3304: 2 Things You Absolutely MUST Do If You Want to Get Out of Debt by Jackie Beck on How to Improve My Finances

Summary

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Episode Overview

Podcast: Optimal Finance Daily
Host: Diania Merriam
Episode: 3304 – 2 Things You Absolutely MUST Do If You Want to Get Out of Debt
Original Author Featured: Jackie Beck (JackieBeck.com)
Date: October 3, 2025

In this episode, Diania Merriam presents Jackie Beck’s advice on escaping debt, focusing on the fundamental mindset and behavioral changes required. Diania also answers a listener’s question about whether to prioritize paying off a car loan or continue investing, sharing her own financial journey and practical recommendations. The tone throughout is motivational, straightforward, and full of actionable tips for anyone serious about financial independence and eliminating debt.

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Key Discussion Points and Insights

1. The Two Essential Steps to Get Out of Debt

[01:29 - 07:50] Jackie Beck insists that before diving into debt payoff strategies (debt snowball, avalanche, or interest rate reductions), two core actions are absolutely vital:

Step 1: Stop Borrowing

• Mindset Shift:

  • Many people struggle with wanting to get out of debt while still borrowing for emergencies or lifestyle expenses.
  • Jackie notes:

    "I can't tell you how often I borrowed on one hand while struggling to pay off debt with the other, never realizing what was actually holding me back and I was by no means alone." (02:28)

  • Using debt should not be the go-to solution. She stresses:

    "Remember, debt is not a solution, it's a problem." (03:07)

  • The analogy:

    "When you're in a hole and want to climb out, the first step is to put down the shovel." (03:27)

• Social Support:

  • Find a group of like-minded people and define your ‘why’ for becoming debt-free.
  • Partner alignment is essential, especially for couples:

    "It's hard to get out of debt when you're frantically trying to climb out of the hole, but the other person is pouring dirt in on top of your head." (04:28)

Step 2: Stick to Your Guns

• Perseverance and Resilience:

  • Debt elimination is a long process that requires continued effort, even when setbacks occur.

    "You can't give up when life throws the inevitable curve balls at you... stick to your guns and get it done." (05:10)

  • Mistakes are natural; learning from them is key.

• Emergency Fund and Backup Plans:

  • Build an emergency fund (recommendation: at least $1,000 to start) to prevent future borrowing.

    "Any emergency fund is better than nothing." (06:20)

  • Budget for all types of expenses—expected and unexpected.

Most Important Takeaway

• The biggest lesson is that “there are always alternatives to borrowing,” and these choices become easier with each small success. (07:25)

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2. Listener Q&A: Balancing Debt Payoff and Investing

[09:01 - End]

Diania reads a thoughtful query from a listener debating between paying off a car loan ($24,000 at 3.49% interest) versus maintaining cash investments for flexibility.

Listener’s Dilemma

• Two main options:
  1. Cash out investments to settle the car loan, then rebuild cash.
  2. Pause investing and redirect that monthly money to accelerate car loan payoff.

Diania’s Advice

• Do Not Cash Out Investments:
  • Risks include lost momentum from compound interest and incurring capital gains taxes.

    "My first thought is to not sell your investments. There's a bigger opportunity cost here in losing momentum on compound interest and selling means you'll most likely incur capital gains taxes which would eat into the money you plan to use to pay off the car." (09:27)

• Maintain an Emergency Fund:
  • Keep some cash available to avoid new debt in case of emergencies.
• Combine Debt Payment and Investment:
  • Suggests a balanced approach, splitting extra money between car payment and investments.

    “Why not do both? ... Let's say $635 towards each. That alone will cut down your four-year timeline on the car…” (10:07)

• Flexibility is Key:
  • If circumstances change (e.g., higher income), the plan can accelerate.
• Personal Anecdote – The Case Against Expensive Cars:
  • Diania shares her regret about buying a brand new car:

    “I bought a brand new car once and I will never do it again… The next car I bought was for $6,000 cash and I really love not having a car payment.” (11:01)

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Notable Quotes & Memorable Moments

• Jackie Beck:

  • "You have to quit borrowing in order for any get out of debt method to work." (03:07)
  • "Quit debt cold turkey… it helps to know that you're not alone." (03:50)
  • “Stick to your guns and get it done... setbacks are normal and no fun but you'll get through them.” (05:10 – 05:32)
  • "There are always alternatives to borrowing. It's just up to you to find them." (07:25)

• Diania Merriam:

  • "There's a bigger opportunity cost here in losing momentum on compound interest..." (09:27)
  • “…I really love not having a car payment.” (11:14)

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Timestamps for Key Segments

• 00:00–01:28: Ad reads and brief intro (skip)
• 01:29–07:50: Jackie Beck's “2 Things You Absolutely MUST Do If You Want to Get Out of Debt”
• 09:01–12:00: Listener question: car loan versus investing, Diania’s advice, and personal story

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In Summary

This episode distills Jackie's no-nonsense philosophy: stop borrowing and stay committed until the job is done. Diania reinforces this wisdom with practical advice on balancing debt paydown with investing, and injects her own lived experience to make the lessons real and highly relatable. The episode’s tone is supportive, pragmatic, and empowering—offering listeners both the motivation and practical steps to finally break the debt cycle.

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Transcript

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This is optimal finance Daily two things you absolutely must do if you want to get out of debt By Jackie Beck of JackieBeck.com when you first decide to get out of debt, it's common to spend a bunch of time analyzing your debts and trying to figure out the best way to pay them off. Should you pay a little bit extra to each one every month? Should you focus on just one? With the debt snowball method, use the debt avalanche. Reduce your interest rates. People sometimes spend months trying to decide. But there are two things that matter a whole lot more that you have got to do if you want to get out of debt and stay out. 1. Something critical that so many people forget to even think about, let alone do. Ready for them. Number one, if you want to get out of debt, you have to stop borrowing. It sounds so simple, doesn't it? Sometimes people actually laugh when I say that, because Captain Obvious here, right? Except it's not. I can't tell you how often I borrowed on one hand while struggling to pay off debt with the other, never realizing what was actually holding me back and I was by no means alone. So many people tell me that they have to borrow for emergencies, travel, the holidays, car repairs, you name it, while they're paying off debt. They're so used to using debt as a solution that they don't even realize they have other choices. A lot of this is a mindset change. Remember, debt is not a solution, it's a problem. You have to quit borrowing in order for any get out of debt method to work. So so quit borrowing money. Make the payments on the loans you already have and eventually you will get out of debt as long as you're at least paying enough to knock out a little bit of the principal too. Truly remember when you're in a hole and want to climb out, the first step is to put down the shovel. Quit digging, prevent more earth from falling in on you and then figure out how to climb out how to quit digging yourself in deeper. Having a support group of like minded people and clearly defined goals helps to get rid of your debt. In other words, you've got to know what you want to be debt free, why you want it. Less stress, A better future. Insert your reason here and you've got to talk to other like minded people who are going through the same thing. While you can quit debt cold turkey and without any outside help, and I highly recommend quitting debt cold turkey, it helps to know that you're not alone. Talk with others who have done it or have seen successes in their journey so far. It helps to hear Great idea, I'm buying that beater instead of isn't it time to buy a new car? Or hey, want to come over for game night? Instead of oh come on, let's go out to eat tonight at that new restaurant. It helps to read death stories from others who have been there, done that, and gotten the coveted I'm Debt free t shirt if you're married or in a relationship where you share money. Of course, it also helps immensely to be on the same page as each other. It's hard to get out of debt when you're frantically trying to climb out of the hole, but the other person is pouring dirt in on top of your head. And number two, Stick to your guns. Once you decide to get out of debt, you have to keep going until you're done. Stick to your guns and get it done. You can't give up when life throws the inevitable curve balls at you. You can't give up when you're tired or feeling desperate. You have to keep going. Get help along the way too. Have fun along the way too, because you're in it for the long haul and that may as well be fun. Stay committed and you'll get there someday. It will be so worth it. Know that you can do it given enough time. Setbacks are normal and no fun but you'll get through them. You can learn from mistakes instead of beating yourself up. You can plan for future emergencies, revise your budget until it works, earn extra money, and maybe cut back on expenses and have a backup plan. A backup plan helps you succeed. Of course, we all need money for things, and we can't just magically throw all of our money at debt and be done, especially when there's an emergency. That means that we've got to have a backup plan so that we can successfully quit borrowing money. In financial terms, that backup plan is often an emergency fund. Aim for a thousand dollar emergency fund for starters, or whatever you think you can scrape together. Any emergency fund is better than nothing. Making sure you have money available when you need it also means budgeting. Start planning ahead now for all of the types of expenses you'll encounter. Regular, irregular, and even the unexpected. You may not know what unexpected expenses will come up, but you can be sure something will start expecting the unexpected the Most Important Thing to Remember the most important thing when it comes to quitting debt is remembering that there are always alternatives to borrowing. It's just up to you to find them. That gets easier with time and with smaller successes. Stick to your guns on the most important step and you absolutely will get out of debt. You just listened to the post titled two Things you Absolutely Must do if youf Want to Get out of Debt by Jackie Beck of JackieBeck.com Imagine you're a business owner who has to rely on a dozen different software programs to run your company, none of which are connected, and each one is more expensive and more complicated than the last. It can be pretty stressful. Now imagine Odoo. 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[A]

This article reminded me of a listener who wrote to me with the following question. He said, quote I have $24,000 in savings and investments, 7,500 in savings and 16,500 in ETFs. My car loan is now down to $24,000. It has four years left at a 3.49% interest. I pay $550 a month for it. I love the idea of being debt free and this loan is my only debt, but I also enjoy having the cash on hand in case I want to travel in the next few months. I've done the math and if I was to cash out all savings and investments to pay off the loan completely, it would take me 17 months to get back to $24,000 in assets. My other option is to pause my investing at $720 a month and redirect that over to my car loan, which would get rid of the loan in 18 months. Either way, net worth would be $24,000 in 18 months down the road. What would you do? End quote. And here is how I responded to him. My first thought is to not sell your investments. There's a bigger opportunity cost here in losing momentum on compound interest and selling means you'll most likely incur capital gains taxes which would eat into the money you plan to use to pay off the car. You also need an emergency fund or cash on hand so that you're not forced to raid your investments when life throws something unexpected your way. I don't think you need to completely pause investing or in other words, choose between investing and paying down debt. Why not do both? You could pay a little bit more towards the car each month and a little bit less towards investments each month. Let's say $635 towards each. That alone will cut down your four year timeline on the car, but also a lot can change for you during this process. If you get a raise or pick up a side hustle, you could shorten your timeline even more on that car loan. Now, I don't know how you feel about this car, but I will tell you that I bought a brand new car once and I will never do it again. I probably got around a $20,000 loan and I owed $12,000. When I got rid of the car, I was able to find a buyer to just pay what I owed on it so I could get rid of it. The next car I bought was for $6,000 cash and I really love not having a car payment. You might not like hearing this, but if it were me, I would probably try to get rid of the car and buy something much cheaper so that I didn't have a car payment. And that will do it for today. Have a great day and start to your weekend. Thank you for listening and I'll be back here reading to you tomorrow where your optimal life awaits.