Money Rehab with Nicole Lapin - Nicole Grows Listener's Money By 5% Live - Here's How

Episode Date: January 24, 2024

Be a fly on the wall as Nicole walks a listener through buying a certificate of deposit (CD) that will yield 5% returns. To learn more about the CD Lauren bought, click here.

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. 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. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. Finances should not be sexy. I know this is counter to everything we saw in like The Wolf of Wall Street with Margot Robbie and her fabulous ankle breaking heels. But also, how well did The Wolf of Wall Street work out anyway? So as you know, I talk a lot about the unsexy, slow and steady investments like index funds, ETFs and CDs or certificates of deposit. So when I got a DM from money rehabber Lauren asking whether she should put some of her money in a CD, I invited her on the show ASAP. Here's some of our one on one money rehab.

I'm so excited to say, Lauren, welcome to Money Rehab. Thank you for having me. This is lovely. A little birdie has told me that you are a longtime listener to the show. I am. I am. It's nice to have you as a first-time guest. I'm super excited. What is the question that's on your mind right now? So my question is really around CDs. Are they worth it now that we have higher interest rate savings account, which I currently have with a 4% interest rate and they're offering, you know, five, 5.5. One offer I saw was for $5,000 for six months and it gave the breakout of the interest and it was $135. So with the delta of what I'm currently getting and and that is it even worth the hassle of shuffling money around opening a CD and then just letting it hang out there to accrue

what seems to be kind of minimal for what the interest rates are right now. So is it worth it? Do you like extra money? I love extra money. You and me both. So I think it's worth it for extra money. I would think but that's why I wasn't sure because I've done, you know, I have the high interest rate savings account and I have a money market with a financial advisor and I have I bonds thanks to you. So I didn't know, like, I guess, is it worth locking up that five thousand dollars, too? Well, let's talk about your next year or your next 18 months. What does that look like? What kind of expenses do you have on the horizon? Do you need that money? I don't. I think I have enough in my overall savings account

that if I took that money out, it wouldn't be a complete hit, especially for only like six months. I don't I mean, I don't anticipate anything huge happening with my house or my car, but you never know. The only thing that I have coming up later the year is a trip to Scotland and then hopefully trying to book something next year. So other than that, that's really the only thing of like high price expenses that I have like on my docket there. So you have five grand right now kind of chilling in your savings account that you're not sure to leave it there or to put it in a CD where you wouldn't be able to touch it. So maybe let's rewind a little bit. Do we know what a CD is? Other than a certificate of deposit, and I had one when I was in my early 20s for 500 bucks.

Cool. I just know it locks it up and you normally get a little bit of a higher interest rate than what's currently out there. That's about the extent of what I know about it. Yep, exactly. So it's locked up. Usually, if you withdraw early, you get a penalty. So right now, you don't need to use that $5,000 for anything like that you can expect, right? There's always unexpected stuff. God forbid forbid something happens to your car, something happens to your roof, you know, whatever. But right now you have 5K extra, essentially, in your high yield savings account. Yes. That's awesome. Well, my parents did a really good job teaching me basics growing up. And then I loved to learn about how can I make more. So I feel like I'm in a good spot. And the only way I feel like I can make more money without like, obviously a promotion or job or second income, it's other

than if I was gonna budget my life down to the things that I would take out that I enjoy, which I don't want to do. So I think feel like at this point, I'm like, okay, what what can I do to take advantage of what's already out there? Yes. Well, I love this question. You've already gotten yourself to like a good baseline, it sounds like and now you just want to step it up. Pretty much because my ideal is to take big trips every year for as long as I can. Yes, please. Well, my dad, he passed away in March, but he had a stroke in August of 2021. Thank you. I'm an only child. So I had to do all his Medicare care, which took 10 years off my life, I swear. But after watching them basically take all the money that he had in order to do that, I was like, well, yes, I will save for

retirement. But now I'm going to really live my life because the government's not getting any more of my money if I can help it. Tell me what that journey was like. Tell me what that money journey was like. Yeah, no. So my dad, he was a Vietnam veteran and he had a ton of health issues like my entire life. And it was a really big fight to get money from the VA. So he finally was getting money from the VA and I had to manage his money because that man still could not write a check. It was just easier for me to pay his bills online, be done with it. So thankfully, since I knew where all his money went, I had it moved into a, it was like using my account as a base and then putting it into a higher yield savings for him. He had about $40,000 saved because he didn't do anything. He just lived his life. He went to the bar every day and that was

really about it. But basically what it came down to once he had the stroke and he needed long-term care and I'm talking to Medicaid and the people at the care center, it was basically you can pre-plan his funeral, which was probably the best thing I ever did because I didn't have to worry about the money or making decisions it was paid for. And then I basically just had to write checks and deplete his money to the care center until he got down to nothing. And then I had to work with the VA to take, he was getting like 3000 a month from the VA. And I said, you need to take this down to 300 because he was making too much money for him to qualify. And then when he was in the care center, he only got to keep $45

out of his income, which then I had to give back to the high rise because Medicaid didn't approve all of his time because I couldn't find, I had to look back in five years worth of history, what anything over $500 was. So there were things I couldn't account for. So they used that and said, okay, well, you owe us $30,000 for that. Well, he did not me. So I just his $45 just went to the to the care center. So it's a sucky process for anybody. Luckily, the people I dealt with were lovely, like nobody treated like I was taking their money. But that whole like system and working through that is clear as mud. That sounds so hard. And it also sounds like as you were going through the process,

it made you appreciate living your life more. It did. I mean, my mom and my dad have been divorced the majority of my life, but she helped me with everything. And we talked to an elder law attorney in finding that out. Her and my stepdad immediately went and opened a trust because their house is paid off. He has antique cars. And it was like, well, we don't, you know, the money. And I told him like, live your life. I don't want money. Like, I don't care. But I was, she's like, I'm not paying off my house to give it to the government if something happens to one of us or the cars. So it was just to protect themselves. They were like, they were just glad they learned about it.

Because other than that, how do you know until you have you're forced into the situation. And my mother has like the dark sense of humor that I do. She's like, told my stepdad, she's like, if anything happens within five years, just put me in the fridge for five. I was like, too soon. Yeah, exactly. Like you're, you're not going to be like knocking on the door, you know, heaven's door tomorrow, You're fine. It's so hard. And it's the age that I think you and I are in where we're, you know, taking care of an older generation and looking after a new generation and then looking after our own goals. Right.

And so it's this sandwich generation that's not talked about very often. Right. And I'm like, I don't have any children. And my parents, thankfully, my mom and my stepdad are pretty healthy, but I used to joke with everybody. I'd be like, who needs children when I have parents? Because one would go down with something and another one would take the other one down. And I'm like, could you stop?

One at a time here. But I tell all my friends who have kids, I'm like, open trusts. You're in your 40s now. It's fine. Do it and start talking to your parents about it. Because I have family members that are like, oh, well, the house is in my name. And I'm like, does it matter? You're surprised what Medicaid can get their hands on. It's always a surprise when you don't have all the transparency around money stuff in a family. And you're never usually going to have complete transparency. It's just the

way it goes. And so it sounds like you figured it out the hard way. And so you want transparency and you want to take control of yourself based on seeing, you know, all the things that could go wrong, it sounds like. Yeah, I mean, that's one of the things too, like with having my savings. So I'm, you know, obviously my savings, retirement, planning for that. But life's too short to just put something on hold and do it. So I'm like, traveling is fine. Like, I love my house. I don't need to upgrade my house or anything. So I'm like, well, I'll travel for the next five years and then I'll take five years off and then redo my house because I'm sure by then it'll be dated. Yeah. And those sound like great goals.

So let's back into it. So it sounds like your five, 10, 15, 20 year goals, like you already have those in order. You're pretty clear about it. So the next five years, do you know approximately how much you want for a travel budget each year? Oh, that's a great question. I would say probably I think five grand is probably a good spot because I did go to Paris and London in April. I guess it's probably been closer to a seven or eight with adding in Scotland. Scotland was kind of like I was bored and I was like playing on the app and I was like, oh, look at that. This can happen in Thanksgiving. Let's book that. But I probably would like to if it's one trip a year or this happens to be two, but I would say

probably five to seven grand is usually pretty good. And I have a great travel agent because I'm not that person that wants to. That's the one thing, even though I love a deal, I do not want to be on the Internet researching deals. But I just want to be like, here's what I want to do. Book everything for me and I'll show up. Well, listen, that's what you're optimizing for. And that is like, you know, somebody else might like cars and you might not like cars and they might not like travel. And this is the thing that is your thing.

And so cool. Do it how you want to do it. Yeah. And last year was the first time I ever went to Europe. And that's when I decided like, OK, I can you know, I'm 41. I have great friends, but some are married. Some have kids, some don't. But it's really hard to get people to want to do what you want to do or go where you

want to go so I was like eff it I'm just gonna go by myself it gives my parents a heart attack but I have a great time but I do like the tours so I'm not necessarily by myself like I I love the people that do that I don't know that I could do it but you know I have a guided tour if somebody that's not gonna lose me so you are not gonna get lost in Europe I promise my best friend gave me a her an air tag. She's like, you're my fourth child. Please take this. And I was like, it's fine.

But yes, I will. Yeah, when I took my first solo trip, it was so empowering. I was like waiting for a boyfriend or a friend who want to come with me to Bali. And at one point, I was just like, I'm just going to go. And it was even more empowering to be able to do that for myself. I think so. And I think it's one of those like I'm an only child, so I'm used to being in my own company.

But, you know, when I was married, I mean, he was a ball of anxiety half the time. So it's just nice that I can go and be like, if I want to take a nap, there's nobody that can say anything. If I want to go drop four grand on a purse, that's what I'm going to go do. Yeah, girl. Okay. Listen, women get a bad rap for all of that drama. We could probably have a whole nother hour for that. A hundred percent. Okay. So it sounds like you want to ideally save up five to seven grand a year for the next five years for a trip of a lifetime every year, kind of in honor of your father and like, you know, a life that was perhaps taken too short.

Yeah. And I mean, with him being in Vietnam, he got to travel the world. He was in Australia, I mean, not in a good way, but he was still in a lot of different places. So that's one of the things that I'm like, I want to see what I can. And I think people, you know, put their life on hold because somebody can't go with them or they don't want to do it. And I agree with you. It was probably one of the most empowering things to do. And I wish like, I tell everybody that I know that younger because I've had interns and trainees and stuff in my jobs.

And I'm always like, live your life like your job will be here. Trust me. The world went without a pope for three weeks. Like the company is not going to burn down without you being here. Like, your job will be here. Trust me. The world went without a pope for three weeks. Like, the company is not going to burn down without you being here. Like, just go. So I was really glad a girl I worked with, she's in her early 20s, her and her friends ended up coordinating a trip to Greece. And I just kept telling her, I was like, just go.

Like, if you can afford it, go. Like, don't drive yourself into debt. I don't know what her situation was, but she ended up going. And I'm like, it's the best thing you'll ever do. I love this. You are also paying it forward. Trying. You're on track, sister. Okay. So if you have 5k in a high yield savings account, you'll be getting, have you calculated this out? Like what the interest rates would be? I don't only because I kind of have to calculate different math things for work. So normally I'm like, okay, I know what it, I know my numbers, but to calculate it out, I never really do it. Yeah. You're like, I'm done. Decision fatigue,

math fatigue. Yeah. I need, I need Excel and a calculator for me to do it. Totally get it. So basically if you keep $5,000 in a 4% savings account, you're going to make less obviously than if you put it in a 5% CD. So like roughly if you have 5k in a high yield savings account, you'll get around 200 bucks in 18 months. But if you put it in a high yield CD, and right now I like Ally Bank's high yield CD, you'll be getting 250 bucks. So if you don't want more money, that's totally fine. I like to always optimize for more money, personally. Well, and it's nice because my interest, the higher interest rate account is Ally. So that would actually make it really easy to open it and shuffle money as opposed to

making it difficult and trying to open it in another bank. I was going to ask you, yeah, because Ally Bank's high yield savings account right now is also at 4%. So I was like, hmm, this looks familiar. Okay. So yeah, so you're getting higher interest rates than we have in a really, really long time. So I think it's important to take advantage of that. No. And I think with knowing that I can probably do it easily with Ally, because in total, I have probably, I just like to say, I think 14,000 total in my savings account. So if I took

out the five, I still have a buffer of nine, which I still think if something happened, that's enough to cover me without being like terrible, you know? And I think this helped because I really just went back and forth and it's just, you know, sometimes you never know what the paperwork is going to be like and just the hassle of moving it, but I'll definitely look into Ally. That's the easiest thing I could do. And then that way I can just, I'm sure it's clicking a button and shuffling money around for them too. But if it does gain me some extra interest, I mean, free money is free money. You work so hard for your money, Lauren. My opinion is that it returned the favor. I like it. Do you want to just open your app and see? Yeah. Funny thing is I don't even have it on my phone for it. I tried not to look at it because

then I will obsessively go in and look at a number. I get it. I like to just have it pleasantly surprised. Listen, there's a balance, right? Like there's a balance between being obsessive compulsive about it and constantly checking and freaking out and then not checking at all and being like, that's pretty much what I do. The same thing with my retirement account, my IRA. I'm like, I don't I don't want to look at it. All sister well let's look at it like it sounds like you're a girl who loves a calendar invite so what if we send you a calendar invite for like once every two weeks I could do that because I probably check my my IRA and well my brokerage account I probably check everything in there like maybe once every six months and then I meet meet with him once a year. We go over it, especially the last time when

everything tanked and it crashed. I was like, oh, I was like, why did you make me open it? It was blissfully unaware that I knew things were happening. I just didn't want to see it and make it real. So here's my other suggestion. So there's a sweet spot between blissfully unaware and hyper aware. Like what if we could just get to aware? We could do that. We'll even send you a calendar invite if you don't want to send it yourself. So we'll take out the friction from this and we'll say, Lauren, you know, every two weeks, time to check your accounts. I could do that. It would make it easier for when I get paid, just every two weeks, look at it, tie it in with all the budgeting. Yeah, that's a great way to do it. You're doing it when you're

getting money in, which is you're going to be in a good mood. Exactly. I was just watching this video about Arigato Money that I sent Morgan, our amazing producer, where in Japan they say thank you, like the billionaires of Japan say thank you every time money comes or goes. They have gratitude for their money. Now, granted, this is not going to change your financial situation just thanking money. But it is a nice process to sort of have a better relationship with your money because I think a lot of times the enemy is between our ears. Like even for you, it sounded like to me, you didn't know whether or not there would be a lot of paperwork or how you would do it. And you just assume that

it was going to be a hard, long, annoying process. Right. So oftentimes with any money stuff, we suffer more in imagination than in reality. Oh, I believe that. Yeah. And so that's why I'm like, OK, we're on the phone right now. Like, just open it up. I'll do it with you. I'll hold your hand. Is there a cat or a dog behind you? Is he moving? Yeah, it's my cat. Sorry, I can move it and realize he's bathing.

No, we're all here with you. What's his name? Lucius. Lucius. Great. Lauren, you have Lucius. You have Nicole. Let's see how hard is it to scoot money from a high yield savings account to a CD.

Hold on to your wallets. Money Rehab will be right back. 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. 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. And now for some more money rehab. Let's see. I have it up on my screen. So I have two screens. If I'm not looking at you,

I'm looking at that one. No, please. Let's see. We're making moves. We're literally making money moves right now. There we go. Ally checking and savings, investment and retirement. Let's see. We're making moves. We're literally making money moves right now. There we go. Ally checking and savings, investment and retirement. Let's go back to checking and savings. High yield CD, raise your rate CD and no penalty CD. Sweet. And so do you see the Ally Bank's high yield CD? The 18 month high yield CD has a 5% rate right now. It's somewhere on here. Oh, there we go. Finally, it loaded the we can change the opening deposit because 25,000 is not going to happen yet. Yet. Good point. Okay. So yeah, it does have all the interest rates there. And it's loading. Here we go. Individual online certificate of deposit. 18 month.

Does that sound like a good amount of time for you? Yeah, I don't. I well, it's funny. It's fast as time is going. I feel like 18 months will be here in a blink of an eye. Like I can't believe it's the middle of June. I just I'm confused. What is time? But it sounds like you'll have that money for your next vacation. Yeah. I can go to Greece or somewhere else that I want to go. I love that. Oh, and it's easy enough.

You just add this account. If that's really all it took. It's easy enough. I can add a joint owner. I'll add my mother later. It's going to take 15 seconds to review my application. So you put $5,000 from your savings account? Yep. Cool. I call my great life investments as opposed to like emergency fund,

play on words. They're going to have the positive energy. I'm here for it. I'm here for all the plays on words. And I'm done. It says I'm all set. I'm done easy enough my mature date is December 15th 2024 my birthday will be January 12th 2025 so I'll take that and celebrate my birthday I love this well thank you this was easy enough that was awesome I'm so proud of you me too because I normally would have been like can I think think about this? I know. And that's how it goes. And I was just like, no sister, we're doing this right now. Yes. No. And I always like, I think that's your point about like being your own worst enemy. It's like you him hot back and forth about it. And then it's like the longer you think about it, you're just like, that's fine.

I'm not going to do it. Like I had friends that didn't even bother remortgage refinancing when all the mortgage rates were low. And I was like, you're going to make me lose my mind. What do you mean you didn't remortgage? Well, sometimes, and I find this too, even with my girlfriends, I'm like, no, we're doing this right now. You can't make a decision. You're in decision fatigue. You've made a thousand decisions today. You need a CEO of your life. I'm stepping in. I'm interim CEO. We're doing it like this minute. That's it. Yes. And then it's over. And so then you got some extra space in your head. Yeah. And at least it's like, I like knowing that I don't know if this is just a function of the way I grew up, but I like knowing that I have money in different spots because it's also like I have just like I have my local bank

is PNC that I use my debit card and there is a savings account, but I always keep it that only at like 500 to 1000. And if it does go over, then I just shift that money. I'm so proud. I could not be more proud. Oh, proud mama bear. But thank you so much for having me on. I really appreciate it. This was a lot of fun.

Thanks, Lauren. It was so fun. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. 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 Money News

and TikTok at Money News Network 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. Thank you.