175. Why You Pay Off Debt and End Up Right Back in It
episode
Becoming The Wealthy You | How to Save Money, Stop Overspending, Get Out of Debt, Budgeting & Personal Finance for Women
11 min
1 speaker
3 chapters
transcribed 1 month ago
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What is the main topic discussed in this episode?
You are listening to the Becoming the Wealthy You podcast with Jermaine Foley.
If you're a woman who makes good money in your career or business, but you're not building wealth like you want to, then you're in the right place. In this podcast, you'll learn how to stop overspending, break free from the cycle of debt, save lots of cash, and become the wealthy woman you were born to be. Let's dive in. Well, hello, everyone. Welcome back to the podcast. OK, so I recently lost about 15 pounds and I did it in a way that was very intentional and not very fast because I wanted to do it in a way that was sustainable and I wanted to lose the weight the same way I would live it. And so I still allowed myself to have dessert. French fries, the occasional dinner roll, because again, I wasn't just trying to lose weight.
I wanted to lose it in a way that I plan to live. I want it to be sustainable because what's the point of reaching a goal if you can't maintain it? And as I was going through the process, I kept thinking that this is exactly what I see with money, especially when it comes to getting out of debt. Because when you really look at it, there are two ways you can get to any goal. You can get there fast or you can get there in a way that actually changes you. So, for example, with my weight loss situation, if I wanted to, I could have gone on a very strict diet, cut everything out, been super restrictive with myself, and I probably could have lost the weight in about a month. but I didn't do that. Instead, I took my time and I developed a new way of eating and a new way of living in a way that I could actually sustain, not just during the process, but even after I got the result.
So yes, it's taken me longer, but now that I'm here, it's really, really easy to maintain because I've been living this way the entire time. Now, imagine if I would have taken the other route. If I would have gone on a super strict diet, lost the weight really fast, I would have felt good, right? I would have been so proud of myself, but that would not have been sustainable long-term. So what would have happened? Once I went back to my normal life, the life that caused me to gain the weight in the first place, the weight would just come back, right? And this is exactly what happens with debt. You have the same two options. You can get out fast or you can get out in a way that actually changes you. So here's what the fast way would look like when it comes to getting out of debt.
Extreme restriction, extreme restrictive budgeting, cutting everything out, eating rice and beans, white knuckling your way through it. Or you could do it this way, which I see all the time, especially with people in corporate America who get bonuses. You get your annual bonus or your quarterly bonus and you just wipe the debt out in one swoop. And again, it feels good in the moment. It feels like progress, like you did it, but it's not sustainable because one day you're in debt and one day you're out of debt. And so after you pay it off with that bonus on paper, it feels amazing. It looks amazing, right? Your debt to income ratio goes down. Your credit score improves, right? But what I see all the time is this.
By the time that next bonus comes around, guess what? They're right back where they started.
How does Jermaine compare sustainable weight loss to getting out of debt quickly?
And they need to use that bonus to pay off the debt. Why? Because they didn't change. They didn't walk the journey. They were literally teleported to the destination. And so they didn't become someone different. And so once they paid off the debt and went back to living their old normal life, they the one that got them in debt in the first place, guess what? The debt has no choice but to come back. And so this is why I do things differently with my clients because the goal isn't just for you to get out of debt. It's not for you to just say, hey, I'm debt-free. It's to change who you are with money, how you think about money, how you behave with money, all of it. And so when you get out of debt, guess what?
You actually stay out.
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Chapters
3 chaptersSpeakers
1 identifiedMore from Becoming The Wealthy You | How to Save Money, Stop Overspending, Get Out of Debt, Budgeting & Personal Finance for Women
189. How to Build Wealth Without Giving Up the Life You Enjoy
188. The Biggest Financial Mistake Women Make After Getting a Raise
187. Making Good Money Isn’t the Same as Building Wealth
186. Why Making More Money Can Still Leave You Feeling Behind
185. Your Past Money Habits Created Your Current Financial Life
184. Why Money Keeps Coming In and Going Right Back Out