Velocity Banking: How Do I Roll Cash Flow from One Credit Card to the Next?
Vložit
- čas přidán 29. 10. 2023
- Get ready for a Velocity Banking challenge! A viewer asked, how do I roll the cash flow from one card to the next? So we're diving into a word problem and I'm breaking it down step by step.
The key takeaway in this video: it's all about managing cash flow effectively. By budgeting and using each card strategically, this viewer can maximize his financial resources. This approach ensures he doesn't have to come up with extra money for minimum payments and can pay down his primary card more quickly.
Remember, Velocity Banking is all about optimizing cash flow to pay down debt effectively. Stay tuned for more exciting insights!
If you find my videos helpful, please like and subscribe!
Shop for Velocity Banking worksheets and case studies here payhip.com/AskMeHowIBudget
NOTE: I am not a financial advisor and I do not provide professional financial advice; the information presented on this channel is presented for information and educational purposes only. Following any words, actions, or advice in this video or on this channel AS professional financial advice is not intended and is the responsibility of the viewer, not the video creator. The knowledge presented herein was gained from my personal journey getting out of credit card debt. This channel was created to share my experience with others.
#velocitybanking, #creditcarddebt, #velocitybankingwithacreditcard, #cashflow
Like you, I am a very visual person. The information I get from other channels are great but kind of go in one ear and out the other.🙁 Your videos are extremely helpful to me and not only with the visuals but with your printouts. I purchased your last case study as I have purchased your precious ones. The dots are all beginning to connect, my numbers all added up this month, my credit score is going up slowly (have lots of credit cards) and I feel like I succeeded after a few attempts in the last 57 years, lol! Thank you for your time and effort to educate us!
The visuals including taking away the extra information that just isn't relevant, is extremely helpful. Thank you!
Glad it was helpful!
YEY!!!! Love seeing your channel grow.
I’m beyond happy every time I see a new video ❤
Me too!
Y’all 😊😊😊
Me three! 😉✌🏼
Great!!!
THIS made it all click for me. THANK YOU!!!
this is great!
Good stuff as always, Molly! -Kyle
Shop my money tracker worksheets, Excel/Googlesheets template, and real-world Case Studies submitted by viewers new to Velocity Banking! payhip.com/AskMeHowIBudget
Great video explanation. !!!
Thank you!
Of course a visual! I love seeing them... they make it understandable! I also freak out with all the information. So striking the unnecessary jibberish helps.
Right?! Now, when I do a case study I want alll the info so I can properly strategize but when you’re new to the concept too MUCH information can be overwhelming.
That’s me. Word problems. Forget it
Love your visuals! They really do help. I think I’m on the right track, but I do get overwhelmed at times. Do you have a way for us to contact you for advice?
Sure do! Email me at askmehowibudget@gmail.com
Do not think of me as just a superfan. I'm your sidekick!
Okay but my sidekicks require protective eye gear, a cape, and a sidecar.
@@askmehowibudget -- will I get to drive sometimes?
Absolutely! You gotta drive before you can fly!
What does it mean when you say put $118 bill on cc 2?
You pay bill $118 with cc 2 then pay the card?
what about the finance charges. in this case cc2. that bill brought the balance right back.
Could you do a video for if you just have one card? If you've done one already, please link it. Thanks.
I don't think I have one. I will definitely put that on the list!
Hi, I have a question if I have loc at 35K, which is the cap at 10.5% and visa 28000 at 20.99%. Mc 2000 at 20.99 % Which one do I start with first. Thank you
I’m about to start this! I have several credit cards like this example, with various fixed interest rates from pretty good to awfully high, and with varying balances. Which card should I designate as my “primary” card? High or lower interest? High or lower balance? None have awesome rewards to consider (I’ll work on getting a better card eventually).
Typically in Velocity Banking your primary card is always the card with the highest minimum PAYMENT. The reason: your variables (budgeted amount for groceries, gas and misc items) will often be MORE than your monthly payment so when you pay your card to cover the groceries and gas you satisfy the credit card's monthly payment. You're not having to come out of pocket with anything extra, you're just paying for items you would bought anyway. Some people refer to that as "two birds, one stone" or "using the same dollar twice".
Here's where I have a hrd time getting started. Placing your $800.00 cumulative grocery expenditure in the card on a min payment of $438; yes, does in fact cover that payment. But it just increases your balance $362.00 when you buy your groceries. There will be a perpetual in/out and never getting a reduction in balance. This cash flow of 438 dollars is really just a placeholder. Right?
The interest on lines of credit (in your case credit card) is calculated on the average daily balance. So if the more, and longer, that grocery money stays in the credit card the more interest you save. Example: If you grocery shop once every two weeks and you place let's say 400 at the beginning of the 2 weeks for groceries. Your interest on that credit card is 22% interest. That means placing the 400, for 2 weeks earning 22%, earns you 3.66 for 2 weeks of parking that money in the credit card. So doing this for a year earns you 95.33 for the year. That doesn't include the rewards cash back for swiping your credit card. This is only groceries, imagine doing this for other expenses. Remember, change your mindset from your credit card being a bill/expense to an unorthodox checking account where you park your cashflow and pay your credit expenses from.
@@Jesus-kt5dcI think I've grasped velocity banking except for one thing. How is cash flow transferred from one card to another.
@@user-ui7oc1ow9m That's up to you. You can zero out your main credit card and just start putting expenses and cash flow on your second main CC. Say CC1 is at 0 balance. You then start putting credit expenses and cash flow on CC2. Another way is you don't zero it out because the minimum monthly payment is so small that you just start making minimum payment on CC1 and move on to CC2 as your new main CC.
@user-ui7oc1ow9m I posted a comment with a link but I think it got deleted. Hopefully you got it.
I get that we use our bills as our CC payments but having trouble lining up the bills to the CC. If my CC due date is the 22nd, do I chose bills that are after that date so the payment is on the CC before charging again? Also, I'm able to pay my rent with a CC so should this be on my primary card or chose another card? I don't have a CC payment this high ($1400).
Shoot me an email. Fill out the Month at a Glance and the credit worksheet and I’ll take a look.
I like the scenario you laid out. My issue was I’m in negative cash flow so I am already using my primary card for gas and groceries and I have one bill that I can pay with a credit card which only totals $80.
Car insurance ?? Internet? Water ? Power ? Tv? All of these i can pay with a credit card
Good video thank you. Do you also transfer your income to your primary card?
Yes I do! You can find how I do it in my money tracker videos. Basically, my husband and I get paid weekly. I deposit our paychecks in the bank on Saturday, I pay all the bills (that can’t be paid with a credit card) for the upcoming week out of our checking account, what’s left over is made as a payment to our primary card. So, I’m depositing the REMAINDER of our paychecks on to our primary card each week. This lowers the average daily balance, which lowers the interest charged, it pays the card back for what we just spent buying groceries and gas the previous week, and it pays down the balance.
Awesome. May I recommend that whenever you are shopping for a new credit card to look at a local credit union. I was able to get a very generous credit limit through my credit union and 0% interest on transfers for six months. Six months is not a long time I know, however, there’s a major upside with the credit unions. You can transfer as much as you have available in your limit over to your bank account for no fee and as many times as you want a month. So I can literally put every single penny of my income into that and then whatever cannot be paid off of that credit card. I transfer over to my checking account and then pay out to my mortgage and such. I believe it works like that with all credit unions, take a look if you ever need to.
If I was wanting to get some advice from you on my velocity banking. How would I reach out to you about it?
I would also love some advice from Molly. I think I’m on the right track, but another set of eyes never hurts.😊
Just email me at askmehowibudget@gmail.com
On the example above, $800 is paid on CC1 then the minimum payment is $438. The remainder is $362. Why is there a cash flow of $438, is that for the next month? Sorry I'm confused a little bit about this.
Check out this video, it might make it a little more clear. czcams.com/video/eBFlB7ltP6c/video.htmlsi=RMtvoHHZpgn4PrOp
The reason for 438 cash flow is because she's using those dollars 2 times. The old way of managing one's money is you have to come up 438 for the CC minimum payment and another 438 for the bills/expenses, usually paid from a checking account. Using VB, velocity banking people know that putting your money into a LOC (this case a cc) the money isn't gone, it's resting on the cc saving you interest until payment of the expense/bill comes due. You must change mindset from a cc being a bill, to it being an unorthodox checking account. In some cases saving/earning you 30% interest. Hopefully this helped, have a great day.
I checked out the video and understand they amounts and how the CCs are paid but where is the acctual money($438) sitting where you can actually use it to pay on CC3. Because you can't pay a CC with another CC, so the $438 must be in cash somewhere@@askmehowibudget
Can this be done in the United Kingdom?.
I don't see why not? Is there any particular reason why you think it would be an issue?