Get the Hell Out of Debt: The Proven 3-Phase Method That Will Radically Shift Your Relationship to Money

A POST HILL PRESS BOOK

ISBN: 978-1-64293-955-2

ISBN (eBook): 978-1-64293-956-9

Get the Hell Out of Debt:

The Proven 3-Phase Method That Will Radically Shift Your Relationship to Money

© 2021 by Erin Skye Kelly

All Rights Reserved

Cover art by Cody Corcoran

Although every effort has been made to ensure that the personal and professional advice present within this book is useful and appropriate, the author and publisher do not assume and hereby disclaim any liability to any person, business, or organization choosing to employ the guidance offered in this book.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author and publisher.

Post Hill Press

New York • Nashville

posthillpress.com

Published in the United States of America

Dedication

This book is dedicated to Jidi.

I was a teenager when I told my grandfather I was thinking of becoming a broadcaster. He paused, and then pointedly said, "That’s nice kiddo, but you are a girl and one day you will be fat, middle-aged, and ugly, and no one will want you on TV."

Now this sounds rather harsh, and yes, it smarted.

But it was my boorish Lebanese grandfather’s 1990-ish way of saying, If you want to have a career you must not leave its success up to someone else’s decision-making.

So, I started investing in real estate and businesses on the side, and plunged into my first long-term relationship—with debt.

It would not have mattered in the end what I had done with my life or how well I’d done it. It would not have mattered to my grandfather that I ended up failing spectacularly, if only he’d lived to see it. It would not have mattered that I worked tirelessly to recover. It would not matter that eventually I would abandon this idea of needing a backup plan and learn to commit myself fully to accomplish more than my teenage self ever dreamed of.

His eyes always lit up when I entered the room. He was unfussed about whether people liked him or agreed with his decisions. He was simultaneously horribly inappropriate and remarkably progressive. He loved me with his whole heart, and I felt it every day.

My wish for you, dear reader, is that you always have someone whose eyes light up when you enter the room. And if you don’t, know that I am excited you are here, for the journey you are taking, and I believe in you, even during those times you are finding it hard to believe in yourself. The fact that you are here makes my eyes light up.

I miss you, Jidi. And in spite of how far we still have to go, you would not believe the kinds of awesome things women get to do now.

Author’s Note

Pre-2020, you’d be hard-pressed to find a financial expert who didn’t give conservative advice about having three to six months of expenses in a savings account for emergencies.

And then the pandemic hit to test that.

Having substantial savings is definitely helpful in pandemic times. But as you likely figured out, six months of expenses wouldn’t have been enough.

One of the most frustrating things about pandemic life is how average humans were financially shamed for not having six months of savings on hand, and yet businesses that did not have cash on hand are now getting massive forgivable loans and corporate bailouts. The government has convinced us that millions of hard-working people are actually lazy in order to take the focus off the few hundred people who are truly greedy.

The whole system is a mess. And if you look closely at how it is designed, you can quickly see that if you carry consumer debt and you feel trapped in the cycle of minimum payments and maxed out accounts, you are right where the system wants you to be.

I want you to create your own personal economy so you are less at the mercy of what is happening around you and more in control of the flow of money in and out of your life.

When we carry consumer debt, we are in a position of weakness. Debt causes us to stay too long in relationships we ought to leave. Debt causes us to stay too long in jobs we hate. Debt requires us to often put up with toxic environments: physically, emotionally, mentally, and spiritually. Debt is a trap. And debt causes us to make decisions against our better judgement because being broke is expensive.

Imagine for a moment you have just become an adult and you have the opportunity to earn income. You first need to buy safety equipment in order to do this work. You could earn $1000 doing this work, but the equipment you need is either high quality and very expensive or poor quality and affordable.

The high-quality equipment is $2500 but it will last you for ten years.

The cheap equipment will keep you safe, but it only lasts one year and it costs $800.

When you are starting out, you do not have enough money to buy the expensive equipment, so you buy the cheap equipment, thinking you’ll save up for the expensive equipment in time. But because you have other costs to keep you alive, you just never quite get around to it.

After ten years, the cheap equipment has cost you $8000.

The higher quality equipment would have cost you $2500.

These numbers are speculative, but they illustrate my point: being broke is very expensive, and there are systems in place to keep you there because someone is profiting off you buying $800 equipment every year for ten years.

Getting ahead is crucial to long-term happiness and freedom, and I know this from personal experience.

Years ago, before the #metoo movement, I landed a job I wanted so badly. I was the co-host of a talk radio program and had big visions for that show, what we could accomplish, who we could interview, and how we could impact the airwaves for the better. But the problem was: not everyone on the team shared this vision. I worked with this…man. I was going to say gentleman, but that is not an adequate description.

He was a thirty-something petulant toddler at his best, and a megalomaniac-certifiable narcissist the rest of the time, and he felt impossible to work with.

Less than a year before this job, I had won an award for my writing on Creating a Compelling Corporate Culture, so it wasn’t like I didn’t have the skills to work with difficult people. But there is a massive difference between working with a challenging coworker and trying to book a guest for the talk show while he pretends to masturbate when you are on the phone and then squirts your hands and keyboard with hand sanitizer to mimic ejaculate while you are carefully and calmly giving instructions to the guest on how to connect with the technical producer at the scheduled interview time.

*sigh*

It was emotionally and mentally exhausting.

The day of the Last Straw was a day like most others. There wasn’t anything really earth-shattering that happened, but I think it’s why it’s called the last straw. On its own, it is weightless and overlookable. But when you realize you are carrying around a haybale of misogynistic bullshit, you can’t ignore the heft of it anymore. I was on the phone booking us a guest for later that day—a psychologist, of all people. And while I was giving her instructions on how to connect with our technical producer for her timeslot later that morning, he started mocking me in a high-pitched voice—the one that men sometimes use when they want to mimic women in a condescending way. And halfway through my call with that psychologist, I simply put down the receiver, grabbed my bag, and walked out.

I drove home and called the program director, letting him know that I would not be back, and I’d had enough. We agreed to a meeting the next day, and in the meantime, he took my coworker out for beers to discuss.

A few weeks later someone from corporate HR flew in to have a meeting about his constant and relentless nonsense and they offered me a monetary settlement. They were offering me money if I would sign a document that stated I would never ever talk about the series of events that happened in that workplace.

Here’s the deal, friend: I never asked them for a cent. I wasn’t looking for money, I was looking to protect my own mental health and get the hell out of that workplace. But the minute they offered money to gag me, I was furious.

(I will never understand this practice. A person gets mistreated or abused, then is offered compensation, but only on another condition of abuse: forced silence.)

When I walked away and said, No thank you, my freedom is more important, the HR fella said, Ms. Kelly, do not do anything to disparage the company.

I had to gently remind him that it was not me who disparaged the company, it was my coworker.

Oh, and spoiler alert: that coworker kept his job for another two years.

As you’ll learn in the chapters of this book, I am not a prude and I can take a joke. I do, however, know the difference between accidentally crossing the line and being someone who takes sick delight in manipulating, controlling, shocking, and gaslighting others.

But let me tell you why this story matters. Leaving suddenly and losing that income hurt significantly, but if this had happened to me when I was in the thick of my financial struggles, I would not have had the ability to walk away from that nightmare job. I would have been too worried about how I was going to pay for my housing or my kids’ medical needs. I would have had to endure two more years of listening to that windbag drone on while cutting off listeners who called in and turning off my microphone if I tried to interject. I would have had to sit through his jokes about pedophilia for another two years.

And if I would have taken that stupid hush money, I would have had to wrestle with my own integrity by staying silent while the men back at the office continued to pat him on the back.

I realized I was free when I could walk out and not fear the financial repercussions. For a moment, I considered suing them and donating any proceeds, but then I realized that by taking care of myself, I had already won.

The system is afraid of financially free women. When women are financially free, they are more likely to use their voices. They are more likely to be advocates for change. Financially fierce women are more powerful, better equipped, and more independent. And the system of greed and power will shift dramatically if the majority of people are no longer chained to the system.

Maybe your last straw was a phone call from a collector.

Maybe your last straw was your twenty-third rejection letter from a prospective employer.

Maybe your last straw was having a declined card at the checkout counter.

It doesn’t matter what the last straw is, the compounded weight of it can break you, or it can transform you.

If you’ve picked up this book, you know we are at a crucial time in history. The decisions you make today will determine how quickly you recover. If you are privileged, you might have lots of decisions available to you. If you are not so fortunate, it is likely going to be a slog. I can’t offer you a quick fix, but I can offer you some insights that have helped other people create their own personal freedoms in spite of their circumstances, and in Covid times, perhaps that is all you have to work with.

Maybe you grew up in a home where money was not discussed. Perhaps it wasn’t considered polite. Perhaps there was simply no access. Maybe you did receive that education, but you battled a health crisis or an addiction that wiped out your plans. Here’s the best news: you are here now, and we can start today.

I wish I could tell you I have all the answers to fix the systemic issues that are making it so difficult to get ahead, but I don’t. I only have a little bit of wisdom to offer you based on how I’ve changed my own life and how I’ve impacted others to do the same and while I had not lived through a pandemic prior to this, here’s what I know about financial emergencies:

1.Our primary focus in a true emergency is focusing on not going into more debt. Often what happens when people are excited to pay off debt is that they start putting all their income toward debt payoff, but then they create more debt in order to survive and pay bills. What this does is keep us credit dependent. If you are experiencing a financial emergency, it’s imperative that you start to move away from using credit day-to-day, even if that means you are delaying paying down debt. What we have to do is get off the system that makes getting into debt and being broke the easiest financial choice.

2.If you are receiving any sort of stimulus money and you have lost your job or you think there’s a possibility you might lose your job, your primary focus is stockpiling cash to prepare for any upcoming financial challenges. It is not the time to be making major purchases. When I say stockpiling cash, I am referring to padding up an emergency fund that will get you through the crisis. When life settles down and you have certainty around a steady stream of income, that’s when you can resume paying down debt, making major purchases, or whatever it was you were intending to do with the money.

3.If the money you receive is taxable and income taxes have not been withheld, you must put the equivalent tax amount away in preparation for it to go to the government at tax time. If you can’t prepay that tax, put that equivalent away where you won’t see it and do your very best not to use it, otherwise you are just kicking your emergency further down the road where it will compound. Of course, if you need to use it for a true immediate emergency like medication or whatnot, do so, but just consider a plan to then pay the taxes in the future so you aren’t caught off-guard when the tax bill comes. The important thing to remember is when you owe the government money and you struggle to pay it, they can simply come take it. I have had this happen and it’s humiliating. It doesn’t matter what gets deposited into your account, if you owe the government, every penny goes to pay them first, even if your cupboards are bare.

You’ll learn all of the steps in much more detail in the pages to come.

If Covid has taught us anything, it’s to learn the difference between what is urgent and what is important.

People who focused on what was urgent were out hoarding toilet paper, panic-buying, watching the headlines, and arguing with strangers on the internet.

People who focused on what was important were checking in with family and friends to ensure they had enough toilet paper, staying indoors for the most part, and dropping off groceries on grandma and grandpa’s doorstep. They were watching their kids play in the backyard and sending positive, encouraging messages to strangers on the frontlines.

Financially, what this translates to is lack or abundance.

When we are living in urgency, we are making short-term, survival-based decisions. If this is where you are today, that’s okay. I’ll show you throughout this book how to transition this lack-based thinking into a longer-term financial strategy as we go. But urgency requires a credit card. It’s buy now and pay later. It feels like there is never enough. It feels like there is always an emergency on the horizon. It’s very difficult to plan long-term because you are worried about how you are going to make it until next payday. Life can feel segmented or compartmentalized: my relationship sucks, my kids are misbehaving, I’m broke, my health isn’t where I want it….

When everything feels urgent, it means we are moving from crisis to crisis, and it’s very difficult to visualize a future where we feel both secure and free.

When we are living in importance, we are making longer-term, joy-based decisions. It means that sometimes we make sacrifices for comfort today so that our children are better off, or so that our future selves are more comfortable. It means we set our own financial goals, and we understand that while we can’t control the market or the economy, we can make consistently healthy financial choices to make progress toward a goal, even if it seems like the goal is a long way off. It means we don’t live in an all-or-nothing mentality, and we understand that even by making a little progress toward our financial goals today, we can see big future gains tomorrow. We understand that we can’t rely on a credit card to build a healthy financial future. When we live by what is important, although we don’t take on other people’s emergencies as our own crises, we can help people from a position of abundance while still having enough for ourselves. It’s a holistic view of life, one that incorporates your overall physical, relational, spiritual, emotional, and mental wellness.

As with anything, the story you tell yourself about who you are and what is happening in your life right now has greater impact on the future than the circumstances you find yourself in today. We all have a tremendous opportunity right now to use this Great Pause for good. Ten years from now you can look back on the pandemic as the thing that destroyed you or the time in your life you transformed your finances for the better. Let’s imagine it is ten years in the future and you are looking back at your younger self (you’ve hardly aged a day in ten years, darling!) holding this book. You are absolutely living the life you imagined, and you are truly happy.

What decisions is future you proud that pandemic you made?

What decisions does future you regret making during the pandemic?

When you are ninety years old and telling your great grandchildren about how you lived through pandemic times, what stories are you proud to tell them that they can carry through their own lives?

We are at such a precious time in history. Some people will remember this as the worst time in their lives. It’s like you’ve been handed a terrible plot, a not-so-great setting, a bunch of possibly insane political characters, a global health crisis, and a very scary and silent villain named Covid. But the very fortunate part of it all is that you have also been handed a pen. You get to write the next chapter of your life and make it mean whatever you want it to mean.

Disclaimer

The information provided in this book is for information and educational purposes only and does not constitute legal or financial advice for your unique circumstances. It is always advisable to contact a financial professional to determine what may be best for your individual needs. The publisher and the author do not make any guarantee or other promise as to any results that may be obtained from using the content of this book. You must never make any investment decision without first consulting with your own financial advisor and conducting your own research and due diligence. Things change quickly and what is printed here may not be current, so your own research is always encouraged. To the maximum extent permitted by law, the publisher and the author disclaim any and all liability in the event any information, commentary, analysis, opinions, advice, and/or recommendations contained in this book prove to be inaccurate, incomplete, or unreliable, or result in any investment or other losses. Content contained or made available through this book is not intended to and does not constitute legal or financial advice. The publisher and the author are providing this book and its contents on an as-is basis. Your use of the information in this book is at your own risk.

Further Study

If you find you want to do this work in a community for added support, check out www.getthehelloutofdebt.com

The online program has helped thousands of people pay off millions of dollars in consumer debt. Once you register, you can log on to your personal and private portal to watch videos on demand and even join occasional live calls with the author. Your exclusive online access will also give you entrance to a private social media group.

There are three ways to access the group coaching for Get the Hell Out of Debt.

1.You can sign up and pay the registration fee and be granted instant access.

2.You can register for the pay-what-you-can option if the registration fee is out of your reach today.

3.You can apply for complete sponsorship. One of the most beautiful parts of this community is often people who become debt-free turn around and sponsor new people into the program by paying for someone else. It’s not an expectation if you’ve been sponsored that you must turn around and pay for someone else. It’s truly a gift from a graduate who has a changed life and wants to pay it forward. We match every sponsorship, so one sponsorship provides financial education for two people. We can’t guarantee sponsorship, but you can scroll down to the bottom of www.GettheHellOutofDebt.com and apply. We will let you know ASAP if we have matched you with a sponsor.

You can also follow the author on social media @erinskyekelly and on Instagram @getthehelloutofdebt.

To book Erin to speak at your event, your bookclub, or for your podcast, head to www.erinskyekelly.com.

If you want to order bulk books for your organization go to bulkbooks.com.

Erin loves to check in on your progress and cheer you on during your journey to debt freedom, so if you are posting on social media, use the hashtag #GetTheHellOutofDebt.

Table of Contents

Introduction: Get the Hell Out of Debt

Chapter One: Before You Begin

Chapter Two: How to Maximize Your Money Success

PHASE ONE

Chapter Three: The Two Tools

Chapter Four: The Second Master Tool

Chapter Five: What to Do If You Have Unpredictable Income

Chapter Six: The Safe Zone

Chapter Seven: The Quick and Dirty Fund

Chapter Eight: Love and Money

PHASE TWO

Chapter Nine: Phase Two

Chapter Ten: Understanding Debt Behavior

Chapter Eleven: Single Task Your Debt Payoff

Chapter Twelve: This is Worse Than I Thought (Insolvency)

Chapter Thirteen: Your Order of Operations

Chapter Fourteen: Rebuilding Your Relationship with Money

Chapter Fifteen: Living in Alignment

Chapter Sixteen: Financial Boundaries

Chapter Seventeen: Mortgages

Chapter Eighteen: Plot Twist

Chapter Nineteen: Vehicles

Chapter Twenty: A Completion Ceremony

Chapter Twenty-One: Debt Burnout

PHASE THREE

Chapter Twenty-Two: You’re Debt-Free!

Chapter Twenty-Three: Your New Credit Card is Cash

Chapter Twenty-Four: Becoming an Investor and Laying Out Your Options

Chapter Twenty-Five: Choose Your Wealth-Building Order of Operations

Chapter Twenty-Six: We Start by Starting

Chapter Twenty-Seven: A Living Paycheck

Chapter Twenty-Eight: Financial Freedom

Chapter Twenty-Nine: Your Legacy of Love

Glossary

Recommended Reading

Order of Operations For Paying Off Debt

Acknowledgments

About the Author

Introduction

Get the Hell Out of Debt

My phone was lighting up.

I had turned the ringer off for weeks and only answered it if I recognized the number on the call display.

Hello?

It was a client. They wanted to meet across town to discuss some business. We made arrangements to meet later that day, and I got dressed in my fanciest jeans and my least-scuffed boots and threw my bag on the passenger seat. I timed the meeting for the middle of the day so I could get away with not buying lunch or dinner. It was too late for coffee, so I could say I was trying to drink more water, and I could still buy the client a beverage on the remaining balance of a gift card I had.

I turned the ignition and began to cry.

Empty.

There was no fuel in the tank.

My bank account was overdrawn. I had no cash. My credit was maxed out. Even the piggy bank had been raided. There was no way I was going to get to that meeting across town on these fumes. I went inside, called the client, and made up a story about diarrhea, which somehow seemed less embarrassing than saying, I’m on the verge of bankruptcy and I cannot afford to even do a transaction that would land me your business.

The shame told me that no one would want to do business with a big dumb failure like me anyway.

I shut the world out for a few hours, and as the darkness of the night took over, so did the darkness of the emotional weight of the debt.

I spent a lot of time trying to figure out how I got myself into this position. I was doing everything right! I had a near perfect credit score and I owned lots of assets! How could I possibly be so broke?

Chapter One

Before You Begin

There are a few things you need to do in order to make this a successful journey.

If you are totally committed to paying off your consumer debt and living debt-free, then you absolutely will not start doing any fancy financing right now. You will not consolidate. You will not cash out any investments to pay off your debt. You pinkie swear that you will read the book and take action as required, and then re-read the book as necessary.

If you are ever tempted to solve your financial stress with a quick math solution, you are just kicking your problem further down the sidewalk. Most people, after consolidating their debt, end up in more debt in the long run because they did not learn to actually master their money. Most people who struggle financially and then