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00:00financial wellness is crucial as we fight the war against covet 19 our very own essence senior
00:12editor and the creator of the unbossed podcast marquita harris joins us now in the essence
00:18wellness house to talk about everything financial from the stimulus payments to unemployment to
00:25foreclosure saving and more we are very lucky that she's going to be actually interviewing
00:30best-selling author and washington post personal finance columnist michelle singletary who isn't
00:36just giving us tips and tricks today she's also got an amazing downloadable resource right under
00:41her video screen you'll see that purple bar i want you to click it download it you will see a bevy of
00:46links for any kind of money issue you might have during covet 19. so what are you waiting for get
00:51ready to watch take it away ladies and learn how you can work towards financial stability during this
01:21time to speak with you hi i'm fine how are you i'm great well all things considered i'm great it's um
01:44so lovely to just be able to have this time to speak with you you know i have questions um but
01:50before we get into those questions i have to ask you how has your shelter in place experience been
01:56going i know you know we've all been impacted in different ways yeah it's been going pretty well my
02:02husband's working at home with me as well and my two college-age children are home so uh you know for
02:08the record it's good okay just between me and you i want them out gone back to where they're supposed to be
02:14they're supposed to be i mean you know you don't want to complain when you have a job but you know
02:22no i i i'm not a mom but i do understand like i i hear i hear a lot of different things so i get it
02:29but you mom mother's day is coming up so you can you know they'll be there for that which is nice
02:35you're like no i used to joke that i wanted my husband to um work from home with me but i don't
02:42anymore he needs to go back to work well um as much as i kind of want to dig into that side that
02:52difference of working from home and how that's changed we're going to talk about money today and
02:56we're going to talk about um i have a lot of personal finance questions um but to start
03:01with this shutdown like with our economy change it's been a surreal couple of months it's crazy
03:09how quickly things have changed but um i want to know for you personally how have your personal finance
03:16habits been impacted have you pivoted in any ways can you kind of talk about that a little bit
03:23well you know i've always been a good saver from the time i got my first job so i haven't had to change
03:29much i save a great amount of my income i've been saving for retirement um none of my kids have
03:35student-owned debt because my husband and i say from the time they were born uh and so for us the
03:41economic impact isn't that great now having said that you know my retirement portfolio like everybody
03:47else's has taken a hit and that can kind of stop your heart a little bit you spent years doing the
03:53right thing and you see on paper at least your retirement going down and down and then it'll go up and
03:59down and that skin can be pretty scary uh and so one of the things i had to do is take a step back and
04:05pause and and just be grateful because so many people are out of work so many people are worried
04:11about the food on their table and i have to remember that even if i lose 30 or 40 of my portfolio i'm still
04:18going to be okay because we've taken care of all those other things we won't take a mortgage into
04:23retirement our kids don't have student loan debt and we don't carry credit card debt or loans so
04:30in that sense that for me it has made me um just take a step back and just be grateful for what i have
04:38yeah i love that you said that because i think gratitude is so important in life and i also don't
04:46think um we don't talk enough about our emotional connection i think to money and to finance and i
04:52think part of um not spending so much or overspending it does start with gratitude and kind of just
04:58taking stock of what you have what you already own and just maybe not overdoing it you're not over
05:05shopping or you know like it just makes saving easier at least that's my personal experience so i do
05:12love that i think that's a great that's that's a great point this pandemic has made us pause and i
05:19think i'm hoping that people have been able to take time to think about what they really want to do with
05:25their money and you may find especially if you lost your job that you were wasting money that you need
05:31now uh but now it's not the time to kick yourself go into survival mode and then when we get through this
05:37then you can make some changes to to do better with your money yes absolutely um speaking of survival
05:44mode um in a recent column for the washington post that you did you explained a very specific way that
05:52we can all kind of prioritize what bills we should be focusing on right now can you explain what this
05:59method is and also just how did you even figure out this method well you know i get this question
06:07from so many people right now who have been furloughed or lost their job or had a a reduction in their
06:12income what should i pay first should i pay my credit card should i pay my student loans what should i do
06:16and i was thinking about a way to explain how you prioritize paying your bills and it came to me that
06:23when we go to if you've ever been to an emergency room that's been overcrowded you come in and maybe you got
06:28there two or three hours um before somebody else maybe you've got a jammed thumb or something and
06:34someone walks in and they get served right away and you're thinking hold up wait a minute i've been
06:38here for three or four hours but when you have right exactly when you have a critical situation
06:45in an emergency room they triage the incoming patients meaning they take the most critical patients
06:51first because of course if somebody's having a heart attack your thumb can wait and you have to do the
06:56same thing with your bills you have to triage your bills so right now it's the roof over your head
07:03it's food on the table and you know it's the essential uh liabilities like your car loan because
07:09you're going to need that car to get to your job and although i am an advocate for getting rid of debt
07:15your credit card debt is not a priority right now if you don't have income coming in you just can't pay
07:20that bill now having said that you need to contact all of those lenders and creditors you can't pay
07:27and tell them i'm out of work you know that there's this great crisis going on i cannot pay you can i get
07:33a pause in my payments and whether they say yes or no you got to do what's important for you right now
07:40and that is take care of the most critical things that you need in your financial budget so triage your
07:46bills student loans credit cards medical debts even the the loan to peaches that is put on hold
07:53you know i mean she's gonna be mad but you know you have food on that table and i guess you know and
08:01i think i don't know about you and i can't speak for everyone out there but i am i was definitely
08:08raised to be very responsible when it comes to paying bills and to always be caught up with you know
08:13credit card payments and all these things if i even have them so the idea of prioritizing bills
08:20during a challenging time like this it does give me anxiety because i you know especially if those
08:26bill collectors start calling or you know it gives you anxiety it makes you pay the bill and i guess
08:31that's why they you know they're successfully collecting debt but um i i don't know have you ever
08:37experienced that kind of uh have you ever had to do this personally and have you experienced that kind
08:43of anxiety that comes with i guess not paying something that you know you need to i i love what
08:50you said about the anxiety and people calling um because that's what usually happens the the creditors
08:57that are the most aggressive ends up getting paid because they're on the phone or they're bugging you or
09:02they're standing and so you feel like i gotta pay them but just because they are pressing you does not mean
09:07that you need to be pressed you say i don't have the money stop calling me for right now now i know
09:13because you know listen we a lot of us were brought up you got to pay your bills um and and we're not
09:18saying shirk your debts but you got to be in survival mode now i personally have not been in that
09:24situation because you know look i came out the womb knowing how to say yeah i mean i'm just looking
09:28around you know yeah operating room i'm like do you need to throw that stuff away right there maybe you
09:33can reuse that so i have always but that's just how i'm built you know that some people are born to
09:40shop and some people are born to save and that was me so i'm not ever had that anxiety but i have dealt
09:47with it um because at my church i lead a financial ministry um i belong to a big church in in the
09:54maryland area uh first baptist church in glenard and we have you know thousands of members and so i run
09:59a ministry where every year we have about 200 people that go to a financial program so i've sat
10:04down in front of people and i've had to sit with them and say you can pay this you can't pay this you
10:09can pay this you can't pay that and we prioritize it we help them get straight and then we go back
10:15and pay people that they couldn't pay if they had lost their job or something interrupted their income
10:21got it so um speaking of you know bills being impacted should we be worried about our credit
10:30scores now is that something that we just have to kind of forget for the time being
10:36well i think you should you know recognize that there's some things you're going to do that might
10:40hurt your credit score like say you want an aggressive debt payment plan and now you've got to
10:45stop that because you need that money for rent more food um and so right now you cannot worry about your
10:52credit score i mean we're going to go out and buy a car or house no so you know down the road you can
10:59rebuild that credit score but right now if you have to pause and say you contact your lender most of them
11:06i mean that i know are giving people a break but let's just say you run into someone who doesn't
11:11well and they may date credit score or your credit report so be it for right now i mean just i'm just
11:19being real that you cannot worry about what is the credit score anyway it's your it's your uh uh
11:27credits it's like the sat for credit and if you're not going to college you don't necessarily have to
11:32worry about your sat i don't even know you know business we had so you have to look at it like that
11:38it's important at the time when you need to borrow but right now you're not going to be doing that so
11:43you know don't worry about that right now and i'm not saying don't be concerned about it but that can
11:48be fixed down the road and it really isn't that hard to rebuild your credit score because the majority
11:54of your credit score is paying bills on time so once you get past this crisis and get back to paying
12:01your bills on time your credit score will go up i appreciate that just excuse me it's just a little
12:07takeaway it can be fixed so right now we are in survival mode so thank you um so this week as i
12:16know that you know um it was announced that i believe 33.5 million people in the u.s have filed
12:25for unemployment which is just i even just to let that number sink in is just so powerful and just
12:33devastating um so what advice do you have for people filing unemployment for the first time what
12:40should they know well first thing to know that they probably will run into a delay the systems were not
12:49built for tens of millions of people filing for unemployment at the same time so systems are crashing
12:57you can't get to reach someone you can't even get to someone to ask them a question about even
13:03filing the report and so you have to pack your patience uh and i know that may sound insensitive
13:10like what are you talking about girl i got bills to pay but there's nothing else that you can do so
13:14you're gonna have to stay on that phone you're gonna have to call at all hours try to go online like
13:20at 3 a.m in the morning um when you know if the system is up 24 7 you know you got to strategize when
13:26the call and sometimes you may have to stay on the phone all day long to get through um and that's just
13:32the reality of where we are right now they are taking claims but it's a slow process uh but don't be
13:40disheartened because you are in line with a whole lot of people now some people might find that they are
13:46denied um unemployment and don't stop that you'll get some information to appeal because some of the
13:52systems are not being updated and maybe you answer the question the wrong way so if you are denied still
13:58appeal because you still may be able to get unemployment okay okay that's a good way to um
14:06put things in perspective too so it's yeah i keep i have a lot of um i'm extremely fortunate to still
14:12have a job right now and um i have a lot of friends who very successful and you know some
14:18are artists some are this they're that just the spectrum of jobs and they've been talking about
14:23their unemployment experiences because they were let go recently and i do remember a conversation i
14:31just had where a friend was complaining about you know like i've been on the phone you know for two
14:36days and blah blah blah and we did you know i was like i hate to say this but like
14:40you got to do it there's a sense of like you just have to let it you don't have control over the
14:46situation and it's i think that in itself is just hard to kind of cope with so that's you know i yes
14:53i get it yeah i mean listen when when your money is disrupted it there's all this anxiety i had a
14:59good friend whose husband who's been working since he was 16 never out of work you know a hard worker
15:05and to be let go during this time and just for the first time really since a teenager facing
15:11unemployment that's such a blow to your ego and then there's a lot of frustration you know at the
15:16system at the government why can't they process my claims but all of us have to remember that this is
15:22an extraordinary time that doesn't mean that they should have long outdated their systems but
15:27nonetheless tens of millions of people are on that same line you know if we you know stretch it across
15:35the country as you and so you just have to remember that and once you get through to someone don't yell
15:41at them because they're stressed and they just dealt with thousands of people on the phone um in stress
15:48and um you know if you're a person of faith this is a time where you reach down for their faith
15:53of the faith for patience and this two show pass and i gotta persevere uh and i know that that is
16:00hard uh but this and this is testing us in a way that many of us were never prepared for uh and uh it's
16:08and i know it's hard but you just gotta keep pressing keep calling stay on hold and while you're doing
16:14that cut as much as you can reach out to other people we we you know especially as a people as
16:20as an african-american we are a proud people uh and sometimes we don't want to ask for help
16:25but this may be the time if you know a friend or family member who's doing better to say hey
16:31can you help can you help me and if you are on the other end you've been doing well don't wait for
16:37somebody to call you know your brother is out of work call him and ask them you know what let me take
16:42care you rent this month let me help you with this car payment you don't need to wait for people to call
16:46you know the need is great and if you've been blessed with an abundance you need to turn around
16:53and help other people whoo okay we're done i can't i but just yes oh my gosh um so for those who are
17:07i mean they're still employed but maybe they were approaching it was their retirement year or
17:12maybe that's next year but um i'm kind of curious like is it wise for people to be withdrawing from
17:19money from their retirement plans now or what are your thoughts on that so if you've been laid off or
17:26furloughed and you have no savings um normally we would say don't touch it don't touch it you know try
17:31to get another job try to make it but you know where are the jobs unemployment stats came out and and
17:38we've got unemployment rates that we haven't seen since the great depression so that's a last resort
17:43and now it's a first resort so if you can hold off hold off but if you can't go ahead and tap it
17:50only tap what you need don't take out an abundance of money take out just what you need you can go back
17:55and the cares act has allowed people to take out money from their 401k if they're 59 and a half or
18:01younger you don't have to do uh you don't you're not subject to that 10 percent early withdrawal penalty
18:07and that's really key and if you take out money you have three years to put it back if you take
18:13out a loan you have three years to to pay down that loan so there's a lot of provisions in the cares
18:19act part of that stimulus package that allows you to tap your retirement funds without all the stringent
18:24penalties that were there before if you can wait do it but if you can't you know you got to do what
18:30you got to do in a time like this now if you are still working and things okay then obviously you
18:36don't want to be topping it and then you actually maybe increase what you've been putting in and
18:40maybe you've only been putting in three percent and you're not shopping you're not eating out your
18:45expenses are down your kids are home there's no daycare hey boost your retirement because now even
18:50though the markets are down things are on sale so this is your opportunity to take advantage of that
18:56extra money that you have coming in at a time when other people are struggling now some people may find
19:02that they were ready to retire but they weren't really ready they didn't have a retirement budget
19:07and now they're seeing their portfolio lower so it may be that you have to delay retirement
19:12until the economy gets back to some semblance of normalcy okay okay that's good that's good to
19:21kind of put it into perspective like that i have um one of my aunts is retiring well she was supposed to
19:27retire this year and she ended up putting it off and it's been you know she's been looking forward
19:32to it 2020 was her golden year and but i mean i feel bad but i also it's we were talking about it
19:39and i do think um that might be the move she's just you just kind of have to keep going for a little
19:44longer um yeah and that's okay that's one of the things that we all have to do during this pandemic is
19:50that we had plans in place and we got to be able to pivot you know change be okay with that
19:56maybe delay your retirement maybe you're going to have to take social security a little earlier than
20:00you planned because you just don't have enough we got to be okay with that um because times change and
20:08you've got to be able to change with it if your financial situation has um been upended because of
20:15the coronavirus yeah so michelle um a recent mckinsey report came out um and it kind of you know it said
20:25black workers across every education level and pretty much in any industry are more likely to be
20:34the first group to be laid off um yeah which is another conversation for another for another segment
20:41um but my question is of course this leads to us being um you know the first group to default on
20:48mortgages and uh student loan payments and all these major bills um so what i want to know more about
20:57is um when it comes to educational debt and mortgages what advice do you have specifically for those two
21:04areas because i think uh those are two areas of the spectrum for us that impact us a great deal
21:12but if we can't pay those what should we know right now what kind of penalties should we be thinking about
21:18yeah well the good thing is the cares act put in place some protections for people right now
21:23so if you have a federal back mortgage and that's key federal back so you've got an fha loan or you've
21:30got a va loan that they can they have to give you a forbearance if you ask for it that's also key you
21:37have to ask for it so the law calls for 180 days initially um and then another 180 days if you need it so
21:46a year um now institutions are giving that forbearance and 90 day increments and so definitely
21:52ask for that break if you need it now you're gonna have to call your lender or your loan servicer and
21:59again the lines are going to be long you may have to take hours before you can get through to them to
22:04ask for this um this break but it's there for you uh and take advantage of it so that you get a break now
22:11recognize when it's all over you've got to pay that money back somehow but and then initially
22:16people were told they'd have to pay it back after 90 days which was insane like who can do that so
22:21so they've clarified it that oftentimes they may add it to the back of your loan or add extra money to
22:27your monthly payments so you can catch up if you have a student a federal uh direct student loan
22:32there's actually a zero they they pause payments and why it's paused there's no interest accruing
22:38of that until september so again it has to be a federal loan so private loans are not included in
22:43that but if you have a federal direct loan you get that break until september now if you have one of
22:49those loans and you're still working and you can pay people like well why don't i just take the break
22:53but look it's zero percent so you can use that time to to make an a huge dent on that principle of
23:01that student loan so if you can afford it not only make that monthly payment but make more i have
23:07my niece and nephew and my nephew has um a student loan debt and they were asking me what should i do
23:13and i said you know oh my gosh throw all your money in it in fact i actually told them to take money
23:18from their emergency fund and put it on there like they they're really really good savers so they've got
23:23a lot in emergency fund i said like cut that emergency fund in half and throw it on that student loan debt
23:27and do you know if they do that they will be out of that student loan debt by the end of the summer
23:32because there's zero percent interest and all of that money is going to go to principal so that's a
23:36strategy for you so don't because people like oh i got a break you know no just use this to your
23:42advantage if you can afford it right right got it do you you know i i had a conversation recently um with
23:51a friend and we we both have very similar situations um but we were talking about you know should we just
23:58like you know should we put a pause on you know paying those larger bills she has a mortgage i have
24:03a student loan um but we were talking about just different options and from what you just explained
24:09about mortgages it sounds like that was pretty much the avenue that she was able to take um but i do
24:15wonder i've also spoken to people with private loans and it sounds like that there aren't any options
24:22really for people like that um some people have discussed that they were going to just not pay and
24:28focus on their emergency fund and that to me sounds like a red flag but i just want to know what do you
24:34recommend for people in those specific situations who don't you know have that option to furlough
24:41so i started breaking in three groups if you're laid off a furlough just pay the essentials so you you
24:46know get that mortgage break if you have a mortgage get take advantage of that student loan break
24:50because you need every dollar for the essentials if you have had a reduction in your income you may
24:57you do probably want to build up the emergency fund a little bit because you're going to need that money
25:02um to to bridge the gap for the income that's not coming in so if if you've got a cut but you still
25:08can manage to save a little bit you want to do that because in the next month you may find that you're
25:13short now if you are still working and you feel like your job is fairly secure although that's you know
25:19i mean who knows what's going to happen if this happens long term but still you're pretty
25:24okay right now then i would not stop paying the mortgage i would not stop i would i would pay my
25:30student loans because remember this is just a break this doesn't mean that those payments go away
25:35and you want to wait if you need i call it grace like don't take the grace right now if you don't
25:40need it because like let's say you say you want to tell your landlord i want a rental break because
25:45you've got a rental uh an eviction moratorium in your area but in six months something happens on
25:50your job now you've used up all that grace and the landlord is like i can't let carry you anymore so
25:56don't take advantage of these breaks if you don't need them right now save it for later um so that when
26:04if you've been paying all along and then somehow your job has to have some disruption in income or you
26:09get low enough now your landlord's like you know what during the toughest time you kept paying your rent
26:13i'm gonna give you a break so that's how i look at it and and just look and assess your job too um
26:20we all sort of sometimes we think oh you know i'm good my job is not gonna go anywhere but we don't
26:24know that for example you know if you work for the state of federal government you know they've been
26:29paying people even if you're not working uh but think about this people are not paying taxes they're
26:34not paying you know real estate you know things have paused you know business taxes aren't coming in
26:39the revenue is not coming in so there may be times down the road that they may have some rolling
26:44furloughs where maybe you work three months three weeks a month and you have to take a week off um so
26:50if you are still working i would be if you have not had an emergency fund and you're still working
26:55i would be stuffing that thing with cash right now um for down the road and if you don't need it then hey
27:02that's okay too because now you got a bad emergency fund and there's nothing wrong with having more
27:08uh down the road i'd rather have more than not have anything uh when it comes time with um uh
27:15have an emergency fund and if you got a high paying job absolutely we used to tell people to have three
27:20to six months living expenses but if you're making big bucks you know eighty thousand ninety thousand
27:26a hundred thousand dollars you really need about six months to 18 months of the living expenses
27:30because if you lose your job it takes longer for high income people to replace that income
27:37than it has someone making like thirty or forty thousand dollars a year yes good point such a good
27:44point um i would love to continue talking to you for the rest of the day but i know you have things to
27:52do and there are other people that are on this amazing lineup today um so for those who want to you know
27:59continue learning more about what their options are um you know just learn more about the work
28:05that you do where can everyone find out that information also you have a book i have an amazing
28:12book i do i do i do like can i sneak it in can i sneak it in like yes please i highly recommend the book
28:18it is so good yeah it's like it's so good um it's called the 21 day financial fast and that sounds
28:25crazy if i would tell people like you can't spend on anything that's not a necessity people like
28:30i'm already doing that by default but the fact of the matter is that the the fast is not just about
28:37stopping shopping it's about taking a pause to look at all of the money coming in you know are you
28:43saving for retirement are you how are you preparing your children for college so that they
28:47don't take they don't have to take on all the debt you know what if you are what if you're great
28:52with your money and you have money but you don't want to give to anybody that's not good either
28:57so every day you read a chapter and every day there's a different financial principles principle
29:01well tithing there's so much in this book and so i really you know i love this book it came out of the
29:06ministry from my church um and most importantly and i i sort of hate self-promotion i do but what i like
29:13you gotta do it you gotta do it but also the whole idea is that you this book would have prepared you
29:20for this pandemic so when this is over there will be another financial crisis and you want to be
29:25prepared for that and also please go to washingtonpost.com look at all my columns i've been covering
29:31everything as it relates to the stimulus payments and the economy and so you'll get a lot of good
29:35information in there as well so washingtonpost.com and then the 21 day financial fast two things that you
29:41can go to to help you during this time i love it thank you michelle thank you so much for taking
29:47the time and um and also i just i love i feel like there's two major themes that we talked about
29:52gratitude but also preparation and i think that's right so important so thank you really enjoyed this
29:59conversation me too it was lovely i wish we had more time
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