The Fastest Way To Pay Down Debt And Build Wealth

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[The following is a partial transcript of this episode of The Scott Alan Turner Show. Listen to the full episode to hear this story, listener questions, money hacks, and inspiring stories of people that are changing their financial lives. Subscribe to the free podcast on iTunes or Google Play]

Today I want to talk to you about the power of small wins. I believe we miss this in our lives, especially when it comes to money. We miss it because we don’t feel like small amounts matter – the $4 coffee. We miss it because the raise once it’s divided up is only an extra $35 in a paycheck after all the taxes. We miss it because even taking $40 and doubling it to $80 doesn’t buy that much.

Remember a time where you got a pat on the back, a ‘great job’, a ‘you’re crushing it’. I was in a grocery store the other day and in some places they have the employee pictures hanging up with ‘Associate Of The Month’. Somebody who gets enough pats on the back, gets their picture on a wall.

Get even more and maybe they win some type of award, or get promoted, or at the very high end get the free vacation for their awesome service.

But it all traces back to the small things that led to small wins.

Many people struggle to pay down debts, something that people were probably excited about a few weeks ago. To finally make that life change. Or to start investing. Retire a millionaire. To finally make that life change.

Half of households can’t pay off their credit cards, with the average balance $15,000 spread over four credit cards. People have to decide which card to pay, how much, what’s the minimum on each.

A research study by Harvard Business Review showed the quickest way to pay down debt is to use what’s called the debt snowball method

It’s simple, that’s one of the reasons it works:

• To start a person would list out all their debts from smallest to largest.
• Pay the minimums on all of the debts.
• Throw extra money at the smallest debt until its repaid.
• Then move on to the next smallest debt.

Focusing on paying down the account with the smallest balance tends to have the most powerful effect on people’s sense of progress — and therefore their motivation to continue paying down their debts – Remi Trudel

Small wins, build momentum, which keeps you motivated.

It’s like if a person wanted to lose 100 pounds, checking the scale every week and seeing it go down 1–2 pounds is motivation. Being able to fit into old clothes is motivation. Looking thinner in the mirror is motivation. Feeling more alive and with more energy is motivation.

If it took eating salad for three years before losing one pound, and then two days after that the other ninety nine pounds just fell off, nobody would do it. Besides that with all the salad poisoning in the news the person would drop dead first anyway.

I think not enjoying the journey and the small wins is one of the great enemies of our lives. It’s so easy to know where you want to go, but most people won’t keep walking to get their. Which is crazy, right? They say, “I don’t believe I’ll ever get there.” and they stop.

Or, they want to try something new, because it’s new. Or something unproven or that they made up on their own from sixteen different places.

I’m not saying there are some things – some spices – that can’t be thrown into the recipe to kick up the heat. But we’re cooking a pot of money stew in the crock pot.

People think if they throw a bunch of stuff into a bowl and put it in the microwave for 60 seconds, that’s going to be a five star dinner. Well, it’s going to taste terrible, get thrown out, and then it’s gotta be started all over.

How many people do you think in 2017 – this is the year! And in 2018 said – this is the year! And in 2019 said – this is the year!

Follow the recipe! Have some faith that it works. Harvard said so, they are pretty smart people. To get there, wherever you’re going, in your mind you have to say:

I trust the plan. I trust I’ll lose the weight, lose the debt, gain the wealth, gain security. I trust I’ll need some help and continued motivation, to remind me of the small wins even when I can’t see them.

You’ve gotten that pat on the back before. I know you have. And it felt great right? It was a small win and you were on top of the world all day long. What are we, six minutes in to this show? You’re still with me? That’s a win, thanks for committing your time today to be better.

There is one the thing nobody can get around when it comes to paying down debt quickly. It takes discipline. It doesn’t matter how a person got into their situation – student loans, buying too much stuff, medical bills, the debt is there. It’s not going away, it has to be dealt with.

Not opening the bills and not answering the phone can make the problem much worse.

I know that’s hard to hear, and its hard to do. But I had to go through the same thing of paying down my student loans for 2 1/2 years on my entry level salary.

Believe in yourself. Believe in the small wins, they will get you there.

I know it might seem like it’s going to take forever, but it’ll be worth it. Go ahead and take a leap of faith. Start walking. Keep walking. Look at the bushes and the bees and stop and pet a cat on the side of the road as you’re going. There are long slogs everywhere in life. How do I even know that word? Slog?

Maybe it’s from Lord of the Rings when they walked through the swamps.

What’s true about tomorrow is if you don’t start today, that thing you’ve been putting off is going to take one more day to happen. For some people many tomorrows add up to many years. Will 2025 be your year? Or 2019. You pick.

To become debt free, to build a huge nest egg, to become a millionaire, you just need to work on the small wins and building the habits and behaviors first. Small wins provide motivation, which builds momentum, which grows your money.

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