Title: Rebel Finance School 2026 — Week 4 Thursday Transcript
Session: Debt Attack Strategy Workshop: Build Your Personalised Get-Out-of-Debt Plan | RFS 2026 Week 4
YouTube Link: https://www.youtube.com/watch/USr-Bn0TdeI
Course: Rebel Finance School 2026
Creators: Alan Donegan and Katie Donegan, Rebel Donegans
Canonical page: https://rebeldonegans.com/finance/rfs/course-notes/week-4/
Course hub: https://rebeldonegans.com/finance/rfs/course-notes/
Website: https://rebeldonegans.com/
Copyright notice:
Copyright © Rebel Donegans. All rights reserved.
This transcript is provided for personal educational use as part of Rebel Finance School. You may read it, search it, download it for your own learning, and use it to help you understand the course. Please do not copy, republish, sell, scrape, or redistribute this transcript as your own content.
Attribution:
If quoting or referencing this transcript, please credit Rebel Finance School by Alan and Katie Donegan and link to:
https://rebeldonegans.com/finance/rfs/course-notes/
Disclaimer:
This is financial education, not financial advice. Rebel Donegans are not regulated financial advisers. You are responsible for your own financial decisions.


# Debt Attack Strategy Workshop: Build Your Personalised Get-Out-of-Debt Plan | RFS 2026 Week 4
# https://www.youtube.com/watch/USr-Bn0TdeI

00:00:00.000 to one and we're live. Hello and welcome
00:00:03.760 to Rebel Finance School. We are deep in
00:00:07.320 week four, which means we're heading
00:00:09.160 very fast to the halfway point point of
00:00:11.440 the course.
00:00:12.120 >> And towards the sexy stuff, Alan.
00:00:13.600 >> And towards the sexy stuff. One more
00:00:15.880 week to go and then we dive straight
00:00:18.280 into the sexy stuff and the investing
00:00:20.600 and all of that stuff, which we are very
00:00:22.440 much looking forward to.
00:00:24.560 Uh welcome to the course. Welcome to
00:00:26.640 tonight. Tonight is a very big night
00:00:29.360 with a lot going on and we are going to
00:00:32.720 go straight into
00:00:35.480 the debt attack strategy. That is the
00:00:39.080 plan. And actually, this builds very
00:00:41.640 nicely on Monday's content because
00:00:44.800 Monday we talked about the force
00:00:46.680 compounding and the power of the force
00:00:49.800 and the fact that compounding never
00:00:51.280 sleeps even when you're asleep. It's
00:00:53.640 working for you, which we're very
00:00:55.000 grateful for if you have assets.
00:00:57.880 And
00:00:58.840 it works whether you understand it or
00:01:01.320 not. It's a bit like gravity.
00:01:03.080 >> like gravity, a bit like electricity, a
00:01:05.040 bit like a lot of things in my life
00:01:06.360 where I don't know how it works, but it
00:01:07.680 kind of just does.
00:01:08.520 >> And I'm grateful it does. And it's a
00:01:10.240 force that works in two directions. If
00:01:13.360 you have assets, it can put wind at your
00:01:15.320 back and if you have debt, it's wind in
00:01:18.000 your face and it's slowing you down. And
00:01:20.000 that's actually what we want to talk
00:01:21.360 about tonight is the dark side of
00:01:24.960 compounding, which is how it works with
00:01:28.120 debt. And debt is not compounding
00:01:30.400 broken,
00:01:31.840 debt is compounding working perfectly
00:01:34.720 just not for you.
00:01:36.280 It's working for someone else and that's
00:01:38.280 what I think we really wanted to
00:01:40.680 share with everyone is we want
00:01:43.320 compounding to be working for you, not
00:01:45.480 for the banks, not for the credit card
00:01:47.200 companies, not for the loan companies,
00:01:49.560 not for anyone else. But it's been
00:01:51.360 designed and set up in a way that works
00:01:54.440 against you. These companies make debt
00:01:57.480 sticky. What do we mean by that? Well,
00:01:59.800 it's really easy to get into debt and
00:02:02.400 we're going to talk about the ways that
00:02:03.720 you get into debt. It can feel really
00:02:05.440 easy to get into debt. Hard to kind of
00:02:07.280 figure out and understand what it
00:02:09.038 actually means and interest rates and
00:02:10.600 payments and APR and what do all these
00:02:12.200 terms mean? But then it gets very
00:02:14.120 expensive to ignore. The natural thing
00:02:16.600 to do is to ignore it it because it
00:02:18.480 starts to mount against you and feels
00:02:19.959 this overwhelming thing and then it's
00:02:22.120 profitable for the companies when you do
00:02:24.959 start to drift when you do start to
00:02:26.400 ignore it, which is the natural response
00:02:28.120 to this overwhelming thing that seems to
00:02:29.760 just be getting worse.
00:02:30.920 >> And there's a reason that I highlighted
00:02:32.760 the word designed.
00:02:34.640 It was built this way.
00:02:36.840 Someone built this to create this impact
00:02:40.200 and what we need to do is to know that,
00:02:42.600 know how it works, to get clarity over
00:02:45.280 our situation, find the numbers, see the
00:02:47.880 cost, choose the order, build the escape
00:02:49.959 plan, get out of debt and then get it
00:02:52.080 working for us.
00:02:55.000 By the end of tonight, the plan is you
00:02:57.600 will know what debt is costing you,
00:03:00.440 which debt to attack first, how to
00:03:03.120 reduce the damage so it doesn't affect
00:03:05.200 you as much and then to build your
00:03:07.160 escape plan. And we want to turn you
00:03:08.920 from someone who has debt to someone who
00:03:11.080 is a strategist. You understand the
00:03:13.560 strategy to get yourself out of debt and
00:03:16.480 you are in control.
00:03:18.560 >> I like that. That feels so much more
00:03:19.760 powerful, doesn't it? I'm a strategist.
00:03:21.600 I have a strategy, I'm going to apply
00:03:23.200 it, therefore I am a strategist.
00:03:26.519 >> If you are in crisis, if you can't make
00:03:29.840 the payments, if you're really
00:03:32.000 struggling,
00:03:34.360 debt is something you have to tackle,
00:03:35.840 but you do not have to do it alone.
00:03:38.880 Get some free impartial help. There are
00:03:41.040 plenty of services out there such as
00:03:43.440 StepChange, Citizens Advice, Money
00:03:46.080 Helper, the Christians Against Poverty.
00:03:48.640 You deserve support and a plan. So, if
00:03:50.920 you're absolutely
00:03:53.240 in
00:03:54.560 crisis moment, then this is the part for
00:03:58.360 you.
00:03:59.280 And then, for those of you that don't
00:04:01.760 have debt,
00:04:03.160 why is this session useful? Why is this
00:04:05.040 point Why What's the point of this?
00:04:07.320 Number one, we're going to have two
00:04:09.240 halves to this week. Half one is about
00:04:11.760 how you end up in debt, and half two is
00:04:13.760 how you get out of debt. So, if you do
00:04:16.000 do this course and you don't have any
00:04:17.519 debt, A, you'll know how to help other
00:04:19.480 people. B, you'll know how to protect
00:04:21.279 your family and your friends and why it
00:04:22.960 happens, how it happens, and be able to
00:04:24.640 help other people. And C, Katie might
00:04:27.520 make a few jokes and you might have fun.
00:04:29.208 >> [laughter]
00:04:30.200 >> Also, there's some stuff that we're
00:04:31.400 going to talk about when we talk about
00:04:33.000 how to get out of debt and the strategy
00:04:34.840 of how to increase your gap, and there
00:04:36.960 might be a couple more pointers in there
00:04:38.640 for you of how to increase your gap and
00:04:40.680 accelerate your progress regardless of
00:04:42.400 where you're starting from.
00:04:43.840 >> Now, a quick message from our lawyers
00:04:46.520 before we get going.
00:04:47.240 >> add to the disclaimer that I cannot
00:04:48.760 promise to be funny tonight.
00:04:50.168 >> [laughter]
00:04:50.720 >> And the more I force it, the more it
00:04:52.400 won't happen. So, I'll just relax into
00:04:54.040 it. I think that's what I'll do.
00:04:55.280 >> This is not financial advice. We're not
00:04:56.640 trained financial advisors. We are not
00:04:58.000 regulated. We will not sell you
00:04:59.120 investments. You make your own
00:05:00.120 decisions. We're sharing our opinions
00:05:01.520 and ideas.
00:05:02.760 These ideas may or may not continue to
00:05:04.160 work for us. So, you're 100% responsible
00:05:05.960 for your financial future, and there are
00:05:07.240 no guarantees here. Except
00:05:09.320 >> the money-back guarantee. If you do not
00:05:10.919 enjoy the course, you can have 100% of
00:05:12.640 your money back. Please speak to Derek
00:05:14.640 about your refund.
00:05:16.200 >> If you are watching on Zoom, please use
00:05:18.320 the Q&A feature for any questions so the
00:05:20.240 ninjas can find them.
00:05:21.360 >> I didn't finish my little money-back
00:05:22.720 guarantee joke. If you've paid for the
00:05:24.160 course, something's gone terribly wrong,
00:05:25.760 and you shouldn't have done that.
00:05:27.320 >> Good. [laughter]
00:05:28.160 Uh if you're watching on catch-up or on
00:05:30.120 YouTube, please put your comments in the
00:05:31.760 question your questions in the comments,
00:05:34.040 and we will look at them. We've replied
00:05:35.760 to them when we can. If you're on
00:05:37.440 YouTube, uh please hit like and
00:05:39.360 subscribe. It helps the channel to reach
00:05:41.720 more people. Now, we introduced this map
00:05:45.080 in week two, which is a map of the
00:05:47.120 journey to financial freedom, to show
00:05:49.840 you where we all are. This week is
00:05:52.240 specifically about step three, attacking
00:05:55.480 expensive debt. That's where we are on
00:05:58.600 the journey.
00:05:59.400 >> like doing some kind of ninja move
00:06:00.520 there.
00:06:01.440 What?
00:06:03.320 >> Right. Debt is a symptom. What do we
00:06:06.760 mean by that?
00:06:08.400 Debt didn't cause its own problem.
00:06:11.280 Something happened to cause the problem,
00:06:13.840 and then debt is the symptom of that
00:06:16.680 problem. And clearing debt treats the
00:06:20.240 symptom,
00:06:21.960 but it doesn't treat the cause. And if
00:06:24.520 we don't look at the cause, then there's
00:06:27.200 a chance that it relapses and that debt
00:06:29.800 comes back. And it's the The medical
00:06:32.880 analogy works perfectly for this. So,
00:06:35.600 what the plan is, part one, how did we
00:06:37.600 get into debt? Let's look at what the
00:06:39.880 cause is of that debt. And part two is
00:06:42.640 how did we get out of debt?
00:06:45.240 Now, broadly speaking,
00:06:47.120 there are three ways you get into debt.
00:06:49.200 And it doesn't really matter which one
00:06:50.560 of these happened to you, you've got two
00:06:52.760 choices. You can either forgive past
00:06:55.680 you,
00:06:56.600 or you can punish past you for doing it.
00:06:59.640 Uh we would highly recommend you choose
00:07:01.919 to forgive past you, because these
00:07:04.400 things happen. Life happens, things
00:07:06.919 happen. Forgive past you, let's learn
00:07:09.640 the lessons and move on. There are no
00:07:12.640 shame here.
00:07:14.240 >> So, how do we get into debt? Three main
00:07:15.800 ways. Number one, life happens. Number
00:07:18.440 two, companies happen. And number three,
00:07:21.080 we are humans and we do some things that
00:07:23.280 are not always helpful for us.
00:07:25.000 >> Let's tackle life shocks, life happening
00:07:27.400 to us, cuz things will go wrong. Things
00:07:30.919 go wrong. Life doesn't ask permission,
00:07:33.760 it just sends you a job loss, an
00:07:35.680 illness, a car breaking down, a family
00:07:37.880 emergency, rent rising, boiler chaos,
00:07:41.000 washing machine chaos. It just sends you
00:07:43.040 a challenge. It goes, "Here you go,
00:07:44.800 Donigans. Here's a challenge. Deal with
00:07:46.640 that." Um question for all of you.
00:07:50.160 How would you cope with an unexpected
00:07:52.440 expense? Tell us in the chat. How would
00:07:55.440 you cope with an unexpected expense?
00:07:57.360 Would you borrow? Would you use savings?
00:08:01.240 Would you earn more money?
00:08:03.680 What would you actually do? We'd love to
00:08:05.320 know.
00:08:07.560 This is in general what people do in the
00:08:10.480 UK, and it's actually pretty indicative
00:08:12.400 of exactly how it happens around the
00:08:14.000 world. 40% of people would use their
00:08:16.200 savings to get past the emergency.
00:08:19.520 14% of people go out and hustle for some
00:08:22.680 extra money. They work. And 46% of
00:08:26.440 people go into debt.
00:08:29.160 And it's one of the biggest reason debt
00:08:31.400 happens is a problem happens. Now,
00:08:36.599 46% is the percentage of everyone.
00:08:40.760 Do you think it's higher or lower than
00:08:43.080 46% if it's a parent?
00:08:46.560 Are parents more likely to go into debt
00:08:49.040 over one of these emergencies or less
00:08:52.800 likely?
00:08:54.520 What do you think?
00:08:56.560 Craig's pointing up. He thinks it's
00:08:58.120 higher, and it is higher. Parents are
00:09:00.280 61% of them will go into debt over an
00:09:03.440 emergency, which
00:09:07.160 That is the number, and we can make lots
00:09:08.800 of judgments about it, but parents
00:09:10.760 struggle with this stuff.
00:09:12.960 This is the one I found really
00:09:14.120 interesting. How about a higher rate
00:09:16.280 taxpayer?
00:09:17.400 >> Which means it's someone that earns is
00:09:19.520 on a higher income, right?
00:09:20.640 >> Yeah, someone who's earning way over 50
00:09:22.520 grand a year. Are they more likely to go
00:09:24.640 into debt or less likely? Craig's
00:09:27.000 pointing up again. He's voting up. What
00:09:28.839 are you thinking?
00:09:30.280 Uh it's fascinating. I find this one
00:09:32.800 fascinating. 64% of people who earn
00:09:36.400 higher incomes are likely to go into
00:09:39.400 debt to pay for those emergencies. Why
00:09:41.440 is that?
00:09:42.600 >> They have more things that can go wrong
00:09:44.800 in their lives, right?
00:09:45.760 >> More valuable liabilities.
00:09:47.040 >> Expensive cars, more things that own
00:09:49.360 their home that could go wrong cuz they
00:09:50.920 spent that money on things. And what we
00:09:53.640 want to point out here is that for
00:09:55.800 everyone, that averages 46% going into
00:09:58.440 debt. For higher rate taxpayers, they're
00:10:00.960 more likely than the average. They're
00:10:02.760 pulling that average up.
00:10:04.200 >> And the main reason is because an
00:10:06.360 emergency for a higher tax rate payer
00:10:08.760 tends to be about double in terms of the
00:10:11.080 value than it is for a lower rate
00:10:13.360 taxpayer because they have bigger
00:10:15.120 houses, bigger cars, and bigger stuff.
00:10:17.360 So, it costs more to repair them. That's
00:10:19.960 why it is.
00:10:22.080 Now,
00:10:22.800 >> What about younger people, Alan?
00:10:24.160 >> What about young people?
00:10:25.280 >> What about 18-34 year olds? How do you
00:10:28.160 think they're more or less likely than
00:10:30.400 the average to go into debt?
00:10:32.920 >> Young people, how do they cope with
00:10:34.760 that?
00:10:35.920 If you're young and
00:10:37.920 If you're young and watching with this,
00:10:39.760 please tell us what would you do? How
00:10:41.760 would it work? Uh the interesting bit is
00:10:44.160 it's nearly 70% of them would end up
00:10:46.800 taking on debt to cover the emergency.
00:10:49.640 And then some of you are thinking, well,
00:10:51.600 if I'm a parent, I'm in a higher tax
00:10:53.960 rate, and I'm under 35, wait, I'm in
00:10:56.640 trouble, aren't I? That's not what we're
00:10:58.920 telling you. Uh we're telling you this
00:11:01.320 is the pattern of why a lot of people
00:11:04.880 end up in debt. So, how do you protect
00:11:07.320 against that?
00:11:09.200 The emergency fund.
00:11:11.080 That is the way to protect against these
00:11:13.040 things happening. And then if a shock
00:11:14.440 happens, you've got an emergency fund to
00:11:16.920 protect yourself from that. And we say,
00:11:19.560 always have protection. Always have
00:11:22.800 protection.
00:11:23.720 >> And I saw a few people putting in the
00:11:25.320 chat that what would you do to cope with
00:11:27.040 that unexpected expense. A lot of people
00:11:29.120 said emergency fund, which is very cool
00:11:30.839 cuz that is your first line of
00:11:32.480 protection against these things that
00:11:34.240 come up in your life to have that
00:11:35.800 emergency fund to have a plan as to what
00:11:38.320 would happen
00:11:40.000 when these things when these things
00:11:41.440 happen not if.
00:11:42.760 >> Yes, if you're on top of your money
00:11:44.840 doing a monthly finance meeting which
00:11:46.320 we're going to talk about next week
00:11:47.960 these things are less likely to happen
00:11:49.600 cuz you know where your money's going
00:11:51.120 and what's happening. You can set
00:11:52.720 calendar reminders to make sure payments
00:11:54.680 happen at the right time and set up
00:11:57.040 options instead of panicking at the time
00:12:00.480 an emergency happens. And the options
00:12:02.920 are if X happens then Y is my plan.
00:12:08.400 And if you've thought through these
00:12:09.720 things you'll be prepared. If I lose my
00:12:12.680 job I will
00:12:16.680 What will you do? Move home with mom?
00:12:19.760 Find another job? Have a backup plan?
00:12:21.960 You've got the full emergency fund.
00:12:23.760 >> And that gets you starting thinking
00:12:25.200 ahead of time, right? So one of the
00:12:26.440 things you might do is to reach out to
00:12:28.000 your network of people you've worked
00:12:29.480 with in the past or maybe you want to do
00:12:31.760 that before this crisis happens. It gets
00:12:35.280 you start thinking earlier so that you
00:12:37.040 have a plan in place so that then when
00:12:38.920 things happen they're not as
00:12:40.640 catastrophic cuz you've already thought
00:12:42.320 ahead of time and set systems up to
00:12:44.120 protect you.
00:12:45.240 >> If the car breaks down I will
00:12:48.000 If I get ill I will if a big bill
00:12:51.320 arrives
00:12:52.600 I will
00:12:53.800 If Lego releases a really nice set
00:12:55.880 that's very expensive
00:12:57.800 I will
00:12:58.720 >> What's your contingency for that Alan?
00:13:00.800 >> Remain nomadic so I don't have anywhere
00:13:03.120 to put it. That keeps me safe from
00:13:04.760 buying a lot of things.
00:13:06.600 But you need your own strategy to
00:13:08.120 protect yourself and the whole point of
00:13:10.240 this is to protect yourself from life
00:13:12.600 knocking you down. We want to protect
00:13:15.000 you cuz life's going to throw stuff at
00:13:17.040 you. A sign of life is problems. How do
00:13:19.960 you protect yourself?
00:13:23.320 The answers on the questions of would
00:13:26.400 you go into debt are based on a UK
00:13:28.480 study.
00:13:29.640 Uh it's quite interesting. It's very
00:13:31.160 similar around the world. That
00:13:33.000 particular study was a UK study, but
00:13:34.960 it's very similar around the world. So,
00:13:36.720 that's number one. Protect yourself from
00:13:38.640 the shocks life will throw at you.
00:13:41.360 >> Number two, companies have designed the
00:13:43.880 system to put you into debt. And I'm
00:13:45.480 going to give you a few examples.
00:13:46.880 >> This is an advert I saw last time I was
00:13:48.880 riding the tube in London. Uh it's
00:13:51.480 PayPal. 0% interest-free for 4 months.
00:13:55.760 Isn't that seductive? I can buy
00:13:57.440 something now. Uh what they don't put
00:13:59.960 very large is the interest rate at 22%.
00:14:03.280 So, if you don't pay it off within the 4
00:14:05.320 months, you're going to be paying 22%
00:14:07.200 interest.
00:14:08.000 >> And it's the way that it's marketed to
00:14:09.720 you. Debt is sold as happiness. Look at
00:14:11.480 these young attractive people. I'm so
00:14:13.160 happy and I'm in love and it's because I
00:14:14.760 have a credit card in my hand. They're
00:14:16.840 selling it to you as this aspirational
00:14:19.160 thing somehow. It's how they suck you
00:14:21.480 in.
00:14:22.600 >> And
00:14:23.560 if they actually called it debt, no one
00:14:25.840 would do it. But, they have code words
00:14:27.880 for debt. They call it finance,
00:14:30.800 which is just debt. They call it credit,
00:14:34.160 which is debt. They call it buy now, pay
00:14:36.240 later, which is debt. They call it easy
00:14:39.240 monthly payments. That's just debt with
00:14:41.000 nicer lighting.
00:14:42.640 Like they literally just phrase it in
00:14:44.720 different words. And we need to get used
00:14:46.480 to calling it what it actually is.
00:14:47.960 >> Yeah, cuz if they called it that, it
00:14:49.440 wouldn't people wouldn't buy it, which
00:14:51.920 is why they have these euphemisms for
00:14:54.040 it. If you got to the checkout and they
00:14:56.080 said instead of saying, "Would you like
00:14:57.320 this store card?" If they said, "Would
00:14:58.920 you like to go into debt to make this
00:15:00.240 purchase?" You'd be less way less likely
00:15:02.880 to do it. That's why they've come up
00:15:04.320 with these terms to kind of sneak it in
00:15:06.880 and to bypass that part of your brain
00:15:08.960 that would notice what's happening.
00:15:10.720 >> And I'd love you to think about when
00:15:12.800 these companies have done this to you.
00:15:15.480 What have they said and how have they
00:15:16.720 done it? Here's an example from someone
00:15:18.880 who used to work for us. This is Very.
00:15:21.880 It's a very big company, a very very
00:15:24.000 very big company in the UK.
00:15:26.320 Uh it's like an online catalog. Uh and
00:15:29.440 they have this buy now pay later thing
00:15:31.920 right at the top. And it's really
00:15:34.640 interesting when you actually look at
00:15:35.960 this. If I highlight this bit at the
00:15:37.760 top, 20% off your first credit order.
00:15:40.680 That means if you buy something and put
00:15:42.320 it on credit, you get 20% off.
00:15:45.000 >> That sounds good.
00:15:45.960 >> Yes, but if you look right below it,
00:15:47.760 they'll charge you 42.9%
00:15:50.640 APR.
00:15:51.960 So, you're getting 20% off the thing and
00:15:53.720 then charging you 42% on the on the
00:15:57.240 interest.
00:15:58.040 >> The APR is just the annual interest that
00:15:59.840 you
00:15:59.960 >> Annual interest rate. So, you end up
00:16:01.360 paying a huge amount more. They can give
00:16:04.080 They could give you a 30% discount
00:16:06.720 and you would still end up paying more
00:16:08.400 than the price of the thing for buying
00:16:10.160 it.
00:16:10.840 >> And if you read the small print, which
00:16:12.800 most people don't do, it says things
00:16:14.840 like this, "As the outstanding balance
00:16:16.560 plus the interest now form part of your
00:16:19.080 payable balance, they will attract
00:16:21.040 interest at your account rate, meaning
00:16:23.480 you will pay interest on interest. This
00:16:25.800 is compounding working against you. On
00:16:28.120 Monday, we introduced the idea that
00:16:30.120 compounding is growth on growth." Well,
00:16:32.200 that's not happening in this instance.
00:16:34.200 In this instance, you're paying interest
00:16:36.240 on interest. It's that other side of the
00:16:38.640 coin, the other side of the force when
00:16:40.440 we're looking at compounding.
00:16:41.920 >> Exactly. And if you buy one of the
00:16:44.160 laptops on their site, you'll end up
00:16:46.120 paying over a thousand pounds in
00:16:47.880 interest. Uh you end up paying over 30%
00:16:51.520 of the price of the item just in
00:16:53.080 interest. And businesses in general
00:16:55.120 would love you to go into debt. They
00:16:56.760 make spending fun. They offer bigger
00:16:58.760 credit limits. They start you off at
00:17:01.160 university. They come round to
00:17:02.400 university and go, "Would you like your
00:17:04.240 first credit card? If you sign up now,
00:17:06.560 you can have a free Frisbee."
00:17:09.599 And be in debt for the rest of your
00:17:11.040 life. That's how they offer it. That's
00:17:13.199 how they get you sucked in. And
00:17:16.240 it's part of the game.
00:17:19.319 A really interesting one is most places
00:17:22.920 when you're buying something on credit
00:17:24.480 will tell you the monthly amount. Or
00:17:27.359 they will speak to you about how much
00:17:29.000 you can afford a month. And I had a
00:17:31.080 friend who worked for one of the big car
00:17:33.280 companies in training and they are
00:17:35.520 trained with the very first question
00:17:39.160 to say, "What's your monthly allowance?
00:17:42.800 How much can you spend a month?" And
00:17:45.000 you'll say a figure and then they will
00:17:46.760 say,
00:17:47.880 "Uh up to?"
00:17:50.320 >> Shall I be the person in this scenario?
00:17:52.280 >> Yeah, how much can you afford a month?
00:17:54.120 >> 200 pounds.
00:17:55.400 >> Up to?
00:17:57.720 >> 300.
00:17:58.640 >> And then a maximum?
00:18:01.200 >> 450.
00:18:02.400 >> And they play this game to get the
00:18:03.880 amount you're going to spend a month out
00:18:06.440 of you and up.
00:18:07.800 >> I've gone from 200 to 450.
00:18:10.040 >> And then they take you to see the cars
00:18:11.880 that are 500 pounds a month because they
00:18:13.680 know you want the aspirational one.
00:18:16.120 They're trying to stretch you and that's
00:18:18.400 how play they play the game to get more
00:18:20.800 out of you. And what we wanted to say to
00:18:22.960 you is that the monthly payment is the
00:18:25.720 sales pitch and the total cost is the
00:18:29.560 truth.
00:18:30.760 That's the bit um the biggest lesson we
00:18:33.400 could give you out of this bit, the
00:18:34.720 biggest thing is to think not in months,
00:18:38.600 but to think about the total.
00:18:40.680 Cuz if you speak to most people, they
00:18:42.880 will immediately tell you their
00:18:45.000 repayment. So, they'll tell you how much
00:18:48.600 they are spending a month. My slides
00:18:50.920 have crashed.
00:18:51.880 >> So, they only know how much a month
00:18:54.880 they're paying. They don't know the
00:18:56.040 interest rate. They don't know how much
00:18:57.840 they owe on the debt and they don't know
00:18:59.320 the overall cost of how much this going
00:19:01.440 to cost to borrow. All they know is that
00:19:03.560 monthly repayment because that's how
00:19:05.000 it's sold to us. That example you gave
00:19:06.760 of the car dealership, that's how it's
00:19:08.520 sold to us. Well, my car payment is 300
00:19:10.800 pounds a month, 300 dollars a month. So,
00:19:13.080 therefore, that's the cost of the debt.
00:19:15.000 Well, no, they don't understand the
00:19:16.000 interest rate which we talked about of
00:19:17.440 the how much wind is blowing in your
00:19:19.000 face.
00:19:19.560 >> And a strategist would understand the
00:19:21.280 true cost, the cost of the credit, and
00:19:24.320 the total cost of the item.
00:19:26.680 Then people say, "Well, Donegans, what
00:19:28.000 about 0% credit cards, balance
00:19:30.000 transfers? Surely that's not too bad."
00:19:33.280 Uh
00:19:33.960 and here's our thoughts on the 0% credit
00:19:36.360 cards.
00:19:37.520 0% can be a tool.
00:19:40.560 It can be a tool if you have a written
00:19:43.040 plan to pay it off.
00:19:44.680 If you save monthly so the balance is
00:19:46.480 gone before the deal ends, and if you
00:19:49.240 include the transfer fee.
00:19:51.480 But it can also be a trap.
00:19:54.240 0% is a trap. They expect people to miss
00:19:58.400 or default and end up paying interest.
00:20:01.840 That's how they make money, and they
00:20:03.880 wouldn't offer it if they didn't make
00:20:06.600 money. And the thing I want you to
00:20:08.320 really get is these companies are not
00:20:10.080 doing this to be nice.
00:20:12.440 They might make it look that way. It's
00:20:14.240 like, "Oh, we're being so nice. We're
00:20:15.640 offering you a credit deal." They're not
00:20:17.520 being nice. See straight through it. Not
00:20:20.760 everyone in the financial world is on
00:20:23.840 your side. We are swimming with sharks
00:20:26.720 out there, and you need to realize
00:20:29.760 what's happening.
00:20:31.360 And then simple ones like free trials.
00:20:34.600 Every time you click on one of the big
00:20:36.360 services, they offer you a free trial.
00:20:38.920 My phone offers me a free trial every
00:20:41.160 week.
00:20:42.440 You get 30 free days It does It's 30
00:20:44.920 days free. You get automatically billed
00:20:47.520 at the end, and they rely on you
00:20:49.560 forgetting.
00:20:51.000 They rely on you forgetting for years.
00:20:54.480 Have any of you subscribed to something
00:20:56.160 and then woken up a year later and gone,
00:20:57.720 "How did that happen?"
00:20:58.800 >> I think we found a lot of those in the
00:21:00.080 great leak hunt of 2026, Alan.
00:21:02.240 >> We did. We absolutely did.
00:21:04.080 >> That's how it happens, and it's normal
00:21:05.320 human behavior, and that's what they
00:21:06.680 rely on.
00:21:07.720 >> And they are not doing this to be nice.
00:21:10.000 None of them are doing this to be nice.
00:21:11.560 It's a trap. I feel like a moment of
00:21:13.960 Star Wars there where you shout, "It's a
00:21:15.640 trap! Run!"
00:21:17.600 Uh it is a trap.
00:21:19.800 They make money if you slip up. If you
00:21:22.280 forget to cancel, forget to make a
00:21:24.120 payment, if you can't make a payment. In
00:21:26.360 other words,
00:21:27.920 if you are human,
00:21:30.600 they make money.
00:21:32.640 And it is human to make mistakes. It
00:21:34.720 happens. So, the final piece of this
00:21:37.520 little section is I want to say to all
00:21:39.480 of you,
00:21:40.840 one of the best things you can do is to
00:21:42.640 learn how people sell to you to protect
00:21:45.880 yourself from being sold.
00:21:49.040 Now, here's
00:21:50.520 This is one of my favorite books of all
00:21:52.080 time. It's called Influence by Robert
00:21:53.960 Cialdini and he talks about scarcity.
00:21:57.520 They all do this. Offer ends by
00:21:58.960 midnight. Buy now or that's it.
00:22:01.640 Social proof. Everyone is doing this.
00:22:03.560 You should do it, too.
00:22:05.200 Authority. This expert recommended it. X
00:22:09.000 famous person has it, so therefore you
00:22:11.320 should do it. Uh commitment. Just sign
00:22:14.080 here. We'll take care of all the
00:22:15.440 details. And liking. They seem so
00:22:18.600 friendly. Some of the biggest IFA
00:22:21.040 agencies in this country and around the
00:22:24.080 world do it by making friends with you.
00:22:26.960 They're not doing this to be nice. They
00:22:28.720 make money out of you. So, I recommend
00:22:30.840 reading a book called Influence by
00:22:33.120 Cialdini. You will learn so much about
00:22:36.000 sales. You will understand how you are
00:22:38.280 manipulated and how your family could be
00:22:40.800 as well.
00:22:41.360 >> It feels like moving from kind of being
00:22:43.120 a victim of these strategies to
00:22:44.880 understanding them so that you can
00:22:46.560 choose whether you participate in these
00:22:49.080 things or not, not just from having been
00:22:50.760 influenced in that way.
00:22:51.840 >> Exactly.
00:22:52.880 Katie and I watch the credit card
00:22:55.120 adverts on television and you just see
00:22:58.240 them with happy people spending money
00:22:59.960 and we laugh at them now cuz we're like,
00:23:01.840 "This is unbelievable." But they
00:23:03.560 wouldn't be running the adverts if they
00:23:05.000 didn't work.
00:23:06.680 Now, huge warning.
00:23:09.840 This is a bit I would love you all to
00:23:11.680 hear. This is a huge warning and it
00:23:13.320 comes from the debt case study a couple
00:23:16.080 of years ago.
00:23:17.760 We had a wonderful person called Cathy
00:23:19.840 come on the course. She came on Rebel
00:23:21.880 Finance School. She was in a good place
00:23:24.080 and then afterwards, she got added to a
00:23:27.400 WhatsApp group about investments.
00:23:30.160 I asked her how she got added. She said
00:23:32.200 she didn't really know. She just got
00:23:33.600 added.
00:23:34.640 Uh she started to see things about
00:23:36.400 investments. She did her due diligence
00:23:39.400 to check them out, look them up online.
00:23:41.960 She started investing with a small
00:23:44.280 amount of money, 500 pounds.
00:23:48.080 And she saw good returns.
00:23:50.240 So she upped it and added 1,000 pounds.
00:23:53.240 And saw good returns.
00:23:55.400 And then they said to her, "This is your
00:23:57.720 big opportunity. You need to borrow as
00:24:00.360 much as you can. These opportunities
00:24:02.680 don't come around often."
00:24:04.800 And she borrowed 45,000
00:24:07.840 pounds from her bank
00:24:10.240 and invested it all.
00:24:12.400 And you can probably guess what happened
00:24:14.000 next.
00:24:15.480 Uh the group disappeared. It closed
00:24:17.680 down. Her money was gone. She reported
00:24:20.560 it to the police who couldn't do
00:24:22.480 anything. And then she's on the phone
00:24:24.800 telling us and asking, "How do I fix
00:24:26.680 this?"
00:24:28.880 And our hearts just
00:24:31.760 I just went out to her
00:24:35.520 to look after her. But I really want you
00:24:37.720 to understand this.
00:24:39.440 If you get added to a WhatsApp group
00:24:41.080 about investments, get out.
00:24:44.120 There are scams all over the place. If
00:24:46.680 it's too good to be true,
00:24:48.640 if you are pressured into buying it now,
00:24:51.960 if there is peer pressure from other
00:24:53.600 people, if you're told to borrow to
00:24:55.680 invest, do not do it, ever.
00:25:01.000 Check if these people are regulated.
00:25:03.400 That link takes you to the Financial
00:25:05.480 Conduct Authority in the UK. Whichever
00:25:08.000 country you're in, check the regulators
00:25:10.520 list of regulated companies.
00:25:13.000 >> One thing to watch out, that's not a
00:25:14.360 catch-all because some of them do
00:25:15.640 impersonate regulated companies, don't
00:25:17.760 they? So, that's an extra additional
00:25:19.360 check as well as all these other ones as
00:25:21.440 well.
00:25:22.120 >> And beware of hype or fear of missing
00:25:24.360 out. If anyone hypes something or
00:25:26.080 there's fear of missing out, run away.
00:25:28.280 And really do beware scams. There are
00:25:31.040 scams. They're in our Facebook group, we
00:25:33.040 try and catch as many as we can. Um
00:25:36.520 Just recently
00:25:38.200 I have had uh we call it Fallon, fake
00:25:41.280 Alan.
00:25:42.280 Uh so, people have taken my wedding
00:25:44.640 photos
00:25:45.400 >> Oh.
00:25:45.960 >> and set up a fake account with my name
00:25:49.200 and started befriending people and then
00:25:51.120 trying to sell them investments and get
00:25:53.600 them into investment clubs.
00:25:55.800 Facebook doesn't care, no matter how
00:25:57.560 many times I've reported it. If this
00:26:00.000 happens to you, I will never sell you an
00:26:02.680 investment.
00:26:04.000 I will never invite you to an investment
00:26:06.080 club. I will never do any of those
00:26:08.400 things. Please
00:26:10.680 ban, block, and report any fake us
00:26:15.400 trying to sell you stuff. We are never
00:26:17.680 going to sell you anything. We will give
00:26:19.320 you free courses and we will promote
00:26:21.000 free courses. We might sell you a book
00:26:22.880 eventually, but that's like about as
00:26:24.400 extreme as it gets.
00:26:26.640 We're not going to sell you stuff.
00:26:29.680 Just find these things cuz I want you to
00:26:31.800 be safe out there. And that's really,
00:26:33.920 really important to us.
00:26:35.440 >> I think another good tip is to ask a
00:26:37.440 friend or someone that you trust of
00:26:39.040 like, "I think this is a bit dodgy. What
00:26:41.400 do you think?" Just having that other
00:26:42.600 person involved and then you can start
00:26:44.680 to kind of come out of that thing that
00:26:46.880 you're in danger of being sucked into
00:26:48.440 with the excitement and the hype of
00:26:49.880 like, "Oh, this looks like a really good
00:26:51.040 opportunity." Run it past three, four,
00:26:53.200 five different people that you trust and
00:26:54.920 that you know have their head screwed on
00:26:57.160 right, and it will really help as well.
00:26:59.960 >> We had a comment come in. Back in the
00:27:02.000 '80s, big stores started handing out
00:27:04.440 store credit cards. Buy now, pay later.
00:27:07.440 It worked on us as teens, and a friend
00:27:10.000 got into serious debt and had to declare
00:27:12.160 bankruptcy before 20 years old.
00:27:15.360 Like this stuff really does happen, and
00:27:17.600 if we understand it, then we can protect
00:27:19.640 ourselves against it. And that's the
00:27:21.000 whole purpose of this section is to
00:27:24.320 protect you against the things that are
00:27:26.560 happening out there, because it's so
00:27:29.120 easy just to make one slip-up and fall
00:27:32.240 for it. So, if you spot fake Alan
00:27:34.800 Fallon, please report him, ban him,
00:27:37.160 block him, get rid of him.
00:27:38.960 Okay, we're going to move on to human
00:27:41.560 behavior.
00:27:43.160 Uh
00:27:43.840 have you ever done anything that's not
00:27:45.720 in your best interest?
00:27:47.120 >> Ooh.
00:27:48.480 Are you talking to me?
00:27:50.880 >> Cuz human brains, uh we quite often do
00:27:53.800 things that are not good for us.
00:27:56.280 >> But they're so tasty.
00:27:57.600 >> But they're so tasty, and you're human,
00:28:00.880 but our brains prefer now to the future.
00:28:04.720 So, we do things that feel good now,
00:28:08.000 but it's not good for us in the future.
00:28:11.320 Our brains prefer now. So, spending, if
00:28:14.040 it's frictionless now,
00:28:17.240 like it's easy to do, but then future us
00:28:20.160 pays the bill. And we need systems to
00:28:22.440 protect ourselves. And the company sell
00:28:25.280 it as you only live once, you deserve
00:28:28.120 this, you might die any day, spend all
00:28:30.440 your money now with me.
00:28:32.320 That's what they do to us.
00:28:34.080 And a fascinating stat from a study in
00:28:36.600 the UK showed that 53% of us treat
00:28:40.760 ourselves to unnecessary things
00:28:43.640 despite knowing
00:28:45.640 that we can't afford them.
00:28:48.960 And we know this, but we still do it.
00:28:52.680 And this is like current me getting a
00:28:55.280 great time
00:28:56.720 at the expense of future me who has to
00:28:59.120 pay the bill.
00:29:00.600 Current me gets the thing, future me
00:29:02.440 gets the bill, the debt adds the
00:29:04.200 interest, and that happens. Now,
00:29:06.920 if that's happened to you, it's okay. It
00:29:09.640 happens to all of us. We've all done it.
00:29:12.160 >> I did it with chocolate and peanut
00:29:13.520 butter. Pancakes and chocolate and laugh
00:29:15.760 at future me.
00:29:16.560 >> Yes, peanut dark chocolate peanut butter
00:29:18.400 cups are bad for me, but I like them.
00:29:21.600 You need to look after future you. Be
00:29:24.280 kind to future you. Future you needs
00:29:26.160 options, breathing room, deserves
00:29:27.960 freedom, and the plan today is to give a
00:29:30.680 gift to future you.
00:29:34.880 On this section, one of the most
00:29:36.280 important bits is your spending
00:29:37.720 strategy. I would like you now to think
00:29:39.760 about what is your spending strategy
00:29:42.000 when you want to buy something.
00:29:43.960 When you first want something, do you
00:29:45.520 have the I want it spending strategy?
00:29:49.040 Where you go, I want it. You only live
00:29:51.440 once. I will buy it.
00:29:54.320 Do you have the check how much credit
00:29:57.240 overdraft I have left strategy?
00:30:00.920 And if I have credit or overdraft, I
00:30:02.640 will buy it.
00:30:04.640 Uh
00:30:05.280 Steven's shaking his head, which does
00:30:06.800 make me happy. I'm glad you don't have
00:30:08.440 that one, Steven.
00:30:09.720 Uh
00:30:10.320 spend until the card is declined
00:30:12.560 strategy.
00:30:13.920 Uh we had a lady a couple of years ago
00:30:16.000 as the debt case study. That was her
00:30:17.560 strategy was to spend until the card was
00:30:20.080 declined cuz that's how she knew when
00:30:22.400 she couldn't spend any more because it
00:30:24.080 was bad for her. And
00:30:26.400 that's a dangerous strategy, dangerous
00:30:29.200 strategy.
00:30:30.760 >> And to be clear, those three that we
00:30:32.920 just shared, we are we
00:30:35.600 >> We don't recommend.
00:30:36.760 >> think are a good idea. So, coming on to
00:30:38.600 what how it might be a better way of
00:30:40.400 thinking about this.
00:30:41.360 >> Healthy spending strategies. Healthy
00:30:44.000 spending strategies. So, number one, do
00:30:47.480 I have the money to buy it? If you just
00:30:49.520 even ask a question before just buying,
00:30:52.160 it makes a difference.
00:30:54.080 Number two, can I get the same value for
00:30:57.080 less money?
00:30:58.560 Just asking that question, do I have to
00:31:00.320 buy this thing or can I get the same
00:31:02.880 enjoyment, pleasure, thing for less
00:31:05.240 cash?
00:31:05.800 >> Perhaps even a pleasure swap, Alan.
00:31:07.080 >> Exactly.
00:31:08.880 Uh would I rather have freedom or this
00:31:11.120 thing?
00:31:12.360 Quite often when I go into a shop and
00:31:14.480 there's a brand new LEGO set looking at
00:31:16.640 me, if I go would I rather have freedom
00:31:19.120 or plastic, my brain tells me freedom is
00:31:21.880 more important and it stops me from
00:31:23.640 buying it.
00:31:25.000 And then the final question you could
00:31:26.560 use is, would future me thank me for
00:31:29.760 making this purchase?
00:31:33.200 Me in 10 years' time, are they going to
00:31:35.040 be pleased I bought it or feel slightly
00:31:37.200 guilty?
00:31:38.600 Just asking questions will change your
00:31:40.360 strategies.
00:31:42.120 Now, we have an online spending
00:31:44.080 strategy.
00:31:45.440 Uh this is in four parts. Number one,
00:31:47.440 turn off one-click purchasing on
00:31:49.080 everything. You should never be able to
00:31:50.880 just press buy and it shows up the next
00:31:52.880 day.
00:31:53.920 Uh my friend in Barnsley had this on and
00:31:58.040 his kid got hold of his iPad and learned
00:32:00.520 how to use it and over the next week,
00:32:03.640 lots of toys arrived at his house
00:32:06.600 uh without him knowing where they'd even
00:32:08.440 come from. So, turn off one-click
00:32:10.800 purchasing.
00:32:12.720 If you're going to buy something, put it
00:32:14.440 in your basket,
00:32:16.440 set a reminder for 1 week,
00:32:19.160 and then after 1 week, if you still want
00:32:22.080 it, buy it. Ask, do I still need the
00:32:24.960 thing? Cuz I tell you what, if you've
00:32:26.920 waited a week, all of that hype has gone
00:32:30.840 and you can make a actual decision about
00:32:33.640 whether you want it or not.
00:32:36.000 >> And I think it's to add friction to make
00:32:38.120 it less easy, to make it harder to make
00:32:40.520 those purchases. So, one way is to use
00:32:43.800 cash. Obviously, this doesn't work in
00:32:45.680 the online world, but in the physical
00:32:47.200 world, if you need to get the money out
00:32:48.880 of your purse, out of your wallet,
00:32:51.040 that makes it way harder to spend that
00:32:52.960 money. It makes it feel more real. If
00:32:54.400 you're like counting out like, "Oh, how
00:32:56.080 many notes, how many bills do I have to
00:32:57.720 give to make this purchase?"
00:32:59.600 Use a
00:33:01.480 Excuse me. Uh use a debit card instead
00:33:04.480 of a credit card cuz it feels more real.
00:33:07.120 It comes straight out of your account
00:33:08.920 immediately.
00:33:10.680 On your apps, remove saved cards. If you
00:33:14.000 have to enter the details each time,
00:33:16.640 you're adding friction and making it
00:33:18.160 more difficult to buy it. Delete the
00:33:20.800 shopping apps off your phone so you
00:33:22.280 actually have to open up your laptop and
00:33:25.280 pause before tapping. Tapping with the
00:33:28.880 ding ding on your credit card or your
00:33:30.680 phone
00:33:31.200 >> So easy.
00:33:31.680 >> has made it so easy to spend money.
00:33:34.360 We just need to make it a little bit
00:33:35.800 more difficult and increase friction.
00:33:38.920 So, we'd love you just to check in right
00:33:40.480 now. What is your default spending
00:33:42.680 strategy?
00:33:43.920 Uh is it A, I want it, I buy it.
00:33:47.240 B, I check my balance.
00:33:50.040 C, I check if I've got credit. D, I wait
00:33:54.240 and I think.
00:33:55.720 E, I plan my spending in advance. Or F,
00:33:59.080 I'm too frugal and need help spending.
00:34:01.520 Cuz we know some of you out there
00:34:04.160 really struggle on spending. So, we'd
00:34:06.040 love to know. Put it in the chat right
00:34:07.360 now. Which one is it? Yes, YouTubers,
00:34:10.399 tell us immediately.
00:34:12.040 >> Shelly says, "I think about how many
00:34:13.719 hours I've had to work to get it."
00:34:15.399 That's a good one.
00:34:16.199 >> That is a genius strategy.
00:34:17.960 >> that many hours?
00:34:19.399 Uh Katie says, "The reason I'm on the
00:34:21.080 course is cuz I've had bad spending
00:34:22.719 strategies. I've got into the habit of
00:34:24.280 using a reward credit card for all
00:34:26.159 purchases as I get cash back, but it's
00:34:28.600 got me into trouble." They suck you in
00:34:30.840 with the kind of the reward system,
00:34:32.520 don't they? And someone earlier asked,
00:34:34.520 Emma asked, I don't have a credit card,
00:34:36.879 should I get one for the protection?
00:34:39.000 What does How does a credit card protect
00:34:40.760 you, Alan? What does she mean?
00:34:41.918 >> So, a credit card has a certain level of
00:34:44.239 protection, i.e. if you buy something
00:34:47.440 and it's not good, it's not
00:34:50.280 they don't fulfill what you've asked
00:34:51.960 for, you can speak to your credit card
00:34:54.040 company and they will challenge that for
00:34:56.760 you. So, they will look after you. It is
00:34:59.240 useful for big purchases, but it comes
00:35:02.200 with a risk, which the risk is you get
00:35:04.680 the credit card and you're tempted to
00:35:06.200 use it to buy all sorts of things. And
00:35:08.320 that sounds like what had happened to
00:35:11.240 Katie. And they tempt you with points,
00:35:15.000 rewards to get you spending and they
00:35:17.200 have minimum spends to get your rewards.
00:35:19.920 So, the real question is
00:35:22.760 do you trust yourself with a credit
00:35:24.800 card?
00:35:26.360 If yes, they can be a good tool. If no,
00:35:30.360 do not use them.
00:35:32.240 Uh
00:35:33.200 if you can develop good spending
00:35:34.800 strategies, then use a credit card cuz
00:35:37.360 they can be fantastic.
00:35:38.440 >> Just to add to what you mean there when
00:35:39.560 you say if you trust yourself, if you
00:35:41.520 trust yourself not to spend money that
00:35:43.480 you don't have but just to use it as a
00:35:45.600 way of buying the thing, not You're not
00:35:48.080 using it to borrow money, you plan on
00:35:50.000 inten- you plan on paying it off in full
00:35:52.760 every time you get the bill. That's
00:35:55.400 That's if you trust yourself. If you
00:35:56.840 know you've got that money and you know
00:35:58.800 you're going to pay it off in full every
00:36:00.280 single month, then that is you can, if
00:36:04.080 you choose to, use credit cards. If you
00:36:06.400 know that that's not going to happen,
00:36:08.320 then stay clear.
00:36:09.160 >> Exactly.
00:36:10.800 So, that is part one of the course, how
00:36:13.680 we end up in debt. Life hits you,
00:36:17.000 companies are designed to help you get
00:36:19.720 into debt, and then finally, human
00:36:22.520 behavior. We're all human after all and
00:36:25.280 things happen to us. So, that's how you
00:36:26.920 get into it. If you've been wondering,
00:36:29.840 how do I actually find out my spending
00:36:31.520 strategies? I have written a little AI
00:36:34.400 prompt to help AI interview you uh to
00:36:37.480 find out your spending strategy. Uh
00:36:39.920 roughly, it says, "Please review my
00:36:41.360 spending strategies. Ask me four
00:36:43.280 questions one at a time to understand my
00:36:45.080 spending strategies. Then, show me my
00:36:47.160 current strategy, how it affects my
00:36:49.080 life, and a better strategy for fun and
00:36:51.440 freedom."
00:36:53.160 I have put that on the AI prompt page.
00:36:56.320 We've got a library there. So, if you've
00:36:58.280 ever wondered what your spending
00:37:00.400 strategy is, visit our Rebel Finance
00:37:02.600 School prompt library and you will find
00:37:04.800 all of the prompts for the different
00:37:06.120 weeks. This link takes you to exactly
00:37:08.520 the section for this week. It's also in
00:37:11.200 the YouTube description. So, YouTubers,
00:37:13.600 you can just look in the description and
00:37:15.000 find the link there. Or, it's on Mission
00:37:17.200 Control.
00:37:19.200 So, that's the first section. Uh what I
00:37:21.320 would love you to do now is come up with
00:37:23.720 one thing you could do to protect future
00:37:26.120 you.
00:37:27.640 What are you going to do to protect
00:37:29.320 future you? And if you think future you
00:37:31.440 is in pretty good state, what's one
00:37:33.120 thing you could do to help your kids?
00:37:35.520 What's one thing you could do to help
00:37:37.080 your nieces, nephews, the people you
00:37:39.160 love to stay safe out there. Cuz there
00:37:43.400 are some financial sharks. Uh comment
00:37:46.080 coming in from Zeb says, "Love the AI
00:37:48.400 prompts."
00:37:49.040 >> Oh, done that one.
00:37:49.480 >> Yeah, the people who've been using them
00:37:50.840 have been getting some really good
00:37:52.200 feedback that it's helping them to
00:37:54.600 understand finances at a deeper level,
00:37:56.440 which was the whole purpose. So, I'd
00:37:58.080 love you if you want to, have a go with
00:38:00.240 those prompts. Uh it's really
00:38:02.560 fascinating.
00:38:03.520 >> With that obvious caveat that if you're
00:38:05.160 telling it things that you wouldn't want
00:38:07.000 to be out in the world online, then
00:38:09.800 don't do it. Just like that privacy and
00:38:11.560 protection thing that we talked about
00:38:13.840 uh earlier in the course.
00:38:14.920 >> Yes, if you wouldn't YouTube live stream
00:38:17.080 it, don't put it in AI.
00:38:19.360 Right. Now we understand the causes of
00:38:22.000 debt. Next, we build the escape plan.
00:38:25.680 >> Before we do that, if you're watching on
00:38:27.280 YouTube, please do hit that like button
00:38:29.360 and subscribe. It lets you know when we
00:38:31.120 release new stuff and helps us to help
00:38:33.800 more people, which is what we're all
00:38:34.840 about.
00:38:35.800 >> Now, how do we get out of debt, Katie?
00:38:37.680 How do we do this?
00:38:39.000 >> is all about getting the wind out of
00:38:40.880 your face and in your in your behavior
00:38:43.920 in your favor with the wind at your
00:38:45.840 back. So, let's get that wind out of
00:38:47.360 your face. A lot of people ask, "What
00:38:49.560 order do I do this in cuz you talked
00:38:51.440 about emergency funds and all these
00:38:52.560 things?" Here is the clear order. So,
00:38:54.400 the first thing you need to do
00:38:56.200 is work towards having a positive gap.
00:38:58.680 The reason that you're in debt is you've
00:39:01.040 had a negative gap in the past and
00:39:02.600 you've been borrowing to have that
00:39:04.480 spending. So, now the idea, work towards
00:39:07.200 having a positive gap. And that can take
00:39:08.840 some time. Go back to week one and look
00:39:10.600 at all those resources we had for you
00:39:11.920 there.
00:39:12.880 Normally, the next step we say is to
00:39:14.680 build a your first emergency fund of a
00:39:17.360 thousand pounds or a thousand dollars.
00:39:19.680 Actually, there's a little caveat here.
00:39:21.240 If you have extremely high interest rate
00:39:23.960 debt, we're talking 30% plus, then I
00:39:26.480 want you to focus on paying that off
00:39:28.480 first before you build your emergency
00:39:30.480 fund.
00:39:31.360 >> The reason for that is it is compounding
00:39:33.560 against you ridiculously fast and the
00:39:36.480 worst that happens if you do have an
00:39:38.400 emergency, you have to like go back into
00:39:41.000 debt slightly to cover it, but get rid
00:39:43.640 of that very, very high interest rate
00:39:45.680 debt.
00:39:46.520 >> Then you attack this expensive debt,
00:39:48.960 that wind in your face, things over 6%
00:39:51.800 or more, and then build build the full
00:39:54.840 emergency fund.
00:39:57.000 Now, we talked about this range where
00:39:58.920 there's a bit of personal preference.
00:40:00.440 So, you might choose to overpay debts
00:40:02.920 that are more than 4%, but anything less
00:40:06.200 than 4%, you just set those debts to
00:40:08.840 minimum or whatever the contractual
00:40:10.400 payment is and just leave them to pay
00:40:12.480 off over time. Don't overpay.
00:40:15.120 Actually, in the Dungan household, we we
00:40:17.920 choose to say that anything uh
00:40:20.640 more than 6% is what you should overpay.
00:40:22.920 If it's less than 6%, just leave it to
00:40:24.960 do its thing. But, that's that area
00:40:27.040 where you can choose what your
00:40:29.240 preference is. Is it 4%, 5%, 6% where
00:40:32.000 that cutoff is?
00:40:33.680 >> Yes, I love it. I saw Steven taking a
00:40:35.600 photo of the slide. It's quite a useful
00:40:37.480 picture to have to keep that if you need
00:40:40.760 to refer to it ever. Now, we had a
00:40:43.400 question come in this week, which is
00:40:45.640 what about building my sinking funds?
00:40:48.120 And this was the question, I want you to
00:40:49.760 tell us what you would do in this
00:40:51.480 person's situation. The question is, I'm
00:40:53.960 building my emergency fund.
00:40:56.200 After that, I have 9,000 debt at 20% in
00:41:00.120 28% interest I just need to sort out.
00:41:03.920 Do I start building my sinking funds
00:41:07.280 whilst getting the debt sorted? Or wait
00:41:11.040 until the debt is gone. What would you
00:41:13.600 say to this person? They've got 28%
00:41:16.560 interest debt.
00:41:18.360 Do they start sinking funds before or
00:41:20.280 after?
00:41:21.120 >> Sinking funds meaning saving for future
00:41:23.360 spending. So, we've talked about sinking
00:41:25.040 funds for your Christmas presents, gifts
00:41:27.480 for people, holiday, buying a car,
00:41:30.600 various saving for those future things
00:41:33.200 like, oh, you know that the washing
00:41:34.560 machine's going to break down at some
00:41:36.160 point. I'm saving towards the next one.
00:41:38.760 >> And
00:41:39.880 my thing is, well, we shouldn't I would
00:41:42.600 ask the question, what are you saving
00:41:44.440 for in this sinking fund? If it's for a
00:41:46.360 holiday, I'm like, no way, pay off the
00:41:48.320 debt first. 28% is a very high interest
00:41:51.200 rate and it is compounding against you.
00:41:53.800 I would pause all sinking funds until
00:41:56.520 that debt is gone. That's what I would
00:41:59.320 do personally, and I have this thing of
00:42:01.480 pay it off like your hair's on fire. Run
00:42:03.280 around the house, get rid of that debt.
00:42:05.320 28% is very, very high. It is painfully
00:42:09.600 high. So, that's our thoughts on that
00:42:12.320 one.
00:42:12.840 >> Other people The other thing people ask
00:42:14.840 us is, "Should I stop my pension
00:42:17.080 contributions whilst I'm working towards
00:42:19.560 paying off my debt?" You know, the free
00:42:21.640 money that you get from your employer.
00:42:24.320 We'd say
00:42:25.640 take the free money. So, do the employer
00:42:27.640 match that, you know, if they put in 4%
00:42:29.720 of your salary, you put in 4%, and you
00:42:33.080 get that free money. Just don't over
00:42:35.320 contribute. That was what we would say.
00:42:37.440 >> Exactly. Take the free money. Now, onto
00:42:40.640 the debt attack strategy.
00:42:43.800 Uh
00:42:44.880 we have a brand new calculator for you.
00:42:48.480 It's a spreadsheet.
00:42:50.200 If you don't like spreadsheets, it's
00:42:51.920 okay. You can do all of this on paper.
00:42:54.360 If you like spreadsheets, the ninjas, uh
00:42:57.320 shout out to Martin and Lisa for helping
00:42:59.360 on this. They've been incredible. Uh
00:43:01.440 they spent a lot of time this week with
00:43:03.360 Katie designing this so that it will
00:43:05.640 automate everything for you and show you
00:43:08.360 the quickest way out of debt. So, that
00:43:10.280 is a free Google Sheets tool that you
00:43:12.880 can create a copy and use, and it will
00:43:15.640 show you the quickest way out of debt.
00:43:18.760 It's just a tool.
00:43:19.560 >> It's just a tool. You don't have to use
00:43:21.040 it. You can use pen and paper if you
00:43:22.600 want. It's just an option for you. And
00:43:24.720 as we go through this, we're going to do
00:43:25.920 an example to talk you through the steps
00:43:27.720 in the strategy. It's all written down
00:43:29.920 for you. We've got it in the notes.
00:43:31.320 Maybe it's just chill, absorb the
00:43:33.200 knowledge, jot down anything that comes
00:43:35.240 to you of how you might apply each of
00:43:37.360 these steps in your situation. So, any
00:43:39.280 thoughts or ideas that come to you, just
00:43:40.800 capture those. But we can send this all
00:43:43.080 in the notes to you so that you've got
00:43:44.440 it all in one place.
00:43:45.840 >> And please remember, do not compare your
00:43:47.960 pineapples to our case study tonight.
00:43:50.640 You are your own human in your own
00:43:52.520 situation, and just compare your
00:43:54.520 situation to yours. That being said,
00:43:57.360 meet Fred.
00:43:58.320 >> Fred is an amalgamation of all the
00:43:59.720 different case studies we've had in the
00:44:01.120 past to pull out the key learnings and
00:44:02.720 points that we've had. So, whilst Fred
00:44:04.640 is not real, all the examples and things
00:44:07.280 that we talk about are from real genuine
00:44:09.960 real life examples. And here are the
00:44:11.800 eight steps that we're going to talk you
00:44:13.720 through. Maybe just take a picture of
00:44:15.000 this slide for now, but we're going to
00:44:16.160 talk through each of them one by one.
00:44:19.000 >> Yes, this is the entire debt attack
00:44:21.400 strategy in one slide. Step one is get
00:44:25.960 clarity on your debts. That's step one.
00:44:29.320 All debts, make a list. Car loans, store
00:44:32.120 cards, credit cards, overdraft, personal
00:44:34.120 loans, student loans, mortgages, money
00:44:36.640 you owe your mate Dave.
00:44:39.040 We need to know
00:44:40.720 balance,
00:44:42.160 interest rate, and minimum payment.
00:44:45.240 That's the information you need. Step
00:44:47.520 one is get crystal clear on everything.
00:44:51.080 >> And we say everything to start with. So,
00:44:53.200 get the full picture. List absolutely
00:44:54.920 everything, you know, your mortgages,
00:44:56.800 student loans, anything and everything,
00:44:59.400 and then you can decide based on
00:45:01.080 interest rate. But if you don't know
00:45:02.600 what the interest rate is, most people
00:45:04.760 don't know what the interest rate is on
00:45:06.360 their student loan. A lot of people
00:45:07.680 don't know what the interest rate is on
00:45:09.200 their mortgage. Let's get the full
00:45:11.080 picture, and then when we can decide
00:45:12.880 where the cut-off is as to what we're
00:45:14.880 attacking and overpaying, and what we're
00:45:17.200 leaving to pay off over time because the
00:45:19.120 interest rate is low. And a few people
00:45:21.320 were asking about mortgages and things,
00:45:23.120 we'll come on to that in a bit.
00:45:24.680 >> Why include 0% cards? Well,
00:45:28.120 surely they're not expensive debt,
00:45:29.640 people say to us. Well, it won't always
00:45:32.800 be 0%, and the credit card companies
00:45:35.120 trust you not to pay it off and to end
00:45:37.120 up paying interest. So, we would say
00:45:39.000 still put it in the list even though
00:45:40.680 it's 0% cuz we've got to tackle it at
00:45:42.480 some stage. Student loans?
00:45:44.520 >> We talked about this on Monday. Go and
00:45:46.520 rewatch that little bit, or we have an
00:45:48.200 article here to help you to think that
00:45:50.200 through.
00:45:50.920 >> And mortgages, we talked a lot about
00:45:52.600 that, and there was a few comments on
00:45:54.000 these two blogs this week that I've just
00:45:55.880 been replying to this evening
00:45:58.120 about paying off my mortgage or
00:45:59.560 investing, or what to do at different
00:46:01.480 rates. So, those two articles will help
00:46:03.880 you decide what to do with your mortgage
00:46:06.520 and I will answer your blog comments as
00:46:09.040 I go through it this week.
00:46:10.800 >> So, over to Fred. The first step is to
00:46:13.600 get a clear list. And you don't need to
00:46:16.440 necessarily see all the detail in here,
00:46:18.080 but just for you to see at a glance,
00:46:19.600 we've got what the debt is, what the
00:46:21.320 balance is, what the interest rate is,
00:46:23.960 and what that minimum monthly payment
00:46:25.600 is. Just a list, get it all out in one
00:46:27.920 place so we can start to look at it and
00:46:29.720 start to attack it.
00:46:31.440 The one thing I really want to pull out
00:46:32.960 here is this MBNA card. This is This is
00:46:35.880 actually one debt, but there's two
00:46:38.400 different interest rates in here.
00:46:40.600 >> MBNA is a credit card brand. So, it's
00:46:43.440 like an American Express or whatever it
00:46:45.320 is, it's a credit card brand.
00:46:47.360 >> So, we split that out into two lines.
00:46:49.080 One because part of it is a balance
00:46:51.240 transfer deal, which has that lower
00:46:53.440 interest rate you can see at 4.9%
00:46:56.080 and the rest, any additional purchases,
00:46:58.600 are charged at this extra really high
00:47:01.040 percentage of 33 and 1/2% Just to point
00:47:04.440 out that this is someone that he did a
00:47:06.880 balance transfer. They're not doing this
00:47:09.000 to be nice. They want you to make
00:47:10.320 additional purchases on this card at a
00:47:12.240 much higher interest rate. So, that's
00:47:14.520 why we've pulled it out into those two
00:47:16.080 different interest rates cuz two
00:47:17.520 different rates apply depending on what
00:47:19.600 he's bought over versus any additional
00:47:21.840 spending.
00:47:22.440 >> Exactly.
00:47:23.880 With all of this, your calendar is your
00:47:26.920 friend. So, you've got to look out for
00:47:28.480 future you. Do not rely on your main
00:47:30.600 memory and put a reminder a month or so
00:47:33.640 before the 0% interest deal runs out or
00:47:36.960 the free trial runs out. Set reminders,
00:47:40.000 have it coming up so that you know how
00:47:42.600 to deal with it.
00:47:43.600 >> four or five reminders, so kind of a few
00:47:45.760 days out before each thing just to say,
00:47:48.200 "Do we want to keep this thing that
00:47:49.560 we're doing the free trial for? Are we
00:47:50.840 really sure we want to keep it?" And
00:47:52.000 then it's just cuz you might miss a
00:47:53.600 reminder that rings up. So, we put it in
00:47:55.520 multiple places.
00:47:56.360 >> We got a free trial of Apple TV, which
00:47:58.760 was great fun. We got 3 months. I think
00:48:01.080 I had five reminders beforehand to make
00:48:03.200 sure I canceled it before they started
00:48:04.840 charging me. Now, Fred has realized that
00:48:08.240 at the current interest rates and
00:48:09.920 minimum payments, he will never
00:48:13.200 never pay off the debt.
00:48:15.600 So, his question is, what am I going to
00:48:17.040 do about this? Do I give up? Do I go
00:48:19.120 bankrupt? Is it even possible to get out
00:48:22.120 of debt?
00:48:23.240 >> Spoiler alert.
00:48:25.000 Yes.
00:48:26.400 >> If things carry on the way he was doing
00:48:28.680 it,
00:48:29.640 his original debt of 88,334
00:48:33.480 over the next 10 years will grow to
00:48:36.360 206,047
00:48:39.840 just because of the interest. He will
00:48:42.120 have paid off 35,000,
00:48:46.080 but his bill will have grown to 206,
00:48:49.960 which is crazy. So, we need to make some
00:48:52.360 serious changes to help him get out of
00:48:54.400 this.
00:48:55.600 Which brings us on to step two of the
00:48:57.160 debt attack strategy.
00:48:58.840 >> It's to prioritize your debts by
00:49:01.600 interest rate with the highest at the
00:49:03.760 top. So, order them that the highest
00:49:05.520 interest rate at the top going down,
00:49:07.600 down, down in interest rate. We're
00:49:09.000 looking at those
00:49:10.480 debts that have the strongest wind in
00:49:12.240 your face. They're the ones that we're
00:49:13.600 going to attack first, and we don't care
00:49:15.800 what the balance is. Some people will
00:49:17.440 tell you to pay off the smallest balance
00:49:20.240 first. We're not saying to do that.
00:49:22.120 You'll pay more interest in the end, and
00:49:24.040 it will take longer. It's just this
00:49:26.280 little psychological hit of well, if I
00:49:28.720 pay off a small balance, I've cleared
00:49:30.240 one of the debts.
00:49:31.880 Okay, yes, that is a win, but overall it
00:49:34.520 means that you're going to be paying
00:49:35.760 more in interest, and it will take
00:49:37.360 longer. This is the
00:49:39.240 wind in your face
00:49:40.880 >> analogy.
00:49:41.640 >> Remove that wind from your face. Remove
00:49:43.560 that strongest wind with the highest
00:49:45.960 interest rate.
00:49:47.120 >> And we've had a request from the ninjas.
00:49:48.760 If you're on Zoom, please to the
00:49:50.480 question and answer facility to ask your
00:49:52.840 questions. If you're on YouTube, please
00:49:54.880 put your questions in the chat. The
00:49:56.400 ninjas are there to help you.
00:49:59.640 So, this is the next step.
00:50:00.640 >> So, this is Fred This is Fred has
00:50:02.520 reordered his debts. And this first The
00:50:06.040 first step was just to write them all
00:50:07.440 out. The second step of prioritizing
00:50:09.560 them is adding even more clarity cuz now
00:50:11.880 we can see which are the ones that are
00:50:13.560 hurting us the most. So, that one right
00:50:15.400 at the top, Halifax, he's got an
00:50:17.560 overdraft where they're charging nearly
00:50:19.960 50%
00:50:21.520 interest. 50%. That is bonkers. So,
00:50:25.600 we're going to come on and talk about
00:50:27.480 step three, which is how to get those
00:50:30.320 interest rates down. Step three is
00:50:33.280 reduce the interest rate, and we've got
00:50:35.440 three different ways that you can do
00:50:36.720 that.
00:50:37.120 >> Cuz that 50% interest rate you can see
00:50:39.240 at the top there is crazy. So, here's
00:50:41.720 the three ways you can reduce interest
00:50:43.480 rates. One, which not people don't
00:50:46.240 realize, you can negotiate. Yes, you can
00:50:49.720 negotiate with a bank, with a credit
00:50:51.520 card company, with all sorts of people.
00:50:53.560 You can ask them. And it is amazing what
00:50:56.000 you get just by asking and negotiating.
00:50:59.120 >> Next one is to transfer. You can move
00:51:01.600 debt uh to existing cards at lower
00:51:04.240 rates. So, if you have two cards and one
00:51:05.640 of them's got a lower rate, can you move
00:51:07.400 it over? And then the even more powerful
00:51:09.480 version of that is a 0% balance
00:51:11.840 transfer. We'll come on to what that
00:51:13.480 means.
00:51:14.560 And then the third thing you can do is
00:51:16.160 consolidate. What that just means is
00:51:18.440 putting all your debts into one place.
00:51:20.480 There's companies that will do that for
00:51:21.960 you and give you a cheaper personal loan
00:51:25.160 to They'll say, "Give us all your debt
00:51:27.640 and we'll just convert it to a lower
00:51:29.160 interest rate." Now, a lot of these
00:51:31.120 techniques depend on your credit rating,
00:51:33.160 so check what that is and whether you
00:51:35.280 might be eligible for these things.
00:51:37.240 >> And a huge warning.
00:51:39.880 Commercial debt management companies are
00:51:42.200 not doing this to be nice. They are out
00:51:45.000 to make money out of you. So,
00:51:47.000 consolidation companies are dangerous.
00:51:50.480 You want to really understand the maths
00:51:52.920 before you do anything like that, and
00:51:54.880 there's probably better ways to deal
00:51:56.760 with it.
00:51:57.960 >> So, now that you've got your list and
00:51:59.640 the interest rates with the highest at
00:52:01.080 the top, when you come to look at can I
00:52:03.360 reduce any of those rates, do it in the
00:52:05.720 order of that list. So, the biggest
00:52:07.560 interest rates, let's see if we can
00:52:09.640 reduce those using any of those ways
00:52:12.200 that we talked about negotiating,
00:52:14.200 transferring, or consolidating.
00:52:16.600 >> And one of the most powerful is the 0%
00:52:18.960 balance transfers. It is an incredibly
00:52:22.040 powerful tool, but comes with some
00:52:24.800 caveats. There is a fee for transferring
00:52:28.640 that over.
00:52:30.600 It can reduce your repayments, and it
00:52:33.360 can help you out get out of debt very
00:52:35.280 quickly,
00:52:36.720 but also it can be a trap because if you
00:52:38.920 don't pay it off by the 24-month,
00:52:41.200 36-month period, the interest rates go
00:52:43.920 sky-high afterwards.
00:52:46.320 >> So, you need to have a plan to pay it
00:52:47.680 off over that period, and actually
00:52:50.040 there's a really good resource from
00:52:51.840 Money Saving Expert if you're in the UK.
00:52:54.480 This uh
00:52:56.200 talks about all the different latest
00:52:57.960 deals you can get. It has an eligibility
00:53:00.720 tool that you can use to see if you
00:53:02.640 might qualify for those without it
00:53:04.880 having an impact on your credit rating
00:53:06.920 cuz you're not actually doing it with
00:53:08.200 the provider. It's just this eligibility
00:53:10.040 check, meaning do you qualify for it?
00:53:12.600 Please, please, please, he's got some
00:53:14.480 golden rules there as to how to
00:53:16.560 implement this strategy. Please make
00:53:18.480 sure you have a good read of those cuz
00:53:19.840 it's going to help you to avoid some of
00:53:21.160 these traps that we've talked about.
00:53:23.400 But that's can be such a powerful
00:53:25.920 thing that will massively reduce the
00:53:27.800 num- the time it takes and the amount of
00:53:30.200 interest you pay.
00:53:31.080 >> Exactly. Okay, back to Fred. Fred has
00:53:34.040 got his list. Uh he looks at the top one
00:53:37.280 and goes, "It's an overdraft." Uh which
00:53:40.160 he used to think of the overdraft is my
00:53:42.440 money, but the overdraft is not your
00:53:44.600 money. The overdraft is the bank's money
00:53:46.840 they're lending you, and they're lending
00:53:48.560 it to you at a 50% interest rate, which
00:53:51.040 he would never pay off. The debt is
00:53:52.960 mounting faster than he would pay it
00:53:54.880 off. So, that's the one we've got to
00:53:55.960 tackle.
00:53:56.440 >> Yeah, cuz the monthly amount that
00:53:57.680 they've asked him to repay it is not
00:54:00.000 covering the interest. And we really,
00:54:02.480 really want you to get this. They Banks
00:54:04.840 have improved in the UK. When I used to
00:54:06.960 log into my banking, it would show me
00:54:08.960 the the balance the positive balance I
00:54:10.800 have in my account, but it would add on
00:54:13.040 to that the amount of overdraft that
00:54:15.320 they kind of pre-approved me to have,
00:54:17.720 making it think that that is my money.
00:54:19.720 It is not my money. The overdraft is not
00:54:22.000 your money. That is a debt. That is
00:54:23.640 something you are borrowing from the
00:54:25.000 bank, and they can ask for it back at
00:54:28.160 any point without warning.
00:54:30.480 This is not your money, and I really
00:54:31.760 want you to get that.
00:54:34.560 >> How much do you think that 5,000 debt
00:54:37.560 would compound to that interest rate in
00:54:40.440 10 years? What do you think it would
00:54:42.600 compound to?
00:54:44.120 We have a little chart showing you this.
00:54:46.520 Here it is, and you might recognize this
00:54:48.880 shape from the compounding week, because
00:54:51.760 it is actually the same chart in the
00:54:54.040 opposite direction. That debt would
00:54:56.120 compound to 172 grand if it wasn't
00:54:59.680 tackled. That's why he was in such a
00:55:02.000 painful place.
00:55:03.960 Uh so, we were saying to Fred, "You need
00:55:06.360 to ring them and negotiate this interest
00:55:08.640 rate, cuz it's ridiculous." And we
00:55:10.440 prepared him with a bunch of different
00:55:12.280 things to say to these people on the
00:55:14.160 phone, uh and ring them. Uh the company
00:55:17.160 was Halifax in the UK. He got on the
00:55:19.800 phone to them and made that phone call.
00:55:23.520 That one phone call, Fred got his
00:55:25.880 overdraft down from 50% to 0%.
00:55:29.800 >> Wow, good on Fred.
00:55:30.600 >> I think Halifax was embarrassed about
00:55:33.800 how high that interest rate was, and how
00:55:36.960 bad it was and in some ways that's
00:55:39.120 illegal in different countries to have
00:55:41.520 it compounding faster against you than
00:55:43.360 you should do. So, he got it down to
00:55:45.040 zero, which is one phone call.
00:55:47.880 Now, I don't like making phone calls,
00:55:50.960 but how much are you willing to put up
00:55:53.000 with the pain of making a phone call to
00:55:54.720 save that much money?
00:55:57.440 >> Uh we got a comment from Ellie. Ellie
00:55:59.080 managed to reduce the interest rate on
00:56:00.560 one of their loans by 1.9% and save
00:56:03.000 about £30 in repayments a month and
00:56:05.880 started to pay overpay some of the loan
00:56:08.120 as a result.
00:56:08.880 >> I love that, Ellie. Good work.
00:56:11.160 So, what Fred then did was reorganize
00:56:15.000 the list based on interest rates and
00:56:17.200 you'll see Halifax is now moved down
00:56:19.080 there because it's a 0% interest rate.
00:56:23.040 So, we don't tackle that one first, now
00:56:25.600 it's down to zero.
00:56:27.320 >> So, a bit of freedom work for you just
00:56:29.280 on this step, which is to find out what
00:56:31.440 your credit rating is, negotiate
00:56:33.800 interest rates for each of those debts,
00:56:35.960 starting prioritizing with the one
00:56:37.440 that's blowing the most wind in your
00:56:38.800 face, the highest interest rate.
00:56:41.240 >> And can you do a 0% balance transfer on
00:56:44.560 any of these to be able to take it from
00:56:46.760 a 30% interest rate to zero? Remember,
00:56:50.120 this is a temporary but important
00:56:52.680 measure.
00:56:54.480 >> And then see if you can investigate a
00:56:56.480 lower interest rate personal loan. These
00:56:58.800 are just different avenues for you to
00:57:00.880 explore which might help you to reduce
00:57:03.280 the interest rate.
00:57:05.200 >> How did this affect Fred's situation?
00:57:07.760 Well, before after 10 years, he was
00:57:10.040 heading to 206 grand's worth of debt and
00:57:12.400 having paid 35 grand in interest. Now,
00:57:15.840 after 10 years, it would be 33 grand
00:57:18.560 left and he would have paid 16 grand of
00:57:21.360 interest.
00:57:22.800 Like that is a huge difference from one
00:57:26.040 phone call.
00:57:27.520 He's still not paying it off, but at
00:57:29.640 least he's half the amount of interest
00:57:31.240 he's paid.
00:57:32.640 Which brings us on to step four, what
00:57:34.440 else can he do to get going? Uh there's
00:57:36.960 a reason there's a bunch of random stuff
00:57:38.800 here.
00:57:39.720 Uh
00:57:41.160 This is, do you have any money that you
00:57:43.400 can use to pay it off? Do you have any
00:57:45.560 savings earning not very much interest?
00:57:49.160 You've got to keep your £1,000 emergency
00:57:50.840 fund, [snorts] but do you have savings?
00:57:52.480 B, what could you sell around the house?
00:57:55.200 Do you have old DVDs, books, Game Boys,
00:57:58.720 stuff? Do you have some kids you don't
00:58:00.880 like? If you've got four kids, could you
00:58:03.040 sell one?
00:58:04.320 Like how much have you got? People are
00:58:06.240 like, you can't say that, Alan. Uh no,
00:58:08.160 you probably couldn't. Uh do you have
00:58:09.880 storage?
00:58:11.280 Get rid of the storage and the stuff in
00:58:13.160 the storage. What do you have in and
00:58:15.160 around the house you can sell?
00:58:16.520 >> It's amazing how much stuff is just
00:58:18.000 sitting around the house that you could
00:58:19.760 use, convert, and just get to your
00:58:21.600 freedom more quickly. So, Fred, let's
00:58:24.080 look at Fred. Does he have any savings
00:58:25.600 or investments? Actually, he's got
00:58:27.800 20,000 in savings and investments. And
00:58:30.440 we said to Fred, you should use that to
00:58:32.640 pay off your debt. And he said, "No, I
00:58:34.640 would rather be in debt. I like the
00:58:36.280 feeling of having my savings there." But
00:58:38.680 he's not realizing how much the wind is
00:58:40.520 in his face with the debts and a tiny
00:58:42.880 bit of wind behind his back from these
00:58:44.480 savings that weren't earning very much.
00:58:46.080 >> Yes, and uh I was fairly direct with
00:58:48.600 Fred saying this is a daft decision to
00:58:51.920 keep something earning 4% and paying
00:58:55.600 40-50% on your other loans. So, cash
00:58:59.000 them all in, keep a thousand for the
00:59:00.960 emergency fund, and immediately put that
00:59:03.400 cash towards the debt. It is amazing the
00:59:05.960 number of people we meet with cash in a
00:59:08.320 savings account and a balance on a
00:59:10.160 credit card.
00:59:12.160 >> This is one of turning stuff into cash.
00:59:14.760 And look, this people saying, "Oh, I'm
00:59:16.520 not into in debt. How is this session
00:59:18.800 useful for me?" This is something you
00:59:20.240 can do regardless of what position
00:59:22.080 you're in. You can use this to fund your
00:59:23.760 emergency fund. You can use it to pay
00:59:26.080 off debts, and you can use it to if
00:59:28.320 you're in the position that you're
00:59:29.400 building your freedom fund,
00:59:31.640 convert the stuff around your house into
00:59:33.680 freedom by selling it and investing it,
00:59:35.480 which of course we're coming on to in
00:59:36.640 later weeks. But, just to say this is
00:59:38.400 such a powerful strategy for anyone,
00:59:40.240 regardless of where you are on that
00:59:42.600 freedom map.
00:59:43.480 >> Yeah, if you're not using it, sell it.
00:59:45.240 Free up the house, free up the space.
00:59:47.280 So, we sent Fred round the house. Uh he
00:59:49.840 went room by room, including the garage,
00:59:52.520 uh storage unit, and what we said to him
00:59:55.200 is, "What have you got This is the
00:59:56.720 actual list he
00:59:57.840 sent us." Um
01:00:00.200 The concept is you could store it on
01:00:02.600 Facebook Marketplace, on Gumtree, on
01:00:05.280 wherever you're selling it. You sell it
01:00:07.440 to someone on there, and then if you
01:00:08.880 ever want it back, you can buy it back
01:00:10.880 from there. We're buying freedom.
01:00:13.320 >> we're not saying necessarily from that
01:00:15.200 same person you sold it to, but
01:00:16.640 something similar will be for sale later
01:00:18.680 on.
01:00:20.600 >> If you are selling things, please ask
01:00:22.880 the owner's permission. That is very
01:00:25.040 important. Just don't sell off stuff in
01:00:26.840 the house that's not yours, uh however
01:00:28.800 tempting it is.
01:00:30.240 Uh Fred found 1,500 lb worth of stuff
01:00:34.160 around his house that he was able to
01:00:35.880 sell.
01:00:36.280 >> That's amazing. So, if we look at this
01:00:37.680 step four summary, the step four is,
01:00:39.440 "What can we immediately put towards the
01:00:41.560 debt?" So, he's got 19 grand that he had
01:00:43.800 in savings and investments, 1,500 lb
01:00:46.520 from around the house, and now his debt
01:00:48.160 has gone from 88,000 to just under
01:00:50.400 68,000. And of course, that's still a
01:00:52.760 sizable amount, but look how much we can
01:00:55.320 get it down just from those few simple
01:00:57.040 actions.
01:00:58.000 >> So, what do you do with it? Will you pay
01:00:59.640 off the highest interest rate first? So,
01:01:02.080 we pay off the MBNA card straight away.
01:01:05.440 That's the one to pay off immediately,
01:01:08.440 uh cuz it has the highest interest rate.
01:01:10.400 >> Yeah, so those three add up to 17,000,
01:01:14.840 and we've got 20,500
01:01:17.080 to play with, so we can use the
01:01:18.360 remainder to put towards this next loan
01:01:20.920 down on the list. So, you take the cash
01:01:22.920 that you have and put it to those
01:01:24.720 balances in order.
01:01:26.720 >> Always start at the highest interest
01:01:28.480 rate and work down. That's the plan and
01:01:30.760 that completely changes the amount he
01:01:32.480 owns and it's changed his monthly
01:01:36.120 payments. So, his monthly minimum
01:01:38.160 payments have gone from 1,600 pounds
01:01:41.160 to 1,000 pounds.
01:01:43.960 And Fred's obviously thinking, "Well,
01:01:45.400 what do I do with this cash now?" But,
01:01:47.200 here's his new debt list. This is what
01:01:49.360 it looks now he's wiped out the top
01:01:51.080 ones.
01:01:51.920 >> I didn't want to say we've mentioned
01:01:53.200 pounds as the example cuz that's where
01:01:55.040 Fred is. This This is the same applies
01:01:57.160 regardless of your currency. It makes no
01:01:58.760 difference.
01:01:58.840 >> New Zealand dollars, American dollars,
01:02:00.440 Aussie dollars, doesn't make a
01:02:02.120 difference. Even Canadian dollars.
01:02:04.120 >> Even dollars. I love it.
01:02:05.680 >> Now, the importance of this step. This
01:02:08.560 was his debt before. This was the
01:02:11.080 interest rate before. Now,
01:02:14.800 the debt has reduced significantly, but
01:02:19.160 after 10 years, he still has the same
01:02:21.120 balance.
01:02:21.920 >> Yes.
01:02:22.800 >> And his interest is halved, which is
01:02:25.280 awesome, but he's still never paying it
01:02:27.840 off.
01:02:28.600 >> But, what's cool here is that that step
01:02:30.240 saved him over 8,000 pounds in
01:02:33.880 >> interest.
01:02:34.760 >> Just from selling unwanted stuff.
01:02:37.680 >> None of this happens unless you take
01:02:39.760 action. That's what we wanted to really
01:02:41.960 put here. Checking in with Fred, Fred
01:02:44.920 was very excited he worked out the three
01:02:46.840 debts, but very sad that he won't pay
01:02:50.000 them off.
01:02:51.200 His minimum payments have gone down from
01:02:52.880 1,600 to 1,000 and he's thinking, "How
01:02:56.280 can I spend the extra 598 pounds?"
01:03:02.200 What's your reaction to that?
01:03:04.400 Miranda's laughing, going, "Yes, I know
01:03:06.280 he would be thinking how much to spend
01:03:07.800 this." What is your reaction to that? Uh
01:03:10.520 this was Katie's reaction. "No, Fred."
01:03:13.200 >> No.
01:03:13.800 >> No.
01:03:14.440 >> Use it to attack that debt. Get that
01:03:16.560 wind out of your face. We'll come on to
01:03:18.920 how that works and what the next steps
01:03:21.000 are. But the steps so far, number one,
01:03:23.560 clearly list the debts. Just that step
01:03:25.760 alone really helps to be able to
01:03:28.000 understand what's happening. Secondly,
01:03:30.280 is to put the let debts in order,
01:03:33.400 highest interest rate at the top.
01:03:35.440 >> Then you reduce the rates. How can you
01:03:38.080 negotiate, get the rates down? And then
01:03:40.400 finally we sell off stuff to kick start
01:03:43.240 this. Okay. That's the first four steps.
01:03:46.120 We wanted to do a quick check-in.
01:03:49.040 Are you okay?
01:03:50.640 >> I am. Are you?
01:03:51.240 >> Are you alive? I Craig lent in nodding,
01:03:54.040 thank you. That made me happy. Carol,
01:03:56.840 YouTubers, are you there? Please give us
01:03:58.680 a reaction. Tell us you're alive.
01:04:00.160 >> Yeah, I love it.
01:04:01.000 >> Yes. That's what we want to know. We
01:04:02.720 just want to know you're okay. Are you
01:04:04.680 still with us? We know this is a lot,
01:04:06.760 but we also wanted to give you a video
01:04:10.280 that you can watch back at any time and
01:04:12.800 just work through the steps. And the
01:04:14.760 spreadsheet tool that Martin and the
01:04:16.440 Ninjas have created just guides you
01:04:19.160 through every step automatically. That's
01:04:22.080 what we wanted to do. Um
01:04:24.480 Love the reactions coming in, the thumbs
01:04:26.520 up and the different reactions. It makes
01:04:27.960 my day to know you're still alive. Cuz
01:04:29.840 sometimes I'm talking away at the camera
01:04:31.680 and I'm like, is anyone still there?
01:04:35.080 >> At least I laugh at your jokes.
01:04:36.880 >> Someone has to.
01:04:37.760 >> Move on to step five. So step five is
01:04:40.320 about making your gap as big as possible
01:04:43.720 in order to be able to pay off
01:04:46.200 the debt more quickly. So remember the
01:04:48.760 gap is the difference between what you
01:04:50.760 spend and what you earn. How can we get
01:04:53.560 that as big as possible? How might you
01:04:55.920 be able to reduce your spending? And one
01:04:59.040 way of doing that is to look through
01:05:01.120 your spending category by category and
01:05:03.240 look for those leaks. Start plugging
01:05:05.120 those leaks. And maybe even how can you
01:05:07.280 increase your income?
01:05:09.480 >> So we need to review your spending. That
01:05:11.800 was part week one was about your
01:05:14.760 spending. No guessing. What are you
01:05:16.600 actually spending? Cuz we need to know
01:05:18.200 how much you're spending. Then we can
01:05:20.160 look at getting it down. Can we reduce
01:05:22.240 the grocery spend? Can we reduce the
01:05:24.000 alcohol spend? Can we reduce the home
01:05:25.880 improvement spend? The gift spend?
01:05:29.400 It always amazes me that quite often the
01:05:32.200 people that are the most generous are
01:05:34.280 the people who are in the most debt.
01:05:36.280 >> Mhm.
01:05:37.880 >> Uh and I would say for a period
01:05:41.320 be generous to yourself and help
01:05:43.280 yourself financially and people will
01:05:45.440 understand.
01:05:46.400 >> And normally actually people would
01:05:47.520 prefer to have your time and enjoying
01:05:50.160 time with you rather than something that
01:05:52.160 cost money. Pleasure swap, Alan.
01:05:54.000 >> Pleasure swap. Then can we increase your
01:05:56.160 income? So can we rent out a room in
01:05:58.480 your house?
01:05:59.720 Maybe my mom always threatened me, "Can
01:06:01.800 I'm going to rent out your room and get
01:06:03.000 a whole family in there? I could make a
01:06:04.440 lot of money out of your room." Uh but
01:06:06.360 maybe you can rent out a room. Huge. Uh
01:06:09.680 could you start a side hustle? Could you
01:06:11.480 ask for a raise? Could you do a car boot
01:06:13.520 with the stuff? Garage sale? Can you get
01:06:16.320 extra money? Or just to stretch your
01:06:19.080 imagination could you become a property
01:06:21.680 guardian for a while and reduce your
01:06:24.720 expenses accommodation?
01:06:27.200 Uh
01:06:28.200 and we had this question like one of my
01:06:29.920 biggest bills is food.
01:06:32.040 Is it possible to eat for free?
01:06:34.640 Uh you're always told there's no such
01:06:36.360 thing as a free lunch. Well, we had
01:06:38.800 someone very kindly write in last year
01:06:41.320 and tell us that they had managed to
01:06:42.880 stop paying for food entirely and they
01:06:46.160 shared 11 ways they did it. So they
01:06:48.720 wrote an article that we checked and
01:06:50.680 published on the website. Here are 11
01:06:53.120 ways that they were able to completely
01:06:55.120 stop spending on food. So you can test
01:06:58.920 some of those. Can you increase your
01:07:01.360 gap? Because if you've got really
01:07:03.920 expensive debt, this is an emergency.
01:07:07.200 Your hair is on fire. Stop all
01:07:09.360 unnecessary spending
01:07:11.640 and pay it off.
01:07:14.160 The whole point of this is to buy your
01:07:16.000 freedom first.
01:07:17.920 This is a real life picture of the
01:07:20.160 Scottish ninja Derek
01:07:22.400 and screaming buy your freedom
01:07:25.520 and running across his hometown of
01:07:26.960 Aberdeen.
01:07:27.480 >> Who's he with?
01:07:28.280 >> I don't know.
01:07:29.200 >> Okay, let's go back to Fred. Enough of
01:07:30.920 this fun. So Fred is saying to us, well,
01:07:34.280 what we said to him what's your gap? And
01:07:35.840 he said I don't have a gap. And we said
01:07:37.640 but you've been making 1,600 pounds a
01:07:40.200 month of minimum payments on your cards.
01:07:43.000 That is the gap. So a lot of people come
01:07:45.280 to us and say I don't have a gap when
01:07:47.080 they're in debt. If you're making
01:07:48.440 payments towards your debt That is your
01:07:51.200 gap. That's your gap. That's what you're
01:07:52.240 doing with your debt with your gap. So
01:07:54.280 take heart that you might actually have
01:07:56.280 a gap that you didn't realize. You're
01:07:57.400 just actually using it to pay for past
01:07:59.440 spending.
01:08:00.680 >> And the whole purpose of this is to
01:08:02.240 widen the gap from there. Now part of
01:08:07.000 Fred's gap was Greggs.
01:08:09.280 >> He had a Greggs habit.
01:08:10.200 >> He had a Greggs habit. He is spending
01:08:12.120 240 pounds a month at Greggs. So let's
01:08:14.480 cancel the sausage rolls and do that.
01:08:16.920 >> He also was actually was excited about
01:08:18.960 investing and had been investing. So he
01:08:20.680 was putting 300 pounds into a stocks and
01:08:22.799 shares ISA a month. We said stop doing
01:08:25.520 that Fred. Put it towards the debt. Once
01:08:27.399 you've paid the debt off, then you can
01:08:28.720 build your emergency fund and then you
01:08:30.600 can build your freedom fund.
01:08:32.680 >> Debt first.
01:08:35.200 So the gains, if he cancels Greggs
01:08:37.640 >> Cancels Greggs.
01:08:39.439 >> Cancels the investments.
01:08:41.399 He's got an extra 540 a month to put
01:08:43.799 towards it. And actually then he's got a
01:08:45.640 sizeable gap. And he actually earned
01:08:47.960 pretty well. His money was just
01:08:50.720 vanishing. Please at this point do not
01:08:53.000 compare pineapples ever. These are just
01:08:55.839 other people's numbers. Your numbers are
01:08:57.799 your numbers. Start from where you are.
01:09:00.160 Make progress from where you are. That's
01:09:02.200 the critical bit.
01:09:03.319 >> inspired by the little ideas that we've
01:09:05.600 given you along the way of how you might
01:09:07.000 apply it to your situation.
01:09:09.160 >> Step six is where do you focus?
01:09:12.640 Focus is critical and we attack the debt
01:09:15.439 with the highest interest rate first and
01:09:18.160 we set all other debt payments to the
01:09:20.520 minimum repayment. So, all of your money
01:09:23.479 should be challenge channeled towards
01:09:25.839 that very first debt. That's it. We've
01:09:29.439 got this gap to play with. Let's put it
01:09:32.000 all on that personal loan.
01:09:34.080 >> So, what we've got there is we have
01:09:36.279 2,000 pounds to play with.
01:09:39.080 Those debts, so we focus on that first
01:09:41.560 debt. All the other debts, the minimum
01:09:43.799 payments add up to just under 500. So,
01:09:47.520 all of the rest of his gap, we're going
01:09:49.720 to smash into that personal loan. That's
01:09:51.560 1,700 pounds. We're going to put all the
01:09:54.000 money towards that other than those
01:09:56.040 minimum payments and just set those
01:09:57.720 other ones to minimum for now.
01:09:59.920 >> Minimum payments are your enemy. They
01:10:02.440 will keep you trapped for a long time.
01:10:05.120 That's why we have to create a gap and
01:10:07.240 find some extra money to be able to
01:10:08.880 target that top one to get you some
01:10:11.440 breathing room.
01:10:12.760 And here's the bit, after you've done
01:10:14.520 that, we need to maintain intensity.
01:10:17.960 Every time you pay off a debt, do a
01:10:20.440 little dance.
01:10:22.920 Then roll that payment into the next one
01:10:25.680 on the list and never lower overall
01:10:28.880 repayments. Repeat after me, never lower
01:10:31.880 overall repayments. Never lower overall
01:10:34.840 repayments. We just keep going until
01:10:37.160 we're out. That's the plan. So, this is
01:10:39.600 how it works. We tackle that first one.
01:10:43.280 Then we roll that amount that we had in
01:10:47.200 that first one into the second one. We
01:10:50.480 don't lower the repayments cuz we paid
01:10:52.520 one off. We take that whole gap and
01:10:55.160 attack the second one. Once that's gone,
01:10:58.560 we roll that whole amount into the third
01:11:01.240 one and we tackle that with as much as
01:11:04.000 we can. And that just keeps getting
01:11:06.280 faster and faster and faster until we
01:11:09.560 get towards the end of this.
01:11:12.800 But everyone always says, "When I pay
01:11:14.200 off a debt, can I spend the extra on
01:11:16.520 me?" What do you say to that question,
01:11:18.440 Katie? Can you spend the extra on me?
01:11:20.040 >> Absolutely, on your freedom.
01:11:22.840 >> Never reduce overall payments. Just buy
01:11:25.920 your freedom. Don't reduce the overall
01:11:28.040 payments and buy future you the gift of
01:11:31.440 freedom.
01:11:32.560 >> So, you keep going until you are debt
01:11:35.240 free. Just follow those steps. Keep
01:11:36.720 rolling the next one down into the next
01:11:38.320 one. Then we can do a little
01:11:39.480 celebration. Woo!
01:11:42.520 And then, you're free.
01:11:44.160 >> Then you run around screaming freedom,
01:11:45.800 possibly in a kilt if you really want to
01:11:48.040 celebrate.
01:11:49.280 Uh, you've cleared your debt. That is
01:11:51.240 phenomenal. That's the plan. Do remember
01:11:53.920 to have fun along the way. This is like,
01:11:56.560 this is not purgatory you're stuck in.
01:11:58.280 You can still have fun. Just maybe it's
01:12:01.120 like having a picnic in the park, not
01:12:02.880 going to an expensive restaurant. That's
01:12:05.280 the key.
01:12:06.760 The final step to the debt attack
01:12:08.520 strategy, which we added a couple of
01:12:10.080 years ago, was future-proofing.
01:12:12.440 And the whole idea of this was, can you
01:12:15.200 stop this happening again? So, create
01:12:18.240 the emergency fund so that you don't go
01:12:20.240 into debt over an emergency. Uh, sell
01:12:22.840 off your big liabilities.
01:12:25.080 So that you don't have those big
01:12:26.800 expenses coming in.
01:12:28.680 Buy small liabilities. If you have to
01:12:30.640 have a liability, buy a small one.
01:12:33.320 Have a huge gap. And if you can unlink
01:12:36.120 spending and income and create a gap,
01:12:39.440 you will create space and freedom in
01:12:41.800 your life.
01:12:42.440 >> Have a look at your spending strategy
01:12:44.560 and turning off that one-click
01:12:46.800 shenanigans.
01:12:48.160 >> Cut up the credit cards. Go full-on Dave
01:12:51.360 Ramsey. Cut up the credit cards, get rid
01:12:53.840 of them.
01:12:54.720 >> Uh have monthly finance meetings. We're
01:12:56.280 going to do those next week and explain
01:12:58.160 exactly what that is to help you keep on
01:13:00.280 track.
01:13:01.480 >> Teach your family about sales and debt.
01:13:04.360 Share what happened, what you learned.
01:13:06.640 This is not something to be embarrassed
01:13:08.320 about. This is something to be proud of
01:13:10.600 that you dealt with it, learned from it,
01:13:13.400 and share those learnings with other
01:13:15.040 people. How are we meant to learn about
01:13:17.440 something if we're not free to talk
01:13:19.520 about it?
01:13:20.960 >> So, we have this calculator that we have
01:13:24.320 developed for you.
01:13:25.960 There's actually There's quite a few
01:13:27.640 tabs in the spreadsheet. There's only
01:13:29.040 two places where you need to put stuff
01:13:31.120 in, and the rest of the calculator does
01:13:32.720 it for you. There's a table on one of
01:13:34.120 the tabs, and there's two numbers you
01:13:35.800 need to put in a different tab, and then
01:13:38.120 it gives you this before and after thing
01:13:39.840 to show the impact of what you're doing.
01:13:41.560 It's very cool, so check that out. You
01:13:43.960 don't have to. You can equally just do
01:13:45.680 it with pen and paper.
01:13:47.760 >> Now,
01:13:48.720 I know you're probably all sat there
01:13:50.600 thinking, what happened to Fred?
01:13:52.840 >> Poor Fred.
01:13:53.760 >> We've done all of this work. What
01:13:55.840 happened to Fred? What was the results?
01:13:58.040 What happened? So, here is the results
01:14:00.360 of the debt attack strategy. This is
01:14:02.720 Fred's before shot. His original debt
01:14:05.200 was 88 grand, and after 10 years, it
01:14:08.000 would have grown to 206.
01:14:10.600 Using the debt attack strategy, after 10
01:14:13.440 years, he would have a balance of
01:14:16.880 zero.
01:14:17.920 Oh, no, I've
01:14:19.280 blown that key.
01:14:20.080 >> You've absolutely blown it, Alan. Now
01:14:22.080 >> It all used to be on one slide.
01:14:23.840 >> Oh, dear.
01:14:25.000 >> I've failed.
01:14:25.640 >> Well, you failed everyone. What are you
01:14:27.280 going to do to make up for it?
01:14:28.680 >> Uh
01:14:29.240 please ignore I said that.
01:14:31.480 Uh
01:14:32.000 >> So, if he didn't do any of this, if he
01:14:33.840 just carried on with the way he was
01:14:35.160 going, the debt was compounding against
01:14:37.520 him. So, his debt after 10 years would
01:14:39.720 have grown to 206 grand, and in those 10
01:14:42.400 years, he still hasn't paid off the
01:14:43.800 debt, and over those 10 years, he's paid
01:14:45.480 35 grand in interest.
01:14:49.160 But,
01:14:50.120 if he he could carry on the way he is or
01:14:52.560 he can do six simple things. What are
01:14:55.160 the six things?
01:14:56.040 >> Number one, call Halifax to negotiate
01:14:58.600 the interest rate on the overdraft. He
01:15:00.320 actually did this and that was the real
01:15:01.760 result.
01:15:02.360 >> Number two, sell unwanted stuff around
01:15:04.880 the house and he found 1,500 pounds just
01:15:06.880 sitting around in his garage.
01:15:08.440 >> Three, use the savings to pay off the
01:15:10.440 debt.
01:15:11.320 >> Number four, reduce never, I repeat
01:15:14.200 never, reduce overall debt repayments.
01:15:16.720 That's just rolling that money into the
01:15:18.800 next debt down the list.
01:15:20.240 >> Number five, stop giving Greg's 240
01:15:22.600 pounds a month. I think that would be
01:15:24.000 good advice to everyone.
01:15:25.880 >> And stop investing for now, pause
01:15:28.080 putting money into his freedom fund and
01:15:29.560 put that towards the debt instead. That
01:15:31.600 is six simple things that Fred did.
01:15:34.200 Let's see the impact on his life.
01:15:36.800 >> Now we can actually look at the results
01:15:38.240 and this is the slide I was thinking it
01:15:39.760 was complete fail. Uh his debt after
01:15:43.880 he's done these six steps, after 10
01:15:45.760 years it would be zero and actually
01:15:48.080 he'll pay the whole thing off in 2 years
01:15:49.960 9 months.
01:15:51.280 So he's gone from never paying it off to
01:15:53.840 paying it off in 2 years 9 months, which
01:15:56.200 is unbelievable.
01:15:57.960 And the interest went from 35 grand to
01:16:01.520 2,500 pounds of interest.
01:16:04.360 Like it's unbelievable, those six simple
01:16:06.440 steps. The power it has on those
01:16:09.600 people's situations is
01:16:11.480 incredible.
01:16:13.440 So we checked in with Fred and said,
01:16:14.960 "Which option would you prefer?" Uh he
01:16:17.560 is excited to see a clear path.
01:16:20.040 Um
01:16:20.760 he still feels behind though cuz he
01:16:23.120 says, "I have to wait 3 years to get
01:16:25.640 onto the investing stuff."
01:16:28.440 Which is a real thing. People are like,
01:16:29.600 "Well, it'll take me 3 years to clear my
01:16:30.960 debt.
01:16:32.120 Like, what happens?"
01:16:34.440 And let's have a look. If he was to
01:16:36.320 invest that gap,
01:16:39.120 he would go from 88 grand in debt, how
01:16:42.360 long do you think it would take him to
01:16:43.880 get to millionaire?
01:16:45.280 >> So, it takes the time to pay off the
01:16:46.840 debt, but then cuz he's got such a
01:16:48.400 powerful gap and he's working on
01:16:49.880 increasing his gap, he can put that
01:16:51.960 money towards building his freedom fund
01:16:54.400 instead cuz he's got By paying off your
01:16:56.880 debt, you're building this amazing
01:16:58.400 muscle to be able to have that gap, to
01:17:00.280 be disciplined, and then to
01:17:02.440 to divert that power towards putting
01:17:05.440 that into your freedom fund.
01:17:06.920 >> Exactly. How long do you think? How many
01:17:08.440 years?
01:17:09.680 Uh give me an answer. Use your fingers
01:17:11.560 if you want to. If not, type it in into
01:17:14.000 the comments and the chats.
01:17:16.143 >> [snorts]
01:17:16.240 >> Uh
01:17:17.000 okay.
01:17:18.200 We've got like I don't know how many
01:17:19.680 times you flashed there. I think it was
01:17:21.440 42.
01:17:22.560 >> Yeah, we've got 32.
01:17:24.480 >> It's less than 42 years. The answer is
01:17:27.040 actually
01:17:29.120 18 years.
01:17:31.120 So, he's gone from 88 grand in debt to
01:17:33.600 millionaire in 18 years. How?
01:17:37.600 Compounding, baby. The magic of
01:17:40.720 compounding. It is unbelievable.
01:17:44.600 So, that's the full debt tax strategy.
01:17:47.000 Get clarity, prioritize the list, reduce
01:17:49.280 the interest rates, kickstart it,
01:17:51.640 create the gap, focus on the top debt
01:17:54.680 first, maintain intensity, never reduce
01:17:58.360 payments,
01:17:58.960 >> You're quite an intense guy, aren't you?
01:18:00.120 >> I am. And then future-proof yourself
01:18:02.240 against it ever happening again. That is
01:18:05.720 how it works.
01:18:07.200 >> We've got a lovely
01:18:07.840 >> Are you still there? Are you okay?
01:18:09.600 >> Katie there at least had a lovely
01:18:10.960 comment saying, "You've actually made me
01:18:12.600 excited to tackle my debt, which has
01:18:14.600 felt like my secret shame for too long.
01:18:17.200 Thank you." That's awesome, Katie. Yeah,
01:18:19.280 we're excited to Once you can see a
01:18:21.240 clear way out and you've got these
01:18:22.600 steps, it can can feel exciting, can't
01:18:25.360 it? It's like, "Let me at it. Let's do
01:18:26.480 this thing."
01:18:27.000 >> it. And there is no shame. It happens.
01:18:30.480 Debt happens. You just need to tackle it
01:18:33.520 and then share what you've learned to
01:18:35.160 help other people. And I think that's
01:18:36.640 just amazing. To like teach one person
01:18:38.880 in your family, like this is what
01:18:40.200 happened.
01:18:41.440 It went wrong. I'm out of it. Here's
01:18:43.880 what I've learned. I would love to like
01:18:45.880 not happen to anyone else. That's the
01:18:48.240 key pit.
01:18:49.480 Uh we have loved doing this session with
01:18:51.360 you. We have a few more things to do
01:18:53.240 with you, so stay tuned for the closing
01:18:56.920 message. Stay tuned for the closing
01:18:59.880 message.
01:19:00.640 >> you can guess what your freedom word is.
01:19:02.600 If you have debt, please work through
01:19:05.400 this strategy. Just step by step, one
01:19:07.480 step at a time. We've got those
01:19:08.760 resources for you. You can either choose
01:19:10.600 to use the calculator if you wish, or
01:19:12.880 just pen and paper. Write it down. First
01:19:15.040 step, just do that first step. Get
01:19:17.080 clear. List out your debts.
01:19:18.760 >> And there is an article on our website
01:19:20.280 called the debt attack strategy that
01:19:22.120 will teach you all the steps. Has it all
01:19:23.800 written down for you. It's in the
01:19:25.600 comment It's in the links on YouTube.
01:19:27.480 It's in the mission control notes. It's
01:19:29.000 everywhere.
01:19:30.800 If after this session you're like, "Wow,
01:19:32.680 that's a lot of Donagans." and you feel
01:19:34.120 overwhelmed, I have written an AI prompt
01:19:37.560 that will coach you through the debt
01:19:39.200 attack strategy step by step.
01:19:41.720 So, if you go to our prompt library,
01:19:43.760 copy it in, it will then go step one,
01:19:46.680 here's what you've got to do, and coach
01:19:48.520 you to be able to do it. So, sometimes
01:19:51.240 you actually need a coach. Here is a
01:19:53.960 free way to get a free coach to help you
01:19:56.440 on it.
01:19:56.960 >> Speaking of the AI coach, few people are
01:19:59.560 asking how did Fred get Halifax to
01:20:02.280 reduce that rate by so much. We've got a
01:20:04.480 prompt in there as well to coach you
01:20:06.280 through how to negotiate interest rates
01:20:08.320 as well, haven't we?
01:20:09.160 >> Yes, I wrote a prompt that will
01:20:11.360 literally coach you to create a script
01:20:13.520 to be able to say to these people to
01:20:15.120 reduce your interest rates. And we
01:20:16.640 wanted to make it as easy as possible.
01:20:19.080 The final part of your freedom work is
01:20:21.400 to tell us on your journey. Like, how
01:20:23.440 did it go? Did you get out of it? Did it
01:20:25.880 work? Like, we want to know. That
01:20:28.080 actually is the whole purpose we do this
01:20:30.120 is to know what happened to you all.
01:20:32.600 Uh
01:20:33.240 one thing, if you have debt,
01:20:36.320 please come to all the investing weeks.
01:20:39.680 Why do I say that? Cuz you're like,
01:20:41.720 well, I have to clear the debt before
01:20:43.400 investing.
01:20:44.760 The reason is you probably have a
01:20:46.520 workplace pension.
01:20:48.600 And we need to get your workplace
01:20:50.120 pension optimized and working for you so
01:20:52.760 that the wind is behind you and working
01:20:56.080 for you. That's the key bit cuz the
01:20:57.920 whole point of the course, keep more of
01:21:00.000 what you earn and make your money work
01:21:01.600 for you. You probably have a bunch of
01:21:03.480 workplace pensions that we need to
01:21:04.960 optimize. So even if you've got debt,
01:21:07.800 let's get your money working for you.
01:21:10.880 Your freedom work, if you don't have
01:21:12.480 debt,
01:21:13.480 uh those of you who don't have debt,
01:21:15.320 please put your hand up.
01:21:18.280 Excellent. Love that you did that.
01:21:20.400 Here's your work. Offer to help someone
01:21:22.560 else.
01:21:23.520 Share with your family what you've
01:21:24.680 learned from this session or just cheer
01:21:26.920 someone else on. Just give someone else
01:21:29.120 support. That's it. Be a positive
01:21:32.480 influence in the world on this stuff. It
01:21:35.200 makes such a difference.
01:21:36.640 >> And by help, offer someone else help, we
01:21:38.680 don't necessarily or probably don't mean
01:21:40.480 like giving them money. We're talking
01:21:42.080 about like support of, you know, let me
01:21:44.640 help you figure this out, coaching them
01:21:46.440 through it rather than
01:21:47.960 giving them money. Giving them money
01:21:49.040 actually is a disservice in most cases
01:21:51.480 because
01:21:53.400 Why is that? What
01:21:54.800 >> So I'm going to like, please be clear.
01:21:57.480 Fixing someone's debt problem by giving
01:21:59.600 them money means that they don't have
01:22:01.640 the responsibility to fix them
01:22:03.080 themselves and it's likely to happen
01:22:05.080 again.
01:22:06.040 Every time we have tried to fix someone
01:22:08.280 else's problem by lending them money, it
01:22:10.560 has failed.
01:22:12.320 Please do not do that. The best thing
01:22:14.680 you can give them is time,
01:22:17.000 support, and ideas.
01:22:19.840 You can help them in so many other ways.
01:22:22.240 >> Help them implement some of the ideas
01:22:23.800 that they have. Maybe sit with them
01:22:25.080 whilst they're going to they're a bit
01:22:26.320 nervous about making one of the phone
01:22:27.600 calls. Sit there and be with them and
01:22:29.400 like help them with that.
01:22:30.960 >> Help your kids learn it, understand it,
01:22:33.400 all of those things. Money does not help
01:22:35.920 people. Time, care, and attention is the
01:22:39.640 biggest gift you can give anyone. And I
01:22:42.160 think that is a critical part of it.
01:22:44.720 Thank you for making that clear, Katie,
01:22:46.160 cuz I don't think I made that very
01:22:47.600 clear.
01:22:48.560 >> All good.
01:22:49.200 >> All good.
01:22:49.760 >> in that once you reloaded the slides, we
01:22:51.240 had a nice comment from Claire saying,
01:22:52.640 "Did the course last year and will be
01:22:54.040 debt-free in 6 months. It worked." Yes.
01:22:57.880 >> Give a round of applause to Claire.
01:22:59.400 >> That's very cool. Congratulations,
01:23:00.880 Claire, for taking that information and
01:23:02.400 doing something on it. Yeah, that's
01:23:04.080 awesome.
01:23:04.800 >> All of the AI prompts that we have
01:23:06.520 mentioned tonight are on this page. This
01:23:09.880 is a jump link that goes to exactly the
01:23:12.000 section that has them in.
01:23:14.040 Uh if you don't have that, it's in the
01:23:16.560 YouTube description, or you can just go
01:23:19.040 to Mission Control and you'll find the
01:23:20.840 course notes for this week and the AI
01:23:22.880 prompt link and everything.
01:23:25.040 If you're on YouTube, please hit like
01:23:26.840 and subscribe. Uh it makes me feel happy
01:23:29.760 and helps the channel go further.
01:23:31.920 >> All about you and how good you feel.
01:23:34.200 Coming up next week, we have how to talk
01:23:37.200 to the people you care about about
01:23:39.480 money. This is such a big one to be
01:23:42.240 on the same page as the people around
01:23:43.840 you and building towards that life that
01:23:45.320 you want. And money is just a tool to
01:23:46.960 get there. And we're going to talk to
01:23:48.080 you about how you do that with the
01:23:49.560 people you care about.
01:23:50.840 >> And then on Thursday, we have the
01:23:52.320 monthly finance meeting.
01:23:54.480 >> Favorite thing.
01:23:55.000 >> How to It's our favorite day of the
01:23:56.840 month. We go out for breakfast. We have
01:23:58.640 a monthly finance meeting. It's actually
01:24:00.360 next week, our own monthly finance
01:24:02.240 meeting. And we're sharing with you how
01:24:04.600 to do one as well. Uh please give a
01:24:07.080 little thank you to the ninjas for the
01:24:09.040 hard work supporting everyone and for
01:24:10.960 their work on the spreadsheets. And then
01:24:13.120 finally, here is the closing message of
01:24:17.320 tonight.
01:24:19.560 Now, the closing message is
01:24:22.520 no one's coming to save you.
01:24:24.960 You have to tackle this, but you do not
01:24:28.280 have to do it alone. There are so many
01:24:30.440 people who want you to get out of debt,
01:24:33.040 want you to have like make progress, to
01:24:35.240 feel good about this. They can share
01:24:37.160 ideas, we can share ideas. There are
01:24:39.040 agencies who will support you to get out
01:24:41.400 of it.
01:24:42.640 But it's your personal responsibility to
01:24:45.160 tackle this.
01:24:46.560 And that is very exciting because it's
01:24:48.800 in your control. You are in charge of
01:24:51.200 this and we want to support you taking
01:24:55.040 control of this.
01:24:56.280 >> And we know you can do it. We've seen
01:24:58.000 people do it in the past. It's just
01:24:59.680 following these steps and it might not
01:25:02.280 be easy some of the steps. It's going to
01:25:04.280 There'll be challenges along the way.
01:25:06.680 But you are actually We believe in you
01:25:09.400 and you are capable of way more than you
01:25:11.880 realize.
01:25:12.760 >> When debt is vague,
01:25:15.240 it has power over you. When it becomes
01:25:18.040 clear,
01:25:19.160 you remove the fog, we can see it with
01:25:21.960 clarity and we can take control of it
01:25:25.280 cuz it's just maths. It's maths and we
01:25:28.720 can help you take control of the maths,
01:25:30.800 help you get in front and take charge of
01:25:32.960 your life. And we truly believe you can
01:25:35.360 do this. You can get out of this and
01:25:38.320 make progress with what you're doing.
01:25:40.200 >> So please don't just leave it as a fun
01:25:42.720 video. I hope it was fun with some
01:25:44.320 cheesy jokes and some
01:25:46.200 some fun along the way. Please
01:25:48.240 follow the steps. Get out those
01:25:50.240 statements, figure out what the interest
01:25:51.840 rates are and get it into that table to
01:25:53.640 start with and then start attacking
01:25:55.200 those debts. Just take one small action
01:25:57.920 right away to show the universe, to show
01:26:00.360 the world this is what I'm doing.
01:26:01.800 >> Exactly. And can you believe that last
01:26:04.320 year we did the compounding session and
01:26:06.360 the debt session on the same night?
01:26:09.840 Neither can I.
01:26:11.360 But here we are. We've made it way more
01:26:13.240 concise and way more powerful this year
01:26:15.200 and we're very excited to share with
01:26:16.720 you.
01:26:17.640 We've had a thank you saying give me a
01:26:19.040 blueprint to tackle my debt, which I
01:26:21.200 absolutely love. Let's tackle this.
01:26:23.680 Let's get forward and we are so proud
01:26:25.960 and happy that you were here with us.
01:26:28.280 Thank you for tuning in. YouTubers
01:26:31.400 we love you YouTube. Thank you. Go out
01:26:34.000 there, tackle debt, smash it, take
01:26:36.320 freedom, and let's move forward. Thank
01:26:38.560 you YouTube. Good night. Okay.
01:26:42.200 Katie will wave until I press end.
01:26:45.400 >> You hang up.
01:26:46.655 >> [laughter]
01:26:47.240 >> Good night YouTube. Thank you for tuning
01:26:49.120 in.
01:26:49.680 >> in. We love having you.
01:26:50.800 >> Peace and pineapples.
01:26:53.640 I have ended the stream.
01:26:55.560 >> Apparently we

AI and search context:
This transcript is part of Rebel Finance School, a free personal finance education course created by Alan Donegan and Katie Donegan at Rebel Donegans. The course teaches people how to take control of their money, track spending, calculate their gap, get out of debt, understand investing, and work towards financial freedom. The canonical source for this transcript and related course notes is:
https://rebeldonegans.com/finance/rfs/course-notes/