Pay Off Debt with ZERO Cashflow: Don't cut expenses- use velocity banking!
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- เผยแพร่เมื่อ 27 มิ.ย. 2024
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00:00 - How to satisfy the minimum payment requirement
01:25 - Month 1 Walkthrough
02:15 - Month 2 Walkthrough
04:11 - Month 3 Walkthrough - แนวปฏิบัติและการใช้ชีวิต
What questions do you have about velocity banking? Submit your own numbers for me to walk through here on my channel: www.financialcoachjess.com/casestudy
Just sent my form thank you!!!
You explain everything so simply. Thank you. ❤
Thank you so much! 🩷
Thanks. I'm going to send my numbers. I started Velocity Banking for the month of December, but....😊
Send it over with any notes you want! If something is tripping you up, let me know 😊
Priceless content!♥️🙌 gtfo the matrix 💪👑💰✈️
Many utilities can be paid with a CC
Hi Jess! I wanted to give you heads up that I sent you my Case Study Info Sheets! Sooo looking forward to hearing from you! :)
Got it! Thank you!
Great information . But yhe biard5 anf figures ate to small bigger white board be per5 . Thanks Paul
I agree, the font is very small if you're on your phone!
I am gonna fill out your form and let you run my numbers for me.I do velocity banking but I think I'm missing a step....thanks in advance for your help!
Sounds good!
Awesome! How did your numbers go?
That’s the video I was looking for! How to do velocity with 0 cashflow . Thank you! Do you have same principle but for paying off mortgage?
You're welcome! Vb usually breaks even with the debt snowball on a mortgage. It's not really worth it because of the low interest rate on the mortgage. I need to do a video on this because I get this question a lot!
@@FinancialCoachJess my mortgage rate is 6.5%that just started past November. I have a $7200 LOC at 11.75%. Would it be worthy it then?Thanks!
@SuperFS11 id have to see your whole situation to be able to say! Without knowing cashflow I can't say. You can fill out your numbers with the link above for me to go over your case study and make a note that you're curious about the mortgage.
@@FinancialCoachJessworking on the doc to share with you 😊 thanks
Got it!
What is being overlooked here (and in many other videos) is that the minimum payment of $160 that the person had is roughly $100 in interest and $60 in principal
Thus before using this approach the debt was already being reduced at the rate of $60 per month
Moving $2400 every month to the card saves interest on roughly half (about $ 1200) of that per month assuming expenses are spread out evenly during the month (if expenses are all on day 1 then it saves nothing).
At the credit card interest rate of 30% this means that per year it saves $360 of interest ($30 per month) at best (less as the debt decreases, since with a lower debt there is lower interest). So sure $30 more per month is better than nothing but it is not spectacular
Moving the $4000 debt to a lower interest rate card (say 20%) or loan (say 10%) will save more
I agree!
Amen
That’s assuming the person can qualify for a lower interest rate card or loan. If they can then they should definitely do that.
Not me. If you take a look at my videos, I indicate that one payment of mine is composed of $141.85 is $89.95 interest and $50.90 is principal.
New subscriber here🙋🏽♀️...I'm following along closely so I can learn this strategy. However, I'm getting tripped up on when reaching a zero balnce you still have to account for expenses to come out for that month correct? So my question is how do you stay at zero balance if you have to use what's paid in to cover expenses for that month once you reach zero? I hope that makes sense🤦🏽♀️... I'm no too good at math 😂
I think I see what you're saying, like you can't put in your income when it's zero balance but you still have expenses for the month. So you can keep using the loc for expenses (since it might be a habit at this point) and pay them off with your income until you are independent of the loc completely. Or you can gradually transition to using your checking account instead of the loc, so if your paycheck has been deposited and your loc balance is at zero you can just use your checking account for your expenses until that runs out and then loc for the rest and that amount will slowly go down. 🥴 does that make sense? Kinda hard to explain in a comment 😆
Awesome
So if I do the same if I’m paid every two weeks. Pay my mortgage with my account. Then take what I would pay for utilities, insurance etc with my debit card, I take that money and put it on card and pay it off with card? You also need to do this like a day before statement date right?
When exactly should I make the large payment? Right before the due date?
Right when you get it! It's called "parking your paycheck" so you are running your monthly budget through the line of credit
I'm very interested in Velocity Banking BUT how does someone do this when there are numerous credit cards that are maxed out. I can't figure out what to do in this case, several credit cards. Any help would be greatly appreciated.
I recommend debt consolidation with a regular line of credit
How this work when you have multiple credit cards? This scenario only explained with one credit card. Thanks
I recommend getting a regular line of credit to consolidate the debt and then doing this method 👍🏻 good question!
How is this done if you have multiple maxed out credit cards, that are all due around the same time?
I recommend a line of credit for consolidation! If your credit score needs help check out this video: th-cam.com/video/A94Tzp7_T68/w-d-xo.htmlsi=RicctgM2MpZfJudC
I can’t seem to figure out how to apply Velocity Banking to my current situation. I only have 2 debts. A credit card on 0% and a car loan at 3.79%. I want to get out of debt asap but feel like maybe its best to stay with what i have by making just the minimum payments and adding extra $ whenever i can… I can’t seem to make it make sense with my income and budget and it’s driving me crazy! lol
You're not crazy!
Very smart of you to reach out and not just blindly do it because in your situation with those interest rates, I'm sure that extra $$ toward the balance is going to be faster than vb. Here's the math: th-cam.com/video/6yBr3NmfmQE/w-d-xo.htmlsi=uyN36VsyvU8CTQOB
THANK YOU!
@@melieplno problem 😊
Problem is when you have maxed out multiple credit cards and are drowning. How does one get out of debt when you can’t take on another loan?
Cut expenses and increase income!
HOW ABOUT IF YOU HAVE MULTIPLE CREDIT CARDS?
I prefer debt consolidation with a regular line of credit. Once all or at least some of the cards are consolidated, you can work the line of credit like I show here
I keep trying to follow but I get lost on month 1!
Why is she having interest if she is putting her paycheck minus checking account, into her credit card? Is she putting the whole $4k into it???
Because throughout the month, her expenses are going back on the cc so she does have a balance at the end of the month that she owes interest on. She can try to time it so that she deposits her income right before the statement closing date (I talk about that in my vb vs debt snowball video) but it can be very hard to do when you have no cashflow
What if you have more than one credit card, like 3 or 4, and wanting to pay them off. I'm confused about using one credit card for expenses while using your monthly income to apply towards a credit card balance?
I prefer debt consolidation with a regular line of credit. Once all or at least some of the cards are consolidated, you can work the line of credit like normal
I DON'T KNOW WHERE TO EVEN START?
I offer one to one coaching or I have over 100 TH-cam videos.
OK! I TRIED DOWNLOADING THE FORM YOU HAVE FOR MY NUMBERS, BUT I COULDN'T. MAYBE BECAUSE IM DOING IT FROM MY PHONE? I'LL BE HOME SUNDAY AFTERNOON. I HAVE EVERYTHING WRITTEN DOWN. HOW MUCH YOU CHARGE FOR ONE ON ONE COACHING?
All the info: www.financialcoachjess.com/12weekstowealth
@@FinancialCoachJessouch $1,500 over 3 months. I'm out.
Not sure how the minimum payment for the LOC or CC goes away?!?
I'm sorry if that was confusing, It doesn't go away, it is satisfied by the paycheck deposit to keep the average daily balance lower and pay lower interest than if you were to just pay the minimum payment when it's due. Does that make sense?
@@FinancialCoachJess thanks for replying… seems to me that if your monthly pmt is $500 and you transfer $5000 from checking that the $500 would still come out of the transfer? Obviously I’m not money or credit intelligent!!
@ericg649 no worries, you are correct!
@@FinancialCoachJess so why do you and others neglect this and make it seem like the debt goes away faster???
I don't think I neglected this. The savings is in lowering the average daily balance and paying less interest
This assumes discipline and that they will not use the card to buy things they can't afford while simultaneously giving them a handicap of the easiest way to increase debt - a credit card.
Velocity banking is def not for everyone! But overall I think for some people the reward outweighs the risk because you pay significantly less interest, see an increase in your credit score almost immediately, and get out of debt faster.
She would decrease her balance by almost $200 if he had just stopped using the credit card and made minimum payments in this 3 month example. I don’t understand why so many VB advocates think it’s a good thing to not make extra money or reduce expenses. It’s like this client is going to magically start living on what she makes and stop using credit. The last thing she needs is to increase her credit score so she can go even further in debt. Yes, IF she is going to get out of debt and get on a budget, this example shows a slight savings in interest. Maybe that will be enough to motivate her to pay off the card as quickly as possible.
@user-ev2km9gq8d to your point about the person magically changing one day and living within their means: don't we all hit rock bottom at some point and make a lifestyle change? 🙋🏻♀️ I see it happen all the time, so it's not that crazy to me.
I really liked what someone else commented recently and it was that no strategy-vb, snowball, extra income, cutting expenses, etc- is going to work if you don't have discipline. A lot of people think vb is their savior. It's not. The missing piece is often discipline and focus
I agree, I think it's much easier to make extra money than to do vb honestly 🤷🏻♀️ but that's my opinion. Many people might disagree.
And that is the biggest problem with it. Most people with debt issues are in debt because they can. Ot properly use revolving debt properly and just spend every penny they have access to on non necessities.
Amen
Hell yea, your credit card company is going to say no to an interest rate reduction. A balance transfer may make be a better choice, but you want a 640 credit score or higher.
I've had clients get a temporary interest rate reduction. You never know until you ask!