(acoustic music) – I think a lot of
people struggle with debt because one, we’re so
afraid to look at it. I think that’s the number
one hurdle that we actually really have to get past, but I also think that a lot of the time when we carry debt, we feel stuck like, I, like almost like we wanna pursue and tackle
other areas of our lives but we can’t because we’re
carrying debt on our shoulders, and I think that’s why a lot
of people struggle with it, plus people don’t really
even know where to start with their debt, they have so much, there’s so many different kinds, they have so much going on,
and just that initial step of where do I even start. For me, it was trial and error, right. Getting it down in front of my face was probably one of the most,
was the most important step on my journey, getting over that fear, getting it down on a piece
of paper in front of my face, and truly being aware of it
and wanting to tackle it. But I think also the, you know,
there is so much information on paying off debt, you get overwhelmed. You get pulled in 10,000
different directions. Should you do this, should you start an emergency fund first, what debts should you pay off first, should you tackle the
highest interest rate, the lowest balance. And so it comes down to
really asking yourself what’s going to motivate you
on your debt payoff journey. For me, I was motivated by knowing I was gonna save the most
interest over the long run or the life of my debt, so
I used the avalanche method. If you’re going to be more motivated by seeing those debt disappear quicker, meaning you would pay off
the smallest balances first, you see signs of progress
and success early on in your debt payoff
journey and then you get to the very last debt which
is your high debt balances. And so I think those are the things, but also it’s really hard to feel hope when you’re dealing with a lot of debt. It’s almost like, this is impossible, there’s no way I can do this. And so I think realizing,
looking at the bigger picture and really going after and fighting for what you want for your future is really important as well. Debt is pretty normal. It’s funny now, I mean we rely
on it for so many reasons, sometimes even if we don’t need it. And I think another
thing that scares people into using debt is the
fact that they think it’s going to wreak havoc
on their credit report. I get so many questions that people say well Miko, you’re 100% debt-free, you’re buying your house with cash, you literally have no
debt, so how do you expect to have a great credit score? And my credit score isn’t great, I think the last time I
checked it was like 816, but I’ve never been truly
worried about my credit score getting any lower or it
decreasing over time. If you are worried about
saying no, having no debt footprint, I know I
will never use debt again, so for me it’s not that big of a worry. But I would essentially say
when you pay off your debt and you’re ready to be disciplined enough to pay off a credit
card every single month, start with just using
a credit card for gas, pay it off every month. Give that card a specific purpose. Now I do have some readers
that use rewards cards. And you can eventually get to that point where you can put all
of your monthly expenses on a credit card and
pay it off every month if that’s the route that you choose. I’m always gonna be dedicated to cash, just because it’s something that just had this huge significant impact in my life and that’s, I think, what
I’ll always end up doing. No, so I am very
different in that thought. So I don’t think all debt is bad. I think hey, if you can
travel the world for free using your credit rewards,
like, go for it all day long. I think when debt gets bad
is when you don’t realize you’re ready to use the debt. I think using credit cards
is okay for some people, it’s not okay for me, and I’m willing to be honest with myself
and say that out loud. Miko, me, I should not have
credit cards, I just shouldn’t. I just paid off my debt last year and I just still don’t
trust myself with them. I’m one of the type of
people where it’s like oh, I’ll just pay it off
later and then I don’t. So I know that about myself, and so that’s where you
have to be very honest with yourself if you can handle and be disciplined enough to have debt. And to use it. I also don’t think having
a mortgage is bad debt. I think that if you’re
using debt irresponsibly, it’s bad debt. But if you’re being disciplined and you can pay it off, and some things, I mean let’s be honest,
there’s a lot of people out there in this world who cannot afford to buy a house in cash,
or even a car in cash. That is the reality. So I don’t necessarily
think all debt is bad. Yeah, making the decision to
buy my first house with cash was probably one of the
hardest financial decisions I had to make on my journey. I was getting pulled between
I can have it right now if I finance it and I
can have my dream house, or I can be a patient spender
and really follow my heart on what I believe is right for me. So I decided to not finance my house and use cash instead is
because one, I knew it was a goal that I could achieve. But two, it opened up so many doors and possibilities for my future. When I think about the life
that I want with my son, having a mortgage was not in that picture. And there’s a couple
different reasons for that. One, I’m self-employed. And I just left my
full-time job back in May to run the Budget Mom full time. Honestly, having a mortgage payment, a huge mortgage payment
hanging over my head was absolutely terrifying,
where it kept me up at night thinking about it. And also, I have the
chance to retire early. There are a lot of doors that were opened when I made this decision for my future and for my son as well, and in the life that I really wanted with
him, and so I think sometimes that financial decisions
shouldn’t always just be about the numbers, you
have to feel at peace with the decisions that you’re making for you and your family and
only for you and your family. ‘Cause without that peace of mind, without that confidence in the decisions you’re making with your money, you’re never gonna feel
successful with it. No. Getting out of debt sucks, and it’s hard. And I mean, it’s daunting
and it’s frustrating, and it’s happiness and it’s tears of joy. And it’s frustration,
and it’s moments where you’re stronger than you
ever though you would be. Getting out of debt is a journey. It’s ups and downs, and it’s
triumphs and it’s failures. And I think that anyone who
starts a debt-free journey, I want them to know a debt-free journey and paying off your debt is
not about making debt payments. It is not. A debt journey and paying off your debt is a self discovery journey. You will learn more about
yourself paying off your debt than I think a lot of other
journeys might take you, and for me, I really got to know myself. Because you’re forced to
ask the hard questions. It’s like paying off, paying off debt becomes so important to
you where you are forced to make decisions and to truly, honest give yourself honest answers about where you are and
why you’re spending money, money that you know you don’t have. So is paying off debt hard? Absolutely. Probably one of the
hardest things I ever did. But it’s so worth it. (gentle music)