You know, I have a friend of mine that when he finds out I'm facing a tough task or had a tough day, he always says to me, tell me, Bob, what is happening between your ears as your head? That is where we're going to start today? What are your beliefs about where you are today? What's your mindset? What habits supports you or hurt you? You'll hear me say this a lot throughout the course, you can't get out of debt, with the same habits, beliefs and mindset that got you into debt in the first place.

There's no question that getting out of debt is about eliminating liabilities. It's also about changing your beliefs and mindset to where it support you. This is where the byproduct of getting out of debt comes in personal growth. Let's start out with the debt free mindset and developing new habits. Hi, my name is Bob Brooks and you are watching the prudent money channel. You know, we've got a real major problem in this country.

And it's a four letter word, it's dead, which is a problem on a national level. It's a problem on an individual level. You know, if you think back to 2007 In 2009, we went through a financial crisis that was brought on by debt. And you would think that the trauma that that financial crisis created would cause people to rethink their habits rethink what they're doing, rethink getting into debt, getting out of debt. But yet that's not happening. It's alarming when you start to see new statistics come up that are greater than the ones back during the financial crisis.

This is just a small list. Auto delinquencies have now eclipsed their peak levels. during the financial crisis. The percentage of borrowers with credit scores below 660 has climbed from 30% to 36%. Since 2011, I mean, that's a statistic you want to see get better not get worse, we will probably set a new record for credit card debt. The record was set in 2008.

And by the end of this year, which is 2016. We will probably Eclipse that mark. These are not good statistics. And the reality of it is simply this. There's just way too Too much debt. I mean, look at this debt is spiraling out of control in this country, over $19 trillion worth of debt, nationally, over $1.3 trillion worth of student loan debt.

The numbers are staggering, and they continue to get worse. So what do you do about a situation like this, we can't control the irresponsible spending of the politicians, and they're going to continue to do that. And that that's going to have its day of reckoning at some point. Can't do anything about student loan debt. It's once again kind of brought on by the politicians and can't do anything about the credit card debt, but we can individually do things and to get our own selves out of debt, because here's the thing, who will survive and prosper once all this becomes a problem because this debt bomb that we see building right now is going to go off at some point. And it's going to be the the people who are financially responsible, those who are debt free.

And that should be the goal to get to a point of financial freedom where you get an act get rid of All that debt once and for all on an individual level, but here's the thing, you can't get out of debt, with the same mindset and the same set of habits that got you into debt. You're gonna have to change that today, what's what we're going to talk about the mindset that you need to have a debt free existence, so very important that we focus on this. And of course, then the debt free mindset also affects your habits. So getting out of debt starts with the right mindset. The first thing we want to talk about is the guilt. The guilt is not going to do you any good deal with it and let it go.

I can't tell you how many times people have come into my office want to talk about their debt situation, and we start off and the first thing out of their mouth, I can't believe I let this happen. I can't believe that I made those decisions. I wish I wouldn't have made that mistake and all I hear is guilt and regret. Besides the fact that it's unproductive. And besides the fact it's not healthy. It's not going to do you any good trying to get out of debt.

If you're hanging on to the past. The best thing that you can do for yourself is look at the past and say, Okay, I did some things that I wish I would have done differently. What's done is done it is what it is. Now, what can I learn from it? I realized that turns into an expensive lesson when you start thinking of it that way. But that is the whole point of past actions that didn't work out, you realize what you learn from it, you let go all the negativity of it, and you use that to benefit as you try to get out of debt.

Number two, this is a season and not something that lasts forever. You know, when you get when you accumulate a lot of debt, it certainly does feel like it's something that's going to be there for 15 2025 years, or maybe a lifetime. And I've heard people actually say that, that I'm never going to get out of debt. This is going to last for forever. I got to tell you, if you look at in my book, deceptive money, I go through the strategies from A to Z of what to do to get to get out of debt once and for all. And the strategies that that I've talked to people about once they see that put into place Once they learn and understand how it all works, they realize, Hey, wait a minute, I actually if I do this, which I can do, I'll be out of debt in four years.

Now, when you start to look at it from that standpoint and looking at it as a season, it's not going to last your entire lifetime. It's just a seasonal thing you're going to get through it. It's going to get you just have to commit to once again, a new mindset in new habits. Be careful trusting the Debt Solutions business. I write a lot about this in my book, deceptive money, because it is deceptive. They promise all kinds of things and you've seen the late night commercials, you'll be sitting on the couch, maybe you've accumulated some debt, you're worried about it in the commercial comes on.

The announcer says you know we can take care of that debt problem for you. You don't, you shouldn't have to owe those credit card companies. They took advantage of you. But we can take that debt. We can cut it in half, we can cut your interest rates in half. We can catch your payments in half.

All you have to do is pick up the phone and call one 100 get out of debt. Now I'm making that up. I don't even know if that's a real company or not, or a real phone number. But that it's that simple. The thing you got to realize is it is not that simple. These credit card companies want to be paid.

And I'll tell you that one of the reasons that people think that, you know, this is gonna last forever, is the debt, the debt solution proposals. And I actually have a couple of my book that I point out in one, and I gotta tell you that these are almost fraudulent, the numbers are so wrong, they would show that if they kept if they, they kept paying it at their current rate, it would take you know, 1520 years to get out of debt, which was absolutely wrong. It didn't take that long, but they paint this this dire situation if you don't go with them. And then they say, Well, if you do go and this is what's going to happen. And when you read them, you think, well, this is what they're gonna guarantee to do, but there's nothing guaranteed about any of it. In fact, I've seen more times than not going to these debt solution companies and turning over your situation to them.

And ends up making it a bigger disaster, and even has legal consequences are can. So you want to be real careful about trust in this industry because I have yet to see a system that does work in they can do as promised. You have to get a little uncomfortable and change your habits. You know, it's the funny thing about habits. We have habits that don't support us. We have habits that don't work for us.

In fact, they create misery in our life. But there's something comfortable about those, those habits, even though they're not working for us, even though they're not supporting us, because they keep us in our comfort zone. We're used to them, we know them. And but they're not supporting us. The reality of it is you've got to get out of that comfort zone. You've got to develop new habits.

And once you develop new habits and you live with those habits for a while, what you'll find is that you develop a new comfort zone. It's just once again, it's that introductory period into a new set of financial habits, but you've got to have these new habits and a new mindset to make That the debt go away. Don't pretend it is not there or rationalize it the more you ignore it, the worse it gets. This is something that I see a lot is that you get kind of get into the loop of you've got all this debt, you're just making the minimum payment. You know I got to make that minimum payment I got it and pay it every single month. You don't look at the balance.

You don't check the interest rates you don't check to make sure that nothing that everything is is as it should be. What happens is you set by ignoring it, you set yourself up to make a mistake. And one of the things I'll point out in the my book deceptive money is that people credit card companies love it when human nature steps in and you make a mistake and they are ready to pounce on you when you make a mistake. And if you look at current terms and conditions and credit cards as it stands today, the the fine print is full of consequences for making a mistake. So it's it's easy to do if you're not pretend if you're not Paying attention, it's really important to recognize, okay, it is what it is, I acknowledge it, and I'm taking care of it, and you get a game plan and get done with it once and for all.

You, your spouse, and your kids have to be fully committed. Now, obviously, you look at that and you say, Okay, I get the whole you and your spouse thing but the kids, I think that people are missing out on an incredible teaching moment with their kids to say, hey, look, because I did this, this and this accumulated debt. And you had the opportunity to make that debt look like the worst thing in the entire world. And to the point where your kids are never going to want to accumulate debt. And you got to show them this is what we're going to have to do as a family we're going to have to cut back to create extra money and you include them in the process. And I tell tell you, once you take them through that process, there it's a it's a it's a high likelihood that they are never going to want to take on debt.

You know, this is where we get our habits. Growing up, and I wrote a piece not too long ago talking about this very thing about, about parents and teaching moments and money, you know, and in the title of it is, do you want to teach your kids about money? Or do you want the Kardashians to teach your kids about money, and something like that, but it's so true because where they learn about money, where they get their values is by watching TV, by internet by the world, wouldn't you rather have the first shot at influencing that and shaping those values, the way they should be shaped versus letting someone else influence them. So your kids very important that you include them in in this loop and not be embarrassed about it. It's just it is what it is, once again. Now your spouse, obviously you and your spouse have got to be on the same page and have got to be united in this in this season that you're going to go through.

So very important, and a lot of benefits to including the family. Don't feel like you're alone because you're not. It's interesting as I talk to people, that's kind of that feeling that you I'm out here on an island and I got all this debt. everybody else's is prosperous. Everybody else is living a great life. I get the opportunity to talk to so many different people and they share with me what's going on in their financial life.

And I'm telling you, you're not alone. If you're going through this situation, I describe it like this. If you're if your house represents your life, then everything that you don't want anybody to know about that you're embarrassed about, which would be the debt is locked away in this dark closet, you keep that door closed, you don't let that out. You don't let anybody into that closet. And that's everybody's got financial secrets. It's just the way that it is.

Everybody's got regrets. Because not everybody's perfect when it comes to money. It's just the way it is. So don't feel like you're alone. There's a lot of people dealing with it. All you have to do is look at the numbers, the debt numbers to know You certainly aren't alone.

As you make progress, everything starts to improve and this is what's great about the process as you get into your debt elimination program. You're, you're committed to it, you're committed to new habits, you're committed to paying extra, you're making those payments, that debt dwindles down, it starts to go down, all of a sudden, your credit score starts to go up, it starts to improve, and then you start getting offers for lower interest rates in transferring that debt. You know, the key is is to pay that is while you're paying that debt off, is to get the lowest interest rates possible. As you pay that debt down, you start to look better on paper and that that credit score comes up you get more opportunities for lower rates. So as you go through, you get everything starts to improve habits determine your financial future, and this is I just want to park on this for a second because, you know, your habits are determining your outcomes.

If you don't like your house, if you don't like your outcomes, change your habits. It's so extremely important to take the time to do an inventory. Of these are my habits these are this is what I do. This either supports me or it doesn't support me and you don't have the luxury of going through a situation of trying to get out of debt. with bad habits. You've got to change your habits.

That's that's the thing about it's a cycle. First you get your an education on how money works, which influences your habits which influences your decision making, which determines your outcome. It's so extremely important that you're doing the right things. You know, I think everybody's got the opportunity right now to make two choices. You can't like I said, you can't do anything about the national debt can't do anything about student loan debt, overall credit card debt, but you can make different decisions. You can choose the habits that will Yes, they're going to take you out of your comfort zone, but that's only for a small time period, and you'll get a new comfort zone and the growth that will come out of you going through this process will affect every area of your life.

The key is new mindset.