How to Get Out of Debt in 2026 Without Giving Up Your Life | 506

0:00Guys, we are so excited to talk to you today about what's happening next week.

0:03Vanessa:I know. We have our Money Makeover Bootcamp. Yes. It's the first time we're doing something like this. We've seen a lot of people have success with it because it's different than just the podcast where we'll be able to go back and forth and we'll be able to interact with you and really get into some deeper stuff with you. And we're really excited. If you want to get out of debt in 2026 but refuse to live on rice and beans, this one is for you. Ooh, a little shave, Vanessa. You can be bougie on a budget, stop relying on debt, and still make real progress. Yeah. And so today we're going to show you how to see every debt on one page, which is very important, how to set up realistic payments, and how to create savings buckets to keep you from sliding back.

0:44Yep. We'll walk through the three different ways to pay off debt, how to find your extra that you can put on debt, and why minimum payments are not necessarily the enemy.

0:53Vanessa:Yeah. So you can stop adding to debt and start being your own bank and make this year the year that it finally sticks. 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? Hey, it's okay if you don't already know how to budget or if you're using credit cards to get through the month. Hey, it's okay if 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.

1:25Vanessa: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. We want to help you take the guesswork out of your budget, improve your marriages, and even bring your kids in on the conversation.

2:00We 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

2:07Vanessa:mortgages. 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. All right, Vanessa, when we're telling people how to get out of debt in 2026, We want to tell you that we want you to do it completely different from everything else we've ever heard because we are different than everything else you've ever heard. Yes. And the term, the tagline, the main thing about who we are and what we're about is that we want you to be bougie on a budget. That's really important for us. What we mean is you don't have to give everything up to get out of debt.

2:46Little side quest here, a little backstory. We are trained by Dave Ramsey. We went through this program. We taught FPU many times. And we've helped lots and lots of people get out of debt. Guess what? Not everybody wants to give up their entire life. Not everybody is able to. Even sometimes I think about how we were able to get out of debt when we were younger and our kids were younger is completely different than if we're trying to do that right now,

3:10Vanessa:we would not be able to do it. I think of how I did it back then and how rice and beans it was. And I think that I would have done it so differently. I know, not think. I know I would have done it so differently now. Yeah. And so we've come up with a different way to talk about it, a different way for you to do it because we know how we are now and how our clients, they don't want to give up their pumpkin spice lattes. That's in our intro. You heard it. That's what they tell us. They're like, look, I'm willing to do this. I remember my one client, Vanessa, I will do this. She got on her first call.

3:40She said, I'm going to do this, but I'm not giving up travel and I'm not giving up eating out. And I'm like, okay. And she did. She did do it without doing that.

3:46Vanessa:And we've had plenty of clients come to us that way and say that, look, these are my boundaries. and we're like, we're for it. We get it. But, and I want to go into what bougie on a budget means. Okay. It's something different for everyone. So we're not talking about, Hey, you can get out of debt and go buy all Gucci purses. That's not what we're talking about. We're talking about, we want you to be able to still allow your kids to play travel sports. We want you to go on date night. There are things that we want you to be able to spend money on Christmas and spend money for their birthdays and be giving.

4:15Vanessa:Get your hair done. Get your hair done. Get your nails done. We want you to be able to get your, have my husband's new thing is he gets his beer done every month. That's his version of bougie right now. He's loving his bougie. Yes. Grooming. His man, his groom budget, whatever. He's loving that for himself. And I'm loving that for him. When we say bougie on a budget, we want you to know that means something different for everyone as it should, because your lifestyle, what's important for you is different than the next person. So the overall message here, the overall, the high vision, high level vision message here is you can get out of debt while being bougie on a budget, right?

4:46Now we're going to go into the tactical though, because what are the steps? What do you actually need to do if you're going to do it our way, which is not having to be gazelle intense. It's just, what's a different animal that's not like as fast. It's not a sloth and

4:57Vanessa:it's not gazelle. So I really was going to say manatee because that's my spirit animal, but that's not the right one either. They're fast in the water. Like they can book it if they, because the weight doesn't bother you as much in the water. Anyway, long story short, you think of it. You tell us which one. It's an animal between us and you can be intense, but you can also live your life. And that's where we want you to live. And so the first step, Vanessa, it's always going to be for us. We love to get everything out on one paper, get it out of your brain, get it out of like being wrecking balls in your head, get it out on one paper, see what the actual data is in front of you.

5:24Vanessa:Yeah. So our budget system has a debt tracker page and it's really beautiful. And it just allows you to list all of your debts. It allows you to list what it is, the type of debt, the amount, the interest rate, the minimum payment, just so you can see it. Like, okay, what am I looking at? What am I tackling first? And it just allows, it's one place that you can just overall see what's happening. Yeah. And just like with the budget, we say this all the time, people have never looked at what they're actually, all their money is doing it in one month. Most people have never looked at their full list of debt.

5:52And so when we, when we have coaching clients, this is one of the first steps that we have other than setting goals is we list out what the name of the debt is, what type of debt it is, what's the opening balance. And then what the current balance is, what the interest rate. So many people don't know their interest rates. And I feel like it's not your fault because a lot of them, they are trying to hide it from you. So you don't know and you don't feel, oh, I gotta get rid of that. And then we also want a minimum payment. We want all of that data, which you may never have gathered or seen on one page.

6:18It might sting a little bit, but that's the first step. And it's really important to rip the bandaid off that way.

6:22Vanessa:And I think again, we go back to it's data, not drama. We're just saying, okay, what is happening? And our data tracker has a lot of lines for you to use. Sometimes we use them all, sometimes we don't with people, but it allows you to be able to, again, see everything and just go, okay, this is my starting point. Yep. and speaking of that starting point so that's the first step the second step if you're new here you might be but if you're not going to be shocked the next step is create a monthly budget what everybody's brains are just blowing open i can't believe it okay so we want to take the information that you listed on the debt tracker which is the type the name of the debt and the minimum balance you're going to take the name of the debt and the minimum payment and you're going to go over to your budget and you're going to list your income your minimum debt payments your bills your spending, and your savings.

7:06Vanessa:We need to be able to see your entire month, your money, on one page, including all those debt payments that you have to make. Yeah. And because eventually all of this data, all of these numbers are going to subtract and let you know how much you can pay extra on debt. But again, this is a situation where a lot of our clients realize when they do this that they don't need to be using debt. And that's an eye-opening thing. They're like, oh, if I actually just stuck to a budget that I created, by the way, it's not, remember we were talking about being bougie it's not a restrictive budget it's a fun budget i could actually never have to use my credit card purpose and so that's what seeing everything on one page is really going to help you do but another key to that vanessa is you have to be realistic with your spending and your savings no absolutely i think when people go to make a budget sometimes they're listening to other people about what you should be budgeting what does it need to look like what is your spending percentages saving percentages all of that or they're listening to these people that are like my monthly grocery budget is$500.

8:02I'm like, who? What? Yeah. How? What are you eating? Tell me more. Actually, I don't want to know.

8:06Vanessa:No, I don't. Yeah. I don't think I want to know. That's great. But here's the thing is you have to make a budget that matches your life. And that's something that you're, you're excited about because otherwise you're not going to do it. You're going to feel like you failed. You're going to throw it out and be like, this doesn't work. And you can write right back to credit card and then you're going to get further in debt. Yeah. It reminds me of how people say, if you're going to quote unquote go on a diet or whatever, you need to eat in a way that is sustainable. Like something that you're willing to do for the rest of your life, basically.

8:30And that's where you want to set this budget up. Don't set it up in white knuckling. Okay, if I only spend$5 for every week on myself for the rest of the year, I'll be fine. No, be realistic. Now set up a budget like Vanessa said that you're not going to want to throw away day two. Set it up to where I get spending money and we have plenty of money for food and I'm saving for Christmas and I feel good about this budget. Set it up realistic from the beginning. That's really important and make it something that you can live with as you like you can actually live with and it is sustainable.

8:57Vanessa:And when you put those minimum debt payments in your budget, it's not, oh, it says I only have to pay 25, but I actually pay 50 every month. No, we're going to bring it back down to just minimum payments in your budget. You're going to change all of your auto pays to just minimum payments. And then when you go to make your budget, that's realistic again, that you love, that's got all of your bills, all of your spending, all of your savings and your minimum debt payments. Then you can say, Hey, I have a thousand dollars left over every month to be able to put towards debt, then you can really start making progress because you have one, like a whole chunk of money to be able to put towards one thing.

9:31Yeah. And I think that's really important. So what, what people, other people tell you is to put extra on debt, pay double, do your snowball method or whatever. How do you know how much you can do? This is how you figure out how much you can pay. You have taken your income, you've subtracted your minimums, you've subtracted all your bills, you've subtracted what you're going going to spend on groceries, gas, spending money, your haircuts, your kids, your pets, whatever, you're going to spend on your life every month. And you've subtracted what you need to be saving for so you don't have to use debt, right, in the future.

9:59And so now all of that equals, hopefully not zero, but it'll equal a number. And that's how much you can put extra on debt each month to begin with.

10:08Vanessa:Yeah. So now you've figured out exactly how much extra you have on debt to be able to start this snowball method. When we talk about snowball method, it's not necessarily the debt snowball method. It's just tackling the debt and tackling one at a time. So let's talk about paying off debt. How many, like, do we always recommend the snowball method or how many different ways do we talk about how to pay off debt? Yeah. So the most popular way that you probably have heard a lot of talk about is a snowball, but we in our budget system, all of this is in our budget system. All of the math does it automatically for you that we're going to talk about, but we also list the avalanche method and the minimum payment method.

10:39Okay. Just really quickly. The snowball method is going to go, you're going to pay each card off by balance, right? By the minimum or the current balance. And it's going to be the lower one first. And then you're going to go from there. The avalanche is actually going to look at the biggest balance slash biggest interest rate. And you're going to, you're going to look at the biggest interest rate and try to get that one knocked out because otherwise you're paying so much more just to have the card every month. And then finally, the minimum payment method is you look at, I have a client right now, they have, I'm not kidding you, they have a$1 ,200 or$1 ,800 balance.

11:10And the minimum payment is$320 a month. Okay, so I'm like, whatever we do, even though that's not your smallest one, you're going to pay that one off first, because you get$320 back in your budget. So we look at the minimum payment. And that's how we decide that one.

11:24Vanessa:I think that's really big. I had a lady come in for a free call one time. And she was like, she completely bypassed her car payment. She had$3 ,000 left to pay on her car. But her car payment was like$800. Yes, exactly. And I said, just pay off your car. And she said, yeah, but the interest rate's 6%. I'm like, doesn't matter. If you pay off your car, you get$800 back in your budget tomorrow. And that, she was like, oh, that was an aha moment for her, that light bulb moment. She was like, oh, I didn't realize that. So we're not always recommending the snowball. We always do recommend is if you have that thousand dollars and you're going to put it on debt, then the next time when you pay off whatever one you do, whether it's avalanche minimum or snowball, you're going going to still roll that other minimum payment into this new amount of money that you have left over each month.

12:06Vanessa:Yeah. The extra on debt that you're budgeting on purpose each month. Yeah. So now you're rolling all of that over, but it doesn't necessarily have to be in the snowball method, but you're still taking all that extra money and putting it towards debt. Sometimes you may get a bonus. And so one month, actually, I'm going to do the debt avalanche this month, this time, because this works better for me right now. It doesn't always, once you choose a method, doesn't mean you have to stick with it every time. Right. And it really does depend on the said on the moment. So you might do the snowball like throughout the year.

12:33And then every once in a while, when you get a bigger chunk of money, or when you when you have a different situation happen, you might go one or two months to an avalanche or snow or a minimum payment method. And then you go right back to the snowball. But really, it is up to your budget. And that's why knowing that extra on debt is so important. And actually, every month, it might change because you might get overtime, you might have a garage sale, you might do some other things to get you more extra on debt. And so if you only have$300 regularly, every month, but then this month, I worked a bunch of overtime and I have$1 ,300.

13:01That might change which debt you pay off. It might change your answer to that question. And that's why it's so important to have that whole list of them and see all of it. You can see the minimum payment amount. You can see the current balance amount. You can see your interest rate. You can see it all and make an informed decision each month.

13:16Vanessa:And you may have two debts. Let's talk about this. One has$13 ,000 and one has$14 ,000. Okay. And your$13 ,000 one has a interest rate of 16%. But your$14 ,000 one has an interest rate of 31%. You better be sure that we're going to be tackling that$14 ,000 balance one first, if you are coaching with us. Because the balance is right there. They're very similar. But your interest is almost doubling. We're definitely going to want to get rid of that one. So in situations like that, it's not always following the snowball method. You know what? when you say that, it reminds me if they just follow what we say to do instead, that would be better.

13:52Because I was just thinking we have our, we have a DIY debt relief program workbook that we give you to avoid. Because if you're listening to this, and if you're thinking about how much debt and you've seen it, you're like, oh, maybe I should just do a debt consolidation program. No, you shouldn't. You can do all of this without it. And what it made me think, Vanessa, is if you were our client, and you had a 31.99 % interest rate, you better believe the first thing that we're going to do is tell you to call them and say, hey, can you help me? And we go through exactly what to say, what to do with a yes, what to do with a no, all of that kind of stuff in our debt relief work.

14:22We're not going to necessarily repeat it here, but you do not need to use a debt consolidation program yourself, or you can do it yourself instead.

14:29Vanessa:And I will say we just updated it. We added a lot more content based on a couple of years of gathering client data from calling. And so it's filled. The workbook is literally filled with so much information to be able to help you. So go to budgetbesties.com forward slash DIY debt relief to look at that. Yeah, you're going to do it yourself. We believe in you that you can do that. Okay. So then there, here's the, how about some finishing touches? Like there's some little magic spark, scrubber brush, like to go along with the tactical stuff that we just told you. One thing that we really want you to do if you're trying to get out of debt in 2026 is to celebrate not adding debt.

15:03That is actually your first step, your first big win. You might be like, Oh, it's going to take me two months to pay off my first credit card. And you're just like so hard on yourself. But actually but we want you to be like, hey, that's two months. You didn't put any extra on debt. That was a huge habit change, huge deal, big win. And we want you to celebrate it.

15:21Vanessa:Yeah. That's two months that you bid cash for everything instead of putting it on a card. So the next thing I want you to do is stop relying on debt. So a lot of times people tell us, hey, I didn't actually need to even use credit card debt. I didn't know that before because I didn't know my numbers. So we want you again, stop relying. That is the key term here. We want you to go throughout the month knowing that you can pay cash for everything and you don't have to use credit as a crutch. Yeah, I think that it's really important because you don't know necessarily how to budget. You're not really sure.

15:47You don't have the time. You don't have the energy to deal with it. So you just use credit cards as a budget and you just rely on it in that way. It's, again, like Vanessa said, usually it's not because you can't afford to pay for stuff in cash. You just don't know if you can. You don't have a system. We want you to change that. Be your own bank to become the kind of person that doesn't rely on debt.

16:06Vanessa: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. Everybody 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.