– All right, I am pumped about this episode because it has to deal with
a topic that most of you are dealing with in your
life, which is debt. Ugh, it is so discouraging.
I read all these statistics and these studies all around this topic. And it’s like America is drowning in debt. And you may feel this way.
78% of Americans now— it used to be 70%, but now it’s
up to 78% of Americans— are living paycheck to paycheck. And a good reason of that
is because of how much debt they have and how much debt they’re paying out every single month. And the other hard thing about
debt is that it’s so normal in our world today, so normal, that people forget what debt even is. I was talking to a group of
college students years ago, and this guy came up to me
as I was getting started. He was like, “Hey, are
you the money girl?” And I was like, “Yeah, I guess so. “Are we here to talk about money?” He’s like, “Oh, cool,
cool. Well, I’m debt-free.” And I was like, you’re debt-free? You’re a college student who’s debt-free? You’re like a unicorn.
Like, you don’t exist. And I got so excited, and I
was like, “Tell me your story. “Like, how are you getting
through school debt-free? “Are you working?
Did your parents pay for it? “Is it scholarships and grants?” And he looked at me like (laughing) when my dog looks at me, and he just turned his head. And he was like, “No. “I have $36,000 in student
loans, but I’m debt-free.” You guys, I hear that all the time. Oh yeah, we’re
debt-free, but you know, our car loan every month is really high. I’m like, ugh, so, let’s just get on the same page all together, okay? This is what debt is:
Debt is owing anything to anyone for any reason. Say it again. Debt is owing anything
to anyone for any reason. Now to make it even less complicated, let’s play a little debt game—
What Is Debt, and What Is Not? (cartoony music)
Car loans? Debt.
(cartoony music) Pizza?
(cartoony music) No, no, no, no, not debt—just delicious. Student loans?
(cartoony music) Debt, yes. Student loans, debt. My dog Nala: not debt. But
you can lease pets now. Have you heard this?
(cartoony music) Yeah, that’s not a good idea,
so sad. Don’t lease your pets. Your mortgage: debt.
It’s the one type of debt I won’t yell at you for, but it is debt. Credit cards: debt—yes, even if you pay your credit card off every month. During the month, you are
still technically in debt because you owe someone something
at the end of the month. So, that is what debt is.
Some of you have fainted, and you don’t even know what
to do right now in life (laughing) because I may
have just busted some bubbles for you. But that is
what debt is, you guys— again, owing anything to
anyone for any reason. And when you look through
Scripture, every time it is mentioned in Scripture
(debt), it is in a negative fashion. It’s a curse. It’s
a burden on your family. It also says that the borrower
is slave to the lender. And I think that is
such a visceral picture. It’s such an example because
that is what debt does. It limits your freedom. The
borrower is slave to the lender. Meaning you don’t have the
freedom to get to decide what to do with your income.
When you work and your income comes in and you have debt,
you have to pay other people. You owe someone something,
and there’s not the freedom to say, hey, what do we
want to do with this money? Do we wanna invest it?
Do we wanna give it away? Do we wanna spend it? What do we wanna do? You don’t have say over your money. And that limits your freedom.
And my friend, Chris Hogan, says that debt is a thief. It
not only steals your income from you, but it steals
your sleep at night. It steals your peace of
mind. And so, when we look at this, debt not only has
an emotional impact on you, a spiritual impact on you, but
also a big financial impact on you. And some of you are
feeling this pain right now. Whether it’s student loan
debt, credit cards, car loans, or all the above, you’re
feeling this weight. And you’re getting to a
point where you’re starting to get mad at your situation.
Because you’re like, what am I doing? I’m working so hard, and I feel like I have
nothing to show for it. You’re getting that feeling, and
when you get that feeling, that’s when change occurs.
That’s when you decide, I’m gonna do something different. Because those of you out
there that are like, yeah, kind of, sort of
wanna get out of debt. I mean, I think that’d be
fun, kind of, yeah, guess so. Yeah, yeah, yeah, you’re
not gettin’ out, okay? ‘Cause you can wonder your way in, but you cannot wonder your way out of debt. You have to be so invested in this. You have to say, I am
going to work so hard to get out of debt. And
that’s what it takes. But you gotta get mad, you guys. You gotta be like, I am
sick and tired of this. I am sick and tired of livin’ like this. So when you get that,
that’s when you can start this process of getting out of debt and to be completely debt-free. So, to get out of debt, we
teach the debt snowball. And that’s where you list
out all of your debts, smallest to largest, regardless
of the interest rates; pay minimum payments on all your debt; and then attack the smallest one first. And when I say attack,
you look at your budget, and you’re like, we’re
not going out to eat. We’re not going shopping this month. You take everything out. You cut cable. You do all of these
sacrifices in your budget and say, we’re gonna put as much money as possible to pay off that smallest debt. And then once that’s paid
off, you take all the payments you were paying on that
one, and you roll it over to the second smallest debt.
And maybe you get an extra job, and maybe you go crazy to
get as much money as possible to pay off that second smallest. Then once that’s paid
off, you roll it over to the third smallest, and
you keep going and going and going until that
last debt is paid off. Then you are debt-free; everything but your house is completely paid off. And we’re finding that
people are doing this within 18 to 24 months on average. And this is all income levels.
This is all debt levels. I mean, people are getting
crazy ’cause what ends up happening is, as you’re gaining traction and paying off the smallest debt, you actually are seeing
hope. And you’re thinking, I can do this. Even if
it’s a $200 Macy’s card that you pay off first, you pay it off, and it’s like, okay, this is possible. And you start to gain hope,
because this is one area of money that can become so hopeless. ‘Cause you feel like
you are so deep in debt that there’s no way out.
So again, the sacrifices that you make within your lifestyle, getting your income up, and
letting your expenses go down, all those things together,
you’re able to get out of debt. And I’m telling you, getting out of debt is something that will take
care of you and your family far into the future.
(upbeat pop music)