Your Credit Card Isn’t a Budget — How to Pay Off Credit Card Debt | 475

0:00You make way too much money to be in this much debt. That's so good. If you're swiping the credit card for groceries, juggling balances between cards, and just justifying all of it with, oh, at least I'm getting a little bit of points, you're not budgeting. You're stuck in this debt cycle. Yep. And debt keeps you stuck in the past. Paying for things you don't necessarily even remember what you're paying for while your future is sitting there unfunded. But when you flip that and you swap the credit card for the debit card, which is what we're going to talk about today, and you start funding your future, you'll finally start to break that cycle.

0:31Yeah, today we're going to show you why your credit card isn't your budget and what being your own bank really looks like and how you can go from paying for your past to building a future you're excited about. 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.

0:59Hey, 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.

1:35We 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 here and encourage you at the same time. This is the Financial Coaching for Women podcast. So we have a wonderful client. I believe he is a chiropractor. He's a doctor and she is a stay at home mom. They have, I think four kids, very high functioning, like very, a wonderful loving family.

2:13And they were using debt just for fun. Like they didn't even need it. They literally made enough money to afford all their things, but then they were using the credit card. And so they were a month behind. This is what happens. It's like you rack it up a month and then you get paid and then you pay it off. And then you rack it up a month and then you get paid, you pay the credit card off and then you start over. So you're literally a month behind all the time. And this is what was happening with her. And when we finally made her budget and showed her, you don't need to use this. And her husband was like, whoa, what about all my points?

2:42I've earned all this and I'm like whatever status in the credit card company. we decided to put all that money shana in a savings bucket a savings account and he was making three to four or five percent interest based on the market and interest every month versus just his one to two percent interest on credit card points so he was winning that way versus this other way that he thought he was winning yeah and and that that was just one of the new wins because i had a client they and it's always amex like amex love them but they're the worst. Like they're the best, I guess, maybe, but they're also the worst.

3:16Like all of the hard lessons have come with Amex. But I have these clients and they had a card that they thought, like somebody sold this to them like it was a good idea. Oh, I remember this client. You have to pay the whole thing off. Like you have to pay the whole thing off. And that makes you responsible. Like it's, that was the deal with this card. They think they're helping. Yeah. And they're like, we will require you to pay it all off. Therefore you're going to be, and that's fine. But you're also like Vanessa said, I am now paying$6 ,000 off every month and I'm crippled right from the beginning to be able to do anything.

3:45So with them, we had to, that was a tough one versus like other people, we can slowly wean them off and they might have to pay a little bit of interest, like one or two months and then they can get paid off. This one we had, there was a lot, but the point here, this was, and I have, we've seen it all the time. This client, they were making really good money. They were both making six figures and they were military. They were, they had only two kids. They were like living very, they were actually living very frugally. Because they thought they had to. Because they just were by nature. Like they weren't big spenders, but they were relying on debt.

4:19See, they were just using that because that's what they've been told. Just put it on the credit card, pay it off the next month. Put it on the credit card, pay it off. That's not how you build wealth. You have no idea. That's not a budget. You can't make a plan on that. You can't build wealth. But they had the money. And that's really the point here. a lot of times you have the money. So we talked about in the last step, sometimes you use debt because you haven't saved for unexpected expenses. Other times you're just doing it because it's habit. You're using it not because like Vanessa said with the other client, when we actually put your budget on paper, you can see you don't need debt.

4:48You don't need debt to get through the month. You don't need debt to buy, to pay for the life that you're living. You're just used to doing it. And that's the habit. Yeah. Yeah. And so, you know, the idea here is when you fund your future, you'll stop paying for your past. So when you stop funding what you did pay for, then you can start funding for all the fun things that you want. And I think that's a really good point, Shana, that you made about the savings buckets episode that we did last week was a lot of people go into debt for all these quote unquote unexpected expenses because they forget about it.

5:16We don't want you to do that. We want you to stay in the now. We want you to start using and paying cash for stuff and not relying and being like the slave to your credit card company. And it's like I said, when you said like that the bonus for him was that he was making money, but it's also you're not like when you are in debt, you owe someone else money. You are using someone else's money and we're not trying to be mean, but that's not a fun. That's not fun. And you, you make good money. Why are you using someone else's money to pay for stuff? You don't have to. But again, what we like, what we're saying is you just get stuck in the cycle.

5:49We want you to break up. We want you to stop relying on debt. We want you to break up with your credit cards and just understand, use our budget system. See that you can afford your life without debt. And once you start doing that, once you start doing that, you will see. 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.

6:22and 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. 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.

6:55Now back to today's show. I just had a client email me last night and she said, I'm just, I'm so frustrated that we got here. We let ourselves get to this point because we didn't need to. And I said, there's obviously we're looking forward and you're doing what you have, what you can now and all the encouragement, but that is where a lot of people are is we're just in this cycle without really thinking about it or having our eyes on it. And you don't have, you don't need to do it. So that's what, and credit card is not, it's not, they're not your friends. They're not the answer. They're not for you.

7:23They're not helping you. They are not going to be helping you build wealth. No, you're using credit cards. You're not building wealth. Like those are incompatible. You're playing a game that you didn't know you were in. I think that's really what happens is you're doing this for so long. And then all of a sudden you look up, become the ostrich in the sand and you look up and you're like, what is happening? How did I get myself in this situation? It's because they, you're exactly where they want you to be. And I hate to say it. I'm not trying to be ugly. and even a lot of people come to us and they say, yeah, but I don't pay any interest because I pay it off every month.

7:50But you're probably, and we've seen it nine times out of 10, you spend more money naturally because you're using a credit card versus using a budget. If you were using a debit card instead of using a credit card, you would spend less money because you're more conscious of your spending habits. So it really does make a difference. Your credit card balance is not your budget. Watching that go up every month is stressful. It's unnecessary. theory. And it again, is not a budget. Yeah, it's not a budget. And I think we are just, we're just relying on it because we're in the throes of life, the throes of busy life.

8:24But it's not, you're not actually in control of your money. You're not actually budgeting when you're using that for everything or when you're using it to rely, like to bail you out. But we understand it's not necessarily the easiest thing to do. But, and so what we often do with our clients is they will come in, we will put everything on one piece of paper, and they will say, oh, I have more money than I thought. Oh, I don't need to use the credit cards. And if we can just start there, it doesn't mean you necessarily will be able to pay off all of your debt month one, right? But your first step to breaking up with your credit cards is to not use them anymore.

9:00That's what we want to do. We want to not use them, use our budget, use cash, use the debit card, like Vanessa said, get on a budget. And then when you see that budget all together, you'll see how much extra you can start to put on debt and get that, get those. And then you can start really, truly building wealth, investing, whatever it is you want to do and be in control of your money, be in control of your financial future. So there's one thing that you heard, or you're going to hear out of this entire podcast, it's swap the credit card for the debit card. And it's going to be hard, especially when you've been relying on debt for, or relying on credit for so long, we get it, but you have to start somewhere.

9:32And yes, like Shana just said, you may not be able to pay off that credit card that you've been racking up every single month. You may not be able to pay it off month one. That's okay. You're going to hate it enough or you're going to be mad at it enough to do something about it and we'll get there. Yeah. And the other thing that you can do, so you can do what we want you to do, the main thing, like Vanessa said, swap the credit card for the debit card. So that might mean take it out, take the credit cards out of your wallet, leave them at home. That's a big step. We get it. Leave them at home.

9:59Start relying on yourself, be your own bank. Start relying on yourself to pay for things, not other people's money, right? You can also take it off. Take them off Amazon, take them off your bill pay, whatever random bills you might have, take them off of PayPal, take them off of the grocery stores, whatever you have them hooked up, take them off. These are little steps you can do and start using your own money. We have a wonderful resource for you that has really helped hundreds and maybe if not thousands of people get out of debt. It is our DIY debt relief workbook. It is on our website. Go check it out.

10:33See all of the reviews and all of the testimonials that people have listed on there on how it has helped them speak to creditors, get to know what to say, how to say it, and have resources in their corners so that when they go to talk to these credit card companies, they know what to say to help them put them in the right situation to help them get out of debt. So yeah, go to budgetbesties.com forward slash debt. And so we hope that you enjoyed this one. Step six, break up with debt. And we'll see you next week. Yeah, so next week we're going to have make your budget automatic. Step seven. We're almost there, Vanessa.

11:05Two left, guys. Hang in there. 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. Watch 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.

11:37Go to budgetbesties.com forward slash automate to start today.