How Do I Start Paying Down Debt When I’m Only Covering Minimums?

Speaker A00:00:00

Have you ever made every minimum payment and still feel like you're just losing the battle? You know, you're working hard, you're doing what you can, but that debt just sits there. And then the shame voice shows up.You start hearing things like you're failing. God must be disappointed in me. Your family deserves better. And why can't you get it together, friend? I want you to hear me clearly.Minimum payments are not proof that you're failing. They are proof that you're still fighting. And today I'm going to give you a first step that works when you're stuck in that minimum only mode.Hey, friend. Ralph Estep Jr. Here.This is financially Confident Christian, where every day I help you break that cycle of financial shame and do it with confidence. And today's topic is going to help you on that confidence road.We're going to talk about how to start paying down debt when you're only covering those minimums. Well, let's get right to today's listener question. And today's listener question is this.Ralph, I'm paying minimums every month and I'm watching the debt just sit there. I feel like I'm failing. I'm failing God, I'm failing my family. And honestly, I'm failing myself.This burden is crushing me, and I don't know how to move forward when I can't do it all right now. Where do I even start?I want to be faithful and responsible, but I'm drowning and I need someone to tell me what the first step is when you're this stuck. And man, I tell you, when I read that question, of course I read it before we did the show today.I just felt so bad for this person because I know what it's like to feel stuck. And I just want to say one thing about this because it's easy. Get stuck on what winning looks like.But your first win is not paying off all your debts. It's really creating one extra dollar to attack that debt with. And friendless. And debt payoff doesn't start with a big payment.It starts with a small system that creates momentum. And the system I want you to use today is simple. And it's this. Minimums everywhere, plus one targeted extra.We're going to get into targeting it extra. But here's how you do that. First thing you must do, you've got to make peace with the minimums now. Make peace for now. But this is important.Minimum payments are not you being lazy. They're just not. They keep your credit score okay? And they're a form of triage.They keep you current, they keep the lights on, and they protect you from falling further behind. See, we've got to stop calling minimums failure.I've heard that so many times that people come in and sit with me and say, ralph, I feel like I'm not getting anywhere. All I do is just make the minimum payments. And I always say to them, at least you're doing that. So minimums are your baseline.Now, I'm not saying we need to stay there. Not a good place to be long term, but we've got to stay there so that we can build that first breakthrough.Well, let's talk about how to build that first breakthrough. I want you to choose one. Focus debt. This is what we're going to really focus in on. And there's only one. I don't want five of them, not all of them.I want you to pick one debt to attack first. There's two real easy ways to do that.We can talk about the smallest balance, and I love that one because it's really a quick win motivation, or we pick the highest interest.Now, if you're a math person like me, you want to say, well, I'm going to do the highest interest one, because that's the one that's costing me the most. But it really comes down to what do you want to do if you're exhausted and discouraged?Start with the smallest balance first, because you're going to see a win. You don't need some fancy spreadsheet. You just need hope. Here's the next step. I want you to find $25 without finding more income.You're probably thinking, wait a minute, Ralph, where am I going to find $25? We're not doing miracles here. We're just finding some margin. Here's some great ways that you can find those things.You could pause one subscription for 30 days. Yeah, maybe you don't have Netflix this month or one of the other subscriptions you have that can free up a couple dollars to help attack that debt.Maybe you eat at home this month. No eating out. If you think about it, even two extra meals at home could save you $25 a month.Maybe you've got a bunch of stuff sitting around that you don't use anymore. Sell those things. There's great marketplaces, Facebook Marketplace, Craigslist. There's all kinds of places where you can sell that thing.Maybe you cut one convenience, spend this week. Maybe you don't go for Starbucks this week. Hate to call out Starbucks, but listen, if you're looking for a way to build that momentum.Here's another thing you can do that a lot of people don't think about. You can call one bill and ask for a reduction. This is a really a pro tip.Every year, if you've got any kind of recurring subscriptions, call them and tell them, hey, I'm going to leave. You'll be shocked what you can get. I do this all the time with satellite radio here in the US and it's amazing.They always give me a great price so that I stay. So this isn't about being perfect, is to create a $25 of extra attack power. Here's the next step. I want you to create a debt punch auto transfer.Make it automatic. I'm talking about the day after payday schedule an extra payment to your focus debt.Listen, even if it's only 10 bucks or $25 like we talked about, that automatic beats that emotional because you're going to be feeling rough. This is a tight margin. But when you feel ready, you're going to do it ahead of time. And the month will eat your money if you're not careful.And finally, this. I want you to track one number. Not how many debts you have, not the number of bills. I want you to just track the balance moving forward every month.I want you to write down the new balance. If you started off at 10,000 and now you're down to 9,800, that's pretty progress. And I'm not telling you to shame you or guilt you.I'm not telling you to live in the past. I just want you to see this number moving. Because when you start to see it moving, you get that momentum.And when you live in momentum, it builds that confidence. And that confidence is what breaks this cycle once and for all. Because the truth is, one focus step beats a thousand guilty thoughts.And listen, we're all guilty of those guilty thoughts. So here's your win for today. I want you to pick that one focus debt. Maybe it's that debt. You're just like, I hate this debt, Ralph.I just want to be done with it. Pick that debt. Set up one automatic extra payment for the day after your next paycheck, even if it's 10 bucks.Because today is about momentum and not miracles. Well, let's get to our Bible verse for today comes to us from the book of Psalms, chapter 34, verse 18.This is one of those ones I think you got to write down because I love this verse again, Psalm 34, 18. The Lord is close to the brokenhearted and saves those who are crushed in spirit. Here's the thing I want you to hear.God doesn't stand over you in disappointment. He just doesn't. He comes closer to you in the middle of that. Wait. So just give it to God. Let's do that right now.Father God, you see the pressure we're all under. You see the burden of debt and the crushing shame that comes with it right now, Lord, I ask you to draw near to all of us.Replace that despair with hope, Lord, and replace confusion with just one clear next step. Give us wisdom to choose that one focused debt.And give us courage to start small without quitting, Lord, and give us peace that you're not ashamed of any of us. Provide for what we need, Lord. Strengthen us as we feel in this weakness. And let today be the being of our freedom journey.And we ask this in Jesus name. Amen. Friend, I want you to hear this loud and clear. You're not failing, you're rebuilding. And you're rebuilding one faithful step at a time.If you've got a question you'd like me to cover on this show, by the way, you know I love questions. Go to financiallyconfidentchristian.com/question we'll put that in the show notes, but I'm going to give it to you again in case you want to write it down.It's financiallyconfidentchristian.com/question well, thank you so much for joining me. As I always say, stay financially savvy. May God bless you and you have a great day today.