it is an opportunity to start learning skills, money management skills, and understanding how to put money aside automatically in order to start seeing your debt go down. And then when you hit a point where your credit cards are paid off, you can start reallocating some of your funds to other debt as well as investing. And investing is where you want to get to in order to grow wealth. And wealth is what we're all in this for, because wealth is buying back your time. Wealth is options. Wealth is not being chained to monthly payments of credit card debts. And it just gives you a little bit of room to breathe. So if you are wanting to get out of debt for the purpose of focusing on what's next, you want to get out of debt with the vision of starting your wealth building journey. Because Otherwise, debt feels like the the whole journey when really it's just the opportunity to build the foundational skills to then move on to the fun part of money, the wealth building part of money. So if you are at the bottom of Mount Everest, try and zoom out on your whole money journey and realize that this is just an opportunity to learn those skills. And you can absolutely start to pay off debt so much faster when you have the practice of gratitude and you have a good plan in place. So I want to give you a few tangible things that you can do when you are looking to get serious about paying off your debt. Okay, first up, write out all of the debt that you have. This might be the most painful part of this journey, but write out all of the debt that you have and all of the interest rates that are attached to them. And then stack rank them in order from highest interest rate to lowest interest rate. From there, I want you to next to every single line of debt, write out three things that you are grateful for that that debt provided for you. And I want you to actually write it out pen to paper because what you're doing is you're starting to train your brain to view that debt differently and to remove the negative connotation with that debt and start to look at it from a more positive perspective. So write out three things that you're grateful for for every single piece of debt that you have acquired. And maybe it's a lesson learned that you gathered from taking on that debt that now you want to apply moving forward and start to be grateful for that lesson that you learned. Then what I want you to do is I want you to take a look at your current spending and I want you to start figuring out where is an opportunity for you to lower your expenses. So this could be looking at all of your monthly expenses that you have. Your bills, your Internet, your phone bill, all of these things. And just seeing if there's an opportunity for you to consolidate with somebody else. See if there's an opportunity for you to call and see if they have any deals going on and lower your bills. One huge area to look at is subscriptions. We live in a wild time where everything out there is a subscription. It's so easy to sign up for something and not think anything of it. If we're, if it's 5, 10, 15, 20, 50 bucks a month, whatever it might be. But those subscriptions add up so much and you would be so surprised how many people are paying for subscriptions that they have just completely forgot about. I had one client who did this exercise and went back through all of her accounts and was looking at all of the different subscriptions she had signed up for and found a subscription that had been running on her card for something like three years that she completely forgot she signed up for, that she was not utilizing. And immediately like that, we found thousands of dollars back into her budget just by being able to cancel that. That subscription. So please pay attention to them. And a really cool exercise to do is go through and just maybe cancel all of them and then re add them back into your life as you need them. Obviously this won't make sense for every subscription that you have, but if you're a person who has a lot of subscriptions, I really encourage you to just go through and decide if you can cancel it. And then if that subscription is needed again in the future, then re add it back into your life. But there are oftentimes a lot of subscriptions laying around that people don't actually utilize and, and are just small ways to start adding some money back into your budget. I don't want you to spend like an incredible amount of time here, but go through and just see if you can find any money in your current fixed bills that you have that you could try and lower. And then you look at your variable expenses and just really figure out where is all of your money going every week? Are you eating out all the time? Are you shopping online? Are you spending money on traveling? Like, what is it? And is there an opportunity for you to maybe lower some of that while you're in this process of really taking your debt seriously? Something that comes up a lot when we're talking about getting out of debt and maybe lowering some of our expenses is this feeling of sacrificing things that bring us joy. And that is absolutely not what this is about. This is about realigning your spending with what you're calling out as a priority. Again, getting out of debt does not have to feel like this really restrictive time period in your life. Instead, it should feel feel empowering that you're getting in the driver's seat, that you're controlling where your money's going and you're calling your shot and you're saying, hey, I am going to feel so much better about my finances now and in the future if I take this seriously and I prioritize some of this stuff. And that's all you're doing, is you're realigning your spending with your priorities. And that doesn't mean you have to cut out everything fun that doesn't mean you have to cut out all these things that bring you joy. Like, I definitely don't agree with the stance of, you know, just stop getting a $5 coffee and stop getting your nail done and then all of your problems are going to be solved and you're going to get out of debt. That's not necessarily what I'm saying, but there are going to be opportunities in your spending to maybe scale back a little bit in order to put it towards your priority, which is getting out of debt. And prioritizing something like this is going to have such an insane ROI on your future because you're learning all of the skills and you are picking your future self as a priority right now. And I think that's super huge. And it's something you should definitely be proud of. And there shouldn't be this negative scarcity mindset around this chapter of your life. And then if you want to go ahead and move it up a notch and get out of debt even quicker, what you want to look at is finding ways to increase your income. I recognize that it is expensive out there. Inflation is through the roof right now. And really at the end of the day, there really is only so low that you can get your expenses in a month, but there is unlimited income potential. And so you can start to figure out ways to bring in more money. Whether it is a side hustle, whether you walk dogs on the weekend or drive Uber or go and negotiate a raise at your current job. Maybe you need to move jobs to start bringing in more money and start negotiating a higher salary. There's so many different options. But when you do that and you start to make more money, you want to make sure that you're putting that money towards the debt. When you are doing something to increase your income, don't fall into the trap of just lifestyle creep where you've got more money and now you're spending more money. This is super common and definitely not the goal if you are trying to get out of debt. So see if you can go ahead and find some new ways to make a couple extra hundred bucks even a month and put that towards your debt. And that's going to be like the supercharged method to get out of debt even quicker. And now what you want to do is you want to again look at your stack rank of debt and you want to prioritize paying your minimum payments on all of your bills. This would be my recommended strategy. All of your bills, aside from the priority debt, your number one highest interest debt, and you want to put all that extra money that you just found towards that highest interest debt until it's paid off. And then you move on to the next one, and then you move on to the next one. And the last thing that I want to leave with is every single time you make a payment towards your debt, I want you to to thank it for what you identified it provided you. So look back at that list that you've got and say thank you so much for giving me that couch. I love sitting on it when I come home every single day and cuddling with my dog. It is such a place of comfort for me and a great way for me to unwind at the end of the work day. Thank you so much to my car loan. You are just making me feel like a baddie. Driving around town, I got my windows down and blasting my favorite, favorite songs and I am loving life. Right? So find what those things that you're thankful for are and say thank you every single time you make that payment. I'm telling you, it's going to start changing your perspective about paying off debt. You're going to start seeing things in a way more positive light and it's going to make this journey feel a lot more light and a lot more fun. Okay, I lied. I thought of one more thing that I think is helpful for people that are competitive and love a little bit of motivation is you can gamify getting out of debt. So set progress points for yourself along the journey and leave rewards for yourself along the way. So if you are looking at buying something for yourself, right, we'll call this maybe a clothing item or a service that you want to do. Maybe you want to go get a facial, maybe you want to buy a new outfit for something. You know, we're talking maybe like a hundred bucks or under. Set up progress points for yourself along the way. So if you're looking at paying off thousands and thousands of dollars of credit card debt, it could be a little bit of a longer journey for you to be able to get out of that. And so make it a point. Say, okay, once I hit this mile marker, I'm going to allow myself to spend X amount of money on this and get really clear on what that is. Because when you have a really clear vision of what it is that you're working towards, it's going to motivate you a lot more. So go online, go figure out what it is and actually have a clear vision of what it is that you're working towards. And so that when you hit these different Milestones along the way, you have something to look forward to. Because I think, I think enjoying the journey of paying off debt makes it go a lot faster. It makes it way more enjoyable and it just gives you something to look forward to. Because I think when you're trying to get out of debt, it can feel hard to spend your money on anything that isn't going towards debt. And that's not fun, that's not enjoyable. Like, we want to enjoy this journey. So gamify it and set milestones and reward yourself for the accomplishment. And be so proud of yourself for taking this seriously and getting out of debt. Debt. Because if you are prioritizing getting out of debt, you're teaching yourself the fundamental skills to then start building wealth and to start actually seeing your money work for you and start growing. And that is such a great milestone to get to and such an awesome point to get to in your life. And so you should be so proud of yourself for taking money seriously and being able to achieve these goals. And I'm so proud of you for taking the time to put a plan in place and to go after your goals and to believe in yourself and to know that you absolutely can, can get out of debt and you absolutely can enjoy the journey if you let yourself. So that is it for today. If you learned anything fun in here, anything that you're going to implement, I'd love to hear what works for you. DM me on Instagram at the Madison J and I want to hear all about your debt payoff strategies and wins along the way. And I'm wishing you all the best. Hey, before you go, I just want to go ahead and say thank you for spending a little bit of your time with me today. And also congratulations for four finding a chunk of time to carve out and focus on you and moving the needle and becoming a better version of yourself. If there is anybody that you think could benefit from this podcast, please share it with a friend, share it with a family member, feel free to share it on your socials and help me spread the word about busy getting better. Thank you so much and I will see you on the next episode.