Episode Transcript
[00:00:00] Speaker A: It's Tuesday. That means Mansa Musa is on the phone. Mansa, we've been on this series about being in debt, getting out of debt.
Today we're going to take a little different angle on it and you have some reasons why people actually get into debt and how do we stay from doing that over and over?
[00:00:20] Speaker B: Yeah, like you said last time we, we talked about how to get out of debt, encourage people to go, to take control Tuesday.com check out the archive on that. But now we want to talk about why people get into debt after they paid it all.
And I've been in this situation myself, it happens a lot. People will sacrifice, do what they need to do to get out of debt and look up a couple years later and they're right back in the same situation.
So understand this.
Staying out of debt is behavior and structure. The Bible tells us the borrower is servant to the lender.
So debt limits our freedom.
So if you fight to get free, the goal isn't just paying off, is staying free? Yes. Not just paying off the debt, it's staying free.
So over the years of coaching and stuff, here are the five reasons that people fall back in the debt after they paid off debt. First of all, they've got no emergency buffer, no emergency.
So the first thing that happens, it's right back on the credit card, right back to the payday loan, whatever the situation is.
The second thing is lifestyle creep.
After people pay off debt, their bending grows automatically. They've been paying a $300 a month card note for the last 60 months. They get it paid off, what happens to that $300 and gonna spend it? Well that's where you gotta have the right mindset. That's what number three is. No system. You need a written plan that you can review and that gives you guardrails. So you should know before you make that last $300 payment on the car where that next month is going. You already have it in your budget. Yeah, true. Just send it somewhere else. The fourth thing is income instability where people build their lifestyle based on their highest income instead of their lowest reliable income. For example, people base their lifestyle based on overtime and that can be taken away. Yep. And you make it on just straight time or depending on a second job or side hustle. The fifth one is emotional spending and that's where might get an amen on that. That's where stress, boredom and a reward mentality where transactions and impulse buys are driven by feelings instead of intentionality or values.
[00:03:17] Speaker A: Guilty.
[00:03:18] Speaker B: I said I get an amen around here. Here's what we can do to fix these Number one Continue to contribute to your emergency fund even while paying off debt. That's a place for that 300amonth. That was a car payment to go for a little while.
Send it to your emergency fund.
Number two like I just said, when a debt is paid off, decide in advance where the payment goes next.
Build simple systems automatic payments monthly check ins a calendar that you can wash, rinse and repeat. Number 4 base your lifestyle on your lowest reliable income.
Number 5 identify emotional triggers that send you out for retail therapy before they become transaction right. Here's the final thing. Getting out of debt is a season in your life.
Staying out of debt is a structure
[00:04:22] Speaker A: in your life that is powerful and I'm going to have this on repeat for a little bit. You can get this and all the other information from Take Control Tuesday attakecontrol Tuesday.com Manta thank you for this. This is really helping a lot of people, including me.
[00:04:39] Speaker B: Me too. Thank you.
