BiggerPockets Money Podcast - 471: The Secret to Saving More, Spending Less, and a Perfect Credit Score

Episode Date: November 21, 2023

Building wealth, saving money, getting rich—it’s much more straightforward than most people think. You don’t need to be a financial expert or millionaire to know what you should do with your money. But if you’ve found yourself in a spot where saving and investing just isn’t happening or you want to build wealth but don’t know where to start, we’ve got the perfect guest for you! Tiffany Aliche, AKA “The Budgetnista,” is on track to help more than 300,000 people start their journey to financial freedom with her Live Richer Challenge, following the same steps she took to get out of over $30,000 in credit card debt, fix her trashed credit score, and save and invest her way to serious wealth. In today’s show, Tiffany will talk about the ten steps you can take to go from money mayhem to net worth nirvana so you can build generational wealth, achieve financial freedom, and leave a legacy for your family. If you liked today’s episode, grab a copy of Tiffany’s Made Whole financial workbook that’ll help you get good with money no matter where you’re starting! In This Episode We Cover The ten steps that’ll take you from broke to building a financial legacy  Why you’re budgeting all wrong and the right way to make sure you’re not overspending The EASIEST way to save money every month that will grow your bank account without you even noticing it The different methods to get out of debt and which one makes most the sense for your situation How to take your credit score from the 500s to the 800s with some super simple hacks The one thing you can do right now to start building your retirement nest egg And So Much More! Links from the Show BiggerPockets Money Facebook Group BiggerPockets Forums Finance Review Guest Onboarding Join BiggerPockets for FREE Mindy on BiggerPockets Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Money Moment From Financially Perfect to Rock Bottom (and Back Again) How to Teach Your Children About Money Tiffany Aliche’s 10 Financial Components to Become ‘Financially Whole’ Join the Live Richer Challenge! Click here to check the full show notes: https://www.biggerpockets.com/blog/money-471   Interested in learning more about today's sponsors or becoming a BiggerPockets partner yourself? Email us: [e-mail] Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money podcast where we interview Tiffany Oliej, the budget nista, and talk about financial wholeness and how to achieve it. Hello, hello, hello. My name is Mindy Jensen. And joining me today is my not nearly as cool as Tiffany O'Lejay co-host, Kyle Mast. Sorry, Kyle, but come on, you just spent an hour talking to Tiffany. You know I'm right. So true.

So true. All right. Kyle and I are here to make financial independence less scary, less just for somebody else. To introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you are starting. Whether you want to retire early, travel the world, go on to make big time investments in assets like real estate, start your own business. We'll help you reach your financial goals, get money out of the way so you can just launch yourself towards your dreams. Now is the time for our segment of the show called The Money Moment, where we share a money hack, tip, or trick to help you on your financial journey. Today's money moment is a lot of us buy way more food per week than we consume.

To avoid this, go grocery shopping more than once a week. In many parts of the world, people buy their food daily. Not all of us will be able to do that, but if you can increase the amount of times you go food shopping, your food will be fresh and you won't be buying more than you need. Do you have a money tip for us? Email money moment at biggerpockets.com. Kyle, I am so excited to talk to Tiffany today. has a new book out. It's called Made Whole. And it isn't a book. It's a workbook, kind of a companion

to her book from two years ago called Get Good With Money. And it is really just filled with her signature brand of compassionate information in a not judgmental format. Yeah, we just need to get this interview out for people to listen to. She has an infectious personality. She just is so good at making things a lot lighter and a lot more approachable. So this is a great interview. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going and more importantly where your tax refund can make the biggest impact.

Because the goal isn't just to look backward. It's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life. easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code Pock. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves the needle.

Achieve your financial goals for good with Monarch, the all-in-one tool that makes money management simple. Use the code pockets at monarch.com for half off your first year. That's 50% off at monarch. com code pockets. I love Matt, said no one ever. Nobody starts a business thinking, you know what would make this more fun? Calculating quarterly estimated taxes. But somehow, every small business owner ends up doing it. Your dreams of creating, selling, and growing get replaced by late nights chasing receipts, juggling invoices, and wondering if that bad sushi lunch with Scott counts as a write-off. Change all that with Found. Found is a business banking platform built to take the pain out of managing money. automatically tracks expenses, organizes invoices, and even preps you for tax season without you doing the heavy lifting.

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Don't put this one off. Join thousands of small business owners who have streamlined their finances with Found. Audible has been a core part of my routine for more than a decade. I started listening years ago to make better use of drive time and workouts, and it stuck. At this point, I've logged over 229 audiobook completions on Audible alone, and I still regularly re-listen to the highest impact titles. Lately, I've been listening to Bigger Liener Stronger for Fitness, The Anxious Generation for Parenting Perspective and several Arthur Brooks' audiobooks that have been excellent for mental well-being.

What makes Audible so powerful as its breadth. Beyond audiobooks, you also get Audible Originals, podcasts, and a massive back catalog across business, health, parenting, and more. All accessible in one app. If you're looking to turn everyday moments into real progress, Audible has been indispensable for me over over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free 30-day trial at Audible. dot com slash BP money. Tiffany Aliche is a former preschool teacher who is now devoted to the financial education of millions.

Tiffany is the founder of the Live Richer Academy, the co-host of the Brown Ambition podcast, and the author of several books, including the New York Times bestseller, Get Good with Money, and the new workbook, Made Whole. Tiffany, welcome back to the Bigger Pockets Money podcast. I'm so excited to talk to you today. Thank you, Mindy. Thank you, Kyle. Thanks for having me back.

But the third time, it's a three-peat. That's a three-peat. Yes, if you did not catch Tiffany on episode eight or episode 187, you need to go back and listen to those because Tiffany is a rock star. Tiffany, let's start out with who is the budget Nista and the Live Richer Challenge. So the budget Nista is essentially me, which is I'm a financial educator, a former preschool teacher. and I like to educate a myriad of ways. So whether it's books, like my new book made whole, whether it's my podcast. I have an online school, The Liverture Academy.

And then I do a free challenge, financial challenge every year in January called the Liverture Challenge. I love the way that your Liverture Challenge works because it's so non-judgmental. Here's, and it's easy. You're not throwing like, here's 100 hours of stuff to do. I'll see you tomorrow. It's like, here's a minute. Here's five minutes. Here's a small task.

And I'll see you tomorrow. Yes. And honestly, it's the reason why I initially wrote Get Good with Money, which the companion book is the new book made whole, is because as I was doing the challenges, people were asking additional questions. Like, what about budget and what about savings? What about? And I thought, what if I could put together like a book that kind of answers all these

foundational financial questions, but then walks you through the budget. the work like the way the Liverture Challenge did. And so I wrote Get Go With Money about two years ago and literally hundreds of thousands of people have purchased that book, almost 300,000 people in two years. It became a New York Times bestseller. But then I got feedback that they were like, this is a really great textbook, but I want to get to the work sooner rather than later. And so I made its companion copy made whole where it's like, all right, as soon as you learn

the lesson, I give you the space to practice the work. Like a real teacher. Like, you know, I know locally we all hated homework, but the reason why you got homework is because you learned something in school that day and your teacher wanted you to immediately put it to practice so you wouldn't lose the knowledge. And so that's what the made whole workbook allows you to do. Learn a thing, practice a thing, keep that knowledge. That's awesome.

I'm a sucker for workbooks. I remember like being in college and flying home for spring break or back for the summer. And, you know, in the airports, if there was any financial book that had a workbook in it. Like, that was basically the criteria that I would purchase that to do it on the plane. And what's really cool is years later, if you keep any of those things, it's pretty funny to look back at them and what your goals were. One of the reasons, you know, journaling is such a good thing too. But tell us a little bit more about this made whole. You know, like, what do you cover in it? Is this something that people can get a really good picture of their whole financial goals, future,

you know, where they're at now? Like, what's it really intended to do and what are the details of it? It's holistically looking at your financial life over 10 steps. And each step is worth 10%. So by the end, you are 100% whole. And so the first five steps are budgeting, savings, credit, debt, earning. And the second five steps are investing for both retirement and wealth, insurance. It is your net worth, your financial team, and estate planning. So those 10 steps collectively make your holistic financial.

life. And if you can master them, you don't have to be super wealthy. You can master them as a mechanic, as a teacher, as a nurse, as a doctor, as a CEO. But anyone can master, for the most part, those 10 steps. And in doing so, have a strong financial foundation that they can live the rest of their lives on. Tiffany, what are some of the steps that you advise people to take emotionally before they can embark on these financial 10 steps? So that's something that, like, one of the things I wanted to make sure that I addressed and made whole was that part. Like, before you actually get to the work, you know, we talk about that part. And one of those things is that so many of us are carrying shame when it comes to some of the choices we've made. Because I know

I have made every mistake possible. For those of you who read GICCA with Money, remember Jake the Thief, who's still in jail, by the way. For those who didn't get good money, he was someone who scammed me and left me $35,000 in credit card debt. And it was like the worst time because then the next year the recession happened and I lost my job. And then I lost my condo because I bought one when I was 25 and I thought like, oh, I'm so financially grown. And then I had to move back home with my parents. It was a series of remarkable challenges between the age of like 26 and like 31. Life was really, really hard financially. eventually. And so I had a hard time moving past those mistakes. So I wanted to address that for

folks who, you know, are feeling down on themselves to the mistakes they made. And one of those things is that, is that I learned that the only way, I learned this therapy, the only way to release shame is to give voice to it. Like, you have to tell someone, you know, like whether it's your bestie, your mom, for me, it was my best friend Linda. And I remember like crying to her and being like, oh, my God, I owe all this money on my credit card, and I got to move back home with my parents. And, you know, and she was like, well, I'm currently sitting on my mom's couch where I currently live.

So welcome to the couch club. And she literally said that and made me laugh. And it allowed me to release some of that shame. And in so doing, I was able to look around and realize, you know, I actually do know how to budget really well. And even though I'm on unemployment, you know, if I navigate in this way, I could save something. And so shame shield solutions and releasing that through sharing it with someone, you know,

really helps for you to see what those solutions are. So I opened the book with like giving yourself grace and space and sharing the shame. That's really good. That's our next question that we wanted to ask you is about the B word in personal finance, budgeting. And that's just, you know, like people hear that, especially if they don't live in this world of personal finance, they're like, that stinks. I don't, that sounds terrible. I got to see what I bought on Amazon for the last three months.

That's going to be very depressing. And talk about shame coming in from all those packages arriving on my doorstep. How do you, like, what are some tips that you give people when they're sitting down to budget? And everyone has heard of you need a budget. You know, that's something that is out there. Someone has heard that somewhere, whether it's from their boss, from a friend on, you know, an advertisement on TV, but people don't know how to get started. Like, what is something that can help people get past maybe, whether it's fear or shame or reluctance? Like, how do you get people to just

take the first step on that? I like first to, Kyle, to reframe, right? So in the book, I don't, even though I'm the budget needs to, I call it your money list. Whatever is going to be like, okay, it's like, we don't have to call the B word. So I don't really call it that in the book. I'm like, here's your money list. And then I like to remind you that like your money list or your budget is really, I want you to think about like it as like your mom growing up as a kid or whoever raised you. Right. So you might be like, mom, can I have dessert? Yes, after you eat dinner or mom, can I play outside with my friends? Yes, if you do your homework. And so your money list or your budget is not there to say no, just like your mom. They're there. Your money list is there to say yes in a way

that is sustainable and healthy and safe. So, yeah, yes, you can go on vacation. Yes, when you save for this. Yes, if you reduce some of your expenses. Yes, in conjunction with XYZ. So I don't like to think of my budget as a, that's why I like to reframe. I don't like to think of my budget as a restriction.

It's my say yes plan. It's here to say yes in a way that's sustainable. Let's talk about people's, problems with saving because, you know, they have the issue with budgeting. We've already reframed that. Thank you for giving us a way to look at that in a different way. What are some of people's or what are people's biggest struggles with savings? And how do you tackle these in the book? So people struggle with savings is people are usually good at, well, they're not good at saving. They're good at delayed spending. If you're anything like

me, I used to put something in my savings account, only to go to Target and be like, girl, just come on over here to checking so we can use you. And so it wasn't saving. It was just delayed spending. And so one of the ways to tackle that, and I tackle that in the book is I share this tool that I call split it before you get it. And this is when you go to HR and you say, hey, and most payroll departments can do this. Not all, but most. Instead of giving me all my money in my checking account, I'd like you to split it into two checking accounts at this one bank, my regular brick and mortar bank and two savings accounts at my online only high yield savings bank. And so when you have this money, you're saving separate from your checking, if you're

going to want to make a transfer from this online only bank to where your checking account is, you're looking at it about 24 hour, sometimes up to 72 hour wait depending on what day. You know, so that means you're not going to do any impulse buying with your savings. It's going to make you stop and pause and leave your savings alone. So that's one of the ways to help you automate. savings, one, and then leave it alone because you've made your money inconvenient and inconvenient money gets saved. Oh, I love that. Inconvenient money gets saved. And I'm not saying that you can't do those purchases, Mindy, right? So that's why I like to have two checking accounts,

one for bills, because it's like, let's be real. You know, we're an adult. I don't want anyone knocking on my door. And then another checking account for spending. So for groceries and some impulse purchases, because we're still human. So you want to leave space for that. But at least you know, I swipe my debit card, one, I dislodge my debit card for my bills account. Like, the bank won't tell you this, but you actually don't have to have a debit card attached to a checking account. You can actually break that connection. So I know when I swipe my debit card, it's not my bill money. It's not my savings. It's only money that I've set aside for spending on things like groceries and grooming,

but also maybe some unexpected things that I just want for myself. And then it allows me to be like, I can only be as reckless as the money that's set aside in that account. And I know it's never going to be savings. It's never going to be bills. So it can't be that bad. This is such a good. Let's hit home on this a little bit. This split it before you forget it. Well, say it again, split it. No, split it before you get it. Split it before you get it. There we go. Oh, and then you forget it. You know, what if it's like split it, get it, forget it. Oh, I like that. Yes, that's right. That it works. But this is so powerful. Like this is, we've talked about it before on the podcast and people talk about it all the time.

Why does the government have your employer withhold taxes from your paycheck? Because you're not going to pay it 12 months from now. You're not going to save 25% of your paycheck to pay the federal government, your local government, your state government. They pull it out right away. You don't even know it's there. And sometimes people will be like, ah, you know, just two checking accounts. I've got to keep track of two or three savings accounts.

Oh, my goodness. I'm going to lose track of it. Well, that's probably good. But if you can set these things up automatically, it's just that lazy person budget. It's going to solve so many your problems, especially when a lot of times you'll read an awesome workbook or a book that's put out by someone like you and be gung-ho for a certain amount of time. And once you get past the initial excitement, if you can have automated as much of that as possible, it will keep you on the train.

And when you get busy, when you have little kids, and the summer happens and you're running everywhere and Christmas is coming and the gifts are coming. You know, it's that automation. I mean, I love how you hammered out on that. I just think that is so, so huge. And even the splitting of your checking accounts from the adult account. I love that. Let's be adults with this one.

And then, you know, let's have fun with this one. But you've already predetermined that. And there's no shame. There's no guilt there. And that just you're not having to try to argue with yourself, should I spend this or not? It's already there or it's not. Exactly, exactly. It's almost like for those people who might meal plan, like if you meal plan on Sundays, it's like basically you're automating your money. And then throughout the week, you can just pull the meals out of the refrigerator. And so you're right, Kyle, that people are most excited when they first start. So if you can like lean in on that excitement and set up all these automations, because we're all going to get lazy again, it's happening. You know, then it's like, ooh, I'm so glad that I call her responsible Tiffany. I'm like, I'm so glad responsible Tiffany set up her automations because real Tiffany is back. Yes, yes, totally, yes.

Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going, and more importantly, where your tax refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop.

Feel aware and in control of your finances this tax season and get 50% off your monarch subscription with the code pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves in Edle. Achieve your financial goals for good with Monarch, the all in one tool that makes money management simple. Use the code pockets at monarch.com for half off your first year. That's 50% off at monarch.com code pockets. You just realized your business needed to hire someone yesterday.

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Then I also had a $200,000 mortgage and then I also had a $52,000 student loan debt. So I started off with the snowball method, which I found to be really helpful, especially snowball is when you pay off, you know, the smallest balances first. and as you pay them off, then you roll over whatever that balance was to the next smallest debt on your list, whatever you were paying, that payment. And so I started off there. And Snowball works great if you're just starting out and you need a little motivation because you get some early wins. And as I got really good at Snowball, then I switched over to Avalanche.

And that method is when you pay off the debt with the highest interest rate first. And so because I had done snowball for like a year or so. And then I was like, oh, okay, so now I've gotten pretty good at it. I don't necessarily need the pat on the back. Let me do the most impactful debt. Let me get rid of that first, you know. And so I started to do that. And then most recently, and I wish I read a hard about this before the book came out,

I forget the name of it, Snowball Avalance. There's another term, which I wrote it down. But essentially, it's when you take care of the debt with the most emotional weight. And I can't remember the name of it, like it's some other snow name. And I remember being like, I love that, you know, that basically you start to, there are, for example, let's just say you borrow money from your grandmother, you know, like, and you're like, I got to give Granny her money back, even though you're like, because you're like, Chase, bang, I'll see you later, but not Granny.

And so I have to figure out the name of that, but I love that to integrate that, that, to then look at debt to say, okay, you know, which one do I have, that's giving me the most emotional distress and focus on paying that debt offers. So a mix of those three, depending on who you are, you know, is really going to be, I think work best. And I say starting with the snowball method first is probably best and then intermingling avalanche and the other method where you work on the debt that gives you the most stress and anxiety. I love that emotional debt piece. I have not heard that before. I think that is just incredible. And as soon as you said that, I thought relatives, friends, if you've borrowed anything from any,

anybody that you value a relationship with, nail that one first. Because most likely that's going to have the emotional burden. And it's going to impact that relationship in a way that's different than your relationship with Chase Bank. That's really cool. I think that's a really neat thing. And I agree with you too, like the snowball effect to get those quick wins. Like if you've got a $75 a month debt and all of a sudden you knock it out and then you knock out a $200 a month debt, like these little ones, it really gives you some psychological motivation that you can actually get this done. But just to transition to another kind of situation when it comes to debt, how do you talk to people about people who have done something or multiple things where their

credit is just trashed? You know, like someone where they maybe, maybe it was a debt thing, maybe it was a medical bill thing, maybe it was their fault, maybe it was life just happened. But like, where do people start with something like that? What do you tell people, both from probably an emotional standpoint, but then like first actions to take to start getting on the right path to where you can then move into a different financial stage of life after that. So Kyle, first things first. I tell people that like, if credit is your main issue, breathe easy. Because to me, it is the easiest thing to fix.

That is like, well, you know, we're going to be here for a while. Buckle up. You know, you know, budgeting is also like, okay, budgeting is a lot of discipline and even savings. But credit is really just tips and tricks. You know, so I'm like, you know, and typically that's the thing that people are most, like, freaked out about. And I'm just like, honestly, like, I want you to breathe easy if that's your biggest issue because with some tips and tricks, we can get you right as rain, right? And so that's, I start with there just like, we got this when it comes to credit. And then I like to put what I call on the board where it's like here is the goal on the board.

Once you get to about 750, 760, you start to enter what they call like perfect credit, meaning. like 800 it's great, you know, 800 and 50 is great. But truthfully, once you get to that 74750 and above, for the most part, you're in the A plus class either way. So don't try to stress yourself like, but I really want 800. I'm like, eh, focus someplace else once you get to like 760. Right. So that's the second thing that I do is like let's set the number so that we know where we're actually chasing. And then third, we break down the components of your credit score. 35% of your credit score is payment history. And if you set up that separate checking account for your bills and automate your bill payment,

cha-ching, like look how much work you've done already with no real work. Like literally automating your payments is going to tremendously help your credit score. And then 30% of your credit score is amounts owed. Right. So that's just really paying down debt, you know? And so if you kind of start to automate like through that avalanche, through snowball and I can't remember the other. I'm going to figure out the other one and then I'm going to claim.

It's going to be my claim to fame that I made it up. So if you heard it here, folks. And then the other one, whatever the other snow reference one, you know, once you set up and automate a debt paydown plan, you're taking care of 65% of the things that positively affect your credit score, you know? And then once you get that and it's automated, then we can start to get into some of the tricks instead of just the tips. And so one of my favorite tricks that I use is I call it like, so I'm 44.

So like I grew up with Jordan. I know everybody loves LeBron, but I'm like, have you watched Jordan play? Right? Yes. Yes. Right? So I call it the jump like Jordan method. Because remember Jordan used to jump and it was like he was frozen in the air, right?

Yes, with the tongue out. With the tongue out. Jump like Jordan method is this, is that you get a credit card that you ideally already have or maybe you were going to get one anyway. It has a zero balance and you're going to put, you're going to look at your budget or your money list and find the lowest reoccurring bill. So let's just say it's Planet Fitness for like 15 bucks or Netflix or whatever. Whatever your lowest reoccurring bill is and you're going to put it on that card and nothing else. That card's going to stay home. And then every month you're going to pay that card off in full

because I don't know what it is, but the credit bureaus like ring the alarm like, oh my gosh, Mindy paid it off, copped it off in full every single month. And in so doing, it gives an extra boost. Like, it doesn't matter if it's $5, $500, $5,000. And I did that when my credit score like dropped really low after Jake the thief left me and all that credit card debt. And I had a foreclosure. And in two years, I went from like a $5.30. It took me two years because of the foreclosure to get up to $750. And now I'm in the $800. And so that. that is one of the tricks that you can use paying off a credit card in full every single month, but it doesn't have to be a lot of money.

And so like made whole is full of here are kind of like some tips and tricks to raise your credit score. And most of them are automated so you don't have to stress yourself out. I love that tip. I didn't know about that. And I like I always pay off my credit cards because I'm, you know, I'm a nerd like that. I'm responsible like that. Let's reframe this because this is a good thing to pay off your credit cards. I didn't know that was an option.

When I got my first credit card, I was 17. I graduated. I have a late birthday. And my parents, you can't get a credit card when you're 17. So my parents got a credit card and added me to the credit card as an authorized user. I had my own card. And when I turned 18, I inherited their credit score, which was. I didn't even know was a thing, which is now called adding somebody onto your card as an authorized

user. And then after, I don't know how long it takes for you to inherit their credit score. But that's another way to get your credit score. The issue is, I believe when you are no longer on that card, you no longer have that score. So yes, this is true. And so I did this for my sister. My dad, same thing.

Mindy, I, too, was 17. I have a late birthday when I graduated high school. and my dad did that for me that I was added on as an authorized user and his good behavior became my good behavior as long as you're on that card. Now the key is because I did this for my sister and because I thought, oh, you know what?

I'm going to pass the love along. I was in my 20s and I forgot to make a payment. So she called me fussing. I was like, what's your problem? My credit score. I was like, oh, yeah, forgot to make that payment because you inherit the good or the bad. Yeah.

And you know what? That's a great point that I wanted to bring up. You were talking about payment history is 35% of your score. So you need to make sure that you're paying your payments on time. When you miss a payment, one payment, you're perfect forever. You miss one payment. You are horrible. Your score drops so much. I want to think of like your credit score. Like I tell people like your GPA, like in high school. And so you have straight A's and you just got a big F. So you're not going to go down to F, but that F is going to be averaged into your credit score GPA. Rounding out the credit score, what comes into it is credit inquiries, credit history, and credit mix. So the credit history I want to highlight. Some people will say, okay, I got out of debt. Now I'm canceling my credit card. Ooh, hold off.

Don't cancel the very first card you ever had. My husband and I have a card from like 27 years ago. We use it zero of the time. because it doesn't give us anything. It's not, you know, we do these benefits and like credit card points and all of that. But we keep it open and every once in a while we'll like put gas on it and then go pay it off right away because it's been open for 27 years. When we close that, then our credit history shrinks a little bit.

Other cards, we open and close a lot. But having that open long enough or that long really makes us look like sure bets. Let's switch gears and talk about retirement. Can you break down how to invest for retirement and how to, invest for wealth building into the present. So one of my favorite chapters in the longest chapters in Made Hall is the investment chapter. It's the sixth step on the made whole kind of like checklist. And I like to distinguish between investing for wealth and investing for retirement.

Like when people say I'm saving for retirement, I'm like maybe initially you saved, but ultimately your retirement money is meant to be grown. And so I like to change and reframe that language that you're really investing for retirement. And the difference between the two is this, is that if you are invested, you want to start with investing for retirement with any excess money that you might have after bills are paid. And you know that you're investing for retirement because if you can look around how your life looks now and investing for retirement means you will be able to maintain your current lifestyle, that's the purpose behind investing for retirement.

It's not going to put you on the private island. It's not going to, it's like, oh, this chair? I'll have that chair in retirement. You know, like I'm talking about metaphorically. You know, like your life now, you can currently maintain that life. And investing for wealth is different. It is to raise your current lifestyle and to leave a legacy. But I want you to do the foundational part first, which is retirement first.

So when you're going to invest for retirement, you're going to figure out like what there are investment vehicles that are available to you. Well, one, you're going to figure out what type of investor are you? Are you someone who is passive? Are you an active investor? Are you somebody who's kind of like in between? So I have like a fun set of quizzes to kind of identify what kind of investor you are. So you can kind of figure out which vehicle that you should invest in.

So it's like understanding like, oh, like for me, I'm kind of in between. Like I'll do a little bit of research, but your girl is busy. You know, like some people, a friend of mine is an active trader. You know, I'm Tila. So she's active. So, you know, so for her stocks are like perfect. For me, I'm more an ETF girl or like mutual funds because I want to kind of set it semi-forget it. So you take the quiz inside the book, you figure out what kind of investor you are,

and then you figure out what vehicles are available to you. So I like to, first and foremost, when it's investing for retirement, ask yourself, does my company offer a match wherever I work? Because if so, there's money on the table, go get it. So if your company, a match looks like this. The percentage of your income that you make, they will put up if you put up as well. So if the matches, say, 5%, if you put up 1%, they'll put up 1. If you put up 4, they put up 4. If you put up 5, they put up 5. If you put up 6, they put up 5 because that's their cap.

So if your company offers a match, you want to at least put up enough to max out the match that they're giving you, you know? And so because that's technically, I mean, people say free money, but nothing's ever free, but at least it's like, because ideally you want to set aside like 10 to depending these days, maybe even upwards of 20%, if possible, of your income to set aside for depending what kind of retirement you want to have. Right. And so if 10% is your goal, then if you put up five and they put up five, you've met your

goal without having to put the whole, whole amount up yourself. But I also want you to consider external retirement accounts, like an IRA, you know, an individual retirement account and a Roth IRA. So I can't remember when I wrote the book at the time, I want to say if you made under $130,000 or $140,000, I don't know what it is now to have to Google it, then you're eligible to put money up for a Roth IRA, although there's backdoor Ross and ways to get around it. But on the front end, like Roth IRAs, you have to make under a certain amount to qualify. So the difference between traditional retirement on IRA and a Roth IRA is traditional retirement,

you get your savings now. You put money in that account, it reduces your income and you pay less taxes now. And then when you pull the money out later, you pay taxes on the money later. A Roth IRA is you put your money has already been taxed and you put money into your Roth IRA. And then later, you don't have to pay taxes on the money you pull out. And so it's really ideal to be putting money into pre-tax, like an account, like the account at your retirement account at your job or an IRA. And also a Roth IRA, having some and both. So that way, when it's time to retire, you've gotten some tax benefits up front.

And then because you might have a Roth, you've gotten some tax benefits, you know, when it's time to retire. So these are things to consider when you're investing for retirement. Now, investing for well, this is where you could be a little bit more aggressive for those folks who have bills paid on time. Debt is fully managed. They're, you know, they're doing great with retirement investing. And now they're ready to invest for to currently increase their level. of living and setting aside money for their heirs or their legacy. And so it looks similar to investing for retirement, except for there's not going to be tax benefits, you know. So because,

you know, the accounts that you're going to be using, these brokerage accounts you're going to be using, you know, they're like, whatever, you have enough money to do this. We're not going to give you a tax benefit. But you want to identify for yourself with how an investor you are. Are you going to be heavily into stocks? Maybe investing looks like real estate for you. Investing might be looking like investing into businesses for you, identifying like what that kind of looks like for you. And I help you in the book to identify the avenues to go through and then putting that excess money there consistently. If you do those things, then like you might not be the richest, but you'll certainly have more than enough to take care of yourself and your family. Yeah. Thanks for clarifying

between the two items there for retirement and wealth building. That's a completely different goal. Okay. Let's talk about chapter nine, my favorite chapter. Grow rich. ish. First of all, I love that title, ish, richish, because you're not promising the world. One thing I love about you, I mean, everything I love about you, Tiffany, but one thing I love about you is you don't promise the world. You're not promising, hey, if you do everything, you're going to be a billionaire. You're not probably going to be a billionaire, but you can be richish if you follow all these steps. And in this chapter, you're talking about increasing your net worth. And it is peppered with reassurances, which I love, because we're all feeling this.

shame, like you said earlier, the SH word, the shame of not knowing about your money. And if you didn't know about it, if you didn't learn about it, how do you know, don't feel shame. So so many people feel bad about their lack of knowledge and their financial situation and they shouldn't. And you've got reassurances like, and this is a quote, net worth isn't a number that says anything about what kind of person you are or accomplishments you've had in your life. Whatever your net worth is, it's okay. All you have now is a number that gives you something to work with, a place to start from. Yeah, net worth really is what you own minus what you owe. That's just that simple. I own these things. I have a house, well, at least the equity in my house, you know, the value of my car. You know, I don't know, maybe it's like your wedding ring.

Maybe you have some art in the house. It's cash businesses. So I, you know, the value of my car. So I, you know, I don't know, maybe it's like your wedding ring. It's cash, businesses. So I own these things. And then I owe these things. So it's like my actual mortgage. Maybe you have like, there's money left in the car that you actually owe, you know, credit card debt, student loan debt. And so I owe these things. So if you subtract what you owe from what you own, you will have a number that's your net worth. It is not your value number of who you are as a person. A net worth is a really great way to just kind of do like a financial checkup to say, because there are people who own millions and millions and millions and millions and millions and millions dollars.

You know, they own $50 million. You're like, wow, you must be rich. But they owe $250 million. You're like, oh, you're broker than my five-year-old nephew. You know, because you owe way more than you own. And so the key, where I love that net worth is near the end is because what I tell you is if you do all the works in the prior chapters, once you get to net worth, you have all the tools to increase what you own and decrease what you owe. So somebody going through this

workbook, how long do you anticipate them spending with the book? It's not just pick it up and you're done in a day. It depends, right? So I'm someone who I love to read. So, and I probably wouldn't suggest that somebody raced through it in a week. You certainly could if you, so there are some people like this. They're like, first round, I just want to listen. So, you know, maybe it's like this first week. You're just going to listen. You're not going to do anything. And then second round, I'm going to work through it. And so maybe that's like a month. I suggest a book club, you know, like with some friends so you can actually work through

it together. That would be really fun. And then some people want to like me, too, I actually, sometimes I like to read and do. You know, so if I'm a read and doer, then I go much slower and I'm looking at about a month, a month and a half to kind of really work through. Or you might also, because I love that it's 10 steps, you might say, well, every week I'm going to work on a step. So then that's 10 weeks, you know.

So there's so many ways. I like to just, for me, I like to create a system for myself so I don't fall off when it comes to work books. I'm like, okay, here's my system. Typically, I find a friend to do along with me. And then, like, even now I'm reading a book called Attached. It's about like attachment styles and about like, you know, how do you show up? Like, are you anxious when you show up for people in your life? Are you kind of aloof and avoided or are you secure? And so I'm trying to figure out, like, who am I and how do I show up differently? And so a friend of mine, we're reading it together. And every week, we go through like two chapters and we'll talk through it.

And so like, you know, even though the book attaches not a workbook, but because I'm trying to do work, so I'm like forcing it to be a workbook. But the good thing about made holes that you don't have to force it, you know, you could check in weekly with yourself or whoever you're working through it with in order to do the work. So do you have a book club set up that people can join? So absolutely. So when I first did made hole that came out, like when I first did get good with money,

it's companion book, people wanted it. So a few months later, I created a, you know, like a sheet, like a kit, a work, not a kit. Yeah, really like a book club kit. And so I'm going to do the same thing for Made Hall where it's literally like a series of videos and questions you can ask. Because I find that, you know, which I'm so glad people agree with me, that money is not a solo sport. That you ought to do it along with other people. So, yeah, there'll be a free downloadable book club kit, you know, on the site. So that way you can, you know, you could do it with other people.

Tiffany, it is always a joy to talk to you. I really have to keep myself in check. So I just a fan girl all over you. But this was so helpful. Anybody who needs help with their finances, anybody who knows somebody who needs help with their finances. Hey, Christmas is coming. When does this book come out and where can people find it? So the book comes out November 21st and folks can find it wherever books are sold.

And if you're like me, I like to support like local bookstores. So if you go to made whole workbook.com, so that's madeholeworkbook.com, you will see a list of like all of these different places, you know, from the big box places to like smaller places where you can purchase the book. Tiffany is so good to talk with you today. Thank you so much for being on. Thank you for being just a joy to talk to and just so much fun. I feel like we could just keep going for a long time here. Where can people find you? What's the best place for people to connect with you? if they want to learn more, not just about your book, but about who you are, all these other resources you have. Well, Kyle, thank you so much. I am the budgetneista everywhere, the budgetneista.com,

the budgetneista on TikTok, although I don't TikTok much, but Instagram, Facebook still, YouTube, Twitter, or X or whatever they're calling it now, and LinkedIn. But, yeah, just the budgetista wherever, like, social media and sites are found. Tiffany, thank you so much for your time today, and we will talk to you again soon. Holy cats, Kyle. That was Tiffany, and she is amazing. What was your biggest takeaway? And there's so much in here. It was just really good to hear her talk about everything. If I had to pick one thing, I usually, whenever I learn something or hear a new terminology that I've never heard anymore. Terminology, hear a new term that I've never heard before.

She talked about the emotional debt snowball or snowflake or, you know, whatever we would. want to call it. I think she's going to try to think of something to call it. But I just thought that was a really neat concept when you're starting to pay off your debt to look at different strategies to do that, but to keep in mind the emotional weight that some sort of debt may hold on you, which, whether that's a debt to a family member, a friend, some sort of relation, or maybe it has something to do with something that was hard, like a divorce or something like that. But that was just a really cool concept. So I just, I like that she pulled that out. And I haven't heard that talked about very much before. I really liked how she encourages you to reframe your thinking. Tiffany gave

us a lot of ways to do this. Most notably budgeting. Budgeting isn't a limitation. It's your mother. Yes. Yes, but yes, you can do this, but first you have to do that. And that is such a great way to reframe the thinking about budgeting. She's got a lot of ways to reframe your thinking. The money one, split it before you get it. So you split your income before it comes into your bank account. So you go to your HR person and you say, hey, instead of giving me my entire paycheck, put X amount of dollars into this account and X amount of dollars into that account.

So you've got your money for your bills and you've got your money for your discretionary or more discretionary spending. And you pay your bills from here. You never have to worry about going negative in that account because that's just for bills. And you even have it at different banks, which I think is a huge key point to make to people who are having trouble getting started. If your money is easily transferred between your accounts, it's going to be a lot easier for you to just be like, oh, I'll just move over these $500. No, if it's really, really hard to make that money move, it, like that can be such a,

a slam down to you making that money move. Oh, it's going to take three days. Forget it. I'll just do something else. And I just, I love the way she thinks and I love these little mind tricks that she has to help you change your mindset about money. She's just great. All right, Kyle, should we get out of here? Sounds good to me. That wraps up this episode of the Bigger Pockets Money podcast. He is Kyle Mast. Kyle, where can people find more about you? The best place is just Kyle Mast.com. I write a newsletter sometimes and I've got some other stuff on there. But yeah, I'm on Twitter a little bit, but usually my website is the easiest way. Kylemask.com.

And I am Mindy Jensen saying got to go, Beagle. If you enjoyed today's episode, please give us a five-star review on Spotify or Apple. And if you're looking for even more money content, feel free to visit our YouTube channel at YouTube.com slash Bigger Pockets Money. Bigger Pockets Money was created by Mindy Jensen and Scott Trench, produced by Kaylin Bennett. by Exodus Media, copywriting by Nate Weintraub. Lastly, a big thank you to the Bigger Pockets team for making this show possible.