Money Rehab with Nicole Lapin - Government Funding Is Gone For 3+ Million Americans — And No, This Isn't About Student Debt

Episode Date: October 4, 2023

On this week's roundup of the biggest headlines on Wall Street and how they affect your finances, Nicole unpacks: student loan payment requirements begin (for real this time), the government funding that ran out this week and Sam Bankman Fried goes to trial.

I love hosting on Airbnb. It's a great way to bring in some extra cash. But I totally get it that it might sound overwhelming to start, or even too complicated, if, say, you want to put your summer home in Maine on Airbnb, but you live full-time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you.

I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself.

Find a co-host at Airbnb.com slash host. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. All right, here's your weekly roundup of the biggest headlines on Wall Street and how they affect your wallet. Let's start with some good news, shall we? The federal government managed to avoid a shutdown. Yay. That means a whole lot of

government employees like TSA workers will get their paycheck for their work and a bunch of key programs will continue to be funded like the National Flood Insurance Program. Personally, I could not get over the threat of Congress shutting down the very same week that the student loan repayments came due. This is your urgent reminder that yes, student loan payments, it is actually happening this time. I've covered best practices for student loans a bunch of times on the show, but here's a quick to-do list if you've been putting this off in hopes that it would just go away. First, log on to the federal government's student loan portal. Answer the secret question,

do a little interpretive dance, whatever it takes to get your old login info back. From there, identify the company servicing your student loan. It might be with a brand new company. During the pause, a lot of borrowers got shuffled around. Next, figure out a repayment plan that works for you. Student loan forgiveness is still out there, and the federal government has new income-driven repayment plans that can save you a ton of money if you're eligible. If you've already enrolled in a payment plan or if you've used the pause to pay off your loans interest-free, then give yourself a pat on the back. If you've been procrastinating, don't freak out, of course. Currently, the federal government isn't reporting late payments to the credit bureaus, but this isn't a get-out-of-jail

free card. They are still charging you interest. So the longer you let this debt just sit unattended, the more it's going to cost you in the long run. There has been a lot of coverage about the restart of the student loan repayment program last weekend, but one federal program ended and it hasn't gotten nearly the same amount of coverage, yet it impacts millions of families in the United States. On September 30th, pandemic-era funding for early education and child care programs ran out. The most immediate result will be that some 70,000 daycares and preschool programs will close. Others will have to reduce the number of children they can serve. Overall, some 3.2 million children will lose their educational spot. We could talk all day long about the benefits of federal investment in early

childhood education and how in the long term Head Start programs pay for themselves since every dollar invested resulted about a $2 increase in the earnings for the child. But that's the future benefit of educating and caring for children. The most immediate impact for providing low-cost child care is that more parents can work. Cutting off child care for 3.2 million kids means that their families are going to have to cut back on the work they do or change their shifts to accommodate them. It's estimated that families impacted by the drop in funding will lose out on $9 billion in earnings over the next year alone. Recent studies have shown that the existing

child care shortage is contributing to the shortage of nurses and teachers. And that was before 3.2 million extra kids lost their place. In some states like Arkansas and Montana, the number of child care providers will be cut in half. If you are one of the families impacted by these closures, I can't imagine how frustrating this must be. I wish I could offer you a quick fix, but this is really a systemic issue. Fortunately, some states have stepped up to fill in the gap. You can file for child or dependent care on your taxes, which will allow for up to six grand in credit per child. Otherwise, the best advice I can offer is that you are very much not alone. So look for others in your community who have also lost child care and try to pull your resources together for a

babysitter share. Millions of families are in the same tight spot right now, and there is power in numbers. Moving over to someone who is in a very tight spot but of a different kind, jury selection in the SBF trial started on Tuesday. This story was all over the news last fall, and it's about to dominate your feeds yet again, so here's a quick refresher. This story is all over the news last fall, and it's about to dominate your feeds yet again. So here's a quick refresher. This story is all about the acronym. So let's just kick this off with a little dictionary recap. SBF is Sam Bingbenfried, and he ran a crypto exchange called FTX, which stood for futures exchange. And the futures part of the futures exchange is a key part of this. Generally, crypto exchanges allow you to deposit currency and use that to buy crypto. It's about buying and holding crypto. However, that wasn't the bulk

of FTX's business. They were mostly in the leveraged crypto derivatives futures business. I'm simplifying this, but they were a place where you could put up $100 to borrow $900 in order to bet $1,000 in total on the price of crypto going up or going down. Obviously, that is a super risky business model that requires careful risk management and accounting. Even a traditional futures exchange like the London Metal Exchange has to run into issues. So a billion-dollar corporation doing their accounting on QuickBooks, seriously, was probably always going to get into trouble the moment the crypto market stopped printing money. Another note here, QuickBooks is a great tool if

you run a small to mid-sized business. MNN uses QuickBooks. It's not, though, a good choice if you are managing billions of dollars involved in complicated and novel investment vehicles. Just a money tip here in case that ever comes up in your professional life. Anyway, back to FTX. Even if you do have the secret sauce of accounting and risk management, the futures market is a tough one. One of FTX's biggest customers was its personal trading firm Alameda Research, run by the ex-girlfriend of SBF. Plus, FTX was shelling out big bucks to buy property in the Bahamas for all of its employees and SBF's parents to pay celebrity endorsements and also to make political donations. So when there were rumors

of accounting irregularities at FTX and customers came looking for their money, creating a run on the exchange, they weren't able to get their cash. What happened to their money will be the subject of SBF's upcoming trial. Did FTX embezzle customers' money and spend it on penthouses, donations to Congress, and bad investments? Or did they epically mismanage everything from the risk assessment to the siloing of consumer money away from the general funds of the corporation? I tend to think that both things can be true. But these arguments will be at the heart of the fraud case against SBF, and we will hear from both sides in the case.

SBF is also expected to testify, which could be wild. We don't know yet if the jury is going to find him believable or not. While he can come across as very weird and awkward, it is worth noting that extremely savvy investors and business people loved this guy. People just ate up all of the BS from SBF and found him quite charming. He's a billion-dollar conman, so it's conceivable that the right jury could find him very believable. We don't know yet, and I am very much looking forward to how all of this will unfold. For today's tip, you can take straight to the bank. Spotting a conman can be very tricky. Spotting a credit card skimmer might be a little bit easier.

These are devices that criminals use to steal your credit card info when you use a credit card at unintended locations like a gas pump or a self-checkout. You can check them by checking to see if the machine looks like business as usual and also giving the card reader a little tug to make sure nothing is laid over top of it. While not super common, they are more than just financial urban legend. I love hosting on Airbnb. It's a great way to bring in some extra cash. But I totally get it that it might sound overwhelming to start, or even too complicated, if say you want to put your summer home in Maine on Airbnb, but you live full-time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been

holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you. I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself.

Find a co-host at Airbnb.com slash host. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Levoy. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com,

to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at moneynews and TikTok at moneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.