How to Pay Off Debt Without Going Back to Credit Cards | 583

0:00There is no point in trying to attack debt aggressively if you don't have money saved up for the things that are about to come and hitch. That's going to basically send you back to using credit cards. That's not the first step, guys. You have to get your savings buckets figured out first. Not necessarily, it's not cookie cutter, and there's not one path. Really important to us that you don't ever feel like you have to use a credit card again. 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?

0:30but 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. 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. 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.

1:05In 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 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.

1:33This is the Financial Coaching for Women podcast. My first lesson here, guys, okay, okay, is that there is no point in trying to attack debt aggressively if you don't have money saved up for the things that are about to come and hit you, right? And that's going to basically send you back to using credit cards, which is probably why you got in credit card debt in the first place. This is very hard for some of you, especially some of you that have been listening to Dave Ramsey, who's telling you that all you're going to do is pay off debt and you're not going to look up and you're going to do anything else.

2:03That's not the first step, guys. It feels like it should be the first step. It feels like you want to get the debt paid off and we want you to get that paid off. Believe us. We take personal like joy and like dopamine hits when you pay off debt. So don't - Especially you get bonus points if you do it on the call with us. Yeah, we love it. Send me a screenshot. I want to know. Okay. But we have to get your savings buckets figured out first. And actually the order is let's get everything on paper. Let's get a budget. Then we need to spend some time making sure your spending is working. And some of you are going to go faster with this than others, which is fine.

2:34Like some of you are going to get it all because you've been listening to us maybe for a year and you're like, finally, I'm ready to do it. And you've already got it. But as long as it takes the first thing after you get a budget figured out is get your spending account set up and get the amounts to where they make sense to you. And they're happening and you've got the transfers and you feel comfortable with the different categories that you've set in the amounts and you're like, you're successful, give yourself that win. And then the next step is to get those savings buckets going. And as we've said a million times before, you're going to have your must have ones, you may not be able to do every single savings bucket that you want.

3:06We understand that. But you're going to look at your life and see what you know, you're going to pay you have to pay. And if and you're going to start saving for those, what we this is where we're saying we have to avoid you using debt, you using debt in the future, right? We want to make sure that you are saving for the things that you typically put on a credit card. And then, and only then, once all of those things are figured out, then we get to decide to pay extra on debt. Once it feels like your budget's running, you have your spending figured out, you're saving for the things that you need to have, then we can get aggressive on debt.

3:38But you can't do it before because you're just going to repeat the cycle. And it's really important to us that you don't ever feel like you have to use a credit card again. Yeah. One of the things that we love to say is that we don't want you to rely on credit. Okay. So relying on a credit card versus wanting to use it for points or whatever, don't get started, but if that's you, those are two different things. When you have to rely on your credit card throughout the month to go to buy everyday normal things, because either A, you don't have enough to sustain it like on a regular budget or something popped up and you either put that thing that popped up on a credit card or you bought the thing in cash that popped up and then you use the credit card for gas and groceries and everyday normal things, which normally happens, right?

4:19So we see both that happen all the time. And so what we want you to do is make sure that you're set up. You can't get out of debt if your budget isn't set up the right way. So as long as you have those upcoming emergency, you're saving or unexpected expenses that are coming up that you're saving for. So whether it's a vacation that you know that's already happening, soccer dues, whether it's, I don't know, let's think of something else, birthdays, Christmas, all that stuff that you know is coming up and it's immediate that you have to save for, get those on paper in your budget, part of your budget, and know that you're going to be able to save for them while paying off debt, because you can do both at the same time.

4:54And then once you've paid for those immediate things, then you can go, okay, what are things on a 12-month basis that are happening normally? Instead of now dividing the expenses by maybe two or three or four months, You can say, now I have 12 months to be saving for stuff. So that way it brings your expenses or your savings down throughout the month, right? So that way you can stretch it out and you have more money to play with. Yeah. And so I did have a client that she's been paying off debt a lot. She, we really, because of the nature of so many things going on with her business and her personal life, she hasn't super duper started savings buckets.

5:29She's been living by the, what is it? The hair on her chinny chin chin. She's getting her teeth or whatever you want to call it. I don't even know. However, she has, so she's paid off a lot of debts, but that was because we had to. And we want, she wants to start, or she wanted to go to the next debt. And I said, no, now that we've gotten a lot of this figured out and decluttered, and that's where she's feeling all the relief. Like, I paid off this, I paid off this. I only have these three left. It's like, yeah, that's true. You do. But if we don't save for the big property tax or this, whatever, that's coming up in two months, then we're not going to be able to handle it.

6:01Sometimes you might have to go back and forth or something new happens, and you might just have to take your foot off the pedal of paying off debt for a little bit to be able to save for certain things. But I really like to, and you guys should do this, list out your priorities, put them in an order. So you might say, Vanessa said, paying for vacation, and then I'm going to pay off the Amex. And then the next thing is, we're going to save, start saving for Christmas or whatever. And then the next thing is, I'm like, whatever your roadmap looks like, see and think about that. It's not necessarily, it's not cookie cutter.

6:30And there's not one path, But it is good to see like in my life, here are the priorities that are coming. And once I get this done, that's my next focus. Because we say it's hard to do a lot of things with your money. If you can really figure out with whatever's quote unquote extra in your budget, where you want that focus to be. And you have a trajectory. And then I have lots of clients that live. In six months, after I figure all this out, I'm going to be able to really start investing more. I'm going to be able to really start saving a lot more. And I'm really excited. But that's not, I'm not here this first, then this, then I can get there.

7:00Yeah, she had to get the wiggle room in her budget that she needed. So whether it was like an extra$500 a month because she paid off all that debt, now she doesn't have those minimum payments. She's able to take that and now disperse it elsewhere in her budget to be able to help her save for those unexpected expenses coming up. And that's really what we want you guys to do is just get that wiggle room that you need so you can do with it what you need. 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.

7:32No 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.

8:12Six months from now, you'll wish you started today. All right. I have a sweet, lovely single mom that is working with me, and she has some real estate investments. She has a little casita that is, I don't know if it's on her property or not, but she has a little house that she rents out. And she also has another house that she rents out long term. But she was so nervous about starting her spending count. Okay. So she, not that there's a language barrier, but she understands things a little differently and needs a little more of a simple plan. Right. Like we say, nothing is cookie cutter. And for her to be able to maintain what she needed with her brain and her kids and her life, what she's got going on, She needed one spending account to start with.

8:53So we met in the middle and we're doing that for now. Okay. And so she's got the one account with the money in it. And when we first started, we deposited, I think, a couple hundred dollars because she was about to get paid and I wanted her to have a little bit of a buffer. And then when her paycheck came, she didn't transfer money. Interesting. And she was so nervous. And she said, I didn't know what to do. I was so nervous. I was scared. I didn't know when I was supposed to do it, how much I was supposed to do it. And then she said, and then I remembered your recap and how you literally told me everything exactly how to do it right there.

9:23She said, I didn't pull it up. And I said, okay, let's just do it together right now. So the first thing we did was go back through her bills account to figure out how much money she had spent in her bills account for when throughout that time, because that's what she was using as her backup plan. And then we transferred the amount of money, the proper amount of money into her new spending account. And we set up automatic transfers to go in there every single paycheck. So that way she knew how much money she had to spend. She didn't have to do anything. It was all set for her, ready to go. All she had to do was use the debit card.

9:53And she was so relieved that we did that for her. We set it all up. I got it organized. We walked through her bank app. So that way everything was done. And now she knows that she has the cash to be able to spend. And she has, her son is coming into town. So she wants to pay for his plane ticket in a couple months. Her daughter is going somewhere. So our college visit, so she wants to pay for that. And she didn't think she had the cash to pay for it. But after looking at all of it and realizing that now that her bills are separate from her spending and knowing that everything is taken care of, I think that was the biggest relief for her.

10:24She needed to know that. She needed to know and have that security that her bills are being paid for, her debts are being paid for. And also she is free to spend all this money over here throughout the month. Yeah. And I think that the spending is the thing that we want to get across to you guys is you're going to spend the money anyway. So we get the fear. We get that this is new and we want to. You're like, I don't know. You're going to spend the money anyway. We might as well separate it and make it easier on your brain for sure. And the other thing is if you get to the point where you're a couple days into your paycheck or whatever, a week into the pay period that you forgot to do it because you didn't set it up automatically, so you don't have to remember, but whatever, fine.

11:00What Vanessa is saying is they went, they said, oh, my spending budget is$1 ,000. I've already spent$300, so I'm just going to transfer$700 to get through until the next one. And then that one, you better believe I'm going to set it up automatically so I don't have to do this again. So if you find yourself stuck in that situation, that's all you really have to do. Do the math. The other thing I was going to say is a lot of times single moms, which there are single dads out there too, but we deal with single moms mostly. You might have a simpler spending account set up. I had a single mom that just did food.

11:29She says, I don't care if we eat out or if we're eating at home. All food. It's food. Detable. And I don't care. And then when we're out, we're just going to have to live with it. So it's really up to you what makes sense to you. if you need that first step like Vanessa offered just one account I'm only going to spend out of this account for two weeks or however often I get paid and I'm just going to figure this out and that's the first step fine do it it's the most important the best first step you can take is to separate the spending even if it's one account we definitely think it's going to help you to to further separate out of that your your groceries are eating out your personal spending and then anything for the kids at least those are the main ones that's going to help but if you need that first baby step, do it.

12:09Do it. You're going to spend the money anyway. I know that. So sometimes they're like, I don't have the money. But you're going to spend money. It's there. It's just all convoluted. So let's separate it out so it's no longer convoluted. Yeah. I'm just, I'm so happy for her. She was so excited to be able to go through this first time of after a couple of months of coaching and getting it all under control to be able to have cash to spend and knowing, like I said, that her bills are taken care of. So I can't wait. We meet next week and I I can't wait to hear about it. If you make good money but have nothing to show for it, this quiz will help you figure out what's really going on with your money and what your next step should be.

12:41You'll get a personalized result and a simple action step to help you feel more organized and less stressed. Go to budgetbesties.com forward slash quiz and take the free quiz today. That's budgetbesties.com forward slash quiz to find out what's really going on with your money.