High Income, Still in Debt: Why Financial Planning Matters More Than Ever | 437

0:00Today we're bringing you real life stories and lessons from our private coaching sessions. If our clients are dealing with it, chances are you are too. So we're breaking it down to help you avoid the same mistakes, feel less alone, and walk away with some quick wins for your budget. Do you make good money but have nothing to show for it? Are you tired of living paycheck to paycheck? Do you have big dreams for your financial future? Do you want to get debt free but you don't want to live on beans and rice? Or you don't want to give up those pumpkin spice lattes? If you don't already know how to budget or if you're using credit cards to get through the month.

0:30If you want to seem like you have your finances all together or you're not on the same page with your spouse when it comes to finances. We know what you're doing probably isn't working, but guess what? You're in the right place. We're Shana and Vanessa. We're best friends, business partners, and master financial coaches trained by Dave Ramsey. We've been in business since 2019, helping hundreds of amazing people like you create budgets, get out of debt, stop living paycheck to paycheck and know exactly what to do with their money. In this podcast, we'll share with you everything we know, plus everything we're working on with our clients so that you have the best chance at reaching your financial goals.

1:05We want to help you take the guesswork out of your budget, improve your marriages, and even bring your kids in on the conversation. We can help you no matter where you're at, whether you're the single mom who's never had$500 in her savings account or the millionaire who's paid off four real estate mortgages. And we're not going to shy away from the tough love. We'll tell you what you need to here and encourage you at the same time. This is the Financial Coaching for Women podcast. So my client was frustrated. I've talked about her before. So they're living in Oklahoma, so they have a little bit of a lower cost of living than maybe some other places in the country.

1:41But she was frustrated that she is, according to her, in the top percent of income. They're doing really well for where they live. But it's not. It's still feels like it's not enough. She's like, how can, how are other people even doing it? Like, how are they even living? I feel so bad for them. And it was interesting because she was talking to her accountant friend and her accountant friend said, this is exactly what everybody's doing it because they're, they have four, they have$400 ,000 in credit card debt. That's what her, that's what she was saying. She's, I'm, they're not, I'm doing the books for all of this and nobody's making this work.

2:17And so anyway, it was just really good for her to know that she is trying so hard and she's and hopefully this goes for you guys too you probably feel like you are doing all you can you're scrimping as much as you can you're saving you're trying to be smart with your money trying to make good decisions and it still might feel it's not working right and it's partially I will say partially because of that life is expensive life is expensive but I will tell you what I told her which is she's also underestimating real life right? A lot of times, and we've talked about this, people will put this sweet little, oh, we're just going to do$1 ,000 for groceries.

2:52Or my spending money is going to be 50 bucks for the month or something. Or we'll just do$100 for restaurants and we have five kids. No, that's not. That's one trip to Chick-fil-A. Yeah. So that's not enough. But also the kids are going to need clothes. You're going to have dentist appointments. Like we have to be real with what's going in that budget. Not hopeful, not, well, I'll just be frugal and I'll figure it out. That doesn't work. That gets you in debt. And then you feel like you're doing it wrong. It's not. You just need to put it all on paper and then figure out how to make it work. And even though that might, we're not trying to be frugal about putting it on paper.

3:23You need to put the real life on paper. Like I said, Zenist appointments, shoes, all of those are going to come. So don't try to pretend like they're not and try to make the budget work because of it. You need to plan for real life. I just had actually this same exact conversation with a graduating client this month because we were doing her savings buckets as she was exiting. And she said, oh, I just need$200 for the year for gifts. Okay. And then she told me, my parents' anniversary is next month and I need$100 for them. And I said, so there's$100 for everyone else for the entire year. And so it was just, I think it really helps having a coach though, at putting things in a perspective.

3:55It's things that they don't think about. So they don't think about the extra things like you talked about, the dentist appointments, the kids stuff, like all that stuff that comes up throughout the year. They forget about it because they're really just in the moment, like tunnel vision, trying to make this budget work. They're trying to figure out how to do gas and do groceries and pay for things in the moment. But what we're trying to show you is, hey, if you take a step back and you actually plan out what, you know, how much you spend for the year, we're not asking for perfection here. We're asking for progress.

4:21So look at what do I think I'm going to spend in medical bills, co-pays, travel, all that sports in a year. And then let's start budgeting for it over a span of 12 months so that you don't go into debt. You can be born prepared because this lady, her insurance bill was like$3 ,700 for the year. And I said, but she's been in the moment budgeting for that. It's not working. You're literally signed up for coaching because what you're doing isn't working and you know that and you're looking for something else. How about we take$3 ,700, we divide it by 12 and hey, that's more manageable. I think when her accountant is looking at her stuff and everybody else's, they're not making it work and they're putting it on debt because they don't have a plan.

4:58I love that you said that and I have two points because I actually said it wrong about what the accountant said. The accountant said even people making$400 ,000 a year are still using credit cards because of what you just said. They don't have a plan. They're not planning for it. And we know that because our clients come in using credit cards. And one of the first things that we'll say is you don't need to use credit cards. They're just doing it because they don't know what's going on. They don't know where their money is, what's the point, all of that. That's important to think about to understand that regardless of income level, you still have to plan your money.

5:29Whether you have a lot or little, you still want to plan for it and make it go where you want it to on purpose. Yeah, I think it means way more fun when you have extra like we get that. But also I have a lady that she's a single mom and we did her savings book and said, look, she's maybe putting like 50 bucks, maybe 20 bucks,$10 here and there. It's what she can do. But in the long run, like in the end, it's going to be worth it because she's going to have saved up money for these important things down the road that are coming. And so we just tell you, like start somewhere and label them very specifically.

5:58I always use with my clients, your example, when you say Melanie's wedding, I'm going to put a savings bucket that says Melanie's wedding, I'm less likely to use it on my target trip because I know that it's for something specific and I don't want to steal from that because it's designated for something very meaningful. When you label these savings buckets ahead of time and go, I am going to hold myself accountable to keeping the money in there because I need it. It's not that I'm going to use it someday maybe for something like you said earlier. It's no, it's going to happen. And I need to make sure that I don't spend it because I'm going to spend it eventually on something very like purposeful.

6:31Yeah. And I think speaking of spending, a lot of times these people are these people. We love you. We're not calling you these people, but you guys come in thinking you're really bad at budgeting. You're really bad with money. You're spending all of your money. And that's where this client was. She's like, I'm just spending. I'm so bad at this. I'm like, no, you're not bad. You're not. It's not, again, we've said it. We'll say it again. We're not going shopping at Prada. I don't know why I said Prada. I do know because our friends are in Italy. Nordstrom is where we normally go, but also we've never been.

6:57So there's that. But anyway, back to the point. It's not like you're going shopping trips at Nordstrom and buying boats and whatever else. It is the little things that are quote unquote surprising you. That doesn't make you a bad spender, an overspender, whatever. It just means you need to have a better plan and be realistic with it. That's all that means. So yeah. And that's what we're here to hopefully help you. On the topic of debt, one of my clients was trying to compensate for making all these little purchases here and there on debt by trying to make probably like$50 to$100 over her minimum payments on debt every month.

7:31So her idea of getting out of debt was to take this credit card, that credit card, and maybe put an extra 20 bucks here, extra 50 bucks here, 100 bucks here. And then she couldn't figure out why she was never getting out of debt. And she couldn't figure out why she kept needing to use the credit cards the next month because there was no money in the account. And we'll tell you why. Because you are, you still have subscriptions attached to those cards because you don't know if you can pay from out of your regular bank account. You are spending all the money in your bank account and also racking up your credit cards.

8:00So it's not like she needed to be in debt. It's not like she didn't have enough money. Her budget is conservative. It's just her and her husband. I think they bring in about$8 ,000 to$9 ,000 a month, but there's so much extra because she's conservative, but yet she has all these debt payments because they didn't know if they could pay for it. So conveniently, they just put it on the debt and she was just making little payments here and there throughout the month on them, but not going anywhere. Like she was never making progress. And you know, what we want to tell you is we know it's going to hurt.

8:31Like we know it's going to stink for you to make those minimum payments only, but for a minute, you need to do that and make your budget only showing the minimum payments and then take a step back and go, okay, if I only do that and I'm only paying what I'm required to pay, what is this bulk of money that I have at the end of the month that I can actually put on one card? Maybe you can pay something completely off by actually seeing that lump sum of money. And she said, look, I know it's going to take a minute. I know I'm going to be frustrated by it, but it makes sense to me now because we actually have a plan.

8:59And I think it goes back to that four-letter word, that plan word. Like all the time we keep seeing it, you need to know what you want. You have to see it visually. You have to know what you want to do to be able to accomplish should. All right, budget besties. It's time for some real talk. You don't need another budget. You need a budget system. Our simplified budget system is what you've been looking for. It's going to allow you to be bougie on a budget. You'll be able to easily set up a system that runs automatically and shows you exactly where your money is going. And it's going to give you permission to spend.

9:31Everybody loves that. Yeah. It's straightforward, pretty, and packed with walkthrough videos that break down the exact methods we use with our clients to get out of debt, set up a bills account, separate spending, build savings buckets, and end the paycheck to paycheck feel. If you're new to budgeting, this is the perfect way to jump in. And if you're already a budget nerd like us, you're about to meet your new obsession. This is the upgrade to your finances that you need right now. Yeah. So head on over to budgetbesties.com forward slash budget and grab yours. Now back to today's show. I just had a client yesterday.

10:05We were setting up their brand new budget and they found credit card payments that they didn't even know they were making. And we've had that before. And so your plan, you think you're going to outsmart them and we love you saying this in total love is by paying a little 10, 20, even$50 extra a month, it's definitely going to take care of the problem. No. And their plan is if they can keep your minimum payment low enough, long enough that you won't ever even think about it or try to pay it off and they'll make the most possible interest off of you as possible if they want. We're going to not play either one of those games.

10:35We're going to be intentional about getting all of those. I think about all of our clients, all of their budgets that are cluttered up with debt payments. Imagine if they didn't have them. There's so much that we could all, that they could all do with that money if they actually were intentional on paying it off. So yes, like you said, it's annoying to only pay the minimum, but honestly, you're not making any progress doing this little, these little onesie twosie extras anyway. Yes, if you are our client, we are going to make you reset. If you're just automatically paying 50 over or whatever, we're going to make you reset it to the minimum.

11:06Vanessa said, we're going to make you do it. So if you're not our client, go ahead and do it. And then on purpose, use the budget system, budgetbesties.com forward slash budget. It'll show you once you just have the minimums, it'll tell you exactly how much you can pay extra. And then on purpose, target that money one at a time, whatever order is important to you and get out of debt and get all that money back in your budget. That's the point. And we see so much more progress that way. I think that's where the light bulbs go off is when we show them, hey, this is going to work and we're going to prove it to you.

11:35They're like, ah, like when it actually happens, it's like there's this like big aha moment. Like why, why can't I do this for myself? And it's, it's not necessarily that you couldn't do it. It's that you couldn't see it. I think having somebody else coming and look at your stuff from a bird's eye view, that third person come in, who's not emotionally attached to your money that can say things and make decisions not based on what you've always done, right? Because we tend to do things based on our habits. So if you're always making decisions based on that, but somebody else coming in who's not, doesn't know your habits, doesn't know anything, we can say things and make suggestions.

12:03And it's, I don't know why I never tried that before. So it does really help you make a lot of progress very quickly. And again, if you make one or two months with just minimum payments to try to reset your budget and reset your month, you're not actually going to be that far behind. Okay. Does that make sense? You're not, you think you're going to be so far behind because you're making 50 bucks a year. No, like that couple of months that you need to do that, it's not going to be that bad. Yeah. And that reminds me, so now I have two extra things to say. Everybody's really surprised. But I did have my client that just started yesterday.

12:34They're just getting started. And I told them they are excited to pay off debt, but the actual first plan is to get on a budget. And it might, like Vanessa said, it might take a minute, a month or two of not paying anything extra just to get your bills account set up, to get ahead, to get a buffer, whatever it is. And that is okay. That is huge progress because as I told a client on Tuesday, not using debt all by itself. That's another huge, like getting the budget set up so that you don't have to use the credit cards and then being able to pay off the credit scores. Like it's a path, right? And it takes what you have to do one at a time usually, unless you have millions of dollars setting aside, it's fine.

13:11But even that, it still takes time, time and money. We can't always have both. So sometimes it just takes time to get the stuff set up and get it clear and know what's working and feel confident. And then let's go, let's pay off that debt. I think that's a good reminder. I had a, I graduated a client this month and she said she, I think she paid off in six months,$9 ,800. So it was almost$10 ,000 that she paid off in the six month period. And she said, look, I would have rather have made more progress on that. I understand I didn't make as much as I wanted to, but life happened. She had to pay property taxes that she didn't know she had to pay.

13:43There was an AC situation that she had to pay for, but she said, but it doesn't matter because I still made so much more progress mentally and emotionally and systematically in our bank that I would have never done had I not signed up for coaching. And it was just this aha moment of, it's not necessarily about that number. It's so much more than that. It is. And going back to what you said about decision. So I think what you were saying is that people, they can't see it. They don't know whatever you're busy and you're not like in it. We are in these budgets every day. We see sort of the same thing over and over again.

14:17So we can see it very easily. Patterns, yeah. And so what I'm going to tell you, you're listening to our podcast. Just trust us and let us make this decision for you. I think that's one of the biggest benefits of coaching is we tell you what to do. Obviously, it's in accordance to your goals and you're going to agree to do it, right? We're not forcing you to do anything. But we're telling you to do this, then this, and it'll all work. And it takes some of that pressure off of you. You don't have to make those decisions. I think that's good because a lot of people, they have decision anxiety. They don't know what to do, how to do it.

14:43There's a million people telling them you can do this, you can do that. But just pick one. Pick one way and do it, and I promise it's going to be successful. And it's our way. Yes, it should be our way. And so we're telling you right now, if you're like, I don't know which one, you're going to stop. You're going to make minimum payments only until you can figure out, get your budget system set up. You're going to set your budget system up because it's going to help you to stop using credit cards. You're going to know I have money for spending. I have money for this, that, and the other. I don't need to use those credit cards.

15:09And once that's all good, once your bills account's going, your spendings are going, you're good, then we're going to go back and really hit the debt if that's one of your goals. Super hard. And that's the order. That's the steps. And you won't know how much money you have extra to pay on debt if you don't just put your budget to minimum payments only first. So by doing that, you'll get a whole clear picture of where all that extra money is in your budget. And you'll probably get some stuff cleaned up. So when we coach our clients and they stop using credit cards, because Shana said we set their accounts up.

15:37So they're from this point on using cash for everything. And when we start setting their accounts up, they start realizing, oh, I had this charge on my credit card that I didn't know about because they're not using their credit cards anymore. So the statements aren't as long. So they'll find these random charges, like Shana said before, they're small enough to where they don't want you to pay attention to it and you're charging it and you don't really know about it. So when you stop using the credit cards and you can see those statements, then you can maybe cancel some stuff that you haven't used in years.

16:04Yeah. So it's a win-win. Yeah, that's it's a great point. It's a great point that once there's not so many thousands of charges, you'll really be able to see clearly a lot better what's going on. And I think the same thing happens in your spending accounts. You'll be able to see clearly what's going on with your spending habits. Okay? So it's a win-win. If you're tired of feeling like your finances are all over the place and you're ready for a simple set-it-and-forget-it way to budget, we have something special for you. Watch our Automate Your Budget Masterclass at budgetbesties.com forward slash automate.

16:33We'll show you step-by-step how to finally organize your money, how to set up your accounts, and put your budget on autopilot so your bills, saving, and spending run like clockwork. Imagine less stress, more savings, and the freedom to spend money without having to track every dollar or babysit your bank account. Go to budgetbesties.com forward slash automate to start today.