Transcript
Candy Valentino (0:00)
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Candy Valentino (0:33)
Welcome to the Candy Valentino show, the podcast for founders, investors and entrepreneurs where we have honest conversations about what it takes to grow your business, build more wealth, and create financial freedom.
Unknown Financial Expert (0:56)
Today, we are going to be talking about one of the biggest financial challenges that most Americans, millions of Americans, are currently facing. I talked about this in the book Wealth Habits. I did a whole chapter on it. And I think it's really important to understand that if you're struggling with debt, you're not alone. Our society literally perpetuates marketing to you in order for you to use the flashy credit card, in order to put something on credit, in order to get the bigger house, the bigger car, all of the things that you want and desire. They're playing to that ego. And so debt is something that's here for so many millions of Americans. And it's really more than a financial burden. It can actually be an emotional one, one that's anxiety inducing, stress inducing, because the stress of paying off bills or not being able to make your rent payment really takes its toll on your mental well being. But having debt doesn't mean you're a failure. It doesn't even mean that you're stupid or that you should be embarrassed or any of those things. It means that you were part of a system that we never learned or were educated about. We were taught so much history and science and math in school, but nobody told us what to stay away from, how to make more money, how to pay less taxes, and why we should not take on debt. In 2023, consumer debt in the United States is expanded, expected to exceed $14 trillion, a staggering number that has increased over 30% since 2020. And as debt levels continue to rise, it's becoming increasingly important to understand how to proactively manage it so that you can become financially free. Because here's the deal, you will never out invest bad debt. So if you have all of this debt hanging over your head, it's like trying to build to climb a mountain and have a big bag of rocks that you're trying to climb with you. You're never going to build true financial wealth while you have bad debt. So I want to cover just seven quick ways that you can get on the path to being financially free and to stop taking on all of this debt. Okay, number one, everyone will tell you that you need a budget. Making sure that each dollar is like a soldier that goes out and has a purpose is really key. It's important to understand your finances. And by doing a budget, it really starts to help you identify, like, what are you spending money on and what money do you really have to allocate to certain expenses. This will help you maintain greater control and transparency on where your money's going and how you can make necessary cutbacks. So here's the thing. If you don't have a budget and you aren't allocating where all of your funds are going, it's really easy to overspend. Once you have wealth and you're making money, you actually typically don't have a budget. What we do then is we just decide what life we want to live and what we want to actually spend, and then we reverse engineer it to just make more money. But at the end of the day, either you control your finances or they will control you. And according to a study by the national foundation for credit counseling, 65% of Americans don't have a budget. So it's not shocking that a huge portion of Americans are in debt. By creating a budget, it's really the first step to understanding your finances and really start eliminating debt so that you can pay that down and start investing in your future. Second, number two, get creative in finding additional income sources. Now, here's the thing. Like I always say, business and personal finance, super easy. You either increase your income, reduce your expenses. That's it. The way you bridge the gap will allow you to pay down debt more quickly. So are there ways that you can get additional side jobs? A study by Bankrate found that nearly half of Americans earn extra income through a side hustle. So it's always worth exploring what you can do. What do you have experience in? What do you have knowledge in? What are you currently doing in your day job that you may be able to do on the side? That's a way to create additional income opportunities. Number three, evaluate all in any forms of debt that you have. This could be a student loan that you took out 20 years ago that you're still paying on credit cards. And always see if there's a different repayment option available to you. And also if there's a lower interest rate that may be available to you. Oftentimes we get a credit card five, 10 years ago, and maybe your credit wasn't as good, but you actually are paying a higher interest rate than you can be paying now. Sometimes it's just worth a call to that financial institution to see if there's anything else available to you so that you can lower that interest rate and start to pay off that debt faster. This one little shift can save you thousands of dollars.