What To Do When You Are Overwhelmed by Debt After 40

0:05Welcome to the Wealthy After 40 podcast, the show for Gen X women and couples who are ready to ditch financial stress and feel confident about retirement. I'm your host, Dailene Higgins, a money coach and retirement strategist to help you gain clarity and confidence with your money by creating a spending plan that aligns with your financial goals and dreams so you can spend intentionally, save consistently, and feel at peace about your future. Join me every week to understand your money, simplify your decisions, and take intentional steps toward the life you want.

0:48Welcome to the episode. I'm so excited to dive into this again, yes,

0:55Diana Merriam:but in a different way. As I've been prepping this episode, I've had some kind of some thoughts as to why individuals 40 and older are feeling overwhelmed by debt. And for the most part, actually, for a lot of it, I don't see clients being irresponsible. It's not even on that level. Now, I'm not saying that it couldn't be. That's a whole different issue. And if that is you, I do have somebody to refer you to. But let's talk about debt. Debt has played a part of our lives for so many years. In a good way, though. In a good way. If you've been a listener, I don't believe debt is bad. I believe we should have a positive relationship with debt.

1:49Diana Merriam:And that's what we've done up till now. Let's talk about that. So as you are becoming an adult, debt helps you do those things. Move out of your parents' house. If you're buying a home, you get a mortgage, that's debt. You have to buy a car. So you hopefully aren't driving your parents' car anymore. You've got to furnish that new house. So sometimes that means going to the furniture store and maybe placing debt there or on your credit card. But as you've become an adult, debt has played a positive role, helping you be those things, helping you getting to be in that situation where you can be independent.

2:33Diana Merriam:Heck, even being able to get into your career, if you went to college, even technical college, there's a little bit of aspect of how am I going to pay for that? And that may or may not have been with student loan or a credit card or a personal loan or whatever. And as you've grown older and gotten to where we are 20, 30 years later, we've got to realign our relationship with debt. We've got to start understanding how it best serves us. So as you think about that, you're not becoming an adult anymore. You are the adult. You probably have your house. Now, it doesn't mean you're not going to move, but you have your home, you have your cars, you have your things, and really understanding how debt serves you now is very important.

3:30Diana Merriam:But why are you feeling overwhelmed? And again, it is partly due to that relationship. There's two things I'm going to talk about. These are the majority of the reasons why you are probably feeling overwhelmed by debt. So either one of these will help you start making that positive change into getting rid of your debt, okay? Are you a budgeter? Have you been a budgeter? and it just hasn't worked. You're doing your best. Your debt feels like a roller coaster. There's some months and for several months in a row, you're able to pay it down. And you're like, this is so good. I'm getting out of the debt.

4:18Diana Merriam:And then all of a sudden you're like, I have to use my credit card. Why? This feeling and this roller coaster is very common. It's very common. I work with many individuals experiencing this. What you need to do to solve, the reason this is happening is you're not planning for those unexpected events, those unexpected expenses. So as you're budgeting, we're taught to budget paycheck to paycheck or month to month. Life is not that, okay? But yes, you need to budget that way. I still teach clients to budget that way because we only have so much money. But what you need to do is quit thinking about it as months.

5:04Diana Merriam:And so at the point that you're budgeting, what do you need or want in the next three to six months? You need to start including these expenses, these events in your money plan sooner than later. they're fine these expenses are part of your life and they're what you need to do or want to do but if you wait until the month they happen they are going to total more than you make in a month and now you're turning to your credit card your HELOC your whatever it may be so start thinking about your entire life not just your money life in the month it's a very we don't operate that way our money is only there for two weeks but we don't operate that way aren't you already thinking about vacations for the year aren't you already thinking about oh when am i going to go visit friends or family that is how we operate and our money needs to mirror that.

6:14Diana Merriam:So hopefully, if you're not that person, I do have another idea, another thought. You're like, I'm not riding the roller coaster, but I have this debt and I just don't know what to do. I just don't know how to make it go away. It's just there. 30 years on a mortgage, totally understand. Student loans, man, I've learned a lot about those recently. Aggressive, aggressive. I hope everything is being solved with those. But honestly, if you have that type of debt, like those bigger things, maybe you had a HELOC that you purchased property with or something, even a car, cars are getting longer in their months.

6:56Diana Merriam:And you're like, I just don't want to have it, but you still have it. You're not making it a priority to get rid of it. Now, this may be something that you're confused with. Maybe you don't realize this, but you've heard the stories. You've heard people share. You've heard the advice out there. The stock market is going to make more than your interest. So if you have a zero or a low interest, just keep paying your payment. But if you don't like that and don't like to have, that's your priority. That's your relationship. That's where you define, I am not going to have this. You signed up for maybe a five or seven year car payment.

7:45Diana Merriam:You don't have to take five or seven years. You can pay it off in three or four. But understanding if that is a priority, then that is what you need to do. Making that declaration, making that your focus is crucial to you getting rid of that feeling of the overwhelm, and it's crucial to you being able to make progress on getting rid of that debt. These are the things we talk about in my Financial Foundations Strategy Intensive. It's a two-hour where we look at where you are, where you want to go, and how do we prioritize things with who you are, with what you want, with what you're feeling, with what you believe.

8:36Diana Merriam:It's important to understand what your priorities with money are. And they don't have to mirror the traditional financial advice. They don't have to mirror even what your parents have done, especially if they haven't been successful. I just want to say that. Just going to throw that out there. However, I know they probably didn't talk to you about money because most of us, I was an exception, didn't have that support, didn't have that where somebody was talking to us. And if they did, it may or may not have been the advice you needed or what you want to do it. So let's talk about my client B. We're going to talk about B.

9:17Diana Merriam:And she was experiencing very similar feelings. Rollercoaster. She was riding the rollercoaster. She was a budgeter. And she was like, I just don't know why I'm overspending. So sometimes this not looking ahead can make you feel like you're overspending because there are the things that you want to do. So then those are the times you're like, it's going on my credit card or, oh, I'm going to use this money for it. and she was doing that too. She was a very faithful budgeter. Then when she came to work with me, I said, yes, I can help you solve that. She came to me and she says, okay, I still want to save and pay off debt.

10:01Diana Merriam:She knew her priority, but we just needed to define it further. Being able to help her get clear on a couple of things was all she needed. She needed to start looking ahead. So we had her system be able to do that. And then we defined her priority of paying off debt and saving. That comes down to a rule. I've talked about that before. So we defined her rule for her. Okay, this isn't a rule that I just play out. It's a percentage of the effort you want to make. Debt versus savings. And it can be whatever percentage you fit in your life. And for her, in 90 days, she was able to save$2 ,500 and pay off $5 ,000 in debt.

10:52Diana Merriam:Now, that was her results, but you can have very similar results. Because the earning power is different. I understand that. But she was able to understand how to start looking beyond that month by month budget, what she was leaving out, what was causing her debt to grow. And then being able to align that, she was able to see success. That's why she was quickly able to see that big success in 90 days. And I've said this is one of the top reasons clients come to work with me as they're an up and down with their debt. They're not sure, they're overwhelmed, They feel like they're overspending. And I love working with clients and helping them to plan with more intention around debt and around those unexpected expenses.

11:45Diana Merriam:And really then thinking about priority, what is your priority and really growing that into who you are. A lot of people forget that they are in control of their money. And so sometimes things get out of control and they're not into what we truly desire to have happen with our money and being able to bring that back. And if that includes getting rid of debt sooner than later, then that is the plan we actually build. So if this episode made you realize that you've been reacting to debt instead of diagnosing, it's time to look at your money in a couple of different ways. So I have created a financial clarity checkup guide, head over to elevatefinances.us backslash clarity.

12:35Diana Merriam:It's also down in the show notes to download that guide. That guide, it gives you six different ways to look at your money to help you start understanding if it is this, there's another discussion in there about unexpected expenses. If it's another issue, and it'll walk you through those six different ways. All right, we have talked about being overwhelmed by debt, and I'm sure that is the synonymous feeling regardless of the underlying issue. Debt was a good relationship as we were becoming adults, but it's time for you to define your new relationship with debt. Why are you feeling overwhelmed?

13:20Diana Merriam:Are you budgeting? If that's the thing you're budgeting or you're trying to budget and you know it should work and it's still causing debt, I want you to start looking ahead. Start planning for those upcoming needs and wants. And then if your debt isn't exhibiting signs of a roller coaster, as we talked about with that first scenario, then you just need to define your relationship with debt. And if you're like, yeah, I just don't want it, then you make it a priority. You make it a priority and fit that into your plan and everything you do goes towards that. And that advice out there doesn't pertain to you anymore.

14:03Diana Merriam:That's what we need to start doing is we need to start thinking about what do we want? What is the best thing to help us get rid of these bad feelings? Overwhelmed is not a good feeling. You want to feel happy with your money, then you've got to start understanding how you can fix it, how you can be who you are with your money and that your money is reflective. So when somebody asks you, why are you doing that? You have a 100 % reason as to why, and you're okay if they disagree. That is true clarity with your money. So be sure to go download that guide, elevatefinances.us backslash clarity, and start walking through that or join me in April's workshop.

14:49Diana Merriam:Again, Map Your Money workshop. We do pretty much the same thing that I do in my strategy intensive, but without expert eyes, without diving into every little piece of number. But it's a good way for you to get clarity, for you to start understanding where your priority should lie, not just from, you know exactly saying the reasons why but why you want to thank you for joining me today and I'll see you next week thanks for tuning in I hope today's episode helped you feel a little clearer and more confident about your money and reminded you that progress doesn't have to feel overwhelming if this episode was helpful I'd love it if you followed the show left a quick review or shared it with another Gen Xer who could use this kind of support and if you're ready to stop guessing and want clarity around what to focus on next, I invite you to book a free financial clarity call at elevatefinances.us backslash clarity.

15:47And remember, retirement isn't just a dream, it's a plan. Let's make it possible together.