The surprising truth about paying off your debt

The Street

Most people think becoming debt-free means putting life on hold , but there’s a smarter way to do it.

Transcript

00:00Getting debt-free should not be this core focus.

00:02You should kind of set it and forget it.

00:04So I learned this lesson when I was paying off my credit card debt.

00:07I was a victim of a scam that left me $35,000 in debt in my 20s.

00:12And I struggled.

00:14I didn't go anywhere.

00:14I didn't do anything.

00:15I didn't save anything for two and a half years.

00:18And I finally paid off that credit card debt.

00:20And I was so happy for about 10 minutes.

00:22And then I looked and realized, but you still have $50,000 of student loan debt.

00:26And I thought, do I have to take another four or five years to have no life?

00:30It was a light bulb moment that went on that like, yes, you should be paying your debt,

00:36automating it, paying more than the minimum, but honestly kind of setting it and forgetting

00:39it and then working on the rest of your life.

00:42And so deciding from your budget, this is why budgets are so great.

00:46How much money would you really have accessible to pay down debt?

00:50And then what are you going to leave left over for savings?

00:53And honestly, enjoying life too.

00:54Because I don't believe just because you're paying off debt that you shouldn't set aside

00:57some money for enjoying life.

00:59I think that you should be looking at your finances holistically.

01:02And so I think you should be doing both.

01:04Sometimes people will come to me and say, Tiffany, how can I save more?

01:07I look at their budget and I'm like, honestly, you can't save more.

01:11You're not going out.

01:12You're not spending money on grooming.

01:15You're not, there's just not extra money here.

01:17If you look at your, if you don't have enough money at the end of the month, right?

01:21And you look at your budget and most of your money is going to your Bs and UBs, your bills

01:26and utility bills, then you probably have a don't make enough issue.

01:30If most of your money is going to your Cs, your cash expenses, then you probably have

01:35a spend too much issue, right?

01:37So if you have a spend too much issue, then it's just going line item by line item and

01:41saying what things here are really choice expenses that I can really cut out, you know,

01:46literally looking at some of your subscriptions, cutting those out one by one.

01:49But if you have a don't make enough issue, there is no more cutting back to do.

01:53You're going to have to ask yourself, how can I make more income?

01:57You know, does that look like asking for a raise at work?

02:00Does that look like side hustling?

02:02Does that look like finding a job that's actually going to pay me more?

02:05Sometimes we have to make those hard choices, but there's only so much cutting that you can

02:09do.

02:09Everyone is not being irresponsible with their money.

02:11Some people just don't make enough.

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