How to Stop Living Paycheck to Paycheck and Get One Paycheck Ahead | 510

0:28Do you make good money but have nothing to show for it? 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.

1:00We 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 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. So if you didn't know, what we are here to talk about today is to stop living paycheck to paycheck and to get a paycheck ahead. Everybody's favorite topic, Vanessa. Yeah, I think this is one of the things that we get asked probably the most. How do we hear you say, get a paycheck ahead?

1:34How do you actually do that? How do I stop living paycheck to paycheck? So we are going to talk about that very specifically. We have a example budget to show you to help walk you through it. And so if you guys have a question, we love that you want to answer them while we're talking. We may miss it when we go back and scroll. So if you guys could hold your questions to the end so that we can see them all at once and we can try to tackle those, We would love that. So let's dive in and let's figure out how to stop living paycheck to paycheck. All right. So we already talked about that. So yeah, today we're going to talk about, yesterday we talked about getting clear where your money goes.

2:07Today we're going to talk about paycheck to paycheck, but raise your hand, tell us in the chat if you planned your accounts. The homework yesterday was to plan your spending and savings account. We wanted you to at least plan your non-negotiable savings account, and then we can get to the dreamy savings ones as well. We gave you a workbook to do your homework. So Nikki, you get a gold star. So far, one person did their homework. Good job. Okay, here we go. Done. Done, I did it. Done, did it. Okay, plan perfect. Get dreamy with it when y 'all do your savings buckets. It's fun. Oh, and opened. Yeah.

2:42She's that gold star, like double gold star. Yes, and honestly, opening them shouldn't be too much of a trial. If you find that you have to ride your horse to the bank and open a bank account, you need a new bank. Okay. I was just talking to a client today and they're like, we're going to have to go to the bank to rename the account. I was like, no, you're not. I love you. I love that you think that, but it's not true. You should be able to do most of this online. Just like you do your shopping. You can trade banking online for shopping online because it's the same. No nerd out. That's not on your good job guys.

3:12And sometimes just writing something down. Look at this monkey that's showing up. I don't know what's happening, but yes. And yes. I love that. See, I'm easily distracted. I probably should turn that off. But what we want for you is that you, you write it down, that really sometimes I feel like is like half the battle. It's like getting out of my head, making a plan, thinking about what it could be like, and then I'm motivated to actually do the thing. What we know is what your goals, 60 % of them happen if you actually just write them down. So same thing here. If you're planning, if you're hoping and wanting to open those accounts, write it down, speak it to life, say that this is what you're going to do and be the type of person that is going to make that happen, right?

3:44Shayna said yesterday, even if that means you're putting$5 or$10 in that account, you are now the type of person that has separated their finances, you're organizing it, and now you're going to move to the place where we're going to do automatic transfers. Yep. All right. And so again, today we're going to talk about living paycheck to paycheck, then how to get a paycheck ahead. We're going to do a giveaway. Then we're going to do the Q &A and we're going to give you some homework. Yep. All right. Let's dive in. Okay. How, okay. Wait, do you guys remember the comedian? Here's your sign. His name is Bill something.

4:14Maybe you don't because you're probably all younger and not dorky like me. But anyway, here's some call me old. Did you remember? Yes. Okay. Then you're old with me. Sorry, friend. Love you. Sorry about that. Okay. Anyway, it's probably because your parents were watching it. It's fine. Okay. Signs you're living paycheck to paycheck. You guys, if every money decision is based on the next payday, guess what? You're living paycheck to paycheck. And that's where we find you guys come to us with that sort of mentality. It's okay, but I got to wait till this payday to do this. I have to do this payday.

4:43Or I'm like white knuckling it. There's no money anywhere until I get paid. That is a sign you're living paycheck to paycheck. We don't love that for you. Yeah. And also, if you're reacting instead of planning. So if you're the type of person that you're just figuring out what's in the bank and then making a plan after you see what's going on, that is reacting. We're not planning ahead. We're not saying, no, this is what's going to happen with my money instead of just our money happening to us. Then that obviously means that you are living paycheck to paycheck. Another thing that can make you feel or let you know that you're living paycheck is the constant decision fatigue.

5:14I love the friend that told us, I don't know what her full name was because it was abbreviated, but told us that she does a nosedive after she messes it up. It's because of the decision. It's not, oh, I clearly can do this or I clearly cannot do this or I clearly did this, but all I have to do to fix it is this one simple thing. It's, oh, I think it's not right. Therefore, I will just not make any decisions again for the rest of the month other than to just make maybe bad ones or self-sabotage or whatever. And it's because you have that weight every time you want to spend money, every time you want to make sure that you can afford this or the other or whatever, it's you have to fight through a cloud and a spider web of decisions.

5:50And guess what? Nope. Like we're right here. Like we're right here with you. We don't have any extra time, energy, like brain calories to make decisions. They already need to be made whenever like we were well rested that one time two years ago when we were well rested that time. That's when the decisions need to be made. We can't do it in the moment. And that's why you're feeling this way. And that's why it continues to be in this cycle. Yeah. And also, if you cannot say yes to spontaneous things, if you can't say yes in the moment because you want to say yes, because your money is so tight and there's no wiggle room at all and you have no savings buckets and all that, then you are living paycheck to paycheck.

6:24So what we want you to do is have that money set aside and have that money coming in. So when you're a paycheck ahead, everything is just rolling. Money's coming in, money's going out. And you can say yes to things because you know the cash is there. Yeah. Okay. Another sign that you're living paycheck to paycheck is that you're one unexpected bill away from panic. We talk about that with our savings buckets. We really try to help you get all the quote unquote unexpected bill, unexpected expenses figured out, planned, all of that. But a lot of times we're just spending everything we have because we're not thinking about that.

6:57And then when these things that are quote unquote unexpected, then we are just in panic mode. Right. And so we want to help you get out of that cycle, too. Yeah. And then also if there's absolutely no clarity in what's happening with your money and what's going on and there's no peace, you feel no peace. You always feel stressed. You always feel you have a weight on your shoulders about your finances. I had a session this morning with a lovely lady and she said that she's a brand new client. I'm so excited to work with her. And she said, I'm only dealing with my finances. She's like, finances stress me out, period.

7:25I'm also dealing with mine, my aunt's and my mom's and rental property. So business. So She has four different types of finances that she's dealing with, and she hates all of it because she's so stressed out. Yeah, I'm stressed out too. Gosh, one is enough, right, to stress you out. Okay, so let's move on and talk about getting a paycheck. What happened here? Oh, I don't know. That was fun. Okay, let me see. What was that? What was the other one? I don't know. They're the same. Okay, there's some more signs we want to talk to you about. You, let's see, what does that say? Your budget. What does it say, guys?

7:56Plan is to make it to Friday. Oh, gosh. That's definitely. Raise your hand if you've ever said that. Raise your hand if you resonate with that. My budget is if I just can make it till Friday. We believe that's probably pretty common for so many times. But then another one is you're afraid to put bills on autopay. Vanessa, people are often afraid of that. And they don't want to believe us that this is going to be a magic in your life. You don't need to be waiting or wasting so much energy thinking about what day it's going and manually doing it. But if you're afraid to do it, it is a sign that you're living paycheck to paycheck.

8:27Yeah, we have a lot of people that don't trust the process and they physically cannot do auto pay because it'll make them sick because they don't trust that the money is going to be there. Another sign is that if you feel rich for 24 hours every two weeks. So if you know you've got cash in the bank the second you got paid and that's about it. So 24 hours lapsing, you're done. Then listen, we got to change that feeling. Yeah, and we do want to change it. So what we want you to do is get used to and this is going to be a transition. We've learned with you guys, all of us, that you are so used to that feeling.

8:56and we talked about like your like nervous system regulation before you're so used to that feeling of just spending everything and everything leaves so quickly that once we show you how to get a paycheck ahead once we show you how to set up your savings bucket once we show you how to get get to the point where everything is just automated then you might get have you might find yourself having a little trouble having money in the bank people get weirded out about that but it's going to happen we can do it another one is if you tell yourself next month it's going to be different but it happens every single month.

9:26That's why you're here now. This is like the same when people say, oh, I put$300 in my savings every single month as soon as I get paid. And then five days later, you're taking it out. If you're doing the same thing, the definition of insanity is doing the same thing over and over again, expecting different results. We want to change that, right? We want to tell yourself that it's going to change and it is going to change because you've done something different. Yeah, and then so another one is you find yourself using the billing grace periods. A lot of times when we start with clients, that is what they're doing.

9:52They're like, I don't pay the mortgage on the first because I have 15 days. And I usually don't get it till the 6th because you're not a paycheck ahead. Or they're using different grace periods with different bills, maybe credits, cards and stuff in order to wait till payday drops and they can actually pay it. How many of you guys raise your hand in the chat if that is you? If you're like the due date is actually the grace period due date. So let's because we do have a lot of clients that start there. So tell us in the chat and we'll go on to the next one. If you find yourself using. Sorry. If you're afraid to spend money.

10:21How many people do we see that chance? they are afraid to spend money, but they get so frustrated at some point in the budget or during the month, they end up spending money. Then they feel that bad that they spend money because they didn't have it. And it's like this whole mind game that they play with themselves over and over again. Yeah. We're not here for you to feel bad. We're over that. We don't want that for you anymore. So we're going to work on that by showing you how to get a paycheck ahead. So the basic steps here, Vanessa, let's go through them. All right. So the first thing we want you to do is obviously you hear us talk about this all the time, we want you to use that last paycheck of the month for the upcoming months.

10:55Okay. So that means let's talk about December really quick. Most of you got paid either on December 19th or December 26th and Friday. I want to show them. So really quick, like the basic deal is like that your last paycheck is going to become your first paycheck. You're going to add a catch-up line into the new month and then you're going to keep it going. So let's show them because that's what Vanessa was fun. Oh, that was a fun time that we just did. I don't know what happened. Keep talking. Okay. So yeah. So the idea here is you guys got paid probably December 19th or December 26th. That is the last paycheck that you guys received in the month of December.

11:31So what we want to do is we wanted to use those for January. So what we do is we put that line item in the budget. February. Put that line item in the budget as the first paycheck of the month. Okay. So when you look at our budgets, you're going to see it's probably going to say like December, I will say that January 20 something or February 20 something. It's always the month ahead. Right. So that's what we're going to do. And then you guys are going to use that next paycheck. So if you got paid on December 19th, then that means you got paid again on January 2nd. What if those with the only two paychecks, Shaina, that you needed to fund the month of January?

12:11And then you were done funding your entire month by January 2nd. What if that was a thing? So just imagine what that life could be for you. And I actually want to show you guys that don't worry about how cluttered this is. I want to show you right now. Can you guys see the calendar right here? Don't worry about this. The rest of it. Right now, our clients got paid on the 19th of December. That was their first paycheck for January. Then they got paid on the 2nd. And then they're also getting paid on the 16th. They're getting three paychecks in January and they're a paycheck ahead because then the January 30th is going to go for February.

12:45And this is a good month to be able to get a paycheck ahead because you're able to have three pay periods going on in January because there's five Thursdays and Fridays each and throughout the month of January. So this is a great month to be able to get ahead because if you can use that January 30th paycheck to be the first one for February, just like Vanessa has written here, then you're a paycheck ahead. Yeah. So you guys see that? So there's two different people. There's Sarah. She gets paid once a month on the first. So that's her whole paycheck's going in. And then Mike, so this is February's paycheck.

13:16This is February's budget. He got paid on January 30th. And then he's getting paid, oh, it's supposed to be 213. Sorry about that. 213. So he is automatically already a paycheck ahead for the month of February because that 30th paycheck coming in January is what we're using to start the month with. And that's what we want. So like Shana said, if you guys aren't a paycheck ahead, January is a great month to be able to do that. Yeah. So if you think, let me look at one of these January budgets. So the way this would actually look, let's see, all of these are due really early. So I'm going to click that we paid all of these bills in like we're in January, right?

13:52And we're fast forwarding like it's almost February, right? And I want to get ahead. I want to get that paycheck ahead. So I'm saying, look, all of these things got paid except for here at the end. I'm just going through and updating my January budget, right? Everything got paid except for the last bits here. And I, so I have these things I'm looking here at the end of the month in order to move it to move those. That's what we're talking about with the catch up. I'm putting, I'm not putting January 30th paycheck in here. I'm not doing it. I'm going to put it in my February budget, but I'm saying, okay, if January 30th was supposed to pay, maybe I'm late on some bills, maybe whatever, maybe these are all due on the 30th.

14:32Then I'm adding these all up and it's $454. So then I'm taking that and we put it, we buffered it, but we can put it real quick just so you can see it. We said, okay, I'm going to put those catch up. That's how much extra bills are going to happen in February in order to catch up and get a paycheck ahead because I put the January budget or January paycheck in the income for February. So I hope you guys caught that. I'm going to reiterate what she said. It's basically taking, okay, in the month of January, these are the paycheck. These are the bills that are going out that I know that I need that last paycheck to cover because I've already blew my money or spent it or whatever.

15:08Okay. So I'm going to take that bulk of money, add it up, put it in the upcoming month's budget. Like Shannon just said for 454 and go ahead and start to be a paycheck ahead starting in February, because I already said, I'm going to catch up. I'm going to help myself catch up with those bills, but it's going to be in February with that last paycheck. Yeah. So let us know if that makes sense. The other way that I've done this is I'll put like January gym, right? Yeah. Like if you feel like you need a little bit more clarity so you can visa, whatever, and then you can just list them out over here.

15:41Just there one time we're getting caught up and then I'm always going to be a paycheck ahead. See, let us know in the chat if that makes sense. But this is how you get a paycheck ahead is you just move that last paycheck of the month, you move it over to the new month and any straggler bills you can move over to. And what might happen is you might not be able to save as much that month or you might not be able to pay extra on debt because you're trying to use all of your quote unquote extra money to get to the point where you can be a paycheck ahead. And why do we want to be a paycheck ahead? We want on January 30th, we want that paycheck in there ready to pay all the beginning bills of February.

16:15We don't want to wait. Otherwise, we'd have to wait till the 6th, maybe? Or the 13th. Or the 13th for your first paycheck, quote unquote, of February, which is not great because that's why you're using, that's why you have no money. That's why you're using grace periods, all of that. I want to talk about that for a second. For those of you guys that are, that would budget your paychecks like normal, okay, and say, okay, my first paycheck in February is the 13th. Tell me how that's working. You have 12 days, 12 days of bills that are due, right? So we have to have a paycheck before that to be able to fund that month.

16:51So that's what we're wanting to do, okay? Again, February 6th, if that was the date, you have five days of bills. Most likely your mortgage or rent is in there. So we need the paycheck ahead, the one before that, to be able to fund all of that stuff happening at the beginning of the month. Yeah. And so ask for questions in there. Some people said, I'm trying to wrap my brain around this. It's a little overwhelming. Other people seem like they maybe get it. They're just putting going back that last paycheck of the month. We're putting it into the next month. That's as simple as we can break it down.

17:20The only confusing part is if you have any bills left from that month, you have to put them into February. So even though it was quote unquote due in January, that January paycheck, and this is a hard one. This isn't as clear because it's right on the date. So the other deal would be like, if you go back, look over here, guys, can you see December? This is where I want you to look. December 19th, that would have been the first paycheck for January. So that's a little bit more time and a little more wiggle room. So you would have had bills due on the 20th. Right. All the bills that were due between the 20th and the 31st that you needed that 19th paycheck to pay for.

17:53That's what you're going to add up and add into January's budget. And that so just depends on which month you do, when the paycheck was. Any other bills that were due after that paycheck, you're going to move them over to the next month. Yeah. But again, this is why it's great to do it this month, because January 30th, that's one day. It's a long month. That's one day. You have three paychecks if you're getting paid every two weeks to work with. Okay. I will tell you, too, I just had a session with a client yesterday and they were in the same boat. We were adding all their money for December. We were closing out December and really looking at January again to make sure that it was on track.

18:22And I said, Liz, you're missing like a thousand bucks. Like what happened? And it was because Christmas went OK. They had they went out of town, their kids, they went to go visit their kids and stuff and they spent more money. She said the money was sitting in bills. And I forgot that it was our last month's paycheck that was supposed to fund January and they ended up spending it. So we needed to do a catch-up line again in her January budget to fund all of the stuff that she paid for in December that was supposed to be paid for with December's money. And I will say that would be different for me as a coach over here.

18:51I would be putting extra spending. So it's like a little shady. Oh, I did that on her. But it's not that shady. You know what I mean? Like, catch-up is too nice. If you spend money in your bills account, we have to account for it. So we put extra spending in here. But I do want to say, this is part of what we're talking about, getting used to having money. You have money pooled in there getting ready to pay all your bills so you don't have to pay them late. You don't have to use grace periods. You always have money. That's what we are trying to accomplish with this. It's revolving. So what you want to make sure is that money is coming in, money is coming out.

19:22And this is what I want to show you with the budget really quick. People get really confused about making a budget and they're trying to be so precise. All we're saying is with this money, we're doing this with it. So if you guys have stuff listed in here, like on these line items that are taking money out, but it's not equating to like using this money to pay for it, then we have to make a budget that matches. So all of your income needs to be listed. Everything that you're using the money for in that month and then everything that you're deducting from it. Okay. So let's see if we can get our slides back.

19:56And I know we're going to have questions. Let's see where we're at here. We are going to present. I'm super pumped. All right. Let's see. I think we're on day one. Oh, awesome. Please hold calm. Guys, we're really good at technology. I don't know about you. Okay. Here we are. Okay. So yeah, so that's the idea. The last paycheck of the month becomes the first paycheck of the month. You are, if you need to one month catch up on any remaining bills that are from the last month, you're going to put that in your budget and then you're just going to keep it going. So now what's the February? So what's their last, their next paycheck?

20:28Their first paycheck of February or March would be? First paycheck of March if they're getting paid on what cycle? Yeah, what we were just saying with the 30th. January. So January, then it would be February 13th. And then so February 27th, paycheck is going to go towards March. That's going to be the first paycheck of March. And that's how you just keep going. Keep it going. And then March will be the 13th. And then March 27th, just because it's double. Remember, March 27th is going to be for April. All right. We need our giveaway person. We're excited. Drum roll, Michelle. We need our giveaway.

20:58She's going to help us out with that today. Oh, Michelle. Yeah. Are we ready? What was that? We are ready. We are ready. Let's do Patti Bell Hastings. Oops. Yes. So if you will email us, what did you say? Annabelle? What did you say? Patti Bell. Patti Bell. Patti Bell. Go ahead and email us at hello at budgetbesties.com so we can get you your gift card. Yes. Let me know actually in that email if you want an Amazon, Target, or Starbucks, and I'll send that to you. Okay. Now, we just, we understand this is a hard concept. We also will have another podcast coming out with it just to keep reiterating it because it is a game changer.

21:37Knowing that you're ahead is a game changer, but we understand it a lot, right? Some of you said it was overwhelming. So let's go ahead and answer some questions. Okay. If the system is purchased, Lindsay asked, can you use it for multiple accounts as in a personal? Yeah. We just make two copies, use one for business and one for personal. That's what we do with our clients. So that was a great question. Michelle answered that. Thank you, Michelle. What if I'm already behind on January rent? I need half, but from the next check. Okay, so you're just going to build your January budget regular and try to get to the point where you can get ahead the next month, right?