The Vault with Financielle - Should Couples Combine Finances? | The Vault Episode 26

Episode Date: August 21, 2024

Send us a textIn Episode 26 of The Vault, we discuss the controversial opinion, ‘Couples should always combine finances’, before diving into our listener dilemmas:- ”I've always been an 'executive sponsor' for my friends” - ”£90k debt and my husband has run out of money”We celebrate a listener's money win - they switched bank accounts to snag a £175 bonus, received it early, and immediately used it to overpay their loan! 💸 #FinancialFreedom #DebtFreeJourney #GoalsIf you’d like to share your money win, head to the community in the Financielle app or email [e-mail] your (totally anonymous) money dilemmas to [e-mail] and we may feature yours on a future episode 💌Chapters:00:00 Welcome to The Vault: Episode 2600:37 Celebrating Milestones and Listener Feedback02:28 Combining Finances: A Controversial Opinion03:06 Personal Experiences with Joint Finances04:19 Financial Privilege and Trust Issues06:04 Balancing Independence and Joint Goals12:28 Generosity and Friendship Dynamics18:39 Community Wins and Bank Switching19:23 The Albanca Switch Mishap20:08 Charity Direct Debits Tip21:51 Financial Community Service Idea23:12 Debt Dilemma: Husband's Confession25:10 Analyzing the Debt Problem29:46 Debt Repayment Strategies32:27 Emergency Fund Importance34:29 Final Advice and Encouragement35:50 Closing RemarksThe Vault is an entertaining yet thought provoking podcast that answers our community’s dilemmas and confessions surrounding women and money.Visit https://www.financielle.com to download our app.Watch the podcast on YouTube.Follow Financielle for more:▶︎ TikTok▶︎ InstagramAbout Financielle:Financielle is a female focussed finance app helping women to take back control of their money, ditch debt, increase savings and invest in their future.Recorded and Produced by Liverpool Podcast Studios▶︎ Web ▶︎ Instagram▶︎ LinkedIn

that's a way we're suddenly like selling things around the house going you get scrappy yeah absolutely oh my god you go to war you get a bit feral yeah i'm gonna sell it all get off that sofa i've sold it three hours ago the man's coming now he's coming now get on the camping chairs welcome to the vault with financial this is a safe space where we talk all things life and money and no topics are off limits. Happy episode 26.

Oh my gosh. Lucky 26. I can't keep being surprised that we do it every week. I know. Oh my gosh. We've still got a job. We're still here.

Are we going to celebrate for like big milestones? What's the big milestone? We've not done our milestone celebration yet. Maybe food after here.

We're all like food's our love language to four of us. What about like for the pod? Oh. What's the big milestone? We've not done our milestone celebration yet. Maybe food after here. We're all like, food's our love language to four of us. What about like, for the pod? Oh. What do you mean? Like, what's the celebration? Special outfits. Definitely.

Cake, badges. We can't be balloon wankers. Have you seen that on? Oh, yeah. Yeah, I think we could. No balloon wankers allowed. But for like, when people hit 10k on Instagram,

woo! 100k, woo! I've seen so many people try to get to the 10K and they tell the followers and then people just start unfollowing them. Yeah,

and it's like, no, it's weird. I saw someone do it that hit a million and then I went back on their YouTube channel the other day

and they were like, 9,000, 9,000, whatever it is, 9,900, 9,700, 9,000, or 900,000.

I was like, did they lose like 900? Yeah, so people just went eh not letting you get to that milestone haters we will never say

people are asking us for longer ones that these are a bit short would you like longer podcast we could look at longer and we could look at more

so now we do one a week could we do more do you want more tell us we i mean you do but tell us louder yeah and like if there's anything that you think would be good to cover or again keep the keep the dialing has come in because um we get we get a lot we're gonna think about how else we can answer them when they can't all make the pod, because there's so many now, and we want to be able to, they're so good that it's really helpful

to workshop it with many. So whether that's in the community more, whether it's TikTok, we'll share with you, but we're getting that many. But some of them are a bit repeatable, that we'll make sure we answer them all, but we want you all to be involved in answering them. So watch this space okay I've got a controversial opinion

I think it will be maybe let's see couples should always always always combine finances what you're all thinking when you hear Lizzie say that what you're all thinking when you hear Lucy say that what you're all thinking I'm going to say couple I'm thinking minimum three four years into the relationship okay extra context but you don't have to be married so we lived in a household whereby we went there before our parents got married so I don't know what they did prior to that but all we've known is our parents having joint finances and it worked really well for them because I never ever heard my parents argue about money I never heard gonna be a bit stereotypical because these are the types of dilemmas that we get into the pod my dad

criticized my mum in any way for buying school shoes paying for school trips booking holidays like any of the types of dilemmas that we're getting where people feel like they're getting kicked back for managing a budget at home and the other person's not quite on board I never heard an argument about money and therefore me and my partner followed the same thing whereby we have had joint finances for as long as I can remember and we don't we don't argue about money either so there's no there's never any of that one and you're gonna come in with your one-upmanship stuff with Alex whereby he buys a pair of trainers and Lucy's like well I've got to buy a pair of trainers now there doesn't really

there is never anything like that because it's our money it's never your money and my money in a central part for but for bills we literally put everything in the top because we've got two joint children together the life admin dear god it's hard enough anyway I can't imagine what it would be like if it was I bought you dinner the other day so can you transfer me that money on top of everything else that you've got when you start to build out a family um the added layer of privilege on that is a mum and dad that stayed together a mum and and dad, like it was a safe space. Earnings, like from what we know now, they eventually both like worked their way up the career ladders.

Early days, like they weren't big earners. Like it wasn't like, oh, there was loads going around. It was they did this both from working class homes, like really struggled in childhood, slowly, slowly built up financial stability. But yeah, massive level of privilege on that, that there was no financial coercion, there was no financial control. Or someone didn't have an addiction whereby if money came into the family account,

that person would go and spend it on either alcohol or gambling or shopping. So that's a very neutral place to be, easy place to say yeah it helps to give context is how we can answer that because I think um there is that spectrum of trust and but also slowly slowly catch your monkey so you know I met my partner later and we combined finances. We had a child before marriage. So we combined finances before then. But also we then started to save for a house together as well. So it was a joint account. When was it a joint account?

Maybe when we started to buy the house or save for the house. When you had a joint goal. So we then went and we were living together, renting. So joint savings account and joint current account. And we went there. house when you had a joint goal so we then went and we were living together renting so joint savings account and joint current account and we went there and actually we both kept bank accounts that had little bits of money and we both had savings and stuff but we were both so focused on our joint goal which was saving for the home we both had emergency fund money so we combined that so again really privileged but um the big problem with combining finances, you can't predict the future, but if you,

you kind of know in your gut, if you want extra protection, extra savings, and also just independence. And I find lots of people are finding a great balance between, I have my money, you have your money. Let's do the household budget together. Let's make sure that we do. Yeah. Let's make sure we do the household budget together let's make sure that we do yeah let's make sure we do the household budget together and this is where we come from what contribution do you put in I think couples especially three years plus should always combine their budgeting I'm not as precious about them actually combining accounts because there's so many variables and the big thing here is the more savings going around the better like if you've got your savings and I've got my savings and we've both got our F off money, then that F off money

is also our collective F off money. And so if you get to a point where you've combined finances and you've got joint savings and stuff, and then the relationship breaks down, as long as there's not a worry that one would run off with money and steal money, because that's the problem. You've got a joint account, someone could clear it out and that literally does nothing the bank will do nothing will happen um usually for that because it's kind of a joint account so you'll if you if you don't have those vibes and you don't have that echo you don't think that someone could do that then having joint stuff is is great and it's wonderful as holly said i just like the idea of actually you also have stuff in your own name and quite frankly the more financially well you get the more savings pots you need

because you want to be able to get all these good interest rates and you might have five grand in your name two grand in the other's name like it's that's a goals place to be anyway and if stuff breaks down you've both got access to kind of finance what do you think what do you and alex do i think we do like percentage that works for us we're obviously not married i think we've been together four or five years so you check so you budget the house together yeah so we do a combined budget for the house not for everything in life but uh yeah so like all bills expenses like food and stuff, like maybe like date pots or stuff like that. Everything that we spend together,

that would be like based on a percentage split. And then hair, appointment or new shoes. That's all mine. And like that's all his, whatever we want. I can see it. I think the budgeting together is the important thing. Yeah. And like starting that and getting that as a habit

early on but yeah I don't think I think it would cause arguments right now if we were fully combined if you could join everything

yeah and it's like each to their own there's no right or wrong so yes it's a controversial opinion potentially but it is

in each to their own situation it's a great relationship therapy process to start. When you start, oh my God, it's a bit like naked attraction. Let me see your current account. It's like, you know, it is an interesting, there's so many people so defensive of, if I want to go get coffees,

I don't want him to know that I'm getting coffees. That's my business. And I get it, I do. but there's also something quite freeing about sharing that and sharing that you like to go get coffees and if you're getting too many coffees you probably know you are like it's like a conversation to be had the day my mum and dad went like digital bank was the day that my dad has massive regrets because he said to me like when notifications happen because it's the notification pop-ups with the neo bank versus the older banks didn't use to do it but they do now but they didn't so there was that's that's what you mean

isn't it yeah so you'd say like greg's he's like oh she knows i've been to greg's again like do you need another sausage roll a little snitch roll in your pocket yeah but there was a time when they all do it now but the traditional banks didn't and the starling did and the company number yeah what's that i don't know it was post office now it's greg's mcdonald's greg's greg's greg's greg's pub can't hide just a quick one laura here. If you're wanting to take back control of your money, ditch debt, make better decisions and build wealth for the future, the Financial app is for you. With Financial, you can track your spending on the go, hit your money goals faster and create a realistic budget that you can actually stick to.

Not to mention, you'll be part of an exclusive money community who share tips, offer support, and celebrate your successes along the way. Click the link in the description to download Financial and start your free trial now. This is your sign to take control of your money today. Okay, I'm done. Let's go back to the vault. But the big thing that people, we see the shift when there's a relationship where you are completely committed to each other you've been there a long time you're you you kind of married in the sense of the world like you're sharing lots of responsibilities for example and returns leave happens or a job loss happened and so if your partner had a job loss Lucy but you were kind of cracking on in the same

way that you combine the household budgeting personal money's our own he could be sat there going i can't contribute to the main pot and by the way you're going having a gales and a nice hairdo and like i'm struggling and or we want to go on holiday together and he's like i can't you can understand how there's such a job loss or a health issue. Flip side is like maternity. So if you have children, this is where we see the lack of combined finances really holding like the woman back or the man, if they're having extra parental leave, because suddenly the wage drops and the other person's still getting their disposable income and, oh, I've put my part into the pot, you know, but I can go have tennis lessons until leave because suddenly the wage drops and the other person's still getting their disposable

income and oh I've put my part into the pot you know but I can go have tennis lessons or you know do an online order and so when you get to these like really big life stages um even if you don't want to fully combine all bank accounts and have it all sloshing around together be mindful of those moments when there's an imbalance because again this is a relationship opportunity how can we navigate this moment how can we help the other person out it's such a loving thing to do um and it it's it's very like empowering for the person that can help out more than the other one and I don't know I like it yeah I like it I think it is different for every situation okay I've always been the executive sponsor for my friends that's the sad name my late husband used to call me I used to take my friends shopping in New York using my husband's points that had to

be used by a certain date spending loads of money on clothes flights food, food, drinks, you name it. I was the bank always lending money that never got repaid. After my husband's tragic death eight years ago, my so-called friends vanished quickly. However, new ones came, leeching off my continued generosity because I still had plenty of money. For a while, I kept up the habit, thinking I was helping or maintaining friendships, but then I had enough. I realised it was all one way and worth no and worth nothing I decided to change I cut off the leeches became super careful with friends strict with the strict with expenses and I stopped lending money and giving things for giving things for free my peace of mind is great now because I know where I stand but here's my dilemma was I wrong to cut off these friends and change my

ways so drastically how do I find a balance in between being generous and protecting myself from being taken advantage of this is a really difficult one oh that's a sad name isn't it that so her late husband even identified there was a problem here and he spotted yeah he spotted early doors that she was being taken advantage of effectively by her so-called friends and I say so-called because that's not a friendship to me I don't care if you pay for me to go somewhere pay for me for dinner I loyalty and friendship yeah friendships about friendship and it was telling that when her husband died those people went away like that's a perfect your friends are still by you no matter what,

no matter your financial situation, no matter what's going on in your life. So I think she'd answered her own question in that she was right to cut those people off because they obviously didn't stick around when she absolutely needed them. But yeah, it's a tough one. We all kind of find, especially if we're going through something like that or a period of low self-esteem,

period of like neediness maybe, like we find our role. I see it a little bit in some of like my daughter's friends on their rugby teams. There's a couple of girls that spring to mind where they have been through a lot, have been through a lot in home life and they, you know, naughty at school, detentions, getting in trouble,

can be aggressive verbally, not really aggressive physically, it's rugby, so you can get a bit aggressive, but not like, not out of order, just. And the two in particular, and I feel like they think it's their role to be the naughty one, to be the cheeky one, to be like, that's the role I play in the friendship group. That's the role I play in

the cast. And I'm accepted as that. And people know me as that. And if I'm going a bit on a tangent here, because what I feel like is if I'm not that, who am I? And I think that when you are in a place of low self-esteem or of neediness, your identity is really important. And if that's the, you could have even been playing up to that, if that was your role. So if your role was, I provide for my friends, I treat us all like, it's, you know, I can afford it. You know, some of these friends have obviously, they might have intentionally taken advantage initially, but it's kind of the routine. It's really sad that suddenly I think she's woke up and gone, hang on, was that my role?

Am I the provider? And I'm proud of her for going, there's more to me than that. It's hard because she obviously gets a joy. From being generous. Some people do you have people in friendship groups that friend springs to mind and if she's watching and i'm calling her out like she will always be there i'll buy the drink for everyone and i'll do this and i'll do that and sometimes you know she's not like it doesn't serve her that well in a financial well-being

sense of you and laura challenged her on it the other day and she was like come on now and she's like I know but she's just she's the happiest I feel like she'll know I'm talking about her yeah yeah um but yeah she and and you just want to say like you're more than that that point you're more than that to us like you don't need to be there I'll buy it I'll do it I'll host you like she's she's a the host, but I feel like it will impact her financial wellbeing for sure, because she's just so generous and she's that, that's her personality. She's just so happy, go lucky and wants to look after everybody that, but it can kind of backfire for you personally. It's something that we all have to be mindful of because, um, recognize your own value in, in your friendship groups.

And I said that I would counter her to say, did she take on the role so much that it could wear her friend's leeches? Like we've talked about this before, like the leech concept. Yeah, she might have overcome. Sometimes it's a sense of like little self-worth, isn't it? Where you're like, I'm going to do it

because you just want to get in there. Yeah, like you'll get a little buzz and dopamine hit from treating your friends and then you've created that character they've not necessarily put you on a pedestal

and gone so obviously you're paying expectations if you start the friendship with I'm going to buy this of course people are just going to settle in

for the ride and also you know if you want to go to New York and you have points and or money and whatever and your friends can't afford it but you want them to be there you're like come on I'm paying because I want to go to New York and um you have points and or money and whatever and your friends can't afford it but you want them to be there come on I'm paying because I want to go um but

it's about picking your friends wisely and making sure that you're happy in yourself that you're worth more than that because it because the thing with she talks about being like a money lender no no no no you should never and like i talk about like if you're in a position of strength financially and if a friend or family member is struggling and if you want to give money as a one-off like you give money because not a bank you're not you're not a bank so you can't give more than once no you're not an atm you can't give more than once and you also can't you shouldn't lend because it's just it's just this really weird thing with friends and family when you lend money really weird it's especially if it's more than a one-off because then you're seen as an atm and that's i can't imagine that feels nice yeah definitely not

okay this is a community win i switched my bank account earlier this week as there was a switching offer giving 170 pounds cash for switching my bank account earlier this week as there was a switching offer giving 170 pounds cash for switching my bank account it says it would be paid within 10 days of switching and i received it earlier today went straight on overpaying my loan to clear it using the bank's money against them weaponizing they're scared of you i got one too can i just say i've got a little win i did a current didn't yeah I did you finally did one I did one

ladies and gentlemen we've only had this business god knows how many years Holly's done a bank switch and my husband did one as well you doubled up so that's double bubble

what did you get 175 times two I'll leave that to you under pressure you're 50 I round about do you I mean Lucy yeah this is a touchy subject I'll leave that to you under pressure 150 around about do you

I mean Lucy yeah this is a touchy subject Lucy what happened with the old bank switch well I didn't read the blog post close enough

clearly in the app I went to do which one was it first direct same one that you did sorry and I didn't realise I had to set up two direct was it? First direct? Yes. The one that you did. Sorry.

And I didn't realize I had to set up two direct debits to switch over. And I just switched a random bank account that I had from a last switch with nothing in it. It had a penny in it so that I knew when it was closed. I've got a little tip for, wait, so it didn't work, did it? Sorry, I've just interrupted you. No, it didn't work. But if you're going to say about direct debits, I wouldn't know what to do anyway. So I've got a tip and maybe we'll turn it into a financial product. But I didn't, I've done it before where I set up some charity direct debits that you can kind of use.

And this sounds really anti-charity, but we give to charity anyway. I've got a giving amount. So I just wanted some small direct debits to be able to use that wasn't kind of key direct debits. Because what I didn't want was those moving around the place because the ADHD in my life just would not cope with where the hell, what's coming out from where, my budget's nice and slick. And so I set up a couple of charity direct debits. But I wanted to cancel them because they weren't meaningful enough. And like I said, I gave it to charity separately. And it was so hard to cancel. And I cancelled one too early and nearly didn't qualify for the thing. And it was messing around. And suddenly I was like, what if I just did a one pound direct debit to financial? So I settled a direct debit from my bank account to our company bank account for a pound.

So we've made a pound. I think there's a bit of a... Can you do two separate transactions? So I did two direct two direct debits yeah so I'll do that next time so in my next work here in my next but I feel like we could probably offer this as a service which is like we make nothing on it by the time we've paid the transfer fee the the transaction fee transaction fee financial is not making any money on that but I was like I'd rather

control that more easily I'll cancel it anytime two one pound direct debits to financial boom and so on my next bank transfer I think it needs two for me two for my husband and I need to do it before the end of July because I read the blog so I'm going to do it again dig because I read the blog

because I read the blog why don't you try it so if anyone dig because I read the blog because I read the blog because I read the blog why don't you try it so I need to reread the blog because I don't know the terms and I think I'm going to do it again

so if you guys if you want me to set up a scrappy web page where you can set up a financial direct debit donate to the cause one pound if it helps you out

it's certainly helped me out because I didn't have to mess maybe we'll give it back as like a prize fund oh yeah that's fun we could do that because literally just to help you it's to help our community it's not it doesn't make we'll give it back as like a prize fund oh yeah that's fun we could do that because literally just to help you

it's to help our community it's not it doesn't make any money like premium bonds but fun and once a month we give the pot to one of the people that use it

yeah we should totally do that right yeah we've not got enough to do so we'll just have a go at that but yeah tip we're not busy enough let's give ourselves another job okay

if you'd like to tell us your win head to the community in the app or email it to the vault at financial.com ready for the next dilemma okay ready for the next dilemma okay yeah talking to yourself are you ready Lucy yeah I am yes yes I am here I go we're going in you know what this is like

do you remember in school and you'd be in English class or something and you would get it would be like you're reading page one you're reading page two

and it's like I'm going to be on page three like let me you read ahead let me make sure bye it's me every podcast or I'll be staring out the window and they'll be like come on sorry okay 90k debt and my husband has run out of money

please help last week my husband came to me to confess he had ran out of money and was unable to make his debt payments days after he'd been paid. He had taken this debt out, without my knowledge, of around £11k, mostly on high interest payday loans. With this new additional debt we are now in a total consumer debt of £90k and this last unknown batch of debt has taken us from keeping our head above the water to leaving us with £100 excess for the whole month after bills, food and petrol. This has become the proverbial straw that broke the camel's back. The debt consists of mostly loans and around £10k in credit cards. We have a combined household salary of £110k and no savings. We cannot move any credit cards to zero interest or consolidate as we have done this several times

and racked up the spending back on the credit again. We have stripped the budget of all unnecessary expenses, subscriptions, beauty treatments etc, no social activities. We clearly have a significant spending problem. With that in mind, how do we change our destructive patterns? We already have a couple of sinking funds but with so little to spare, should we throw it all at our debt or tackle our loans first so we cannot add to the credit cards? I have spoken to debt management charities and there are no other options available to us as we don't want to pursue a debt management plan or similar as this would affect our mortgage when the fix ends. Disclaimer please do not blame my husband this has simply been the tipping point for what has been poor financial decisions and spending for most of our 20s on both of our parts. Sorry the chaotic message and i love love love the podcast i love love love that you

don't want to blame your husband yeah i know because i was about to go in i wasn't really there's obviously a significant spending problem there and that's just not because someone can't be bothered to it's just like debt has been the norm yeah sometimes you need that one thing that makes you go enough like we cannot keep lying to ourselves we cannot keep kidding ourselves and like healthy household income this is evidence everyone like it is not necessarily just the low earners that are trying factors sometimes the more that you're aware of what you've got the better you manage it is so easy to increase spending and this is one where i'm like i wish they could come in and give me the budget i want the budget i want to go line by line we've got our details we'll do a little bit of budget therapy with them maybe

definitely you can do that yeah because and i credit to them for not wanting to go the formal route so they've obviously spoken to debt charities that's a really good tip speak to them because you have more than just the fault and you'll get immediate you know advice and you'll also be able to have it personal to your actual situation and but be mindful that debt charities have been accused is the wrong word but sometimes they're very quick to jump to a formal solution, a formal arrangement, and it's not an easy way out. It impacts your credit and your life for a long time, actually, you know? So that's really for when the math is literally so, so tough. And so you say you've got a hundred excess. I definitely feel like

you need to do sinking funds in the budget from the off the reason is and i mean like necessary thinking for us we like a nice christmas we go on holiday every year and and at the moment i'll be honestly saying you don't go on holiday like this is not a holiday family not for a couple of years because you have to create some this is about creating momentum isn't it and you've got to get the first shove so you do need sinking funds in your budget for things that are going to come up like car car insurances home anything that helps you live your life minimum because you are going to spend so let's not pretend what i would say though it is and i spoke to someone a couple weeks ago about this. Your emergency fund can be like a car maintenance emergency fund. So like, you know, you're going to have an MOT, you should save for that. That's not an emergency. You know, it's

coming. You don't know if you're going to need new tires or not. And so for a period of time to scrape together like a one month's expenses emergency fund being the focus you can really dial back on those I call them safety sinking funds so the house we have a house and garden fund but that and if something went wrong with the house like if we had a leak we would probably use the house fund for it rather than our emergency fund but that's a luxury so we don't need that house and garden fund and quite frankly we don't need the house lot like mowing and we don't need the fence repainting. That's all luxuries. So it's about picking these sinking funds that are for the car insurance is going to come up and actually can get it cheaper if I pay for it in full. So I'm going to put a little

bit away. Car service, MOT, Christmas, you know, birthdays, but we're talking like non-bougie birthdays. If you can get the sinking funds in your budget but as small as possible and still have a little bit of an excess you've had a win but you you need a little bit of excess to create that little bit of shove to get the wheel moving yeah for sure because a hundred pound excess is not not much momentum at all you're not really going to be making a dent in anything but their annual salaries aren't to be sniffed at either like there should be there should be more momentum in that but because the debt's so high and imagine the loans and the interest rates and all that kind of stuff starts to become a little bit overwhelming there's I mean 100% do the money MOT because I would challenge you that you might

have cancelled this that and the other but again a bit of budget therapy like if we were sat next to you could you justify every single item we would be so challenging because someone would be like so we've done it before where someone's spends double on things and they don't realize i'm like but you've already got this over here like yeah but you're like no no or like there's a meal prep service in there or there's a gym but it's really important that i'm being fit and like we get it yeah we we get it and you could put that back in but sometimes you need a six month lean in. And the other thing is income helps you right now.

So I know you've got a really good income, but if one or both of you can drive Uber, do delivery, you know, take on extra proper work, not like you survey stuff, like take on a part-time job again for a period of time. And that was put solely on debt. You would see an impact immediately. Yeah, you can. So this is not going to be easy. This is about both of you realising that agreeing, we have to change our lives. Because what kind of life are we going to live?

So they've said, do they tackle the loans first or the credit cards? Because if they do the credit cards first, they're just going to rack that back up. Well, then don't tackle anything if you're just going to rack it back up like i'm going to be harsh like this is killing you with kindness here you have to decide you're never going to use debt again those cards should be cut up it shouldn't exist go in the financial community and see the people that have cut the cards up because that's someone that is hell-bent on never using credit again the fact that she's already planning to the language is we're gonna we're definitely gonna use it again no no this is a lifestyle change now you now have a new way you will create new habits you have a methodology that you can stick to you don't need to go back into debt you actually don't you can do it so i know what she

means because they she's already said they won't get approved for not percents, which is what she's mentally thinking is if I pay off the, um, if I pay off the cards, I'm not eligible for a loan. I'm not eligible for a new card cause I'm maxed out. So I'll just write them back up again. Um, I mean, I feel like it's, if she's got so many, I would look at the avalanche method for this debt payoff. There's two ways to pay off debt. There's the debt snowball, which is where you list your debts smallest to largest, and you tackle the smallest first. And a Harvard business school study showed that this way is more successful than avalanche because avalanche is about maths. Avalanche method is about tackling debts in order of interest rate so we usually recommend

the snowball because harvard says so and we do what harvard says we're like we'll follow the brains and and we've personally both used snowball method it's very addictive because you get you get momentum straight away like you get the quick wins so you just stay committed to it but in this case like where there's lots of higher interest rates like like not all of us have been in situations where we've got cards, which could be at a 28, 29% APR. It's worth looking at those and doing a bit of the maths because you may find that tackling the loans of the higher interest rate or the cards is whichever way, whichever order you think you feel excited about. And if that's loan first, great. But those cards should be cut up. You should not have them connected to your phone. You should not be able to buy anything with them.

And if you're not going to do that, not that we can't help you, but this isn't going to work. The whole plan's not going to work because you're never going to do it. Like you have to get to a point where you hate that consumer debt so much that it could impact your marriage it could impact your family and you're going I'm done

and if you decide that like you've got so many other people in this community that'll be like yay us too like we did it and we were there

and we thought we couldn't she doesn't talk about emergency fund does she no I don't think so she's got no savings she says because she's going to hate to save them all

but she needs to do the emergency fund first. Because you're just going to go into debt. She's just going to go into debt. Because you'll get the budget wrong. And there will be an emergency. Like, there is. Define emergency. New washing machine needed.

School shoes needed. Emergency flights to see family. Budgeting wrong and you need food. That's like a human thing. So the worst thing about this is I'm going to tell to build the emergency fund first which increases the debt

but it's that's a way we're suddenly like selling things around the house going you get scrappy yeah

absolutely oh my god you go to war you get a bit feral yeah I'm going to sell it all get off that sofa I've sold it

three hours ago the man's coming now. He's coming now. Get on the camping chairs. My favourite thing is sending my husband from a Facebook marketplace. If I've sold something, I'm not going to the door.

You are hiding upstairs. I'm not. We did that last week. I'm not talking to the person. I've got a weight set. I was like, oh, Alex can't lift that all downstairs, can I?

I couldn't possibly. Girl power. And then I'm going out. Bye. So I might call at this time. lift that all downstairs can I I couldn't possibly girl power and then I'm going out bye so I'm at call at this time I've never met

face to face a Facebook marketplace person but my husband has met plenty I actually did it for the first time the other day I gave someone

a Wii sorry a Nintendo Wii yeah for money you gave so many no for free

I just needed it I don't know why we had it bowling don't know why we had it bowling I don't know why we had it bowling the guy has since messaged me being like do you have the sensor

I was like no what's the sensor oh yeah for the actual okay it doesn't work okay I'm glad you didn't I'm glad you didn't charge him money

you give him a piece of plastic I was like do you want this whole thing apart from the sensor yeah so you can't play the games I can see how that will get lost actually they're only little is it like the long thing yeah but it's how this thing works it doesn't work without I think I've got one in my cupboard I'll send it to him I'm not giving him though you have to but there's like this is about small milestones and if firstly, send us your budget, we will love to go through it with

you. And I think if you even looked at it yourself and pretended that you were sat on this sofa, we will be cool to be kind big sisters. And we will be like, nope, like you could do this again for a period of time. Second is, can you bring in any extra money? One of you, both of you, can you get part-time jobs? Can you drive Uber? Can you do delivery? Period of time, you could make 500 quid, a thousand pound in a month. That's building up that emergency fund. And once you've got that, you start tackling this debt and cut them up.

You can do it. Send the picture. You want a picture. Send it to me, I'll do it. Blend them. No, don't blend them. Blend them. Sell the blender't blend them. Blend them. Sell the blender.

She can't Facebook marketplace the blender that she's never used now. Imagine. We've all got one of them. Don't do that. It's probably a health and safety issue. We are not giving health and safety advice. Okay.

Any final words? Don't blend your cards. Cut them up and cut them from your phone because they're on that wallet I know and it's so easy and it's scary but do it

and build that emergency fund and I promise and then message us when you've done it and then we'll give you your next piece of homework on to the next that's all for this episode

The Vault is now closed just a quick disclaimer The Vault is just a chat around life and money topics and we are not giving financial advice.