What Society Won’t Tell You About Debt

What Society Won’t Tell You About Debt


– All right, I am pumped about this episode because it has to deal with
a topic that most of you are dealing with in your
life, which is debt. Ugh, it is so discouraging.
I read all these statistics and these studies all around this topic. And it’s like America is drowning in debt. And you may feel this way.
78% of Americans now— it used to be 70%, but now it’s
up to 78% of Americans— are living paycheck to paycheck. And a good reason of that
is because of how much debt they have and how much debt they’re paying out every single month. And the other hard thing about
debt is that it’s so normal in our world today, so normal, that people forget what debt even is. I was talking to a group of
college students years ago, and this guy came up to me
as I was getting started. He was like, “Hey, are
you the money girl?” And I was like, “Yeah, I guess so. “Are we here to talk about money?” He’s like, “Oh, cool,
cool. Well, I’m debt-free.” And I was like, you’re debt-free? You’re a college student who’s debt-free? You’re like a unicorn.
Like, you don’t exist. And I got so excited, and I
was like, “Tell me your story. “Like, how are you getting
through school debt-free? “Are you working?
Did your parents pay for it? “Is it scholarships and grants?” And he looked at me like (laughing) when my dog looks at me, and he just turned his head. And he was like, “No. “I have $36,000 in student
loans, but I’m debt-free.” You guys, I hear that all the time. Oh yeah, we’re
debt-free, but you know, our car loan every month is really high. I’m like, ugh, so, let’s just get on the same page all together, okay? This is what debt is:
Debt is owing anything to anyone for any reason. Say it again. Debt is owing anything
to anyone for any reason. Now to make it even less complicated, let’s play a little debt game—
What Is Debt, and What Is Not? (cartoony music)
Car loans? Debt.
(cartoony music) Pizza?
(cartoony music) No, no, no, no, not debt—just delicious. Student loans?
(cartoony music) Debt, yes. Student loans, debt. My dog Nala: not debt. But
you can lease pets now. Have you heard this?
(cartoony music) Yeah, that’s not a good idea,
so sad. Don’t lease your pets. Your mortgage: debt.
It’s the one type of debt I won’t yell at you for, but it is debt. Credit cards: debt—yes, even if you pay your credit card off every month. During the month, you are
still technically in debt because you owe someone something
at the end of the month. So, that is what debt is.
Some of you have fainted, and you don’t even know what
to do right now in life (laughing) because I may
have just busted some bubbles for you. But that is
what debt is, you guys— again, owing anything to
anyone for any reason. And when you look through
Scripture, every time it is mentioned in Scripture
(debt), it is in a negative fashion. It’s a curse. It’s
a burden on your family. It also says that the borrower
is slave to the lender. And I think that is
such a visceral picture. It’s such an example because
that is what debt does. It limits your freedom. The
borrower is slave to the lender. Meaning you don’t have the
freedom to get to decide what to do with your income.
When you work and your income comes in and you have debt,
you have to pay other people. You owe someone something,
and there’s not the freedom to say, hey, what do we
want to do with this money? Do we wanna invest it?
Do we wanna give it away? Do we wanna spend it? What do we wanna do? You don’t have say over your money. And that limits your freedom.
And my friend, Chris Hogan, says that debt is a thief. It
not only steals your income from you, but it steals
your sleep at night. It steals your peace of
mind. And so, when we look at this, debt not only has
an emotional impact on you, a spiritual impact on you, but
also a big financial impact on you. And some of you are
feeling this pain right now. Whether it’s student loan
debt, credit cards, car loans, or all the above, you’re
feeling this weight. And you’re getting to a
point where you’re starting to get mad at your situation.
Because you’re like, what am I doing? I’m working so hard, and I feel like I have
nothing to show for it. You’re getting that feeling, and
when you get that feeling, that’s when change occurs.
That’s when you decide, I’m gonna do something different. Because those of you out
there that are like, yeah, kind of, sort of
wanna get out of debt. I mean, I think that’d be
fun, kind of, yeah, guess so. Yeah, yeah, yeah, you’re
not gettin’ out, okay? ‘Cause you can wonder your way in, but you cannot wonder your way out of debt. You have to be so invested in this. You have to say, I am
going to work so hard to get out of debt. And
that’s what it takes. But you gotta get mad, you guys. You gotta be like, I am
sick and tired of this. I am sick and tired of livin’ like this. So when you get that,
that’s when you can start this process of getting out of debt and to be completely debt-free. So, to get out of debt, we
teach the debt snowball. And that’s where you list
out all of your debts, smallest to largest, regardless
of the interest rates; pay minimum payments on all your debt; and then attack the smallest one first. And when I say attack,
you look at your budget, and you’re like, we’re
not going out to eat. We’re not going shopping this month. You take everything out. You cut cable. You do all of these
sacrifices in your budget and say, we’re gonna put as much money as possible to pay off that smallest debt. And then once that’s paid
off, you take all the payments you were paying on that
one, and you roll it over to the second smallest debt.
And maybe you get an extra job, and maybe you go crazy to
get as much money as possible to pay off that second smallest. Then once that’s paid
off, you roll it over to the third smallest, and
you keep going and going and going until that
last debt is paid off. Then you are debt-free; everything but your house is completely paid off. And we’re finding that
people are doing this within 18 to 24 months on average. And this is all income levels.
This is all debt levels. I mean, people are getting
crazy ’cause what ends up happening is, as you’re gaining traction and paying off the smallest debt, you actually are seeing
hope. And you’re thinking, I can do this. Even if
it’s a $200 Macy’s card that you pay off first, you pay it off, and it’s like, okay, this is possible. And you start to gain hope,
because this is one area of money that can become so hopeless. ‘Cause you feel like
you are so deep in debt that there’s no way out.
So again, the sacrifices that you make within your lifestyle, getting your income up, and
letting your expenses go down, all those things together,
you’re able to get out of debt. And I’m telling you, getting out of debt is something that will take
care of you and your family far into the future.
(upbeat pop music)

Comments

  1. Post
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    Brandi Mattingly

    Yesssssssss! Thanks for telling us the hard stuff and not being afraid to speak with boldness! Lots of love to you!

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    Kentucky Frey'd Fun

    How did you respond to the college student? My husband and I are teaching the FPU class at our church. I've had some of the people in the class come up and tell me how they have that 1 credit card, because they think you have to have a credit score. Most of them are older than me. I'm just never quite sure how to answer them.

  7. Post
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    J S

    Kids are going off to college with no clue what debt even is. They don't even know how to balance a checkbook. Parents don't teach them. And they might get a semester of personal finance in high school if they're lucky. Sad.

  8. Post
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    KC H

    Electric bill…. debt, used electricity and now owe funds for the used commodity. The UK even has prepaid cards for electricity. I fight debt with everything I have! Thank you so much Rachel

  9. Post
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    vinmama

    I just started a new job as cashier, I tell every kid that pays with a card under $5.00 a story of when you could not buy pizza with a credit card. Their faces!

  10. Post
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    Wendy Keegan

    Rachel, do you think the $1,000 emergency fund is too low? I view other vlogs and they feel $1,000 is too low. I broke a tooth and needed car repairs. I took a second job because both had high priorities. My birthday was around the time of the car repair so the amount was $800 car repair and tooth was close to $800 (I had dental insurance thru work; without the insurance $2550.

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    blackhawksq1

    Trying to get my mom onto the debt snowball and had this same conversation with her. (she went to college late in life). "Well mom, what debt do you have?" "Just the car loan." "Uhm what about your student loans?" "Oh that's only 25k it's ok." Sigh

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    Bucky Barnes

    I'll never forget I was in high school and someone told me a story about someone else's family. They said they never take out loans, they buy everything with cash whether it's a house or a car or whatever. And when I heard this I was like, wow those people are totally strange — don't they know that you can borrow money and get things? So even when I was being instructed of how to do it "right", I thought it was abnormal

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    Jesus Feeds

    Just became debt free! Looking forward to hopefully doing a scream on the show live ❤️❤️! Thank-you and Dave!

  21. Post
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    Naomi Talking Money

    People were probably fainting because they didn't realize that you shouldn't put Pizza on your credit card 🙂

  22. Post
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    Kaitlyn Cunha

    Working on paying off my debt. My friends put me on the Financial Peace plan 2 years ago, now I'm $24,000 down with $31,000 to go!

  23. Post
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    pete mama

    Within a month of each other your story about debt v becoming a millionaire has a difference of more than 100,000 views after 4 months of their publishing. This is very telling. Not trolling you. People don't want to look at what they are doing wrong they just want to get out of debt; they want a solution. Youtube in and of itself is a great social experiment. The fact that 9,000 views shows many didn't believe knowing about debt is important v your videos on wanting to become a millionaire with more than 100,000 views. Many are wrong in not wanting to know about debt. Your average person would avoid all angles. What's more sad is the average person that wants to get out of debt isn't motivated or driven enough to do that. Sure someone on here will be a millionaire after viewing it but there are 350 million Americans PLUS AND Growing. In America people will tell you advancement is hard because there are factors that they can't control. This is untrue of course. If one poor man can become a millionaire then it's doable 349,999,999 times. People have the power and no government or president will ever tell you everything nor do they altruistically care about their citizens.

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    Scott in MN

    CELL PHONES ARE DEBT! I learned that by observing a 21 year old cashier at Home Depot. She is in community college (no debt), saves money upfront to maintain her car, and she pays for a cell phone up front. She is the oldest of 7 kids with a single Mom. She even moved into her own apartment year.

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    Natasha Rennison

    Okay so I realize it’s not good to be “in debt” but me and my husband buy whatever we need on a credit card and pay the money back in full every month. The credit card gives us points and those points turn into money for vacation or cash so I think it’s better to do that way then buy it in cash and get no benefits from it. Also if you’re going to buy something like a laptop on a credit card that is going to benefit you like to make great youtube videos that will potentially make you thousands of dollars than you should even tho you’re “in debt” at first

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    Νικόλαος αἰσθητικός

    i can’t believe there are idiots are out there who don’t think student loans are debt.

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    MsOnitemi

    Okay we should all then stop congratulating people who say they are debt free except their mortgage. I am referring to all those folks holding up signs on instagram

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    Christian Aguilar

    I am a student in college who is actually debt free. I transferred to a CSU. I am a senior, I live in the most expensive apartments on campus and have the most expensive meal plan, and I have not accepted a student loan.

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    GEAUX FRUGAL

    My daughter as far as I know is debt free. She is in college has scholorship , is working while in school.

  32. Post
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    GEAUX FRUGAL

    I have credit card that I pay 100% every month. I do so for cash back rewards. This year I was paid $218 for this. Last time I was at Sam's club I got stuff I really wanted to eat . When I went to pay the prompt asked if I wanted to pay for it using the rewards money? Hellya Sam's club just gave me a lot of tasty food? Preach on sister got it cc is debt it is debt that is paying me for the money I have to spend any way. I use my CC to pay my utilities and an old man in there acted like I was in bed with the devil. I got to pay faster because they had a window that took only cc and check. A lot of grocery stores have card only registers I want an option so I don't have to wait all day long for my turn to pay. Got to see where we come from too.

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    Regina Sellers

    I’m now on my last debts $2500 school loan which will be paid off in less than a year and my house. My advice—God first with your whole being (love the Lord with your whole heart, soul and strength plus pay your tithes & offering) and loving your neighbor as yourself so with extra money you can help the homeless. 🙏😇♥️ and pray for men and women boys and girls for God to change their hearts to live for the Lord and make the world a better place to live in.

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    Squashballs

    But would it be considered debt on the credit card if you pay the amount you charged as soon as you charge it to the card?

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    Nate

    You do a better job of relating to the younger generation than your dad. Sorry Dave, Rachel will take it from here.

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    Devin Das

    Debt free? The moment you stop comparing yourself with others and grateful with what you already have.

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