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00:00I
00:30Hey, hey, hey, it's me, Tiffany, the Budgetnista Aliche, your favorite financial educator.
00:42And today I am going to help you get your money straight during these uncertain times
00:48between the pandemic, market crashes, what's a sister to do?
00:53We're going to talk about it today.
00:55So I don't know if you know, but I used to be a school teacher for over 10 years.
01:00So we're going to class.
01:01That means I want you to get a pen, a pad, a piece of paper, something to write on, because
01:06you're going to want to take a lot of notes.
01:08Here's what's going to happen.
01:09We're going to talk recession, the do's and the don'ts.
01:12And we're also going to talk stimulus.
01:14Are you going to get money?
01:15Are you not?
01:16What should you do with that money?
01:18And then I'm going to take your questions because I know you have a lot of them.
01:21You ready?
01:22Let's set.
01:23Let's go.
01:23All right.
01:24Let's talk about recession.
01:26A recession is an economic decline, a consistent economic decline for six months or more.
01:34And so you might hear people say we're in a recession, but it's hard to call it just yet
01:38because it hasn't been six months.
01:40But that's what they're estimating.
01:42So when a recession is pending or if we have a little bit of warning right now, there's some
01:48things that you can do.
01:49So let's go over some of the things you can do.
01:51Got your pen ready?
01:52Pull it out.
01:53One, I want you to create a noodle budget.
01:57So what does that mean?
01:57I need you to drop down and get your noodle on, girl.
02:00Hey, drop down and get your noodle on.
02:01So a noodle budget is this.
02:03It is your baseline budget.
02:05Remember back in the day that you had to eat ramen noodles because you didn't have much
02:09money for anything else, meaning that you really only took care of your necessities.
02:14You should have your noodle budget on deck.
02:16So in case you have a loss or a decline in income, you could drop down and get your noodle
02:21on and live at your noodle budget.
02:23Two, call your service providers now.
02:26They're a little bit overwhelmed, I'll admit, but almost everyone that you pay money to, your
02:31utilities, your mortgage, your insurance places, everything, almost everyone you pay
02:36money to has some sort of program in place because they understand we're in unprecedented
02:41times with COVID-19 and how that's affected your income.
02:45So share something like my income has been negatively affected as a result of COVID-19.
02:50What program do you have in place and how do I apply for it?
02:53So do that.
02:54Three, reduce your debt payment.
02:57So I am a girl who loves to be debt-free.
02:59I am currently debt-free.
03:00I'm sitting in my debt-free house.
03:02I have an investment property that's debt-free.
03:05I paid off my student loans.
03:06I don't have a car note.
03:08I don't like debt.
03:09But when a recession is potentially looming, it's more important that you have a strong
03:15cash position, meaning that it's more important that you have more cash and I would worry less
03:20about debt.
03:21So it doesn't mean that you shouldn't pay your debt, but I would honestly be paying the
03:25minimums to my debt and putting the rest in an online-only savings account because
03:31an online-only savings account is going to give you more interest and I would not open
03:37a checking account at that online-only savings account.
03:40So that way, the only way for you to get your money is to transfer it back to your normal
03:43bank at your normal checking account.
03:47And that's about a 24-hour wait.
03:48So it makes your money inconvenient when you use an online-only savings account and inconvenient
03:54money gets saved.
03:55That's a tweetable.
03:56If you're going to tweet me, you better tweet me at the Budgetnista.
04:00Four, I want you to prepare to invest.
04:02So if you're someone whose bills are great, if you're someone who has a good amount of
04:07money and savings, then prepare to invest.
04:09So preparing to invest just means, do you have your brokerage account?
04:13Is it open?
04:15Preparing to invest means that, is the money transferred there?
04:18Have you taken a class or a course?
04:19Have you reached out to your financial planner, financial advisor?
04:23Preparation is key.
04:24Then five, assess your current job.
04:27So what does that mean?
04:28Do you think that your current job is pretty stable?
04:32Are you an essential worker?
04:33If not, then that means it's potentially on the chopping block.
04:37And I want you to move accordingly now.
04:39If you think that you might not have a job in a little while, then I want you to make a
04:44move now.
04:44Should you be looking into applying for unemployment, especially dropping down to your noodle budget?
04:49So just assess your current income and your current job, because at this point, nothing's
04:52really guaranteed.
04:54Now let's talk about what not to do.
04:55Do not go running to the bank and pulling out all of your money.
05:00Sis, there's something called FDIC insurance.
05:03It's not 1930 when they didn't have this insurance and if the bank closed, your money was gone too.
05:09No, FDIC insurance will protect your money up to $250,000 per account per bank.
05:17So if you have more than $250,000 in that account, holla at me.
05:22No, sincerely, if you have more, then certainly transfer it to another account so that all of
05:27your money is protected.
05:29Don't go pulling it out.
05:30Also, don't go pulling money out of your 401k if you have more than 10 years to retirement.
05:36What we forget sometimes is that recessions are a natural part of our economy.
05:42They happen every 10 years or so.
05:44The last recession happened 2008, 2009.
05:47It is now 2020.
05:49We've been late.
05:50Recession was coming.
05:52COVID-19 did not cause a recession.
05:54It was merely like the switch that flipped it on.
05:57Okay?
05:57And so what that means is, is that with recessions, declines come inclines, right?
06:03So we will go up and we will go down.
06:05Think about a roller coaster.
06:06You can't continuously go up on a roller coaster forever.
06:09Eventually it comes down and that's what we're experiencing.
06:12And you can't go down forever.
06:14Eventually it will go up.
06:15And so within the next 10 years, we will go up.
06:18So if you pull your money out of your retirement account now, you're going to lock in your loss.
06:22Right now it's a loss on paper, not in real, real, real life.
06:26You're going to lock in your loss.
06:27If you have more than 10 years to retire, we're going to go back and so will your retirement
06:31account likely.
06:32So don't pull money out of your retirement account.
06:35I also too, during these times, I don't want you to co-sign.
06:38Now I'm not a big fan of co-signing anyway, but especially now, and here's why, because
06:44someone who is normally very responsible might lose their job through no fault of their
06:48own.
06:48So you might co-sign for your sister who's never laid on a bill.
06:53And then during this time that we're living in now, she loses her job.
06:57And then that means you are equally responsible for that bill.
07:00I also don't want you to get any new debt.
07:02People have been asking, should they buy a house right now?
07:04And I'm like, eh, I would wait to see how this pending recession is going to really shake
07:11out because I really rather you have cash on hand for one of two reasons.
07:16One, having more cash on hand means that if you do lose your income, you will be able
07:20to continue to survive.
07:23And two, having cash on hand means you'll be able to take advantage of what happens during
07:28recessions, which is that you'll be able to invest in things that you'll be able to pay
07:33pennies on the dollar for things that cost more money.
07:36Home prices tend to drop during recessions.
07:39So does the stock market.
07:40We've seen it drop already and it rebounded somewhat.
07:44But I don't want you to lock up your money in debt if you are able not to.
07:49And five, and what not to do, don't take your income for granted.
07:53I know when I was a school teacher before I was the budget needs to, during the last recession,
07:58I just knew I couldn't lose my job.
08:00There's just no way.
08:01And I did.
08:03My whole school closed and I took my income for granted.
08:06And so I wasn't quite prepared.
08:08So don't take any income for granted.
08:10I don't care if you're a police officer.
08:11I don't care if you're a doctor or a nurse.
08:13Nothing is for certain.
08:15So be mindful of that.
08:16So y'all good on recession?
08:17Let's talk about what you really want to talk about.
08:19Stimulus.
08:21All right.
08:21So let's talk about stimulus.
08:22So the president signed a $2 trillion stimulus package and people are geeked because they
08:30know that there's some money that's potentially coming to them.
08:32So what does that mean for you?
08:34An estimate $3 billion of that stimulus package, of that $2 trillion stimulus package, it's going
08:40to come to taxpayers directly as cash or direct cash deposits, whether it's a cash, whether
08:47it's a check or a deposit in your direct deposit account.
08:50So let's talk about when you're going to potentially get that money.
08:54One, you're looking at about mid-April because Treasury Secretary Steven Munchin, I love his
09:01last name, Munchin, he shared about three weeks.
09:05And from when he said that, it's about mid-April.
09:07So you're expecting it.
09:08And here's the thing.
09:09It is going to be contingent upon your adjusted gross income.
09:15So what is that?
09:16I want you to look at your last tax filings, right?
09:20Pull out that paper.
09:20It's probably a 1040 or 1040EZ.
09:23Look at line 8B.
09:25That is your adjusted gross income.
09:29And so when you look at that number, you're going to ask yourself, am I single, ready to
09:33mingle?
09:33And if you're single and you make under $75,000 according to line 8B, you qualify for the max,
09:41which is $1,200.
09:43And ask yourself, how did you get your money last year?
09:45If you got your money via direct deposit, it likely will come that way.
09:49If you got a check last year, a physical check, it likely will come that way.
09:53If you don't use that direct deposit anymore, just assume you're going to get a check.
09:57So under $75,000.
09:59$75,000 or under as a single, full amount, $1,200.
10:03If you are a married couple, double that.
10:07If you guys make under $150,000 collectively as a married couple, and you file jointly, then
10:14you will get up to $2,400.
10:18Okay?
10:18Now, here's the thing.
10:19If you're single and you make over $99,000, you know, according to your adjusted gross
10:26income, you're not going to get anything.
10:28So anything below 99,000, there's something to receive.
10:32There are all these stimulus calculators online.
10:35Do your Googles and find a stimulus calculator to see if you're between 75 and 99, what you'll
10:40receive.
10:40And if you are a couple filing jointly, then anything over earning over anyone earning over
10:46$198,000, then you're not going to get anything because they're like, you're good, right?
10:52You might not feel like you're good, but you're gooder than most.
10:56I know good is not a word, but we're trying to have a little levity here.
10:59So then, so let's talk about who else is going to receive the baby.
11:03So your child under the age of 17, they have to be under the age of 17 via the tax year.
11:10That they're using to determine your, your stimulus.
11:13You don't have to do anything.
11:14The IRS and the federal government are going to look at your taxes together and determine
11:18and give you your money.
11:20If your child is under the age of 17 via the tax year that they're looking at.
11:24So they're going to be looking at 2018 at 2019 taxes.
11:29And so if you haven't filed your 2019, they're going to look at 2018.
11:33If they haven't, if you haven't filed your 2018, what you waiting on?
11:38You want this money and all.
11:39Okay.
11:39And so they're going to look at that.
11:41And if your baby is under the age of 17, um, then you are, um, potentially qualified to
11:48get $500 per child.
11:50I have not seen that there's a limit on how many children.
11:52So if you have a lot of kids and they're all under the age of 16 and under, then you should
11:58be getting $500 per child.
12:00Now here's where it gets a little sticky and people are upset because if your child is 18,
12:0519, 20, up to 23, and you're claiming them as a dependent, you're not going to get money
12:11for that child because they're past the age and your child, unless they are a student or
12:18unless they have filed taxes for themselves and they're not dependent on you, then, then
12:23they're not going to get money either.
12:24So let's talk about, as we move into the actually, and so, you know what, a question people ask
12:28me all the time, is this check going to be taxable?
12:31No.
12:32And is your 2019 refund going to be affected by this, um, by this check?
12:38No.
12:38Um, and let's talk about who's not getting money because I think people really want to
12:42know who's not going to get any money.
12:43So one, I'm sorry, but if you owe back child support, you are either getting nothing or
12:49reduced.
12:50Um, so it's not clear whether they're going to put that money towards your back child support,
12:54but just be on alert that it's not happening.
12:57Children, this is who's not getting money.
12:59Children who are over the age of, um, uh, like I said, 17, 18, 19, 23 children who are
13:06dependents, but are over the age of, um, of, of 16 are not going to get a check for themselves
13:12or their parent.
13:13If you are a adult and you are dependent, like, so there are people who are adults, which
13:18seems kind of unfair, but I don't make the rules that adult dependents are not getting
13:22money and you are not getting money for the adult that you've claimed as a dependent.
13:27That's what it says thus far, um, non-residents.
13:30So if you don't have your green card, you're not getting a stimulus check.
13:34Um, individuals, like I said, who make too much or not, I don't want to say too much
13:38individuals that make over a certain amount, not getting a stimulus check and people who
13:42did not file the 2018 or 2019, um, tax return.
13:47So you need to do it, right?
13:49So folks have asked, but it's the budget needs to, what would you do with the money?
13:53Let's talk about it.
13:54What I would do is first things first, I would pay my bills.
13:58So let's just say my bills are, you know, I was just a little bit behind because maybe
14:02recently I lost my money due to, um, I lost my income due to coronavirus.
14:08Um, so I would pay those bills because you want to make sure that those bills are paid
14:12up.
14:12And so ask yourself this, but I would not go overboard.
14:15I would ask myself if I don't pay this bill, will I be unhealthy or will I be unsafe?
14:20So I want you to really prioritize the bills that will help you to maintain your safety and
14:24your health.
14:25So, because you know, $1,200, it, you know, it might not be enough to cover all your bills.
14:30So focus on those first.
14:32So let's just say bills pay good girl.
14:33I'm good.
14:34What next?
14:35Then I would say, now it's time to really lean into your savings.
14:39Remember we talked about that savings, having a strong cash position is going to be key
14:43because if you were to lose your income, you want to lean into your savings.
14:47Ideally, the goal is six months of your noodle budget save.
14:51So six months of your baseline budget save.
14:54So you're like, girl, I'm good on savings.
14:57Okay.
14:57Moving right along then.
14:58Then I, although I told you, I don't want you to go too heavy on, on paying off debt.
15:04You do have an opportunity.
15:05If you have savings and your bills are up to date, you have an opportunity to lean heavily
15:10into paying down your student loan debt if it's federal.
15:13So what does that mean?
15:15The federal government is suspending student loan payments and interest until September 30th,
15:222020.
15:22That means they're not going to take your money up until September, 2020, September 30th,
15:272020, but it doesn't, you don't, you don't have to, well, you don't have to pay it, but
15:32you can.
15:33So normally when you give money towards your loan, some of it goes to the loan, that's
15:39the principal.
15:40And some of it goes towards your interest.
15:43That's the fee that whoever you owe is charging you because they lent you money.
15:48What the federal government is essentially saying, you don't have to pay interest or the
15:52principal.
15:53But if you do give us money, all of it is going to go to the principal.
15:56So you have this unique opportunity that every dollar you send to them is going to go towards
16:00your student loan.
16:01So I would maybe look into that.
16:03Then also too, if you're like, I'm good on bills, I'm good on savings.
16:08I don't have student loans.
16:09Then I would, honestly, I would look to start investing, lean into finding a financial planner,
16:16financial advisor, and I would look to invest.
16:19And if you don't know anything else, you can use that money to increase your money that you're
16:23putting towards your 401k.
16:24Maybe you have a retirement account, an external retirement account.
16:29Maybe you don't.
16:30If you don't have a retirement account, or maybe you do have a retirement account and
16:34they're already funded and you're like, I just want to invest for wealth, which is always
16:38a good thing.
16:39Remember these three words, target, date, fund.
16:44Target, like, you know, bullseye, date, like, oh, you want to take me out?
16:49And fund, like, let's have some fun with a deal.
16:51Target, date, fund, and a target date fund is merely just a fund.
16:55It can be a retirement account.
16:57It doesn't have to be.
16:58There are a big major, you could Google, like, who has the best target date funds.
17:02Use your Googles.
17:03It's your friend.
17:04And what you're going to look for is what year do you want to pull that money out?
17:08Is it your retirement year?
17:10Is it another year that you want to pick?
17:12Target date funds usually roll out every five years.
17:14So you'll see target date fund 2030, 2035, 2040.
17:19You get the drift.
17:20And what I like about target date funds is that you don't have to be savvy with your investments.
17:24You choose a fund, put your money in every pay period, like a savings account, and the
17:29fund will rebalance itself every year for you.
17:32The closer you get to your target date, the more conservative the funds are invested because
17:38the fund understands you're about to take your money.
17:40So when you're about to take your money, your funds should be conservatively invested because
17:45you don't be out here wilding and then the market is going up and down and you're invested
17:48in risky investments and you lose your money right before you're about to pull in.
17:52The target date fund knows this and adjusts accordingly.
17:55And that's why I like target date funds.
17:57Tell a friend, tell a friend.
17:58Um, so yeah, I, you know, I know that you guys have a ton of questions and I think that,
18:07um, I just want to make sure that you understand some of the other stimulus things that, that they
18:13have available to you.
18:14Um, like right now, if you apply for unemployment, there are some resources available in that you
18:20can, you can receive up to 39 weeks of unemployment.
18:24That's about 13 weeks more than the average, um, state is, is normally a lot.
18:30So, and also too, the government is doing this federal boost up until July 30th, where they're
18:35giving you an additional $600 a week.
18:38Although people are applying for unemployment in record droves and it's a little frustrating
18:43right now.
18:43So you might have to wait online for a long time.
18:45You might have to call and wait for a long time, but it's worth it too.
18:50If, if you're needing the help and what's so great about unemployment right now is that
18:54normally, you know, unemployment is pretty strict about who can apply, but now they're
18:58letting independent contractors apply for unemployment, furloughed workers apply, gig workers apply
19:04for unemployment, freelancers that really wasn't there before.
19:08So if you're like, Oh, normally I can't apply.
19:10You likely can apply now.
19:11You definitely want to lean into that.
19:12When it relates to your mortgage, if you have a federally backed mortgage, that's like an
19:18FHA loan or VA loan, then that your mortgage company, um, cannot, um, cannot for the next
19:26120 days, they cannot foreclose upon your property.
19:29And also you can apply for assistance, um, with your mortgage company up to six months
19:35and an additional six months if you need it of not making any payments to your, your interest
19:40or your principal.
19:41So six months of no mortgage payments, but you're wanting to make sure what does that
19:44look like for the back end?
19:46Because some mortgage companies are allowing you to tack it onto the back end and some
19:50mortgage companies are making it all come due.
19:52So you want to make sure that what your mortgage company is doing, even if you have a private
19:57mortgage company, I've definitely heard that they're giving up to three months of non-payment,
20:01but then it comes due after three months.
20:03So it's like, so instead of paying monthly, now all of it is due at the three month mark.
20:08And I think that's ridiculous.
20:10So you want to make sure that when you are looking and reaching out for help, asking those
20:15important questions, like if I'm not paying now, when is it due?
20:19What does that look like?
20:20So, like I said, there are all of these, um, resources in place, but I know you have a ton
20:25of questions.
20:26So I'm actually going to pull out, they sent me these questions on my trusty phone.
20:30So I'm going to pull it out and read some of your questions and, um, and answer them for
20:35you.
20:35So I already explained, Oh, somebody asked, can you please explain the stimulus package?
20:41Is everyone eligible?
20:43Um, who is, and who's not, and how long before I received them, I explained already who's
20:49eligible, your, your income amounts, and you're receiving it in about three weeks, mid April,
20:53and you don't have to pay taxes on them.
20:56Um, and it's not going to affect your 2019, um, income tax, um, either.
21:01Um, two, I'm being told to stretch my dollars right now, but without any pay, I don't have
21:07anything to stretch.
21:09Which bills could I skip without hurting my credit?
21:12How do I get letters to give me extension?
21:14So here's the thing.
21:16I need you to woo side and understand that there's no such thing as skipping a bill and
21:19not hurting your credit.
21:20I get it.
21:21I have been there.
21:23My credit in my twenties was like an, uh, uh, in the eight hundreds.
21:26I, during the last recession, I had to skip bills.
21:29I didn't have it.
21:30My credits fell to a 547.
21:33Guess where I'm at now?
21:34802.
21:35Credit is one of those things that you can rebuild.
21:37I wouldn't concern myself with that unless you were trying to buy a house soon, which I'll
21:42probably hold off on.
21:42Um, so what I would focus on if you don't have income coming in is paying the bills that,
21:49that you not paying them will leave you unsafe or unhealthy.
21:52So make sure you, you get your medication, make sure you're paying for where you stay,
21:57make sure you're taking care of your groceries.
21:59I would be dropping down and getting my noodle on ASAP.
22:03The worst thing you can do is when a financial, um, crisis is, is arising is to wait too long
22:11to get frugal.
22:12People will be like, Oh, I'll probably get a job in the next month or, or a few weeks.
22:16So until then you need to drop down immediately and get your frugal on.
22:21You need to be cutting off any subscriptions, any membership, anything that is not essential
22:26until you replace that income and you need to apply for unemployment ASAP.
22:31Cause like I mentioned before, you're, you will be able to receive unemployment for an average
22:37about 13 weeks longer than usual.
22:38Also you, um, might be eligible for that, um, $600 federal weekly boost to your unemployment,
22:45which would be tremendous.
22:46So, and how do you get your lenders to give you extensions?
22:49They're giving out extensions like lollipops right now.
22:52Cause they get it.
22:53It's a pandemic.
22:54It's known.
22:54Just call, call and ask what resources do you have available for me?
22:59I need them and call right away.
23:01Um, what are three most important things we should be doing now to prepare for the recession?
23:05Said this already boo boo.
23:07So most important things to prepare is getting frugal, saving, saving, savings, and, um, getting
23:15frugal, saving, savings.
23:17I'm trying to think a third most important for me.
23:19Honestly, I will be preparing to invest if you, if, if you have dropped down and got your
23:24frugal on and you do have savings.
23:26The number one thing is a saving, saving, savings, but preparing to invest to me would
23:29be the third.
23:30Um, four.
23:32All right.
23:33Do you see any E4C rent mortgage relief based upon the shutdown?
23:36Absolutely.
23:37Actually wrote it down somewhere because it's a lot.
23:40So I mentioned earlier that for the, um, so there's something called the mortgage relief
23:45for homeowners.
23:46And like I said, it requires, um, homeowners with federally backed.
23:51Um, well, if your loan is federally backed, like I said, FDA, FHA, VA loan, then there is,
23:58um, there's something there for you.
23:59If you have a conventional loan that you have to call your lender, but they're under
24:04no, um, federal obligation to, to assist you.
24:08Although they, most of them are offering some sort of assistance.
24:11And like I said, um, there's a foreclosure memorandum where you cannot have your house
24:16foreclosed upon for the next, I said, I'm sorry, at least the next 60 days.
24:20I think I said 120, so at least the next 60 days.
24:22Um, and then also too, if you are a renter, your landlord, if your landlord has an FHA loan
24:28or a VA loan or a federally backed loan, they are not allowed to evict you for the next 120
24:34days.
24:34That's where I got the 120 from before.
24:36So yeah, there are some things in the works.
24:39Uh, let's see.
24:40Is now a good time to buy stocks?
24:41Good question.
24:42If so, do I recommend any stocks?
24:44Should have said this before I open.
24:46I am a financial educator.
24:48I am not your financial advisor.
24:50I am not your financial planner.
24:52So what does that mean?
24:53That means you need to lean into your accountant, your CFO, your financial advisor, your financial
24:59planner, that you, I'm just someone online being helpful.
25:02I'm your financial girlfriend and I'm here to be helpful, but for you to take this information
25:08and to then vet it through the financial professional that you are paying.
25:12Okay.
25:12In other words, sue your grandma.
25:15Anyway, um, it's not a good time to buy stocks.
25:17So I'm not going to tell you what stocks to buy.
25:19Cause says, you're not getting me hemmed up, but it's always a good time to invest.
25:24But the key to investing, um, is typically to, unless you're trading, investing is long
25:30term as a long term strategy and trading is really like kind of getting in and out of
25:37the market to make money now.
25:39So is it a good time to invest?
25:41It's always a good time to invest.
25:42Is it a good time to trade?
25:43Maybe not.
25:44If you have not taken trading courses, if you have not practiced with a practice trading
25:50account, they're available.
25:52I think there's one, my friend Tila, who has this company called trade your nine to five.
25:56She recommends one called think or swim, think or swim.
26:01They have a free, you could do it like a free full trading account where you could practice.
26:05Now is the, is not the time to lace up your sneakers and jump into the all-star game.
26:10And you just learned how to play basketball.
26:12Now is the time to work on the fundamentals.
26:15So indeed, yes.
26:16Investing now, I mean, for longterm, it's always the time.
26:19And if you are like learning how to read charts, if you've been following companies, investing
26:25in longterm companies is, is really the way to grow solid wealth.
26:30So I would say, yes, it's a good time to invest, but is it a good time to buy stocks?
26:35Um, it's going to be up to you.
26:36Like what's your risk tolerance, because the market is up, the market is down, the market
26:40is up.
26:40And if you don't know how to invest, you're definitely going to lose money.
26:43Um, what else?
26:45What tips do you have for borrowing against your 401k?
26:49Here's the thing.
26:50I'm not a big fan of borrowing against your 401k, but I am going to share with you what, um,
26:56the federal government is doing, which I don't know if this is the greatest idea, but we're
26:59here now.
27:00I say, don't borrow against your 401k unless you are hungry or homeless, meaning that it
27:06would have to be dire, a dire situation for you to borrow against your 401k, because truly
27:12it is your younger self's job to look after your older self.
27:17What does it mean?
27:18It means one day, God willing, I will be old.
27:21And so I've already named my older self.
27:23Her name is Wanda and Wanda is sassy.
27:28So, um, I can just imagine Wanda sitting on that porch, you know, like just minding everybody's
27:34business, but her own, cause she don't have no real business.
27:36And so what is your old, old lady name?
27:39Let me know.
27:40Um, so it is my job to look after Wanda cause Wanda's old.
27:44Imagine me expecting that Wanda is supposed to pick up the slack for myself now.
27:50That's not fair.
27:51I am young now, you know, and I am able to put in the work to save a little bit more,
27:59to put in that effort, to wake up a little earlier, to go to bed a little later, to do
28:03the work now, because it is your younger self's job to look after your older self.
28:08Tweet it, told it, send it to me.
28:10Um, and so I say all that to say that when you pull money out of your retirement account,
28:15you are essentially going in your grandma's self's purse and taking money.
28:19She don't like that.
28:20So let's not do that.
28:21But if you must, so there is a memorandum, but that was added to the cares act.
28:27This is what the stimulus package is, is tucked into.
28:30And that if you've been diagnosed with COVID 19 or spouse or family member, or you just been
28:36negatively affected your income by, by, by this virus that you can take up to a hundred thousand
28:42dollars out of your 401k, basically your tax advantage retirement account.
28:46So that's like, um, an IRA, a Roth IRA, a 401k, a 403b.
28:51Um, and you can take it out penalty free.
28:54What does that mean?
28:55Because typically if you are not a retirement age and you take out your money, not only do
29:01you have to pay tax on that money, but you also have to pay a 10% penalty.
29:05So let's just say you pull out, um, $10,000 or just a full hundred thousand.
29:10Let's just say you have a hundred thousand.
29:12Normally you would the, they would be keeping 10,000 of that hundred thousand as a penalty,
29:18but they have weighed that penalty, but you still would have to pay taxes on that amount
29:25pulled out.
29:26Well, not if it's a wrong IRA, but you would still have to pay taxes on that amount pulled
29:30out.
29:31If you don't pay back that money within three years, you have a three year window to pay
29:35back that money.
29:36And if you don't, then you're going to have to pay taxes on it because that money they're
29:41assuming if, you know, with your 401k, remember, they take that money from you before, before
29:45they paid, you actually get your paycheck.
29:47So the way a 401k and a traditional IRA and individual, individual retirement account
29:53works is that your money is taken before you're taxed on it.
29:58And so they're like, we never taxed this money.
30:00So we need to tax this money now.
30:02All right.
30:03So that's a good question.
30:04Um, let me see, let me see, let me see any recommendations to generate cash now?
30:10Well, I mean, I don't know what you mean by generating cash.
30:13So there are definitely some, um, like, I know, like Amazon is hiring, um, um,
30:17you know, there are online programs.
30:19You can, you can work for, um, call center, a friend of mine just got a job doing that.
30:24Um, but also too, if you are searching for a divisional income or you just need income
30:29in general, then there are definitely, uh, programs available.
30:33There are, there's unemployment, like I mentioned, I'm trying to think, I know I wrote it down
30:37somewhere.
30:37Um, there are, um, unemployment benefits.
30:40There are also, of course I can't find it cause I got so many things.
30:46Oh, I know off the top of my head, employment benefits.
30:49There are also food programs tucked into this cares act that you can lean into.
30:54Um, there's also family leave, um, that you can, that you can lean into paid sick leave.
31:00So I'm assuming that's what you're meaning.
31:01And if not, then yes, looking for jobs online.
31:05I mean, it's a little crazy for everyone and everyone is running to unemployment, but I also
31:10would be looking to hone my skillset and to see how can I pivot?
31:13That's going to be the word for 2020.
31:15So I saw this online.
31:16I thought this was excellent.
31:17Um, it was an influencer.
31:19Um, her name was like, Oh, Oh, Oh, Oh, Oh, Ski.
31:22I think her name is.
31:23And she's got like the blue beautiful like weave that she normally wears.
31:27So she said, Hey, if you're a stylist and you normally work in a salon, you know, we can't
31:33go outside right now.
31:34So what are you going to do for income?
31:36Here's a pivot.
31:37Why not post on social that you will do a wig refresh, right?
31:41All the girls are wearing wigs now.
31:42Right.
31:43Everybody got their 22 inch, 26 inch.
31:45I don't know the inches.
31:46Um, cause I have locks.
31:48Um, so you can, if you were a stylist, you could pivot and say, you know, I can refresh
31:54your wig, wash style, cut, whatever for a certain amount of money.
31:58So do you see how that is a pivot?
32:01So I would be leaning into my skillset and asking myself, how can I pivot?
32:05If I was a teacher, you know, these parents are having a hard time.
32:09So if I was a teacher, is there a way maybe I can offer my services digitally to parents?
32:15Like, can I do morning circle time?
32:17If I'm a preschool teacher in charge for that, um, can I do tutoring online tutoring?
32:22Because like I have, um, my bonus daughter, she's 13, she's going to be heading into high
32:28school next year.
32:29I mean, God willing, I don't know what's going to happen.
32:31And we're worried about, you know, what is she going to do about math and science and
32:36all these things that she's going to need to know.
32:37So we're looking for tutors for that.
32:39So I would pivot and figure out in this new order, in this new world order, how can I make
32:45an income?
32:46Um, now is really the time.
32:48So many businesses are created during down and economic times.
32:53So many example, myself, I started the budget needs to during the last recession because I
32:59could not find a job, but I did know how to do a few things.
33:01Well, I was a good teacher and I was good at my money.
33:05So I started helping people little by little, $50 one-on-one, then 75, then I started doing
33:11speaking engagements and I wrote books.
33:14And then I started an online school, the Live Richer Academy.
33:17And I just recently wrote my first children's book, Happy Birthday, Molly Moore.
33:22And so, but you see how I've built on top of the thing I knew how to do, teach and financial
33:27education.
33:28And I had built more and more things on top of that.
33:31So it's possible to pivot.
33:32Um, and I encourage you to do so.
33:34So we all have skillsets that other people would pay for lean into that and learn to
33:38monetize those skillsets.
33:40Um, somebody asked, what's a noodle budget?
33:42Again, your noodle budget is if you had to eat ramen noodles, if you had to eat ramen noodles,
33:49what does that look like?
33:50You know, what does that?
33:51And I'm not literally eat ramen noodles cause I posted this online and sometimes I'm like
33:55the socials.
33:56I'm like, I don't mean literally ramen noodles, figuratively.
34:00If you had to cut all the way down, what does your budget look like?
34:05So maybe your normal budget with the mortgage and the kids and extracurricular activities
34:10and hair done, nails done, everything did is $5,000 a month.
34:14Let's just say that's how much your life costs you normally.
34:17But your noodle budget, if you cut out all the excess is $4,000 a month.
34:24Now you shouldn't, one, you should never be living at the max and I don't really recommend
34:28living at the lowest either, unless tough economic times call for it.
34:34So if you're like, you know, right now my job seems pretty secure.
34:39So instead of living at 5,000, it's still pending recession.
34:43I'm going to live at 4,500, right?
34:45But I lost my job at, you need to be at that 4,000.
34:48You need to be at your noodle budget.
34:49You need to be at your baseline.
34:51So that's what your noodle budget is.
34:52Your baseline budget.
34:53It's just a fun way to drop down and get your noodle on, girl.
34:57Am I able to work from home?
34:58Oh, I am able to work from home.
35:00Another question.
35:00Um, because of this time of social distancing, she's getting her salary.
35:06Awesome.
35:07I'm not spending as much on gas lunches and not doing any shopping.
35:10Should I save, invest the extra money?
35:13Or should I save or invest the extra money?
35:15I'm saving each pay period.
35:17Great question.
35:19So first I want to, so it sounds like your bills are up to date.
35:23So that's awesome.
35:24Now here's the question.
35:25Do you have six months worth of noodle budget saved?
35:29If you do, then I would be investing.
35:34Um, if you don't have six months of noodle budget saved, honestly, I would put that money
35:38toward my savings in an online only savings account.
35:41Like I mentioned earlier, and I would, that's where I put that money.
35:45Now, let me explain what the, the four factors you should look for when you're looking for an
35:50online only savings account.
35:52Because people ask me, there's a great website called magnifymoney.com.
35:58Magnify, I have a little bit of a list.
36:01So sometimes people are like, what's she saying?
36:04Magnifymoney.com.
36:06And so, uh, magnifymoney.com rates online banks, um, and they give them like grades.
36:11So you're going to look for a, cause don't nobody want to see bank.
36:14Okay.
36:15Um, so you're going to look for a bank that has an A.
36:18You're going to look for a bank that's FDIC insured, because for obvious reasons, if that
36:22bank closes, you want to have access to your money.
36:24You're also going to look for a bank that offers the highest interest rate.
36:29It's not great right now because interest rates have been slashed, but still, and you're
36:33also going to look for a bank where the deposit requirement is low, low, low, low.
36:40So sometimes banks will have a deposit requirement of like $10,000.
36:44Tried it.
36:45So you're going to look for a bank, maybe the deposit requirement is like a dollar, $2, maybe
36:49even zero.
36:50So what that means is that it doesn't cost hardly anything to open it and it doesn't cost
36:55a lot of money for, you don't have to maintain a high balance to get that interest rate.
37:00So you want to make sure of that.
37:01If you do those four things, then you'll find the best bank and you're, you know, like I
37:05said, open up an online only bank account and I would put my money there.
37:09It's critical that just because you don't spend money, I need you to understand.
37:13It doesn't mean that you are saving money.
37:16Saving money means not spending it and then putting it somewhere.
37:21You see that second part?
37:22It's important.
37:23Not spending it, part one.
37:26Putting it somewhere, part two.
37:29So I would, you know, that's really important.
37:31I want you to do that and then link your online only bank to your regular bank, your brick and
37:36mortar physical bank.
37:38Link the checking account from your regular bank to your, the savings account from your,
37:43your online only bank savings account.
37:44You don't want to open up a checking account at your online only bank.
37:47Speaking of banking, I feel like I should break down for you the three types of banking
37:53institutions I suggest that we all get cute with.
37:55Okay.
37:56So one, get cute with your regular bank.
37:58That's good.
37:59Like you want ease of checking.
38:01You want no matter where you go in the country that you can hit up your big bank.
38:05We all know, know the names of the big banks.
38:06I'm not going to say them because they don't give me no money.
38:09Um, so big banks, right?
38:11So have that for, for convenience banking institution.
38:16Number two, online only bank.
38:18I don't save that money really at my big bank because big banks don't give you any money to
38:24save.
38:25They give you a piece of piece of piece of a piece of a piece of a penny.
38:28And I'm not even joking.
38:30So you like, you know, your interest rate might be like 0.01%.
38:34What?
38:36What?
38:36That doesn't make no sense.
38:37So I'd rather save my money at a, at a online only bank where at least I get a penny two
38:42or three.
38:43Okay.
38:44Um, and then two, I want you to have the third financial institution that I suggest
38:49is a credit union.
38:51Here's why.
38:52And credit union is a, typically they're nonprofits.
38:56And what that means is that they don't need to make high profits in order to have a successful
39:03business.
39:03So they get to, to, to pass that savings onto you when you're looking to borrow money.
39:07So if I was borrowing money, I would not borrow money typically from a big bank.
39:10I would be looking at a credit union.
39:13They have credit unions for teachers, for janitors, for Google credit union in your area.
39:18Sometimes they have credit unions based upon where you live, what you do for a living, you
39:23know, your, your ethnicity, you know, I've seen credit unions for like, you know, Armenian
39:27credit unions.
39:28And so I suggest that you like get yourself a credit union, get it now before you need it.
39:36And I suggest that, um, that's where you look first when you're looking to borrow money
39:40for a house, a car, or any of those things.
39:42Those are the free, the three financial institutions that I suggest.
39:45Um, I hope this was helpful.
39:47I hope you got a little, you know, all the tea, no shade when it comes to recession, all
39:52the tea, no shade when it comes to stimulus.
39:55And you feel good about that.
39:57Um, I hope that you feel strong.
40:00Um, and I want you to know that economic ups and downs are a part of the economy.
40:05It's a part of life and I'm always here to help.
40:09I am Tiffany, the budget Nista, your favorite financial educator.
40:12If you need more assistance, you can find me at the budget Nista.com.
40:18You can also find me at, um, I am the budget Nista on all the social platforms.
40:23So Instagram, Twitter, um, Twitter, YouTube, Facebook.
40:28I'm the budget Nista and especially, especially, especially, I will encourage you to, because
40:33in times like this, three things are most important, knowledge, access, and community.
40:37And I provide all three for free in my private Facebook group called dream catchers, live
40:43richer with the budget Nista.
40:44And there are over 400,000 women just like you who work together collectively on their finances
40:5024 hours a day, seven days a week.
40:52It's just free assistance and we all can use it right now.
40:55So hopefully this was helpful and I will see you in these internet streets.
40:59Okay.
41:00Bye.
41:25Bye.
41:26Bye.
41:26Bye.
41:26Bye.
41:27Bye.
41:28Bye.
41:29Bye.
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