Should I Pay Off My House Early or Use My Money Differently? | 500

0:00Vanessa:Hey, Budget Besties, big news. We're hosting our live money makeover bootcamp. Yes. Picture this, a fun interactive hangout where we're breaking down budgeting, tackling your money goals, and setting you up to start 2026 on the right financial flip. Yeah. All in real time with us. We know you're juggling a lot right now. So we've scheduled this bootcamp for after the holiday hustle. So do your future self a favor right now and sign up at budgetbesties.com forward slash bootcamp. And then you can get back to the holiday hustle. Let's dive into a new year together with fresh plan for your money.

0:35Vanessa:Congratulations to us. It's our 500th episode, Vanessa. I can't believe it's been that long. I remember listening to other people's podcasts, who had 500 episodes, and I was like, how did they get there? Here we are. We're doing it too. So we are excited today to celebrate that. We are going to do it by reading some bad budgeting advice from TikTok and Reddit and giving you our take on it because we want to do something a little fun, a little different. What do you think, Vanessa? It's going to be a good time. Yeah, okay. Get some laughs. Do you make good money but have nothing to show for it?

1:05Vanessa: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 money. 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.

1:35Vanessa: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. 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.

2:11Vanessa: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. best we usually give you good budgeting advice but yes maybe this time it'll just be the worst budgeting advice you've ever heard or or myths you've ever heard so well the first one's interesting and i'm going to take this one just because it hits near and dear to my heart but uh so this person on tiktok shana is that what it says said you should never pay off your health never ever well that's a huge like um that's a huge thing for the the people that want to act like they're financial gurus or whatever out there I shouldn't say act like but the big money people they think they are there they are always saying you know the interest rate this and that and the other so maybe you should explain it and then tell them why you don't agree so basically they're saying if you took the money that you were going to pay off your mortgage with and you use that in investments you'll make more in return right so they're basically that's what they're telling you're going to make more in the long run if you take that money and put it towards investments versus paying off your house because there's less of a return.

3:18Plus their big caveat is, hey, you can claim your interest on your taxes and it's a tax deduction. Like that's still such small-minded thinking for me. Like I just can't. I can't wrap my brain around that. Yeah, and I think what is the deduction totally? Maybe$1 ,200 a year. I mean it might be more now. That you're allowed to. It might be more now. I don't know. But it's not that much of a deduction. But, you know, what this reminds me. So the bottom line, Vanessa is going to tell you, and I'm going to tell you the same thing, but she's actually paid off her mortgage so it's different is we do think you should pay off your mortgage but what it reminds me of vanessa is like we listen to entrepreneurs and they have like these people that want to be billionaires and they want to spend every waking money moment working and then there's lifestyle entrepreneurs and i feel like that's where we're here we're like do i want to like play this game so hard and and um see how i can max out every percentage or dollar?

4:09Or does my budget and my choices with my money want to match the lifestyle that I want? Which by the way, one of those lifestyles would be not having a mortgage. Well, and it's one of those situations where, okay, let's walk the path less traveled here. Because what is everyone else doing and how are they living their lives? Are they still in credit? You're using credit cards. Are they still stressed about money? Are they still, are they still, or why don't you look at the people that have actually paid off their mortgage and see how it's completely changed our life. For us, when we did it, I think it was eight years ago now, seven years ago, I don't remember.

4:41It was a while ago, but it was peace of mind. And it was that freedom to know that nobody was ever going to come take our home away from us. Well, the American dream used to be owning a home. And we're going to get into a little bit of that dream reality right now, but it's not renting a home. It's not paying a mortgage. It's owning your own home. And so that is something, and it's something intangible because if we're always going to look at the numbers. Let me tell you, if you look at the numbers don't have children because they only cost money, they don't make you money, right? You know what I mean?

5:10But no, of course, it's one of the most rewarding experience, the most rewarding experience that you'll ever have. Owning a home, this is a similar thing. It's not necessarily a math thing. It's not necessarily a mental thing. It is a feels thing. And we can't describe that to you, but you probably know inherently, like knowing that you own your home, knowing that you don't have to pay a mortgage every month, those things are worth more than whatever interest you might have gotten from doing it the other way. Well, and so many people, when my husband went to work and said that this is what we were doing, he had so much negative feedback and comments about it.

5:42And it was because of that. Well, you'll make so much more money. All the, you know, the men mindset, they've done the math and we're like, no, you're missing the point. That's not what it was for us. But the other thing I will say is that it opened up so many more doors for us. Like we were able to do so much more once that happened for us. So I just think that there's a lot more there. I don't agree with this at all. And so, um, I think we hit the nail on the head there. Yeah, I agree. Well, and so another, another person said, I have a chef that comes in and cooks for me every single day. And I call that a business dinner.

6:12Then I take a photo of that food, post it online. Now that's a business write-off. Okay. What? They, they, so that's like their proof that it's a business dinner. So, so then they can write, feel good about writing it off. Yeah, because they post it online. So anyway, the point being is this, you know, it's whatever kind of advice. But the deal is if you want to pay for dinner or someone to cook for you, it's fine. It just needs to be in the budget, right? Right. So we are always saying be bougie on a budget. But what we notice, especially with business budgets, is people are spending without understanding if they can afford it, right?

6:49Your business budget needs to grow at the speed of cash. So if you get to the point where you can pay for a personal chef, wonderful. and that's something that you want, wonderful. But it needs to be in the budget either way. Well, you know, people use their business credit card, business debit card, whatever, as this black hole of endless transactions. I'll just write it off. You still have to pay for it. Well, that's exactly what they say. Well, it's a write-off. And I'm like, yeah, but the cash has to come from somewhere. So it doesn't matter. It doesn't matter whether it's a business expense or a personal expense.

7:16You still have to use cash to pay for it. So then, again, you have to make a budget. If it's something you can afford, awesome. We are so for it. We're excited for you. It's less time you have to spend in the kitchen. But again, you have to pay for it one way or another. Yeah. And being bougie on a budget means something different for everyone. And I'm super fine with that. So let me give you a personal insight is I meal prep for my mom and she cleans my house. So I'm bougie, I guess, in that way. I cook for her and then she cleans my whole house. I don't think it's fair. I don't think the exchange is fair, Vanessa, but you know.

7:50Vanessa:It's a lovely partnership. Plus you go on a walk with her that day and you have lunch with her that day. Like it's a whole thing. It's a whole thing. But the point being, being bougie on a budget, you know, Vanessa, you had an assistant earlier in the year and we're going to try to bring that back for 2026, right? But we're not saying don't do stuff like this. It's just, it has to make sense for your budget and it has to make sense in your life and it has to be a priority. Like if it's this or we eat or if it's this or I can't pay off debt and I'm just going to be languishing in debt here, like then that's when you have to make those decisions.

8:25Vanessa:And I'm going to go back to my personal assistant really quick. Oh, can we get that again? Yes, I do want that again. And I actually, Shana, I'm going to tell you about this on the podcast too because I was thinking about it yesterday. I thought if I just go to her and say, what would it take for you to be with us full time? What's the price tag? Because everyone has a price tag, right? but if you guys can have a personal assistant it changed my life she was almost with me for a year and she had her own business and she was an entrepreneur at heart and at spirit so I love that we're so excited for her I know so we're so excited that her business was flourishing and she had to step away from from being my personal assistant it's fine but I it literally changed my life within the time that she was there and I saw so much value and it was priceless for me yeah yeah um I can't wait to talk about that more later okay so I want to talk about there was another one.

9:11I think what happened on Reddit was, you guys have heard people talk about how buying a home is not affordable for the current generation anymore, or the new young generation, I guess. I'm not sure what they're saying there exactly. And then there's a whole thing on Reddit about, well, if you, when I was trying to buy my first home, I wasn't buying smashed avocado for$19 and$4 coffee or four coffees at$4 each. And then somebody came back and said, oh, So avocados are why I can't afford a house. Now, I thought it was because our country, whatever. Our country was a, whatever, nightmare or whatever.

9:46So I don't really want to get into all of this, but I didn't buy a house until I was 30. And we had been working. I've been working at a career. You know, my husband had since 18. And that was when we could first afford it. We did not have, we had like a very small budget to go grocery shopping. I never went, I never even been in a Starbucks. We didn't eat out. We didn't have, like, we just, all of our money went to being able to afford a house, right? And I think that's kind of the mean vibe that they're giving. I don't know if it's still too expensive, even if you do do all that. I'm not sure.

10:25I haven't, like, tried to buy a house as a 30-year-old lately, but. Well, I think that it's just one of those things where decide what your bouche is, right? So if you want to continue to go to Starbucks and live, you know, buy avocados and do have personal chefs or whatever, but that's keeping you from affording a house, then that's the lifestyle you want, then fine. But if you really want a house and you need to look at your budget and figure out what's most important to you, I have a little bit of a different story. I bought my first house at 21. Yep. And, but it was the cheapest house in the neighborhood.

10:54And if you listen to Dave, he talks about, you know, try to find the cheapest or the house that needs the most work in the best neighborhood. So that way when you do do the things that you need to do to it, then it's up to par and you can sell it for a high value. And that's what we did. So we bought a house that we could barely afford, but we could afford it. I did the numbers. It was in the budget. And then when we sold it, we had a really awesome return, which in turn allowed us to put that to the new house, which allowed us to pay that down and pay it off faster. It was a whole thing. But we did it the right way.

11:25Like we didn't just buy a house on a whim because we wanted a house. We really had to look at the numbers. Well, I think the difference is they're the last, I would say, our generation. So we're, you know, Vanessa's not 40 yet, but I am, is you weren't supposed to have a house at 21. Like, you know, and you, you know, you had your special circumstances or whatever. That was never the plan. The plan is you have to get to that point. And so now, because we all have been doing it, so nobody's to blame or anything. But now, because, you know, and we had the bubble pop in 2008 and we're going to have it again.

11:56like um now everybody has that expectation but that's not really what you're supposed to work up to that point and um and so like saving for a down payment is supposed to be a thing and like and being frugal and being on a budget until you get to those uh higher earning in decades at this thing we see when our parents have at a young age we're like oh i want that now and if you can afford it then then fine but but again i and to shana's point i was like how cheap can the electricity bill be? Like, what is this game that I can play, right? The water, all of it. So I didn't go to a store. Most people don't want to do that.

12:29Right. I didn't even decorate my house for like almost two years. We used my husband's mattress from college, right? Until we could go out and afford one. So we bought the house, but it took us a long time to get it up to where we wanted to, but it was a give and take for us. Yeah.

12:44Vanessa:Okay. 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.

13:21Vanessa:If you're new to budgeting, this is the perfect way to jump in. And if you're already a budget nerd like us, you're about to meet your new obsession. This is the upgrade to your finances that you need right now. Yeah. So head on over to budgetbesties.com forward slash budget and grab yours. Now back to today's show. How about this one, Vanessa? The more money you spend with your credit card, the more money you make. Oh, that's dumb. Who said that? Sorry. I didn't mean to say that out loud. That's probably not great advice. The more you spend with a credit card, the more money you make. Like on points or whatever.

13:58Oh, no. I think that, again, this is whether you want to play that game or not. I remember, I've said it before on the podcast, my husband was deployed with this guy who was super smart with his finances, but his thing that he did with the credit cards to take advantage and actually win, quote unquote, win their game was like the extreme couponing. Like it was so, he was so - Full-time job. Yeah. He had to do so many things like, because in order to get the balance, the balance had to be this by this point, and then you have to pay the fee, but you have to pay it off, but you have to cancel, but you can't cancel too soon because then you didn't get the bonus or whatever.

14:32And then you had to like keep transferring balances and your cards to get their points and all that. And even if it is, if I spend all this money, I make points or spend your own money and stop relying on debt. That's what we would say. Yeah. Stop relying on other people's money to make money.

14:49Vanessa:Spend your own money. Save your own money so it makes its own money. Like, it's a better game. Yeah, you could definitely have a high-yield savings account where you're making three to four percent interest on that. That's more points, quote unquote, that you're going to get in interest over time. Yeah. Yeah. So, okay. So the next one is they're letting you pay it over 12 months. Why wouldn't you take the deal? So let's say for an example, we use this one all the time. Like you're going in to get tires and somebody's like, uh, or they offer you the 0 % for one year to pay for your tires. And you, or I guess you, maybe you have the cash.

15:19Why wouldn't you take the deal? Cause then you don't have to give them all your money at one time. And again, this is where, you know, I guess we're, we're just, we're just different. We want you to be in charge of your own finances. we want you to not owe people money because whether whether it's zero percent or not it's still debt and um we'd like you to just have a nice clean simple budget where you don't have that you're you have your own money you pay for things in cash because you can and you don't owe people money this is like when we have clients come in and they have furniture loans or tire loans and different things their payments are like six hundred dollars a month but it's zero percent it'll get paid off automatically by this time it's like or you could just pay it off because you have the cash to do that and you have$600 back in your budget every month.

16:02So that's the mindset. It doesn't matter necessarily the interest rate, what it is. It's just how much cash can I get back in my pocket? And that's what we want for you. Like Shannon said, if you have the cash to pay for something, pay for it. What is this mind game that we're trying to do with, I don't want to give them all my money because I can use my money to do other things. Yeah, you're probably blowing it on things that don't matter, right? So we want to just pay cash and be your own bank. Yeah, I think pay cash, be your own bank. Love that. We have been conditioned to play their game. Like they tell you, hey, you have 12 months to pay this off before it's, and so you're like, okay, I will take 12 months to pay it off.

16:33But you don't have to play by their rules. You don't have to play their game. You can play your own game. And like Vanessa said, when people come in, we're like, hey, let's pay this off because you're paying$172 to them a month. What if we could put that in a savings bucket? What if we could do, pay for anything, literally anything else besides debt? And so it's just a mindset you have to get out of always playing by their rules, playing their game. Okay. So another one that somebody said was their mother told them that she should buy the new uh buy the new car you can afford it you deserve it i know you like that truck go ahead and get it and whatever you know we're not that different necessarily if you can afford it we might say that too what i thought about that vanessa is how you get certain mindsets from your parents about money and um how that can be really difficult to to overcome and if somebody does overcome it then they should like that's a big deal to do that.

17:25Yeah. And you know, I, this mom, she's like, oh honey, you deserve it. Like, I get it. Your sweet mom is trying to help you like have the mindset of like, get the car because you have the job and you have the cash, but maybe she doesn't really know what's truly going on. Cause you probably haven't told your mom really what's going on with your finances. And we understand where her heart and her, where she's coming from, but also you're as an adult, your parents maybe shouldn't be making your financial decisions for you. Cause we've seen in the past with clients It's trying to live up to this expectation of what their parents think and how they should be living in a certain way and things that they should have.

17:59So just be honest. And you really need to just, again, run the numbers. And if you can afford it, awesome.

18:04Vanessa:But if it doesn't align with your goals, your vision, or what you want for your future, then maybe just not the right time. Let me add to that, actually. The thing is, like, opportunity cost. So, yes, you could maybe afford the truck. But you have to decide, is there anything else I'd rather afford? Would I rather be funding vacations? Would I rather be funding something for my kid's future or whatever? It doesn't matter. Whatever it is, that's where you have to think about it. It's not that you can afford it. That's not what anybody is saying. It's what else am I not affording in order to afford this?

18:33And if the answer is like, that's not as important, fine.

18:35Vanessa:Then go grab it. It's fine. Again, this is why we don't do cookie cutter budgets. This is why you having a car payment may be different than me having a car payment, right? Okay, here's a really fun one. We're totally for this, guys. Yeah. Okay, so this person said, if possible, marry rich. Great advice. Yes. I think that's great. My daughter, y 'all listen. They all need it. This girl, she wants a farm with cows and horses and all the things. And I said, well, honey, you either need to A, make a lot of money, or B, make a lot of money and marry somebody that can afford you. Yeah. Like I have – my son is going to be happy if he just has like a room with instruments.

19:13He won't ever probably leave that room. He won't do anything else. and he'll have a sweet bride that loves music too, and they'll be fine. And then there's my youngest daughter, you guys. She needs to either make a lot of money or marry someone who makes a lot of money because she just came out that way, Vanessa. Yeah, I did too. She did not learn it from me. And so anyway, no, really seriously, obviously our budget advice is to marry someone you love and that has your values and your vision and your dreams, shares in your dreams. If that person also happens to be rich.

19:49Vanessa:Yeah. I mean, we're not going to tell you that. We're not going to say don't do that. But also, you know, if you're thinking about who you want to marry, maybe the thing is to just ensure that you guys are on the same page financially, right? So even if you're not on the same page as far as how much you make or if you have debt or not, but like what do we want out of our life? What do we believe in? Do we believe that we're going to get a new mortgage every year so that we can make the interest or do whatever these crazy things that people do? Or are we like, hey, let's have a budget and pay for things as we go and be a normal people?

20:19Vanessa:Whatever it is, you want to be on the same page for how you want to deal with your money. Yeah. I just think having that conversation, a lot of people maybe avoid that or not really sure what that person feels about money or maybe they are coming into the relationship with money baggage or whatever. to have those conversations and know, and obviously we know that their income doesn't matter. But we just, we saw that for advice and we're like, oh, we have to, we definitely have to talk about that. That was cute. I think we can add a few words to the sentence and then it's a, it's a good, it's good advice.

20:45Yes. Okay. Here's a fun one. This is like the, um, in the, maybe in the same vein, I don't know. We're getting in this fun romance lane, but here it is. It says, leave the, the advice is leave the finances to the man of the house. Mm-hmm. Mm-hmm. Mm-hmm. That's just like I'm in the 1940s or something. Like I don't even understand. Listen, we know that there's usually a financial guru in your house. Maybe it's the woman. Maybe it's the man. Yeah. It doesn't matter. You both need to understand what the heck is going on with your finances. Yeah. You know what's really funny to me, Vanessa, is people assume when – like when we go on other people's podcasts or whatever, people assume one or the other.

21:24They assume that everyone who comes to us, the man does the finances, or they assume everyone that comes to us, the women, the woman does the finances because there's each stereotype, right? The woman's at home, like managing all the money and putting it, putting them in coffee tins or whatever. I don't know what they're doing. And then there's a stereotype of the man like this one. And, you know, our take is we want, you both need to be in on it, right? This is a, this is a dream team work and we want to both be on it. Like Vanessa is alluding to, maybe one of you is going to do more of the quote unquote heavy lifting, like actually do the one plus one equals two stuff instead of like the dreaming and the planning.