The Fastest Way to Pay Off All Your Debt


Transcript

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- 80% of Americans are
living paycheck to paycheck

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because of debt.

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So, let's talk about how
to free up your finances

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and your future.

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(upbeat music)

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All right, this year we are doing a series

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on each of the Baby Steps.

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So, if you missed last episode,

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we talked about Baby Step 1,

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which is saving a $1,000 emergency fund.

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In this episode, we're gonna
talk about Baby Step 2,

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which is getting out of debt.

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So, we're gonna bring
on my dad, Dave Ramsey,

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who came up with the Baby Steps

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and has been walking people through them

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for the last 25 years.

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And then we're gonna talk to a couple

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who are working their way
through the debt snowball,

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and they're in the middle
of their debt-free journey.

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It's great, because they're just starting

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to feel the freedom in getting
control of their lives,

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and best of all you guys,
they have hope again.

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Now, a lot of people think
that debt is not bad.

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Like, it's just a normal way of thinking.

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That's what society tells us.

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And in fact, 80% of Americans

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are living with some form
of consumer debt right now.

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Listen, you cannot create a life you love

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while you're in debt.

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When you are in debt, it forces you

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to live life looking
through the rearview mirror

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because you are chained
to stuff in the past.

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So, how do you get rid of debt?

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Well it all starts with the debt snowball.

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Okay, this is the best way,

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the most effective way, to get out of debt.

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And this is the debt snowball:

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where you list out all of your debts

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smallest amount to largest amount,

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regardless of the interest rate,

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pay minimal payments on everything,

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and pay off the smallest debt first.

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And once that's paid off,
you roll all the payments,

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all the money you were
throwing at the smallest debt,

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to the second smallest debt.

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Then once that's paid off,

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you have the minimal
payments of the smallest debt

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and the second smallest debt

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to roll over to the third smallest debt.

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So it gets bigger, and bigger, and bigger.

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You're money continues to expand

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to start knocking down each debt.

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And I love this because what
this takes is motivation.

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And once you pay off that smallest debt,

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motivation comes. Your
behavior starts to change.

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Now, some of you might
be thinking, "But Rachel,

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shouldn't you pay off the
highest interest rate first?"

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Yes, technically that would
be mathematically correct,

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and that method is what they
call the debt avalanche,

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which is terrible by the way.

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I mean, avalanche or snowball?

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Okay, snowballs are way more fun.

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I don't want to be caught in
an avalanche. No, no, no, no.

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So, stick with the debt snowball.

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But again, mathematically speaking,

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yes, the debt avalanche could
save you a few hundred bucks,

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mathematically speaking,

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but when studies have been done

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of people who do the debt snowball

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versus the debt avalanche,

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they actually get out of debt faster

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using the debt snowball.

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Again, because it's all
about your motivation,

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it's all about your behavior change.

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And a debt snowball,

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it has worked for millions
and millions of people,

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and I promise, it can work for you.

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But up next, I wanna talk
about something that you need

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no matter which Baby Step you're on.

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(light piano music)

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So, earlier this year
I was at a live event,

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and before some of our live events

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we do these backstage experiences.

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So you can purchase these tickets

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and me and the other speaker will go back,

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and answer questions, and
meet people backstage.

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And during one of these
backstage experiences,

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this man came up to me, and he
was like six foot something,

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like huge, he was tall,
big, big, big beard.

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I mean just like this burly man.

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And he asked me if he could
talk to me for a second.

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And I was like, "Yeah, sure."

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And so he pulled me aside,
and he just started crying.

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And it took him a second

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to kinda console himself
to even get his words out.

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But he began to tell me

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that him and his wife were on
the journey of the Baby Steps.

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And they were working their way through,

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and she actually watched
The Rachel Cruze Show

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for motivation,

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which is obviously so fun
to hear, I always love that.

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And I could still see though,

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obviously the sadness from his tears

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and the way he was talking
that something happened.

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And so, as he began to tell me his story,

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three months prior to that live event,

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him and his wife, they got in a car wreck,

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and she actually ended up passing away,

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leaving him with their
three young children.

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And so, at the time I was newly pregnant,

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and I mean, you just put
yourself in that situation

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and I'm like, that's the
absolute worst thing

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that could possibly happen,

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and that happened to him and his family.

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I mean, it's unimaginable.

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And then he began to tell me though

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that he had purchased term life insurance,

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him and his wife, and
they had it in place.

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And so, he was saying, "Rachel,

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this is not the way to
get to Baby Step 7,

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but because of term life insurance,

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I don't have to work,
our house is paid for,

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everything's taken care of.

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And if we had not gotten that,

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this entire grieving process
would look so different."

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And in that moment, I was like,

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man, that's why we do it, you guys.

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We talk about term life insurance
all the time on this show,

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and you know that Winston and
I, we use Zander insurance,

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I talk about it all the time.

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And you might be thinking,
"Okay, that's great.

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Maybe I'll get it one day."

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But listen, stuff happens you guys,

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and you want to make sure

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that you and your family
are taken care of.

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And I was so thankful
for him and his story

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that money didn't have to play a role

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in their grieving process.
Like, all of that was taken care of.

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And again, that's not the way

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you want to get to Baby Step 7.

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But man, how much more
stress, and heartache,

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and life heaviness would be on that family

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if they didn't have life insurance.

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So, if you do not have
term life insurance,

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go to zander.com, get
started on a quote today,

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because they will find you the best rates,

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and they're going to take
care of you and your family.

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Again, if something were to happen,

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having term life insurance is
one of the best safety nets

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that you can have for your family.

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All right, up next I wanna
bring on my dad, Dave Ramsey,

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and we're gonna get back to talking about

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getting out of debt

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because this is one place

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that can free up your family as well.

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But debt in general, it's changed,
you guys, over decades now.

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And so, we're gonna hear all
from big Dave's perspective

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when it comes to that.

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(musical tone)

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All right, you're back.

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- I am.

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- Here you are at "The Rachel Cruze Show".

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- Almost like I work here.

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- (laughs) Almost, sort of. You're
sort of connected, I guess.

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Okay, so this episode's
all about Baby Step 2,

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and you've been known as
the get-out-of-debt guy

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for decades now.

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So I'm curious from you,

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you take calls on the radio everyday,

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what has changed about debt in 25 years?

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Like, peoples questions,
have you seen a difference

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from 25, 30 years ago with debt to today?

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- I think there's different,

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we've gone through different ebbs and flows

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of which kind of debt is
the crisis of the day,

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the flavor of the day.

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When we first started,

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everybody was talking
about credit card debt,

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how evil and how horrible
credit card debt is,

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and we still think it is.

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- Do you find that people
are in more credit card debt,

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it's become more normalized
than even 30 years ago?

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What do you see around
that subject specifically?

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- 30 years ago people wrote checks.

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- Yeah.

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- And so, it was a big deal.

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- The chunk-chunk of the credit card.

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- You would run across the thing.

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- You know what I always
think about? Home Alone 2,

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when he's lost in New York,

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and he has to give it to the guy,

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and they pull it out,

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and they chunk-chunk, and he
gets into The Plaza Hotel.

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That's always my thought
of credit cards back then.

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- It's like pulling out the
cell phone in Jerry McGuire

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that's this big. Same thing.

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It shows you the age of the movie, right?

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So credit cards are,
what's happened with them is,

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the debit card has
eclipsed first the check,

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and now checks have
just about disappeared.

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And then the debit card
has become so normalized,

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and we've helped with this.
We've made it very, very popular

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as an alternative to the credit card.

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So the credit card kinda looks like

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the dirty, crazy cousin
of the debit card now.

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- The crazy thing is that
Millennials, studies are showing,

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are actually getting into
less credit card debt

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than their parents were.

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- Because they have this option,
and it's been put forward.

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I mean, people are starting to realize

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the credit card is the cigarette
of the financial world.

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It used to be cool, and
all the movies had it,

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in 1950's everybody's
smoking everything, right?

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And then people start talking about,

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hey this stuff kills you.

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And then the surgeon general came out.

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And then we put it in
the elementary schools

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and said, "Oh children, don't
smoke. It will kill you".

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- D.A.R.E. programs popped up everywhere.

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- And that's what's happening gradually

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with the credit card, only
in a more adult level,

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to where the Millennials
are coming along going,

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hey, this credit card didn't
work for our boomer parents.

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They got screwed by
this. We're not playing.

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But it's not at the forefront
of society's mind today.

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Then we kinda went through this thing

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where we went from car
payments to car leases.

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Car companies realized

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they could make a lot more money on leases

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than they could on regular
payments on regular car loans,

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and so they start pushing.

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And today, 78% of the cars
that roll off a new car lot

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are car fleeces,

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and the reason is they
make more money on them,

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but we went through a phase

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because it was kinda
new and it was faddish.

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And then of course

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we moved into the
student loan epic plague,

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because it has grown. It's exploded.

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- But the difference though,

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of 30 years ago with
students loans and today,

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is massive, probably
more so than car loans

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and credit cards combined.

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- Because of just the volume
of it, the number of dollars.

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And there's a little
bit of a stigma shift.

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You know, my generation
to the next generation,

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those are two previous to today.

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If they took out a student loan,

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they kinda did it holding their nose.

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And now everybody's like,
well that's just what you do.

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And so, the stigma has gone away from it.

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The fear around it has gone away from it.

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But now this epic plague
is bringing the fear back.

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Which is good news because
it's waking people up going,

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this is not working.

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- So, debt has somewhat changed,

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shifted the conversations
around it in 30 years.

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But the way to get out

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and the mindset around it hasn't changed

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in the sense of the things you need to do.

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So, we talk about budgeting
all the time on the show

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about being intentional,

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and it's the best step you can take

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to not just get in control of your money,

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but to get out of debt.

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So, do you still find that to be true,

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that budgeting is still a key
part of getting out of debt?

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- Well, because you have to
control the fuel that you have

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to get out of debt with,

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and the fuel is the money.

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And the money, the way you
control the fuel, is the budget.

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It's you turn it up,
turn it down. And you go,

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okay, we'll turn this one down,

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this one down, this one down,
so that more comes over here.

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And so we're cutting back lifestyle

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because we're sick and tired
of being sick and tired.

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We're really angry. We're really scared.

0:10:20.670,0:10:23.590
We really have had it. We're
really going to change.

0:10:23.590,0:10:24.760
And we're not going on vacation.

0:10:24.760,0:10:26.601
And we're not going to a restaurant.

0:10:26.601,0:10:29.880
And we're gonna dress the
kids in consignment clothes.

0:10:29.880,0:10:32.410
And we're really, for the next 18 months,

0:10:32.410,0:10:34.260
the next 36 months, whatever it is,

0:10:34.260,0:10:36.410
we're really gonna sacrifice deeply,

0:10:36.410,0:10:39.345
and that shows up in the written plan.

0:10:39.345,0:10:42.420
That is not just a random
series of decisions.

0:10:42.420,0:10:43.340
- Yep, so good.

0:10:43.340,0:10:46.003
And then also, taking responsibility.

0:10:46.003,0:10:49.540
When you look at your life
and the mess you've caused,

0:10:49.540,0:10:51.037
not to put shame, but to say,

0:10:51.037,0:10:52.467
okay, I've done this.

0:10:52.467,0:10:53.527
But then at the same time,

0:10:53.527,0:10:56.320
I have the power to be
able to clean up this mess.

0:10:56.320,0:10:59.230
Do you see that as still a huge
step in getting out of debt?

0:10:59.230,0:11:01.460
- Absolutely, the power and the dignity

0:11:01.460,0:11:02.810
to make their own decision.

0:11:02.810,0:11:06.030
And, you know, and really the realization

0:11:06.030,0:11:07.826
that no one's coming.

0:11:07.826,0:11:10.033
The Lone Ranger's not coming.

0:11:11.820,0:11:14.320
Whatever's happening, the
pioneers are all surrounded,

0:11:14.320,0:11:15.630
they're being attacked, or whatever,

0:11:15.630,0:11:18.440
and the calvary is not coming.

0:11:18.440,0:11:22.830
And so, you are the problem
and you're the solution.

0:11:22.830,0:11:25.640
And that's both wonderful
news, and it's scary news.

0:11:25.640,0:11:26.473
- Yes, absolutely.

0:11:26.473,0:11:28.140
And then, the third is a tool

0:11:28.140,0:11:30.380
that you've been teaching for decades now,

0:11:30.380,0:11:31.640
is Financial Peace University.

0:11:31.640,0:11:34.430
And we talk about this,
but getting signed up,

0:11:34.430,0:11:38.250
going through that course,
being around like-minded people,

0:11:38.250,0:11:42.370
this is a huge step to help
accelerate your journey.

0:11:42.370,0:11:44.830
- In a much more intense situation,

0:11:44.830,0:11:47.570
if you're dealing with
someone who has an addiction

0:11:47.570,0:11:49.620
there's two things that they do.

0:11:49.620,0:11:52.140
One is, they quit hanging out
with their friends who drink,

0:11:52.140,0:11:53.660
if they've got a drinking problem,

0:11:53.660,0:11:56.450
because you're gonna become
who you hang around with,

0:11:56.450,0:11:57.810
it's just nature.

0:11:57.810,0:11:58.643
And you know this

0:11:58.643,0:11:59.880
because you don't let your
kids hang around people,

0:11:59.880,0:12:00.980
the kids that are misbehaving,

0:12:00.980,0:12:03.020
because they're gonna
misbehave like that kid.

0:12:03.020,0:12:04.920
And so, you can't hang out
with your drinking buddies

0:12:04.920,0:12:06.060
if you want to quit drinking

0:12:06.060,0:12:07.600
because you have a drinking problem.

0:12:07.600,0:12:09.150
And guess what else you do?

0:12:09.150,0:12:11.390
You get in a group of
people who are solving this,

0:12:11.390,0:12:12.223
called 12 Step.

0:12:12.223,0:12:14.060
And so, you go to Alcoholics Anonymous,

0:12:14.060,0:12:14.893
and you sit down, and you go,

0:12:14.893,0:12:16.490
"My name is David, and I've got a problem".

0:12:16.490,0:12:18.980
Now that's a much more extreme situation.

0:12:18.980,0:12:20.743
That's a heavier burden

0:12:20.743,0:12:23.770
than just simply changing
your behaviors on money,

0:12:23.770,0:12:27.450
but it's exactly the same
equation, only on a lighter form.

0:12:27.450,0:12:29.336
And so, you can't hang out
with your broke friends

0:12:29.336,0:12:32.980
who are putting stuff in your
face on Instagram all the time

0:12:32.980,0:12:36.130
that you can't afford, and
that they can't afford either,

0:12:36.130,0:12:39.000
and you can't keep hanging out
at the bar, if you're a drunk,

0:12:39.000,0:12:40.270
with drunks.

0:12:40.270,0:12:42.910
And you need to get in the group of people

0:12:42.910,0:12:45.910
who are positive peer
pressure in your church

0:12:45.910,0:12:47.301
and in your 12 Step

0:12:47.301,0:12:49.090
that are gonna turn this around with you.

0:12:49.090,0:12:50.917
And so, you get around a
bunch of people who are going,

0:12:50.917,0:12:54.820
hey, this is now, in this
group, being weird is normal.

0:12:54.820,0:12:56.970
- Yes, and walk with it.

0:12:56.970,0:12:58.440
So you guys, if you haven't
checked it out, do it.

0:12:58.440,0:13:00.280
Because again, those are the things,

0:13:00.280,0:13:01.500
besides just the debt snowball

0:13:01.500,0:13:02.860
and the tactical side
of getting out of debt,

0:13:02.860,0:13:04.962
that's really gonna help the mindset shift

0:13:04.962,0:13:06.473
while you're in Baby Step 2.

0:13:06.473,0:13:09.480
- It's a very unusual person
that has enough backbone

0:13:09.480,0:13:10.630
and enough chutzpah

0:13:10.630,0:13:15.580
to completely change
their lives by themselves

0:13:15.580,0:13:18.360
and not have people
like-minded around them,

0:13:18.360,0:13:20.830
and not have continual content

0:13:20.830,0:13:23.820
and input from new lessons coming at them.

0:13:23.820,0:13:25.850
If you can just sit in
the corner, in the dark,

0:13:25.850,0:13:27.100
and change your life,

0:13:27.100,0:13:28.840
you would've probably already done it.

0:13:28.840,0:13:30.970
- That's a good point, so good.

0:13:30.970,0:13:32.110
Always wonderful. (hand clap)

0:13:32.110,0:13:33.200
Thanks for coming in.

0:13:33.200,0:13:34.080
- Good times.

0:13:34.080,0:13:35.000
- So fun, so fun.

0:13:35.000,0:13:36.871
All right, coming up next,
Micah and Chelsea are here.

0:13:36.871,0:13:38.490
They're on Baby Step 2,

0:13:38.490,0:13:41.380
and we get to see what life
is like for them on this step.

0:13:41.380,0:13:44.200
(musical tone)

0:13:44.200,0:13:45.920
- Before we decided to get out of debt,

0:13:45.920,0:13:48.570
we stayed frustrated with our finances,

0:13:48.570,0:13:50.880
frustrated with each other constantly.

0:13:50.880,0:13:54.430
- I was really confused
about how much we had,

0:13:54.430,0:13:55.730
neither of us knew.

0:13:55.730,0:13:57.460
- Every time we got a
check it was a relief

0:13:57.460,0:13:59.077
because we thought, okay, finally,

0:13:59.077,0:14:01.277
another band-aid to
kinda fix the problem.

0:14:02.488,0:14:06.745
We both grew up with money
being a huge stress always,

0:14:06.745,0:14:09.920
and to start our family,
when we get married,

0:14:09.920,0:14:11.360
I didn't want that same environment.

0:14:11.360,0:14:14.780
I didn't want the inheritance
to be frustration.

0:14:14.780,0:14:18.162
- Especially for our marriage,
and thus for our kids.

0:14:18.162,0:14:22.870
- I'd heard about Dave
Ramsey when I was early 20s

0:14:22.870,0:14:25.580
and knew he had written some
books, and that was about it.

0:14:25.580,0:14:27.290
Something about pay something off

0:14:27.290,0:14:29.290
and then roll that money to the next.

0:14:29.290,0:14:31.040
- I had found the app through a friend,

0:14:31.040,0:14:32.770
but didn't know it was
the Dave Ramsey app,

0:14:32.770,0:14:34.160
a few years back.

0:14:34.160,0:14:35.650
And I had shown him,

0:14:35.650,0:14:37.700
but we had looked at so
many budget apps together,

0:14:37.700,0:14:39.060
I think I caught him at the wrong time

0:14:39.060,0:14:40.237
and he was just like,

0:14:40.237,0:14:42.580
yeah, we're not gonna
do an app right now.

0:14:42.580,0:14:44.930
It took him finding it and
being like, look at this,

0:14:44.930,0:14:47.913
and us sitting down together
and really playing with it.

0:14:47.913,0:14:49.710
- I think the ah-ha moment for us

0:14:49.710,0:14:52.220
was probably the same as most people

0:14:52.220,0:14:53.951
when they do the budget
for the first time,

0:14:53.951,0:14:55.870
is you see what's left over.

0:14:55.870,0:14:56.850
She showed me,

0:14:56.850,0:15:01.110
and I said, "No, that's not
right, you miscalculated".

0:15:01.110,0:15:02.774
And there is an
unbelievable amount of peace

0:15:02.774,0:15:06.450
to having every dollar, and
having every thing in control,

0:15:07.544,0:15:08.814
and you're in control of it.

0:15:08.814,0:15:12.870
- I tell people all the time,
I think it's actually freeing.

0:15:12.870,0:15:14.460
It keeps us on the same page all the time.

0:15:14.460,0:15:16.010
We don't have to fight,
I don't have to ask.

0:15:16.010,0:15:17.690
- It's good for your finances,

0:15:17.690,0:15:20.820
but it's also good for your
marriage, and teamwork.

0:15:20.820,0:15:22.070
There's a transparency there

0:15:22.070,0:15:25.910
that is necessary in a marriage.

0:15:25.910,0:15:27.660
It's not just when you're debt-free,

0:15:27.660,0:15:29.650
but it's while you're
in debt and budgeting.

0:15:29.650,0:15:32.090
It's brilliantly titled Financial Peace.

0:15:32.090,0:15:33.623
It is a really comforting thing.

0:15:36.370,0:15:38.470
- All right, Micah, Chelsea, thank
you so much for being here.

0:15:38.470,0:15:39.620
- Thanks for having us.

0:15:40.513,0:15:41.820
- So we always talk about

0:15:41.820,0:15:43.350
how you can wander your way into debt,

0:15:43.350,0:15:45.140
but you cannot wander your way out.

0:15:45.140,0:15:46.707
And Baby Step 2 is tough

0:15:46.707,0:15:48.410
because you have to be fully committed.

0:15:48.410,0:15:50.610
And you can't just be on the plan-ish.

0:15:51.480,0:15:53.230
We call that ish people.

0:15:53.230,0:15:57.437
And so, you would say that
you were kind of ish people

0:15:57.437,0:15:59.630
before being fully committed.

0:15:59.630,0:16:02.030
So kinda tell me your story around that.

0:16:02.030,0:16:05.117
- Yeah, so before we really dove into it,

0:16:05.117,0:16:08.147
I guess we were as ish as it could be.

0:16:08.147,0:16:10.878
I knew how to spell Dave
and that was about it.

0:16:10.878,0:16:12.083
- There you go.

0:16:12.083,0:16:16.058
- I knew Dave Ramsey.
I knew he had written a book,

0:16:16.058,0:16:18.640
and that was about what I knew.

0:16:18.640,0:16:23.460
We had some friends that
were hosting FPU,

0:16:23.460,0:16:24.980
and we went to their house one night

0:16:24.980,0:16:27.016
and got a cute little folder,

0:16:27.016,0:16:28.017
and we were like,

0:16:28.017,0:16:31.140
great, we'll order water
when we go out to eat.

0:16:31.140,0:16:33.757
And we went to one class
and didn't go back.

0:16:33.757,0:16:37.193
And also didn't realize it was
a regular thing you attended.

0:16:38.830,0:16:42.569
So it was, that started
Daveish, and we always knew,

0:16:42.569,0:16:45.820
at least I always knew,
that credit cards were bad

0:16:45.820,0:16:49.060
and snowballs were a thing.

0:16:49.060,0:16:52.240
And so, we said we snowballed,

0:16:52.240,0:16:55.380
but we might had done it once or twice.

0:16:55.380,0:16:58.530
So we don't count out debt-free journey

0:16:58.530,0:17:00.720
until we really started the budget.

0:17:00.720,0:17:02.490
We just wandered in darkness

0:17:02.490,0:17:05.010
and was confused and frustrated.

0:17:05.010,0:17:07.180
- Yeah so, Chelsea, what
did marriage look like

0:17:07.180,0:17:09.330
when you guys were in that season?

0:17:09.330,0:17:10.163
- It was okay,

0:17:10.163,0:17:12.945
but we just either avoided and/or

0:17:12.945,0:17:14.910
I wouldn't even say argued

0:17:14.910,0:17:16.630
as much as just constant frustration

0:17:16.630,0:17:19.080
and miscommunication.

0:17:19.080,0:17:21.090
- Yeah, so were you guys,

0:17:21.090,0:17:22.900
so you felt like you
didn't really have a plan,

0:17:22.900,0:17:24.560
it was kinda just like here and there.

0:17:24.560,0:17:25.910
So what was the catalyst?

0:17:25.910,0:17:26.787
What was the point that you were like,

0:17:26.787,0:17:28.577
okay, something has to change,

0:17:28.577,0:17:29.870
something has to be different?

0:17:29.870,0:17:33.440
- Every time she grocery shopped it was—

0:17:33.440,0:17:34.273
- Those were arguments.

0:17:34.273,0:17:35.106
- Okay, okay.

0:17:35.973,0:17:38.710
- We felt good because
we had good intentions,

0:17:38.710,0:17:40.700
but we didn't follow through
with any kinda budget.

0:17:40.700,0:17:42.387
So we felt like, it's almost like,

0:17:42.387,0:17:44.730
I think I'll start a
diet, and feeling like,

0:17:44.730,0:17:47.061
good for me, I thought
about having a diet.

0:17:47.061,0:17:47.894
(Rachel laughs)

0:17:47.894,0:17:48.830
I feel thinner already.

0:17:48.830,0:17:50.820
- I think I'm gonna be a
runner, that feels good.

0:17:50.820,0:17:52.820
(group laughs)

0:17:52.820,0:17:56.880
- So that was kind of the
mindset. We just stayed frustrated

0:17:56.880,0:18:00.250
because there was always confusion.

0:18:00.250,0:18:03.938
But as income increased, we start to see,

0:18:03.938,0:18:07.650
I'm making more so we can
pay more, we can do more.

0:18:07.650,0:18:11.110
And that was a hard part
when we initially started

0:18:11.110,0:18:12.920
and thought we were gonna go at it,

0:18:12.920,0:18:15.790
I had gotten laid off,
she had gotten pregnant.

0:18:15.790,0:18:19.590
And I started a job, and I
was getting $800 a month,

0:18:19.590,0:18:21.200
and that's what we had,

0:18:21.200,0:18:23.455
and there was no way of surviving.

0:18:23.455,0:18:24.963
- The income was the
problem at that situation.

0:18:24.963,0:18:27.340
- And so, just promotions and job changes,

0:18:27.340,0:18:29.510
it kind of led and grew quickly,

0:18:29.510,0:18:31.440
and then we saw we have enough

0:18:31.440,0:18:33.779
to where we can really go at it.

0:18:33.779,0:18:35.650
And that's always a Dave thing.

0:18:35.650,0:18:38.540
If it's not a debt problem,
it's an income problem.

0:18:38.540,0:18:40.200
And it was initially.

0:18:40.200,0:18:41.380
- So what was the one thing

0:18:41.380,0:18:44.070
that really helped you guys
get out of debt, would you say?

0:18:44.070,0:18:45.290
- The budget app.

0:18:45.290,0:18:47.530
- The budget app, EveryDollar, okay.

0:18:47.530,0:18:48.363
So tell me about that?

0:18:48.363,0:18:50.270
How was that, doing it for the first time?

0:18:50.270,0:18:52.698
- I mean, it took us a few
months to really get in the groove

0:18:52.698,0:18:53.860
and really start seeing,

0:18:53.860,0:18:58.240
but even just the first
month he was like, what?

0:18:58.240,0:18:59.747
I got done and it was like,

0:18:59.747,0:19:01.320
we can put this much towards debt.

0:19:01.320,0:19:03.083
He was like, no, I don't
even make that much.

0:19:03.083,0:19:04.870
Are you sure you did everything?

0:19:04.870,0:19:07.710
And it was really freeing

0:19:07.710,0:19:11.400
to see how much we could get
done as quick as we could.

0:19:11.400,0:19:16.112
- And when we had started or
knew about Financial Peace,

0:19:16.112,0:19:19.300
I kept thinking, financial
peace is when you're debt-free,

0:19:19.300,0:19:21.706
but part of that peace
is having structure.

0:19:21.706,0:19:22.800
- Even in the process, yeah.

0:19:22.800,0:19:24.330
- And that budget brought peace.

0:19:24.330,0:19:27.380
I mean, we're gonna be
doing our budget meeting

0:19:27.380,0:19:31.090
on the way home, and that
was the turning point.

0:19:31.090,0:19:33.446
- So compare your budget conversations

0:19:33.446,0:19:36.950
before doing EveryDollar,
and all of that, to after,

0:19:36.950,0:19:38.470
because it sounds like night and day.

0:19:38.470,0:19:39.850
- Oh yeah.

0:19:39.850,0:19:42.180
It used to be, I would write
it down on a piece of paper,

0:19:42.180,0:19:44.820
and sometimes he would, and
we do math really differently,

0:19:44.820,0:19:47.863
so he'd show me what he did
and I'd be like, what?

0:19:47.863,0:19:49.247
- How did you get there?

0:19:49.247,0:19:51.390
- And vice versa, we'd
do the exact same thing,

0:19:51.390,0:19:52.860
and neither of us even understood

0:19:52.860,0:19:53.921
the way each other did math.

0:19:53.921,0:19:57.020
And then we'd end up not talking about it

0:19:57.020,0:20:00.010
because you'd be like, you
know what? No, we can't.

0:20:00.010,0:20:00.843
Either we're gonna argue

0:20:00.843,0:20:01.920
or we're just not gonna talk about it,

0:20:01.920,0:20:03.380
so a lot of times we didn't talk about it.

0:20:03.380,0:20:04.980
- And so now, it's so opposite

0:20:04.980,0:20:06.380
because you're on the same page.

0:20:06.380,0:20:08.830
So would you say, we talk
about, especially with couples,

0:20:08.830,0:20:11.943
that working together and doing a budget

0:20:11.943,0:20:14.390
eliminates so many money fights

0:20:14.390,0:20:15.550
and money problems within a marriage,

0:20:15.550,0:20:16.541
would you say that's true for you guys?

0:20:16.541,0:20:17.374
- [Micah] Oh yeah.

0:20:17.374,0:20:18.207
- And not even just that,

0:20:18.207,0:20:19.760
I think it's relationship building.

0:20:19.760,0:20:23.120
It's more than just taking
out something. It's adding.

0:20:23.120,0:20:25.630
It's changed so much of the
way that we think about it.

0:20:25.630,0:20:26.463
- Within marriage,

0:20:26.463,0:20:27.900
and then also, obviously,
with paying off debt,

0:20:27.900,0:20:30.456
because doing a budget is a
big part of Baby Step 2,

0:20:30.456,0:20:31.430
getting out of debt.

0:20:31.430,0:20:32.700
So what did you guys start with?

0:20:32.700,0:20:34.510
How much debt did you start with?

0:20:34.510,0:20:36.503
- Well, we didn't really know,

0:20:36.503,0:20:40.230
and that was a terrible
feeling, is not knowing.

0:20:40.230,0:20:42.470
And unfortunately for about a year

0:20:42.470,0:20:45.647
we would get another letter
in the mailbox saying,

0:20:45.647,0:20:49.527
hey, your ADS loan has
been bought out by so-and-so,

0:20:49.527,0:20:51.950
and now you owe us this
with this interest.

0:20:51.950,0:20:55.600
So ultimately, overall,
once we figured it all out,

0:20:55.600,0:20:58.160
it was about $80,000–85,000.

0:20:58.160,0:21:00.883
- Okay, and how much
do you guys have left?

0:21:00.883,0:21:01.716
- $5,000.

0:21:01.716,0:21:02.773
- $5,000.

0:21:02.773,0:21:04.760
You're like, right there.

0:21:04.760,0:21:05.593
How does it feel?

0:21:05.593,0:21:07.610
Because, I mean, I know you're
technically not debt-free,

0:21:07.610,0:21:08.443
you've got one more month,

0:21:08.443,0:21:09.276
you've got to get that paycheck in,

0:21:09.276,0:21:11.720
but emotionally it's there.

0:21:11.720,0:21:13.410
So like, how do you feel?

0:21:13.410,0:21:14.580
- It feels good to know

0:21:14.580,0:21:16.690
that our money's going toward the green,

0:21:16.690,0:21:18.200
it's going towards something,

0:21:18.200,0:21:20.180
something that's really in the positive.

0:21:20.180,0:21:22.500
And that alone is exciting.

0:21:22.500,0:21:23.333
- So good.

0:21:23.333,0:21:25.290
Okay, so what encouragement do
you have for people watching

0:21:25.290,0:21:27.727
that are like, okay, I've
got my $1,000,

0:21:27.727,0:21:31.400
I'm about to embark on Baby
Step 2 on this journey,

0:21:31.400,0:21:33.560
and I think I'm
committed, I might be ish.

0:21:33.560,0:21:35.030
But what encouragement would you say

0:21:35.030,0:21:37.350
to be fully committed to this process?

0:21:37.350,0:21:39.010
- I would just say,
especially if it's a couple,

0:21:39.010,0:21:41.270
just really be open to talking about it,

0:21:41.270,0:21:44.376
and getting started, and
trusting each other with it.

0:21:44.376,0:21:47.180
It just helps so much
to get on the same page,

0:21:47.180,0:21:50.600
and you'll be shocked at
how much you can get done,

0:21:50.600,0:21:53.040
even if you have a fairly small income.

0:21:53.040,0:21:58.040
- I had a friend ask me,
how are you doing this?

0:21:58.160,0:22:00.940
And my response, he took it as an insult,

0:22:00.940,0:22:03.090
but I just said, well, self-control.

0:22:03.090,0:22:06.390
And that's what we
don't have as Americans,

0:22:06.390,0:22:09.660
as just people blessed
with so much that we have.

0:22:09.660,0:22:12.040
If we wanna get it, we can go get it.

0:22:12.040,0:22:14.730
Ultimately, I think it's just
self-control and patience.

0:22:14.730,0:22:19.130
And that's the hardest
thing to have, to pray for,

0:22:19.130,0:22:22.408
and to just manage.

0:22:22.408,0:22:25.170
- Well you guys are incredible,

0:22:25.170,0:22:27.730
I mean, seriously, the
amount that you've paid off,

0:22:27.730,0:22:28.800
and that you're so close,

0:22:28.800,0:22:30.280
and that you guys are
working together as a team.

0:22:30.280,0:22:32.290
I mean, it just transformed, I know,

0:22:32.290,0:22:33.860
so many different parts of your lives.

0:22:33.860,0:22:36.844
And so, I'm so thankful that
you came and shared your story.

0:22:36.844,0:22:37.677
- Thank you.

0:22:37.677,0:22:38.640
- Thank you guys so much,

0:22:38.640,0:22:40.650
and I can't wait for you
to be debt-free next month.

0:22:40.650,0:22:41.738
- Yeah, thank you.

0:22:41.738,0:22:42.571
- So exciting, so exciting.

0:22:42.571,0:22:43.404
Thanks for coming on.

0:22:43.404,0:22:44.414
- Appreciate it.

0:22:44.414,0:22:46.997
(upbeat music)

0:22:51.630,0:22:53.250
I just love their story.

0:22:53.250,0:22:56.840
And for you guys, I'm so rooting
for you to get out of debt.

0:22:56.840,0:23:00.100
And so, I hope that this episode
motivated you to do that.

0:23:00.100,0:23:02.020
Thank you so much to all of my guests

0:23:02.020,0:23:05.140
for coming on this episode, and
thank you guys for watching.

0:23:05.140,0:23:07.470
Now to get everything that we
talked about in this episode,

0:23:07.470,0:23:09.743
make sure to click the
link in the description.

0:23:09.743,0:23:11.920
And I always want to hear from you

0:23:11.920,0:23:13.220
and answer your questions.

0:23:13.220,0:23:15.860
So, I set up a new voicemail just for you.

0:23:15.860,0:23:17.800
You can call, leave your message,

0:23:17.800,0:23:18.992
and I may answer your question

0:23:18.992,0:23:21.960
in a future episode of
the show or the podcasts.

0:23:21.960,0:23:26.620
So, just call 844.944.1075 and ask.

0:23:26.620,0:23:28.610
If you haven't subscribed
to my YouTube channel

0:23:28.610,0:23:30.240
or my podcast, make sure you do that

0:23:30.240,0:23:32.880
so you don't miss anything
new coming out from me.

0:23:32.880,0:23:35.800
And as always, make sure to
take control of your money

0:23:35.800,0:23:37.839
and create a life you love.

0:23:37.839,0:23:40.506
(musical tones)