159 | Quick Fix Debt Solutions

Have you ever considered a consolidation loan? Or used a bonus or refund to pay off your debt?

So many lawyers look to these solutions as the answer to their debt problem. But often the results don’t last, and the lawyers end up right back where they started—with the same debt or more.

In this episode, let’s talk about why these quick fixes don’t work and what you need to do to ensure that once you get out of debt, you stay out.

• using a quick fix like a bonus, refund, or loan to pay off credit cards and ending up back in debt again
• why quick fix solutions don’t work on their own
• the importance of changing your money habits
• how to change your habits with money
• a client example of how to successfully use a consolidation loan in your debt payoff strategy

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If you’re ready to learn the mindset and strategies to master your money, let’s schedule a call.

You’re listening to Wealthyesque. We are a community of lawyers who believe that true wealth is having control of our time. I’m Rho Thomas, and as a busy wife, mom, and former Biglaw associate, I know all too well the tension between the culture of the legal profession and pretty much everything else you want to do in life. That’s why each week, I’m bringing you the information and tools you need to improve your money mindset and manage your money to create true wealth. Because ultimately, it’s not about the money. It’s about the freedom and flexibility the money affords.

Hey friend. Welcome back to the show. I hope you’re doing well and having an amazing day so far. Today we are talking about quick fix debt solutions. I have talked with a lot of lawyers recently who are struggling with credit card debt and they try using some kind of quick fix thing to get out of it. But things didn’t work out the way that they wanted them to. For example, they plan to use their bonus but the bonus wasn’t as big as they expected, or they wanted to use their tax refund but the refund wasn’t as much as they thought or in some cases the bonus or the refund was enough to pay it off. Or maybe they got a consolidation loan or personal loan pay it off. But then they ended up being right back in debt again like the brand credit card right back up again. The thing is, those quick fixes don’t work. It’s not going to be like you know I won the lottery and I’m out of debt now kind of thing. It’s not the bonus or the refund or the loan that saves you. That’s not enough. The reason these attorneys ended up right back in the same place is you have to change the behaviors that got you into the debt in the first place. You have to change the habits you have around how you manage your money, and they didn’t do that part. So they paid the debt down or they paid it off. But then they went right back to doing what they were doing before, which is why they ended up buying it back up again. So how do you change the habits you have around your money? It goes to something we talked about in the past which is making it a lifestyle change. We’re not looking for the quick fix, I magically have the results that I want with my money. You need to change the way that you manage your money change the way that you handle it right. It’s looking at the way that you manage your money now, looking at the way you’re spending now taking time to plan your spending at the beginning of the month, taking time to review your spending throughout the month against that plan. Looking at your bank statement, your credit card statements, thinking about the trade offs when your spending is this thing that I’m about to buy more important to me than reaching this goal that I have is changing the way that you make financial decisions. Asking yourself if this decision will move you closer to your goals or further away. Asking yourself if someone who’s good with money would make this decision that you’re considering making. Making decisions in line with the financial goals that you have. Making decisions in that way changes your habits, which changes the person you are so you stop being a person who runs up a bunch of credit card debt and who looks for quick fixes to get out of it and ends up in a cycle of paying down the debt and running it up again and paying it down and running it up again. And you become the person who makes good financial decisions that don’t lead to you running out credit card debt that you can’t pay off in the first place. If you never addressed the behavior piece, if you never address the way that you think about your spending, where you use your credit cards, all of that, then you’ll get that quick fix thing, right you get the loan, you get the bonus you win the lottery, whatever it is for you. And ultimately you find yourself right back in the same place. Again, you have to change the person that you are to be able to maintain those results. You have to change the way that you think about and manage your money to be able to maintain those results. You have to take those consistent steps to where who you want to be and how you want to manage your money. It’s not just going to be this one time Quick Fix thing. You’re going to change the way that you manage your money going forward for the rest of your life. And when you do that, you don’t have to worry about finding yourself back in the same situation again, I’ll give you a perfect example. So I have a client who is paying off some credit cards and the first part of our work together was this behavior change piece. So getting her in the habit of planning her spending revealing our spending, thinking about those trade offs when she’s spending spending less than she makes thinking about her finances differently all that stuff. She’s got that dialed in like she’s good on that. So once she got to that point, then we did a consolidation loan, which gave her a lower interest rate and that’ll allow her to make faster progress on paying that debt off. But we’re not worried about whether she’s just going to end up in the debt again, she’s not going back to what she was doing before with her finances. She thinks about her money differently. She approaches it differently. So the loan is a tool we’re using in this strategy of paying off her credit cards. It’s not the whole strategy, right? It’s not thinking that the consolidation loan is going to be the thing that fixes it all for her which is how a lot of people approach these loans. She has changed the way that she thinks about her finances and now she approaches them differently. She’s making different spending decisions. She’s being more intentional with her money being more thoughtful as she goes about spending her money. And she can direct money toward paying off the loan without worrying that she’s going to simultaneously run the credit cards backup that she paid off with it. So are you willing to do this work? Are you willing to change your habits and the way you approach your money rather than looking for the quick fix Band Aid solution to get out of debt? When you change the underlying behaviors that got you into the debt in the first place? You’ll be able to actually sustain the results that the quick fix solution gets you right, but you can’t skip that part. If you try to do that. If you try to skip that part, then you stay in this cycle of paying off the same debt over and over again paying it off running it back up paying it off running it back up. And in many instances you end up in even more debt because if you use something like a consolidation loan or personal loan to pay off the credit card, and then you don’t change the behaviors and you run the credit card back up. Now you’ve just got more debt right. So I want to help you get out of that. If you are done with the quick fix solutions to your debt and you’re ready to become the person who doesn’t have credit card debt anymore. I am here for you. So go to thomas.com/call to schedule a call to talk about how we can work together All right, that is it for this week’s episode me over on social media you can find me on LinkedIn rho Thomas and Instagram at I am rho Thomas, subscribe to the show and leave a review but that would help more people to find it and please think of a friend or to get us this information and share the episode with them as we close out friend I pray that you take the information you learned here, apply it in your life and open up to the realization that wealth is available to you. As you do that consistently. Week after week. You’ll continue to take steps to regain control of your time, build wealth and live a life of freedom of choice you deserve. Talk to you later.