[0:00] Let me say something that might sound
[0:01] shocking. If you're in debt right now,
[0:04] it's possible you'll be in debt for the
[0:07] rest of your life. Not because you have
[0:09] to be, not because you even want to be,
[0:11] but because you don't know how to escape
[0:13] the cycle. Right now, about 64 million
[0:17] Americans have debt in collections. That
[0:20] means non-stop calls from debt
[0:21] collectors, late fees stacking up, and
[0:24] the constant stress of knowing you're
[0:26] behind. But it doesn't have to be that
[0:28] way for you. That's why you're here. In
[0:30] this video, I'm walking you through the
[0:32] eightstep debt payoff system that
[0:34] actually works so you can get out of
[0:36] debt fast and stay out of it for the
[0:39] rest of your life. This is the system
[0:41] that will change everything. Let's get
[0:43] into it. Step one, face the brutal truth
[0:47] about your debt. A lot of people go,
[0:48] "Yeah, I have some debt, but it's fine.
[0:50] I'm handling it. I'm making payments."
[0:52] If you were handling it, you probably
[0:55] wouldn't be watching this video. Pull up
[0:57] every single debt you have. Credit
[0:59] cards, student loans, medical bills,
[1:01] everything. I don't even care if it's a
[1:02] random $200 bill you owe your friend
[1:04] from three years ago. Write it down.
[1:07] Here's what you need. Total debt amount,
[1:10] interest rates, this is the silent
[1:12] killer, and minimum payments. For
[1:14] example, James gathers everything we
[1:17] just covered. Here's what that would
[1:18] look like for him. Notice he's got his
[1:21] credit card, which has a really high
[1:23] interest rate. another credit card which
[1:25] has an even higher interest rate and a
[1:27] car loan at 9%. And notice those minimum
[1:30] payments. They're quite revealing. Now,
[1:32] most people truly avoid this step
[1:34] because it's painful. Who wants to go
[1:36] digging around for how much we owe? But
[1:38] ignoring your debt does not make it go
[1:40] away. It's like ignoring a gas leak in
[1:42] your house and going, "Well, I don't
[1:43] smell it all the time." All right. Well,
[1:45] it doesn't mean it's not going to blow
[1:46] up. And here's one more thing. Add your
[1:49] credit report to the mix. It's a very
[1:51] high chance you may have forgotten about
[1:53] one piece of debt. Go to
[1:56] annualcreditreport.com and pull your
[1:58] full report. You might find an old debt
[2:00] that you don't even remember or a
[2:01] mistake. Now, if you've ever looked at
[2:03] your credit card statement and thought,
[2:05] "How the hell did this get so high?"
[2:07] You're in the right place. I'm not here
[2:09] to shame you. I'm here to help you pay
[2:11] it off faster, smarter, and without
[2:13] restricting everything you love. So, hit
[2:16] subscribe, turn on notifications, and
[2:18] let's make sure the only thing you are
[2:20] moving forward with is confidence, not
[2:23] debt. All right, you have your full list
[2:25] of debts and interest rates and minimum
[2:26] balances. Let's move on to the next
[2:28] step. Step two, choose your attack plan.
[2:31] Snowball versus avalanche. Now that we
[2:33] know how much debt we're dealing with,
[2:35] it's time to attack it to go on offense.
[2:38] There are two proven ways to do this.
[2:40] First, the debt snowball method. This is
[2:43] where you pay off the smallest balances
[2:45] first. You get some quick wins. You feel
[2:47] good about yourself. It gives you the
[2:49] motivation to keep going. The second
[2:51] approach is the debt avalanche method.
[2:53] This is where you focus on paying off
[2:55] the debt with the highest interest rate
[2:57] first. This approach saves you the most
[3:00] money in the long run. Let me be real
[3:02] with you. If you're more
[3:03] numbersoriented, the avalanche method is
[3:05] mathematically the best choice. You'll
[3:07] pay less interest overall and that's a
[3:09] win. But if you need small wins to keep
[3:11] yourself motivated, go with the snowball
[3:14] method. I really don't care which one
[3:15] you choose. The most important thing is
[3:17] you pick one and you commit. For
[3:20] example, James chooses the snowball
[3:22] method to keep himself motivated and he
[3:24] attacks his smallest debt, which is his
[3:27] Chase credit card first. Bonus strategy,
[3:30] the five-minute call that can save you
[3:31] thousands. This is a strategy most
[3:33] people don't even realize they can use.
[3:35] Call up your credit card company and ask
[3:37] them to lower your APR. Here are the
[3:40] exact words to use. Hi, I'm going to be
[3:43] paying off my credit card debt more
[3:44] aggressively beginning next week, and
[3:46] I'd like for you to lower my interest
[3:48] rate. Uh, why? I've decided to be more
[3:51] aggressive about paying off my debt.
[3:53] Other cards are offering me rates at
[3:55] half of what you're offering. Can you
[3:57] lower my rate by 50% or only 40%. I've
[4:00] been a customer for 8 years and I would
[4:02] prefer not to switch my balance over to
[4:04] a lowinterest card. Can you match the
[4:07] other card rates or can you go lower?
[4:08] Now listen, it doesn't work every time,
[4:10] but when it does, you can often save
[4:13] thousands of dollars in interest alone.
[4:15] So, make the call. That leaves more
[4:17] money to go towards your actual debt so
[4:20] you can pay it off even faster. Step
[4:22] three, the lazy genius way to pay off
[4:25] debt. The biggest mistake people make
[4:27] when trying to pay off their debt is
[4:28] relying on willpower. Guys, willpower is
[4:31] garbage. It's like depending on
[4:33] motivation to go to the gym. That lasts
[4:36] about 3 days and then you're right back
[4:38] sitting on your couch watching Netflix
[4:40] for 4 hours, salt and vinegar chip
[4:42] crumbs all over you. Instead of relying
[4:45] on willpower, automate your debt
[4:47] payments so you don't even have to think
[4:49] about them. Here's how. First, set up
[4:51] minimum payments on all your debts so
[4:54] you won't get hit with any late fees.
[4:57] Next, automatically send any extra cash
[5:00] to your highest priority debt using the
[5:03] avalanche or snowball method, your
[5:06] choice. And most importantly, make sure
[5:08] to time your automatic payments right
[5:10] after payday, so you never even see that
[5:13] money sitting in your account, which
[5:15] tempts you to spend it. Now, once this
[5:17] is set up, your debt shrinks every
[5:19] single month without you stressing out
[5:21] over it or creating any work for you.
[5:24] Quick little bonus, you can use our new
[5:27] debt payoff calculator to see the exact
[5:31] time when you will be debtree. Take a
[5:34] look. Step four, free up cash without
[5:38] living like a hermit. You guys, paying
[5:39] off your debt doesn't mean you have to
[5:41] give up everything you love. People
[5:43] think it means no dinners out, no
[5:44] vacation. Well, okay. You probably
[5:46] shouldn't be taking $5,000 vacations if
[5:47] you have 20k of credit card debt. Let's
[5:49] be honest. But you don't have to sit at
[5:52] home with the lights off eating reheated
[5:54] ramen noodles just to pay off your debt.
[5:57] That's not how we do things here, okay?
[5:58] I believe in living a rich life today
[6:00] and a rich life tomorrow, even if you
[6:02] have debt. So, let's find some extra
[6:04] cash you won't even miss. Start with
[6:07] these quick wins. Unused subscriptions.
[6:10] If you're still paying for subscriptions
[6:13] but not actually using those services or
[6:15] they're just outdated, cancel them.
[6:18] Overpriced insurance, call your
[6:20] providers and say, "Hey, I'm shopping
[6:21] around for better rates. What can you do
[6:22] for me?" And finally, impulse spending.
[6:25] Take an honest look at your spending,
[6:27] especially on eating out and delivery.
[6:29] Figure out what you need to do to
[6:31] pre-plan. That can often save you
[6:33] hundreds of dollars per month. In my
[6:35] experience talking to tons of people, I
[6:37] found that most people can free up at
[6:39] least $500 a month by methodically going
[6:43] through those steps. And when you free
[6:46] that money up, whether it's 100, 500,
[6:48] a,000, you can take that money and
[6:50] redirect it to getting debtree even
[6:53] faster. Next, I want to show you how you
[6:55] can pay off debt even faster. And if I
[6:57] were you, that's exactly what I would
[6:59] want to do. Because your debt doesn't
[7:01] only impact you, it impacts your family.
[7:04] It impacts your kids. What kind of role
[7:07] model are you setting for your kids if
[7:10] you yourself are in debt? Part of what I
[7:13] want you to do is to have a healthy
[7:15] relationship with money. Because as a
[7:17] parent, you want to do everything you
[7:18] can to protect your kids. Yes, that
[7:20] means getting out of debt. It also means
[7:22] making sure you have term life insurance
[7:24] so they are taken care of financially if
[7:27] you were to get hit by a bus tomorrow.
[7:29] This video's sponsor, Fabric by Gerber
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[7:36] can get done right from your couch, all
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[7:44] health exam required. If you've got
[7:46] kids, and especially if you're young and
[7:48] healthy, it's a great idea to lock in
[7:50] rates now. Even if you have life
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[8:23] meetfabric.com/raitsi. Now, let's move
[8:25] on to step five. Unlock the cheat code
[8:28] to pay off debt faster. Okay, now you're
[8:31] paying off debt methodically. But if you
[8:33] want to speed things up even faster,
[8:34] don't only focus on cutting back. Find
[8:37] creative ways to earn more. Even an
[8:40] extra $200, $500, $1,000 a month can
[8:44] make a huge difference. That can often
[8:46] cut off years of debt payments. Here's
[8:49] how to bring in extra cash. Freelancing.
[8:52] Take the expertise you already have and
[8:54] sell it. For example, writing, graphic
[8:57] design, tutoring, project management.
[8:59] There's so many ways you can start to
[9:00] earn more. Side gigs, ride share
[9:02] driving, food delivery, pet sitting.
[9:04] These are just three of a million ideas.
[9:07] Sell things you don't use. Sometimes
[9:09] people show me videos of their closet
[9:10] and I'm like, "What the?" Taking the
[9:13] things in your closet, the things in
[9:15] your storage. In fact, if you have
[9:17] storage right there, that's a great way
[9:20] to get rid of it and cut a monthly fee.
[9:22] Turn hobbies into cash. Cooking,
[9:24] photography, even fitness coaching can
[9:26] become viable income streams. Check out
[9:28] my Earn1K program in the description
[9:30] below to see how I can help you start to
[9:32] earn more money and ask for a raise. If
[9:35] you've been delivering real value at
[9:37] work, learn the skills to negotiate your
[9:39] salary. When you increase your income,
[9:42] stay laser focused on paying off your
[9:44] debt. So, take that extra cash and take
[9:46] at least the majority of it and put it
[9:48] towards paying that debt off even
[9:50] faster. That is the best way to get debt
[9:52] free and to live an even richer life
[9:54] tomorrow. Step six, turn your debt
[9:56] payoff into a game. Debt payoff is
[9:58] boring if you don't track your wins.
[10:00] Now, I don't mind boring. I like eating
[10:02] the same meal pretty much every day. I
[10:04] like seeing my investments grow slowly
[10:07] over time. But I've learned a lot of
[10:09] people hate boring. They want to gify
[10:13] everything. They want everything to have
[10:15] flashing lights. Sometimes they
[10:17] hand me their phone to take photos. I
[10:18] go, "What? You have this many
[10:20] notifications. What's wrong with you?
[10:22] Whatever. It's your life, not mine. But
[10:24] for those of you who are allergic to
[10:25] boring, I get it. If something is
[10:27] boring, you might quit. The secret is
[10:29] making your progress visible and
[10:32] exciting. A weekly check-in, not just
[10:35] monthly, keeps you engaged and helps you
[10:37] catch unnecessary expenses before they
[10:40] drain your spending. Now, for example,
[10:42] these little recurring small charges can
[10:45] often add up over time when you are
[10:47] making an aggressive debt payoff plan.
[10:50] Subscriptions, convenience fees, impulse
[10:53] purchases can sneak in. For example, you
[10:55] might be paying for three different
[10:57] streaming services, but only really
[10:59] watching one. A gym membership you
[11:01] actually haven't used in 2 and 1/2
[11:02] months, or random service fees that you
[11:06] didn't even authorize. Now, if you're
[11:08] only checking your statements once a
[11:09] month during your aggressive debt payoff
[11:11] plan, it's going to be hard to connect
[11:13] those fees with what's going on with
[11:15] your debt, those fees have already been
[11:17] levied. But if you do a quick 5-minute
[11:19] review every week during this aggressive
[11:21] sprint, you can stop those money leaks.
[11:24] Here's your weekly routine. You open up
[11:26] your debt tracking spreadsheet, or you
[11:28] can use wab, credit karma, or another
[11:30] tracker. You look at how much your debt
[11:31] has dropped. Even if it's small, give
[11:33] yourself a big pat on the back. That's
[11:34] progress. Three, you hunt down sneaky
[11:36] charges. Find those little expenses that
[11:38] add up and cut them. And then four, make
[11:41] this a game that you celebrate. Each
[11:44] week at the end of the week, take a look
[11:46] and really realize how far you've come.
[11:48] That is impressive. Tracking your
[11:50] progress weekly is not just about
[11:52] accountability. It's also about
[11:54] momentum. And momentum is what separates
[11:56] the people who actually get out of debt
[11:59] from those who learn to live with it
[12:01] forever. So set a reminder in your phone
[12:03] every Sunday. 5 minutes, no excuses.
[12:06] Step seven, avoid debt traps that keep
[12:09] you stuck. You're making progress.
[12:10] You're paying off debt. You're feeling
[12:11] better, but then boom, you're right back
[12:14] where you started. Why? Because a lot of
[12:16] people fall into the same traps over and
[12:19] over. And you know what I'm talking
[12:20] about if you've ever said something
[12:21] like, "It feels like I take one step
[12:23] forward and two steps back." Well, let's
[12:25] make sure you don't. Here's what will
[12:28] keep you in debt forever and how to
[12:30] avoid it. looking for quick fixes like
[12:33] balance transfers. These sound tempting.
[12:35] Low APRs, a temporary break from
[12:38] interest, and a way to escape
[12:39] highinterest debt. Here's the reality.
[12:42] These credit card companies are way
[12:43] smarter than you or I am. They lure you
[12:46] in with 0% APR for 12 months. But the
[12:49] moment you miss a payment or don't pay
[12:51] off the balance in full, boom, you're
[12:54] hit with a retroactive interest rate
[12:56] that might be even worse than what you
[12:58] started with. Now you're stuck in the
[13:00] same cycle just with a different
[13:01] company. Balance transfers, in my
[13:04] opinion, can work, but they are often a
[13:06] gimmick. Keeping the same old spending
[13:09] habits. Paying off debt is not just
[13:11] about throwing money at your balance.
[13:13] It's actually about changing your
[13:15] relationship with money. So, here's the
[13:17] brutal truth. If you're trying to pay
[13:18] off debt, but you're still swiping your
[13:20] credit card for impulse buys, you're
[13:23] self-sabotaging. And a lot of the ways
[13:25] people tell themselves this is they go,
[13:27] "Well, it's already so big, it's not
[13:28] going to make that much of a difference
[13:29] anyway." Imagine you're trying to run a
[13:31] marathon while eating a triple
[13:33] cheeseburger between each mile. Not only
[13:36] are you slowing yourself down, you're
[13:38] actively making things worse. In other
[13:40] words, you can't dig yourself out of a
[13:42] hole while you're making it deeper. So,
[13:45] if you are serious about paying off
[13:46] credit cards, put those credit cards
[13:48] away and get aggressive with your debt
[13:51] payoff. falling for debt consolidation
[13:53] scams. Yes, there are real debt relief
[13:56] options out there and there are a lot of
[13:58] scams that will screw you over even
[14:00] more. A lot of these debt relief
[14:02] companies promise to simplify your
[14:03] payments or settle your debt for pennies
[14:06] on the dollar. Some of them just charge
[14:08] you hidden fees and drag out your
[14:09] payments longer. And some of them do
[14:12] what you yourself could do, put you on a
[14:14] spending plan, have you call up the
[14:16] companies and negotiate with them. You
[14:18] could do all of this yourself. Really, a
[14:20] lot of people are simply looking to
[14:22] delegate the problem to someone else.
[14:24] But if you want to pay your debt off,
[14:26] you have to take responsibility
[14:28] yourself. Here are some red flags to
[14:30] watch out for. High upfront fees with
[14:33] these debt relief companies before they
[14:34] even help you. Guarantees that sound too
[14:36] good to be true. And advice to stop
[14:39] making payments on your current debt. A
[14:41] good guideline is if a company claims
[14:43] they can erase your debt overnight, run.
[14:46] You can work with a nonprofit credit
[14:48] counseling agency, not a for-profit debt
[14:51] relief company looking to squeeze you
[14:53] for more money. Paying only the
[14:55] minimums. Well, banks love it when you
[14:56] do this cuz it means they get to collect
[14:58] more interest from you over decades. Let
[15:00] me show you how they trick you. Let's
[15:02] say you have $5,000 in debt on a credit
[15:04] card with a 27% APR. If you only make
[15:07] the minimum payments, you could be
[15:08] paying that off for almost 25 years. And
[15:11] over time, you'd pay more than triple
[15:14] what you originally borrowed. Meanwhile,
[15:16] the bank is sending you these credit
[15:18] limit increases and special offers to
[15:20] keep you hooked. Oh, you get 32 points
[15:22] per month. You can redeem it for a
[15:23] Marriott stay uh 300 years from now.
[15:26] Don't fall for it. Pay more than the
[15:29] minimum every single month. And if you
[15:31] can't, then you need to take a hard look
[15:33] at your current spending. If you avoid
[15:35] these traps, you won't just get out of
[15:37] debt, you can stay out of it for good.
[15:39] Which brings me to step eight. Never go
[15:42] back. How to stay debt free for life.
[15:45] Okay, congratulations. You did it. You
[15:47] paid off your debt. You're ahead of most
[15:49] people. But now, let's look at the next
[15:51] challenge over the horizon. Getting out
[15:53] of debt is just the beginning. Staying
[15:55] out is the real win. A lot of people
[15:57] make that final payment, feel the
[15:58] relief, and then slide right back into
[16:00] old habits. Why? Because they didn't
[16:02] have the systems in place to stop that
[16:05] debt from creeping in. We don't want to
[16:07] be yo-yoing back and forth in and out of
[16:09] debt for our whole lives. That sucks.
[16:11] So, let's make sure that's not you. Here
[16:13] are three simple strategies to stay
[16:15] debtree for good. Number one, use the
[16:17] envelope system to control your
[16:19] spending. If credit cards were your
[16:20] weakness, try switching to cash for a
[16:22] little while. It's kind of like using
[16:23] bumper lanes when you start bowling.
[16:25] Just get the habits right and eventually
[16:27] you can take it away. The envelope
[16:29] system is a powerful set of training
[16:31] wheels to build some discipline. Here's
[16:33] how it works. You set spending limits by
[16:35] category, groceries, dining, etc. You
[16:38] put cash in labeled envelopes, and when
[16:40] it's gone, you're done spending. This
[16:42] forces you to live within your means. No
[16:44] surprises, no swipe and forget moments.
[16:47] Number two, use credit cards only if you
[16:50] pay in full every month. Credit cards
[16:52] aren't evil. I have no problem with
[16:54] credit cards, per se. I use multiple
[16:56] credit cards, but here's a rule. If you
[16:57] carry a balance, stop using them.
[17:00] Period. Red alert. That is an emergency.
[17:03] Do you know how many people I talk to on
[17:04] my podcast where they have thousands of
[17:07] dollars in credit card debt every single
[17:08] month? I go, "Why are you paying that?"
[17:09] And they go, "Well, what about the
[17:11] points?" What about the points worth
[17:14] less than one penny? Meanwhile, you're
[17:16] paying
[17:17] 27.99% interest. No. Who told you that?
[17:21] Americans hate to not optimize
[17:24] everything. Why don't you optimize your
[17:26] debt payoff instead of optimizing a stay
[17:28] at a twostar property 36 years from now?
[17:30] Number three, build an emergency fund so
[17:32] you don't rely on credit. You know, a
[17:34] lot of people fall back into debt
[17:35] because they're not prepared. Something
[17:36] happens that they didn't expect. A flat
[17:38] tire, a medical bill, broken AC. That
[17:41] should not derail your finances. Which
[17:43] is why I want you to start small by
[17:45] creating an emergency fund. Start with a
[17:48] $50 a month, $100 a month. Get that
[17:50] number to $1,000. Aim for 3 to 6 months
[17:54] of fixed costs and store that money in a
[17:58] separate high yield savings account. The
[18:01] easiest way to do this is to make it
[18:02] automatic. Set up an automatic transfer
[18:04] every payday. Even $25 a week adds up
[18:08] fast. Remember, we're not relying on
[18:10] willpower. We are using systems to
[18:13] protect you from slipping back into
[18:15] debt. Do this and you will never have to
[18:18] climb out of that hole again. Now you
[18:20] know how to pay off your debt in 6
[18:21] months. And what's the best way to stay
[18:23] out of debt? Make more money so that
[18:26] debt is not your primary problem. Go
[18:29] watch this video next on how to increase
[18:31] your income. Trust me, earning more is
[18:33] the kind of decision that will pay off
[18:35] huge for you.