Why Debt Denial Is So Expensive (and How to Break It)

Episode Transcript

Hey, welcome back to the Get Out of Debt Guy show I’m Steve Rhode and by now, hopefully, you know me as either the other, the other guy or the old stale Get Out of Debt Guy. One of the other, usually the other guy, the other guy. And with me as always is Damon Day, the new Get Out of Debt Guy. You can reach Damon at damonday.com and he’s the guy that you can get on the phone and talk to and talk through your situation.

So Damon, I said real quick, if you’re the other guy that makes me the guy, well, you told me that when you get on the phone with people, they always refer to me as the other guy. So they do. Yeah. So when they’re on the phone with you, you’re the guy I’m the guy. And you know what these days I’m happy not being in the guy. He is him.

Yeah. I had my turn in the barrels. The guy it’s your turn. All right. I’m the guy near the guy. So this is not going to matter in 15 minutes, but we missed our Thursday podcast date because life and so we’re catching up today. Because baseball, Steve, because baseball, Hey, there’s no crying in baseball. That’s right. And, and, and two weeks ago or last week, two weeks ago it was because softball, hopefully next week your balls are not going to play a part.

Yeah. I’m, I’m at that stage of my life where my, my kids, you know, they’re in travel sports and we are going, going, going, going, and it’s very busy. But one day soon my wife and I will be sitting there going now, what do we do? Well, you know, that’s why I enjoy it while you have it, you know, that’s what I thought too. When my daughter left for college, uh, you know, of course she was a little bit weepy in the dorm and Pam and I were like high-fiving in the car on the way home.

Finally some time, but you guys also like to sit and watch like British baking shows and things like that. Oh, that’s now that’s now that’s maybe my taste will change when the kids grow up, but I just don’t see myself going, Hey, did you catch the latest British baking show, babe? Well, I don’t see that. Yeah. That’s you raise a very good point. And then of course, you know, that’s how many years on from college, 20 years on or something like that from college for her when all that happened.

And uh, you know, now like my brain is swimming right now because I was in my other office a few minutes ago, working on three different projects that have nothing to do with debt. And so, uh, you know, my brain’s off doing other things. So in the evening when we watch, uh, Oh, I love broken wood. That’s a New Zealand detective show. And when we watch that was going another way, no, we watched those shows.

Uh, they’re just mindless for me. Mid-summer murders, great British, uh, detective shows. I think it’s like in season 29 or something. If you want to put your, your true crime that ties into your true crime podcast. Well, but here’s the thing, and this applies to our listeners too. Like I don’t want to watch any show that has more drama than life already has, right? We don’t want to deal with more stress and more crap.

And it’s like the, you know, the network, uh, docu-dramas or whatever you’re calling them. It’s all about, somebody’s going to die or get murdered or burn or I don’t know. So that’s why we go to where there’s no drama in the great British bake-off. Yeah. And, and, and a little bit of a background, uh, you know, Steve did live in England for a number of years, so he does, you know, you have kind of those ties to it.

So I can, I can totally see that. Well, here’s the thing. If you’re watching a British, like we watch a lot of stuff on Brit box or acorn. Um, but if you’re watching a show from England, it’s really hard to guess who done it. If you’re watching a detective show or something here in the U S it’s always the guest star. So, you know, I just, I just watch for entertainment.

I don’t want to deal with more shit in the evening. Yeah. And I can attest Steve is like the most laid back guy I know. He just kind of rolls with stuff and his, his, his motto is always, at least you’re not on fire. At least you’re not on fire. Life can always be worse. Yeah. And my, my other motto that serves me very well too is always go for the open door.

It always amazes me. Like when you’re walking in target and one of the sets of doors is open and people pull on the other one, dude, always go for the open door. It’s a sure thing. It’s open. Now I’ve said that you, you will notice like people will walk up to target. This, this happened the other people will walk up to target and I’ll watch them pull open the manual door.

Always go for the open door. The automatic door opens. My favorite is the guy clogging the, the parkway there when you’re trying to go in and park because he wants to have the spot like, you know, three from the front and he’s waiting for some guy to finish loading their groceries or whatever and then back out. But yet five spaces down, there’s plenty of openings and it’s, it’s like, what is that?

50 extra feet? Like we’re all going to sit here and wait behind you because you don’t want to walk 50 feet. But I got the spot. Oh my gosh. That, that just killed. I’m, I’m the guy that’s like, all right, where am I not getting my doors thing? No, I’m the guy that’s parking on the South 40 on purpose. Or or you get the people who want to park in the handicap spot because they have a handicap, you know, placard in their car, not because they need it.

Yeah. Yeah. I’ve known several people like that, including my own mother. Yeah. She would, she would do that. She would go, well, let’s park in the handicap spot, you know, right up to mom. No, I’m not. You don’t need it. I am not parking there. And the reason she, like when you were driving, like she’d hang, she’s like, I got it in my purse. Let me hang it on your windshield.

Yeah. No. I mean, I know she got it because she had been going through chemotherapy and she wasn’t feeling well, but she’s feeling well now. Yeah. Uh, jokes on her, you know, she’s dead. Okay. No, it’s been long enough time now. Yeah, I know. Hang that one, mom. But that is the first time I’ve heard you do a mom joke in years. Well, I was like to try to respect my elders, but the handicap parking thing, that was a bridge too far.

Yeah. What were we talking about today? I don’t know. People are like, why do I tune in? I don’t know. Speaking of how old we are, I use the word tune in. Tune in, tune out. Yeah. Drop in. Any of the younger generation is like, what are they doing? What’s a tuner? I know what a nooner is, but what’s a tuner? I don’t even think the younger generation knows what that is.

I was listening to Sliding into DMs. I was listening to Starland Vocal Band the other day, came up on my Apple music and they had that song Afternoon Delight, which is funny to listen to now because I was thinking as I was listening to it, I wonder how many young people would I get the whole thing, understand the whole song. You start listening to the actual words.

Yeah. Oh, yeah. Yeah. All right. So, you know, the reason we’ve been rambling is just because we’ve been in denial of talking about the real subject of this show. Oh, I see what you’re doing. I see it. I see it coming. See? Wasn’t that good? Yes. Clever. Damon and I, when we talk on the phone, not on the podcast, I always say we should just like start recording before we actually start recording because people would hear the gold.

But you know, it’s a constant struggle for me and I don’t want to speak for Damon, but helping people to get over the hurdle of denial. And we’ve talked about this before, but I just constantly see it. I review all of the AI Steve chats when people go to getoutofdebt.org and three o’clock in the morning and ask AI Steve their questions. And I’ve been asked some crazy stuff, but, you know, it’s funny when it comes back and it gives people like the best researched, well-reasoned answer and people will go, no, I am not doing that.

And the whole reason is, I don’t know, some emotional reason, not based on fact. Well, I think it comes down to our frustration sometimes can be summed up as how can I figure out how to help people get out of their own damn way? I know. That’s the struggle. The struggle is real. It’s old Jerry Maguire. Jerry Maguire? Yeah. Help me help you. Help me help you.

It’s so true. And I’m not, you know, I’m not, I understand how we get in this situation and I, you know, we’ve all been there in our lives and everything else and it’s emotion over math. I understand. But it is so damn frustrating for me when I watch somebody make a decision based on how they might feel or something that they heard. Like for example, in all of the research I do for the posts on the site, like the one I wanted to talk about today, I paid off my collection.

So why is it still on my credit report? All of these things have two components to them. One is all the bullshit you hear people saying, I don’t care if it’s on Reddit or it’s a personal finance guru, everyone is repeating the same information. That doesn’t make it true. It makes it repeated. And so it’s always very frustrating for me when you bring up a fact and people push back with no, I’m not going to do that because so-and-so said that’s bad or wrong.

Or I’m going to use the Dave Ramsey thing again, you know, like Dave Ramsey said bankruptcy is bad. Yeah, Dave filed bankruptcy and that’s how he has the career he has. So you’re going to push back at me on that, but, you know, let’s just talk it through. That’s what I love when people have the opportunity to reach out to you and talk to you is, you know, you do get to talk it through and I don’t know what percentage of the time do you eventually think that you come around and they finally go, Oh, I get it.

Well, honestly, honestly, most, most of the people that call me by the time they, they get to the point where they reach out, a lot of them are ready. You know, they’re like, okay, my way is not working. I’ve been trying my way for years and years and years. These two yackles on this podcast and they, they, they seem cool. They seem like, you know, like just kind of matter of fact about stuff.

They seem to be like throwing some truth bombs out there, which is different than I, that I hear a lot of on these, a lot of these shows and you know what, why not? Let me see what this guy has to say. So, so I think a lot of times, like I said, by time they call me, they are open, but there’s still plenty that, and like, you know, I shared the one on a last month where she actually hung up on me, you know, I was trying to help her and I don’t think I’ve ever had that happen before.

And I was just kind of, I was sitting in the Costco parking lot, remember, and I’m finishing this call and had to go in and get some dog food and some stuff for a trip. I think we were going to Colorado for daughter’s softball, shocker. And so we were leaving the next day and I was doing this, this call with one of our listeners that, you know, wanted some help.

And she was just not happy with what I was probing as far as in her case, I really felt that a bankruptcy was worth exploring and keep in mind, I’m not a bankruptcy attorney. I don’t get paid any money when somebody files bankruptcy. So if I’m looking at your situation, I’m taking 25 years of experience and I’m just having a conversation. And the conversation was so uncomfortable for her that she just wanted to get off the phone and, and I get it, but it was that I was asking questions that she knew she didn’t have logical answers for.

And so it was making her uncomfortable because emotionally she didn’t want to, you know, go down that path. And I wasn’t saying you have to file bankruptcy. I was just trying to explore it so we can figure out what was going on and really go through some scenarios because she was really wanting to make some decisions, um, that made absolute awful sense. It would have been really, really bad decisions in my opinion.

And she was going to spend, um, a lot of money on what she wanted to do, but rather than being open to saying, Hey, look, maybe there’s a better way. Let’s just talk it through. I’m not pushing you that way. Let’s just talk about it in this, you know, go back and forth with it. She was really just looking for somebody to just agree with what she wanted to do.

And we got to the point where I was just like, what do you want me to tell you? Do you want me just to agree? I mean, you called me for help and I was very nice about it, but I was like, if you want me just to agree with you, I can, but that’s not going to do you any good and you’re making a big mistake.

And that’s when, you know, things started to go off the rails for her. And she ended up just like, well, thanks for your time and, you know, and hung up, but I totally get it because there’s been plenty of times in my life, especially like when I filed my bankruptcy back in 2011, right there, I understand the emotion behind it. And I’m sitting here, you know, as somebody who’s been doing this stuff for years, going through it, when it’s personal, the emotion gets in there.

And there’s plenty of times where, you know, I’ve been looking at something that was going on in my life or whatever, and, you know, from a financial standpoint and I would, I’m going to do this or I’m going to do this. And then I would catch myself and be like, if I was my own client, would I advise my client to do what I’m thinking of doing?

And very often it’s fuck no, like this is really stupid, but the emotion, you know, cause now it’s my situation, right? Is if I’m looking at somebody else’s situation from the outside in, things are very clear when it’s my situation. It’s like, well, yeah, that’s what I would tell my client, but this is why it’s different for me because I’m blah, blah, blah, blah, blah. Right. And we all do that.

I, I have a front row seat to all of this in action because, you know, technically I was kind of like your advisor when you were hitting your bankruptcy time. Yeah. And so, and I’d be like, shut up, Steve. Yeah, no, I mean, it would just have to be like a constant drip. And, and I think, I think you’ve told me once before, uh, that the question that I asked you that helped you the most was what would you advise your own client right now?

Yeah. And I think I was pretty quick to say the exact opposite of what I’m doing. Yeah. So we understand. Rules for me, but not for thee. We understand completely, but, uh, we’ve had, we both individually with many people had the success story, which is my favorite number one payoff when helping people, which is when they come to you in the beginning and you give them, you know, some advice solution, a path, and they say to you, there’s no way I’m doing that.

There’s no way. And then by the, by the end where you’ve been able to have a lot of good conversations and heart to hearts and everything else, and then they come around and they go like, yeah, I don’t know why I wouldn’t do that. It makes total sense. The best, the big payoff in the end when it’s all done. And then you get that text or that email.

It’s like, you know, I’m so glad I found you a year ago, two years ago, whatever. This is what my life is like now. Yeah. I can never imagine it would have been like that. Cause I was stuck in this and, you know, people just, just understand when, when. You go to my site, damonday.com, schedule a call with me. It’s free. I’m not there to push you one way or the other.

I’m, I’m there to help you talk through things. Use my 25 plus years of experience. And let’s talk through some, some things based on your scenario, because at the end of the day, it really comes down to one simple thing I like to ask people. What is your plan? You know, you’re listening to the show because you have debt, you know, you’re not sure what to do.

You’re, if you’re the typical person that calls me, you’ve been carrying this debt for years, five years, 10 years. It doesn’t matter why you’ve been carrying it. It doesn’t matter why it happened. Bottom line is you’re struggling. The debt is growing. You’re putting gas and groceries on the cards because it’s choking out your cash flow, you’ve tried getting consolidation loans, you’ve probably borrowed from your 401k, you’ve maybe done a 401k withdrawal.

You’re trying to do all the normal stuff and it’s not working. And so you don’t know what to do. So the biggest thing is if you’ve got this, you know, paralysis of analysis and you’re just trying to figure it out, you need somebody that you can talk it through with and just have an open mind. And no matter what you do, you need to have a viable plan to move forward because not having a plan is a plan.

It’s just a really shitty one. Yeah. It’s like the people who say, I’m not going to vote in a presidential election. Well, you know, that’s a vote. Yeah. And sometimes what? No, nothing. Go ahead. Now, sometimes you just need to break the cycle. I’ve talked about it before, like in 1989, when I was deep in my financial shit and I had to break the cycle when the debt collectors would call me by swapping recipes, you know, because it just wasn’t going to have the same old conversation yet again, and you need to break the cycle by just having a heart to heart with Damon.

I mean, there’s not a damn thing that I’ve never heard from somebody in all my, what am I going on? 30 ish, four, 30 plus years helping people. And neither has Damon. There’s nothing that can shock us. So there’s no reason not just to be open and just, just talk it through. Yeah. And the big thing about, you know, when you’re dealing with finances and debt and what’s, what’s really hard about it is you can’t go to your normal outlets or most people are resistant for obvious reasons to go to their, their normal outlets, like you, you know, and for some people, even their spouses, they, you know, they’re, they don’t want to tell their spouses or they’re trying to protect them from this information.

But, you know, you don’t call up your buddy and be like, you know, Hey, yeah. You know, John, I got all this credit card debt. I’m not sure what to do. You know, that’s not something that you want to talk to friends, family members about, uh, cause it’s, you know, you have the shame, um, and you’re embarrassed or whatever, but even then does John even know what the hell you should do anyway?

Why would you talk to him? He’s just going to repeat something he heard. So it leaves you very vulnerable to these debt relief, you know, scams and shams and they’re not all scams, but most of them are not at minimum are not good. Well, if they’re not complete scams. And don’t have your interest at heart because they’re trying to sell their widget, not fix your financial life.

Yeah. So it, it, it, it becomes a very lonely place very quickly where you’re trying to, you know, be up at night, stressed, you know, ChatGPT, Google searching, Reddit forums, getting all kinds of conflicting information that none of it is tailored to what your actual situation is and most of the time, what you come up with by doing that is not the most optimal strategy and sometimes it’s a really bad strategy and don’t be afraid to bounce it off somebody like me and, but be open if I come back and say, well, we couldn’t do that.

Yeah. But this, yeah. And, and that’s what, you know, Steve was talking about earlier when his AI chats, he sees this a lot where, when AI Steve, you know, brings up an uncomfortable topic, likely have, have you considered bankruptcy or talks about debt settlement or anything like that? A lot of times the chats just kind of abruptly stop. It’s just, you know, people go, Oh, I, you know, no, I don’t want, I want to talk about that.

But there’s nothing wrong with talking things through, I mean, worst case scenario, you invest 10 minutes, you invest 15 minutes, 20 minutes talking something through, no, no bad thing can come from talking something through from somebody that’s knowledgeable on that subject, because either you come away with, you know what, maybe I will look into that a little bit more because it doesn’t sound as bad as I originally thought it would, or, Oh my God, that sounds absolutely horrible. There’s no way in hell I want to do that.

But at least now, you know why you don’t want to do it. Right. You know, that, that can happen too. So either way, talking it through is going to lead to information that can get you to a resolution to living like this, because living in debt, living paycheck to paycheck, just sucks. There’s no future in that. And for a lot of you listening, that’s just a way you’ve, it feels like you’ve lived forever.

And that’s, I know you hesitate to call it a comfort zone, but that’s what you’re, that’s what you’re used to. And it’s hard for you to even to wrap your mind around what your life would be like if this debt was all gone and you had excess cashflow each and every month. You had $15,000 in your savings account. If the car needed new tires, the car needed a repair, something came up.

You had the money for it. Right. And, but instead of, of imagining that life and figuring out how you can get there, your brain is wanting to keep you where you’re the most comfortable, which is where you’ve been at, and you’ll come up with excuses and things like, well, I can’t go bankrupt or I can’t settle my debt, or I can’t do this because if I miss a payment, my car insurance rates might go up or something that I don’t want to say stupid, but illogical.

That is a completely illogical reason to not wipe out $100,000 in debt. Well, one of my favorite rates may or may not go up. One of my favorite, uh, consultation calls of all time was the person I talked to at the end of the conversation was very upset with me, didn’t hang up, but was very upset. Oh, I’ve had people hang out, but, uh, she said, this was a waste of time because you didn’t tell me anything I didn’t already know.

Oh, okay. So why haven’t you done any of it? There’s, there, there’s a huge difference between knowing something and acting on something because you have the conviction of it and you know, for sure it’s right. Like I, you know, you, I think you, you told me this long time ago, a good consultant is somebody that will borrow your watch and tell you the time. Right. So I don’t always have something that is just like earth shattering.

Like I’ve never thought of that. Usually I do. I’m pretty damn good, but not always. But oftentimes it’s just that, oh yeah, I, I, I knew bankruptcy existed. Well, yeah, you did, but we walked through it and we figured out exactly how it would or wouldn’t affect you. And by going through that process and you were able to see your life on the other side, it allowed you to move forward in confidence in that decision.

If that made sense, well, you knew about bankruptcy, but you weren’t at a spot where you were ready to move forward in confidence until we had that conversation. There’s a big difference there. I like that move forward in confidence. That’s good. I just came up with it on the spot. Cause I’m the guy, you aren’t the guy. You smell, it’s like, it tastes like affordability. That’s an insider for the long-time listeners.

Yeah. And we should write those down. You should, we should. Yeah. Yeah. There, there’s actually a really good article on the getoutofdebt.org site. Um, if you just go to the site, you go to the, the magnifying glass in the top right corner and just type in like, uh, research on money psychology. And Steve wrote a great article. It’s kind of like a hub of articles really. Um, and it’s, you know, the title is why financial education fails, the research on money, psychology, and behavior, and it’s a collection of articles all around this whole idea of why we make different decisions about things and why we’re left to our own devices, most of us make the wrong decision when we’re in the moment and we’re in debt and we’re stressed and we’re depressed.

Um, and, and it’s just a really good, insightful collection of articles. I’ll just read you a couple of the titles of the articles in there, but yeah, just go to getoutofdebt.org. Uh, go to the magnifying glass and do research on money psychology and it’ll pop right up number one. But you know, some of the titles of the articles, why people make the wrong debt decision, the behavioral economics of financial choice, the psychology of debt, shame, uh, debt equals depression.

Um, why financial literacy classes fail. So just start going through some of those articles, especially if you’re struggling. Uh, you’ve got paralysis of analysis. You’ve tried a whole bunch of things. It’s not fixed the situation and you’re just at a point where you want to be able to imagine your life without this debt and what that would do for you financially, emotionally, spiritually. I’m telling you, I’ve been in debt and I’ve been out of debt.

And out of debt is more better. So true. It is, it is. It’s so much easier and it’s hard to be a laid back guy like Steve and watch British baking shows. If you have debt, you can’t really, but Steve doesn’t have debt. So he can watch the great British bake off, right? You got to get to that point where you can choose. You know what I’m going to do?

I’m going to sit down and watch the great British bake off. Yep. All right. So, I mean, a good example of that is when I was living in England, uh, I was invited to a committee meeting in parliament to talk about developing financial literacy education in England. And everybody sat and talked and said the same old speaking points you always hear. And they came around to me and I went, yeah, it doesn’t work.

I hear what you’re saying, but if you look into the facts and the statistics, it does not work. Why do you want to do this? And the answer was, well, because we’ve appropriated money to spend on this, so we’re going to do it. Yeah. All right. You do you boo. Well, what did you say at the beginning of the show? Just because you see some advice everywhere, it doesn’t make it right.

It makes it repeated. Yeah. It’s the same problem with, uh, with AI. I mean, one of the things that I’ve learned, I use all sorts of different AI engines every day, all day long and for different projects I’m working on. And one of the things that I have learned is I don’t care if it’s ChatGPT or some other engine. All of these things were trained on, but on what was on the internet.

That didn’t make it right. So oftentimes when I’m having a discussion with AI and it comes back and it gives me an answer, you know, I’ve, I’ve said directly. Yeah, but that is factually incorrect. It will come back and say, well, you know, it’s based on my training data, uh, from before 2024. And it was just on, I’ve never looked into it. I’m just repeating what, what I’ve heard.

And so even with AI, if you get an answer, it’s always worth saying, can you verify that like in, in this post I wanted to chat about today that paid off my collection, so why is it still on my credit report, every fact in that post that is stated is linked to the act where the, you know, where it came from. So you can verify yourself instead of just reading something or believing something, this is why it’s so important to talk to Damon so that you can actually work through these things that people assume all the time.

Like here’s the classic one again, talk about bankruptcy, but you know, I am not going to file bankruptcy because it is immoral. I need to honor my promises. I have an obligation to pay that debt. And then by the end of it, you’re having that same conversation and you say to somebody, I know you were dead set when you came in here that you had an obligation to pay that debt.

Now that we’ve talked about it and you understand it better, there’s nothing that prevents you from repaying your debt after you file bankruptcy. And a hundred percent of the time over my 30 plus years, the answer has always been, why would I do that? Yeah. And not only that, if you did take that approach, you would then have the wiggle room, if you will, to repay that debt under your own terms because you’re not legally obligated to pay it back anymore, rather than try to do quote unquote the right thing and then end up having the creditor just eventually sue you, get a judgment and garnish your wages all because you tried to do the right thing.

Rather than settling the debt way earlier or filing bankruptcy or whatever. And I’m just looking at this, you know, the article, the hub that I mentioned before on the getoutofdebt.org site. And here’s one of the articles, the psychology of debt shame, what neuroscience and research actually shows. And it’s talking about the neuroscience behind why shame makes debt worse, not better. And this is kind of along this idea of, oh, I’m, I’m, you know, bankruptcy makes, you know, gives me that feeling of shame, right?

I don’t want to give up. I’m a failure. And so I’m going to keep, you know, keep on keeping on, but all you’re doing is making the debt worse, making the situation worse, just spending, you know, tens of thousands of dollars on interest for years and years and years trying to do the right thing because bankruptcy seems so shameful. So that emotion is what is costing you money rather than taking a more objective look at, and be honest with your situation, be honest with where you’re at and a lot of people are listening to this going, oh, I’m going to have a plan, we’re going to pay this off, I’m going to get the bonus.

I’m going to get this. How many times have you made up a plan like that over the last few years? And this is going to happen. I’m going to get this better job and I’m going to get the, and yet nothing changes, you make a little bit of progress and then boom, the car breaks down or you have a medical situation. Debt’s back on the, how many years have you been going to pay this debt off?

How many years? And it hasn’t worked and how much has that cost you? And so, you know, being able to sit down and work it through with somebody, take the emotion out of it, run the numbers, run the scenarios, is a very healthy exercise. And again, if you know, you come away with the phone call and you think I’m just an idiot. Well, you don’t have to take any of my advice.

You blame it on the other guy. Yeah. I mean, it’s not my life. It’s your money. It’s your credit. It’s your debt. So, you know, whatever decision you make affects you, not me, but go, you know, Steve, going back to, uh, you know, ChatGPT talking about AI. And it’s, it’s not always right to me. That’s one of the most dangerous things with, you know, AI ChatGPT right now is people are kind of getting to the point where like, well, I asked ChatGPT and it said this, and it’s like, you know, it’s not always right.

Right. And it’s like, like my best example of that. Cause this happens actually quite a bit where I’ll ask it something and then I’ll go, huh, and then I’ll rephrase. And I’m like, I don’t agree. And then ChatGPT, like, this is what bugs me. It goes, oh, you’re right. And I’m like, what the F yeah. Like just because I questioned it all of a sudden, what’d you do?

Some deeper thinking and then realize like, why couldn’t you like, but here’s my favorite one and it’s a simple one, which this has opened my eyes to how often is this actually wrong and people are just relying on this, like it’s fact. And it was, I asked ChatGPT how old I was. And cause honestly, on honest, I, you know, I’m, I’m 48, right. But I had this moment of confusion as you get older.

It’s like, wait, am I 48 or am I turning 48? I like literally, I’m like, so I’m like, wait, I was, I was born in 77. So then I’m counting, you know, so 87, 97. And then I was like, oh, I got ChatGPT. Let me just ask ChatGPT. Cause it’s like, you know, I, I just couldn’t remember if I was going to 48 or I was a 48 going to 49.

And, and so I asked ChatGPT, I said, Hey, I was born and, you know, gave him the month date 1977. How old am I? And it said 49. And. I was like, oh, and I’m sitting there going, I said, it’s like for a couple of minutes, I’m counting on my fingers. And I’m like, and this was before my birthday that year, and it was this year.

And I’m like, I don’t think I’m 49. And then I went back and I was like, no, I think you’re wrong. I don’t, I was born this day and today’s this day, I think I’m 48. And it’s like, oh, you’re right. One of my standing rules with ChatGPT in my, my profile, my instructions that it always uses is I think my number one rule is don’t suck up.

Yeah. And it’s always like that. It’s like, and it’s like, that was a simple math problem is all that was. It was, and if ChatGPT can’t get hard numbers, specific math, right. On a simple, how old am I, if I was born on this date, I mean, Rain Man could have told me that and ChatGPT can’t figure that out. Well, that’s why on my AI, uh, ask Steve chat bot on the getoutofdebt.org site, every day I go through and I review the chats.

When I first started, everyone needed a correction because I had to, you know, train the chat bot to get it right. And now I’m down to, you know, very few need any sort of input, but it has been nothing but ongoing training. Now chat bot is good, but it’s not perfect. I read some of those transcripts and I’d be like, uh, I want to give a little bit different advice, but again, it’s AI Steve, right?

So you have to take it with what it is. It’s not going to be perfect every single time. It’s pretty damn good. Well, what were we talking about the other day with one where, oh, it was somebody was draining their 401k. Yeah. And of course. So the six grand. Yeah. Obviously the knee-jerk reaction is, you know, stop, collaborate, enlist it. Right. Um, don’t, if you’re draining your 401k, that is a red flag to, Hey, stop and come up with a plan first because knee-jerk reaction of the only place I have cash is my 401k, so let me rate it is not usually the best plan, but it was going, I was reading through this chat transcript that it was like, AI Steve asked, you know, how much you have left in the 401k that you’re it was like $6,000 and, you know, basically a rounding error at that point.

But AI Steve was like treating it like this was the Holy grail. Stop, you have $6,000. Do not touch another dollar. And I, and I get overall why that makes sense, but it was just comical is not the right word, but I’m just sitting here going, is that really going to make that much of a difference at this point, like maybe when she had a hundred thousand dollars and was pulling a couple grand a month out of it, then yeah, it’s like, stop.

But at that point it’s like, but, but again, it’s, it’s an AI thing. So it’s just like, okay, that pulling from the 401k is bad until you have a plan. But, but I remember at the very end of that chat, it was like, and nature, you know, it’s just very adamant about that $6,000 that became like the focal point of and protect that at all costs. And I was like, or not, I mean, it’s six grand left.

That’s it. Yeah. You’re down that far. I might as well go to dinner or something. Just enjoy your life on the way out. Yeah. Well, uh, Damon does get to see some of those chats because yeah, during those chats, if somebody says that they, uh, would like to talk to somebody and work through their situation and then they would like to talk to Damon, the chat asks their permission to share that transcript with Damon so that when he talks to that person, he’s got all the background information.

Yeah, it does help. And then the chat says, you know, when you fill out the help request, you know, request a consult with me, you know, somewhere in there, right. You know, cause the, the chat will assign you a name, you know, like, like, like Daring Sparrow or something like that. Right. It’ll just make up like a name and that name will be for you. It’s not your real name.

And I say, if you put it in the help request, then I can look up Daring Sparrow and then I can see that chat transcript. And I can say, oh, that is John Smith who just asked for help. So, you know, you don’t have to repeat all of that stuff. I can see it, but we had somebody yesterday and I get, sometimes things are confusing or whatever, but when you fill out my help request, uh, give me your actual name.

So I know who I’m talking to. I mean, that’s not getting published anywhere. That’s just going to me. So I know I’m talking to John Smith tomorrow or whatever, but yesterday. So, and if, if you’re listening, um, upright Dingo, um, they, they filled out a help request the other day and it is, again, it’s confusing. It’s fine. I mean, I just got a kind of a chuckle out of it, but when I said, you know, on my form, what’s your name?

It said upright Dingo. So I get an alert that upright Dingo wants to talk to me. I have no idea who upright Dingo is. Like when I call him, I just was like, Hey, Dingo, is this upright? I guess that’s better than inverted Dingo. Well, the funny thing is that I had so many chats going, uh, people asking that I had to expand the pool of running out of words.

Yeah. Yeah. So, you know, they all went from gentle sparrow to now upright Dingo. I mean, you know, signs of random combination of words to keep people anonymous. Cause I don’t want to ask their name, but yeah. Well, but I do, if I’m going to actually call you real conversation about real things, I don’t want to call you upright Dingo. Is this Mr. Dingo? That was the only time that’s ever happened though.

I mean, it was the only time everybody else puts their name and then they’ll write somewhere in there, like, you know, I chatted with AI Steve and he recommended I talk to you and my name was, you know, sinking sparrow or whatever. Pretty soon you have to go to like a three name combination. Cause you’ll run out of two names. One of the best names I ever heard in my life was, uh, Mary Margaret Muckenfuss.

Okay. My dad told me the story. He went to school with her back in the, like, you know, 1950s. Oh, this was a real name? This real name. Oh, perfect. He said that he was really embarrassed cause he had to stand up in class one day and read the name and he said, Mary Margaret fucking muss. No, it’s the three M’s. Mary Margaret Muckenfuss. Well, I think the big takeaway from this call is be honest with yourself.

Come up with a plan. You want to talk to me and we can walk through it, come up with a plan. That’s, that’s fine. But you have to be honest with what your plan actually is, and it can’t be more of the same. This year, I’m going to do this. This year is going to be different. If it’s more of the same, be, I’m going to cut my, cut my budget.

All that stuff is fine, but you’re, you’re trying to do traditional solutions in a non-traditional environment right now. I mean, prices are skyrocketing everywhere. And the old, Oh, just, you know, cut this and cut that and do this and eat beans and rice. Hey, you do you boo. If you, if you can, you and your family can pull that off right now. But last time I checked, everything’s about twice as much as it was five years ago.

So unless your income is double, you’re going to have a real hard time doing that. Well, I was going to talk about this whole collection thing. It’s a, it’s a post worth reading. Get Out of Debt Guy, get out debt.org. We can, we can skim through it. You’re the editor. Yeah, I know. But my brain’s been 45 minutes into this. He’s like, I got that great British Bagoff calling my name.

Yeah. Yeah. Uh, I mean, just to cruise through this really quickly, um, it’s a good example of why you read something on Reddit and it’s not the whole story. So you get the, the person that says I paid off an old collection account. Why is it still on my credit report? All right. Then now we’re into the, you got the seven year clock, but when does it start and when does it stop?

And is it really seven years? No, I mean, technically it’s seven years and 180 days that has to fall off your credit report. But if you went delinquent and started making payments and then you fell behind again, when does the time actually start? And here’s where it gets mind melting to me is whether your, your credit score depends, um, on what you did, whether you paid it at all, because these days you’ve got FICO nine and FICO 10 that disregard third-party collections that are paid in full.

Okay. So you went back and paid it. It’s still on your credit report. Doesn’t matter if they’re using FICO nine or 10, but if a lender is using FICO eight, then it does count. But here’s the part that blows my mind. If you’re going for a mortgage and it’s a Fannie Mae or Freddie Mac mortgage, they’re still using FICO two, four, and five, which don’t even include that.

But then another lender might use a Vantage score. See what I’m saying? You can’t just go by one thing that you heard because it’s a freaking onion with just lots of layers. Well, and this is why knowledge of how this stuff works is power because the Vantage score is like the score that you get if you sign up for a free account at Credit Karma, that’s your Vantage score, which is different than your FICO score.

If you want your actual FICO score, you need to go to myfico.com and you can get, I think, Experian for free. But if you want the full actual, you know, three bureau credit report, you do need to pay for it, which is worth paying for if you are trying to buy a car, buy a house, or make a purchase that is going to have, you know, an interest rate that could essentially cost you thousands and thousands of dollars over the next 15, 20 years or whatever, it’s worth paying the 50 bucks or 60 bucks or whatever it costs to get the actual credit report, but having the myfico credit score at myfico.com, you can actually, if you care to, do a deep dive into that and it will tell you here’s your score with all three bureaus with a FICO 10, a FICO 9, a FICO 8, it’ll go through all that stuff.

It’ll give you your score if it’s a mortgage, a lender for a mortgage pulling it up, because it’s a different score and everybody goes, oh, my credit score is 720. It’s like, you have no idea what you’re talking about, you have no idea what your credit score is. Nobody uses the consumer score that you see. Yeah, exactly. So if you’re buying a car, that’s a different score, but if you go to myfico.com, all this information is there.

When you have all that information, then you can see, okay, where do I look the best with my current situation right now? Do I look the best on FICO 10? Do I look the best FICO 9? FICO 8, where do I look the best? And what bureau do I look the best? Cause you could have, okay, my FICO 9 score between Experian, TransUnion and Equifax could vary by a hundred points.

Yeah. Right. So you figure out where you look, it’s guys, it’s all a game. It’s just a freaking game. It’s just a stupid game. So you figure out where you look the best. Now you have that information. You want to get a mortgage or you want to buy a car. Now, what you’re going to do is you’re going to go shop for the lender that uses the model and the credit report that you look the best with, right?

So you look the best. Well, you’ve called up lenders and said, absolutely, you know, what bureau and model are using, and they tell you and you go like, thanks anyway, click. Yeah, that’s exactly what you do, right? You’ve, so I look the best with a TransUnion FICO 9 or whatever that is. So I want to buy a car, I want to get a car loan or whatever.

Okay. I’m going to go call this credit union or, you know, I’m going to shop around. Oh, this is a good rate. I’m going to call them up. Now I don’t have them pull my report or anything like that. I start asking questions like, Hey, when I get a loan, what, what FICO scoring model do you use? Usually the first guy has no idea what I’m talking about.

So they’ll have to move me up in the chain there, but eventually I’ll get somebody to say, oh, we use FICO 8. We use FICO 9. We use whatever. Okay. Well, if that bank uses the FICO that I’m not looking as good, thank you very much. And you dial for dollars guys. So you find somebody, oh, we pull FICO 9. Okay, great. Which, which bureau do you pull from?

Sometimes they’ll pull from two different bureaus. Sometimes it’s just one. Well, if I’m a 750 on TransUnion and a, you know, a 685 on Equifax and they say, oh, we pull from Equifax. No, thank you very much. Have a good day. I’m going to get a higher rate if I go with that bank because they’re pulling from Equifax. So it’s complicated as this stuff is. And as much as it sucks, if you understand it, it’s like having an advantage over the house.

Now you can flip the script and now you can use this information for your benefit instead of just going to a random lender. They pull your score, which is a hard pull on your credit. And then they tell you what you have to pay and you go, oh, that sucks. I didn’t think it, I thought my score was better. Oh, well, shoot. Okay. I guess I’m going to pay a 6% interest rate on this instead of the four.

Like, no, you don’t have to just take what they tell you, find the lender that matches best with you. It’s just stupid ass game. Just learn how to play it. All right. On that note, Damon, until next time, I will see you. You da man, Bob. Peace.