Welcome to the Money Mindset Podcast. Well, you'll find a judgment free zone to help you free yourself from overthinking and the fear of doing things the wrong way. It's time to shed yourself with the mom, guilt, procrastination, and perfectionism so you can start doing the things that you really want to do with your money instead of just working to pay bills. I'm Ashley Patrick, ex detective Turn debt free CEO of my very own business and stay-at-home mom of three. Not too long ago, my dreams of staying at home with my kids seemed impossible. I thought I'd have to stay miserable in a high stress and demanding job just so I could retire someday. After gaining the confidence in my own ability to manage my family's finances and a simple step-by-step plan to make it happen, I was able to pay off $45,000 in just 17 months, which then allowed me to finally quit my job, stay at home with my kids and build a debt-free business. Now my mission is to help moms like you conquer debt and free themselves from the mental load of handling their family's finances. If you're ready to shed the guilt and shame surrounding your past money mistakes and tackle your debt, this is the place for you. Let's get started. Hello, hello. Welcome back to the Money Mindset Podcast. I'm Ashley with Budgets Made Easy and today's episode is a budget bestie meetup. Now you can come join us. It is open to the public, it doesn't cost you a thing, you just have to sign up and show up so that you can learn and share some wins so that you can help inspire other people. So you can come join us, save your seat@budgetsmadeeasy.com slash meetup where you can see the calendar and pick which day works for you. I just ask that if you can't make it, please cancel your spot because space is limited and it's totally fine, like it happens all the time. I totally understand. I get it. People get sick, we have kids, so if you end up having to change your mind or not able to make it, just go into the calendar and cancel it. It's super easy. But I hope to see you there cause I really enjoy these meetups where I get to meet new people in the community and learn more about you. So I hope you can come join us. We have times all the way up through April and don't forget, we are so close to hitting a thousand, a hundred thousand downloads at the Money Mindset Podcast and when we're gonna do a big giveaway. So let's see if we can hit that this week, maybe next week. So be sure to binge listen to a few episodes while you're here and maybe share your favorite with your friends. So I will, I'm so excited about this giveaway and I will will share more details on Instagram once we hit Hit It and get a little bit closer. So here is the Budget Bestie meetup. Welcome back to another budget bestie meetup for the Money Mindset podcast. I'm Ashley, and today we are going to do a short training on should you use a debt relief company. Now this came up during Money Success Club, one of our meetings. It was a question that was asked and so I wanna dive into that a little bit more because I see it come up a lot as well in the Facebook group. So you know, you might be thinking that a debt relief company is a solution for you, it will make things easier for you. You can put all your payments and just pay them and let them deal with everything. But there's a lot of reasons why you should not do that and I'm gonna talk about those as well. Now there are some times where it might make sense, but I'm gonna throw that out there that if it makes sense to use a debt relief company, it's probably gonna make more sense to file bankruptcy. So let's dive into why you really shouldn't use a debt relief company. The biggest reason for me that I have seen throughout my years in business and just life experience is that people that consolidate their debt move their debt around. Like even with putting it into their mortgage using a 401K loan, like even just doing debt consolidation where you know you might get a loan, put all your credit cards on that, what happens over and over and over is that once you get like kind of that relief and have moved that debt, you feel like you've accomplished something but really you've just moved the debt around. And what I see over and over even with bankruptcy and the debt relief company is you end up going back into debt cuz you haven't actually changed your behavior, your habits, your routines, how you think about money. Really all you've done is move money around. So unless you are already working on kind of changing your habits, changing the way that you handle your finances, then doing those things is really more of a temporary fix and what happens in the long run, it becomes a bigger and a bigger problem. And I've seen it over and over and over. And the same thing is true for the debt relief companies. So you may feel like you've accomplished something by hiring one to help you pay off your debt and settle your debts, but if you haven't truly like changed the things that you're doing that got you into that much debt in the first place, you're really not helping yourself in the long term, right? Because you haven't changed those things, those underlying issues that caused you to get in the situation in the first place. So that's the biggest reason that I don't recommend using a debt relief company. Some other issues are, there's lots of scams with these companies. Even just Googling it like the first several results we're just add, add, add, add and you don't really have a way to know if that company is legit or not. There's a lot like this is a predatory industry that is seeking to take advantage of people when they need help the most and it's just very possible that you could fall for a scam or they're, they don't follow through and do what they say they're going to do and things like that. And so that just adds a whole other layer of stress, right? You know, if you care about your credit score, what a lot of people don't realize is when you hire one of these debt relief companies, they ruin your credit cuz what they do is take your payment. So you're just paying them and then they just hold it like in an escrow account until you get so far behind that they can call and try and settle it for you and it ruins your credit score in the process. So if you need a credit score and you have a relative, like a decent credit score right now and you may not, if you're looking for a debt relief company, your credit score may already be shot for now, but it just delays the process even further by paying them cuz you feel like you're paying your debt but you're, you're not actually paying your debt cuz they're not paying your debt for you. What they want you to do is get behind on like your credit cards and everything so much that they can call and negotiate for you. Well guess what? You can do that yourself. Like if you don't care about your credit score, it's already like shot right now. You can call the the credit card companies or the other loan companies and try and negotiate with them yourself. You don't have to pay the fees and go through all of that with another company. They're more willing to work with you, especially if you call them when things start getting hard and if you've already missed some payments and you're already behind and things like that, just go ahead and call them and see if you can work out some kind of arrangement with them and you can even ask them for a settlement offer as well and make payments on a settlement. So you can do that yourself before you know, maybe even before it goes to collections or anything like that. So you can also, you know, pay it yourself. So even if you know you do, you are able to like get a settlement offer from them, like you don't need to pay another company to do that extra step for you. You and you can contact, you can contact them yourself to set up a payment plan and that's better to do that before you know you take on a debt relief company and then just kind of ignore it and let them handle it because they're not, they're not handling it for you at least for quite a while. My understanding and what I've heard from other people that have done this is it can still take a long time, like a year, two years that you're paying them but they're not paying your bills. So you're just getting further and further and further behind and if you're ready to like really get this out of your life then it's important for you to take the steps to do that instead of paying a debt relief company. And I'm sure their fees are astronomical as well and they're, you know, taking your money every month anyway. And if you're in a situation where you can't make a payment plan, like you can't agree to a payment plan because you just don't have the money, if your income and your debt, like if you don't have any money left over your debt to income ratio is really high, then you may wanna talk to a bankruptcy attorney in your area local cuz obviously I'm not an attorney and see what your options are and maybe bankruptcy would be the better option because either way doing the debt relief or doing the bankruptcy is going to ruin your credit for years anyway. And so it, it might make more sense to do that. So it just kind of depends on your situation and of course if you've already filed bankruptcy and things like that. So just look at your other options before contacting a debt relief company. And again, I'll reiterate everything that they do for you you can do for yourself. So if you are going to hire one, if you're looking into it, I want you to make sure you do as much due diligence as you can to make sure this isn't one of the scam companies, right? Like do the best you can in researching to make sure it's a legitimate company. Check reviews, check the Better Business bureau, check your state, your secretary of state's office, see if they have anything on this company, see if there's any complaints and things like that. And you wanna make sure that you have a clear contract with them. I want you to know exactly what happens when you give them your money every month, what their fees are and what they are doing with that money. So is it going to just sit there in an account for a year or two while you're paying them every month but they're not doing anything with your bills until you can, till it can get delinquent enough that they can call and negotiate for you. So that is typically what happens with these companies. So I want you to make sure that you clearly understand what the process is and what they are going to do for you and how much it's going to actually cost you. Like what are their fees And then you also need to know what the tax implications are because if you settle, if they get a settlement for you, so let's say you know you owe $10,000 on your credit card and then you're so far behind that they're willing to negotiate with you and settle for 5,000, well that's $5,000 that you have to end up claiming as income on your taxes. And so how is that going to affect you at tax time the next year? So I just want you to go in knowing clearly what the process is gonna be and how it's going to affect you. And if it still seems like the best option to you, great but I want you to go in there and have a clear understanding of what is to come so you're not surprised. I definitely do not like you to be surprised at tax time. Like that's the worst, especially if you are expecting a refund and then you end up owing like ugh, that's just a mental disaster, right? And a financial disaster for you. And I don't want you to agree to any kind of payment plan with them. Any kind of situation that you can't actually pay. Like if you know that you can't afford $500 a month to pay them, don't agree to pay them 500 a month, okay? So make sure that whatever you agree to, whether you end up doing it yourself or you pay this other company, make sure the amount that you agree to pay every month you can actually pay. And so that is where like knowing your money plan and having a plan by paycheck so that you can know and you clearly understand that yes you can make that payment before you agree to anything and hopefully, hopefully once you do that you can see that you may actually have some money that you can do this yourself. It might be more work for you but it you'll be better off in the long run. But a lot of times people don't have their actual budget playing together and so they actually don't even know what they can afford and what they can afford. You know, especially, I mean obviously there are times when it's an income problem versus debt, like too much debt, not enough income, right? But a lot of times, I mean and I was this way too, like I just didn't realize how much we were just spending on random unnecessary things and that's part of putting that money plane together. Once you put it down on paper you can actually see what you can afford and what you can't and you may surprise yourself, you may end up having money left over that you can actually pay the minimum payments on these things and have some extra to send to start working on paying things off. So definitely before you commit to any kind of debt relief program, know your numbers so that you can make the best decision for you and you need to know your options and when you know your numbers and know what you can actually afford, things will get clear and you'll be able to make a more informed decision. And that's what I really want for you. I don't want you to just go into things blindly and do things with the short term in mind what feels like, oh this is my only option. Because when you do know your numbers and you have a plan, you have more options. So don't close off your options. I never want you to do that. I wanna keep all the doors, windows open, everything, all the options that you can have open. And so that is, you know, I really want you to keep a credit score as best as you can. Now if it's already ruined, I mean it can, it can go back up but if you already have like a decent score but you're just stressed cuz you're just juggling each payday, right? I want you to look at your numbers and see if that, if it really does make sense to do a debt relief program, cuz it, it might not, it might not be the best option for you. Alright, I am going to open it up for questions. Feel free to unmute yourself if you have any comments. Hi Cindy, go ahead. I know you have some opinions on this as well, so feel free to jump in. Hello? Yeah, I was just gonna say, and I kinda said this in the meeting the other night, I did do a debt relief thing. Now it's been 35 years, it was in its inf really? And before all these scammers were out there. Yeah but was, I don't remember if they wanted to pay my like electric and gas or not, but they wanted not just my credit cards that I owed and my car loan, but they wanted to pay everything and I, I think there was a fee like a 1%, 2% of the total, something like that. It wasn't a huge amount, but at the time I was living with a friend of mine and I paid her directly my rent and my part of the utilities and the phone. Okay. But you know, I pay this to my, my roommate, my friend. And so I'd like to continue doing that cause actually I didn't want her to know I was going through This, right? Yeah. And they, they did let me do that. But then whenever the amount was to pay, everything else went directly to them. Now as far as I know at the time, you know, credit score didn't mean anything to me. I was outta college and just had racked up some too many bills. You know, you know, you had the mentality that, hey, I'm out of school, I've got a a full-time job, I can do this and kick the can down the road, you know? And so I can't say if it hurt my credit to the best of my knowledge, they went ahead and paid, Oh, I think you're frozen, Cindy. Oh I think we lost her. But that is a good point that Cindy made because even 35 years ago your credit score didn't matter as much, but nowadays they use it for everything. Like, you know, some insurance companies use it, your car insurance, your house insurance, things like that. I mean not everybody does, but you know, some companies do factor that into your rates and you know, apartments, things like that. Yes, go ahead Laura. I was just going to say that when you said about apartments, my daughter is in first year university and she's with three other girls going to try to get a house for next year and that is one of the things that they wanted from the parents was the credit score. I mean they wanted, you know, referrals and you know, application, whatever, but they wanted the credit score. Yes, absolutely. And you know, that wasn't a thing, you know, not even, But that's the thing. We have our mortgage, you think you're good with that? It's, you know, maybe you're co-signing for your child somewhere. Like it's things you don't even realize down the road that that's coming. Yes, and it's, I mean it's frustrating that your credit score is so ding important nowadays because I mean it really shouldn't. And I know there are some like alternative ways to show like credit rating as opposed to like the credit score. But then like that's just so many more hoops to jump through, right? Like we wanna make things a little bit easier. So if you can keep a decent score or a good score, do it. Like why not, you know, because it does, like you said, even with like college kids, you know, a lot of kids only wanna, or a lot of 'em they have to stay on campus their freshman year depending on the school, but then they don't, they don't wanna live on campus, they wanna rent an apartment, they wanna share the apartment and you know, and financially it might make sense if there's enough people living in there and things like that. So yeah, it plays into that. I didn't even think about the college student aspect of it as well. So it really does touch so many areas of our lives now that it didn't used to. And so I just really hate the idea of ruining your credit. You know how it works now for, so for such a long period of time, if you can take other measures to get over, get through it faster, right? Because if you use the debt relief company, it could be a year or two years before you even reach a settlement or before they're even ready to talk to you. Now it could be faster, right? But you know, if you end up having to wait a year or two of paying them that whole time and it's just like, it's frustrating because it takes too long and then once they, if they are able to get you a settlement, then that's still on your credit for you know, how long. So it's just like, I would rather just get things over with a lot faster. That just feels like too much wasted time to me. But I do understand where it might make sense for certain people, but for the majority of you listening, it doesn't make sense. And especially if you haven't run your numbers and you're just going into this blind because you feel like you're drowning in debt. But if you haven't actually looked at what your expenses are versus like you're just miscellaneous spending and you're all the other spending that you do, it might just be a matter of like taking the steps like we, what we do inside Money Success Club to really get yourself on track and moving in the right direction and you'll get it done way faster and not ruin your credit in the process. It'll probably go up, it'll go up and down through the process, but that's normal. So I just really hate the idea of people wasting that much time, especially with their credit scores and like it's just a hassle, right? It's just a whole extra thing that you have to deal with. But it is tempting, they make it tempting, they make it sound like a good option and easier for you because they'll handle all your payments and things like that, but they're not actually doing anything until they can reach a settlement. So you're just paying them and they're not really paying your other bills typically. Now of course there's different companies so maybe some do, but that's kind of the point is to get you far enough behind that the c the companies will settle your debt and that's really kind of what the, their purpose is. So you know, if a company doesn't do that then I'm not really sure why you would need to use them. There are other companies that I know of that, like one of my one-on-one clients uses where to, just to make it easier for her because she has a lot of different bills, is they, she pays a small fee. It's really not even much, I think it's like a couple bucks a month, but she uses this company and she automatically pays them. They take it out of her bank account and then they pay all her regular bills. Like it's not a debt relief company. Like it's just a service to pay your bills for you so that you don't have to like worry about it being late basically. And that's the primary re she uses it so that she's not late, but also because it's a little bit easier for her to just pay the one company instead of all the other companies, right? So if that's what you're looking for, there's better ways to go about making, paying your bills easier than using a debt relief company. All right, Nicole or Sarah, do you have any comments or questions that you wanna chime in? Feel free to unmute yourself and then we will go to sharing some wins for February. So this is February, 2023 as we are recording this and we just finished opening Money Success Club. We have a lot of new members. So all right, so does anybody want to unmute yourself? I don't have to say your name, you don't have to say your name. If you wanna unmute and share a win with us, it really helps inspire other people. So feel free to unmute yourself and share a win. I will share a win while I wait for somebody to unmute themselves. I am really excited that I have been following through with not drinking so much Dr. Pepper. You guys know that I'm like addicted to the Dr. Pepper and I even had like two different people today tell me it looks like I've lost weight. I don't know, I haven't weighed myself, but I d like I was, it was a bit much, I was drinking like six to seven a day or more like it was, it is ridiculous. So I'm down to like one or two and I'm drinking more water because that's what I've, I've just drink water in the Dr. Pepper. So yeah, I I hopefully that'll be an added benefit of me cutting back. I don't know if I can give it up completely. I have in the past so I know I can do it. I just don't know if I want to do it. So Pepsi was my addiction today. Oh today day one 60 with no pop. Oh and I love that you call it pop because I'm live in the south but I'm from Kansas and we call it pop and so everybody here calls it soda. I'm like yes, another pop person. Cindy, what do you call it up there? Do you call it Pop Pop? Can you hear me at All? Yes, I can hear you now. You sound good now. Yeah, we call it pop up here. I even have a a t-shirt with a Michigan outlined. Yeah and it says something like it's called pop or something like that. So I wear when I'm outta state, I could make myself one. Maybe I'll do that. Yeah, I'll take a picture and send. Yes, that'd be awesome. The credit score you were talking about and how it's used and stuff. I don't think it's every state, but I know it's unfortunately legal here in Michigan, your insurance can be affected by your credit score. They look at that when giving you a quote for your car insurance. Yep. It's pretty crazy. All the things like the insurance companies have some crazy algorithm Have to do with inuring my car. I know, right? I don't, I don't get it. But mean insurance companies, they know like everything about you and like all of it goes in place. It's okay. Do you have any wins to share while you're on? No. Well I probably did but now this week has turned into a humongous challenge because we don't have power and may not have until Sunday night so that that getting hotel room for at least a couple of nights just because between it getting chilly and, Okay Cindy, I'm Gonna go this week is more of a challenge. I know that that sucks. I I don't wanna tell you what the temperature was here today, so I'm gonna go ahead and mute you because you're cut now. Okay, go ahead. Just so you know, I'm from Canada so we also call it pop, just fyi. I never thought about that to even ask. That's Awesome. Every time we hear anybody say soda, we know for sure. Oh they're American, But only part of America. Okay. That's which I Just learned now from this, this, this conversation. I thought, oh that's very interesting. I didn't know it was a little bit of a, a thing down there. Yeah. So that's, that's quite cool. But I'd say my win is that I'm actually on this call. Yay. I scheduled it, I committed to it, I made sure I, you know, marked it down and honestly that's a big win for me. Just, you know, I, I wanna get control of things so it's, I'm gonna get on this call, I'm gonna do this. So my, my big win would be committing to this, sticking to this and hearing. Oh that's awesome. It's been really, Really informative and a lot of great news so thank you very much for, for the info. That is awesome. Well I'm very proud of you cuz that is a big step and so I hope you will be there for the jumpstart week next week too. At least some if you can join live some. So yeah, at least signing up For all, I always find all of your things so helpful, so yeah, for Sure. Oh thank you. I would love to hear that. Well thank you for sharing. Did you have any questions or anything or any other comments? Not really. The only thing about the, the debt recovery companies, I've never even thought about using one. I I can see the, the draw for trying to use one, but as you were talking it kind of made me think about anytime you, you pay for any kind of a convenience true, you know, it's, it sounds like you know, very big stretch here but you know when you buy the Lunchables, the precut up pre it's so much more expensive than if you went and bought the cheese and the crackers or the things yourself. So that's kinda like, I'm like pay it directly because they're gonna take their cut but I didn't realize when you, until you said that they actually hold your money until you're in a worse predicament that like, that is so counterproductive to me when, when I heard you say that I didn't realize that that was what they do or, or at least some of them. And that is so counterproductive cuz as you said, if you do it directly yourself though by buy the Lunchable buy go to the, the company straight yourself, you're starting right then you're not waiting another year until you're further into the problem than having them start to dig you out of it than if you started Now that totally blew me away when you, when you said that that, and I don't think a lot of people know that. Yeah, they, I don't think a lot of people know some of these finer details about it. So that's why I thought because it, you know, it came up during our meeting the other day. I was like, I should do a podcast on that because a lot of people don't know the, the smaller the fine details or hadn't really thought about. They probably think they're, they're like you said, you think you're paying it off, you said it into them and you think it's, it's getting to where it's going right away and it's not. So you're really not even aware of what you're, unless you're also still in touch with the company directly, which you probably are not. Right. The the debtor then you have no idea and you're even in more of a problem than you were like, that just blew me away when you said that. Yeah. And I'm curious if it works the same way in Canada, which I don't know, I dunno. Yeah, I'm curious now that you said that, so I Dunno, but I, I have to check into see it being any different. Yeah, if they're gonna scan, I do see a lot of ads up here for that kind of thing, so, okay. So yeah, it is a big thing there too. Then it's like, oh my gosh, I googled just to like get some other tips and information before tonight and I'm like, oh my gosh, add, add, add, add. And it's like, yeah. Oh my goodness. So yeah. Well thank you for showing up tonight and being willing to share. I love it. I really appreciate it. Thank you. You're welcome. And then I have a comment here, I'd like to sign up for another one of these budget besting meetups. So great, thank you for reminding me to mention how you can sign up so anybody can join us for these and I will be adding in April State here soon. But you can go to budgets made easy.com/meetup to get the calendar with the dates and sign up for one that you can actually attend. Just please make sure that if you do need to cancel that you go in and cancel because there will be other people wanting to get in and the spots are limited. So just please be mindful of other people's opportunities as well to get in because there's only 10 spots open at a time just so I, I don't get overwhelmed either. So I like these smaller meetups. They're a lot of fun. All right, well if nobody has anything else that they wanna add, I think we lost Cindy. She must have lost service. All right, well you guys have a great night. I appreciate you so much for showing up and being here tonight. And those of you in Money's Success Club, I will see you next week. Have a good weekend. Bye. Don't forget if you'd like like to meet me live for one of these meetups, go save your seat@budgetsmadeeasy.com slash meetup space is limited. So come and join us and I hope you have a great week.