Latest / Financial Survival Network / Smart Holiday Spending: Mastering Budgets & Avoiding Debt with Paul Oster #5952

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Smart Holiday Spending: Mastering Budgets & Avoiding Debt with Paul Oster #5952 · Financial Survival Network

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And it might get worse before it gets better. And if we as consumers,
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as an individual, if you don't protect yourself, if you don't do
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something differently, if you don't change your behavior, you're going to find yourself
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in a really, really bad place. Because you know, if you're already
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in credit card debt, every single time that the Fed, the Federal Reserve,
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every time they raised interest rates, that's not just for mortgages, that's
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not just for loans, auto loans. Every time they raise that interest rate,
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your credit card interest rate went up. You're listening to Carrie Let's's Financial
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Survival Network, where you get valuable information you just can't find anywhere else to
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thrive in today's trying times. You need the Financial Survival Network now more than
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ever. Go to Financial Survivalnetwork dot com and get your free newsletter and gift.
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Financial Survival Network now more than ever. And welcome. You are listening
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to and watching the Financial Survival Network. I'm your host, Kerrie Lutz.
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Well, we're just past Black Friday, it's actually Cyber Monday. Credit card
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debt is zooming out of control, hitting into all time highs going into the
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holidays. What does it mean for you? What does it mean for the
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economy, for the global economy, and what do you do about it?
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Paul Oster is with us now Better Credit dot Com. Hey Paul, it's
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great to have you back on the show. So it seems like there's no
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limit to the amount of debt the American consumer will ring up well, and
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it's you know, particularly troubles to them on today because what most people will
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do if they're shopping online for Cyber Monday is use a credit card and not
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a debit card. So the best case scenario would be that they actually use
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a debit card. I actually recommend getting a prepaid gift card right, and
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this will do a couple of different things. This will keep you do on
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budget, right, So you have to do some mental math and figure out
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exactly how much money you can afford to spend during this holiday season. And
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listen, if you're already in credit card debt, that number might be zero.
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Maybe you can't afford to buy any gifts this year, And it's okay
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if you ask the person. If you're troubled with the fact that you might
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not be able to afford it, ask the person that you were going to
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buy that gift for what you bought them last year. You probably don't remember
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and they probably don't remember, so it's not that big of a deal.
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People tend to put way much more pressure on themselves during the holidays. But
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let's say you come up with a number and you say, I can afford
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to spend two hundred dollars this holiday season, I'll be able to pay it
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back over the next thirty days. Is the longest time it should take you
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to pay off a debt is ninety days. You have three months to pay
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off any new balances that you're going to put on a credit card, because
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if you don't, whatever you spend, it's not two hundred dollars anymore.
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After the first thirty days, that becomes two hundred and twenty dollars, then
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it becomes two hundred and fifty dollars, and it just keeps growing. So
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you have to start with a plan. You have to have some type of
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budget in place, and you have to be able to figure that out mathematically.
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I always say this, it's not complicated, right. I'm not saying
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it's easy, but it's not complicated either. How much money do you make
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every single week, every single month, and how much are your expenses and
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if there's some money left over that you can afford to spend on the holidays,
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that's great. Just try not to go over that number, so be
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disciplined about it. And one of the easiest ways again to do that is
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to buy a gift card. When the gift card is empty, you're done.
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That's how. That's a great approach. That's the end of the gifts
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right it is, and listen. It will also help you know, lessen
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the threat of cybersecurity right right now. These bad actors, these identity these
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these fraudsters are out there. They're capturing people's credit card information, debit card
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information, and that's one of the problems that's using a debit card online.
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They will have direct access to your checkings and savings accounts, so you have
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to be really careful about using those cards on websites. They have gotten so
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good at creating fictitious websites. They look exactly like Best Buy, Amazon,
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Walmart. You think you're on their website, but you're none, and you're
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actually giving them all of your information. So if you use a gift card,
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the very worst case scenario is they only have access to that gift card.
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Really careful, do not click on links. If you see ads on
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social media that are just too good to be true, it is it is
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too good to be true. What it's called clickbait. They're trying to get
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you to click on this site. They can infect your computers with malware and
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viruses, and that leads to a whole nother host of problems. So just
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be really diligent. And what happens is life happens. So we're running around
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in this frenzied pace right now, and we do things that we wouldn't normally
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do. So take a deep breath, take a step back, take your
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time, if and when you're going to have to do this today, take
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your time. Yeah yeah, so, but how many people are really going
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to listen to this ball? Well, look at all I've been trying to
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do for the past twenty years is change people's behaviors. And this year is
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like no other year. Carry I hear it all the time. All we've
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been down this road before, we've been here before. We're going to get
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through this. We've never been where we are today. We've never been down
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this road before. We're not even on the road, we're off the road.
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You know, we're we're in a path songwhere tracks we are off the
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tracks, right, it's off the tracks. The world economy, the macro
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economy, that the economy in the United States is not good and it might
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get worse before it gets better. And if we as consumers, as an
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individual, if you don't protect yourself, if you don't do something differently,
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if you don't change your behavior, you're going to find yourself in a really,
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really bad place. Because you know, if you're already in credit card
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debt, every single time that the Fed, the Federal Reserve, every time
6:43
they raised interest rates, that's not just for mortgages, that's not just for
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loans, auto loans. Every time they raise that interest rate, your credit
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card interest rate went up. We were somewhere closer to fifteen percent before we're
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all of these rate hikes. Now we're closer to twenty percent. And if
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you just had the average credit card debt is now over five thousand dollars.
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And if you have a five thousand dollars credit card debt and you only make
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the minimum payment, it would take you over twenty years to pay off five
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thousand dollars. And at the end of that twenty years, you didn't pay
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back five thousand, you paid back more than double. It's like twelve thousand
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dollars. So this is where people have to understand how credit card debt works
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and why it's so so troublesome. Yeah, it just seems to multiply like
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electronically like rabbits. You know, well, it kind of does, right,
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because it's it's daily compounding interest. And here's a quick lesson on daily
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compounding interests. It does multiply. Every single day, your balance is recalculated
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on the previous day's balance, and every single day the interest is added to
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that balance. Luro's balance is going to be higher. If you don't spend
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another dollar, your balance increases every single day. So that is how people
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get into trouble, very very quickly with credit card debt. Again, listen,
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I get it right. We're in the holidays. Yeah, if you
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have to spend some money, okay, but start to put together some type
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of plan to get yourself out of credit card debt, and maybe you have
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to pick up a second job. You get it. You get a side
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gig, you get a side hustle for the amount of time, and it's
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going to take you to pay off your credit card debt, because if you're
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not going to get it, if you're not going to increase your income,
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then you have to decrease your expenses. And you and I we've spoken about
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this. The easiest way to do that are all these subscriptions that we have
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Netflix, Spotify, Ooh, Roadblocks, Xbox PS four, all of these
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Prime this, Prime that music videos and that for old family. That could
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add up to hundreds of dollars a month. Yeah, hundreds of dollars a
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month. So if you cut your subscriptions, and I'm not saying you have
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to do it for the rest of your life, I'm saying you have to
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do it until you're out of credit card debt, right all right? I
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like it. I like it. I wish more of you out there would
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listen because it really does make a big difference, doesn't it. Well,
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it sure does. And again, maybe even consider if you own your house.
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If you own your home, and I know mortgage intertraints, you see
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it in the news every single day. They're at eight percent, Well eight
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percent is better than twenty eight percent. So if you have the ability to
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do a cash out REFI, if you have the ability to get a home
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equity line of credit to pay off that high interest credit card debt. If
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you own your own home, you should only have one debt service, and
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that is your mortgage. And if you need to take out a second mortgage
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to do it, do it because there's some tax benefits that are associated with
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doing it that way. And it's again, eight percent is better than twenty
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percent. Twenty eight percent, right, So if you have the ability to
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tap into the equay of your home, that might be a way to get
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out of credit card debt. If you can take a small loan against your
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four oh one K, that might help. If you're still putting money into
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your four oh one K but you are carrying thousands of dollars in credit card
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debt, it doesn't make sense, right because you're not getting the same return
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on your money in a four oh one K that you're spending to carry that
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debt. So maybe you pause your four oh one k. Wrong with our
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irase your retirement contributions, you pause that for a little while again, until
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you're out of credit card debt. That should be the number one focus.
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Don't go wait next year, right. We hear it all the time during
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this time of the year, Paull twenty twenty four. I'm going to change
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this. I'm going to do this, and well do it now day because
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if you're really serious about it, you don't wait until January one. Put
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the plan together and execute it today. Yeah. Hey, it's never too
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early, right, No, No, it's only too late. I mean
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the best time to do it was was six months ago. The second best
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time is today. So the message really for today, change your behavior and
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be very proactive about dealing with your credit card debt. Yeah. Absolutely,
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Yeah. I couldn't agree with you more. And you're like so emphatic about
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it, Paul. People have to stand up and take notice if you've got
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credit card debt out there and it's getting out of control, because eventually it'll
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overwhelm you and then your only chance choice will be bankruptcy. Right, that's
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right, and listen, bankruptcy is not the end of the world. And
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again I'll go back. I think you and I have spoken about this.
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One of the biggest tragedies that happens across in the across the world, and
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certainly in the United States. It happens all the time. People actually commit
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suicide because they're in debt or or they commit crimes because they're in debt.
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You don't have to do that if you if you can, if you're eligible
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for a bankruptcy, it's not the end of the world. It's actually over
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the end of your life. It's the beginning of your new debt free life.
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So if you're struggling with this and there's really no end in sight,
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you're just buried under this debt and the stress of the debt, reach out
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to a reputable bankruptcy attorney. Contact better Qualified dot com. We have bankruptcy
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attorneys all over the country right so the consultation and analysis is free. So
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we will figure out what is the best plan for you. And in twenty
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years, thank god, I've never had to say to somebody, we can't
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help you, because as long as you're willing to help yourself, is a
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plan that we can put in place to help every single person in this country
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get out of debt. And it's time to make that plan a reality in
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twenty twenty four. Stop waiting for something to happen that isn't and take action
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on it. I mean, that's that's the best thing you can do.
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Hey, just tell us again where we find you again. Paul, go
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to better qualified dot com. It's again, the consultation and analysis is free.
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It's a very very brief phone call to at least figure out what we
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can and can't do to help every single person, every one of your listeners
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and viewers. There is a plan that we can put together for every single
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person that will help them get out of debt, improve their credit. Right
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your credit scores. Your credit scores have always cost or saved you money every
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single day, every single week, every single month. In this environment,
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your credit scores are going to cost you even more money than they used to.
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So if you're not a seven hundred and forty credit score or higher,
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you do need to call us because that's where every single person needs to be.
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Look, it's not easy to be a seven hundred and forty credit score,
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but the reality is if you're a seven to twenty, it will cost
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you more money. If you're a seven hundred, it costs you even more,
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six eighty, six, sixty, go all the way down into the
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six hundreds, and man, that score is costing you more money every single
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day for the same exact thing that your neighbor. You go out and buy
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the same exact car as your neighbor. If you're at a six eighty and
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they're at a seven eighty, they're going to spend hundreds of dollars less every
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single month for the same exact car. When you talk about the financing and
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the insurance, let's remember insurance is directly tied to your credit now, so
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if you have a lower credit score, it could almost be double your policy
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in premium payments can be double if you have bad credit. Really, so
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let's get everybody you know, let's figure out how to help people improve their
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credit scores, and let's help people figure out how to get out of credit
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card debt. All right, I like it, and I think the time
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to do it is now. So hey, you should definitely get in touch
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with Paul if you got a question for me or Paul shoot me an email
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kl at Carrie LUTs dot com and the link to paul site will be in
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the show notes of this interview on Financial Survival Network dot com. So when
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you go there, just click that link. While you're there, sign up
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for your free newsletter. Paul. Always a pleasure and really great advice for
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what hopefully will be a better new year ahead. Absolutely absolutely thank you for
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having me back on. Thanks for listening to Carrie Letz's Financial Survival Network,
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your solution to today's trying times. For the latest, go to Financial Survivalnetwork
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dot com Shill Survival Network now more than ever,