Down Debt

Help you save, spend and pay off your debts

Money Monday: Helping you save, spend and pay off your debts



ASHLEY: MAKE SURE YOU’RE SAVING AND SPENDING THAT MONEY WISELY ON MONDAY. SHEREE: BURNING IS IN STUDIO, MEGAN HAMMANN, DIRECTOR OF FINANCIAL PLANNING AT WEALTH QUEST. TODAY WE ARE TALKING ABOUT DEBT. THANK YOU FOR JOIN US THIS MONDAY. THERE IS RIGHT. IT SOUNDS VERY SIMPLE, BUT WHY IS IT SO EASY FOR US TO GET INTO DEBT? >> I THINK THE QUICK ANSWER IS THEY MAKE IT EASY. SHEREE: THAT’S THE POINT. >> ON THE RIGHT, THE CREDIT INDUSTRY MAKES US SO EASY TO SWIPE A CREDIT CARD OR PRESS A BUTTON ON THE COMPUTER. WE CAN HAVE ALMOST EVERYTHING WITHIN REACH. I THINK THE PROBLEM WITH THIS IS THAT WE DON’T REALLY FEEL THE IMPACT OF THIS PURCHASE UNTIL WE GET OUR STATEMENT A MONTH OR TWO LATER AND THAT CAN BE REALLY DANGEROUS. WE LIKE TO THINK MONEY AND ESPECIALLY DEBT IS ABOUT NUMBERS. IT’S SO MUCH MORE COMPLEX THAN THAT. THERE ARE THOUGHTS, EXPECTATIONS AND PREJUDICES WE USE AND THEY AFFECT HOW WE SPEND. I THINK IT’S REALLY IMPORTANT THAT WE LOOK AT WHY WE SPEND THE WAY WE DO. IS IT BECAUSE OF THE PEOPLE WE ASSOCIATE WITH? WE WILL BUY THE THINGS THEY BUY AND DO THE THINGS THEY DO. HAVE WE HAD ANY MONEY TRAUMA IN THE PAST THAT AFFECTED OUR BELIEFS? WHEN WE THINK ABOUT ALL THESE THINGS AND TAKE BACK IT IS IMPORTANT TO INFORM OURSELVES AND UNDERSTAND WHY WE ARE SPENDING SO THAT WE UNDERSTAND THE IMPACT OF THIS NOW AND IN THE FUTURE. ASHLEY: IT’S DEEP. SHEREE: SOME, I THINK WE ALL ARE — I THINK WE ARE ALL GUILTY OF IT. ASHLEY: WE TEND TO THINK ALL DEBT IS BAD. CAN YOU EXPAND THE DIFFERENCE BETWEEN GOOD DEBT AND BAD DEBT AND WHAT DOES IT MEAN FOR PEOPLE? >> I LIKE TO THINK OF DEBT AS PRODUCTIVE AND UNPRODUCTIVE. THERE MAY BE REASON WHY WE USE. I GREAT EXAMPLE IS A MORTGAGE. BORROWING MONEY FROM A BANK. WE ARE BUYING AN ASSET THAT HAS HISTORICALLY INCREASED IN VALUE. YOU CAN USE THE MONEY WE HAVE NOW. WE LIVE IN THIS WE HAVE IN ASSETS EQUITY IN THE FUTURE. IT’S PRODUCTIVE. THE SAME CAN BE SAYED FOR A CAR. TAKE A LOAN FOR A CAR SO WE CAN GET TO WORK AND HAVE AN INCOME. IT’S PRODUCTIVE. DOES THIS MEAN WE BUY THE MOST EXPENSIVE CAR ON THE LOT AND ARE IN THE BIGGEST DEBT POSSIBLE? NO BUT THERE MAY BE WAYS THAT ARE REALLY PRODUCTIVE. I THINK OF THE OTHER SIDE WHEN YOU THINK OF THE THINGS WE CONSUME AND THE THINGS WE SPEND AND NEVER USE, I AM GUILTY OF IT, THAT’S SURE. YOU KNOW, WE LOSE VALUE. THIS VALUE DECREASES VERY QUICKLY BUT WE PAY IT ON OUR CREDIT CARDS WITH THE INTEREST RATE AGAIN AND AGAIN. IT IS IMPORTANT THAT WE THINK ABOUT THIS AND WHEN WE LOOK AT DIFFERENT TYPES OF DEBT THERE ARE MANY DIFFERENT TYPES OF GOERGES AND STUDENT LOANS SO BEING EDUCATED AND HOW WE CAN USE IT TO MAKE IT PRODUCTIVE FOR US. SHEREE: IT CAN BE REALLY AMAZING WHEN YOU’RE IN DEBT. HAVE ALL BEEN THERE WEATHER IS THROUGH COLLEGE OR WHATEVER YOUR PERSONAL SITUATION IS THEN TALK ABOUT PAYING IT. WHERE DO YOU START? WHAT ARE SOME OF THE FIRST STEPS TO TAKE IF YOU HAVE THIS RENEWABLE CREDIT CARD DEBT OR ANYTHING? >> I THINK YOU HAVE HIT THE NAIL ON YOUR HEAD THAT IT IS IMPORTANT TO FIRST KNOW THAT DEBT CAN BE OVERWHELMING. WITH IT COMES FEELINGS OF SHAME, GUILT AND DENIAL. WE MUST ENTER THIS VULNERABILITY AND ACKNOWLEDGE IT. I THINK WE HAVE TO ALSO RECOGNIZE THAT THERE IS A LOT OF COURAGE AND BRAVERY IN TRYING TO CHANGE THIS HISTORY. FROM THERE, ONCE WE CAN ACCEPT THIS, THIS IS THE MECHANICS TO GATHER ALL OUR STATEMENTS. I WOULD LOOK AT WHAT BALANCE IS. WITH THE TOTAL BALANCE IS. WHAT IS YOUR MINIMUM PAYMENT. WHAT YOU ARE CURRENTLY PAYING WHETHER IT IS MORE OR LESS OR YOUR MINIMUM PAYMENT, YOUR INTEREST RATE AND YOUR DUE DATE AND PUT IT ALL ON A PIECE OF PAPER OR A SHEET OF SPREADSHEET AND YOU WILL PAY THE MINIMUM BALANCE OF EVERYTHING EXCEPT THIS DEBT THAT YOU HAVE IDENTIFIED THAT YOU WANT TO ELIMINATE IT COULD BE THE SMALLEST BALANCE. IT COULD BE THE HIGHEST INTEREST RATE. THERE MAY BE REASONS FOR CHOOSING ONE OR THE OTHER. ONCE YOU HAVE ONE LIMIT, YOU MOVE ON TO THE NEXT. SHEREE: SO YOU SEE SOME THINGS HAVE BEEN PAID. ASHLEY: AND IT HELPS YOU GO. SHEREE: OTHERWISE, IF YOU PAY JUST AN AVERAGE AMOUNT ON FIVE DIFFERENT THINGS, YOU FEEL LIKE IT’S NEVER GOING TO END. >> YOU SEE THIS MOMENTUM AND IT HELPS YOU BUILD THE CONFIDENCE IN YOURSELF TO DO IT. THEN YOU CAN SETTLE ON A REALLY SOLID FINANCIAL BASE. ASHLEY: YOUR VOICE IS SO SOOTHING AND CALM TO TALK ON THIS TOPIC. IT MAKES IT FEEL B

Money Monday: Helping you save, spend and pay off your debts

On Money Monday, Megan Hammann, Director of Financial Planning at Wealthquest, explains how to save, spend and pay off debt.

On Money Monday, Megan Hammann, Director of Financial Planning at Wealthquest, explains how to save, spend and pay off debt.