The Personal Finance Podcast: How to Get Out Of Debt The FAST WAY (The 7-0 Method)

Host: Andrew Giancola
Release Date: May 19, 2025

In this empowering episode of The Personal Finance Podcast, host Andrew Giancola delves deep into strategies for eliminating debt swiftly and effectively using what he terms the "7o Method." Aimed at listeners striving for financial independence, Andrew provides a comprehensive roadmap to tackle high-interest debt, offering both psychological insights and practical steps to regain financial freedom.

1. Understanding the Impact of Debt

Andrew opens the discussion by emphasizing the crippling effects of debt on one's financial and personal life. He states:

"Debt robs you of your time and your freedom. It robs you of more time with your family... and from the ability to just have peace of mind." (02:15)

Highlighting that debt isn't merely a financial burden but also a significant source of stress and anxiety, Andrew underscores the necessity of addressing it as a primary step towards achieving financial goals.

2. Defining High-Interest Debt

Central to the episode is the identification of what constitutes high-interest debt. Andrew defines:

"High interest debt is any debt above a 6% interest rate. If it has above a 6% interest rate, that means you have high interest debt." (10:45)

He differentiates high-interest debt from lower interest obligations like mortgages, explaining that debts exceeding 6% should be prioritized because, statistically, investing available funds elsewhere (like in the S&P 500) can yield returns that outpace the interest accumulations (7-10% vs. 6%).

3. The 7o Method: A Seven-Step Plan to Debt Freedom

Andrew introduces the "7o Method," a structured approach designed to systematically eliminate debt. Here's a breakdown of each step:

Step 1: Stop Borrowing Immediately

"The number one way to get out of a hole is to stop digging yourself deeper in that hole." (15:30)

Andrew stresses the importance of ceasing all forms of borrowing to prevent further debt accumulation. Practical actions include:

• Eliminating Credit Cards: Andrew recommends freezing or cutting up credit cards to remove temptation.
• Avoiding Buy Now, Pay Later Services: He highlights the risks associated with these schemes, labeling them as gateway drugs to deeper debt.
• Turning Off Overdraft Protection: To prevent banks from automatically adding to credit card debt during overdrafts.
• Deleting Stored Information from Shopping Apps: Making purchases less impulsive by removing easy-payment options.

Additionally, he advises listeners to:

• Write Down Their "Why": Clearly articulating personal reasons for eliminating debt and displaying them as daily reminders.

Step 2: List All Debts

"Clarity creates confidence." (25:10)

Creating a comprehensive list of all debts is crucial. Andrew recommends detailing each debt with the following columns:

1. Name of Debt
2. Current Balance
3. Minimum Payment
4. Interest Rate

By organizing debts in this manner, individuals gain a clear picture of their financial obligations, transforming an overwhelming situation into a manageable task.

Step 3: Cut Back on Expenses Aggressively

"Every single dollar you cut is a dollar that could go towards your debt." (35:50)

While Andrew isn't typically an advocate for strict budgeting, he recognizes its necessity for those in high-interest debt. He introduces the CIA Method:

• Cut: Identify and eliminate unnecessary expenses.
• Identify: Allocate the saved funds towards debt repayment.
• Automate: Direct the saved money automatically to debt payments to prevent accidental spending.

Key expense areas to address include:

• Subscriptions: Cancel unused services.
• Dining Out: Limit to once a week.
• Phone Plans: Switch to more affordable options like Mint Mobile.
• Impulse Purchases: Implement stricter purchasing controls.

For substantial savings, he suggests:

• Housing Adjustments: Moving to a cheaper apartment or getting a roommate.
• Transportation Cuts: Selling an expensive car and opting for a more economical vehicle.

Step 4: Choose Your Payoff Method

Andrew explores two primary debt repayment strategies:

1. Debt Avalanche Method

   • Approach: Pay off debts with the highest interest rates first.
   • Pros: Minimizes total interest paid.
   • Cons: Progress may feel slow, potentially reducing motivation.
   • Quote: "This could save you the most money and it could save you the most interest." (55:20)

2. Debt Snowball Method

   • Approach: Pay off the smallest debts first to gain quick wins.
   • Pros: Boosts motivation through early successes.
   • Cons: May result in slightly higher total interest over time.
   • Quote: "A small win early in the process make people feel they are making progress and that makes all of the difference." (1:05:10)

Andrew cites a Northwestern study where the Debt Snowball method led to higher debt elimination rates due to increased motivation, despite the Avalanche method being mathematically superior.

Recommendation: For most listeners, especially those seeking motivation, Andrew advocates for the Debt Snowball method.

Step 5: Make Extra Payments Every Month

"Extra payments are the secret weapon to pay down debt fast." (1:12:45)

Beyond minimum payments, allocating additional funds accelerates debt repayment. Andrew illustrates the impact:

• Example: On a $5,000 credit card with a 20% interest rate, paying $150 minimum results in 5 years of repayment with $3,000 in interest. Adding just $100 monthly can halve the interest and shorten the repayment period to just over 2 years.

He encourages finding these extra funds through:

• Selling Unused Items: Utilizing platforms like Facebook Marketplace, eBay, and others.
• Side Hustles: Engaging in freelance work or service-based gigs.
• Creative Savings: Cutting non-essential expenses identified in previous steps.

Step 6: Increase Your Income and Find Hidden Money

"There is no ceiling on how much money that you can earn." (1:30:20)

To compensate for the limitations of expense cuts, Andrew emphasizes boosting income streams. Strategies include:

• Selling Assets: Regularly offloading items no longer needed.
• Side Hustles: Pursuing freelance opportunities on platforms like Fiverr or Upwork.
• Negotiating Bills: Reducing recurring expenses by renegotiating contracts for services like cable or internet.
• Optimizing Tax Returns: Adjusting withholdings or seeking refunds to reallocate funds.

He urges listeners to take actionable steps immediately:

• Action Items:
  • Sell at least one item per week.
  • Identify three things to sell within the next seven days.
  • Commit to one method of increasing income each week.

Step 7: Stay Laser Focused Until Debt is Gone

"Debt freedom isn't about intensity for a week. It's about consistency for a season." (1:45:00)

The final step revolves around maintaining motivation and consistency throughout the debt repayment journey. Key tactics include:

• Tracking Progress: Weekly updates using visual trackers like spreadsheets or checklists.
• Celebrating Milestones: Rewarding oneself with free activities upon paying off debts.
• Building a Support System: Engaging with communities or trusted individuals for accountability.
• Avoiding Lifestyle Creep: Resisting the urge to upgrade lifestyle prematurely.
• Constantly Reminding Yourself of Your "Why": Keeping the reasons for debt elimination visible and top-of-mind.

Andrew highlights that perseverance is crucial, noting that many abandon their efforts due to temporary discouragements. By fostering a supportive environment and regularly revisiting their motivations, listeners can sustain their commitment to becoming debt-free.

Conclusion

Andrew wraps up the episode by reiterating the transformative power of the 7o Method. He encourages listeners to adopt these steps diligently, assuring them that achieving a debt-free life is attainable with the right mindset and actions. The episode serves as both a motivational and practical guide, designed to empower individuals to take control of their finances and build a foundation for lasting wealth.

"If you are in high interest debt, this is going to be one of the most powerful things that you do in your life." (2:10:30)

Key Takeaways

• Identify and Prioritize High-Interest Debt: Focus on debts exceeding 6% interest rates.
• Cease Borrowing: Eliminate credit cards and other borrowing avenues to prevent further debt.
• Organize Your Debts: Create a detailed list to gain clarity and formulate a repayment strategy.
• Choose the Right Repayment Method: Opt for the Debt Snowball method to maintain motivation or the Debt Avalanche for mathematical efficiency.
• Make Extra Payments: Allocate additional funds monthly to accelerate debt elimination.
• Boost Income Streams: Explore various avenues to increase earnings and reallocate funds towards debt.
• Maintain Consistency and Motivation: Stay committed through tracking, celebrating milestones, and building a support network.

By following Andrew's 7o Method, listeners are equipped with the tools and mindset necessary to dismantle their debt and pave the way toward financial independence.