Financial Freedom Friday – Ditching Credit Card Debt


Hey everyone. Welcome back to Financial
Freedom Friday where we go over tips and encouragement to help you achieve
Financial Freedom. My name is Nate. It’s good to be back. Today we’re going to
talk about something that sucks and credit card debt sucks. It just sucks and
you know we’re in a society today we’re almost 40% of American families
have some form of credit card debt and if you have credit card debt the average
amount for people with credit card debt is $15,000. How on earth did we get here?
I mean there’s a lot of different probably theories. One of my probably
most adamant ones is that we’ve all been taught, this the reason what I think a
lot of people are in credit card debt, is that we’ve all been taught to stuff money into
places where we can’t touch it for many years like retirement programs maybe. I
don’t think it’s just the fact that you’re broke. A lot of people are not
in credit card debt because they’re broke it’s they may have money they just can’t
touch it. So if our money is stopped and socked
away somewhere that we can’t touch suddenly we have to go back maybe even
to that same financial institution and say okay Christmas I overspent, the car
broke down, something happened. I need some money so we use their credit cards to
swipe and the problem is that money is not very cheap. In fact, how smart do you
really think it is to have $15,000 on the credit card where you’re paying 15%,
20% or something like that to them while you have money, you just can’t really
touch it. Stuck in maybe a retirement program or mutual fund and there’s
probably no way that that fund is really going to achieve the same return that
you’re coughing up just to pay for the credit cards money. So, there’s a better
solution I believe and that is to actually become the banker yourself and
start paying yourself exactly what you’re paying credit cards right now so
you can make the same interest and same return that they’re making off you but
do it internally and that means there’s no risk at all. Like in the market, you
can make money you can lose money but if you’re paying yourself interest just
changing where the money is going you can make money in credit and entirely
risk-free and it’s very simple. And, in fact, if we can get you out of credit card
debt paying yourself back you may also be able to sleep better at night because
you won’t have the feeling of financial hopelessness or that you’re drowning in
debt. So we’re going to try to it’s a good feeling when you try to help you
get that. There’s three steps I believe in your journey to get rid of credit
card debt and the first one is you need to build up some money but that money
has to be in a place where you can actually touch it.
It can’t be in a 401k or IRA like your money probably is already or where most
people have their money because that in no way will help you get rid of the
consumer debt. So in a month in a place where you can control the money and use
it. Our favorite place is in a banking policy. A policy designed for high cash
value life insurance policy that is cash value. I’d be happy to teach you about
that but even if you don’t do our strategy, you need to build up money someplace that is
you’re able to access it. That’s step number one. Get just a little bit. It doesn’t have to be a lot – just a little bit. Step number two is start using the money that
you’re building up wherever it is to start attacking the credit card debt and
we would suggest that you start attacking the debt with the lowest
balance so you can get it paid off quickly. Which will give you a sense of
gratification of victory you could say but it also frees up that entire payment.
So if you’re making $100 payment to a credit card and you pay it off you can
take that entire payment and move that towards taking over the next credit card
and the next one and as you take more and more over it gets quicker and
quicker but until you’re able to take over the last one just because you’re
gaining speed. You’re gaining momentum. And those are the first two steps. The
third step is what most people don’t do but it’s probably the most important
step and that is whenever you’ve actually paid off
all the credit cards you desperately need to start repaying yourself exactly
what you were paying the credit cards beforehand.
It’s the part that most people don’t do. Most people and when we pay off the
credit cards were like oh thank good as the credit cards are finally off the
books. The money that we were paying to them somehow gets swallowed up and your
normal living in your lifestyle in the budget somewhere. Eating out more or
something happens to where you start spending the money that you just freed
up. So instead of it going towards wealth building it’s just going to frivolous
things and the problem is that you’ll find yourself in the same situation because
you won’t have any money cause you spent it. That you have to go back to the
credit cards the next Christmas or the next time the car breaks down or some
next time the kids need extensive dental work or whatever it is there’s a lot of
reasons why we find yourself in that. The problem is we don’t have adequate money
so if you would start repaying yourself every dime that you’re currently paying
to the credit card and start putting that back into an account, I would say I
will repay my policy you can do whatever you like but start repaying let’s say
the policy then you’ll have money in the policy in order to pull from the next
time you would normally have swiped your credit card. And so you can actually
become your own credit card or you can become your own bank and so that is
really the key is to build up a system. You can’t do that if whenever we finally
get you out of debt you just take the money and start throwing it at the
frivolous things. Let’s actually become a bank become the credit card and
make all the money that most credit-card companies make off you for your entire
life and works for credit cards, works for car loans, business debt, student
loans. I mean whatever it is that this is the plan and it’s a great plan and it
works really well. So don’t let credit card debt be the
main reason why you can’t achieve Financial Freedom. Let’s actually get a
plan together and we’ll get it, we’ll take some action, and we’ll get it
completely off the books and remember if you don’t build your Financial Freedom
– nobody will. So let’s get to work. We’ll see you next week.

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