According to Bankrate, 29% of Americans have more credit card debt than they have in an emergency fund. That is some scary, scary stuff.
Today, I have a guest that accumulated quite a bit of credit card debt right around the time he got married. We’re going to talk about how he got out of that mess.
Chris Browning is the creator and the host of the award-winning short-form podcast, Popcorn Finance. His topics range from understanding the basics of investing all the way to his love of tiny homes. Chris’s advice has been featured in major publications like NerdWallet, Yahoo Finance, and CNBC.
No student loans, credit card debt, personal loans, car payments and, yes … no mortgage.
After 7 years of educating myself, diligent planning and partnership with my wife, we officially do not owe a single dollar to anyone. (We do have a late fee for Moana at the library. Does that count?)
We’re incredibly excited about our young family’s future and the opportunities that our debt freedom has opened up for us.
Without the right discipline, credit cards can cripple our ability to build our cash savings, our retirement savings and our overall wealth. It’s so easy to swipe that little piece of plastic without even thinking twice about how much money we actually have in our checking account.
My guest today, Whitney Hansen, has developed a business that helps people battle the temptations of the all-powerful credit card. After becoming completely debt free early in her life, she now supports others in doing the same. For most people, that journey to debt freedom starts with their relationship with credit.
Christmas is a time for fun, family, and giving. Unfortunately for some, the spending associated with this joyous time of year was bought on credit.
According to Magnify Money, this past season Americans with holiday debt added $1003 in debt on average and the pay off may not be until the next Christmas! The author of the article Nick Clements writes, “55% plan to take more than 5 months (to pay off the debt) or just make the minimum payments, which could extend the debt to 10 years or more.”
If we’re still paying off debt from last year’s Christmas, how can we enjoy this year’s Christmas?!
The magical, mystical and all-powerful credit card …
If we want something really bad but we don’t have the money for it, credit cards solve our problems immediately. Don’t they? If we’re jonesin’ for some new threads, we want to buy a fancy dinner or even treat ourselves to a tropical vacation, we can swipe our way to happiness. Right?
Well, that quick and easy solution might cure our bad case of the “Wants”, but long-term credit card use without proper cash flow management will most definitely create infinitely more problems for us. In what seems like no time at all, we’re making payments with 18% interest on that tropical vacation we took 2 years ago! The memories of our good times on the beach don’t seem so glorious anymore.