[Music] well hey you guys so the beauty of a new year is that it's built on a fresh start right I mean everyone feels like they have a clean slate you're able to start something new but it's also another reminder that those student loans or any other debt for that matter is still sitting there and you know you have to pay interest on it and it's like oh it's not fun right you kind of feel that weight of the minimum payments well if you feel that and you're like I need something to change you came to the right place cuz we're going to talk about how to pay off debt in the fastest way possible in 2025 and stick around because later I'll be sharing the one kind of debt that some people don't even know they can get rid of and if you haven't subscribed yet to the Channel Make sure you do that so you don't miss a future episode all right so when it comes to paying off debt there is a lot of debt out there that I want you to pay off in order to build wealth and this is everything from student loans car loans credit card debt personal loans helocs I mean there's so much out there so when you look at paying off Consumer Debt this means everything but your house so when you get all of that Consumer Debt I want you to write it all out to know okay exactly how much you owe in each category next let's talk about debt payoff and when that begins so when you start paying off debt you first want to make sure that you have an emergency fund in place and so being able to have $11,000 saved is going to be your first goal before paying off debt because you need you know some money in the bank if something comes up because it will to be able to cash flow those emergencies now those are going to be smaller emergencies because it's only $1,000 so if it's something bigger that you're going to have to pay then usually those type of bills will take two to three months that you have to you know pay those eventually so that means you can get a side hustle and figure out how to cash flow those while you pause paying off debt but again your first goal is that $1,000 emergency fund and this is really your safety net between you in life once that is complete then you're going to start paying off that debt okay so now it's time to talk about what it looks like to attack that Consumer Debt fast and get it out of your life for good but first let's talk about one of our sponsors Christian Healthcare Ministries so just about everything costs more these days so if you're looking at your healthare options during open enrollment check out Christian Healthcare Ministries chm is not health insurance it's a biblically based Health cost sharing Ministry that's helped hundreds of thousands of families like yours with health care costs without sacrificing freedom and you can join chm at any time like now so learn more at chministries.org budget that's chministries.org budget so when I talked about baby step two is that you're going to pay off your debt smallest amount to largest amount regardless of the interest rate and you're going to do this method it's called the debt snowball method and this is the fastest way to pay off debt because what you'll realize is that debt is more of a Behavior issue it's not a math issue and so there's something about changing your behavior where you know that you actually can get out of debt that behavior when you get a quick win suddenly shifts in the positive to know oh my gosh I can do this like I can change how I'm handling my money I can get out of debt so even if it's an $800 credit card bill that's your smallest debt and you pay it off and you cut it up you get rid of it close the account it's like okay well that's done now I can move that minimum payment over to the second smallest debt and again you get a side hustle you decrease your lifestyle you do whatever you can to throw extra money at that one pay it off and you realize okay just paid that one off now you can roll the minimum payment that was on the credit card and the second smallest debt now to the third smallest debt so what happens it starts compounding from a minimum um payment standpoint which is great mathematically but more importantly you are getting quick wins and that is going to help you in this process so that is the debt snowball versus the debt Avalanche where people actually want to pay off the highest interest rate first cuz mathematically that is correct right you want to get rid of the highest interest rate first but the problem is that highest interest rate you know could be a $20,000 debt where you have all these other little like little ankle biter debts that are not as much an interest but you got this big one and you're trying to chase the math where you realize it can feel like oh my God I'm like going up this mountain and it's I feel like I'm not getting traction so changing your behavior is so key when it comes to personal finance that's why that that snowball method is so crucial yeah and you think about it too snowballs like they're more fun than Avalanches right Avalanche scary bad snowballs fun exciting right so always remember the debt snowball method is more effective but the reality is is that a lot of Americans are living paycheck to paycheck and so finding margin to pay off debt is really crucial so here are six ways to find margin number one cut unnecessary expenses when I mentioned lowering your lifestyle for real lower your lifestyle you know cut anything that you don't need and this is subscriptions going out to eat even your grocery budget for the month see if you can shrink it down by $50 to $100 and throw extra at your debt like do whatever you can to cut your expenses and do a budget if you've not done a budget yet so you'll know specifically where your money's going and how to control it number two is to increase your income so this can be from your the job you have this could be working overtime this could be getting a side Hustle but bringing in extra income is going to be a big part of this equation of paying your debt off faster and I was just talking to a group of about 600 people and the amount of side hustles that were out there and people that were making eight nine ,000 I mean it was everything from from pet sit sitting to uh driving Uber or lift this was piano teachers that are like yeah they did a side gig and you know top piano I mean it was everything you can imagine and people were making hundreds of dollars a month like it can be significant and it's not fun right after your full-time job you don't want to go work a side hustle or work on the weekends but for a short period of time to bring in some income to get this debt paid off faster totally worth it also number three is to look around your house and sell your crap we all have stuff that we don't need from clothes to electronics like stuff that is out there that you're like oh my God we don't need this furniture even sell it get rid of it and make some money again we all have so much stuff so get rid of it and make money off of it number four is to pause investing so while you're getting out of debt yes pause investing and that could be hundreds of dollars back in in your paycheck every single month that can help to pay off debt because when you pay off debt and you have no money leaving in payments that means you can actually then save up an emergency fund and then start investing 15% of your income into retirement and that 15% is pretty high compared to what most people are investing from a percentage of their income so you're able to catch up and do even more when you get to that point that you are debt free number five is adjust your tax withholdings so if you got a big tax refund that means you are sending your money that could be in your paycheck to Washington and then once a year you get a big check back and and it's earned no interest it's done nothing it's been sitting there for free when it could have been used to pay off debt that much faster so if you get if you got a big tax refund go to your HR department and adjust your withholdings and then also number six use the money finder so this is a great tool that kind of speeds a lot of this up in real time and it gives you other areas of your life to look to see where you can get extra money and we are finding that people you know are finding a lot which is amazing cuz getting that margin is such a key part of winning financially so I will put a link in the description now as promised there's one kind of debt that most people think that you don't have to pay off quickly but if you do it will boost your net worth and free up your income like nothing else and that is paying off your mortgage early yeah a lot of people are like what but listen we are finding that people that are doing the baby steps and paying off their mortgage which is baby step six toward the end they're doing this on average in nine years and if you are able to pay off your house and you have no mortgage payment you're saving hundreds of thousands of dollars literally in interest like it's amazing how much interest we pay when it comes to a mortgage but then also the complete freedom and freeing up probably one of the largest line items in your budget of not having a mortgage payment like it is an incredible thing so this is on your journey of being debt yes Consumer Debt is so huge but also when you pay off your house down the line it's even better so I hope that all of this helped you guys motivate for the new year to become debt-free and have that freedom not just financially but also emotionally and make sure to share this episode maybe with a friend who wants that freedom as well in 2025 and also avoid the 10 mistakes that can derail your debt payoff coming up next all right you guys remember to take control of your money and create a life you love
