Breaking Free from the Credit Card Blues

The episode explores the challenges of credit card debt and the importance of establishing positive financial habits. Michael emphasizes the need for self-reflection, open communication, and careful spending to avoid falling into the trap of unnecessary debt.

• Discussion on the importance of maintaining a positive outlook 
• Understanding the psychological factors behind credit card spending 
• Impulse buying and its long-term effects on finances 
• The social pressure to keep up with others and its consequences 
• Insights into the statistics of Americans with holiday debt 
• The significance of planning and budgeting in financial habits 
• The value of communication in relationships regarding finances 
• Encouragement to learn from experiences to avoid debt pitfalls 
• Tips for intentional financial planning and saving 
• Closing reminders for setting realistic financial goals

Chapters

• 0:00 Credit Card Blues
• 10:32 Avoiding Financial Ruin
• 21:24 Creating Positive Financial Habits

Transcript

Speaker 1: 0:00

This is Living your Success 24-7 with yours truly. Michael Caine, how are you doing? Happy New Year. Everyone Hope the two weeks into this new year is causing you to set the foundation of a prosperous, healthy year.

Speaker 1: 0:25

Okay, and so, wherever you are, listeners around the world, I thank you for taking the time to listen to me and supporting my podcast, and it's been a challenging road. It's tough out there, but I'm always optimistic and the sun is shining on me. That's how I see it. Even when it's dark, rainy clouds pouring down. At some point the sun is going to shine again, right, so rosy outlook for sure. I'm going to make that a habit to be positive. That actually is. It's a habit to look at things in a positive outlook, but recognizing issues, problems, challenges and failure. Yeah, they have to work. Yeah, I said it, they have to work.

Speaker 1: 1:18

We all go down that path where things aren't working out, but you got to stop, stop and evaluate, review, reflect, meditate and plan and then, after you plan, you have to act and do. See. A lot of times we do all that other stuff preparation but we don't do it. Because what fear? Another F word Failure and fear. Okay, that's what we're scared of. But you can't grow and you can't experience the good things without some level of risk. Right, and fear, and courage is not the absence of fear, no, no, no, no. You can have fear and still do courageous acts and courageous things, and so I'm asking you then, you know, just put that left foot forward and the right foot, left foot, and then also, all of a sudden, you're moving forward down your path.

Speaker 1: 2:20

So what do I want to talk about today? Let's talk about credit card debt. Uh-oh, sensitive, I know it's a sensitive subject credit card debt. Let's informally call this episode Credit Card Blues. Got the blues. You know what the blues man? You heard the style Got the blues. You know what the blues man? You heard the style of music blues. Dogged in ate my homework. The door not fell off, the car ain't starting Right. Things happen, bad things happen to good people, and good people do things that may not be as good as they should be. So we're going to Although this show isn't about habits, it's a byproduct of what habits Will do for you good habits and we want to get rid of those negative habits.

Speaker 1: 3:21

Now let's talk. What about credit cards? Let me get to the point. You find yourself, year after year, negative habits. Now let's talk. What about credit cards? Let me get to the point.

Speaker 1: 3:32

You find yourself, year after year after year after year especially 2024, being overextended, weeks and months into the new year. Raise your hand. Most of us can raise our hand, most of us can raise our hand and we find ourselves in unnecessary debt and a lot of debt that we encumber ourselves with. We did it voluntarily. Nobody coaxed us. Maybe some did. Hey, just buy it. You can pay it off in three years. Just do it. Just live today. You know what I'm all for living for today, living in the present.

Speaker 1: 4:10

But you do have to consider the future too. Where is that going to leave you if you're drowning in credit card debt? Now, when you sign up for a credit card, of course they're not going to tell you that. They're not going to tell you and give you a lesson or preach to you that you better be careful. You could destroy yourself Self-destruct mode. So when the credit card companies do that not all of them it's with the asterisks, okay, and you do have free will where it's a choice.

Speaker 1: 4:51

Now, sometimes people are taken when they're most vulnerable, and I know you want to give your family, especially if you have kids. You want to give them things. You want to show your appreciation and give them nice gifts. You want to take them on nice vacations. You want to give them things. You want to show your appreciation and give them nice gifts. You want to take them on nice vacations. You want to buy them nice clothes. You want to get them nice toys, all the latest electronic gizmos, the Android or iPhone you want to give them stuff. I get that. Some people probably were great to you. You want to give back return the favor. Some people probably were great to you. You want to give back return the favor.

Speaker 1: 5:27

However, but asterisk coming, you got to consider what the impact will be on your present to the future. Are you going to struggle? Are you going to just be drowning in a sea of red? Are you? Are you going to be sacrificing your future, not for weeks, not just for months, but years? Look, I'm raising my hand.

Speaker 1: 5:58

I was a credit card addict. I just do stuff on credit card to oh, I'll pay it off later. Card addict, I'd just do stuff on a credit card to oh, I'll pay it off later. And then the monthly, the minimum monthly payment got so large that I couldn't pay that off. So I couldn't keep up with that hard. So you do want to plan on being humble to what you can afford and people that really are supporting you and really your real family, real friends. They'll understand. If you can't give them a Gucci bag or whatever bag, a Rolex or you know whatever fancy $500 toy. And if they don't understand, well, maybe they don't really care as much as you think. So, and I know you're trying to keep up what they say keep up with the Joneses Sorry, joneses, you got the bad rep with this phrase here, but it's and I don't think it's a well.

Speaker 1: 7:04

Some of the debt, I believe, is a sense of entitlement where you think I deserve just as much and stuff as Johnny and Susie down the street. Yeah, we deserve it too. We work at the same place, make the same kind of money. Why do they have all this stuff and don't seem to be hurting? Well, maybe they are. Maybe they're not what it appears. Maybe they are having money arguments in a relationship, maybe they are a brink of divorce.

Speaker 1: 7:38

You don't know people. They're not going to tell you all their business. Do you really want to join that negativity? I'm not going to tell you all their business. Do you really want to join that negativity, the outcome, the result of being overextended from the holidays? And so I understand.

Speaker 1: 7:53

What do we have? We have Christmas, birthdays, anniversaries, graduations, special occasions, whatever that is, and we celebrate, we buy gifts. Someone buys a house, we bring a gift when we come over for the first time. We do those things. It's kind to do those things, it's nice to do those things, but what you have to consider is what can you afford? What can you comfortably afford where you're not screwing yourself, for the next year, the next six months?

Speaker 1: 8:27

And you know people, let's say this last Christmas, december 2024, people were announced, two weeks later, of course, the people in debt billions of dollars, probably hundreds of millions, probably a billion worldwide, and they're probably not going to pay it off until what, april or May at best. Many people and many people. We're talking next year, because the longer you pay those minimum monthly payments or not at all, the interest is accruing, penalties are accruing as we speak, by the minute, by the second, by the minute, by the hour, by the day, by the week, by the minute, by the second, by the minute, by the hour, by the day, by the week, by the month, by the year, with some people, and so CNBC, to quote them, lending trade. They said 36% of Americans took on holiday debt. 36%, that's the ones that told the truth on the survey. You know that. And the average balance was $1,181.

Speaker 1: 9:38

Okay, it could be worse, could be Thought it would be worse actually, but it's still debt that a lot of people will struggle with and the interest will continue to accrue. At 24, 28, 29 percent and, of that number, 40, 40, 400, 44 percent I need to get my glasses, my gosh. 44 percent plan to be in debt. Can you imagine? Okay, I plan. In a way, I can see that because, let's say, you're budgeting another bad word, the B word. You're planning okay, we're going to put $1,200, this, and the plan is to pay half it off this month, the other half next month. I can deal with that. I can deal with that, but what probably is worse is 56% didn't plan to.

Speaker 1: 10:32

It just came upon them. Call it impulse shopping, guilt shopping, call it what you want. They knew, they probably had some kind of clue they were going to be bad and do it, but probably wasn't fully committed to overextending themselves Possibly only they and God know, and so it's important. I don't want to be preachy, I really don't, but I want to raise the stop sign, the red flag and say be careful, folks, don't rob your future financial freedom, your future self. Do you have to make trade-offs? Do you have to consider not having that? Whatever it is, that gizmo, that boat, that car, that $50,000 vacation, that fancy, luxurious watch, necklace, gemstone, whatever it is, maybe not this year, maybe plan and save and invest for it. But don't impulse shop, don't just throw it on a carry-on without any plan, saying I don't know how I'm going to pay it off, but it'll have to happen.

Speaker 1: 11:53

So many people are in self-destruct mode and get destroyed. Now that's what you don't see People being destroyed, their family, their divorce rate. People argue about what money. Money is one of the number one things people get divorced over financial infidelity, not telling your spouse you're throwing this on a credit card or probably using their credit card, and some people and lie about it. You don't necessarily go down with the problem, but the lying part and you feel ashamed and all this stuff. You can avoid all of this.

Speaker 1: 12:33

I know we want our kids to have the best, but you know, I grew up in an era where you did whatever you can do, and people yeah, people may make fun of you. Don't give a damn about those people. Yeah, they're going to maybe call you names. Oh, look at them the way you dress. You don't give a damn about those people. Yeah, they're gonna maybe call your names. Oh, look at them the way you dress. They. You don't have the latest this, the latest that screw that, screw anybody that. Put you down of that. You don't need them. I don't care who they are, what title they are in your family or friends, or late, uh, work friends for frenemies. Whatever you got, you got to do you, you got to be you. And what do I want for you? A prosperous future, a healthy future.

Speaker 1: 13:17

Why I keep saying health, though? Because you know what, without the health, the game is over, and money stress, other stress, can cause your health to falter. It could put you in a bad situation. That's why you need to take care of your emotional, psychological and psychological and physical health that Trinity, they are of health. You got to take care of all sides of that triangle. Otherwise, yeah, it can't get worse, because if your health is messed up or your finances are messed up and you owe everybody money. This could be end game here. You know where you're just destroyed just nothing, homeless, you know, don't think bad things can't happen to good people. They can. If we make too many foolish decisions or inappropriate decisions, yeah, it could be bad news for you and your family. Scare tactics no, I don't think so, absolutely not. But teach his own.

Speaker 1: 14:20

Some people say, hey, mike, you don't know what you're talking about. Well, you do, you Do you, we do each other right. You do what you got to do. But just credit card blues. Be cautionary and save and invest for the future. Don't live all for the future and sacrifice today and not have fun. I'm not saying not to have fun, but perhaps you can't, like someone did I heard like put $80,000 on a credit card for vacation. I mean, oh my God, and you don't have that kind of income. The person didn't have that kind of income and job to warrant that. If you're making $300,000, $400,000, maybe $80,000 is not too bad. If you're making $300,000, $400,000, you know you'll deal with it, spending 10, 15% of your income on a vacation, whatever. But if you make a hundred thousand or less, oh my God, you're kind of screwed there and I'm being polite when I say kind of.

Speaker 1: 15:24

So guess what other happens when you're encumbered over, encumbered on credit cards. Goals are not met. You could have things planned out. There are significant other Hopefully your spouse and when he turns right, the other turns left OK, disharmony, disagreement. One of you turns right, the other turns left Okay, disharmony, disagreement. And goals not met. It could be opportunity costs because you're so indebted to the credit card companies where you miss something, a good deal on something Like how about a down payment on a house or that car? That is a crazy price tag that you could have bought outright. Opportunity costs Can't spend to help your children, nicer clothes, vacations not made because the debt you can't afford, it now, before the debt you could have.

Speaker 1: 16:26

You can't help others in need. There may be people that helped you when you're down and out before and you can't help them when they're down and out Now. You're down and out again. If you can't help them, joy and happiness is raw. Life doesn't look so good at this point because you're in a dismal situation because of a heavy debt load. So all these things come out of just well, let's put it on a card. And again, I'm preaching to the choir, because I've been there, done that, where I put things on a credit card, boom, $40,000 on a credit card. How are how you can get out of that. Forty thousand dollars, man, making like 70, 60, 70, 000. Wow, how's that work out? Well, it doesn't work out and I know you heard not just me, other people out there in the world saying this, preaching and saying what you should be cautious about.

Speaker 1: 17:32

So it's important that you plan and be intentional with your spending, with your saving and investing. And another thing you can't invest in your 401k or IRA or whatever Roth IRA or investments. If you straddle with debt. You can't do it. So you're literally robbing your future. So I encourage you highly encourage you to come up with a financial plan to save, invest and spend and be wise about your decision and communicate that with your significant other. So you're on the same page, but in a good way. Now I don't want both of you to be on the same page, but in a good way now. I don't want both you be on the same page and fly off the cliff either. Remember the movie thelma and louise? They jumped right into the grand canyon. Spoiler alert movie's been out so long. You should know about it. If you don't. Well, I just gave the ending.

Speaker 1: 18:40

So it's important that, um, you really consider every time you take that plastic out and I mean that credit card plastic before you throw some on there, unless you intend to pay it off within 30 days where you don't accrue any interest. Some people do that and they can master that. It took me years to master that when, literally, pay it off and before our discharged interest, and that's something people can do. That I I had to learn the hard way and however you learn, do learn off of other people's experience. By the way, it doesn't have to be your experience, because some people were almost near total destruction before they got it. Like me, I had another chance, another chance, another chance.

Speaker 1: 19:28

Like a cat with nine lives. You don't know when that ninth life is coming and you run out of lives. You don't want to go there. I tested that theory. It's not pretty. So live the life you always wanted, as Michael Caine says in his book.

Speaker 1: 20:02

Live the life you always wanted, as Michael Caine says in his book, this podcast. Back to video. You know, like YouTube, something like that. I have probably nine videos on YouTube from 2023. And I said, oh man, I said I more want to be like a radio person, you know, just podcast. At this point will you hear my voice? But I at some point probably go back to podcasts on a video. Probably will do that, but not now.

Speaker 1: 20:37

And but life is interesting, okay, and it's meant to have fun, and everything I'm saying today isn't to rob your fun but to put you on that path of financial freedom. I'm telling you the things you shouldn't do, but I have a lot of podcasts for a hundred that do talk about investing and talk about saving and emergency funds and what you should do. I'll make a lot more of what you should do and some of the things maybe we shouldn't or should be thinking about. You know, not doing possibly, ok, any negative habits Of course we shouldn't do those. Any negative habits? Of course we shouldn't do those.

Speaker 1: 21:24

And so positive habits to start, with your spirit and your mind and your body saying, oh, it's a good day today and maybe things didn't work out that day, but don't drown your self-pity into spending money or, to you know, buying things you shouldn't. Ok, so perhaps you need to see a counselor, and I encourage that. And I don't give investment advice I'm giving you, sharing my experiences and observations of other people's experiences, and you know so. Just plan your life and be intentional, is my point, and don't get straddled with unnecessary debt. So that's it. I wish you well this year, this new year. Take advantage, it's a new year, new beginnings, new starts, restarting, resetting, and so that's it. Be safe, be careful, be happy. So this is Michael Caine, with Living, your Success 24-7. Until next time, my friends, adios.