Redefining Your Debt Relationship and Taking Control For Retirement

 Welcome to the episode, debt is not your identity, but you do need to be in control of the relationship. Debt is such an important subject and an important matter for us to better understand who we are with debt, how we get into debt, how we use debt. Whatever way you want to look at it. I was on a Reddit forum and an individual asked how they were supposed to buy a car in retirement. Well, how do you buy a car now? Things don't change as we head into retirement. The manner of the way we get paid is the slight change. There's a lot of, you know, thoughts and beliefs that retirement is completely different. Thanks. It is time freedom it is time freedom, hopefully financial freedom. And so that question kind of threw me off. I was thinking about it and also thinking through my recent clients and realized that debt can be something that we can take all on and we can consume it as our identity. And right there in doing that, taking on that role. Feeling like there is no way out, really limits us in the power of being able to be the one in charge, and that is crucial with debt. So client B of mine, she was experiencing the slow creep of debt. She had a budget, and she says, no matter what I do, no matter how much spending control I give on myself, I'm still seeing my debt slowly climb. Does that sound familiar? Do you feel like you're in a similar situation? Or maybe you're like my other client, Kay, who had experienced a major life event and then through the years after that event, made certain choices. and incurred a certain level of debt for the greater good. I'll explain about more of that in just a minute. But she's feeling the pressure of all of her debt today and she wants it gone. I think most of us do, But that is where she's sitting. Those are probably two of the most common situations and there is one more which I will describe. In just a little bit, but really the goal for debt is to create a positive relationship with debt. You want to be in control at every step and that every step makes sense. You know, debt is such an interesting beast and it can become that beast if you let it get out of control. That's why it's so important for you to stay in control. But debt, usually we get the reward immediately, and then we have all of the work to do. And that misalignment from what we're normally used to, even with working, we work and then we get paid. We work and then we get paid. But debt is the reverse. And right there creates such a different euphoria for us that it's very important that we spend time with debt. And that we not take on its identity once we are in that. But once the reward and that initial, you know, sense of, Oh my gosh, this is great is gone. Now the hard work has to go forward. All right. Let's back up to client B. And if you're like her and you're, you know, she was blaming her spending. That was where she thought the results were lying and that she was just reaching for the credit card out of just unnecessary spending. But once we dove deep. It was actually those demands on her money that were already, you know, they're already coming forth expenses. She had already committed to that. We're showing up. And so she found herself at sometimes, you know, having the money. middle of the payday, first of the payday, didn't seem to be, you know, that problematic. And other times it was probably at the end of the payday. Oh crap, I forgot my car registration. Oh man, I got to pay, you know, the CPA to prepare the taxes. And through that, And depending on that timing, she was turning to her credit card, you know, those, and that was where the slow creep came. It wasn't from the other spending, but she wasn't able to see that. Not until we worked together and I helped, you know, look at her budget, what it was consuming and not consuming, what was all there and having all of those plans. And so if you find yourself reaching for a credit card because you've Forgot this payment was coming up or, oh crap, I'm a little bit short to write, whatever it may be. And that's when you're reaching for a credit card. This is due to the fact you're not creating that sinking funds, those savings buckets to be able to support your expenses that are going to happen throughout the year. Everybody has some, they're not monthly, they're usually annually or biannually, sometimes, you know, every other month. They're just very random. Now these are expenses you're already committed to. You bought a car, you're going to have to register it every year or two years, you've got to insure it. That is another thing. So remembering all of those types of things are very key and being able to set money aside will help get rid of that debt. Alright, then let's go back to client K. Choosing to take on an additional debt to keep the greater good. Of life, you know, after this life event, meaning taking and keeping the house, getting these different situations, maybe paying for, you know, different professional fees to take care of circumstances. Now, when I talk about life event, I think the most common one is divorce, but what about death? You know, what about medical for your spouse or your child? Sometimes there's things that we have to pay for, and then we incur debt for the greater good. We don't want to lose the home where our children are going to be staying. We don't want to do, you know, it's maintaining that greater good. So if you are somebody who has been through this and you're like, yes, that's where my debt came from, it's very important for you to re you know, reflect back on why you made that choice. Why did you decide to incur that debt? And again, like I said earlier, the reward comes and then the hard work of paying off the debt. It's very important for us to keep going back to, okay, the reason I did this, the reason I did that, it's supporting me there. It's giving me everything that I wanted in that way. And I've just got to keep staying the course. To pay it off. It's really, you know, it is backwards, but debt is a part of money. We've just got to, we've got to create that relationship and as I've talked about in prior episodes, really learning to manage our debt. Really employing our methods and our understanding of what we want to extend ourselves to. That is us. That is our choice. And I think it's very important for, for you to remember that every little debt incurred is your choice. The third camp is really engaging in taking on this additional debt. and relying on the lender to tell you yay or nay. If you have gone into whether you're getting a HELOC or a second mortgage, another mortgage, a mortgage, you know, whatever it may be applying for another credit card and you're like, well, if I couldn't afford it, they're going to tell me. That is where That relationship is off. We are no longer in control of the debt at that point. And typically in this camp, the debt has become all consuming. We're spinning plates in the air. We're not sure how to maintain it all. But somewhere deeper, is a story or a feeling that created this storm. And so really reaching down into what that is. It can be depression. It can be, you know, the need to fit in. It can be any type of thing. And so if you're not falling into camp one or two, really take a look at Am I just purchasing because, you know, maybe it's the influence of a spouse, maybe it's the influence of a friend or family member, I mean it can be anybody really close to us, and feeling that pressure and not wanting to make that choice. But feeling like you're obligated societally to do, it's a very slippery slope and being in this creates a storm that eventually will just give us a blackout, it'll just create that. if you are somebody that's like, the lender will tell me, they'll make sure I can keep paying this. The lender is making money off of you, unless they think you're a huge risk, they're going to give you that. And they're going to make money off of you. Why are you letting their control? Be the control. You need to take control. We've kind of gone from very low to medium to high, but debt can, you know, cross many, many boundaries. Debt can become something that very easily gets away from us. That's why I really want you to understand that you need to create a very positive relationship with debt. This is something that needs to happen pre retirement. You need to understand what that is. And then you really need to understand is, are you going to pay off all of that debt before retirement? Or are you okay taking X amount in, or this type of thing in? There are two different camps, but really you're the control. One of the first things I tell my clients to do is to create a list of their debt. This brings in Awareness. So what you're going to do is you're going to write down who it's to, what it's for, the amount per month, the balance and the interest rate, whether you've got three of these, 10 of these, whatever number you do that for each and every one on the same sheet of paper, we're taking an inventory. This creates awareness. a better understanding and gets us in control from this point. This is our very first step in building that relationship and very first step in getting control. Lots of times I see clients who are like, Oh, well I could get this one for less or I could shimmy this one over here. And really what you want to do at step one is create a full picture. Want to see what it is. And The what it's for is a very important, okay, going back to client B and client K. What is it for? And if you're like, I'm not sure, that can either fall into Camp B, which maybe you're like, it was my spending, but really, was it your spending? Or was it, I just hadn't set enough money aside for my car registration or my car insurance or something like that. That's where we start being able to identify, you know, the what and the why and accepting, you know, that we are in charge of this relationship. so now you've got a list. What's next? Well, I want you to listen to next week's episode, and it's going to give you the different debt strategies. Choose from one of those, which one sounds best, which then debt you're going to choose. If you have a list of three or a list of ten, does not matter, I want you to choose one. This is very crucial to creating such the focus. and to take control and not lose yourself in the debt identity. Choose one and then you're going to focus on that. That is the one you're going to work towards getting rid of. in any way, shape, or form, and you're going to take it one step at a time. That is a way you can get out of what you're in. Now, if you're looking to have greater impact, quicker impact, and so definitely what I do in my long term coaching, but in the retirement savings intensive, We map your money, including your debt, what that looks like, how that's all piecing out, moving ahead, moving forward on your plan for retirement. And we can discuss what it looks like for debt, how that would pay off when and where. Sometimes people get You know, they're more creatives. They're not as analytical and they need that support and they need that help. I would love to chat with you and determine if that intensive is perfect for you. So schedule that retirement vision session. The other thing we can do in that. free session is talk about debt in retirement and what that will look like with your vision and how you can make that work or not make that work. I think that's very crucial to being able to, you know, understand who you are with debt and really getting somebody else's support as you're piecing these things together is very, very crucial, but yeah, schedule your complimentary retirement vision session. Let's discuss debt, or maybe it's a savings. Maybe you're like, yeah, I've got the slow creep. What do I need to do? I'd love to explore that with you. We are also right now as a bonus, For those booking a free session through the end of March, these seven financial health areas this is your, all of your life. So financial life impact, and maybe debt is coming from one of those areas. Be sure to book your free call through the end of March and get that additional free financial health audit. We explore, like I said, those seven areas that are crucial. To recap what we've talked about, debt is not your identity. Debt is not the end goal. Debt is not what you should just be settling for. And there is a way out. I just want to share that with you, share that hope with you, as I know when my clients have said that, and being able to provide the exact steps for them. Helping them get out of their debt filling of control and turning that into excitement. It is just so fulfilling and I love supporting, you know, people and their money and their dreams and their retirement. So please schedule your free vision session, like I said, it's a, an additional financial health audit through the end of March to support you in all areas of life and really seeing if maybe debt is coming from something else. Be sure to tune in next week for the five debt strategies to help support you in this. And then the next episode will be my amazing client Bee. We're going to dive into how her slow creep stopped and she just excelled. So I'm excited to share her story. Look forward for you to hear that and until next week.