In this episode we cover
- Different types of debt
- How to handle debt and strategies you can utilize
Sometimes necessary debt.
- House Loan?
- College Loan?
- Business Loan?
- Car Loan?
What debt is considered bad?
- Personal and Home Equity Loans
- Vacation Loans
- Stuff (furniture, toys, etc.)
- Anything that depreciates pause and questions it. (all
Absolutely Avoid Debt?
- Credit card
- Payday Loan
- Retirement Loans (Your stealing from your future self)
- Dropping out College Loans
- Maybe a car to?
- First Write Down Every Debt – With the balance, the interests rate, the monthly payment, and the type of debt.
Debt Avalanche – Pay off debt from highest interests rate to lowest interests rate regardless of balance. While paying minimum on all other debt
Debt Snowball – Pay off smallest balance to largest balance regardless of interests rate. While paying minimum on all other debt
Pick the avalanche or snowball method and stick to it
Strive to live a debt-free life!
- Get rid of the monthly payment mentality.
- Focus on total debt and interest rates.
- Identify your weak spot(s) and deal with it.
- Distance your self-image from materialism.
- Take out only what you need.
- Pay it off fast.
How to handle debt moving forward
- Always Pause. Ask What Is The Opportunity Costs?
- Change Your Mindset? Pay attention to the phrases/words that keep coming into your head
- Change Your Environment? Are you surrounded by others with lots of debt, not providing good advice, encouragement in the wrong direction
- Live Below Your Means. Delayed Gratification.
- What Truly Makes You Happy In The Long-Term?
- What Life Do You Want?
Call to Action:
Make a plan to attack the current debt that you have through the strategies discussed in this episode.