Pay Off Debt or Save Money? How to Budget for Both Without Giving Up Vacations | 619

0:00Sometimes it was short maybe$4 ,000 in a month. You have$50 ,000 on two different credit cards and you're paying 29, 28, 30 % interest. If you know that in five years this is going to happen again, how about we figure out how much money you were shorted for six months and we take that divided by the five years and you start saving money now? Booking the trip does not mean it's paid for. It is okay to pause putting all this extra on debt to fund the thing that's coming up in cash. It's still a win. Do you make good money but have nothing to show for it? Are you tired of living paycheck to paycheck?

0:36Do 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? 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.

1:06We'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 mortgages.

1:38And 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.

1:50All right. So I have a client whose paychecks have been a lot smaller the last six months because he's a pilot and they were going through some trainings and apparently they do this every five years. They cycle through and put them through this training program, which means that their paychecks are a lot lower than normal. But when you're used to living a certain way and having certain expenses, think about what that does to you. And I'm not talking about like maybe short by a thousand. Sometimes it was short, maybe a$4 ,000 in a month. So this is a huge dent in their budget. And that's actually when they signed up for coaching because they realized something that they were doing was not working and they were trying to compensate with the lower paychecks by using credit cards.

2:34So the amount of money that they have racked up in six months with his paychecks being lower because they did not account for that. Anyways, it was really, it was, I was, I was feeling for them. I really was hurt for them because again, when you're used to living a certain way and it's not, I'm looking at their budget and it wasn't outrageous, right? It was just a regular month's budget. But unfortunately the things that they were doing were big. His wife owned a boutique, very successful boutique, but that also comes with costs. And sometimes you need to help them help that. There was a lot going on, but he was getting finally a regular paycheck again.

3:12Yes. After a very long time and he was very excited. And also they had property that their family was selling that was part hers. So they were getting a big lump, a big clump of money that was coming in. And so we got on the call And she said, we really want your opinion on what we should do with it. She's like, however, I will say that when my husband was deciding what he wanted to do with it, all I kept hearing was you out of his mouth. Because she said he kept saying all this stuff. And I was like, that's exactly what Vanessa would say. And so I thought that was really cool. That's the whole point when you're with coaching is that you hear us coach you.

3:46You hear us work through the problem, how we process stuff, how we ask questions. And then by the end of it, you now have that knowledge and you are able to make these decisions on your own. But anyways, they have a good amount of credit card debt still from the past six months. And so they were asking, how do we handle this new income coming in? What do we do with the lump sum from the sale of the property and then also his new paychecks? And they really wanted to fund all their savings buckets. And I said, I understand where you're coming from, but also you have$50 ,000 on two different credit cards and you're paying 29, 28, 30 % interest.

4:23We've got to take care of some of this because that money sitting in the bank account is not helping you when you're paying all this money every single month. So we had to work through that. Yeah. And I think that you had mentioned we also have to come up with a plan for when these paychecks go back down, right? Yeah. And this happens a lot. We were talking about on another podcast. A lot of times people use bonuses or these times that's when you're actually able to fund a lot of your life. And so in this instance, you need to look at what the difference is between when I have and have not months.

4:53And if having a$1 ,000 credit card payment gone actually makes those months where you have less money so much easier, then that definitely would be a good plan. Yeah. And I even told them, I said, OK, look, if you know that in five years this is going to happen again, how about we figure out how much money you were shorted for six months and we take that divided by the five years and you start saving money now. So that way when it comes again, savings bucket for the future, you have it. And that idea had never occurred to them. And so that was really interesting to watch them process. And I love when we throw suggestions out there and I'm watching the wheel turn in their brain and we can see them and the light bulbs go off.

5:32And so it's a lot of fun. But we have very exciting things we want to do with our money. But sometimes the boring answer is the one that we have to go with. And so for her, the boring answer was we need to pay off the debt to allow the wiggle room in your budget to give you the freedom to do other things. And unfortunately, that is just it just it is what it is. Yeah. And this makes me think a couple of things. First, we have our membership that if you have bought our budget, you can come be a part of. And this is the kind of question that you would bring there because this is it is very subjective.

6:06So obviously, we always tell you start your savings buckets, the ones that you know are going to happen before you pay off debt. OK. And those are like your minimum ones. And then you want to look at debt. All of that is a lot. There's a lot of factors that go into deciding that, which is why having another set of eyes on it is always helpful. and you can run ideas back and forth and we can give you some insight here and there. And so if you can't do coaching or if you're done with coaching, this is a great place to be to come bring specific questions like this because everybody's budget is different and everybody has different factors that are going to make those decisions different for them.

6:44Yeah, because we have those weekly office hours available for you to come and ask questions. We have membership only events that we'll be hosting. So there's a lot going on in there And we also have some membership exclusive offers. So it's a great way to stay plugged in. Like Shana said, it's only for those that are graduated clients and those who have purchased our Simplified Budget System. And these questions, when you're stuck in these moments and you're just not really sure what to do, it's a great way to log on and ask during office hours. It's time to enter your coaching era because making good money should feel like making good money.

7:21Yeah, 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-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.

7:54If 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. Yeah. And so I had a client that, okay, so a similar question, a similar thing, but the opposite happened, which, so I want to talk about it. vacation. Okay. So I have a lovely client and she's a nurse and I just love working with nurses. First of all, I'm so grateful that anybody will do that job. So important.

8:26I would never, I would die immediately trying to do that job. But so I'm really grateful, but also you guys make great money and you're able to increase the money you make if you want. So that's really helpful for budgeting, right? Yeah. So before, so she's doing coaching, but she already had a couple trips booked before we started coaching and which is fine. She makes really good money. Nobody is at all saying she shouldn't go on these trips, but she came in wanting to pay off. She has a lot of debt and she wants to start tackling it because there's been a bunch of reasons why it's stacked up, but now it's time to pay it off.

8:59And she really wants to be aggressive about it, but guess what? We can't pay off the debt until we fund these vacations that you've already put into the books. Already committed. Yep. So we've got to start. We've got to make sure we're being realistic with those numbers, put them in the budget, figure out that those are all funded. And then with it, because for example, I think she probably made$5 ,000 last month more than she normally does. And that's pretty typical if she wants, right? So that's a good chunk of change, but we've got to make sure it's allocated properly. And then it gets to go, it gets to go on her debt.

9:31And that's what we always do with coaching clients is we triage it for you. Okay. So you have debt that you want to do. You have savings buckets that you want to do. You have dream savings buckets that you want to do. You have stuff coming up next year. There's a lot. And let's put it in the order of priority according to you and your family and your goals, right? So for her, she's like, it's basically already funded because I bought the tickets. I've already bought the tickets. That's cute. I love that. I love that. I love that. Let's map that out really quick. And then we need to fund for the activities you're going to do there, the travel from, If you're flying to and from the airport, food, entertainment, like I said, and then anything else, spending money, like you want to get souvenirs or you want to go, whatever, stuff like that.

10:10And so her original estimate of how much we needed to budget was$2 ,000 short. So that's what we're saying. Let's be honest about that. And for all of my clients that are making good money, I'm just like, we're not here to say don't spend the money. I just want you to be realistic. Don't say I'm going to spend$1 ,000 and then you come back to me and I have to update$1 ,000 on a budget to figure out, right? Let's be upfront and say, I'm going to spend$2 ,000. I know myself. And then if there's any extra, I will definitely help you figure out how to put that on debt, right? We will help you at the other side, but we don't want to underestimate it.

10:43And then the other thing that we did is once we figured out these two trips, how much money she needed, those are going into your savings bucket. They're going separate. They're not going to be in the bills account. They're not going to be in spending. They're in your savings bucket waiting there until you take the trip. And then you'll use that. you'll transfer it to your spending which whatever amount for that specific trip but it needs to be separated for the love of god yeah oh yes it's gotta go i love how i'm gonna just spoiler alert she's going to paris super jelly i know i said can i go on all your trips i know just come we'll be your financial advisors on your trip no i think that is it's really important for you guys to understand that booking the trip does not mean it's paid for there's so many other things that come along with that.

11:25And again, we are not here to say no. That's not what we want to do or love to do. I don't even like to say no to my kids. I can't tell you no. I know. I have a story later I'll talk to you about. Last night I was telling my husband, I was like, I want to be that mom. And he's like, I love that you're that mom. Because I just wanted to spoil my kids and all their friends. But anyways, I think that you need to be super realistic and just humble yourself when you're looking at vacations or whatever it is, travel sports, anything that you're looking it thinking, oh, it's only the registration fee.

11:53It's only the flight of the trip or the gas or whatever. But no, because my girlfriend and I last year, we went on a cruise and we never got off the boat anywhere. And we racked up that spa bill, girl, like you've never seen. And I had the best time ever and I didn't care. We went to the spa every single day and that was the plan. We knew it from the beginning and I don't regret it at all. But I knew that going into it. I was very aware and very okay with the fact that's what we were going to do. And you just, you have to plan for that. And also plan extra just in case, because you never know things happen in the moment and you want to be able to say yes.

12:32I was just thinking about your spa trip vacation. I want to go on it. And, but also I had a client this last week. She was going to San Diego to visit a friend and she's bougie. She's like, I'm not bougie, but she is. And so, but that means on this trip, She will also be visiting. So the last trip they went and got a cabana wherever they were and rented that and then whatever. Champagne. I don't know what people do. They're living that best life. Yeah. Single ladies. And so she got home and she's like, gosh, I spent$300 today. How did I do that? And also I think maybe she was hungover. I don't know.

13:03Anyway, it's whatever. It's whatever. It was like regret, right? Yes. And then her girlfriend is texting her like, hey, we're doing this again tomorrow. I'm ready to party or whatever. She's like, get ready. I can't. I can't physically. I can't financially. Anyway, so that was the last trip. So she's going on this trip knowing we had to put it in her budget, the bougie friend. We got to be realistic about what it's like to keep up with this bougie friend. Now, I will say this is really good on her part. She ended up cutting her vacation a couple days because it was just it's super close. So she rebooked her flight so that she wasn't there for two days because we're working on some things, right?

13:36We're working on paying some bills and guardrails and guardrails. So that was really good on her part. And instead, she's going to come home and do Uber to make money to do all that stuff. So really good. That was all her decision. But we're just saying, be realistic about your vacations, budget for them properly, separate the money. And then and then if you want, if you paying off debt is actually your goal, then act like it. I mean, does that mean? No, I don't think that's me. I think that, like Shana said, if you already have these things on the books, like sometimes you have a wedding that you literally can't get out of because it's your brother or whatever.

14:09And we understand that you have expenses coming up, but also you're trying to get out of debt. it is okay to pause putting all this extra on debt to fund the thing that's coming up in cash. It's still a win. You're still winning. You're not going backwards. You're not like taking a wrong turn. It's none of that. It's just that we're pausing for the moment. I had a guy, we talk about this a lot in the past. He came into coaching and he said, I will do this, but I'm not giving up my vacations. And I was like, fine, but I'll do this. And I was like, I'll counter, I'll do this, but you're paying for all the rest of your vacations in cash.

14:40He was while continuing to pay back his previous vacations, paying all his debt off. Could he have done it in half the time? Sure. Did he want to? No. Did I force him? No. Because he was having a good time. But it's just about enjoying the ride and knowing that just because you're not going quote unquote as fast as you think you should be because somebody else is telling you you should be living on rice and beans and scorched earth mentality. No, that's not what we're about. Don't love that. And it occurs to me that he was single, ready to mingle. He really was. Anyway, but this is what these are.

15:13You guys are great candidates for coaching. Obviously, married folks are, too. And there's a whole nother reason for that. But he didn't have anyone else to have eyeball this and give him some ideas and some input and all of that. So it's just nice to have someone that you can talk to. I actually think that is good for coaching or for the membership. Vanessa is like, where else can you have these conversations? No, you don't just walk up to your girlfriend at church and be like, look, I'm thousands of dollars in credit card debt. Let's talk. It's not going to happen. Or like somebody we're going to talk about later on another episode, I'm using after pays to pay for groceries.

15:44Those are not conversations that you can have with everybody. That's why we're here. We want one. We want all of those pains to go away. But we are here so that you can talk and we're hopefully like your bestie. So it's no judgment. It's a simple like a no judgment, easy conversation, hopefully. But it's not something you can do with anyone else. So it's hopefully that's what we can provide for you. So if you're thinking I bought the budget system and I was a coaching client and now I just need that extra accountability. Come to our membership. So check your email because everyone was sent a link or email us if you want.

16:15Also, you can check into in your Thrivecart portal. If you have the system, there's a link there that you can get it. And then if you're thinking, no, I know I need that one on one attention. I know I need the accountability. I need somebody in my stuff with me holding me accountable with multiple sessions a month. Go to budgetbesties.com forward slash coaching. Let's get a free call. 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. You'll get a personalized result and a simple action step to help you feel more organized and less stressed.

16:47Go 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.