Debt Consolidation Can Work but Only If You Know This First - Episode 119
In today's episode, I talk with Dr. Erika Rasure about how money problems are more than just numbers. We talk about how debt can make you feel sad, stressed, or stuck, and why it’s important to heal your money story. Dr. Erika shares how she helps people who feel overwhelmed by debt and want to change their lives. We also talk about credit scores, money shame, and how to build healthy habits that actually last.
About our guest
Dr. Erika is a former financial advisor and university professor turned financial therapist and educator who has helped thousands of people approach their money in more holistic, positive ways. She currently serves as Chief Financial Wellness Advisor at Beyond Finance where she meets weekly with clients overburdened with debt and putting them on a path toward financial freedom. Dr. Rasure also serves as Chair of the Research Board for the Financial Therapy Clinical Institute. Additionally, she is a member of the Financial Review Boards for Investopedia, The Balance, VeryWell Family, and VeryWell Parents. Her insight and interviews have been featured in several prestigious national outlets, such as Barron’s, CNN, Forbes, Fox Business, Marketwatch, NBC News Now, USA Today, and Yahoo! She is a Certified Deep Transformational Coach and holds a doctorate in Personal Financial Planning from Kansas State University.
Beyond Finance
—-
Check Intentional Style here: https://www.intentionalstylesuite.com/
Please join me here, and follow me on social media, Instagram, and Facebook.
Need help getting started on your path to financial freedom? Start Here
Join the Financially Intentional Community
Oh and please subscribe and leave a review on whatever app you're using to stream this podcast.
Get my book Smart Money
Subscribe & Review
Love this episode? Please subscribe and leave a review on your favorite podcast platform.
TRANSCRIPT:
[00:00:00]
Naseema: What's up? My financially intentional people. I'm honored to have Erica Rasher join us today and she is a very, very accomplished as you'll hear person in the finance space. Excuse me, doctor. Erica Rasher is what I should be calling her because she has earned those stripes.
Without further ado, Erica, welcome to the Financially Intentional Podcast. How are you today?
Dr. Erika Rasure: I am having a beautiful day and you are just a delight already and I'm
Naseema: of course girl, we have fun here. So Erica, tell us like, how did you come into this space? Personal finance, especially professionally, is one of those male dominated spaces, and so I'm always interested to know how a woman enter enters into this space. Oh, let us hear to tea.
Dr. Erika Rasure: Yeah, sometimes I like to think of it as a comedy of errors in a lot of ways. But the short version is, my, my dad passed away when I was 13. He had multiple sclerosis [00:01:00] and both of my parents had been insurance agents. And so I learned about insurance and, those kinds of things early on.
And when he died, he didn't have life insurance except for, a policy with the military because he had been diagnosed with ms. And with a lot of those illnesses, you do not have the ability to be in short. And so I really thought it would be interesting career wise to become an estate planning attorney.
And so that's where I started, my college trajectory. I was like, yeah, I wanna be an estate planning lawyer. And then I didn't, and I bombed the lsat. I don't, I didn't even study for it barely. And I was like, it didn't feel right to me anymore. And. I think my values had changed a little bit, just my college experience and really getting out into the world a little bit and I was like, there's gotta be a different way to where I can support, families who are going through some of these financial issues that don't come up unless there's some specific.
Circumstances, right? And so I found financial planning and I went and visited the graduate director at the University of [00:02:00] Missouri, go Mizzou. And from there, the rest was kind of history. So I started on that path and I found financial planning to be a really interesting home for me and.
I went on to get my PhD, but when I was in my PhD program, that is where I really started to fall in love with the financial counseling, and particularly the financial therapy aspects, the financial wellness aspects that are so beyond the technical components. People's relationships with money, and that's where I really started to see that shift in myself and that focus on helping people identify, the areas of their life where they can really start to see some improvement and empowerment and confidence no matter what life.
Throws at them. And that's where I found myself now as a university professor for a lot of years. And then from there I started working with Beyond Finance, which is a company that helps people with their overwhelming debt. And, it's a place I never [00:03:00] really thought I would be. and I wanna, elaborate on that a little bit here because you had mentioned, it's.
Going into a field that was primarily male dominated, that was tough. And you know what's, I think even tougher is that environment in which I was, providing my education and that, it was male dominated and there was so much of the emotion taken out of money at that time. It's different, it's shifted now, which is wonderful.
But that time it was very technical, it was emotionless and there wasn't a lot of emphasis on this under underpinning. And so when. I was looking at moving into the debt space and helping people with this major life change, right? It wasn't death, it was debt. I had a lot of reservations about, because I had been told for years, by, the big shots in the industry or in academics that, this was a scammy place to be.
And what I feel about that now is totally different. And I've been completely humbled and changed as a result, and I have no regrets.
Naseema: Oh, I love that. So many things to get into. First I wanted to talk about you [00:04:00] went the academic route of financial planning. I know a lot of financial planners that just get like licenses and they just get, these certifications and different things, but they're like, just go the professional route versus the academic route.
What is the difference in the training and the application for financial planning in that space?
Dr. Erika Rasure: Yeah. So there are some marked differences for sure. If you are, interested in a career in financial planning, I think the premier certification that you would want to work toward is your CFP certification, and then there's all kinds of alphabet soup you can get after that, and you might get some securities licenses. There's, but there is a fair amount of training and support. Port that goes into those things. But if you were interested in a career, in financial planning, you'd definitely want to, I would recommend find a, a university that has a solid, four year program in financial planning and complete that and, work in that progression, as an academic, the.
It's a little bit different. You really focus the master's degree or you get the PhD in personal financial planning or consumer [00:05:00] economics or however that tends to work out. And then many academics do choose to get their CFP or their A FC or any of these other certifications or additional.
Training and support to really help evolve the industry, from the academics on the inside and the way that, comes out on the outside with, research and things of that nature. So they are two very different paths, but there is so much overlap because I think what makes a good educator, especially, I truly in any field is somebody who has experience.
Naseema: Mm-hmm. Mm-hmm.
Dr. Erika Rasure: financial planning is certainly one of those areas who, when you can speak to what it is you're teaching from a very personal level and professional level. I think that is game changer.
Naseema: Yeah. I love that. I love that. And I think like the, especially the research component, like having that knowledge base to back you is a lot different. But just like to be able to get the degrees and the certifications and really have that strong backing speaks a lot about like where you are [00:06:00] in the profession.
But I wanna talk about the debt space because, I'm someone who, is known for paying off a huge amount of debt in a very short period of time. And I saw people in that space take advantage of a lot of people. And so I understand what people were saying.
Maybe from a consumer side that it's like it could be a scammy place, but from your perspective, why do you think people were saying that? For you to steer clear of that?
Dr. Erika Rasure: I think that's a great question and I think there's a fair amount of validity to it. Years and years ago, you had these debt relief companies who were absolutely,
Naseema: Yeah.
Dr. Erika Rasure: Preying on, on people who were in very vulnerable situations. When you're robbing Peter to pay Paul, and your minimum payments are becoming extremely unsustainable, and you are desperate, there's so much money to be made in desperation.
And it's disgusting, but that's the way the [00:07:00] world tends to work, right? We exploit the vulnerable, we exploit, the desperate. And so I think that's why there was so much success in those predatory type environments where you promised people hope and they were hope pedalers and they weren't able to follow through on those promises.
And not only that is. When you think about these companies and you think about the vulnerability of these consumers, they know that, people already feel tremendous amount of shame and guilt around their debt, and they want it gone. And these lofty ideas really just, open the door to the worst predatory practices and lies and you name it.
and people were victims of something that didn't have to be like that,
but was 'cause it was easy.
Naseema: yeah, I personally went through that. I experienced that,
when I was in college it happened to me , it seemed like a lot of debt to me, maybe a couple thousand dollars in credit card debt because I went to [00:08:00] college when, the credit card companies used to be able to line the campus.
With their boosts. And then you got a free, it was a Frisbee free T-shirt. Okay, sure. I'm gonna sign up for the credit card. Why not? I'm like, oh, you're supposed to pay them back. Who knew? So anyway, so I went to one of these debt consolidation companies and they were promising to negotiate with the creditors to get my payments.
Reduced and all this kind of stuff. And I was like, great. They gave me this low payment, I paid it. They never negotiated all my debts went bad. So that's an experience that's like a perfect example of that experience that people are facing with scammy debt companies. And then, I know that dele companies are a lot different now.
Like I said, that was over 20 years ago. But yeah, I mean that's my fondest memory. And so when I went to pay off my debt. 10 years ago when I paid it off, or seven years ago when I paid it off, I was like, I will never work with those companies. Don't ever work with those [00:09:00] companies. But I've learned more that, now there's companies that can be trusted and can actually do those things, but it still leaves a bad taste in my mouth when I think about those debt relief companies.
Dr. Erika Rasure: Absolutely. Your experience was very typical of what a lot of people experienced, and you're right. 20 years ago, credit card companies could come to college campuses. They get the free pizza, the free Frisbee, the free chapstick, you name it, and college students are also a vulnerable population because.
Close to a hundred percent of people haven't had any sort of formal personal financial education. Like it's, it's wild. Like the amount of people who are so in the dark about this and, credit card companies and the, these scammy companies, they all know how to press the right buttons.
And I'm so grateful that things have changed and I think that is. Kind of one of the things I say in my group sessions a lot when I'm doing these sessions with Beyond Finance clients is the one thing that keeps me up at night [00:10:00] are the people who aren't in these rooms with us.
Naseema: Mm-hmm.
Dr. Erika Rasure: when we look at, the statistics on consumer debt and they're currently at $1.21 trillion, people are out there struggling with this big time
Naseema: that is one of the things I really had to reflect just this weekend I was talking to a friend and I was like, man, I'm so grateful to have put these things in place a long time ago and got rid of all that debt because things are crazy. One of my best friends just told me that she got laid off and it broke my heart.
She had been with this, she had been working at the place for 20 years. And had gotten promised, like a new job and all this stuff, and just like that, her job is gone. And I'm just, if that were to happen to me now, I would be okay. But for so many people, they're not. And yeah, so I'm just like people, this is a wake up call, but I also feel like.
It's kind of [00:11:00] like, it's kinda a little late for a lot of people because they are, especially just with this the things that have just been happening this year alone have set people back a lot. So yes, that keeps me up at night too. The people that aren't on this path are these people that haven't had the opportunity to get their stuff together.
Dr. Erika Rasure: Yeah, and that's something I I see all the time is, I wanna say that most people don't come into major debt situations without some sort of precipitating major life event. So it's like what you said, it's the being laid off. It's the being diagnosed with cancer. It is battling an addiction.
It's losing a partner whether that's death or divorce. There's so much context to the financial condition of death that gets overlooked in both, the, the professional aspects of the financial planning industry, but also the academic aspect.
Naseema: [00:12:00] Yeah. Yeah. It's scary.
Dr. Erika Rasure: It's,
Naseema: out here. But I know that you focus heavily on financial wellness and financial wellbeing. What is that exactly?
Dr. Erika Rasure: yeah. So the way I describe financial wellness, it's something that includes your emotional, your psychological, your physical at times. with money and how that feels to you and all of those dimensions, and it considers how money supports your overall wellbeing in life.
It is, money is so interesting because it really is dimensional and dynamic to every aspect of your life. There's not one area of your life that money doesn't touch, and when you are. In a position with money where it does not feel good to you, where you know that you are not well [00:13:00] with your money, it affects your relationship with yourself.
It, affects your relationship with the people close to you and that you love your relationship with people at work. It seeps into all of these areas of your life, and so if you are not good with your money from the inside out, that's where, financial wellness turns into. Not being financially well.
Naseema: Mm-hmm. Mm-hmm. I like that. I like that focus though on wellness because I think. When a lot of people think about where they are with their money, there's a lot of guilt and there's a lot of shame. And I think to give someone like a positive focus, helps the process, helps them to get over that so that they could overcome whatever money, obstacles and challenges they're having. Yeah.
Dr. Erika Rasure: exactly. When you talk about guilt and shame and, when [00:14:00] it comes to financial wellness in particular, I think there's such an important distinction to be made there. And it really does, affect people. But, when we think about guilt, that's, I made a mistake.
Naseema: Mm-hmm.
Dr. Erika Rasure: is I am the mistake.
Naseema: Mm-hmm.
Dr. Erika Rasure: I got into debt and life threw some hard things at me and I'm gonna deal with it. And did I make some mistakes that I feel bad about? Sure. But that's the human way. That's guilt. But when you internalize that as you being the mistake or the problem, or the failure, boy, that's hard to recover from.
Naseema: Yeah, [00:15:00] it is. It is. And I think one of the things that when people come for help, I notice that oftentimes they think that it's oh, I'm not budgeting correctly, or, I'm not doing X, Y, Z, or I'm not applying this. Certain tool correctly. But what it is is that they have all this unhealed money, trauma, and all this guilt and shame around money that they haven't worked through.
So no matter how much you budget, no matter how much debt you pay off, you going to repeat this cycle because you haven't healed that baseline trauma. You keep on repeating those things that got you there in the first place.
Dr. Erika Rasure: Yes, that is an absolute 100%. 1000000% correct observation. There's no doubt in my mind that you have, if you are going to be good with money on the technical side, you have to be okay with. Healing and taking those steps to [00:16:00] heal the trauma you've experienced and the emotional, personal gravity that keeps you stuck flat on the ground and learn how to release that so you can really expand into that desired place of, financial safety or security of satisfaction.
That that feels good to you. I know so many people who. I work with a lot of wealthy clients too. Like in my personal practice, I work with people who make really, really great money, like tons of money, but they can't seem to enjoy it. It's either not enough or they feel guilty about spending money, and so much of that is tied to the way they were, socialized around money or experiences that they had around money while growing up or even into earlier, late adulthood.
And it's. It doesn't matter how much money you make or don't make, if you are not emotionally well with your money, you are not ever going to experience the levels of financial satisfaction that not only do [00:17:00] you deserve, but like you want,
Naseema: Yeah, and the thing is like I think, and maybe you can help me with this, Erica, but there's always like this guilt and shame around money, but then there's this also there's never enough and like where do you think that comes from? Where is that centered? Is that a cultural thing?
Why do we do this?
Dr. Erika Rasure: So that is a question that is wonderful and it is one that I answer regularly because you are so right. It sets scarcity mindset. So many people I. Were raised in conditions where there was just not enough. They didn't feel like there was enough. There wasn't enough for extras or there wasn't enough even for the basics.
And when you are in an environment and you're growing up where you feel the tension, where you feel that pressure, that there is just not enough money to go around [00:18:00] that can sometimes. Obviously continue well into adulthood. And so I typically see it take two tracks. It's people who are doing great things with their money and they just are never, ever comfortable with the amount of money they have because they're afraid that it will go away.
Naseema: Yeah.
Dr. Erika Rasure: then there's the other camp, wherever they get money, they spend immediately because they don't know when it's going to come back. And so it's this kind of cycle of, feast and famine
Naseema: Mm-hmm.
Dr. Erika Rasure: and, both sides of the coin. Deserve and need healing just because you have a lot of money and you have this scarcity mindset that's not good for you either.
And just ha the people have this idea that, oh, money will solve all my problems. No, no, no, no, no, no money. You can have all the money in the world, but you're still gonna have problems. , you can have rich people problems or you can have poor people problems, but you're gonna have problems no matter where you're at.
Naseema: I love that. I'd rather have rich people problems. I'm
Dr. Erika Rasure: Yeah, [00:19:00] I think most of us, most of us would, yeah,
Naseema: So let's talk about beyond finance and what you do there.
Dr. Erika Rasure: Yeah. Yeah. I love Beyond Finance. Like I said, they changed my mind and my attitude and I've never been so humbled and,
Naseema: Mm-hmm.
Dr. Erika Rasure: I wouldn't even say it's necessarily the company. they're the ones who brought me in, which I'm grateful for, but it's actually the clients who, who humbled me, who changed my life.
And I, I tell them that as, as often as I can. I work as their chief Financial Wellness Advisor. And I run with a wonderful colleague five financial wellness sessions a week, and we spend in those sessions, they're about an hour long a piece we spend about, the first half of those sessions talking about some sort of financial wellness or education topic.
Things like financial trauma for
example, or what to expect with your credit score when that's when you're going through the thick of the program. We try to cover a wide range of things and then we, talk to, the clients. We have a live q and a after that and it's just, it's a [00:20:00] wonderful structure that allows us to deliver, some financial wellness education, but also lets us hear from the people who are going through the program who.
And, we've got people who are very new to the program, maybe just, signed up in the last week. But we've got people who've, been coming to our sessions for the last three years. And I love the dynamic that occurs because you've got people who are new and you've got the people who are veterans.
And the people who are new are often very, very scared. They, they don't know how to trust themselves. They don't know if they can trust beyond finance. They're terrified of what's going to happen with their credit score and how to deal with creditors and all of these, things that happen.
And there's also, these veterans who've been through all of it. And so there's this nice play and this reassurance that can happen and this nice mentoring that goes on. And I'm just, I just love getting to hold space for and with. these amazing people who are really going through it, but [00:21:00] who've made a really, really important choice to transform their financial futures.
Naseema: And to zoom out a little bit, what kind of company is beyond finance and how do people usually access the company?
Dr. Erika Rasure: So they are a, a debt consolidation company and they do, they help people, rework their debt with their creditors and, a lot of people find beyond finance when they're, up late at night because they have a stomach ache or they can't sleep because they're worried about their debt and they're out there googling, like how to resolve my debt or how to consolidate my debt.
And, beyond finance along with other companies will, will show up. And so people get beyond finance a call and, that's typically what will start that process. And it's. I think it's such an overwhelming and big step for people to take because at that point they are overwhelmed and they're scared and they don't know where to turn.
And the other option is bankruptcy, right? Or continuing the cycle of making minimum payments
Naseema: Mm-hmm.
Dr. Erika Rasure: 20, 25 [00:22:00] years. And I think Beyond Finance does a nice job of providing, a sense of relief, an optional pathway. it's a path. It's, it's not the only path, but it's, it's something to try, something to maybe put a little bit of faith in or trust in.
And, for at least the people I've worked with, it's not without its frustrations, let's be real. Right there's some wacky, scary things that can happen while in that process, but most of the people I've talked to who have, graduated or read at graduation, they don't regret it.
Like I said, it's not necessarily an easy path, but it's a path.
Naseema: Yeah, so now from my story about what happened to me 20 plus years ago with my debt consolidation, what's different about beyond finance?
Dr. Erika Rasure: So there's, I think the biggest thing is transparency. I think I, I think that's, that's the key. And I, we live in a different time, I think technologically as
Naseema: Yes.
Dr. Erika Rasure: And and I think that also lends to [00:23:00] a lot of that transparency. But, when people call in, They have that opportunity to learn about, what beyond finance offers in terms of, there's a dashboard, they can see, the debts that they've enrolled and they can see, with the progress and things that, there's beautiful visuals, there's, an app associated with all of this.
And so people can see in real time what is going on with their accounts. I would also say that, customer service is probably some of the best I've ever seen because the customer service reps. Are just acutely aware of the emotional aspects of being on this journey and what that looks and feels like throughout the process.
And so I think that there is that level of human compassion that is unmatched. I've only worked with Beyond finance, in my experience, it's unmatched. And when they reached out to me about, maybe coming in and offering, what I do to their clients, I immediately, it was like, ugh, I don't like, [00:24:00] I don't how to describe it.
Everybody there knows that I initially felt that way. I don't feel bad saying it 'cause they know that's how I felt. But what I loved is that, and what in my brain went off, I was like, if they are exploring offering this to other people,
Naseema: yes.
Dr. Erika Rasure: know, I think I would be a real jerk and my karma is gonna come back and get me if I don't at least hear what they have to say and help these people in any way I can.
And in the process, I've again been extremely humbled, but I think the differentiator is the transparency and the compassion and kindness and tenacity that beyond offers to its clients. And it's the support. When they go through the program, they get to come to our sessions, for that support.
It's not required, as part of their program, the people who you know, want to come and they have more than one way to find support. And it's not just in the negotiation of debts. That's not. That's [00:25:00] just one aspect of the program.
Naseema: For me, just the simple fact of having access to someone like you and the education and the resources is beyond what I've seen offered in other debt consolidation companies. It really seems like they have a vested interest in making sure that people get out of debt and stay out of debt.
Because again, this stuff is cyclical if you don't work on it. But you have to know that that's something that happens, right? A lot of people just don't understand. I don't know how many times I've heard, I don't understand why I'm back in this place. I thought I was doing everything right, and here I am back again.
I paid off my debt and now I'm back like. What is happening, but to have someone be able to walk you through and to be a support in that process, I think is totally monumental. It's totally different than what these what other consolidation companies are doing, especially what they were doing back in the day.
But I think that that's amazing and [00:26:00] I've never heard of a debt consolidation company do that either. And I think that, it shows how far we've come in this space, but it also shows that this company in particular has a vested interest in really seeing people improve financially and not just, not just come up off of someone's really, really hard time.
It's not an opportunist thing. It's about we really have a vested interest in seeing you thrive financially. I love that.
Dr. Erika Rasure: yeah. I do too. I really do. And we joke in in our sessions like, Hey, I love seeing you every week, I don't, I don't wanna see you back here in four or five years, once you've graduated. Like I, I would like you to just go and, and be successful. And that is an expectation we set early on.
We want people to take this as an opportunity to grow and learn. Building financial strength is a lot like, building muscle in the gym. Sometimes you gotta tear that muscle down and rebuild it stronger, and all of that stuff they're doing while they're in the program, they're, they're.
Dealing with the creditor calls, they're [00:27:00] dealing with the healing of the financial condition of debt, and they're dealing with the healing of everything that got them there. they're putting the reps in, they are doing this, and every time they put a rep in that is one step closer to transformation.
That is one step closer to progress. And that is like the thing I think that makes the biggest difference is once people start seeing that these things are what makes them successful, not failures. Is where that healing really does begin to take off. They build their muscle.
Naseema: Yeah. So objectively, or more like objectively, what are some of the debt payoff milestones within the company? Or is there like a certain amount, like a minimum debt you have to have to do debt consolidation?
Dr. Erika Rasure: I think it varies with every type of company, but I believe, and I. I don't remember exactly, but I think you have to have at least 10 or $12,000 to enroll in beyond finance. [00:28:00] Again, don't quote me on that. But, we've seen people come in with all kinds of ranges. We've had people who have, a hundred thousand dollars of debt enrolled and sometimes even more.
And, it just depends on, in what order. The, accounts get settled and things like that. And. People do have the ability to, especially within what they can see in their dashboard, they have these beautiful visuals of, as things get paid off, they get to see those changes and they get to see that forward progress as that goes on.
Naseema: I know a lot of people are concerned about debt consolidation because of the potential impact and it can have on their credit and the potential of, being able to finance things like, or buy houses or cars. what impact does debt consolidation truly have?
Dr. Erika Rasure: Yeah. And the impact is huge. I'm not gonna sugarcoat it at all because it's huge. But it's temporary, so I wanna temper it with that. It is
temporary, but [00:29:00] what happens is if you are, engaging with a, company like Beyond Finance and you're, working with a company, you've hired a company to negotiate your debts on your behalf.
One of the things that you can, SP and I, think in the first three to six months of any of these types of programs, they're gonna be the hardest. I think that is the rockiest road. That is the rockiest part, because most people are going to see a significant initial drop in their credit score,
And that credit score drop is.
At the very least, I can say scandalous because a lot of people come in to the program with really good credit scores. High sixes, sevens, eights, and that's because they have been so diligent with making their payments. 35% of your credit score is made up of your ability to make your payments on time.
And when you are shifting out of that space and you're working with a consolidation or resolution company directly, that's not going directly to the creditor. [00:30:00] So you are going to start missing those payments and your credit score is gonna take that, 1, 2, 300 point dive. And that really, really scares people and it scares people from a lot of perspectives.
But one of the reasons, just visually it, it is rough to watch, but two, a lot of people put and equate their financial, worth when it comes to their credit score, the value of their credit score, and they equate it to their self worth as a person.
You think about it like, would you ever date a guy with a low credit score or date a girl with a low credit score?
Like you're no we've been
Naseema: Says a lot about you. Yeah. But
Dr. Erika Rasure: don't want no scrubs in, in the words of TLC, that's been, I'm dating myself now. We've been taught those messages growing up and we've been taught those things by our parents or, the important grownups in our lives as we've evolved from childhood to adulthood.
And so people have to rumble with the idea that, okay, now my credit score is low and I have to have a credit score, or, it's really high and now I have no [00:31:00] social. Worth or stability too. So there's a lot that is wrapped up in that. And I like to remind people that your credit score is really just an indication on whether or not you're gonna get more debt on sale or at retail sticker price,
because that's the only thing our credit score indicates is how cheap our interest is.
That's it.
Naseema: Yep.
Dr. Erika Rasure: it's for more debt.
Naseema: Right.
Dr. Erika Rasure: when you are going through this program, you have to emphasize that this is temporary because we're not here in these types of programs because we have a credit score issue. We're here because we have a debt issue and the credit score is the symptom that we have to, acknowledge, but also to treat. We have to sacrifice that to the credit gods for a little while. As we work through that.
Naseema: So just for my clarification, we work for the debt consolidation company. Or is it you miss those payments because they have to miss the payments to be able to negotiate with the credit card company? Or why [00:32:00] are those payments missed?
Dr. Erika Rasure: Yeah. So in most situations what happens is a client will start, paying the like you mentioned, you start paying in your experience, you start paying the, the company an amount, right? And you start building up with the intention that they will negotiate on your behalf. And so they start, doing that.
And that's exactly how that works.
Naseema: Okay. Okay. Just wanted to clarify because it's been
Dr. Erika Rasure: That's good clarification point. Yeah. So wait a second. Like, how are we missing payments here?
Right. So yeah,
it's because you, you stopped making payments directly to the creditor.
Naseema: And then when you say it's temporary, like how long does it take for somebody to get back to that place where they can get cheaper credit?
Dr. Erika Rasure: Yeah. I like to say that it varies, but I do know that, a huge population of the people close to 100% of the people who graduate from the Beyond program, they have as good, if not better credit than when they first came in. So that's a really encouraging statistic with, the undertone that, they don't have the [00:33:00] debt.
Underneath them any
longer. But at the same time, there's some uncertainty from people, how long is this gonna take? And, humans aren't exactly the most patient of, anybody, right? And so my answer for that is it depends. And I think it depends on a lot of different factors.
I think it depends on, how much you enrolled into the program. I think it depends on, which accounts get settled first and what amounts those look like. And your credit score's gonna do a lot of up and down. and that has to do with, the components that actually make up your credit score.
Because as you are, like if you're maxed out, 30% of your credit score is made up of your, credit utilization. And so as you're. If you're maxed out and things are starting to get settled, your debt load starts to go down. But there is that crunch there too, and that credit utilization.
And so that's at play. And then the payments thing is on time. And even like your credit mix can change. And so it goes up and it goes down, it goes up and it goes down. And it's this, it levels out at some point to where it starts to go [00:34:00] up. I think, I have people in my sessions that come who, I had one lady last week, she's been in the program since September and her credit score's already gone up 50 points
Naseema: Wow.
Dr. Erika Rasure: where another client was like, what do you mean?
I've been in here since September and my credit score is the same. What is happening here? Why isn't this happening to me? And then you have to deal with that too. It's like the comparing yourself to other people. Why does her credit score get to go up and mine doesn't get to go up?
And it's like my loves. Everybody is different. Everybody has a different financial makeup as they come into the program, and and so we have to be especially kind to ourselves in those situations because not only are you dealing with, the credit stuff, which happens to everybody, but then there's also that comparison factor of why isn't that happening for me and why is my timeframe different?
And that can really start to affect people too.
Naseema: Yeah. But on average, how long does it take people usually to get through the program?
Dr. Erika Rasure: Oh, to get through the program?
Naseema: Yeah.
Dr. Erika Rasure: Oh, yeah, about four years is what I've seen. The client, the clients who I, [00:35:00] I work with, it is usually about four or five years. Yeah,
Naseema: The thing is, that sounds really, really long for some people, but when I tell you like that time is gonna go by anyway and a lot of people just don't understand, like they think, oh my God, four years sounds like a long time. Until you're on the back end of it, and then you're just like, man, that was just four years.
It only took me four years to do that,
Dr. Erika Rasure: to think about the alternative too, right? So the alternative is, you suck it up for four years and you just get through it. Or you're dealing with, 20 or 25 years of making minimum payments. And even in that situation, like you said, people are like, how do I get.
Credit after going through this type of program, you're not going to be able to get credit if you're letting your minimum payments roll for 20 or 25 years because your debt income ratio is gonna be too high and you're going to get denied anyway.
Naseema: yeah,
Dr. Erika Rasure: yeah.
Naseema: But from your [00:36:00] perspective as a finance professional I. What's the difference between going through one of these programs and then filing for bankruptcy or just not doing anything? We already talked about not doing anything, but we know about that, but okay, then let, why don't I just file for bankruptcy?
Dr. Erika Rasure: I think there's, and I'm very morally neutral on bankruptcy, in a lot of situations. I do think bankruptcy is the better option. And you wanna talk about guilt and shame. That's where that shame really comes in with bankruptcy. Bankruptcy seems just like really, really big, horrible, scary thing.
And I think for a lot of people, that makes just a lot of sense because. we've been taught that way. And, but like I said, I think for some people it makes a whole lot of sense. I think the biggest difference I would say is one is far more invasive than the other.
With a bankruptcy, you have, all kinds of legal disclosures. You have all kinds of things you have to submit, and [00:37:00] there's hearings and court dates and. Final judgment and all of that. And it can be pricey, right? It can be expensive. I, I know it varies by attorney and by state and by jurisdiction, but bankruptcies can be very expensive.
But rather than, just talking about the expense, it's the invasiveness I think that really fors people out. And the difference, I think with, companies like Beyond Finance. It does feel a little bit less invasive. There's a lot of discomfort. Sure. But it, I think for people, it makes 'em feel slightly more in control of the process.
And it's not like people aren't paying a fee to be on finance to, to help 'em, with this. But it just, I think for a lot of people it doesn't feel as scary. It's still scary, but not as scary.
Naseema: Mm-hmm. Yeah. Yeah. I've done, I've done both. Like I filed for bankruptcy. And it is very invasive and, it's very humiliating and humbling. But I will say [00:38:00] that I'm glad I did. I'm glad I was able to do it when I was in my twenties and I had a long time to recover from it.
But it really didn't take as long as I thought to recover. But then I also didn't have that support on the back end. Like you guys are offering so that I could really understand what that cycle of debt was. I still came out pretty financially naive. Part of my problem was solved and, I knew better than to get back in credit card debt, but that was just like, I just don't wanna do that anymore.
'cause that was really, really hard to get outta.
yeah. Yeah.
yeah.
Dr. Erika Rasure: it's tough. Debt is just a, a tough place to be and like I said, that that financial condition of being in debt comes with so many emotions wrapped into it. But I think , what debt can teach us is that we can. Become empowered through our debt to be cycle breakers, not only for ourselves, but for our children, for future [00:39:00] generations.
So I think one of the things that really has been such a disservice is the ability or willingness to talk about money in meaningful ways. People don't talk about their money when it's good. Nobody's out there being like, I got a 30% bonus and I, that
Naseema: Oh no, I do and I get so much backlash for it. Let me tell you first of all, I live in California. There's pay transparency, but I talk about my pay because I'm a nurse and a lot of people just. Don't know that nurses can have a living wage. Go figure, but when I talk about it, people are just like, you shouldn't talk about your money.
Or even like I share like things about my kids, like their net worth and all these kind of things. Oh, you're coming a walking target. I remember when I started my platform, my grandfather was like, somebody's gonna try to rob you because they think that you have this amount of money. And I was like. Why would they rob me?
There's a lot rich, richer people. You can Google people's net worth. What is, like [00:40:00] why? Why is there so much angst about talking about money? And the thing I like to say is, is that the only people that tell you that talking about money is taboo are the people that have a vested interest in seeing you broke.
Dr. Erika Rasure: I love that. I love that. I love that. Wow. The vested interest in keeping you broke. Oh, what a girl. Oh, what a line. I wanna put that on a t-shirt. My goodness. I don't know if you do any march, but I think that needs to be like set in stone forever. Yeah. Because you're right, these conversations, secrets thrive in the dark, don't they?
Naseema: that's domestic violence, abuse, all of that stuff. It happens only because you keep it a secret. Yeah.
Dr. Erika Rasure: Yep. And the more we can talk about it and be really open with ourselves and whatever audience, you have, I think is such an important place to be because it gives people the confidence to [00:41:00] say, I need to have these important conversations. I need to do better for myself or for my kids.
And we don't have to knock the people who, gave us the, the values we inherited, but we have, and we reserve the right to modify our values as we see fit, to fit our life experience. And we want what we want the future to look like for ourselves and for our kids. And, I. I talk to my kids all the time about money.
they'll ask me, how much was your car mom? Or how much was the mortgage on the house? And I remember when they first started asking me those questions and I felt weird. You, you feel weird when you've been taught not to. And at one time I just, I was like, no, you guys can know and that's okay.
Naseema: Yeah,
I have those conversations regularly. So for people who are like right now in a situation where they feel like, oh my God, maybe it's too late. I haven't, I'm not at the place where I wanna be financially and or I'm at, I'm scared I lose my job and I'm gonna lose [00:42:00] everything.
What advice do you have for those people?
Dr. Erika Rasure: Yeah, first it's never too late.
What I tell my clients all the time is everybody is one major life event away from being indebted. The thing about debt is it doesn't discriminate. It doesn't care how much money you make. It doesn't care how much money you don't make. It doesn't care how educated you are
or how much you are not educated.
It's just, it's something that can happen to anyone at a moment's notice, and you are never far behind unless you choose to remain there.
Once you notice a pattern, once you have those feelings, once you, listening to the money stories in your head and really listening to them. When you go make a purchase or you feel guilty about making that purchase, stop and ask yourself, why do I feel like that?
Where is this coming from? Is this coming from me? Is this coming from somebody else? And it just starts with [00:43:00] bringing that awareness to your mind, to your body, to your soul. Letting yourself learn in that space from the things you've been taught, from the things you believe, and starting to make sense of those patterns, those stories, those beliefs, and those values, and begin trying to make them your own.
Naseema: Mm-hmm. Yeah. Yeah. So for people who maybe aren't necessarily ready to do like a debt consolidation, what are some things that they can do to first of all, get their mind right? We talked about that a little bit, but then just what are some things that they can do to prevent like massive credit card debt or just reorder their finances?
Dr. Erika Rasure: So I think there's a lot you can do and with anything and, and everybody has an opinion, right? And so I'll, give you my observations. It's not necessarily, set in stone here, but some of the things I've, seen my clients. Have success with, again, is the bringing awareness to behaviors in action.[00:44:00]
And so if you are somebody who knows that you're an overs spender, let's say for example, you can't go to Target without, walking out with a hundred dollars or $150 of things you don't need,
Naseema: Mm-hmm.
Dr. Erika Rasure: that is the place where you start, you start recognizing, okay. This is where I'm spending money. You have to know where your money is to do something about it, and you have to know your triggers.
And everybody has a trigger for spending money or even not spending money, okay? But if you are spending money in a way that does not feel good to you, you've gotta focus right there, first and foremost. And one of the things I, I say a lot. You have to play the tape forward with every financial decision you make or financial behavior you decide to engage in.
You ask yourself, okay, does this feel good right now? Of course it does probably right? Let's be real. Is it gonna feel good when I get to the car or when those stack of Amazon packages get delivered to my house? Am I gonna [00:45:00] feel good? Then maybe you might get excited. You might get that rush. Am I gonna feel good in a week?
Am I going to feel good when I get that card statement? If any of those answers is no, walk away from the cart. Start journaling about it. That's what I did to stop my own overspending. I couldn't budget to save my life. I have a PhD in personal financial planning and I help. I help people not be in this position, right?
But I have struggled with overspending for a really long time, and it had everything to do with me using the wrong budgeting technique for myself. And that's how I held myself accountable. I got a journal from the Dollar store and I kept it in my glove box and anytime I'd go in and I was displeased with what I purchased or my financial behaviors, I would write down like, Hey, I did a really great job today.
Nothing to report or definitely overspent by like $30. These things were on my list. I already feel bad about it, but I don't wanna take it back 'cause that'd be embarrassing. So I'm gonna do better next [00:46:00] time. Or there were some days where I'd be like, I had to abandon a cart fully in the store because I got completely outta control because I was stressed out with this thing at work and I was emotional spending.
And I feel really bad for that target person who's gonna have to restock, but I had to do it and I'm really proud of myself for that, and I'm so sorry to the target person. And you send that out into the universe, that's how healing happens. And so you, find those things that work for you.
And, at the very beginning of our call, you were talking a little bit about budgeting and it's, you have to find the tools that, that work for you. And some of those might be unconventional, but I think so many people are afraid to explore.
And that's my other piece of advice here.
Explore things. Nobody's judging you. The only person that's gonna judge you is yourself. But I also want to remind you that nobody cares about your money as much as you're going to. So ignore the haters. Yeah, ignore the haters. Ignore the opinions of others that don't matter. Your opinion and what you feel about yourself and of your money is what matters.
And I think people do really get hung up [00:47:00] to when they're, people can do really well in my experience of observation. They can do really well when it's just them
or where people tend to fall off. The proverbial wagon when it comes to their finances is when they are out with friends or socializing.
And they don't know how to say I am working on my financial fitness or my financial journey, and I'm doing really good. Because they're afraid to talk about, they're afraid of being judged. And if you're in credit card debt or you're trying to even avoid credit card debt, there's a lot of people out there who are like, it's an experience, charge it, money will always, come back to you.
And all it's, the experience is more important. You have to be the one in your group who puts the foot down. And a lot of people struggle with being able to put the foot down for themselves. And sometimes, unfortunately, that leads to not being included. And to that, I say, I'm really sorry that you've experienced that, but were those people really your friends anyway?
And then that's a whole new level of grief you have to deal with,
[00:48:00] right? And that then becomes A new potential financial trauma, right? That anytime you talk or anytime you express your desire to do better, you lose people. And so you have to also bring that awareness to the idea that when you make changes, people around, you can change too,
but you're
Naseema: Also like it's hard with a partner too.
That's even, that's even on a whole nother level, like you're trying to get yourself together and then you have a partner that's on a whole different page. What's the number one reason for divorce, right?
Dr. Erika Rasure: Money.
Naseema: Yes.
Dr. Erika Rasure: People think it's cheating, but it's
Naseema: It's not, it's, it's it's finance. It's it's money.
Always. Yeah.
Dr. Erika Rasure: Yeah.
Naseema: I was just thinking like that journaling idea is incredible. I love that. I've never heard of that. I know there's a million ways to look at your money, but like journaling, I love that. But I also love what you said about. People think there's like this one stop shop way to, to deal with things, and [00:49:00] how could there be when there's, so many different genres of music, there's so many different dance style, there's so many different everything.
Why would you think there's just one budget solution that's gonna work for everyone, or one way to get on top of your spending that's gonna work for everyone? There's not one way. The thing is to do is to find out what works for you and continue to do that. Yeah, so I love that
Dr. Erika Rasure: the thing that you can do conscientiously and consistently and sustainably, that's the thing that's gonna, that's gonna be your magic bullet. There, there is no magic bullet. Let's be real. But, there's so much you can do for yourself, and it's, prioritizing.
If you don't have an emergency fund, that's my, one of my biggest financial building
blocks. Like get that emergency fund. And one of the things that completely stresses me out, and to your point, people think that there's this one size fit all and it's very, this or that.
There's so much bad and good. Thrown out there when it comes to financial education, it's like savings is good, [00:50:00] debt is bad. Budgeting is good, not budgeting is bad. And it's very black and white. And I think the most fun to play in is this space where it's gray, but it's just allowing yourself to, explore and find those things that, that work for you.
Naseema: Yeah.
Dr. Erika Rasure: At the end of the day, it's what works best for you. And same thing with an emergency fund. Going back to that. There's that idea that you have to save three, three months of expenses or six months of expenses. How crazy does that sound for somebody who is struggling to make ends meet and is also trying to pay off credit card debt?
That sounds like the dumbest ask of all time,
doesn't it? Mm-hmm.
Naseema: even have $5 and now you want me to put this money away and I have to pay all these bills? What are you saying? That doesn't even make any sense. Yes, I.
Dr. Erika Rasure: Yeah. And so when you're able to put that into context for people who are. Struggling with that or trying to, get out of it themselves and they're doing a good job, they're putting all that extra work, or maybe they're working extra hours [00:51:00] and they're using, whatever method that they, they're working with that seems to be working and they're doing it and they're doing it by themselves.
Huge, huge congratulations to that. But there is no money for. An emergency fund. And that's where I challenge people or ask people to, think about having one in the future. We know what it's like to only have $5 to your name and how, much that $5 is of importance and how far it will or will not go.
And I encourage people to take that same mentality when they're thinking about funding an emergency fund. If you can't do $5 right now, maybe in six months you can. That $5, you know how much that $5 means, and don't let anybody tell you that it's only $5, that it should be six months of expenses. That $5 was all you had months ago, and that $5 was the richest you've ever felt.
Naseema: That's right. That's right. I love that. I love that shift. Thank you [00:52:00] so much for being vulnerable and saying listen, I have a PhD in STA in this, and I still struggle because a lot of people need to hear that. People need to know that.
Dr. Erika Rasure: Mm-hmm.
Naseema: There is hope for them. and that it's normal to struggle with money, even though this is what your degree is in and you're experiencing you working it every day, doesn't mean that you don't have your own struggles, but it also makes it.
Relatable because you understand what people are going through, and so I, people feel like they can talk to you because it's not just like the it like, oh, like she hasn't gone through that. What does she know about what I'm going through? Like the, we're just one step maybe ahead of where you are in this path, and so we can really feel those things because we have gone through those things.
We know what it feels like, we know how we got there, but we also know how we recovered from it. And so I just love people who have their own testimony to [00:53:00] share even in this space. To say, look, I'm not perfect. I'm a financial professional and I'm not perfect and I know these things. And I really think that that gives people hope.
And I know that people are gonna wanna reach out to you to work with you. So where can people do that?
Dr. Erika Rasure: So I think the best way to, reach out to me if you're interested in, beyond finance and what they do, and if that sounds like it might be, something you're looking at doing at hit beyond finance.com up. Just gets more information and know that, if you like what I have to say, I do do that five times a week in the program.
And you would, be able to work with me in those types of settings for sure. But if you are looking to contact me for, anything outside of what I do with beyond you can always add me on LinkedIn or you can email me at Erica rasher. ERI ks ure at gmail com.
Naseema: I love
Dr. Erika Rasure: I keep it super simple around here, like the simplest, I don't even have a
[00:54:00] website, like it's just,
Naseema: Listen, just email me, hit me up on
Dr. Erika Rasure: just email me.
Naseema: I know, but that, but that eliminates a lot of the barriers that people feel like they have to overcome in order to get to you. So I hope people will take you up on that because, I love what you're doing. You have a wealth of knowledge in these areas, but just focus more on the wellness piece is what I love.
And a lot of people just need that kind of that helping hand to guide them along, they don't need to be talked down to. And I think that's what they think it's gonna happen when they reach out for support. And so I hope they can see from this interview that that's not what it's about.
It's really coming from a pa place of empathy a place of really trying to help people heal and really move on so they can be successful and enjoy their money. So thank you Erica. I love this interview.
Dr. Erika Rasure: My pleasure. This was the most fun I've had in a really long time, so thank you so much. Oh, it was fantastic. and before we leave entirely. I have one more message [00:55:00] for your listeners and that's just seconding what you said. You are not alone in this process. And I sign off every session by saying you are cared for, you are supported.
And if nobody has told you today, you are so incredibly loved.
Naseema: Aw.
Dr. Erika Rasure: Are, you are not alone on this process. People are struggling with debt and it is okay to look and find help. It does not mean you are a failure at all. Seeking help means that you are taking your first step towards transforming your feelings towards yourself, towards your money, and your long lasting financial wellness that you deserve.
You deserve it.
Naseema: I love that I receive it, and I hope everybody else receives it. So thank You Dr. Cher. I love this.
Hey there I’m Naseema
My dream is for everyone to know that financial independence is attainable with a little intentionality. Learn how I can help you finally break the cycle of living paycheck to paycheck.
Join the Facebook Community
Join the Financially Intentional community and get access to resources to guide you on the path to Financial Freedom.
Watch these Videos To Learn How to…
Keep Listening
Here are some more episodes you may enjoy…
We talk about how debt can make you feel sad, stressed, or stuck, and why it’s important to heal your money story.