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debt podcast Aug 29, 2019

Join Tiffany as she has a money talk with Rita Bautista, host and creator of the Empowerment & All That podcast!  We discuss how she was able to pay off $15,000 in credit card debt in less than a year!  She drops some real gems so definitely take a listen.

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About our guest:
Rita Bautista is a Latina Host & Creator of Empowerment & All That Podcast. The podcast was created as a direct result of years of Rita’s own personal development. She launched the podcast for women that deliver motivational tips and empowering stories from women with diverse backgrounds. Her hope is that these stories and tips will one day will reach women all around the world.

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Welcome to Money Talk with Tiff, a podcast where we discuss everything money – from tips and tricks to current events. Follow me on my journey to become debt-free, and meet other cool people along the way. I’m your host, Tiffany Grant, now let’s talk money.

Tiffany Grant (Host): So, hey everyone. So, this episode is actually a Guest Episode, so I have Rita Bautista on the line, and she is the Host and Creator of the Empowerment And All That Podcast – which is a podcast dedicated to sharing empowering tips and motivational stories from a diverse group of women from all works of life.

I’m super excited to have Rita on because she also has been paying off debt and increasing her credit scores, so I wanted to have her on to tell her story a little bit.

So, Rita, how are you.


Rita Bautista (Guest): I’m doing great; thank you so much, Tiffany, for having me on your show today.


Tiffany Grant: Oh yea, no problem. Thank you so much for coming. I’m super excited because you are my first guest; it’s an exciting time.

So, I know a bit of your story. You had $15,000 in credit card debt…


Rita Bautista: Yea.


Tiffany Grant: …And you used the snowball method to go ahead and tackle that. Suppose you could give us just a little bit of what happened. What was the turning point for you? Where you were like, “Okay, enough is enough.”


Rita Bautista: Yea, so like most people when you’re getting in debt. It’s really easy. You aren’t necessarily looking at what’s going on, at least for some of us who are like me. I know for sure, and it’s not probably going to kill me. I wasn’t really taught financial literacy. My mother was always extremely great at doing things, but she was never good at teaching how to execute and not get yourself in debt.

“Never spend your money before you have it.”

– Thomas Jefferson

And so, you know, I got my first credit card probably when I was in my mid-20s. I got a credit card, then the second one, then the third one. I had a decent credit at the time, it wasn’t bad at all, and I was just getting approved left and right. So, I was like, “Okay! No big deal, you know, I could pay this off.” Wrong!

So, I started stacking up, thinking, “If I get it now, it’s not going to be a big deal; I could just pay it off.” Truthfully, that’s how I got into this mountain of debt without even blinking an eye because the truth is this – when you’re not actively engaged in what you’re spending and looking at the money and the dollars that are going out versus the dollars that are coming in. It’s easy to amass a huge quantity of debt without even knowing; I’m one of those student loaners too.

Yea, I’m still tackling student loans, and that’s going to be something that I’m working on now to take away and not have to worry about as much. But you know the percentage on the student loans isn’t that high, versus the percentage of a credit card. When you have mediocre credit, you’re looking at maybe 15% at your lowest and 25% at your highest percent. Some credit cards are like a highway robbery where they’re like 33% if you have zero credit whatsoever or if you had really poor credit.

So, that’s kind of how that happened. Little things continued, growing, you know, I just graduated from college and didn’t have that much money. But everybody thinks you graduate from college, you can automatically get this high-paying job, but that’s not true. So, here I am with this $32,000 a year job, trying to float things back and forth, and it just wasn’t working out. I was like, “Oh well, I’ll just put it on my credit card, no big deal, you know I can pay later,” without realizing that interest charges were going up and eased, and what looked like something that I could keep under control which was like $5,000 turned into $10,000, turned into $15,000.

Now I was just looking at this mount of credit, credit cards that I just maxed out, and it was the scariest feeling in the world because you feel like you’re pinned up against the wall. Everybody can see your credit score on your face. It’s really scary.


Tiffany Grant: Oh yeah, and you see, that’s why people are so afraid to talk about their finances like it’s amazing. I appreciate your openness and honestly because this is a very difficult topic for people and especially when, you know, there are credit card companies that are pushing credit cards down your neck from the time you’re in school. I mean, you’re barely an adult by then; you don’t know what you’re getting yourself into until it’s too late.

So, I appreciate you sharing your story because I promise I didn’t pay her, but she says exactly what I preach about…


Rita Bautista: Yea.


Tiffany Grant: …About knowing how your money flows.


Rita Bautista: Yea. You know that’s one of the biggest fears for everyone. It’s like, “Oh my God!” I think truthfully; it’s a mindset because people take being in debt as a negative. It is technically a negative, because yes, you are in negative dollars, but essentially, it’s not a bad thing; you can get out of it. It’s not a forever hole that you’re never going to see the end of.

And there are people who, if the situation gets so horrible, there are options of filing bankruptcy and starting all over again. I think one of the biggest problems for people is they are afraid of being seen starting from the button, and it’s such a terrible thing that we have to stigmatize people who don’t have good credit, or are just starting out, or are refreshing their lives all over again, or have gone through divorces where once the split happens, then their credit drives down.

I mean, you see this all over the board, and I think because now I’m in my thirties, I’ve seen so many things, at this point I’m like, “Oh yea, that’s fine. In a year, you could get yourself right back up again!” Because I’m like I’ve already done this, I can easily share the wealth, and I’m big on sharing knowledge to people who are undereducated in any area that I’ve already had this experience, snd because you know we are here for a short time in our lives, so why not share the knowledge that you’ve been able to gain, through the ups and the downs.

“If you have knowledge, let others light their candles at it.”

– Margaret Fuller


Tiffany Grant: Exactly! Our struggles are somebody else’s lesson, so that’s why there’s somebody out there listening to this who’s a college student that’s like, “I just got my first credit card, and I didn’t want to end up like Rita….”


Rita Bautista: *laughs* Throw it away! Throw it away!


Tiffany Grant: So, another part of your story is that you took your credit score from 540 to 750 in less than a year. That’s phenomenal. Congratulations!


Rita Bautista: Thank you.


Tiffany Grant: So, was that all from the credit card debt, just getting that paid off?


Rita Bautista: Yes, it was a lot. There were a lot of things. I think many people, as I said, feel as though all these derogatory remarks on their credit reports are just terrible, and they’ll never go away. It’s a massive spoiler, but truthfully, within a year, if you do things right and you’re able to really get yourself on a schedule, you can see a huge significant difference in your credit score. One of the biggest things I always tell everybody is to pull your credit report from all three – Experian, TransUnion, and what’s the third one?


Tiffany Grant: Experian and Equifax.


Rita Bautista: Equifax, yea!

Sorry, but yes, you pull your credit report from all three of these companies; you get it for free once a year from all of them. It will tell you every single thing that’s on your credit report.

Interestingly, many people don’t realize this is how to find out if somebody’s using your credit or anything, right? And how many people pull their credit report, or else they are going to buy a car or a house or get a credit card or whatever. You know, like that’s the only time we’re really pulling our credit card. But for me, I was like, I’m going to get serious about this, I needed to know what exactly was happening in general – whether it was just me, or there are other things going on, or things that are adding up.

So, I started to do a little research, and the first thing I agreed to was not pulling any other credit at all because every card inquiry dings your credit, and your credit score drops. So, I was like, no more pulling credit for at least the next two years. So, that’s the first thing I said. Well, let me rewind, the first thing I said was I’m going to get out of this, and this is going to be okay.

“What do you do with a mistake: recognize it, admit it, learn from it, forget it.”

– Dean Smith

I had to admit to myself that I had a little bit of a spending problem, and from that point, I was like, this isn’t going to me anymore. Just because it was who I was yesterday doesn’t mean I’m going to wake up today. Now, I have to do the hard work and get out of this place that I’m in.

So, I pulled up my credit report and compared them all to ensure that everything was accurate. And some of the things you can get removed like if there’s a whole bunch of addresses that you have, you can dispute charges that aren’t yours, and I’m not saying dispute charges that are yours because that’s illegal, but if there are charges that are on your report that isn’t truly yours – you can dispute that.

Another thing too is that if you know you hadn’t been late on any payments, and the credit card companies which sometimes they do mess up, and this does drive your credit score down. But if they do have you late for something, for a payment that dings your credit as well, so make sure that you’re checking for accuracies first on your credit report, right?


Tiffany Grant: *interrupts*


Rita Bautista: The second thing… Oh, I’m sorry, go ahead.


Tiffany Grant: No, I was just going to say – absolutely!


Rita Bautista: Oh, yeah. The second thing I did was I looked at all of my balances, and I said, these are the highest balances you’re going to get. So, I created my spreadsheet online – on google spreadsheet. I got really in-depth with it; I put my credit limit on every credit card, the amount I owe, the percentage of the credit card, and I put those all in a spreadsheet. And so, it showed me all of the actual amount of credit that I had (the total) and then what was available.

And then how do you find the debt percentage you’re in, which also affects your credit significantly? It’s by dividing what you owe by what you have available. And that’s a huge reality check.


Tiffany Grant: Oh, yeah.


Rita Bautista: Because even if you have very high credit, it doesn’t mean that you’ve reached your low. So, once I did that, I was like, alright, I’m going to go ahead, and we’re going to face reality, and once I did all the numbers in the actual Excel spreadsheet, it showed me what my total amount of debt was. I almost passed out!

But, okay, we’re going tackle this one step at a time. So, I started researching different opportunities and things that I could teach myself. I’m a big self-learner; if I don’t do it myself, it’s not just going to happen. So, I went online, so I researched this technique called the Snowball Effect, and it helped me get back on track with all my debt.

“Life is like a snowball. The important thing is finding wet snow and a really long hill.”

– Warren Buffett.

So, essentially what you do is this – you take all of your debt and line it up, from the highest amount to the lowest amount of what you owe for each credit card, or a loan, or whatever. Then, you put in what their minimum payment is for each one of these cards. Now, what you’re going to do is you’re going to start from the bottom up.

So, you’re going to start with your credit card with the least amount of amounts due period. So let’s say you have three credit cards, for example, one that you owe $500, the other one that you owe $1,500, and the other one that you owe $5,000. So, what you’re going to do is that you’ll pay the minimum payment on the $5,000 one, minimum payment on the $1,500 one, and then you’re going to pay the highest amount that you can monthly on the $500 one because what this does is that it allows for you to pay off that ($500 one) a little faster.

But I know people are probably like, “what about the interest rates that are hitting the larger accounts?” Don’t worry about the interest rate at this point. Your number one concern is to pay the money down, not the interest rate.

So the thing you want to do is, let’s say you have the ability to pay $500 a month on your credit card, and it’s a very high amount, but for some people, it’s a lot higher, so like you know that your $5,000 a month minimum payment is $70, your $1,500 one is like $50, the remaining amount of the $500 that you have in your budget has to be paid to that other credit card. And there’s no going out to dinner, and there’s no “Oh, I have extra money, I’m going to go ahead and buy this thing that I don’t need…. this dress.” No! You’re not allowed to reward yourself at all during this process.

What I would do is that, whenever I would pay one debt down, I would let myself do something small, like even it’s like “Today, I’m going out to dinner, but I still won’t splurge.” I would find ways to cut corners because, obviously, splurging is what got me in this position in the first place.


Tiffany Grant: Right, right! Exactly, and see, that’s the key, once you start paying off debt, and that’s why I love the Snowball method; that’s the same way I’ve paid off some of my student loans. To date, I’ve paid off almost $20,000 in student loans, and that’s how, because it’s psychological.

“Pay off your debt from the smallest to the largest. It’s not about math – it’s about momentum.”

– Dave Ramsey

So, you get that first small win, and you’re like, “yes! I got this!” And then you get that next one, and it just becomes addicting, at least to me, it did.


Rita Bautista: It does! Because you’re like, “wow! I’m paying this off, one by one.” And there are other techniques to it too. Suppose you’ve had late payments on stuffs, on your credit. In that case, I don’t advise touching things that are later than two years on your credit, but because it will just reopen it up, and if you make a mistake on something at that point, then it’s almost like a more severe issue than it is just to wait for it to fall off your credit.

But if you start paying these things down, and like you said, it’s fantastic to look at a statement and see zero dollars ($0) that you owe. You’re just like, “wow! If I can do that if I can pay off $500 in like two months,” versus you’re just paying the minimum payment or a little bit more above the minimum payment, it’s okay.

“Knock out a small debt first, so you get a quick win. Momentum is key.”

 Dave Ramsey

Now, what you do is you take that amount that you were paying on the $500, the total $500, once you eliminate the first debt, you take that money that you’re paying on that one credit card that you no longer have, and you move it up to the next lowest debt, and you start paying that one off. So, that amount plus the minimum payment you were paying before is obviously going to be almost 3-4 times as high as what you were paying before when you were just tackling the minimum payment for that ($500) credit card.

So, within a year, as I said, my snowball was about… I started at like $600 a month, but I got so energized because I was seeing how awesome it was to feel like, “man! I’m paying this debt off.”

I ended up cutting so much of just like lowering my credit, my cell phone bill, making sure I wasn’t using that much more electricity, making sure that my Netflix was gone for a little while, maybe even cutting some parts of the cable. I didn’t cut the internet, just cos I thought that was going to be too much, but I could do it, and I’m telling you, I was on a very strict budget, and I could do it; I promise you that you could do it too!

It’s just making sure that you’re finding the things that you can cut corners with, and even if your snowball isn’t that high, even it’s like $200 or $300, it’s trying to figure out one – put all of your debt together, cos I think that’s one of the hardest things for people to actually see what they did. They’re like, “oh my God!” But put it together, and it’s good for you.

So, every month – on the spreadsheet –  I would go back in; and adjust the amount I had on each of these credit cards. So, I could start to see the percentages go down. It’s like my debt percentages had begun to go down, down, down. So, by the end of the year, I had paid off the $15,000 that I owed.

Now, obviously, the interest ate me up a little bit, but because I was able to do it in less than a year, the amount of interest that I have saved over paying it, let’s say, minimum payment over five years, was almost 25% of the interest rate that I was paying on that credit card.

So, I ended up winning on that end, so I think people shouldn’t be too concerned about the interest rate at the time that you’re paying everything off if you’re going to use the Snowball method – because it does work itself out.


Tiffany Grant: And just do it!


Rita Bautista: Yes, I mean, just do it! Once you get that momentum, I genuinely believe that “just do it” is probably one of the most important lessons in life that I’ll learn, period! The only way you ever learn in anything you do is by actually putting yourself in motion and doing it!

“Good work has a snowball effect; it keeps leading to more good work.”

– Richa Chadha

Tiffany Grant: …Right! Exactly. Rita, thank you so much for coming. This was awesome. Some very good financial gems were dropped, and I appreciate your honesty, transparency, and openness to talk about this difficult topic for some. Now, one more question that I have for you before you wrap it up.

What is one piece of advice you would give my listeners? It doesn’t have to with money; it can be anything – one single price of advice. What do you have?


Rita Bautista: …So, I started the Empowerment And All That Podcast, my audience is essentially for women, but my goal at my core is to ensure that I am empowering people regularly. And empowerment doesn’t necessarily mean that I’m above anybody else. It’s just sharing the knowledge and the tools that I have with other people so that they can also learn either from my mistakes and pick up some of those tips, and use them on their own, or be able to just talk about these different topics that could help other people, you know.

“Sharing knowledge is the most fundamental act of friendship. Because it is a way you can give something without losing something.”

– Richard Stallman

So, for me, what I would tell everyone who’s listening is look, if you have a piece of knowledge that you know somebody else can use to their advantage, and I don’t mean preach to someone, I’m just saying, share the wealth, share the knowledge! Give people the little tidbits that might be able to help them in moments of need, in moments where they’re feeling vulnerable.

You know, we all have this information, for a reason, we all go to school, and we learn that 2+2 equals 4, and a lot of people don’t understand that. It’s your duty as just being a human being to be able to help others. So, yea, just make sure you’re empowering the next person.


Tiffany Grant: Absolutely, that is perfect, and that is a wonderful way to wrap up this podcast. Just give back, everyone. It’s the least you can do. Well, thank you so much, Rita, and I’ll look forward to having you again on the Money Talk With Tiff Podcast.

If you’re interested in hearing more from Rita, all of her contact information will be in the show notes so that you can keep in contact. I hope you have a good one! Bye!

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