In this chapter of the podcast episode, they discuss the first and most important step to take when dealing with a significant amount of debt, which is cutting up credit cards. They highlight that even though credit cards may offer rewards or airline miles, it is crucial to eliminate them because the average American has a $16,000 credit card balance. They explain that spending with cash or a debit card allows individuals to feel a stronger emotional connection to their money and avoid getting into further debt.
Irina and her husband are more than $100,000 in debt. They’re working to pay it off, but between monthly credit card bills, student loan payments, 401k contributions and spending on their new baby, their money is spread too thin. In this episode of How To!, Charles Duhigg bring on Rachel Cruze, a personal finance expert and author of Know Yourself, Know Your Money, to help Irina create a budget that she can actually follow. It will seem hard at first, Rachel says, but if you cut up your credit cards and pause your retirement investments, you can get out of debt much sooner.
If you liked this episode, check out “How To Get That Promotion You Deserve.”
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