BiggerPockets Money Podcast - 548: 2 Money Moves We’re Making TODAY to Prepare for a Potential Recession

Starting point is 00:00:00 We are in a recession, or maybe we're headed into a recession. I don't know, all the news is different. But in recent years, we've had a ton of layoffs, even hitting the normally pretty solid tech sector and all of their overbloded staff loads. If you are worried about this happening to you, today's show will help you get your finances prepared so a layoff or recession doesn't catch you off guard. Hello, hello, hello. And welcome to the Bigger Pockets Money podcast. My name is Mindy Jen. and joining me today is my fantabulous co-host, the She-Wolf of Wall Street, Amanda Wolf. Hello, hello. Bigger Pockets has a goal of creating one million millionaires.

Starting point is 00:00:40 You are in the right place if you want to get your financial house in order because we truly believe financial freedom is attainable for everyone, no matter when or where you're starting. Amanda, I am super excited to have you joining me today to talk about how to prepare yourself in the event of a recession or a job layoff that comes and wallops your finances, or rather how to prepare yourself so that a job layoff doesn't wallop your finances. You have a lot of experience with just giving money advice in general that is rock solid. So I am so thankful for you joining me today. Yeah, and I'm so excited to be here.

Starting point is 00:01:17 You know, those things are never fun to think about, but I know just how comforting having like a good financial foundation feels. So if this is going to give people the little kick in the booty they need to kind of set that solid foundation, it makes me really excited to talk about it. Today we're going to be talking about boosting your emergency fund with some actionable steps that everyone can take. If you don't have an emergency fund and you're familiar with the CNBC article that says 44% of Americans can't pay an unexpected $1,000 expense, we talk about this article all the time, it comes down to being intentional. So we're going to share tips for how you can be intentional with building your emergency fund. We're going to address the common concern. I don't have any

Starting point is 00:02:04 extra money right now. Today, we're going to help you turn over those financial stones to see what you can find in your current life. And we'll also talk about what do I do if I lose my job or if I'm at risk of losing my job. Yeah, so, Mindy, this is the thing. I feel like this is one of those things where we're just kind of like getting caught up in the vernacular of something because you do have an emergency fund whether you want to admit it or not. You just don't have one in the traditional sense that the rest of us have one. So while I might have like a specific set amount of money parked away in a secret place that I don't want to touch because that freaks me out not having it, you still have access

Starting point is 00:02:44 to cash, to liquid cash at any given time. And I feel like it's totally not fair to say you don't have it. an emergency fund. You just don't have one with maybe that specific label or it's not packaged up the same as the rest of us. Yeah, I do have options available. I mean, first off, I have a credit card. So if I am driving down the road and all four tires blow at the same time, I'm not stranded. And I've actually had a credit card since I was 17. My parents hooked me up with it. Once I graduated high school, they're like, we don't want you to be stranded on the side of the road. It's been a minute since I was 17.

Starting point is 00:03:23 I have never been stranded on the side of the road with four blown tires, but I have access to a way to pay for those right away. Once I swipe that card and pay all of those four tires blowing it once never happens. But once I do that, I now have like 30 days to figure out how I'm going to pay that off. I have a job. I have investments. I have cash in a not super easily accessible, but still. accessible to me within that 30 days to pay off my credit card time window. So I do have many

Starting point is 00:03:57 different buckets I can pull from to fund an emergency of almost any size. But I don't have a specific bank account labeled emergency fund that I never get access to except when I need money. And I think that that is an important thing to note. So if you don't think you have an emergency fund, start looking at the different ways that you could cover, let's call it this fictitious blowing out four tires all at once. How could you pay for that? I argue with you again, Mindy, because I'm going to say that a credit card is not an emergency fund. A credit card can cover you until, you know, you have the actual cash in hand, but it's definitely not an emergency fund. And I kind of think there's two groups of people here. There are

Starting point is 00:04:44 those folks who they have access to money, they might have to move some things around to get access to it, but they have it. It's not like, you know, it's not like all of their equities in their home or their car and it's going to be like a really big deal to get access to that cash. And then there's the other camp of people who literally just don't have access to money, whether they don't have any savings, they don't have, you know, real estate investments that are, you know, bringing in extra dough every month. They don't have extra cash. So I think, it's kind of like two groups of people there. So the people you're talking about are people who have access to money. They can use the credit card. They'll figure it out in 30 days. Then there's the camp of

Starting point is 00:05:23 people who they don't actually have enough cash or access to cash. And putting it on a credit card is only going to further snowball their debt. So I kind of think I wanted to call that out because an emergency fund for some people like the credit card is that's really not going to do the job. Right. And I'm glad you said that because a credit card isn't an emergency fund, even though I just said that I have a credit card. So if I have an emergency, I can swipe the card and figure out how to pay for it later. I know how I'm going to pay for it later. I have investments. I have income. I have more income than I am currently spending. So there is a delta between how much is coming in and how much is going out every single month. But also, I think that's a really great point.

Starting point is 00:06:08 If you don't have ways to pay off your credit card, and I pay my credit card every month, I'm not paying 25% interest on my charges from 17 months ago. So if you don't have a way to pay that off every month, then absolutely your credit card is not your emergency fund. It can cover in case of emergency and then you're going to have to figure it out later. But let's talk about ways to build up your emergency fund for those of us who don't have the ability to just pay off their credit card when they're moving things around. What would your, you know, Dave Ramsey is famous for saying, oh, I have a $1,000 emergency fund as baby step number one.

Starting point is 00:06:52 But that has, that really seems like that's super low. Yeah, I would say that, you know, I kind of feel like that is a nice goal to shoot for if you have no cash. But to your point, $1,000 could be not a lot to one person and could be so much to another. And there is not a blanket answer of how much you need for an emergency fund. it depends on so many different factors. Like, you and I probably need different amounts, right? A single mother of three kids probably needs a different amount than I do. So it's a matter of looking at a few different factors in your life.

Starting point is 00:07:24 So first of all, the thing that I like to say is if you were to lose your job tomorrow, how easy would it be for you to get a job of similar pay tomorrow? If you have like some super niche job or your super executive level who is highly compensated, you're probably not going to get a job like next month, right? it's going to be a little bit of a longer wait. However, if you are in a position where your job is a dime a dozen, you know, you could easily go find something down the street, then you probably could have a little bit less of an emergency fund. Harder job to find, bigger emergency fund, easier job, smaller. The second big thing is do you have anybody else who is financially reliant on you? Do you have kids who you're taking care of? Do you have, you know, sick parents who are relying on you, those types of things. If you have people in your life who are financially reliant on you, on you, you probably want to have a little bit larger of an emergency fund. If you are sitting there, like, it's just me and me, me, baby, like, that's it. I just have to take care of me. Then you can probably get away with a smaller one. So there's like some factors that you kind of have to take into account

Starting point is 00:08:25 before you decide how much you actually need. I think that's a great point. What is your job and how easy is it for you to get another one? Because I have lost jobs in the past. It is fairly easy for me to get another job because I have a variety of skills. And I'm not picky. When it comes to applying for a job, I am hyper, let's see, not hyper, what's the opposite of hyperfocused? I'm hyper unfocused. And if it sounds interesting to me, I am applying for it. I have my main resume and I tweak it as I need to and my cover letter to apply to each individual job. And I apply to everything. Because here's the thing. When you don't have a job, nobody's calling you up. Hey, are you looking? Unless you have like super, super, super, super specialized skills. I love that advice. How easy is it for you to get a job? And who's relying on

Starting point is 00:09:22 you? If it's just you, when I was 22, if I lost my job, I could just move back in with my parents. Do I want to? No. But could I? Yes. Now they live in an RV. So I'm not going to move back in with them anyway. One piece of advice that I have seen is to cover your largest deductible. So, and I think it's really important to note that this is not advice, you know, have an emergency fund. You're not going to be able to just come up with a number instantly. Oh, $1,000 sounds good. Really look at all of the expenses in your life, all of the things that are absolute must have. Like you want to be able to pay your rent or your mortgage. You want to be able to put food on the table. You want to keep the lights on.

Starting point is 00:10:06 So look at those expenses and then look at, you know, your other things. Like what's your largest deductible? That's for me, I think it's like $10,000. So I want to have at least $10,000 in a bank account that I can access if I need to. We are going to take a short break. But when we come back, we will look at how you can calculate a good number to aim for as your emergency fund. And later, we'll share some tips for staying marketable in your job search. Tax season is one of the only times all year when most people actually look at their full financial picture,

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Starting point is 00:13:16 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.com slash BP Money. Welcome back to the show. Let's look at how to calculate how much you'll need. for your emergency fund. Amanda, I think this is a really great point. I think so many people are like, okay, I know I need an emergency fund, but how do I figure out how much I need? Yeah, so it's going to be different per person. And I actually do have a free emergency fund calculator on my website. If you go to

Starting point is 00:13:46 shewofal wall street.com backslash e-calc, and it'll be linked in the show notes below, so you don't have to memorize that. But it's going to walk you through the different scenarios to identify what your essentials are in life and how to figure out how much you personally are going to need. it'll walk you through different scenarios because, you know, paying your rent and your mortgage and buying groceries are essentials. You need to make sure you have enough money for those things. But, you know, ordering postmates and, you know, going out to the club are probably not going to be included in your emergency fund if you're going to tighten things up a little bit. So I have a free calculator where you can, you know, walk through that to see how much you'll need,

Starting point is 00:14:23 but it's going to vary per person. Amanda, let's talk about ways to reduce your spending so that. that you don't need as much in your emergency fund to begin with. I know you had a recent Instagram post about one of your coworkers that was cutting down her grocery bill almost in half. I'm fascinated by this. This was actually such an interesting conversation. So one of my, you know, good friends had sent me a text saying, like, do you feel like groceries are just out of control? I'm spending $600 a month right now. And mind you, let's give some context. She is one person, she's like in her 20s, 5 foot 1, 105 pounds like wet noodle, right? Just, I mean,

Starting point is 00:15:06 cannot be eating that much. And when she told me she was spending $600 a month, I was like, there is no way. That is how much basically me and my husband are spending for the two of us. Where are you shopping? And she told me, I'm just going to Kroger. And I was like, that, my friend, is your problem. Because I discovered this issue myself a couple of years ago, hitting up my local Jewel Osco where my grocery bill was getting insane. So we actually started going to Whole Foods and our bill drops drastically. She's like, no way. I think of Whole Foods as Whole Paycheck, right? That's the kind of thing that we've all heard, right? So we decided to do a little test where we compared like a whole bunch of different grocery items at Trader Joe's, Aldi, Kroger,

Starting point is 00:15:48 and Albertsons. And keep in mind that Kroger has like an umbrella of stores beneath them. Albertsons has an umbrella of stores beneath them as well. So it was Trader Joe's Aldi, Whole Foods, Albertsons Croger. We did it across those five chains. And some of the data would be very surprising to you. Aldi, cheapest by far, that's probably not a surprise, right? But not all of us have Aldi near them. And I am one of them.

Starting point is 00:16:15 Colorado does not have Aldi. Hey, Aldi, if you're listening, come to Colorado. No, so many people were saying the same thing. But when we did an analysis of these top, you know, 25 items, because what she essentially started doing was going to Trader Joe's and her bill went from $600 a month to a solid $350 for about two months in a row. So then we were like, let's go on this, you know, endeavor to see, is it just the things that maybe you and I are buying? Let's look up the top, you know, 25, 30 most popular items that people purchase at grocery stores and compare them across these five chains. And we found Aldi was the

Starting point is 00:16:48 cheapest, then Trader Joe's, then Whole Foods, then Kroger, then Albertsons. So, like, on most things, most things, of course there are some outliers, but it was actually really shocking. So, yes, by her just simply changing the grocery store, she picked her groceries up at, she saved hundreds of dollars a month. And she's still buying, like, the same type of stuff. So when you go, like, looking for extra cash in your budget, sometimes it's as simple as, like, taking a step back and being like, where am I buying my things? And also, when are you shopping? Are you shopping when you're hungry? Your grocery cart is going to be so much fuller than if you're shopping when you have, like, eat a snack, eat a big meal before you go to the grocery store. I do not feel

Starting point is 00:17:35 like shopping for groceries. When my stomach is so full, I can barely walk. So, you know, maybe, maybe a little bit between stomach so full you can barely walk and starving. Or I also really like the idea of doing an online pickup for your groceries. You can see exactly how much you're going to spend before you even check out. And I know that some people have a problem because they're like, I like picking my own avocados. Well, if you did it for even 90% of your groceries and you picked out your own avocados and bananas and you know that those are the two things I'm buying like myself, I'm picking myself. You could still save a lot of money because once you see that total before you check out, you're like, oh, I might, you know, pull a few things back. So I think to reduce your overall spend,

Starting point is 00:18:13 And sometimes it's just a matter of changing the way that you're doing things today. So that's interesting. When you say do the online pickup, that forces you to either make a list or go through and specifically choose items. I love going grocery shopping and I am terrible at it because I'm like, oh, this looks interesting. That looks interesting. If I don't go in with an actual list, I come out with way more things that I meant to.

Starting point is 00:18:41 And what is one thing, two extra things? That's not a big deal. But when it's 15 extra things, there goes your grocery budget. Absolutely. And I think that the list is so crucial because I used to be the person who would go to the store three times a week, just pick a thing up here. Because I had no plans for my meals. And then I let so much food go to waste. And I was like, this is making me feel bad because I'm like the, you know, stereotypical person throwing the bag of spinach away at the end of the week that has now gone bad. But also it just makes me feel bad because I'm wasting money. I'm wasting food. I've got to get this under control. So making a list was kind of life-changing for me. Yeah, absolutely. And this all, I know we started talking about emergency funds and we kind of got off into it,

Starting point is 00:19:27 but it's, this is all part of your emergency fund. If you are spending $600 a week on groceries, then you're going to need $600 a week times however many months you're going to do your grocery budgets, however many months your emergency fund is going to be, you're going to need that much. But if you're only spending $350 a week on groceries, now you just cut your grocery needs for your emergency fund almost in half. That's huge. So I think it's so easy to mindlessly spend. I know because I do it myself sometimes. I wish I was perfect, but I'm not. So yeah, I really, I really like. that just audit your spending, groceries, everything. Audit your spending and see what you can cut back just by making little tweaks. Absolutely. And even like just reevaluate, like it goes beyond

Starting point is 00:20:18 the grocery budget. I mean, we've like definitely deep dived into the groceries right now. But there are other places in your life too. Like when was the last time that you renegotiated your car insurance, right? Or like when was the last time you renegotiated your cable bill, Wi-Fi. I know calling them is a pain in the butt, but you can save tons of money or your car insurance, things like that. Absolutely. I just renegotiated my car insurance about a year ago, and I had pretty low coverage. I'm a great driver. I don't get into accidents that are my fault. I have a high deductible on my homeowners policy, but I had done an episode of the Bigger Pockets Money podcast where we talked about a fire that was near my house that took out

Starting point is 00:21:05 1,100 homes. And a lot of those houses, house prices had gone up, but their insurance coverage had not. If you buy a house for $500,000, you insure it for about $500,000. And then when your property values go up, how frequently are you checking back in with your insurance company to make sure you're covered. A lot of these houses had gone up to like $750,000, but they're still insured for $500,000. Guess what check they got from their insurance company when their house burned to the ground? $500,000. So I looked at my policy. I'm like, oh, this is a little outdated. So I called up my insurance company and they offered to, you know, increase my coverage for quite the price. I called up Liberty Mutual. I will absolutely name names. I called up Liberty Mutual and I said,

Starting point is 00:21:54 hey, a friend just renewed their insurance with you. They got an umbrella policy as well. And she said that she had really great experience. Can you give me a quote? They said, sure. They looked at everything. I got more coverage on my auto policy, more coverage on my home policy, and an umbrella coverage policy for less than I was paying before.

Starting point is 00:22:24 your insurance company is not going to reward your loyalty. So don't reward your loyalty to them by staying with them even as they continually increase your prices. Another place that I have saved money is on my cell phone bill. Again, every expense that you are putting out is going to just increase your emergency fund need. I have Mint Mobile. They have been a sponsor. the show in the past. And that's not why I chose Mint Mobile. I chose Mint Mobile because they're $15 a month and they are absolutely very, very reliable. I have had nothing but great service from Mint Mobile, except when I was in Alaska. They didn't cover Alaska. So, you know, definitely find where your coverage is. But why would I pay $100 a month for the same service that I'm getting

Starting point is 00:23:18 for $15 a month? I never use all of my data because I'm not on my phone all that much. They do have different levels of plans. And I mean, the difference between $100 and $15 is $85. That's a lot of money that you're saving or, more importantly, a lot of money you don't need in your emergency fund that could be counted towards other things. Something that I have suggested a couple of times is canceling Amazon Prime. For me, it is very difficult to pay shipping costs. It's a mental block, but when I have Amazon Prime, I go on Amazon, I click the thing, I put it in my cart, I send it to myself, and it's so easy because I'm getting free shipping. But if I had to pay for shipping, that would cause me to pause. Do I really need this thing? Can I get it closer? Do I really need this thing? I mean, it's so easy to just put it in your cart and go. So if you have the same mental block I do, cancel Amazon Prime. Save the money. for the cost of the subscription, but also that'll prevent you from making ridiculous purchases.

Starting point is 00:24:29 If you don't have the mental block of paying for shipping, I would suggest auditing your Amazon purchases anyway, just to make sure you're not mindlessly buying stuff. It's so easy to buy with Amazon. They've really made it so easy to buy. And while you're auditing your Amazon Prime subscription, audit all of your subscriptions. What are you paying for? are you still using all of it? Amanda, I know you did this with Rocket Money. You audited all of your subscriptions. Yeah. So I had actually been speaking with a friend who said she had used Rocket Money and was able to find all types of subscriptions that she had subscribed to that were not even going to her like a current email address that they were like hooked up to her parents. And so they were

Starting point is 00:25:15 being charged for them and she had never even noticed it. So I thought, okay, I am going to sign up for Rocket Money and I'm going to find all of this like, extra money lying around that I didn't even realize, you know, I was wasting it on. And long story short, I unfortunately did not find any subscription. Well, I guess fortunately and unfortunately, right? I didn't find any subscriptions to save myself money on. But the annoying thing is that Rocket Money does not audit itself. So the next month, I forgot to cancel Rocket Money. And then I got it with their subscription fee for the month. So I would say, you know, if you're going to use those subscription services, they can be helpful. But don't.

Starting point is 00:25:52 Don't forget to cancel them because they're not going to give you a warning. That is a really great point. I'm glad you brought that up. Another way to reduce your spending is to get things for free instead of paying for them. Of course, Mindy, what a no-brainer. What I'm talking about is places like your library instead of your bookstore. And yes, you want to support your local authors and you want to support, you know, your favorite authors. but when you are either in a layoff or in a recession or, you know, really looking to boost your

Starting point is 00:26:24 savings, you can look out for your favorite authors down the road. One way that I do this is by subscribing to Kindle Unlimited. I blow through books left and right. And I don't really want to buy 500 books. I don't have the space for them. So I have Kindle Unlimited. But when we were talking about this. You had a really great suggestion that's even better than Kindle Unlimited. It's totally free. Because Kindle Unlimited is not, it's not free, right? Mindy. You just kind of get to buy in bulk. It's not free. It's like $70 a year. Okay. That's still a good deal if you're reading a lot. Not if you're reading one book a year. It's probably not a great deal. But yeah, if you're reading a lot, no, Libby to me, I used to spend so much money on books. And I discovered Libby. That might be old news to some

Starting point is 00:27:13 people, but I know that it's going to be new news to some. So we're going to talk about it for a second. But Libby is the public library. So obviously you can go in person to your physical public library, but sometimes, you know, the millennial and me doesn't necessarily want to go do that. I want to do everything digitally. So it's a digital library card. I didn't even have to leave my couch and I downloaded the app. It like hooked me up to my closest library. And then I get to borrow books for free digitally, like e-books. as well as audiobooks, which I think a lot of people don't realize that audio books are included in it as well. But Libby is freaking so legit and it's totally free.

Starting point is 00:27:51 But you do have to sometimes, you know, wait a week or two. So what I like to do is load up in my, you know, in my queue so that I have some waiting for me. And then, yeah, you can pay literally no money. You can pay $0 for your books. That's my favorite is to pay $0 for my books, especially when I'm blowing through these books left and right. check with your local library to see which service they subscribe to. There's Libby, L-I-B-B-Y, but there's also Hoopla, H-O-O-P-L-A. So check on both of these.

Starting point is 00:28:23 And we would love to hear from you if you have more ways to get free books. Please share those in our Facebook group or in our show notes. Or leave a comment. All right. Let's rethink the idea of assessment. items. Your daily coffee really isn't all that essential. But if it is, you can make it at home. There's gasoline for your car. That's pretty essential. Is going to the club essential? Probably not. Maybe for some people, right? But it's definitely one of those things where it's completely

Starting point is 00:28:58 absolutely subjective. It's necessary if you are the bouncer at the club and you got to get there, right, Mindy? So absolutely. Your essentials are going to be subjective. And I am not the person who is like, you know, we work so hard for our money. And I'm never going to be the person to say, you should not go enjoy your, you know, fancy latte in the mornings. If that is your joy that like, lights up your life every morning. But if you have gotten into the habit of I'm just used to walk and buy it, and now I'm wasting, you know, tons of money. I have a friend who we just kind of did a little financial audit for her. And she was picking herself up a nice little treat on her walk home every day because it's warm in Chicago.

Starting point is 00:29:40 And that was $9.50. She's like, I don't even remember what I've been eating. $9.50 every day times five. You know, that adds up. So if you are somebody who is struggling to fill your emergency fund and you need to cut out some money from your budget, just looking at those small things that do add up over time is a really great place to start to. And it's not like you have to do it forever, right?

Starting point is 00:30:02 Well, and that's a great point. It's not like you have to do it forever. It's absolutely subjective. I love that you shared that because what you find value on, Amanda, may not be something that I find value on and vice versa. I think we all find value in food and then shelter. And that's kind of where the lists of our similarities end. And that's okay.

Starting point is 00:30:21 But looking at what you're spending money on can really open up your eyes to where things can be cut and where things can't be cut. I think that's that's really, really a great point. We are going to take a really quick ad break, but when we're back, we're going to look at more places that you can pull money from and ways to boost your sellability to new employers. 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-old. That's why I like Monarch. It helps you see exactly where your money is going, and more importantly,

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Starting point is 00:33:42 Get more with Northwest Registered Agent at Northwest Registeredagent.com slash money-free. And welcome back to the show. All right. Amanda, what are some more things? that you would suggest people look at when they're trying to find quote unquote extra money to boost their emergency fund. Yeah. So I think if you are somebody who is sitting there thinking, I have nowhere to pull money from. I think that one thing that can be very, very helpful is doing a no spend month.

Starting point is 00:34:13 Have you ever done one of those before, Mindy? I've done no spend month challenges. Towards the end of the month, I kind of fall off. But in the beginning of the month, it's so easy to be like, no. I am not going to do this. I am not going to do this. If a no spend month doesn't work, try a no spend week. Try a no spend half month. Every time you don't spend money on frivolous things that you really don't need, that's more money that you can put into your emergency fund. Absolutely. And I want to caveat by saying no spend month doesn't literally mean don't spend any money. You're still paying

Starting point is 00:34:50 your bills, like, please do not default on your mortgage or, you know, like get kicked out of your apartment or have your cell phone turned off. You're still paying your necessary bills. You, and you're still buying groceries. You are just being highly intentional around how you are spending your money. So you are not ordering out postmates for the month. You know, you're not shopping and, you know, making stops at Sephora or Zara or whatever on your way home from work. You are not spending anything beyond the necessities. And it can be really helpful to identify the places in your life that you've just been filling this void and spending money because it's comfortable or because you're bored or because something else, you know, doesn't feel good and shopping makes you feel good

Starting point is 00:35:33 or whatever your kryptonite is. But it causes you to do a lot of self-reflection and focus on the things that you actually need in life. I think it's an amazing reset. And, you know, again, like what we were talking about earlier, my friend who was spending the $9.54. since it was very specific amount every day. She did the no spend month and now she's not even tempted to to stop and do these things. She's realized, like, wow, I have so much more money at the end of the month and now I can use it towards, you know, that plane ticket to go visit my friend or whatever other things are more important to you. So it's a really great way to reset. I love that. It's a reset. It's not a completely changing your whole life forever,

Starting point is 00:36:11 although it could have some future consequences. So my friend, Angela Rosman started the women's personal finance Facebook group. And she started off having a no spend month because she wanted to get that reset. And it's now been seven years since she has bought any clothes. Now, that doesn't mean she hasn't gotten any clothes that were new to her. We did a clothing swap at my coworking space. We had like 12 or 15 women bring in bags of clothes. I took all the leftovers after everybody picked through everything.

Starting point is 00:36:48 I took 168 pounds of clothing to my local homeless shelter after everything was done. So there's lots of creative ways to get rid of things, acquire new things, all without spending. Just reach out to your local group and start brainstorming ideas to have no spend months, have no spend on specific items, have no spend on anything extra. you know, above the necessities. But yeah, like, like Amanda said, definitely pay your mortgage. Yeah, like, don't default on that. And one man, one man or woman's trash is another woman's treasure, right? So I love the idea of the swaps, too. It's like you get something new and you also offload clutter from your own home. Before we get into some job tips, let's look at other ways

Starting point is 00:37:33 to save. Another way to save is to stop making extra payments. If you're making extra payments on your mortgage, extra payments on your car, extra payments on anything, pull back on that. And either use that money to fund your emergency fund or use that money to put it into a high yield savings account to have access to it. You can always make those extra payments later. And again, this is not just general advice. This is funding your emergency fund and preparing for a potential layoff advice. Absolutely. And I would say it extends beyond even just the extra mortgage payment. It would be extra even credit card debt payment that you're making, which I know sounds counterintuitive to a lot of people because they're like, if I'm paying 30% interest,

Starting point is 00:38:18 you know, I need to be dumping all of my money toward that. And I would argue that, sure, that is very important to prioritize, but you need to have a little bit of cash in case something happens. Because to our point in the beginning, your credit card is really not an emergency fund. So if you're in a position where you have some credit card debt, you want to have some cash on the side just in case. And then once you've built that up, now go and hammer that home. So that, I would say it's extra payments really on anything. Your emergency fund should be your number one financial priority ever. Yes. And again, tagging onto that, your 401k. If you have contributions to your 401k above whatever you're getting as a match from your company, consider pulling back on those

Starting point is 00:39:03 as well, because that can go, again, into your emergency fund, into helping you prepare for a layoff, and you can always make more contributions down the road. And you're right, this is absolutely counterintuitive to all the things that we normally say, but this is a different time period that we are preparing for. Amanda, these are great tips, and I'm super excited to share them with our listeners, but I would also like to hear from our listeners. What tips do you have for boosting your emergency fund, cutting expenses so that you can boost your emergency fund?

Starting point is 00:39:37 Please give us some notes in the Facebook group, which is, Facebook.com slash groups slash BP money or feel free to email me directly, Mindy at BiggerPockets.com. All right, we have teased that we're going to look into the job market and how to prepare yourself so that you can start finding a new job. Amanda, what would you say is the number one thing people should be doing when they are preparing for a new job? I think the number one thing is to be super smart in how you're applying. So I have shared before that my biggest financial mistake I've ever made in my life that I, up to this point, hopefully it's a forever thing. But my number one mistake is staying at the same company for way too long.

Starting point is 00:40:19 So I stayed at my last company for 12 years. And data shows that those who stay at their same company for more than two years end up paid less, like a million dollars less over their lifetime. So for me, it wasn't necessarily that I didn't, I wasn't ready to leave the company. I had a freaking hard time even getting an interview. So for a solid two years, I was applying to places and not even getting anybody to respond back to me. And it wasn't until I hired an actual resume writer to write my resume that I then started

Starting point is 00:40:52 getting callbacks on almost every single one. And that's when I realized my resume was not even getting in front of humans. It was not even passing the computer. So what was making me feel so bad about myself, like, wow, I have no skills. nobody is interested in hiring me. Actually wasn't true at all. I just wasn't playing the game right. So I think the number one thing is before you pour your heart and soul into everything is to

Starting point is 00:41:15 apply really smartly and recognize that there are a lot of computers being used to analyze these resumes in the first place. Yeah, episode 110 of the Bigger Pockets Money podcast, we interviewed a Purple Life. And she talked about how she job hopped to, I think, double or triple her original salary. because the job, the new hire budget is much larger than the retention budget. I don't need to convince you to stay. You're already here. Totally.

Starting point is 00:41:44 But it can be hard to get those jobs. Yeah, it can be. Having a professional resume writer can be absolutely the difference between a resume that gets read and a resume that gets tossed in the bin. And it's, you know, these are skills that somebody else has that you may not. If you are awesome at writing resumes, then great, write your own. But chances are really good that you're not awesome at writing your resumes. I have a friend, Alexa Loken.

Starting point is 00:42:12 She has a career counseling company. It's called Loken Careers. That's L-O-K-E-N Careers.com. And she is absolutely awesome at getting you prepared for your interview, getting your resume perfect so that you can get those recalls and get those interviews in the first. first place. It's one thing to have great skills, but it's another thing to have a company actually call you back. So I love that. Absolutely. Yeah. And just to showcase yourself. Yeah. You want to showcase your skills. And another tip that I have for you is to keep your resume updated. You are

Starting point is 00:42:51 currently at a job that you've been at for five years. Is your resume reflecting that you've been there for five years? I know mine isn't. Mine doesn't reflect all the things that I've done in bigger pockets, but I'm not looking for a job. If you are looking for a job or you're thinking about looking for a job, now is the time to start thinking about all of the things that you have been doing at your company. What have you improved? What processes have you made better? How have you saved the company money? Anything that's tangible, that's hard numbers and facts that you can put into your resume is absolutely going to make you look better. So take stock of your skills, make a list of your hard skills and your soft skills. And keep all of your skills up to date.

Starting point is 00:43:37 If you've got a, if there's a new version of whatever it is you do, make sure you know that. So you're not saying, oh, you're on Microsoft. I don't even know what Microsoft's on now. I know Microsoft 3.1. Well, great. That's not going to help you at all now because it's a little different. So, you know, and the best time to do this is, A, while you still have a job so you can go through all of your past emails and go through the company, you know, all of your projects and all of everything and, oh, yeah, I forgot that I did that project and I saved the company a million dollars. That's a tangible fact.

Starting point is 00:44:10 You want to keep these things in your resume up to date at all times because when you no longer have access to the company files, you might forget all the things you've done or some of the things you've done. Absolutely. And we tend to, when we are panicked, we tend to make bad decisions and we have. short-term memory loss, right? So you might not remember all the amazing things you've done when you're in a panic like, oh crap, I have lost my job now. I don't have an emergency fund. Hopefully you will by the time you're done with the episode here. But hopefully you'll have some steps in place

Starting point is 00:44:43 so that you will have one once this episode is finished. But, you know, doing it when you're not panicked and desperate is a really great time to update your resume. And I would also argue that that is also the time that you want to do some market research analysis, too, to see, are you even being paid fairly in the job you're in now? That might, you know, you might be sitting here thinking, I'm comfortable, I'm not going anywhere. But if you find out that people are being paid double at all of your, you know, neighboring companies, that might light a different fire under your booty to get moving. I absolutely love that. That is a great point. And it's always good to know what your market value is. Amanda, where can I look for my market value? So I think that that was one really

Starting point is 00:45:29 confusing piece for me is, you know, when I was applying to jobs, is how, like, I don't even know what salary to ask for. I don't know where to find this information. But luckily, a whole bunch of states now are required to state their salary range within the actual job description. So what I think is a really great idea is if you do not live in a state where that is required, to look up a similar state, similar-ish state that does have it required and see what those jobs are paying in those states. So, for example, if you live in Iowa, don't go and look at New York City's pay range. Maybe you're going to look at Ohio, which a couple of those cities require salary transparency in the job description. So you can just do a quick Google search of what states

Starting point is 00:46:15 require salary transparency in the job description and see what those are. But going in armed with that information, first of all, just knowing it in the first place, but then once you actually get a callback from that resume, sometimes one of the first questions they ask you is, you know, what are you looking for in terms of salary? You want to make sure that you're not underselling yourself, especially if you've been in a job for a long time. You might be so underpaid and not even realize it. Yeah, if you've been in a job for a super long time, you almost guaranteed are underpaid. So look at, not only look at what other jobs are available, check out Glass Store and see what other companies are paying for the same job as well.

Starting point is 00:46:55 Absolutely. And one of my favorite things also is to slide into people's DMs on LinkedIn and see if they actually like the company they're working at because there's nothing worse than also doing all of this hard work, getting to a company and realizing the culture is terrible. The management is disorganized. And it is just a dumpster fire. So I think that just even hearing from actual people who work there, hey, do you like working there is huge, is huge. It's not just necessarily a disgruntled employee who is, you know, writing a bad review about the company, but people who are currently actively working there, do you like it or not? Because it could save you a lot of time and potential heartache if you don't end up getting actually hired there. I had an interview once where the person

Starting point is 00:47:39 that was interviewing me, I asked her, do you like your job? Because she was giving off like, I hate my job vibes. And she told me point blank, no. And now you know. And now you know, I mean, why jump out of the firing pan into the fire? If you, if you are interviewing at a company where everybody looks unhappy, definitely take a deep dive into their, into their LinkedIn employees and take a peek, ask them. I mean, the worst thing is that they don't even respond. Fine, whatever. But you can get a lot of really valuable feedback from employees when they know that they're trying to prevent you from. doing the same thing that they did. Maybe they were looking for a new job too.

Starting point is 00:48:22 Totally. Totally. And I think that also when you're reaching out to people who are even at a similar level, you'll have a, like, a better chance of getting a response back than, you know, reaching out to somebody in HR where they're just getting like hundreds of messages a day or reaching out to an executive where they're probably getting hit up all the time. You know, just your, not that we aren't, but just your average everyday person who's going to work is probably not getting hundreds of LinkedIn messages. So you have a higher chance of being seen to. All right, Amanda, thank you so much for joining me today. This was super fun.

Starting point is 00:48:53 To recap, we covered ways to save places you can look for to find new funds to put into your emergency fund. We've given advice to potentially stop paying extra or stop contributing extra to your 401k above the match and given you some tips for how to get organized for a new job search. We would love to hear from you. If you have any additional tips, please share them in our Facebook group, which can be found at Facebook.com slash groups slash BP money. Amanda gave a great emergency fund calculator.

Starting point is 00:49:29 It is found at Shewolf of Wall Street.com slash eCalc. All of these links will be found in our show notes. And we appreciate you listening. That wraps up this episode of the Bigger Pockets Money podcast. I am Indy Jensen. And she is the She Wolf of Wall Street. Street, Amanda Wolf. We are saying, Tudaloo Cano. Bigger Pockets Money was created by Mindy Jensen and Scott Trench. This episode was produced by Eric Knudson, copywriting by Calico content. Post

Starting point is 00:49:58 production by Exodus Media and Chris Mickin. Thanks for listening.

BiggerPockets Money Podcast - 548: 2 Money Moves We’re Making TODAY to Prepare for a Potential Recession

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