099 Financial Excellence: Overcoming the Roadblocks to Debt Elimination

Living In Financial Excellence

28 Feb 099 Financial Excellence: Overcoming the Roadblocks to Debt Elimination

Episode 99: Overcoming the Roadblocks to Debt Elimination Feb 28, 2012.

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Today I welcomed financial coach Kevin Suddick back to the show to talk about the major roadblocks he sees with his financial coaching clients who are trying to get out of debt.

Don’t forget: Living In Financial Excellence airs LIVE every Tuesday at 10 a.m. CST. You can watch live and join the chat at financialexcellence.net/live-show

Show notes:

  • Next week is episode 100! That means for 100 weeks – almost two full years – we’ve been recording and airing our shows. Next week we’re celebrating by sharing listener comments on how living in financial excellence has helped them.
  • The first roadblock Kevin mentioned was the housing bubble. It used to be easy to sell a house or other stuff to eliminate debt, but the housing bubble made that much harder to do. It can still be done, but you need a plan for your money in the meantime.
  • Some people just have trouble getting started because they are hopeful that things will get better on their own. Kevin’s advice is to reach out for help because things don’t get better on their own and a financial coach can help you get back on track.
  • Many people fail to get out of debt because they’re inadvertently going deeper into debt. This happens most often when they use their credit card for an emergency fund. Because it’s so easily accessible, the credit card starts covering all the little shortages of cash, and everything becomes an unofficial emergency. The result is more debt.
  • Medical expenses derail many people in their efforts to be debt free, but it doesn’t have to be that way. Being prepared with the right kind of medical coverage makes all the difference in the world.
  • Student loans are a big anchor for many of our clients. Too many people simply accept that they’ll have those loans for 10 to 30 years. Don’t accept that reality. Get motivated and pay them off so you can free up cash flow and empower yourself to win with money!
  • The number one roadblock to eliminating debt is a lack of sacrifice. This should come as no surprise to anyone. Still, it seems that lots of people want to be debt free but aren’t willing to work or sacrifice to get there. Nothing in life worth doing comes easy. Freedom from debt is no different.
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Like what you hear? Visit the iTunes store and leave a review or leave a comment below. Or call our listener feedback line and leave a voice message that we can share on the air. As always, we appreciate your feedback!

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  • Kim
    Posted at 09:03h, 29 February

    I think these are excellent points if a person just isn’t gaining any traction in getting out of dbet. I would also add the taking on of another hobby or recreational activity as a reason folks have difficulty getting out of debt. You could argue this might be a lack of willing to sacrifice, but another person might see it as something important to the joy and mental health of their child/family.

    A parent might allow a child join a sports team without really counting the cost in dollars and time for equipment and travel, plus the added cost of time away from home. That can translate into eating meals out, additional maintenance expenses on the car, and even perhaps having to hire work done on the home, because a parent is away so much.

    I would make the same case for taking on a pet. I have seen too many folks adopt a cat or dog without calculating how much it will impact the budget. The average yearly cost of owning a dog can exceed $800. If you were to sit down with folks and show them how that $66/month could help reduce their debt more quickly, I think most would be surprised at the positive impact.

    • Matt Wegner
      Posted at 09:10h, 29 February

      Excellent points, Kim. We see your examples on a regular basis, and you’re absolutely right. It’s great to have a pet and allow the kids to be in activities but we have to understand the cost (and opportunity cost) of doing so. Often there’s an emotional tie there too, which creates a mental barrier. Some folks have their kids in 4-5 activities a year, or even at the same time. It’s very difficult for them to say no to their kids and cut back (although sometimes the kids would appreciate the ability to cut back). But as with everything, there has to be a balance. I’m all for pets, sports, and extracurricular activities but if it’s putting you deeper in debt or preventing you from gaining traction with the debts, you’ve got to make some tough decisions to get results.

  • sean Hurley
    Posted at 06:00h, 02 March

    Money is in and of itself debt. If you have a dollar in your pocket you have an instrument of debt in your pocket.
    Because money is only ever created out of debt, research fractional reserve banking to understand this.
    More insidious yet are the fundamental flaws with the abstraction of exchanging labour for purchasing power.
    This idea itself results in social stratification, elitism based primarily on economic disparity, poverty, war, and the need for infinite growth to name only a few symptoms.
    It must be understood that cyclical consumption on a finite planet is very simply unsustainable, and growth for the sake of growth is the ideology of the cancer cell.

    • Matt Wegner
      Posted at 21:43h, 05 March

      Actually, money is simply a means of exchange, Sean. It is created out of debt when the fed prints more and allows the banks to hold a fraction of what they loan out but the money itself just facilitates the exchange of things of value. Instead of exchanging labor for food or other goods, we exchange labor for money, then exchange the money for food or other goods.

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