Money Rehab with Nicole Lapin - Encore: Money Tips When You Have No Money

Episode Date: May 21, 2023

Originally aired 8.24.2021 A lot of financial experts target money advice to people who have money. But what if you don’t? Today, a Money Rehabber asks Nicole for the type of financial advice that doesn’t cost a dime.

One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that

I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime. Feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details.

Hey guys, are you ready for some money rehab? Wall Street has been completely upended by an unlikely player game stop and should i have a 401k because you don't do it no i know you think the whole world revolves around you and your money well it doesn't charge for wasting our time i will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. Today we have a question from a listener who wants to stay anonymous.

When I saw this email from her, I got to work on her episode right away. Her question is such an important question, and it really hit close to home for me. Here she is. Hey, Nicole, I am looking for money tips for when you don't have money. I think a lot of financial advice out there seems to be aimed at people who have money and good decisions around that

sort of seem to be a privilege for people who have enough of it that they can actually even make decisions about where it goes. So I'm not one of those people. And I often can't make good decisions around money because I can't make any decisions around money. I have a spreadsheet, you know, that functions like a budget. It shows my expenses and what I make and I know where everything goes, but I can't make decisions about where to move that or, you know, where, how to move that around and, and things like that. And even healthy money practices, like setting aside the correct amount for taxes. I often need that money for more immediate needs like groceries and utilities and rent. But I do want to learn and practice good money habits so that hopefully if I make a more livable amount that I'm set up for success. So in the same vein as keeping a budget, even if you can't decide about where money goes or reviewing card statements,

reviewing every credit score change, are there any other practical tips that you have that don't cost a dime and also just generally good, healthy practices and behaviors around money? Because I also come from a background of dysfunctional money stuff and class anxiety and that, you know, that shit sticks around whether you're poor or rich. So any practical tips that support healthier attitudes around money too. Thank you so much. I completely understand the feeling that some financial advice is just for people who have money. And in some cases, that's totally true. The people that parade as financial experts like Dave Ramsey will tell you that if you're living paycheck to paycheck, you're screwed. That is a true story. A few months ago, Dave Ramsey said that you were

screwed if the stimulus check was a meaningful amount of money to you. That is wrong. So wrong. You are not screwed. And I know this for absolute fact because I've been there myself. I've heard soundbites from financial experts that made me feel like I would never have my own financial security. And that is paralyzing. When you're living paycheck to paycheck, it's hard to hear about how important it is to take steps toward saving for retirement and investing in the stock market or even making an emergency fund.

I get it. I know you are not screwed. This is not the end of your story. You have a whole road ahead of you and you're just at one point along the way. Now, that doesn't mean that the road will be short or the road will be easy. It will be long and some points will be hard and some road will be easy. It will be long. And some points will be hard. And some points will be really, really fucking hard. But if I can do it, you can do it. And I mean that completely. I do want to be mindful here because I've listened to this question a few times and I've thought a lot about it. The listener did not ask me how to make more money or how to spend less money, and so I don't want to share those kinds of tips here. There will be other episodes for that. There will be time,

as the tattoo on my arm says. And I get it. If you're already working three jobs, it's impossible to just tack on a side hustle. Or how frustrating is it to hear that you should just go on a rice and beans diet when you're already on a rice and beans diet? So I want to make sure that I'm giving you exactly what you're asking for. What I'm hearing from this question is that you're in a position where you're expecting to be making the same amount of money and spending the same amount of money for a while, but you're hoping, and I believe, that will change in the future. And when it does, you want to be ready. I got you. The routines you talked about, looking at credit card statements, checking out your credit score, those are great habits. So give yourself kudos for that. Getting into the routine

of keeping up with your spending plan will prevent you from experiencing any lifestyle creep when you are making some more money down the line. There are three other habits that I'd recommend you get into. Number one, negotiate everything. I know that all of your money is accounted for in your budget, but negotiating is a way to free up a fraction of the expenses in your spending plan. Negotiating doesn't cost a thing. It is free, which is my favorite price, but it could save you big. You can negotiate you big. You

can negotiate your rent. You can negotiate the APR on your credit card. You can negotiate your cell phone bill. Anything and everything is negotiable. I can speak from my own experience of childhood financial insecurity. And I will tell you that when I was first getting into the habit of negotiating, I would get major imposter syndrome. But having these conversations where you're in the position of power and asserting control over your finances, that helps quiet that voice in the back of your head that's telling you that you'll never have enough or be enough. With practice and more of these conversations, that voice will become a faint whisper. Let's be honest,

it will never go away entirely, but you'll barely hear it over the sound of yourself negotiating like a boss bitch. Hold on to your wallets, boys and girls. Money rehab will be right back. One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out

Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply. Boosts are available to eligible

Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details. Now for some more money rehab. Number two. When you're looking at your spending plan, don't just look at how much you're paying, but look at when you're paying. For example, I'll give you my favorite mortgage hack. Without tweaking the amount you've decided to contribute monthly to your mortgage, make

biweekly payments. You can determine how much to pay-weekly payments. You can determine how much to pay bi-weekly by dividing whatever you're paying monthly in half. That will be what you pay every other week. In other words, if you need to pay $2,000 monthly, you would instead pay $1,000 every other week. Let's say you had a $300,000 home. By paying bi-weekly instead of monthly, you'd save more than $40,000 in interest. How does that work, you ask? Is it magic, Lappin? No, it's really just an organizational trick to make squeezing in a few extra payments a little more feasible to you. Essentially, you're taking the same amount you would be paying monthly, but instead of 12 payments you would put

down on a monthly schedule, you're actually, sneak attack, making 13 payments a year because that's how it shakes out if you pay bi-weekly. This scheduling shifteroo can knock years and tons of interest off your mortgage. Have the bank set up your bi-weekly payments to deposit automatically. Some banks or credit unions use a third-party processor for bi-weekly payments to deposit automatically. Some banks or credit unions use a third-party processor for bi-weekly payments with high fees. So if that's the case, you can DIY this by basically picking a month to pay twice. That still gets you that annual 13 payments instead of 12. Number three, start getting into the investing mindset by playing with a free stock simulator. I know investing in the market may feel like a far reach right now, but when, not if, but when,

you have some money to play with, investing is the best way to build wealth. And I hear you when you say you come from a background of class anxiety. And so I completely understand how that background can make investing feel absolutely terrifying. If there have been points in your life where you haven't had any money, signing yourself up for the stock market where you can lose it all, all over again, is super triggering. Your financial trauma will probably take control and tell you that throwing your money into the market is the worst thing you could do.

Trust me, I get it. A stock simulator is the best way to dip your toe into the investing waters without actually spending any money. It allows you to basically play house with the stock market. You get to experiment and see what would happen if you were to invest a couple hundred dollars, let's say, in a stock. And let me be super clear here. It's just a simulation. If the money grows in the simulator, you're not actually going to be making any returns, but you're also not going to be losing anything and you're not spending any

money while still learning a lot. It can also get you more comfortable with investing, which is a hurdle I recommend you overcoming ASAP. The best way to build wealth, real wealth, that will affect generations of your family that come after you is to invest. Here's the last thing I'll say. Balance isn't just for your checkbook. If your spending plan is a source of stress, try to balance it out with another money practice that celebrates your wins. Keep a success folder. I do. Whenever I make a payment on time, I keep that shit in my success

folder. Whenever I use a coupon or if I save money shopping at the grocery store, I save the receipt. When I was broke and in debt, this was my financial self-care. When I looked at my incoming bills, I felt like a failure. If I looked at anything past due, I wanted to curl in the fetal position and cry. But in those moments, I could turn to my success folder. And I know that I was doing all the right things to get me where I actually wanted to go. For today's tip, you can take straight to the bank. It's okay to talk about financial anxieties. We all have them. It doesn't make you weak. Being broke is not the same thing as being broken. I am so impressed by and proud of the listener today who was able to share her

own financial anxieties. It inspired me to confront some of my former financial anxieties and maybe between the two of us, it helps inspire you to do the same. Remember, the only problem we can't fix is the one we don't admit we have. Money Rehab is a production of iHeartMedia. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Catherine Law. Money Rehab is edited and engineered by Brandon Dickert with help from Josh Fisher. Executive producers are Mangesh Hatikader and Will Pearson. Huge thanks to the OG Money Rehab supervising producer, Michelle Lanz, for her pre-production and development work. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.