- 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)