I'm gettng there. My issue was "cleaning up" all the juggling around with each card and multiple balances. However, over the last few weeks I was able to get a new card with 0% APR on balance tranfers for 18 months. Transfered those mid-range balances over. I also changed all my automatic payments to the working card and away from my debit account. This has allowed me to set-up which card will now be my primary and which I will be using for those bills, etc. Within a few more days I will have three cards out of circulation and locked in a safe for emergency somethings or others like a car repair or other problem. Next month will still not be perfect but much less hassle.
Good work. This is how I started as well with my zero interest discover card. It already had balance transfers before I started, so I started using this card as my primary card and everything is paid from it except for my small store cards, one loan and an Rv loan. I basically use the primary card as my bank account until its paid off.
So pretty much sleeping all of our other credit cards, while going agresive with our main credit card that we use for our gas, groceries. Misc to pay it off faster?
I’m not a dense person, but I’m still not getting it. I’ll follow your advice to keep watching videos, and maybe over time things will click, but I’ve watched Christi, Denzel, and others and I can’t seem to break the old mindset. I’m not going to give up though.
Which part is confusing you? Old System: Paycheck -> Checking Account -> Expense Velocity Banking: Paycheck -> Checking Account -> CC (Park Cash Flow and Credit Expenses here) -> Expenses You leave cash expenses in your checking account.
I do mine a little different. I have multiple credit cards with low minimum payments so I don't do the bill matching for those.. I use my primary card for ALL bills and variable expenses, except for my loan and rv payment. I use plastiq for my mortgage and car note, which also comes out of my primary card. Doing it this way I have been able to almost put my entire paycheck on my primary card minus the small credit card payments, the loan and rv payment. Also the primary card I am paying off is a 15k zero interest discover card.
The beautiful thing about having the one credit card is you can run all your expenses through the card, set bill payments on auto draft and just park your paychecks there. That card gets paid off in no time! And you rack up the rewards points for travel or cash back.
@@fuzzyelm1 it's not a means to get rich, it's all about freeing up cash flow to put toward other bills or debt. The credit method decreases the time it takes to pay off debt, increases your credit score, and frees up more money to use it for what you want to use it for.
So, your cc minimum payment amount for the cc you want to "put to sleep" is higher than the bill you want to charge on it after it clears, correct?? I just want to understand this because it's a bit confusing.
Excellent question. My answer is, that depends. You’re at 89% utilization so I’d want to know… 1)What’s your minimum payment on that card? 2)How much of that is interest? 3) How much do you have to pay off on your primary card? 4) Are there any other cc minimums going towards your primary?
@@askmehowibudget minimum payment is $141 , interest is $131 . Primary card is $10000 that I’m trying g to get down first , I have another card that I use for another bill payment/ sleep card , that has $6000 with $7000 limit . Another card sleeping for my subscription that I use . So 1 primary card then 3 sleeping cards for bills then I have another 2 cards with small limits that I just keep paying minimum payment on until I have the primary card under control. Not sure if this is enough info for you but if you need more info please don’t hesitate to ask . Thank you and keep up the good work as you have brought some peace and made my life a little less stressful with your channel.
You paid the $368 on main debt tool by paying the upcoming bill of $426.01 so that cleared the due payment. Now you have $368 to be able to pay on another debt. Is that target debt a bill your trying to pay off such as making a chunk payments where you can use a credit card payment? Is that what you mean by "target debt"?
Your target debt is your primary card. Your primary card is always going to be the card with the highest minimum payment. That’s why we use the primary card for our budgeted groceries, gas and BUDGETED misc items (like those trips to Walmart for cold medicine or a forgotten gallon of milk), because groceries and gas are a big part of anyone’s budget and the card with the highest minimum payment isn’t always easily matched with a bill. Groceries and gas, for most people, can easily match any credit card minimum payment. So if this card has its minimum satisfied by what we’re paying ANYWAY for groceries and gas, every other available dollar thrown at it (from the sleeper cards, from coming in under budget, from overtime, from side hustles, from whatever every available dollar) is going to pay down the balance and reduce the interest payment. And as soon as that card gets paid down, the card with the next highest minimum payment moves into position as the primary card.
I think you could do a video on Bills & Expenses (using real people examples). That concept alone needs to be drilled in for some. Once anyone grasps it (lightbulb moment) it's all crystal clear. But it's obvious there are still some financial cobwebs lingering for some folks. Molly. Thanks for all you do for the community and your #1 Sidekick!
I’m getting closer to wanting to do that live session. I’ve gained some interesting observations through this recent community case study regarding debt, denial, compartmentalizing and coping. What do you think do a live before the holidays or after?
LIve session that is on a Mon-Thurs (so I can be there). There is something about people being resistant to change. I've mentioned dozens of times that I have family members still paying bills with checks, while worshipping Dave Ramsey as a Financial Wizard. @@askmehowibudget
What if your debt tool min balance is higher than you monthly variables? I’m using two cards. But my primary card min payment is $700 I don’t use that much on gas and groceries a month 😢
Here's a better system that involves a lot less thinking: 1. Cut out all your expenses that aren't absolutely necessary. Streaming, eating out, coffee, expensive phone paid monthly through an expensive phone plan, etc. Cut your own hair, do your own nails. Don't go in a restaurant unless you're going to bus tables. 2. Apply ALL that money to your lowest balance card. Minimums on the rest. 3. When the first card is paid off, CANCEL IT and put the extra payment toward the next. If you keep it, you'll be tempted to use it. 4. Repeat with the next, etc. Pretty soon you'll ENJOY paying off debt and living frugally. 5. Once you're debt free, you can add back A FEW things, but always paying cash. Start saving and investing. 6. Eventually, retire in a better position than all those people who use tricks to "manage debt" their whole life.
This is classic Dave Ramsey advice. Telling people to cancel their cards is grossly irresponsible as cancelling cards negatively impacts credit score. Age of credit history accounts for 15% of credit score and in this day and age, folks need every percentage point they can get. Like it or not, our credit score impacts our daily life in a surprising number of ways. Looking for an apartment? Good luck. Affordable housing is scarce and thus highly competitive. Marginal credit may require a co-signor, it may require you paying ALL the rent for the entirety of the lease UPFRONT, OR it can result in a flat denial. I found this out the hard way when I got divorced in 2017. Need car insurance? Your credit score is a determining factor in the rate you’re quoted. Looking to get a security clearance for a government job? If your credit score is questionable, so are you. Moving to a new area and need to get the utilities turned on? In my small town of 22,000 you’re charged a $300 deposit with the electric company if your credit is less than stellar, and another $200 at the gas company. And fyi, even Dave Ramsey himself admits his way isn’t the smartest way to pay off debt. It is merely A way. He focuses on the psychological win. And it works for many people. (People who seemingly enjoy frugality, sacrifice, and a long arduous journey out of debt). No thank you. I'll stick with Velocity Banking.
I'm gettng there. My issue was "cleaning up" all the juggling around with each card and multiple balances. However, over the last few weeks I was able to get a new card with 0% APR on balance tranfers for 18 months. Transfered those mid-range balances over. I also changed all my automatic payments to the working card and away from my debit account. This has allowed me to set-up which card will now be my primary and which I will be using for those bills, etc. Within a few more days I will have three cards out of circulation and locked in a safe for emergency somethings or others like a car repair or other problem. Next month will still not be perfect but much less hassle.
Good work. This is how I started as well with my zero interest discover card. It already had balance transfers before I started, so I started using this card as my primary card and everything is paid from it except for my small store cards, one loan and an Rv loan. I basically use the primary card as my bank account until its paid off.
Oh only when you’re maxed! This clarification is exactly what is needed.
Thank you for the additional information.
Yes, I made that mistake this month. Card maxed and I did not pay the interest along with the bill payment. It caused me to go into over limit.
Nice feedback
Do you match the same cc to the same payment every month? Or match to whatever is best?
So pretty much sleeping all of our other credit cards, while going agresive with our main credit card that we use for our gas, groceries. Misc to pay it off faster?
Yup.
Yes!
@@askmehowibudget
I sent you an email following up on my numbers I sent you. ☺️
I’m not a dense person, but I’m still not getting it. I’ll follow your advice to keep watching videos, and maybe over time things will click, but I’ve watched Christi, Denzel, and others and I can’t seem to break the old mindset. I’m not going to give up though.
Which part is confusing you?
Old System:
Paycheck -> Checking Account -> Expense
Velocity Banking:
Paycheck -> Checking Account -> CC (Park Cash Flow and Credit Expenses here) -> Expenses
You leave cash expenses in your checking account.
Cash expenses are mortgage/rent, loans and high fee utilities.
I do mine a little different. I have multiple credit cards with low minimum payments so I don't do the bill matching for those.. I use my primary card for ALL bills and variable expenses, except for my loan and rv payment. I use plastiq for my mortgage and car note, which also comes out of my primary card. Doing it this way I have been able to almost put my entire paycheck on my primary card minus the small credit card payments, the loan and rv payment. Also the primary card I am paying off is a 15k zero interest discover card.
👏 !!!❤
So you're happy paying an extra 2.9% on each mortgage payment? How does that help?
@@SchnabelMcSchnabel 30 dollars is nothing compared to the money it frees up to use for other purposes.
Good video! I only have one cc so I don't have ability to sleep credit cards this is my only tool.
The beautiful thing about having the one credit card is you can run all your expenses through the card, set bill payments on auto draft and just park your paychecks there. That card gets paid off in no time! And you rack up the rewards points for travel or cash back.
@@fuzzyelm1 it's not a means to get rich, it's all about freeing up cash flow to put toward other bills or debt. The credit method decreases the time it takes to pay off debt, increases your credit score, and frees up more money to use it for what you want to use it for.
What if your minimum dues are less than your bills you need to pay? Example $89 minimum due $115 bill
you pay to the CC $115 (This action satisfys the $89 min due.), wait two days for payment to clear, then pay the $115 bill..
I believe I saw this in another video on this channel and do not get it. Are there any other videos that touch on this subject?
So, your cc minimum payment amount for the cc you want to "put to sleep" is higher than the bill you want to charge on it after it clears, correct?? I just want to understand this because it's a bit confusing.
Quick question. If my limit on my sleeping credit card is say $9000 and I’m at $8000 do I still pay the bill amount plus the interest ?
Excellent question. My answer is, that depends. You’re at 89% utilization so I’d want to know…
1)What’s your minimum payment on that card?
2)How much of that is interest?
3) How much do you have to pay off on your primary card?
4) Are there any other cc minimums going towards your primary?
@@askmehowibudget minimum payment is $141 , interest is $131 . Primary card is $10000 that I’m trying g to get down first , I have another card that I use for another bill payment/ sleep card , that has $6000 with $7000 limit . Another card sleeping for my subscription that I use . So 1 primary card then 3 sleeping cards for bills then I have another 2 cards with small limits that I just keep paying minimum payment on until I have the primary card under control. Not sure if this is enough info for you but if you need more info please don’t hesitate to ask . Thank you and keep up the good work as you have brought some peace and made my life a little less stressful with your channel.
Makes sense
You paid the $368 on main debt tool by paying the upcoming bill of $426.01 so that cleared the due payment. Now you have $368 to be able to pay on another debt. Is that target debt a bill your trying to pay off such as making a chunk payments where you can use a credit card payment? Is that what you mean by "target debt"?
Your target debt is your primary card. Your primary card is always going to be the card with the highest minimum payment. That’s why we use the primary card for our budgeted groceries, gas and BUDGETED misc items (like those trips to Walmart for cold medicine or a forgotten gallon of milk), because groceries and gas are a big part of anyone’s budget and the card with the highest minimum payment isn’t always easily matched with a bill. Groceries and gas, for most people, can easily match any credit card minimum payment. So if this card has its minimum satisfied by what we’re paying ANYWAY for groceries and gas, every other available dollar thrown at it (from the sleeper cards, from coming in under budget, from overtime, from side hustles, from whatever every available dollar) is going to pay down the balance and reduce the interest payment. And as soon as that card gets paid down, the card with the next highest minimum payment moves into position as the primary card.
I think you could do a video on Bills & Expenses (using real people examples). That concept alone needs to be drilled in for some. Once anyone grasps it (lightbulb moment) it's all crystal clear. But it's obvious there are still some financial cobwebs lingering for some folks.
Molly. Thanks for all you do for the community and your #1 Sidekick!
I’m getting closer to wanting to do that live session. I’ve gained some interesting observations through this recent community case study regarding debt, denial, compartmentalizing and coping. What do you think do a live before the holidays or after?
LIve session that is on a Mon-Thurs (so I can be there). There is something about people being resistant to change. I've mentioned dozens of times that I have family members still paying bills with checks, while worshipping Dave Ramsey as a Financial Wizard. @@askmehowibudget
do a live asap ! You are doing a great job and your subsc are rising quite quickly! Thks@@askmehowibudget
Before
What if your debt tool min balance is higher than you monthly variables? I’m using two cards. But my primary card min payment is $700 I don’t use that much on gas and groceries a month 😢
Remember you're also parking your monthly cash flow on your main debt tool. So your cash flow and miscellaneous expenses should cover it.
Which card is the Primary card?
Whichever credit card has the highest minimum monthly payment because it gives you the biggest cash flow boost. Have a great day.
Here's a better system that involves a lot less thinking:
1. Cut out all your expenses that aren't absolutely necessary. Streaming, eating out, coffee, expensive phone paid monthly through an expensive phone plan, etc. Cut your own hair, do your own nails. Don't go in a restaurant unless you're going to bus tables.
2. Apply ALL that money to your lowest balance card. Minimums on the rest.
3. When the first card is paid off, CANCEL IT and put the extra payment toward the next. If you keep it, you'll be tempted to use it.
4. Repeat with the next, etc. Pretty soon you'll ENJOY paying off debt and living frugally.
5. Once you're debt free, you can add back A FEW things, but always paying cash. Start saving and investing.
6. Eventually, retire in a better position than all those people who use tricks to "manage debt" their whole life.
This is classic Dave Ramsey advice. Telling people to cancel their cards is grossly irresponsible as cancelling cards negatively impacts credit score. Age of credit history accounts for 15% of credit score and in this day and age, folks need every percentage point they can get. Like it or not, our credit score impacts our daily life in a surprising number of ways.
Looking for an apartment? Good luck. Affordable housing is scarce and thus highly competitive. Marginal credit may require a co-signor, it may require you paying ALL the rent for the entirety of the lease UPFRONT, OR it can result in a flat denial. I found this out the hard way when I got divorced in 2017.
Need car insurance? Your credit score is a determining factor in the rate you’re quoted.
Looking to get a security clearance for a government job? If your credit score is questionable, so are you.
Moving to a new area and need to get the utilities turned on? In my small town of 22,000 you’re charged a $300 deposit with the electric company if your credit is less than stellar, and another $200 at the gas company.
And fyi, even Dave Ramsey himself admits his way isn’t the smartest way to pay off debt. It is merely A way. He focuses on the psychological win. And it works for many people. (People who seemingly enjoy frugality, sacrifice, and a long arduous journey out of debt). No thank you. I'll stick with Velocity Banking.