Why Paying Off Your Credit Card Each Month Still Keeps You Behind + How to Budget Weekly Paychecks Without Losing Your Mind (or Your Money) | 444

0:00You know that we recommend having multiple accounts set up for that way. You have a system in place where everything is taken care of. So you buy online groceries. Awesome. Let's set up a grocery account for that. You go out to eat. I'm sure he goes and gets food. You guys, you're taking your kids to Chick-fil-A or whatever for RallyBell. Like we need a restaurant account. There are certain things that you need in place with guardrails around it that gives you guys the freedom to spend, but also allows you to stay within some type of boundary. So that way everything else can happen and you're with your money.

0:35And hey, guess what? You can also save at the same time. 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. 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.

1:03We 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. We want to help you take the guesswork out of your budget, improve your marriages, and even bring your kids in on the conversation.

1:38We 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. All right, Sam, we're so excited to have you on Financial Coaching for Women. Thank you for coming on and joining us today. Yeah, thank you guys for having me. All right, girls. So tell us what brings you to the call and how can we help? I think like most people, I recently started honing in on finding your podcast.

2:15And I go for my daily walks. And that's what I do while I walk is listen to a podcast or two. And so I've gotten to be super knowing how your system works and then thinking, gosh, this could probably really help us out. One of those people who invested in an app that was supposed to track all of my spend, all of our spending. I think like a lot of married couples, money is not a fun topic. So we did that to try to track things. My husband is an over the road trucker. So he is gone. And so for him to see what's going on here at home and to see, he wants to be super involved, which I can appreciate and totally am thankful for because he actually found our credit card had been stolen.

3:08He found that because he watches everything. So anyway, so we have this app and it's telling us you can't buy this. So you've exceeded something and it's because I don't have the time to go in and make sure that everything is attributed to the right category or whatever the case is. And so what we had, like I said, purchased and thought that it would save things. And there are some pieces of it that we enjoy. It's not doing that. And I'm like, gosh, maybe we could do this. But there are some things that I still question, which is why I gave you guys a call. Okay. All right. So we're basically, you're trying maybe to sort of transition from using that app that isn't exactly working towards setting up our system.

3:58So have some questions maybe along the way is what you're saying? Yeah. Shoot girl. So one of the biggest things that, and I know you guys are, you follow the kind of the Dave Ramsey thing, and I've listened to a lot of that stuff as well. But my husband, because he is all over the United States on any given day, we use credit cards and we pay our credit card off every month. So we don't have issues with that. However, there are issues with, oh, we don't know. We could have a$4 ,000 credit card bill at the end of the month, or we could have a$2 ,000 credit card bill at the end of the month. And then we just don't know.

4:35And then we're not saving what we think we want to be saving. And so that's part of the tracking. That's our biggest. Yeah. Okay. I have a question, but we can go first. That's, you're never going to get to what you're talking about when using a credit card. And we have had clients that were over the road truckers, which is where I learned that phrase. Never knew that was the way to call it, but that did not use credit cards. So it can be done. We can, and also your, your business, his business finances or whatever need to be completely separate from the personal finance that will help a little bit to calm some of the chaos, but using a credit card, you're not going to be able to say, I definitely put$4 ,000 in savings this month because we budgeted the rest and we used all that and we knew we didn't need that.

5:18You're going to have to break that cycle if you want to get serious. Is he a trucker that works for himself or for someone? No, he works for someone. And so his scary part is using a debit card online and then using having a debit card shut off and he would be in five states away. Okay. But how is that different than having a credit card shut off? If the credit card company had a question when you said he travels all over the country, so we use a credit card. And I was like, I don't, those two don't add up in my brain. So he's just afraid of it being stolen. Like it was. Yeah. No, our credit card was stolen, but then we could get our money back.

6:02I know. So So he's so scared us. Okay. Hold on. I know we're so excited. Look, we need to get up. We need to stand up because this is bad. Okay. But this is a really good topic because there are a lot of people out there that are thinking the way that you're thinking because of your mindset and because of what you've heard. So you're doing something because you think it's the right thing because other people are telling you that instead of just making the decision for yourself. Yeah. Okay. Yeah. Here's the deal. Either way, you could have somebody steal your card. Either way, they're going to be fraudulent charges.

6:30It happens on both sides. What you can do is set up a separate debit account for him that doesn't have a whole lot of money that he can use for spending. So it's not if somebody hacks that card that all of your money is taken. So that will solve a little bit of that problem. But debit card has the same protections as your credit card these days. It has the same credit card symbol on it, has the same protections. The difference is you have to stick to a budget, which is much less convenient. But yeah. Yeah. And so I know that the way some of the stuff with his income can, it can get confusing or his expenses, right?

7:07Cause he's doing gas. It should have work. Nope. You don't have to worry about any of that. And what is it spending so much money on that? He's just, Oh, spending money. So all of his food that he buys while he's on the road, all of that, or if he does break down and has to go and get a hotel or something, he'll do that. And then all of the like hotel finances are reimburse, whatever. So it's his business. Yeah. So everything when he's on the road that he is paying for is his own. And then there are some things that get reimbursed, but he does not have his own company. He works for somebody else.

7:43So he doesn't have business expenses per se, but better. That's yeah. You're in a way better situation than some people. Yeah. To track everything on their own, but still. So what I'm thinking in my brain, the first thing that comes to mind is he needs, okay, let me ask you this question. How much in a month does gets reimbursed? Like on average, how much do you think gets reimbursed? Not much, because I will say he takes cash with him too and uses his cash and that's his budget. He, I think it's more of like just a safety net, like a safety blanket, which he could have. And if something happens, hold on, And if it's a safety blanket, then why is the credit card bill getting racked up so much if he's mostly using cash?

8:28Because we use it for everything else. Okay. So what we would say is let's look at what he's historically spent in the last three, six months, whatever, when he's out on the road. Set up a budget for that. Put it in an account. Let him get cash out if he wants. Leave that over there. That's solving for that. All the bills need to come off their credit card and go into a bills account too. That is – so all of our bills are in – So if you look at your credit card, what's on there? Everything. So groceries, because I buy groceries online. I do grocery pickup. Buy groceries online. We do travel volleyball club.

9:05So all of the hotels, all of that stuff is on. Everything else is on the credit card. Okay. Everything. So how long have you been listening to our podcast? Our podcast is a month. And how much? You said a month? Yes. Okay. But I've listened to multiple. I think I have 200 left to listen to. Okay. Now you're on track. All right. So from what you've heard, you know that we are huge advocates of having separate accounts. So we travel volleyball. I just got back from Dallas. My girl got a bid to nationals. Girl, we were there for four days at the Omni Hotel. Let me tell you about taking all my money.

9:38Yeah. Get it. There was no credit card used in the process. So it's like no animals were harmed. There was no credit cards harmed in this. Okay. You know that we recommend having multiple accounts. Yes. Set up for that way. you have a system in place where everything is taken care of. So yeah, you buy online groceries. Awesome. Let's set up a grocery account for that. You go out to eat. I'm sure he goes and gets food. You guys, you're taking your kids to Chick-fil-A or whatever for Raleigh Bowl. Like we need a restaurant account. There are certain things that you need in place with guardrails around it that gives you guys the freedom to spend, but also allows you to stay within some type of boundary.

10:17so that way everything else can happen with your money. And hey, guess what? You can also save at the same time. Yeah. Reason why you guys can't save, like Shayna said at the beginning, is because everything is in one credit card. It's so convoluted. There's no organization. There's no system. Yeah, and there's no budget. There's no budget. When you can just swipe for groceries, there's no budget. When you can swipe for travel volleyball, honestly, that's probably what you'll find is, oh, I'm not saving any money because I'm spending it all on travel volleyball. Raise your hand if you understand.

10:45Oh, I'm sorry. We're here. where that's the realistic thing. But what we want to do is set the money, separate it so that you can truly see where your money is going. The credit card can do that. I would say set up a budget for him, send it to his account, let him live over there. If you pay off the credit card and you really feel like you want to give it to him for the reimbursable hotel expenses, specifically just for his job. So he has it in his pocket in case he was worried or whatever, do that if that's what you guys want to do. But your personal spending, nothing personal needs to be happening out of your credit card.

11:15That's not budgeting. That's just spending. Yeah. But so you can, but good thing about it is all the data is there. So you'll know how much do we basically spend on groceries? How much are we spending on this or that or the other? So really you just have to move your spending from your credit card to your budget. Today's a great day to start thinking about it. Stop the first rule. Well, you may not be trying to completely get out of debt, but the first rule to getting rid of this reliance on the credit card is to start relying on, start using your paychecks to fund, like Vanessa said, a grocery account, a restaurant account, a personal spending for each of you, and then any other ones that we might come up with that are important.

11:52Yeah. Yeah. So I think the biggest, because we, like I said, we don't have debt. We have our vehicle debt, but otherwise we don't really have debt. We don't, we don't carry over credit card debt every month. We pay it off, but we pay it off. And then we're not putting money into savings that we want or unexpected things come up and then it's, we figure it out and we pay it all, but it's just chaotic. And then you have marriage training. It's just making progress, but you're a month behind. So what we find is people who rack up the credit card all month and then they pay it off at the, because their big thing was like, we don't have debt.

12:28We, we pay it off every month. Yeah. But you're naturally spending more money because you're using a credit card versus using a budget and using cash. So in your whole month behind because you're spending, spending. And then at the end of the month is when the paychecks come in is when you're paying those off. And so you're a month. Does that make sense? Yes. No, it does make sense. I think my biggest worry or question was that we were of the mindset that we just use a credit card for everything so that our money wasn't taken and easily given back if something was stolen. And so we just have to shift that mindset and lose a debit card and it's okay.

13:07And contact your bank. Like contact your bank so you know that you have the peace of mind, but they will 100 % tell you like they're going to put that money back in your account and then they're going to investigate it just like a credit card company would. Yeah, okay. There's no that mindset of I don't ask someone to steal my money. Your money is stolen either way, but it's reimbursed the same way. It's fraudulent. Yeah, step one is just to open up those spending accounts and start using these paychecks to fund them. You already have the bills account. The hard part, Sam, might be that you can't pay everything off this month.

13:39You might not be able to pay that balance off because we are funding our life. We are funding spending and savings if travel volleyball has got to go in the savings buckets probably all the time. There's never a time. And then you might only be able to pay$1 ,000 on the credit card or something. And then next month, you'll be able to pay it off once you get into a rhythm. So just understand that is a little hurdle that kind of annoys people because they're used to paying it all off. but you might not be able to fund your whole month and pay off the credit card in the same month. So just understand that you're going to give yourself a little grace, but you can use those credit card statements to come up with some basic numbers, put them in your accounts, your spending accounts, start living over there, cut the credit card up, give it, put it in the freezer, do something with it.

14:18Stop using it. That's the first thing. Stop using it. Start using your spending accounts. There'll be some back and forth adjusting. Like that's okay. But like, just make the decision because what's going to happen is once you do that, you will definitely be able to save money. There won't be any ifs. There won't be any, maybe we will. You'll start to understand that these unexpected expenses are not that unexpected. We can start to plan for those as well. Really, you want to get good at the spending first, and then we can get good at the saving. Yeah. So just plan and submit for everything like that you have.

14:48You will not have a chance to set up those savings buckets right now. That's fine. Start funding your spending. Set that up. Figure out the right amount. It's going to take you a couple months you're not going to get it right the first time and that's okay it we i actually do because we spend so much time like hyper focused on it which it's like we're so hyper focused on it why are we still not saving or why like why it's all going on a credit card but so we know what needs to go where or how much it needs to go or like what is our annual things or things like that. So we have a really good grasp on it.

15:27We just need to figure out like the buckets and setting up the accounts and not spending the money on the credit cards and using the debit card and just really limiting ourselves. Like Shana said, it might take you two months to pay off the credit card this time. Like you may have this one month where you're gonna have to pay interest because you at some point, yeah, but you have to fund your spending accounts. So right now you're so used to just paying everything in the past and then racking back up the credit card. This time you're not doing that. You're actually going to pre-fund all those spending accounts, which means you may not be able to pay off that credit card.

16:03But you'll be able to soon. Don't let that. We're just, we're warning you because we could see your face. Like, you know, it's not going to be what you want, but it's just for a month or two until you're, and then you're done with it forever. And you don't ever have to look back. You can start knowing where your money is going. You can start the savings buckets. You can start tracking. You don't have to track anything. You're just going to put money where it goes and it's going to get put used on what it's supposed to get used on. And then you're all done. Good job. And then, and then what I thought about when you first came on is let's make these money conversations fun.

16:30Let's get this figured out. And then when we talk about money, we're not stressed. We're like dreaming. You're dreaming. Money's in our savings accounts. Yay. Like it's going to be positive because as everybody knows, if you change nothing, nothing changes, right? If you keep doing the same thing over and over again, you're going to get the same results. So now we're going to change something and hopefully get something different and it'll be good. And hopefully the money, the tension, because you're not alone. That's everybody. Most people, that's a source of tension in their marriage. So you're not alone.

16:58We want to change that. We want it to be a good conversation. Yeah. Okay. So get rid of the credit card. Very good. Yeah. 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.

17:45If 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. My next question is twofold. My husband gets paid weekly. I am paid bi-weekly and our bills currently how they stand because I know you guys have talked about I would love ultimately would love to be a month ahead and so fund that bills account the bills are funded for a month and then you guys like it where or what you've talked about is that you weekly or whatever we're paying or we're putting money into the spending accounts or whatever, right?

18:37Instead of doing that on a monthly basis. You just need to do it based on your pay schedule. So if you get paid every other week, then you can fund those spending accounts on your pay cycle. Or like we, my husband has gotten paid weekly for the last 20 years. And so we fund everything every Thursday. He gets paid Wednesday afternoon, every Thursday things get funded. And that's just, that works for us. So it really doesn't, I know you have this let's get a month ahead, which is not wrong, but the idea is money's coming in and the only thing that's going out is the spending money because the bills money is staying in the bills account where your money is getting deposited, right?

19:13Yeah, yeah. What you need to figure out now is not necessarily funding the bills account. It's gonna get funded with those payments. It's funding your spending and funding your savings. You have to figure out which cycle you want and how often you wanna do that. Okay, so I could potentially do it weekly and biweekly just every time we get a paycheck. Oh, no. It would just be weekly, right? You need to pick a pace. you need to do either his pay cycle or yours. You don't do both. Either way, it can't be biweekly and weekly at the same time. This is really about how you manage money. So if you feel like I'm doing good, if I can get through a week without like budgeting a certain amount for just a week, does that mean?

19:49First, you have to get through two weeks on one amount and like mentally preparing like that. I would say weekly for your husband because he's always on the road. And I think that I love weekly. Yeah. Weekly. Yeah. There's nothing wrong with that. The other thing I would say for him, and also I'm going to pause him and you, because I have had both of you guys in my budgets before. So with him, I would start off a little extra, right? Because this conversation maybe is already a little tense, like you said. He's not going to love the no credit card probably anyway. So let's not have his spending money feel restricted as he's going on the road because a lot of that he can't control.

20:29and he will possibly get more honed in as you both continue this journey. Right. I was sort of restrictive there. And Sam, if I can say this, your hair is gorgeous. Okay. I'm always jealous of people who have shiny curly hair, but make sure you put that in your budget. So make sure that when you're budgeting for spending, like getting your hair appointments or whatever, you probably obviously woke up like that. Like mostly hair flip. Okay. But other than if maybe you didn't just wake up like that make sure you put that in your budget because that's unexpected expenses and then depending on how often you go it can be like oh this is a lot of me and whoopsies do you have saving do you have our budget system yet i do not yet have it so when you get it the savings bucket tracker section will allow you to really look at a year and a whole as a whole yeah and go okay how often do i get my hair done how often do we travel how just look at all that And then once you get your budget set settled, like your spend done, then you can start setting up your savings buckets and really start like those unexpected expenses will become non-existent because you're planning for them.

21:35Okay. So the other thing is our bills are very top heavy, meaning like the first half of the month, they're thousands of dollars more than the second half. It's fine. So fund him not weekly with your budget, like with his paychecks start the second half of a month. So does that make sense? Yeah. So like this, so he got paid whatever Friday. Yeah. And so then I would pay. But if I fund, if I fund the first two weeks or whatever, if I, that there might, sometimes there might not be a ton of extra left that week because all of his paycheck is going to the bills. It's going to be a little tight in the beginning.

22:18So what we would say is last Friday, so for people listening, which it's going to not air immediately, but either way, it would have been June 27th was when he got his paycheck. And that's a Friday. July 1st is on a Tuesday. That June 27th paycheck is the first paycheck going into funding July. Yes. By the time the fourth hits, two paychecks in there. If we had talked to you a week before, we would have said the 20th. Let's start with the 20th being the first paycheck for July. just so you can get, like you said, a paycheck ahead and buffer so that when all of those big bills come out, there's money in there.

22:51And then it just funds, it refunds itself as we go throughout the month. It's going to be for one month for you. But at the end of July, when you are still funding the bills account for the exact same amount that is giving you your buffer for August and then continue for September. So long as you're funding the bills account with y 'all's paycheck and all you're sending out is the spending account money. There's the spending money, excuse me, then you'll be fine. Yeah. And I just want to, I want to say like month one, you're not really going to save a lot. You may not pay a lot of debt off. Let's just focus on having a buffer in there so that we can get on the system and then we'll be a couple of paychecks ahead.

23:28Well, everything will feel really good. Then we can start putting money in savings and putting money on debt. If we want, we call it the middle. Like when you're first starting out, getting everything set up, it's messy and it's fine. Like it's our clients hate that it's frustrating, But it is such a huge payoff. Okay. If you can stick with it, get through setting up the accounts, get the debit cards, get it all organized, make sure you figure out how much you need weekly for every account. It's going to be good. Yeah. And then just for you and everybody, we have office hours. So if you want, if you get this going and you need some help, come on Wednesdays and there's a couple of dates in our Facebook group where you can get some free help as you're like having specific questions as you're getting going and listening to other people.

24:06So I think that would be helpful. Yeah. Okay. I have one last little question. Can I? So when you, I've been thinking about this as I shop. And so we go to Target and I'm buying one thing for my daughter, one thing that would come out of my personal account, and then maybe something that would come out of the grocery account. Do you guys separate that out when you go grocery shopping or when you go shopping? And if you have something, or do you just later pull something out of your, the money out of your kids' account and then the money out of your grocery account or what, do you get what I'm saying?

24:44Okay. Let's handle that. Yeah, no, that's fine. If my daughters are with me, they have their own money and they would buy it themselves. But if I do buy something, I would transfer it. I would pay for it, my spending money and transfer it from their account or whatever, however you do it. Immediately. Don't forget, yeah the same with the groceries i would just say groceries i typically would do separate i like might put like a little divider on the thing and say here's some yeah here's my grocery card now i'm paying the fun stuff here's my fun cards yeah okay but that was a big question it takes a little bit of discipline yeah and but that's the point the point is you're supposed to stop for half a second and go okay how am i doing this the right way from the beginning and not how am i gonna fix this later because that never works.