How They Paid Off $30,000 of Debt in 6 Months (Without Being "Gazelle Intense") | 556

0:00Want to pay off debt but don't know where to start? Stop making random extra payments and hoping for the best. Let's build a debt payoff strategy that actually works. Join us Thursday, May 28th for our Debt Payoff Workshop so you'll know what you owe so you can pick your debt payoff method and you can start getting out of debt. We'll help you organize your debt, understand your balances, interest rates, and minimum payments, and help you choose what to pay first. We'll cover all three payoff methods, including the snowball, avalanche, and minimum payments, and we'll also tell you what to know before applying for debt consolidation.

0:32No shame, no finance bro nonsense, just your next right step. Grab your spot at budgetbesties.com forward slash debt workshop. Here's a little bonus pro tip. Put it on every six months or every year. Call your cable company, call your phone company, call your internet company, call your insurance, and renegotiate. Threaten to leave if you have to. We're not afraid of a good time, okay? And see if you can get a lower bill or do some sort of deal to save money. Yeah, I just did that recently with my internet company. that I was leaving and they cut me$20 a deal a month, like$20 less a month that I'm paying.

1:05So it does work. And remember when you're calling insurances, don't just call your auto insurance, call your homeowner's insurance. And if you have health insurance, call them as well. And again, we're looking at calling brokers because they will give you the best deal when you're researching. 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. When 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.

1:37If 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.

2:12We want to help you take the guesswork out of your budget, improve your marriages, and even bring your kids in on a conversation. We can help you no matter where you're at, whether you're the single mom who's never had$500 in their savings account or the millionaire who's paid off four real estate workers. And we're not going to shy away from the tough love. We'll tell you what you need to hear and encourage you at the same time. This is the Financial Coaching for Women podcast. We are excited to give you a case study, you guys. What we're going to do is walk you through beginning to end, give you the situation of what these clients started, what they did, and where they ended up so that you can hopefully get some inspiration, get some ideas, or get some tips on what you could do.

2:50Yeah, absolutely. And they are, this couple that we're going to talk to today is very normal couple. They have, they're married, two kids, they both work. So it's not an extreme circumstance. So it should relate to a lot of you listeners. So let's just get into the meat and potatoes of it. Their average monthly income was about$16 ,000 a month. They had 34 debts. Okay. 34 debts did not include their mortgage. This was all Clarnas and Sizzle Pays and personal loans, vehicle loans, student loans. It was, and a lot of it was credit cards, a lot. So I just want to throw that out there that they were in a dire situation.

3:28Do you know why? I do. They had, I believe her mom passed away a couple years ago and everything just slid downhill from there. She was in a really dark place and said that, decided that they needed, quote unquote needed, to go on vacation and do other things. And she didn't want to be home. And so they racked up a ton of debt from that point on. And once it started, she couldn't get a hold of it. So she just kept putting stuff on debt. So yeah, it racked up very quickly. Yeah, because I feel like that is an extreme circumstance that we don't see that often. We see it's normally like you really are living a lifestyle that you can't exactly, you may be able to afford, but not exactly.

4:09So you start using some credit cards, but there are a lot of times it's medical or there's like a trauma or a death in the family or something that sort of triggers this big situation that they were in. Happy that she was able to see she could use a little help to get out of it. Yeah. And her monthly minimum debt payments were$6 ,300 a month. And that was minimum guys. The minimum amount that she had to pay on her debts every month,$6 ,300. and that was suffocating her. Absolutely. And that was without the mortgage, you said, right? And so when we said her income is$16 ,000 a month or their combined income, then you can see$6 ,000 of that is going toward debt.

4:46And what we know is once you get that taken care of, then that will alleviate the situation. But then I also, that tells us that in order to rack that up, they were spending what,$10 ,000 or more over what they were making each month in order to get to the point where they had that much debt, unfortunately. And when she first started coaching, the total amount of debt that she had on her debt tracker was$304 ,757. And again, that did not include her mortgage. That's scary. Yeah, it was really scary. And I also will say she was a simplified budget system user for about six months on her own and tried the DIY.

5:24And she finally signed up for coaching. And she said, I just need somebody in my corner. I need some help. I need somebody to look at this differently. And she was one of those where I don't think I can afford coaching, but I know that I need it. And we, she made herself afford it, which she didn't put it on credit. It didn't go on debt. We, we budgeted in for her, but it made a world of difference. Yeah. And I, it makes me think of a lot of times we've had, I've had a couple of clients, Vanessa, where they weren't, didn't have any more debt they could put anything on. Like they came in and they were like, yeah, so they have to start paying cash and that might be a situation you find yourself in.

5:57I really need to figure this out. And that's when it is a good time for coaching. Yeah, absolutely. And I think that having somebody there showing her different ways to do stuff and just bouncing ideas off of her, off of me. And again, when you're in it and it's yours, you get tunnel vision sometimes and you don't really see the whole picture because you've been seeing it a certain way for so long and you can't see anything else. Yeah. And it just feels hopeless. And we had somebody say in our Facebook group that she really wanted to get her life together for her kids. basically like she knew that they knew and i'm being facetious with that she didn't say that but like she knew she wanted to get this figured out because she wanted to do better for her kids and i'm sure that was part of her situation coming into this with her goals was knowing that i have these two kids and i need to figure out figure this out probably yeah and she just knew that the trajectory that she was on was not not good she needed to do something different she needed to change she needed somebody else come in yeah so she knew that she her goals were she wanted to learn how to manage money better, set up savings and budgeting to cover all expenses.

6:55So she doesn't have to use those credit cards, pay off credit cards, praise God, and personal loan debt. Yes, that should have been number one, but that's fine. You got to do it in order, whatever matters to you. And then take family vacations, paid for in cash, I'm sure. We did those. And remodel her home, which is, or remodel rooms in her house, which again, pay for in cash, which is fantastic. Yeah. And it seems like those are reasonable goals. It's not like she's asking to do extravagant things. All those are everyday normal things that we all want, things that hit us. Do you know what's on almost everybody's goal list, Vanessa?

7:24Family vacations. That's true. We want that for you too, guys. We want that for you too, guys. We just told you they came in with over$300 ,000 of debt without, that's without their mortgage, and they were paying$6 ,300 in minimum debt payments every month. And they had 34 different debts listed. Vanessa got to put painstakingly into their budget. That's where they started. And when they were done with coaching, drum roll please Vanessa tell me tell us what happened so their income this is really important so their income didn't change say it not stayed steady so a lot of people think that it was an income change or job change none of that was different but I will say that they paid off 11 total debts while she was with coaching and so now she's down to only 23 of them which is huge and I will tell you that one of them was a car payment I believe with a thousand dollar payment a month.

8:10So that was a really good way to alleviate some room, make some real good room in her budget. And then she paid off$30 ,000 in debt by the time she was done coaching, which is huge guys. Imagine paying off. Okay. Investment in coaching pennies. You paid$30 ,000 off in debt in six months that you didn't think was possible. And because you didn't have somebody there to show you properly had to do it. Guys, remember they were paying over$6 ,000 in minimum debt payments a month. And in six months, they were able to reduce that, those minimum payments by almost$1 ,000. And understand they're also paying for coaching during this time.

8:50So once you get coaching out of your budget, you'll be able to put more towards debt. But just in six months with, I feel like it probably took a couple months just to get it all listed. I love you guys. I'm just messing with you. But right in six months, they were able to reduce how much they're paying out by almost a thousand dollars it's huge yeah it was a lot of relief in her budget and the wiggle room that she needed and honestly here's the other part is she said look i'm not living on rice and beans like i want to i have two kids they're in a fun time in their life they're in involved in sports they did travel sports they wanted to probably wear some of the stats from yes they also wanted to go on vacation and do things as a family how did they have time tell me about that i'm just kidding i'm sorry again my first when they weren't at sports okay tell me when this happen anyway.

9:30Yeah. It was just one, she said, I'm not, we're not going to live. We're not going to be a gazelle intense because otherwise I'm going to look back and miss this part of my life with my kids. So I just want to say that she was able to do all that and also enjoy everyday life with her family. And what's cool is they also got a paycheck ahead, which, which is also why it takes a minute to get all of these. You can't do all of them immediately, but you want to get everything organized. You want to get your accounts. You want to try to get a paycheck ahead or have a buffer. And then you're going to start really going aggressively at the same time.

9:58Apparently it's your savings buckets as paying off debt. So it takes a minute, but they got a full paycheck ahead, which I know felt really good. And I didn't, I know I'm getting a little ahead of myself here, but I do want to say that you said it cleared up a lot in her budget when she paid off those 11 debts. It also clears up your mental clarity. If you're having so much going on in and out, that's 11 things you don't have to put in your budget now. Ta-da, you did a great job. Yeah. And I will say that didn't happen. Like Shannon said, it didn't happen overnight. We didn't do all of it in month one.

10:25I don't believe she got a paycheck ahead until about month three or four into coaching and even that she didn't believe me i remember when our very first free call she said i want to get a paycheck ahead and i said we'll get there and she's like i don't believe you literally she just did not she couldn't see it for herself and then we finally got there and it was just this massive sign of relief of oh my gosh the money is always going to be there now when bills are paid because it wasn't before these are more of what they did yeah start living money in those i do want to talk about how she no longer tracked every transaction because that was like She was down to the penny.

10:59Say that one. Where's that? Say that. It's right here, but I know what she meant. Okay. Can we say it there? We're moving up. No, I think it's here. That's something you accomplish. Yeah. And you can say, and you were talking about the mental clarity, Shana, or whatever, and then just loop it in there. Yeah. Another thing that she stopped doing, and Shana was just talking about mental clarity, is that she no longer tracked every single expense. Okay? So we talk about this tracking era that's going on, and everyone needs, you need to track to the penny what's going on. you need to check every time you go to the grocery store, every time you do this.

11:30And that's what she felt like or thought that she had to do in order to be successful at this budgeting, right? And she's not, she's no longer doing that. She's the paycheck ahead. The money's flowing in, it's flowing out to her spending, flowing out to her savings, flowing out to all her payments automatically. And she is not in the budget system every single day, trying to figure out exactly what she did and feeling like she had to write those numbers down. Yeah. For the most part, once you build the system, it just runs on itself. And there's maybe one or two things you need to go do. And obviously working with Vanessa Shea to build the confidence to believe that could be true, but it is true once you set it off.

12:02Okay, we have told you where they started and what amazing things they accomplished. Let's tell you the how, the tangible hows, because these are the things that you can do that can really help you out. And the first one is we said she paid off 11 credit cards, but the really important thing here is to close those credit cards, okay? It's not, there's so many different reasons to do it, whether you have random bills set up to them, you don't need that clutter in your life, but also you don't accidentally need something else to charge to it. You don't need the temptation. You don't need your credit score having, it's not doing you any good to have 11 credit cards open and have no balance recurring on them.

12:38So that doesn't help anyway. And also just having that many loans open or whatever the credit cards companies call it, that's not good. So we need to close them and get closure. And it prevents fraud too. How do you need all these credit cards sitting there able to be used? Shanna said the temptation, all of that. and I had a client recently he said I just have I mean he was really feeling a certain kind of way when I told him to close this card and he said I have access to$20 ,000 and I said tell me the last time you had a$20 ,000 emergency and he paused and he said I haven't and I said exactly so we're gonna close them and he said we have 30 of them open and I was like you're not they're not using them but they're open as like yeah no we're gonna go yeah and the other point is get yourself$20 ,000 when you do this and when you're focused and when you're doing a good job you can get$20 ,000 saved up in your bank and being your own emergency.

13:26Right. Exactly. Also the goal. But another thing they did is they refinanced their Tahoe from a 9 % to a 6 % interest rate, which obviously saves over the life of a loan. It probably saved them over the monthly amount as well. But the other thing here is I bet once they close those 11, their credit score actually probably went up. That's what happens when we're working with you to pay stuff on time, to not, even if you can afford it, there's so much going on that you probably don't look like the best candidate for credit a lot of times, especially if you have 34 debts like she did. So closing those, getting them paid off and closing them probably actually, maybe not immediately, but over a month or two or six will probably raise her score.

14:02And then maybe she'll even be able to get a better interest rate. But even with what you guys said, she was able to get 3 % back. And I don't even want to say possibly it went up. No, I think every single time, we talk to clients about closing these cards and they're continuously making payments on other cards, whether mortgage or student loans or vehicles, different things like that. Your score is naturally going up. So we've not ever had a situation where somebody has come to us and said, oh my gosh, I closed all these cards. My score continued to go down for months. No, it literally goes right back up.

14:30And I even had a lady recently say, my score is almost in the 800s. I've never had that. And it was just because we followed your system. So it does work. And I want to say, that's what we tell you is that your credit score will do all it needs to do. I think my husband has $800 or whatever it is. However, the highest one that you can have with a mortgage. And then every once in a while who likes to have a car payment for a couple months it's really a fun time that we have but other than that that's the best set that you can have and it can be that high like it can be that high without you having to have all of this stuff going on yeah not that we necessarily care if it's that high or not but we're just if we care for you sure yeah the other thing i want to say about the cars is she did defer her car payments to her two different cars what like once each during this which gave her enough wiggle room that month to make a huge payment on a couple of cards and you could pay some off.

15:17We know that deferring a car payment is not going to mess your credit score up. Okay. So we've heard it time and time again from clients. They've done it time and time again, and it's worked for them. So if you have a car payment, that's really eating at your budget, taking up a lot of space, maybe you could defer it. And like this client did, maybe you have two car payments you could defer and she used all that money to put it on debt. And again, allow herself some of the room. Yeah. It's time to enter your coaching era because making good money should feel like making good money. Yeah, imagine six months of private coaching where we'll tell you exactly what to do.

15:51No guesswork, no confusion, and absolutely no judgment. It's a done-for-you system that actually works. You don't know what you don't know, and that's not your fault. And that's why we're here. Financial coaching with us looks like two coaching sessions a month, personalized recaps, and after-hour support, you can text and email. so you're never stuck wondering what to do next. Together, we're going to build your budget, set up your system, and tackle any challenges that come up along the way, which, by the way, they always do. If what you're doing isn't working and you're tired of trying to figure it out on your own, sign up for financial coaching at budgetbesties.com forward slash coaching before all of our spots fill up, and we will help you go further faster.

16:31Six months from now, you'll wish you started today. The other thing she did, and this is one of those things that nobody wants to do, but it usually makes the biggest difference or such a big difference is she called all of her lenders, which for her was not a short task. That was not a quick task, but - Took a couple days. Yeah. We're proud of her for doing it. And the thing is, yeah, immediately you'll be able to see relief. That's what's really promising about this. For example, she was able to reduce her firm payment from$519 to$350. So she saved almost$200 that month, which is huge. That's thing to do.

17:04She also reduced another payment by$90 a month. She had two other loans that got reduced. One was$56 a month. The other one got reduced by$43 a month. And she was able to skip a payment. There's so many different avenues and so many different benefits to just picking up the phone and calling your creditors and seeing what they can do for you. Yeah. And guys, like, like, sometimes if you get these skipped payments or deferred payments, there's a lot going on. But if you're in the position, if you can pay off a smaller debt and get rid of that, like, use, use the money that you're getting back in your budget to make it so next month you don't have as many debts.

17:37And in this case, a lot of times we'll tell you, and obviously this client did too, I want to start my savings buckets. This is important to me, blah, blah, blah. We might need to do triage. And that's happened plenty of times with clients. We have to get this debt burden down first, no matter what, like you just, your budget is at zero and or worse. So we have to focus on this. So if you get a, if you get some money back in your budget, pay off a couple small ones and we'll keep her in like if it took her two days to call even if she like calls five a month or five a week or whatever and then we keep recycling any gains into paying off some of the smaller ones and then we can keep going and just so you get a new baseline if you can get to a baseline especially a lot of times i've had clients where they're not in the black yet like we need to get to the point where you just you can make a regular budget and then and you're not coming out of pocket from some other random place that we don't really have to pay your monthly budget, then that's what we want to do with this.

18:25And then we can move forward into extra spending or more savings or whatever. Yeah. And having 34 credit cards, you can obviously assume that there were no savings buckets happening at the beginning. Okay. Like Shayna says, we were in triage. Yeah. Got to get organized and get figured out. We have to know what the heck is going on and how to get out of this mess first. And that's what we did. And it wasn't until later on, like we said, where she got a paycheck ahead and she was able to start putting money in her savings buckets. And I want to say even by the end of the coaching, she was only funding two savings buckets, which was Christmas because it was coming up and annual bills because that's a non-negotiable.

18:57Yeah. And so this client had their own business, which is a blessing and a curse. So it doesn't, everybody has their own way or path. Like even if you don't have your own business, you might be able to turn up the gas or push on the gas or whatever by working overtime or getting a special bonus or getting a second job. There's all kinds of different ways. But when you have your own business, you have a little bit of control. doesn't mean you have control in your actions, not necessarily the outcomes. And so in this case, you guys were able to figure out what she needed for her business budget and then how she could go faster to help her personal budget.

19:31Yeah. So she had a 40 hour a week job that she worked normally at. She got paid really well. She was also in school to get some certifications and get her master's degree and everything that she needed to level up and continue to get paid more for her specialty. And she also saw clients on the side. And so we figured out, okay, you have to minimally make$850 a week from your one-on-one clients to be able to supplement and make the budget work. And so we figured out how many hours that was, how many clients that was, and that was her bare minimum. Like she knew she had to make that. And I think it gave her like vision and clarity to not like, Oh, I think I need more.

20:08I'm not really sure. I think I have to work till nine o 'clock at night. No, there was none of that. We had her set hours and said, she could still have dinner with the family in the evening. Yeah. And as we always say, this is usually something that we're asking you to ask of yourself for a season. It's not forever. It's going to be a little hard, but unfortunately that's what it's going to take to clean it up. And once you get, give yourself some time to get ahead, then you don't have to live there forever. You don't have to do that forever, but it is really good to know if I'm doing this specifically, if I'm taking time away from my family or from sleeping or from literally anything else that I'd rather do, it's going to actually move my finances forward.

20:42I'm actually making progress and you know exactly what that's doing if you've figured it out like they did. And you can see that light at the end of the tunnel, right? Like you said, it's for a short season. So it's okay. If I need to make or make sure that I pay off this amount of debt with it, then you can stop. Yeah. And another thing that they did is they, that she sold extra things, extra or sold things to get cash. She did pay for her budget or pay off debt. Yeah. She had a lot of things in her house that she no longer wanted or needed and she was prolonging a garage sale and so she i believe it's facebook marketplace that she did really well on and she was able to bring in some decent amount of cash to pay off debt yeah that's awesome and you don't don't give out the side eyes there if it's one credit card or it's one summer camp that you pay for the kids that you didn't have to use a credit card like this is this works and it's a good job you also mentioned that she it took her a while took you like till month three maybe to get a paycheck ahead but that's probably because there was so much to sort so much to figure out but then she was able to get a paycheck ahead which is a big deal.

21:37She was. And also I will say with our simplified budget system, we have a paycheck plan in there and the paycheck plan is different than getting a paycheck ahead. And so we use the paycheck plan to show her and to allow her to trust the system. I think that was really hard for her. She would look at the monthly budget and not understand, sure that this is going to work. We would go over to the paycheck plan tab and show her, look, if this is all you do, if you do this and this, then everything else in your budget will work. That allowed her the piece to trust it. Like I said, and to know that she only had to do these four simple things throughout the month and everything else was just going to happen in the background.

22:09Yeah. And here's a couple of things that she also did. She canceled cable, which is really important. You guys, none of you are that have that much time to watch that much cable, but either way, once you look at your bills, you might say, here's a streaming service I can cancel, or maybe I can get rid of cable, especially when you're looking at, okay, I can have spending money or cable, which one do I want to have? Right. So that is something that she looked at and decided they didn't need along with calling Verizon and lowering her phone bill. And so here's what you can do. Here's a little bonus pro tip.

22:36Put it on every six months or every year. Call your cable company. Call your phone company. Call your internet company. Call your insurance and renegotiate. Threaten to leave if you have to. We're not afraid of a good time. Okay. And see if you can get a lower bill or do some sort of deal to save money. Yeah. I just did that recently with my internet company. Fun times. I said I was leaving and they cut me$20 a deal a month. Like $20 less a month that I'm paying. So it does work. And remember when you're calling insurances, don't just call your auto insurance, call your homeowner's insurance. And if you have health insurance, call them as well.

23:08And again, we're looking at calling brokers because they will give you the best deal when you are researching. So one theme that we're hearing is she was willing to do the work. Sometimes she probably saw that the mess that they had gotten in it, and we understand why there's a lot going on there, but she was willing to do the work. She called credit card companies. She called her billers. She had a garage sale. She did extra shifts with new clients on the side, like she saw she was willing to do the work, which is a really important character trait. If you want to get ahead, if you want to get out of debt, if you want to manage your money, especially when there's this much to clean up, kudos to her for that.

23:42I think that's an important topic because we just had recently a person wanting to come on for coaching and they weren't willing to do the work. And sadly we can't do it for you. We would love to be able to have a power opportunity. We love to be able to jump in and do what we can, where we can and when we can, but doing certain things for you, we just, we cannot do. And so just know that if this, if you're in a situation like this, or you're in your own type of situation that you really know that you want to get out of and you want to change things, you want to change your future. The only way to get out of that is to do the work.