Adulting with Liz (Round Two!)
We had such good feedback on the Managing your Money session last summer that we decided to bring back Financial Coach Liz Schieck from the New School of Finance. This time she discussed the dreaded “D” word: debt.
We discussed things like:
- How to budget your money using 4 types of money categories
- The questions to ask ourselves in determining why we have debt in the first place
- How to sidestep debt in the future
Dan & Rach’s Tips
Some good general tips to help with your debt right off the bat:
- Pay off your highest interest rate debt first (credit card etc)
- Ask your credit card company or bank about lowering your interest rates. Don’t forget you’re the customer. You don’t get what you don’t ask for. The worse they’ll do is say no, and then at least you asked.
Liz’s Adulting Advice
Before you can build a successful plan, you’ve got to unpack your debt, understand why you have it in the first place, and learn how to sidestep it in the future. Strategies and tips are ultimately useless until you deal with the emotional stuff, the root causes of your spending behaviour.
Most debt advice skips this crucial step. Many jump right into the super-exciting math parts, but there is so much that needs to happen before that in order to make sustainable permanent changes to your finances.
If you don’t change your spending behaviour and if you don’t believe you can truly tackle your debt, you’ll never stop the Debt Loop.
First, deal with the emotional side of your debt, then do the math. This is crucial. It’s like having allergies. Instead of treating the symptoms—coughing, sneezing, itchy eyes—over and over, you have to figure out the root cause of the allergy and avoid it altogether.
Spend some time unpacking how you think and feel about your money. Get to a place where you understand your Financial Tripwires and find motivation and strategies beyond the interest your debt is costing you. This is how to stop the Debt Loop.
If you’d like to determine your personal Financial Tripwires and permanently break the Debt Loop, grab a copy of Shannon Lee Simmons’ book, Living Debt-Free, the No-Shame, No-Blame Guide to Getting Rid of Your Debt.