How to Lower Debt Payments, Stick to Your Budget, and Stop Living Paycheck to Paycheck with Coach Michelle | 547

0:00All right, Michelle is back from office hours to talk about some wins, to talk about milestones, and to just go through some of the questions that we're getting in there weekly. Well, I just did a little dance, Michelle, to welcome you back because we love you. We just talked with you on another podcast because here's the thing. This woman said that she feels so alone doing her, even though she's married, doing her finances. And we said, hey, we have the best human in the whole wide world that does weekly office hours, and she can be there with you. She will be helpful. She will support you. She'll be in it with you.

0:31And that's Michelle. And here she is. Thank you.

0:34Coach Michelle:And you know what? That office hours group, the very best. We were talking about today that it's, you know, it's half strategy, half therapy, really. Because that's all the strategy that people are learning to how to organize everything and how to accomplish all those goals and get everything all straightened out and set up and automate it. But then there's the therapy of when can I spend that money that I've been saving up for so long? We talked about that today and that it's okay. And sometimes people just need to hear other people say, it's okay. It's good. This is what you're meant to do. Yeah.

1:13I think that permission of they have the cash. They're not really sure. Is it okay? Have they looked at all the numbers? And just making sure that that purchase or whatever they're going to spend the money on, like you said, is okay to do it because you've done the work to say that it's okay.

1:28Coach Michelle:Right. Right. And they just need that validation. And you know what? Nothing is better than having a group of people that are like-minded, that are on the same journey, that are learning the system as you are, that you've got a few people that are ahead of you in some steps that can help mentor you. It's a really nice group. So. It is. Okay. Well, let's talk about them. Let's talk about this group. That's the nice group behind their back. No, I'm just kidding. It's right. We're going to talk about all their wins, right? We're going to talk about their wins. Do you make good money but have nothing to show for it?

1:58Are 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? 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. We know what you're doing probably isn't working, but guess what? You're in the right place. We're Shana and Vanessa.

2:28We'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. 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 marquines.

3:04And 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. so we had a fun friend that hit the nail on the head with a birthday budget yes oh my gosh she could not have been closer yeah seriously she she budgeted for her her daughter's

3:28Coach Michelle:birthday and she was so excited to come back and tell us all about it because she budgeted right at 200 and she just hit it and she was i think more surprised at herself that she didn't go over than anything. And she just wanted to share. And it's a beautiful moment because those are hard things, right? Those birthday budgets because - You need to get influenced to spend more. Right? You see things, you're like, that reminds me of my kid and that reminds me of my kid and they need this, so they want this or whatever. So it was really cool that she could dial in, be realistic and then hit her number.

4:05Coach Michelle:And then she shared it with us. It was awesome. she came in like a dollar 95 under i think that's what you wrote here and i think that that's awesome because listen this may be the first time ever that she's budgeted an amount of money first of all for to spend on her kid for their birthday and then not only did she budget it but she also stayed within it and said maybe no to like you said all the temptation around it because it's our kid's birthday and sometimes we can go overboard and we want to splurge and but it's not it they don't they don't they don't need anything extra right the kids and it's fine to stay within that certain amount of money that you, that you budgeted for it.

4:38So I'm really happy that she was able to achieve that.

4:41Coach Michelle:It was really cool. Well, I think that we might surprise ourselves of what we're capable of, right? Maybe this is the first time you've thought about sticking to a specific budget for a specific reason, which means probably all of her other money was going to different goals and different things that she wanted. And if I do this$200, I get to do all of that. And I get to do this and I'm not putting it on a credit card. Like you're, You're actually, yeah, you might be capable of more than you think if you just start looking at your numbers, paying attention, and being intentional. Absolutely. So we had another friend who funded an entire trip to Disney without credit cards.

5:20Can we just get an amen? Right.

5:23Coach Michelle:I mean, what a rock star. Seriously. It is just crazy that you can do that these days because it's so expensive. But it was very intentional. she saved up ahead of time she knew she was going she had it in her in her planner right she knew she was going so she was saving up and she said it was just a fantastic feeling coming home after not just because she just had fun she had a great time with her family right she had a fantastic time but the coming home and not having that weight on her shoulders of oh no now i'm gonna to have to pay for it. Right. So that was awesome. I don't know if our listeners know that my, my first fun trip, whatever my first delving into all of this was paying for a Disney vacation with cash.

6:16And we, we slowly paid for it. One month we paid for the tickets. The next month we paid for the hotel, the next month we paid for whatever. And then we just set aside so much money that we knew we're just going to throw in the trash can basically by being there. Sorry. Love you all Disney people. But, and so that was our first, our first foray into, well, it was our first trip. We had never put it. We didn't use credit cards, but we would have otherwise. Right. But on the way there, we listened to Dave Ramsey and, and on the way back, we listened to Dave Ramsey. My husband still listens to Dave Ramsey and he came back, sold his car.

6:44We got debt free and it was all done. But what I want to say is when you go to Disney and you spend$15 on Kraft mac and cheese that they, you know, cost them 13 cents to make, but you spent 15 and that's all that your three-year-old is going to eat. You know, you feel a lot better when you've already saved the money and you already have written that money off. Right. Like I, like I said, you're already planning to spend it versus you on a credit card. Now I'm paying interest on this mac and cheese. And like, you could just like your, your anger level just to say level. And so, yeah, so I know exactly what that's like, but also we're really happy for her because you can truly enjoy yourself when you're paying for it in cash.

7:21Yeah. And I know she slept really good at night

7:23Coach Michelle:knowing that she didn't have that to do. Well, I think it's a different vacation. Like just even while you're there, it's a completely different experience when you're there knowing that you have the cash, you've saved it up, you become your own bank and you're funding this because you purposely and intentionally put money aside for it, right? Versus swiping a card while you're there, white knuckling it and you're stressed out, like Shayna said, because you're going to be paying for$15 mac and cheese for six months afterwards. Right. Right. Right. And then, you know, all this, the stress that it is on your family as well, because, you know, if, if money is a strain and, and you're there and you have to feed the kids and it's costing that much money, you know, that it's, it's just stressful and you're hoping that they're not really hungry that day.

8:08Coach Michelle:Right. Yeah. Yeah. And, you know, I think that the budget, like you said, the planner really helps you figure this out. So what you would do here, guys, if you want to do something similar is go in there. You don't have to get anything perfect. You want to ballpark this as best you can and say, okay, tickets, transportation, which may be airfare, maybe gas, lodging, what we're going to spend on money while we're there. Uber. All of that. Just get a ballpark and then start setting it aside each month. That's how she was able to do it. You know, maybe you get a commission and you put a big chunk toward it.

8:37Maybe you set aside$300 a month before you go. And then voila, you have all of this money ready to go when it's time. and you can just go enjoy yourself. Those for all vacations, right?

8:48Coach Michelle:Yeah. Most of those we're going to know ahead of time anyway. Yeah. Right. You're going to have to take time off from work or you're going to have to take the kids out of school if it's during school, you know, or whatever it is. So you're going to have to have it on your calendar. So you will usually have time ahead of a vacation to be able to. At least minimum, I think a month that people know ahead of time for something like this. Okay. So our next contestant from Office Hours, she said that she avoided depleting her accounts for the month. Can you kind of speak to that, Michelle, when she was there, when she was explaining that?

9:19Coach Michelle:Well, you know, she just was struggling for a few months, right? This guy, I love her. She is fantastic and she's working very hard to get control, right? And get organized. And she just did such a good job because these accounts she was struggling with were just the stuff like groceries, right? Just your normal, slump your groceries or gas. And so because she was not being realistic with her numbers, she was depleting them. And so then once she started being more realistic and once she started really saying, this is what it costs for our family, then the numbers weren't changing the way they had previously.

10:02Coach Michelle:And she still had money left in those accounts. And it was a real relief to her. I think she'd been struggling with that for a while because a lot of folks want to dial down some of these expenses. We all do. We all really kind of want to be frugal, but sometimes it's not realistic. Right. Certainly not for groceries. Certainly not today. And it's like you're setting yourself up for failure and you're just not being a nice person to yourself. Like you can't. Those groceries are expensive, friends. So this is not the time. And to anybody listening, we would say, go like over a little bit. If you did an audit and you said, okay, I think I spent$1 ,500, put yourself$1 ,700 on that budget, girl, if you can, you know, and most of you can.

10:46And then like this fun friend, you will be able to experience victory. I'm just feeling like a failure every month. And you're like, look at me. I have money left over. I'm so good at budgeting. A lot of people will come to us asking us, hey, how much should I put in my grocery account? And we're like, we don't know. It depends on where you live. How many kids do you have? What are you guys eating? I mean, there's a lot of questions that go into play here. And so like Shannon said, but the biggest thing is, is you don't want to set yourself up for failure. Why are we putting this small amount of money for gas and groceries and eating out or whatever kids, whatever you spend money on throughout the month, if it's not realistic, you're going to automatically feel like a failure.

11:20You're automatically going to say, I can't do this. You're going to think you can't budget. You're going to say, budgeting isn't for me. You're going to put all this shame on yourself and then walk away and then continue to do what you're doing, which obviously isn't working and continue to rack up debt. So it's like a whole cycle. Or you can do one small thing and put realistic numbers into your spending section of your budget and feel good when you don't go over or when you come under. Yeah.

11:44Coach Michelle:And I'm just really impressed because it took a while to get there, right? And she spoke some words about that that really hit home for some other people, really. And that's what's very important about that group. Well, I don't know what words she spoke, and I'm really thankful that she did. I remember telling my client earlier, I guess, gosh, it was last year. I was like, girl, you cannot spend a thousand dollars on grocery when you have four kids. Like, stop it. Unreal. And like, she needed me to tell her that. So listeners here, that is not enough. It's not enough. It's not enough. And Vanessa said, we can't tell you.

12:17I can tell you it's not enough. Right. When you have four mouths to feed and a husband, like the husband might be a thousand dollars all by himself. That's what I've learned. Anyway, so my son, my teenage son is probably a thousand dollars all by himself. So we're giving permission to understand groceries cost like double what they did a few years ago. It feels like, OK, so give yourself some breathing room. Put a real number in there. Stop trying to be this frugal Franny. Hey, see, OK, and you're going to be bougie on a budget. But also just be able to like this is important. This is where you need to be able to have money and be able to feed your family and not feel guilty or like I'm a failure if I'm not doing it.

12:50We're not we don't want that. Now, the other thing I'll say, Michelle, is we I like to start people off. I really like to start people off ahead or like over right so I remember my our clients that we had they they came in they were single precious like they were spending money like it was I don't know some sort of analogy that people would understand and I was like okay we're gonna put a thousand dollars spending money each for you like because they were they didn't have kids they made really good money and I was like and they they were like okay we'll do two and I'm like absolutely not look at what you're doing I'm not even doing that so they were spending like $3 ,000 or just spending money, money, money, money.

13:27I was like, we're gonna put$1 ,000 in your account every month. You're gonna be so rich. You can feel so good. And then also their eating out budget was really high. And I wanted them to feel like they were winning immediately. So they would come into the calls kind of like how this fun friend said, where she didn't have, she had money left over in the account, right? They would come in and like, sort of like have a competition. Well, I have more money in my spending than you because I did better. And that's the vibe. Okay, that's the vibe. And then they also said, Hey, because we don't want to spend$1 ,000 on eating out.

13:53We started going to Costco instead of Chipotle and getting their stuffed bell peppers, or I don't even, I don't even know what it was, but they were really excited about it. And it really cost them so much money. And they, they slowly walked those budgets down themselves, but as they got more confident and more, more intentional with their spending. And that's really, if you can, that's where we would say like, walk it back if you, if eventually, but don't start off like white knuckling. That's not for fun. That's not fun at all. Well, and I think when you, like Shana said, they made those decisions after seeing everything on paper for a little bit.

14:23It takes some time. So, but if you immediately start like, like slashing these numbers and starting off with very, very small amount, you're going to hate the process. And you're going to think that this doesn't work. Or the opposite effect is if you start high and realize, Oh, I actually don't even, I don't spend that much, or I don't need to spend that much, or that's kind of ridiculous. You know, she, she had a client long time ago and I had a family of six. They were spending thousands and thousands of dollars out to eat every month, which their budget allowed. But at the same time, she said, I don't care if we can afford it or not.

14:53I don't want to do that. That's not where I want my money to go. So again, it's just you seeing what's happening throughout the month, making sure you have a comfortable spending budget, right, for all those categories. And then you deciding, is this what we want to do? Or do we think that our money can go elsewhere?

15:11Coach Michelle:Love it. Yes, exactly. And we walk through those kinds of examples all the time. 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. No 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 our support, you can text and email.

15:47So 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. Six months from now, you'll wish you started today. So we had another person in office hours who said that she achieved a$2 ,000 surplus. She was a paycheck ahead in one month.

16:22Oh, let's talk about that. Tell us exactly what happened. Yeah. Oh my gosh.

16:27Coach Michelle:She was awesome, right? Right. She was just working so hard. And really, I think what it was, was she was so unorganized. It was all being dumped into one bucket. They didn't know what they had, right? They didn't know where it was going. But once things kind of came untangled, the accounts were set up and separated and automations are set up, then it's like, oh, well, look at that. Where did that come from? Well, what they found out was that once they were very, very intentional with that budget, they get that one page and they got everything on there that they want to do. instead of just swiping the card wherever once their intention they were being intentional then they found that they had two thousand dollars extra but they didn't know they were and they didn't know where it came from but it was because they were being intentional because they separated and organized those things and then they realized that that two thousand dollars was just kind of going out the door wherever before right or not or not pumped yeah so yeah that and she said that it was really just very eye-opening that the money was actually there we see we wear that a lot when people are like are you sure that i have an extra a thousand dollars right and i said well i mean again that's why we love budgets it's black and white the money numbers don't lie.

17:57And it just, but again, it takes putting it on paper and visually seeing it to believe that you have that cash available. Yeah. And sometimes there is an income problem, Michelle, but a lot of the time what we, what you see, what we see is it's not really a problem of that. It is literally specifically not being organized and not looking at your numbers, not telling your money where to go as to borrow from John, what's his name? Maxwell, you know, a budget telling it where to go instead of wondering where it went. Right. So if you're telling it where to go and then you have that sweet guardrail that we talked about with the groceries, with the spending, with the restaurants, whatever, then you're good.

18:30But everybody, for the most part, has a disorganization problem. So, for example, one of my clients, she was spending$2 ,000 eating out a month. And so, like, they didn't need to spend all of that. They didn't, like, that is a surplus that they were way over. But it felt like they weren't because they were unintentionally spending that. And it reminded me of my other clients. They had this terrible card. I'm not going to say the name because I don't want to get in trouble, but it was this card that you had to pay, like they were helping you because you had to pay off the whole balance every month.

19:00So they were helping you. You were required to pay off the whole balance. So they put everything on there and then they had to pay off like a$4 ,000 or whatever it was credit card. And that was all they're spending every month. And it was awful. And so we worked, I worked with them. And again, they made such good money. If I looked at their budget without that, they had so much money they were eventually able to put towards savings and like bulk up their travel and bulk up their Christmas fund and all this kind of fun stuff. But they had no idea because the credit card was allowing. That's just a tool of disorganization.

19:31You don't actually know what's going on with your money. You don't know if you have money. You're just swiping that card and hoping. And then you don't, you can't be intentional with your money. But once they put it all on paper and I showed them like, look at what it should look like. Gosh, you have so much money. You could do so much with it. And so like Vanessa said, that's the first step is like, get it on paper, see what's actually possible.