(upbeat music) - Hey guys it's Dana and it's Tuesday so it's time to talk about money. And in this video I wanted to
talk about mistakes that you don't wanna make when you
are trying to pay off debt. (bell dinging) We've all made really bad
mistakes, all of us, right? I know that I have made
so many terrible, terrible mistakes when it comes to money and in other areas of my life
too but I always tell the kids that mistakes are important to learn from, grow from, as long as you're
learning and growing from them and trying not to make the
same mistake twice, right? So if you are trying to pay off debt then these are some mistakes
that maybe you can avoid and hopefully you can, alright. So number one on the list is
to not have emergency fund because emergencies are
gonna happen, right? They're gonna happen. It's not a matter of if,
it's a matter of when. When is it gonna happen? So at least $1,000 in a
saving account sitting there before you start, you know,
taking a lot of extra money and throwing it towards your debt. So if you can squeeze out any
extra money in your budget the first thing you
wanna do is to build up a little bit of an
emergency fund so that way you can cover the cost if
anything were to happen like an ER visit or something. You know you wanna be
able to have that money sitting there 'cause otherwise you're just gonna use
your credit card again. Speaking of credit cards, a mistake is to continue using your credit cards. I always say that it's
as if you know I've had a real addiction that I had to break and that means that I can't
go back to using credit cards. Debit cards are different. But it's like if you're
trying to get out of debt and you have a problem with
it then you don't want to continue using while
you're trying to sort of break the habit, right? So and also, if you're
using your credit cards then you're just going further into debt and that's making it even harder. You're not gonna get out. You can't get out of debt
if you continue to borrow. So you have to stop using
your credit cards, just stop. Not having an accountability partner. None of this can be done alone, alright? Just like with alcoholism,
drug addictions, you need some help,
you need somebody there to keep you accountable and
to motivate, encourage you. So you have to have somebody
who knows what you're doing and who can support you. Even if that's somebody in
some kind of online group, if that's all you've got,
that's all you've got and you can you know get
into some kinda group and they can hopefully
help keep you accountable, help motivate you, but you need somebody. Hopefully your partner,
you know if you're married, is one of your accountability partners. So also maybe there's some groups nearby, there's some church groups maybe or somebody who just, somebody. Another mistake is to not keep
the debt front and center, forefront in your mind,
to not focus on it. I mean not to dwell on it
everyday and then feel depressed about it, not like that, right? Not an unhealthy way of dwelling on it but you wanna make sure
that you're keeping your eye on the ball so to speak. You have to be focused on this goal if you want it to happen. If you don't focus on it, it's
not, it's never gonna happen. You have to make it, you
have to make it a goal and really try to post
something in your house or put a card in your wallet you know if you read The Strangest
Secret, you know it says on that to write what your goal is on a card and put it in your wallet
and look at it every day, just some kind of way
to help you stay focused on what it is you're trying to do so you don't veer off course and forget and start doing something else. It's a mistake to not cut your lifestyle. Even if you think that
you can pay off your debt by just continuing the
way you've been going, I really think it's a good exercise to cut something that hurts. And when we started paying off
our debt, it hurt really bad to cut certain things
that we had for the kids. It was very almost physically painful to have to make that phone call and cancel what we were paying for. So I think you need to
come up with something, whether it's restaurants,
if stopping going out to eat is painful to you then good. You want it to hurt, you
wanna feel it a little bit and it'll help you to break
your bad spending habits and really make you angry so
that way you're really ready to pay off your debt and
get it out of your life. 'Cause if it doesn't hurt a little bit, most likely you're just
gonna go right back into it when you're done
paying off your debt. Alright so along that same
line is to get a side hustle. It's a mistake to not
have a side hustle at all. You wanna increase your earnings that way you can hit
your debt even harder, pay it off even faster and
again it's that sacrifice. It's just gonna really mark
this time period in your life and when you get done
you're gonna feel so happy that you canceled your gym membership and you were workin' five jobs. It's gonna be something
you're gonna wanna brag about, really and then you're gonna
get out of it so much faster and then you can get back to the gym and you can quit those side jobs. But really try to do something
to help make it go faster, earn more money, and like I said, to really mark this period. I feel like it's important to
mark this period in your life again so that you won't go back into debt. You're gonna really remember. It's like putting a
highlighter on this period of time in your life and
sometimes painful things are important 'cause it helps us to behave and to grow and learn
and be better people. Not working the plan is a mistake. Whatever plan that is that you choose, there's so many different ones out there. You know the debt
snowball is what we like. There's also the debt avalanche where you pay off the
highest interest rate first, but whatever that plan
is, try to find a plan and stick to it, really work the plan. If you don't work the plan,
again you're really lowering your chances of success. I mean there are these plans out there, they've been proven to work. Millions of people have used them and obviously what
you've been doing is not or has not worked, so really do the plan. Do it, it's for you. It's not just for everybody
else because yeah. I used to listen to Dave
Ramsey for about a year and then, before we ever
started our get outta debt plan, and I remember just
listening and then one day I was like one day I was
like, oh, he's talking to me! Like this is for us! Right, we have to do this. I remember having that
moment, I remember that moment where I was like oh my
gosh, oh we have to do it. So you really need to submit to the plan. It's not for everybody else, it's for you if you've got debt. Not doing a unique budget
every single month. Okay so again when we,
long time ago, years ago, we had a budget or I
thought we had a budget but it was just a spreadsheet
that I never updated, ever. It was just like these are our bills and this is what we make
and then that was it. It was just like I thought
that would be good for life, you know, this one budget,
but that didn't work. It doesn't work, you have
to do a different one every single month, a new one and you can use the
template of your prior month because somethings obviously stay the same but other things fluctuate. It might be a month where
you have an extra paycheck like happens twice a year
if you get paid biweekly or it might be you know your
bills are a little bit lower or you've really used a lot
more water so it's a lot higher. I mean there's certain things,
there's Christmas time, so your electric bill's a lot higher. There's just different
things that come into play. You might have gotten a bonus this month and so you need a unique, different budget every single month so
that you can make sure that every single dollar
coming in has an assignment, you're putting as much
as you can on your debt but not more than you should
'cause it's gonna leave you hangin' high and dry as far
as paying off some of your other bills like your water, electric, things that are important to
keep your household running, so you have to do a unique
one in the beginning of every single month, a new one. And it doesn't take too long
once you get into the habit of doing it, it's gonna be fine. Alright, so you have to
just commit to doing it, take the time and make it,
make it work, make it happen. Alright next so getting out of debt, it really is not a passive
thing, it's a very emotional, aggressive, angry,
emotionally charged activity. So it's not like you're
just gonna be like, oh I think I'll get outta debt
and it's just gonna happen. It just, it doesn't work that way. It's kind of like when
you know, you gain weight and you're just sort of like
eating one extra dessert a day and then before you know
it you've gained 20 pounds, well that weight again doesn't
just like melt away rapidly, you have to really do something about it. You have to run hard at the gym or lift weights, you have to
sweat, you have to really work at it to get it off and
debt is the same thing. It really is, it's like oh, $5 extra everyday on our credit
card or oh we can just do this or that, it does just
accumulate, just like weight and then before you know it you look over and you have $20,000 on
your credit card, right? Well if you wanna get out
of it, it's the same thing as trying to lose weight,
you have to sweat. You have to work at it. You have to get really mad
that you have all this debt and you don't want it anymore,
you want it out of your life 'cause that's gonna make you work harder and be more committed to the
plan and maybe throw more money at it, make you skip going out to eat, skip going to buy lunch at
work, it's gonna really help you to get out of it faster
then if you're just like, you know maybe we'll
get outta debt, right? 'Cause then it's again, it's gonna just drag on for 10 years. How many people have
student loans that are just, they've been there for 10 plus years 'cause you're just paying the minimum, paying the minimum and it
just never goes away, right? It's not gonna go away that way. You have to get really
angry and really kick and punch and scream at it. Okay and then last, you
can't get outta debt without your spouse, without your partner. So if you're tryna get
outta debt and your partner really doesn't care and
your husband or wife is just you know still
doing the same things, going out to eat, using their credit card, it's just, it's not, it's
gonna be so hard to do. And again I kind of liken this
to trying to quit smoking. If you and your spouse are both smokers and one of you decides to stop smoking but the other one is still smoking, it's gonna be so hard
because you're inhaling that secondhand smoke and
it's just, your chances of success just go way down
that you're gonna be able to quit smoking if your
partner does not also quit because it's just, you're
gonna be right there. So same thing with your partner with debt. If they're you know,
swiping their credit card and going shoppin' and doing whatever it's gonna be really hard
for you to stick to the plan of paying off your debt
when you have to constantly watch them just you know, doing whatever, living the normal life of walking around, spending money and borrowing,
taking out car payments, going to get a car loan. Like how're you gonna watch that, it's just not gonna work unless you're on the same exact page. You can't do it independently, you can't say I'm getting out of debt, this is my debt, this is my husband's debt or that's my wife's debt. You have to, it's our debt and our money 'cause you're a family, you live together, you share a bed, you share everything and so it's really not going to work to get outta debt independently. Okay, you have to be a team. You have to both be on that same page and both be wanting and
willing to work at it, to get it out of your life and
to never borrow money again. Okay, so this whole video is
about making mistakes, right? So hopefully you don't
make any of those mistakes that I talked about and
if you did, it's okay. It's just like when you're riding and bike and you fall off and you fall off, or you're learning to ride a bike, and you get back on, right? You gotta keep getting back on the bike. So I feel exactly the same
way with getting out of debt. It's like you're gonna mess up, okay, you're gonna make some kinda
mistake probably along the way. Especially when you first start budgeting, you're probably gonna
screw up your budget. You know you might even
overdraft your account, it might seem like you can pay
a lot of extra on your debt, I just can't say enough
how important I think it is to just continue to work at it. Keep going, stay on
the path, don't give up and it's okay if you mess
it up once in awhile, as long as you don't stop. 'Cause if you quit, if
you just say forget it, it's not working, I'm
not doing this anymore, it sucks, I don't wanna
do this, it's too hard, then you're never ever going to get there. So even if it's taking longer
then you think it should to get outta debt, just keep working at it because eventually you will get there if you just keep working at
it and don't quit the plan. Keep working the plan even
if it's taking a lot longer, like I said, just don't quit. Okay? You can do this. You can do it. Okay you guys, that's it for today. Thank you so much for watching. If it's your first time
here, be sure to subscribe. I'm here every single Tuesday
talking all about money and I also have a blog which
I'm working real hard at so thank you to those who
have gone to check it out. It actually crashed the other day and I was just freaking
out but luckily my, I called Bluehost who I have it through and they were able to revive it. But anyway, it's been fun time. So I'm trying to at least post, I have been posting
once a week on the blog, so and I'm starting to, it's again, it's something that I'm sort of trying to get into the habit
of and I don't like it. I haven't liked it for many years but now I'm starting to,
I'm starting to like it and wanna do it, so it's a good thing. Alright, so that's enough,
I'm rambling at this point. Okay, so I'll talk to you guys next week. Bye.
