4 BIG Ways to Speed Up Debt Payoff

[Music] people freak out and they're like money is leaving your paycheck before it even reaches your bank account and i want that money back in your bank account and i find that so many people save thousands of dollars by doing this you guys welcome to this episode of the rachel cruz show all right so many of you are out there on baby step two and you are paying off debt and i know it can feel like an uphill battle and listen there are always things that you can do you know in the short time like limit your lifestyle you know eat rice and beans i mean there's these things we can do in our lifestyle that can help absolutely there's also a couple of things you guys that can make really big splashes with your money big impact okay so yeah cutting out the five dollar coffee here there sure i mean it's helpful it's five dollars yeah and it can add up but to really make some big progress there are a couple of things that you can do to really help you get started on this process or if you're in the middle of your debt snowball it will help you or even if you're on baby step three maybe it can help you as well so those of you on baby step two here are four things that are going to make a big impact to your debt snowball number one increase your take-home pay okay i'm not talking about just getting a raise even though that could be an option but i'm talking about your entire take-home pay your paycheck so one of those things is you're investing so if you're investing in your 401k while you're in baby step 2 money is leaving your paycheck before it even reaches your bank account and i want that money back in your bank account so by pausing your investing while you're getting out of debt it's actually going to give you more cash to get out of debt faster and again this is pausing your investing people freak out and they're like wait you don't want me to invest oh my gosh how dare you listen for a short period of time while you're getting out of debt again you want all of your focus all of your intensity on that baby step and then once you have a fully funded emergency fund after your debt free then baby step four is investing you can go back invest into your 401k roth ira whatever it is 15 of your income into retirement is what you will focus on but if you are getting out of debt and still investing pause it more money will come back in your paycheck also another way to get money back to your paycheck is to change your tax withholdings so if you get a really big check from the irs every year because you've paid too much in taxes that means money is leaving your paycheck going to washington dc sitting there not earning interest nothing and then coming back to you in a big check where that entire year you could have been using that money from your paycheck to get out of debt faster so this is a really important thing to look at and to make sure that you can actually adjust your withholdings and if you don't know how to do that the hr team at your workplace should be able to help all right number two liquidate non-retirement assets and liquidating just means selling something for cash so yeah this can be things all around your house for sure but two big splashes i see people make is with their home and their car now i don't always recommend selling your house while you're getting out of debt but some people do when they say okay my house i i have you know 50 of my income is going to my rent or your or my mortgage that would be a red flag to say yeah you probably do want to downsize and by doing that again it's freeing up so much money in the month to throw at your debt also your car look to see okay do you know do i owe so much money am i able to pay this off in six months to a year and if you're not sell your car by doing these things again you're getting more cash to throw at your debts all right the third thing you can do is use other non-retirement assets so by this i mean any savings bonds you have or stocks or cds or mutual funds or a whole life insurance policy you could cash out all of these things are these you know financial entities that you have around that will not be dinged if you cash out now retirement i do not want you cashing out retirement to get out of debt okay so do not touch your 401k or your roth ira if you have one but everything else is up for grabs and again people are like oh but i've had this couple of thousand dollars from my grandma from a cd she left me cash it out and pay off debt like what a legacy to leave your grandmother and to say grandma i'm using your legacy to help further my financial future by getting out of debt so look at all of those things people get uncomfortable with that but again it is a powerful thing when you're able to say okay i can actually liquidate and cash out all this to throw towards my debt to get out of debt that much faster because you can go back and invest again not just in retirement but if you want to open up a mutual fund later on down the road put money in you can because that means you'll actually have money to do it now when it comes to insurance remember always have term life insurance if you have whole life you're paying too much for it and you have an investment attached to your policy which has a terrible rate of return so get rid of that get term life first get rid of the whole life throw that money at your debt and these days every dollar it matters and taking care of your family matters too and with christian healthcare ministries you can care for your family's health and bank account to learn more go to chministries.org rachel all right last but not least what you can do to make a big splash towards your debt snowball is to check all of your insurances okay so think about car insurance life insurance health insurance homeowners insurance renters insurance i want you to look at every single thing you're paying on insurance because this is something in life that you just get a policy for and you just keep paying it whether it's annually or quarterly it just comes out you're like oh yeah yeah and you don't shop around and you don't see okay is there something you know policy that is great and it's all i need and it's way less expensive and i find that so many people save thousands of dollars by doing this you guys by freeing up your money with just your insurances so it's gonna take time it's kind of annoying to do it but take the time to do it because this could be a huge splash and again i don't want you stuck with a really expensive insurance policy and i don't want you stuck with any of the gimmicky policies out there either so things like cancer insurance accidental death insurance phone insurance all these things you don't necessarily need so i get rid of them and put that money towards your debt and of course there are other ways to pay off your debt besides those things but again those are the four biggest things that are going to move the needle but again there's other things like cutting back on out to eat category not shopping doing a no spin challenge selling stuff all around your house getting a side hustle or a part-time job there are ways to throw money at your debt to get out of debt faster and i hear from people all the time who do this journey and they do some incredible things to get out of debt and we find that people are out of debt in 18 to 24 months by paying off their debt smallest to largest using the debt snowball method so if you're out there and you're doing it keep up the work and if you're not just know you can become debt free this is something that is so so possible and i know it's hard and i know it's a lot of work but i'm telling you the sooner you get out of debt the freer you become of not owing anyone anything and your paycheck coming in and you get to decide what to do with it it gives you power and it gives you options now there is something that my team and i are doing that i would love for you to be a part of so i'm doing a survey so i can keep giving you content that you want and that is relevant for here on the rachel cruz show so i would love for you to take this survey please if you want to fill it out you actually get a chance to win a hundred dollar gift card so the survey is only available until april 22nd so go ahead and fill it out before it's too late if you go to rachelcruise.com survey you can take it there and we can get your feedback i would greatly appreciate it and remember you guys all of this getting out of debt changing your insurance cashing out that mutual fund that you've had but that's not retirement all these things all these things is to help you get from point a to point b from being out of control with your money owing people money all of it to being free and building wealth to change your family tree and be generous to others that's what it's about so remember to take control of your money and create a life you love

Channel: The Rachel Cruze Show

Views: 23,647

Keywords: the rachel cruze show, the rachel cruze show youtube, money, budget, how to save money, budgeting, personal finance, rachel cruze, save money, how to budget, debt, saving money, save, how to make money, ramsey, finance, how to get out of debt, debt free, 4 BIG Ways to Speed Up Debt Payoff

Id: J9OLn1Td0ZY

Length: 8min 43sec (523 seconds)

Published: Mon Apr 11 2022