10 Mistakes That Can Derail Your Debt Payoff 

Thanks to the baby steps I’m debt free since yesterday, 🎉except the mortgage

I rewatch these videos to use as encouraging reminders when I feel like I’m struggling. Thank you

I've been debt free for a long time now and now I'm tackling my mortgage I got 85k left in it... people on the internet always say to not pay it off but I dream of having a paid off home! Watching these gives me reassurance

Doing the credit card balance transfer really helped me as moved my card to a card that was offering 22 months interest free so just done it to ensure that every payment I made was making a difference without being charged interest and ONLY done this to pay off the card quicker. Now it’s cleared I’ve closed the account and no longer have credit card debt.

I did the debt avalanche (highest interest rate first). Totally worked for me. Not everyone is the same. You said debt snowball it is the "most efficeint way" to pay off debt, but even you admitted that isn;t true. It may be the most effective for many people (based on psychology, NOT math), but it is most certainly NOT the most efficient.

1. Debt consolidation 2. Debt settlement 3. 401(k) loans 4. Paying off highest interest 5. Home equity line of credit (HELOC) 6. Not changing your lifestyle 7. Continuing to invest 8. Not giving 9. Credit card balance transfers 10. Waiting on someone else to pay off your debt

You can give your time also. Charity is not just money, volunteering is important.

I have no debt and I’m still watching this 😂

I used 401k loans at 4% interest, credit card transfers at 0%, and gambling on horse races to eliminate $120k in 2 years. I also kicked both my kids out of the house. They were 22 year old leaches. One got a real job and the other is the army's problem now. Worked great!

The credit transfer helped us make real gains on one of our credit cards. We moved to a 0% interest so all of our payment went towards principal. Before that we were taking 2 steps forward and one step back with interest. If you’re intentional and stay intentional, it could be a game changer and it was more motivating.

Getting rid of debt is a guaranteed return. Love it!

Avoid emotional spending

I've balance transferred around $20k of consumer debt to 0% interest cards for a set number of months. Assuming you've broken the habit of living off of credit cards and are now much smarter with your money, balance transfers are a great way to save thousands of dollars in interest payments for anyone that finds themselves in my shoes. Thankfully I can now say I'm credit card debt free. One size does not fit all when it comes to personal finance but I still love what you guys do.

Thanks to the baby steps I am out of debt except for the mortgage (and that’s soon to happen)! There’s such wisdom and common sense in the baby steps!

I am asking God if I should continue to give while getting out of debt. I am so glad I bumped into this video and answering my question. I think God used you to answer me. Thank you.

I completed BS1 and just paid my first debt. It feels good already

We did the HELOC not once...but twice.. ended up with more debt each time. It really is a behavior problem. I feel like I need to suffer and feel the pain of paying off everything to help this tough lesson sink in.

I did a 0% balance transfer and became debt free. I would've paid an additional 5K (approx) worth of interest if I didn't move the funds, and it would've taken longer to pay off due to the interests increasing the balance every month. It doesn't make sense to follow her advice by avoiding the 0% balance transfer, as long as you can pay it off before the promotional period expires.

I have been carrying credit card dept for no reason other than I didn't want to use my savings. I never thought about how it affects my thoughts towards my debt. I am paying off everything except my student debt, which will take more time. Thanks!

I did a transfer b/c my $13k was costing $350/month in interest. That’s $350 I could put towards debt. So went from 33% to 0% interest

I think that what many are missing here regarding the use of a balance transfer to pay off higher interest rate card debt, is that many people who don't have discipline will then keep using the card(s) they just transferred the balance(s) from and end up with more debt. If you immediately close the old accounts or can tell yourself to leave those alone, then sure it can be a useful option.

I'm glad you are teaching giving along the journey

It would be useful to study whether those that consolidate their debt to a lower interest rate actually pay off their debt faster. I don’t think so as I think it might make them feel less pressure to be intentional.

I understand the giving idealism behind growing wealth. I have always been blessed to have enough where I'm handling my finances and if ever anyone needed help financially, I was able to bless them with that help. Some how, some way I always get the money back times extra. Sometimes from the person I helped or by other means, but it's always came back to me. It's true. Now, it is important too not to think you can be taken advantage of so my rule of thumb is, I helped you once, you pay me back I can help you again. You don't pay me back, that's all the help you get. I give without expecting it back, but I also am mindful that I'm not being taken advantage of.

thank you so much for addressing these . There have been 3 or 4 that I have actually considered before and I am glad I chose not to after hearing your views. Thanks Rachel!

Thank you. God's Love and Blessings.

Brilliant advice Rachel!!! Excellent!!!

I’ve done the debt consolidation and the balance transfers, but it didn’t help. I’m doing the debt snow right now and it’s working. I paid off $1,750 of credit card debt this week.

Unfortunately, the HELOC was my only way to keep afloat last year. I was reluctant at first but it was either that or move my family into a 5th wheel so we did what we needed to. Now we're actually making some progress with our debt and should be free of everything but the mortgage in 4.5 years or less depending on when I can go back to having full-time work.

My dad is recommending Debt settlement, but I have had bad experiences with two different companies - one just took my money and the other one told us that we needed a new bank. I did do two 401K loans and they did help me out and I paid them back before I left the company, but I agree about it being a bad idea. Love your videos :)

Using Heloc with low interest rate to pay credit cards with high interests rates is a smarter way of paying off debts faster and cheaper. I did it and it worked. You just have to be disciplined to make the monthly payments. Goodluck 🙏

$8k is what I have. It’s been lingering for 10 years and still causing havoc in my life. I haven’t paid a dime or been in touch and the accounts have been closed/charged off in collections. I don’t know who owns the accounts now but I’m finally in a position to get this debt out of my life. After the $8k is paid I can scream I’m debt free until I purchase a home, then I will have a mortgage and that’s it.

I have done almost all of these things wrong. I am overwhelmed

Give a little until you can give a lot. I love this!

Kinda dumb to me to stop investing in your retirement but keep “giving” to god knows what

Thank you this is very helpful information. Subscribed ❤

Such great advice!

Great video! God Bless!

I really appreciated the part about giving. We're still paying off debt and still give 10% to our church, as well as setting aside a little each month for giving in other ways. Sometimes I just think we could get through it a lot sooner if we took that money and put it towards debt every month. But I know giving is the right thing to do and really does shape our character. Thanks for the encouragement and reminder.

So we are working on the first credit card. Shopping only on one day. Using grocery list. Not going out. Creating dates at home. We are still paying 10% tithes to our church first. Living on a budget. We have made changes in our lives and living frugally. Thanks for your video.

Working on it.Thanks❤

Thank you for this advice.

Stop Investing yet Keep Giving. That’s seems counterintuitive. I understand it may be Character issues, but that has nothing to do with debt or building wealth. Plenty of bad people that are wealthy and debt free. I’d rather give once I fixed myself first.

Great video, thank you

I tried for years paying off debt by paying the largest interest rates. Did not work so I reversed it and it worked wonderfully and progress was seen and encouraging.

Love your work!

Thank You.

For me paying off the one with the largest balance is how it’s going to have to be. The interest rate is horrid, and paying hundreds in interest each month is sickening. The lowest balance one is getting the minimum payment and I’m throwing it all at the highest balance one to hopefully get lower interest with a lower balance.

I paid off my debt with a personal loan. It worked for me. It was a 5 year loan....paid off in 22 months. Less interest, not revolving credit and the fresh do over start is what I needed. Will it work for everyone...no.

Giving is a Correct Principle. I testify of that. Being generous has blessed us tremendously. Right now we got a job that we don't have to pay neither rent nor bills in the best neighborhood and also the kids tuition in private schools. You have to live it to believe it.

Thanks 🙏

best advice everrr! especially HELOC...no bueno!!!

What you said is true about owing your 401k if employment stops while having a balance but there’s also no credit pull for borrowing your own money and the interest paid goes back into your portfolio. Fidelity investments charges a poultry $35 processing fee per loan. Why pay a bank interest when you can pay it back to yourself?

I love all the 9 advice except the balance transfers...Two banks gave me 0% interest in 18 months so I split into two my balance from a high interest one and it really really helps! Instead of paying interest we were able to keep an eye on the goal to pay my debt before the 18months end...The first one was closed and we are near in getting debt free... We depleted our emergency funds when I got pregnant and have so many complications which I was deemed high risk and could not work. Thankfully my daughter(oh yeah,two kids and no more) is healthy and we were past that. We live below our means and we are simple family, it was just that whirlwind of chaos that got us with debt. Seeing my kids I know in my heart even though we came to this situation, I would not trade the world...Oh I am excited to shout to the world that we are debt free!

I need to quit buying unnecessary things. Handbags are my weakness. I try an justify I need this bag or that wallet bc it’s so pretty or this shade of pink is to die for. NO! I have enough!!! I need to stop. It’s like an addiction. I’m staying strong tho. I’m paying these cards off! I’m dodging these handbags left and right 😂 wish me luck and good luck to y’all!! 🍀

Thank You

I owe you an apology. In a prior video I referred to you as condescending…my apologies. You’re right. I’m an idiot, but I will follow the baby step plan. Thank you for the help.

I’m having a hard time supporting my family and I on ssdi. $41000 a year. My wife wants to get a job but I have a lot of medical issues, and she takes care of me and takes me to appointments. Our son is a sophomore in high school and is getting a part time job this summer

I have used the credit card balance transfer a couple times to lower the interest i was paying. I transferred a 10k CC last year and saved thousands in interest.

Such wise council Thanks from the UK

I love you guys!! I also understand and mindset of giving… but it doesn’t make sense to stop investing but continue to give. To me those are in the same category

velocity banking is better than snowballing

I didn’t go for Easy I went for Simple I had a 10%apr CC that I got as a teen So I consolidated everything into this one, not to get a lower payment, but to get a consistent payment This allowed me to save a consistent amount to pay it in full in one go

Great video. I made the 401K loan mistake years before taking FPU. Took me 2 years to pay it off and then I was finally able to start looking for a new job. Ugh. Just remembering that makes me ill.

This is a great video, but I have to say something about your sponsor Christian Health Ministries. It may be a great plan if you have no previous health conditions but if you have any, this is not the plan for you. This was sold to my parents as if it was health insurance. It is not. It says it right on the card. They aren't obligated to pay and if you have a history of anything it is not covered at all for the first two years of the plan. My dad had a history of "fatty liver" (super common, right?). He found out while he had the insurance that he had decompensated liver cirrhosis and needed a transplant. None of it is covered due to that fatty liver diagnosis. He had NO clue he had liver issues. He knew he was overweight, but he didn't know he was in liver failure. We had to wait for open enrollment to get real insurance while zero of his treatments were covered with this plan. It was the longest year of our lives. He couldn't even get his medicine paid for.

I did a balance transfer with 2 of my credit cards for 0% interest for 18 months. The interest was initially so bad. The cost to transfer was just 1 month of interest so it was a winning situation for me. I'll be done paying it off earlier than 18 months and it's nice to see my balance not increase after a payment.

Walked into every mistake in this list of 10 😅 Thanks so much for the wakeup call!

Good advice - yes, If doing debt settlement do it yourself - I had to as husband got sick - I got 30% on 2 cards so far - larger balances - will be working on one larger and smaller ones within a year based on hardship. The original creditors have been easy to deal with so far.

I'm 41 and I've done it all, now very close to paying it off. 0% is how it started and 6 yrs later I still had tens of thousands in 0%, just have 2 car loans left.

I made 2 of these mistakes...never again. Never again ....

Debt settlement companies are a rip off. When I was in my early 20s I tried using a company and after 8 months of absolutely no progress, I cancelled the service and just knocked out my credit card debt as she said . . . starting from the least to the greatest.

What about paying the zero interest balance transfer pieces for a certain number of months then the smallest?

So good !!

Why is she knocking on the Debt Avalanche where you work on the one with the highest interest rate? I’m working on the one with a large balance and high interest rate and the way I have it set up, we will be finished one month earlier than the Debt Snowball method AND saving over $4k in interest!

The only thing I don’t agree on is the balance transfer. I did this and had no interest for 24 months which made it a lot quicker and easier to pay our balances down, considering it was our top priority to be debt free and we stuck with the snowball it was a good move.

Thank you, after watching you and David I will start to pay off my car loan in 12mons intends of 5 yrs....

Thanks Rachel, to be honest I never ever had any debt or took out any loans until recently, the main reason I took out the loan was due to the fact that I got scammed on the Internet paying some guy on PayPal. After that I went on a downward spiral of taking out loans, also I have a student loan that I'm currently paying off so I am in the process of watching your videos and trying to get back to where I was before, I mean I used to have money left over and wasn't living paycheck to paycheck. I'm still struggling financially and still want a better life so I can support my whole family.

Also don’t put to much onto your credit card at once when making payments when thinking I usually pay say 50 a check then you decide to do 150 to pay off faster then you run out of money down the week and have to use the credit card again .. be realistic with your payments and do 75 or 100 even and be real with yourself so you don’t go backward not forwards .

What if I "give" to my investments or retirement plan?

Giving! Yes generosity is about the character not about the circumstances. The poorest people sometimes give the most. And bless others and make the biggest impact! Being generous is very important!!!

I did the consolidation about 10 years ago and it actually wasn’t bad. It was about 14k in money owed. When they do this you no longer pay interest on your monthly payments to the company you only a flat rate. Im sure other companies may be different but my payment plan was for 2.5 years

So if you have a higher medical debt at 0% interest, you'd still pay it off before a smaller loan with interest?

You talked about the option of debt settlement yourself..do you offer a guide or letter to know what to say to the creditor?? I would be so grateful for this!

What aboutt saving the money for the student loans before it resumes? So you’re waiting but you are not relying on them

HELOC is one of the best ways of reducing the debt burden. Think you have not taken a HELOC and continue to pay what you would have paid at the first place. It helps in reducing the EMI while helping in repaying the loan faster. Yes, it means I am risking my house, which actually be used as a source of motivation to get out of debt. Combine all the loans except a home mortgage into a HELOC and then treat as of it never happened. I did take help of a HELOC and was able to get debt free 39 months earlier compared to had I not taken the HELOC.

Depends on who your giving to

I took out a 401-K LOAN, not a withdrawal. The interest is low and a flat rate, not revolving like credit cards. IF I leave my employer or get fired, it would be treated like a withdrawal and I will be taxed for that amount. Using this loan (that I pay back to MYSELF) to pay off 3 high interest credit cards will save me over 10K in interest over the 3-year term. There is no way the amount of the loan was going to make that much money in my 401-K over the next 3 years. And I'm still contributing....I don't want to leave the company's match money laying on the table.

Hi Rachel, which one is the best high yield savings account that you can recommend me??? Thank you 🙏🏻

What if u have a lot of equity? Would it be a good idea to get a helps or refi

Yes! 😂the way u called me out 🎉 I’m paying off my loans ok!! I heard ya

1000 percent disagree about the credit card transfers, just had one for 20 month with 0 interest

How do I get out of one of those debt settlement

I used National Debt Relief back in the day and found it to be a HUGE help.

Debt free, mortgage free, 35 years old, with a booming income property…. Completely self made, no parents, no banks and no partner helping me. Thanks for renforcing the good habits I had developed while being impoverished.

omg!! I didn't even know these things excited! I only have my car loan that I plan to pay off this year woohoo! I am going back to school and I am kind of scared of those payments

The avalanche method works for me

I have credit card debt that adds another $400 to my debt every month. Now what I owe the least on, is my treadmill and there is zero interest on that! Should I still pay off the treadmill first?

I question some of their advice. Balance transfers with no interest fo so many months. Also PSLF worked for me.

All of this makes sense but why not the low intrest credit card for debt transfer? Like if I could I would. It'd cancel the debt on the other cards dropping my utilization, then I can make weekly payments on the 1 card.

I have to disagree with you on the snowball versus avalanche method. Yes, the snowball method makes you feel more motivated because you see things getting paid off quicker, but in the long run, you spend more money and interest will use a snowball method versus the avalanche method and you actually pay off your debt faster when you use the avalanche method.