Why Credit Card Points Keep You Broke + When to Refinance Your Mortgage | 485

0:00Today, we're bringing you real life stories and lessons from our private coaching sessions. If our clients are dealing with it, chances are you are too. So we're breaking it down to help you avoid the same mistakes, feel less alone, and walk away with some quick wins for your budget. 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 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 month.

0:31Hey, 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. 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.

1:07We 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. This is the Financial Coaching for Women podcast. So let's talk about this amazing client that I have who thinks that credit card points are amazing just like they are.

1:38No. So let's set the context. I have a client and they put everything on the card. And this is a brand new client because obviously they won't be doing that after working together. But brand new client and the husband is very big on the credit card points and that was something that when they came in was like this is what i do it's a status thing like i get all my points and i have whatever because i think the more points you get that you level up it's like a game right yes so all of the levels so it's very big for him to be able to get all the points so he levels up in his fun little credit card game points game whatever and they think that's great like they're very excited about this and I said you're$20 ,000 in credit card debt so let's talk about how well that's working and they literally drop your mic when you said that I didn't have one to drop oh so bummer but it flowed out of my mouth and I felt we were like whoops yeah I felt bad in the moment but I also didn't because they literally went silent and they're like oh that's a good point and we just really want you to ask yourself that question of if you think this credit card game is working for you.

2:49One, if you're one of those, I pay it off every month, so I don't have any interest. I'm, I don't have any debt. Like we just rack up this credit card. I paid off. Is that really a budget? Are you still doing all your savings buckets? Are you building wealth? Is it everything that you want it to be? If it is, then I don't think you'd be listening to our podcast. Right. So something's missing. Something's not working. You're missing a piece of the puzzle. And then also if you're like this client in your five, 10, 15, 20, we have some clients that are a hundred thousand dollars of debt if you want to count credit cards and loans and HELOCs because they bought extra things and they needed or even they're consolidating debt right and then they've racked up more debt so if that is you this credit card point game is not worth it it's not and what I think of is do you want to just be surviving because that's what it is if you're into the points and you're into all that then what you're doing is just surviving you're not building a future and like Vanessa said you're not listening to this podcast because you want to be mediocre because you want everything to be average.

3:44You want to just get through the month. We think that you're listening to this because you want to do better. You want to be a good steward. You want to have a future. You want to start building your net worth, your wealth, and start feeling really good about the decisions you're making with your money. And so using credit card points as your way of winning at that is not going to do that. My other thought, Vanessa, was, oh boy, how good they are about gamifying it, especially - The credit card companies? Yeah. Yes, for sure. Not just maybe it hits the men a little harder because it does feel like a game.

4:13But what we want you to do instead is gamify building wealth. Like Vanessa says, when you are putting money in savings buckets and earning interest, let's see what you're doing there versus what you're doing when you're earning points. And even if you don't compare them, just gamify. I had a client the other day. They had no homework and they're about to graduate. And I was like, here's your new homework assignment because she's like a gold star student. She always wants to have something to do. and I said go look at your high yield savings accounts and just tell me all the money that you made this year just from having that money in savings accounts or separate savings accounts instead of using credit cards because we're still paying off their city card which is what they were doing before just to get through and so now go through and see how much money and gamify it that way the other way we like to do it is every time you log in after a payday or whatever when your transfers your automatic transfers happen your balances have grown and like gamify that's a fun game to play too.

5:05That's a better game too. Oh, for sure. And nobody got rich or built wealth off of credit card points. So I want you to remember that. So people who are focused on the wrong thing rely on their credit score to tell them how wealthy they are. Okay. And people who are focused on the right thing determine how wealthy they are, but the amount of money they have in the bank, that's what, that's who we want you to be. Yep. So I also have a fun, fund new clients. I love them so much, but their mortgage is at 7.13%. And that's a lot of people right now. If you moved in the last however many years, definitely that happened to you.

5:42And so they're asking about refinancing. And obviously in this particular case, I just want to lay out the whole conversation we had, which is you're not going to do that yet. You really have to clean up a little bit of credit card debt before they'll probably actually give you the rate that you think is available right now. Just because they're advertising it doesn't mean your credit score is going to let you get it. That's the first thing to think about. The second thing to think about, so then I told them I wanted to know how serious are we about this house? Like how all in are we on this house?

6:11Because we don't want to make a lot of different decisions if we're planning to move, if we're not going to stay in it long term. That's really going to change the decision that we make about that. And so they in particular said that they they're going to stay in that house until they outgrow it and then they want to keep it as a rental and I said okay then that does change the game so what we're going to do is clean up a little bit of this debt then you're going to apply for the refi and then we're going to on purpose make it a 15-year loan if you don't take that one on purpose because right now because of how much interest they're paying just because of that interest rate if they refinance it to a lower interest rate at a 15-year rate or 15-year loan it might be a similar payment or like just a couple hundred dollars difference it really depends on how the numbers shake out and even if they don't do that we might just do a 30-year one but start paying on it like it's a 15-year loan like so those are just conversations that you need to think about what's my order of priority am I serious about this house because these the they want they are counting on the fact that you're going to move every time and they're going to get they get all of the interest up up front right and so if you have to make those have those thoughts before you go all in and then it makes total sense to go all in if you want yeah they know that and they've done the calculations most people move within the first seven years of buying a home.

7:21So you pay the most interest if you pull up the amortization schedule. That's how I said. I always mess it up. That's great. But if you pull it up, it's going to show you that you pay the most interest those first seven years. After that seven year, that's where you break. It's that break-even point. You start paying more in principle than you do interest on your mortgage. So if you look at it and you're like, oh, I'm just going to refinance, then they're going to redo that amortization schedule and, again, put all of that interest back up front for the first seven years. So you really have to do some math and figure out if it's worth it for you.

7:48And sometimes it is. Sometimes it absolutely is worth it. And it makes more sense. And you save money, especially with this free refinance option. That's awesome. Oh, yeah. So a lot of places, it's a huge charge for that. Anyways, just look at all the numbers before making a decision. 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.

8:23And 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.

8:53Six months from now, you'll wish you started today. And I just want to throw in, like I said, this is like a new client. They're super fun. I love working with them and they're doing so well that I just love how the system, I just love how the system is working. It works. It's fun to see it every time we get more proof that the way that we teach, what we do, it works. And these folks were heavy spenders. We're talking about credit card debt. They have a lot of credit card debt that they were just surviving, using it, spending it, not thinking about it, like putting off to tomorrow, like the, can I do this?

9:26Should I do this question that they had today? I want to add really quick in there. They actually found us through our debt consolidation podcast and they scheduled two free calls with us. Him, he scheduled one and she scheduled one. And they were literally on the verge of contacting one. Actually, they did contact one. They found the rules and the terms and everything, and then they decided to go with us instead. So it was a huge pivotal moment for them. Yeah, and so what I love about them is they've pretty quickly got the system set up. They got everything going. And just now that they know what's happening, and it's so clear to them.

9:58They don't have children, so they've got their, again, I think you said about cats earlier some other time. They've got dogs, and so those are their babies that they focus on and that spend their money for them. but they have a little bit more of a simple budget. And so all they have is they have in their spending is gas and groceries, her spending, his spending in restaurants. And they have absolutely stuck to that since day one. And it's not small, like they have a decent size for all of them. But they just said, it's just the simplicity. If I want to spend money, I look in my account, how much money do I have?

10:31And I stick to that. And then if I don't, or if we need groceries, and I don't have to, I'm not spending any other money because I know exactly what I have to spend all the time. And then from there, because they have a budget, that's so easy. It's not like they have to go look at a piece of paper and say, okay, if I do that, it's my bank account balance. That's my budget. But the husband's, I haven't eaten out. I don't even think I've eaten out in weeks. And whereas that was a normal thing, all it took was like actually knowing their numbers and being aware and like putting a flag in the ground and saying, I'm going to do this on purpose.

11:03And now they're doing, all the rest of it just automatically happened just because they know their numbers, they have a goal, and they're just living within their means. And it's all it took was the system and how simple it is. We have so many people that come to us and say, I make such different decisions now because I'm so much more aware of where my money is at, where, why it's going where and all of that. And it really is about just organizing everything and getting it set up and having Shana said, our bank account balance be our budget and those separate spending accounts, it is a night and day difference of how to budget versus what they were trying to make a budget back then.

11:40Because she was actually, we actually used their budget as an example on one of our recent podcasts. And so it was not, it just, no wonder why it wasn't working. If any of this sounds like you, we think that coaching might be a good option for you. We have limited spots for how many people we can coach, but we have openings come up here and there. And so if you feel like, I like that Vanessa said, oh, how's that$20 ,000 in credit card debt working out for you? Or you're like, oh, I like that they could ask somebody else about this refi and like how to make it make sense. That's what coaching is.

12:11It's, it's, we're in it with you and we're helping you solve your actual problems and set up your actual budget so that you can right off into the sunset and be bougie on a budget. Just having that outside perspective, somebody that's not emotionally attached to your money and helping you make decisions, it really does make a difference. So go to budgetbesties.com forward slash coaching, and hopefully I'll see you on a free call. If you're tired of feeling like your finances are all over the place and you're ready for a simple set it and forget it way to budget, we have something special for you.

12:38Watch our automate your budget masterclass at budgetbesties.com forward slash automate. We'll show you step-by-step how to finally organize your money, how to set up your accounts and put your budget on autopilot. So your bills saving and spending run like clockwork, Imagine less stress, more savings, and the freedom to spend money without having to track every dollar or babysit your bank account. Go to budgetbesties.com forward slash automate to start today.