It's time for the b a q a A. The b a q a what you say, the big a q a man day, the b a q eight what today? It's the b a q a Brianna Bison question of answers. You have questions, We have answers that are to be taken with a.
Grain of get yourself. She goes, right, we're.
Not your financial advisor, we're not your attorney, we're not your well we are your financial besties. Let's get into it. But yeah, no, we really you know, basically sue your grandma, not us. So you know here what we have to say. But then leading to the professionals that you pay for this type of advice for. Okay, so let's get started, Manajoe, what's our first question?
Our first question? Want to do the anonymous one first, some mysterious let's give her name? Yeah, let's give her.
How about Gertrude.
Of all the names? Okay, Gertrude, I don't even know how Trudy? How about Trudy?
Yeah?
True, Okay, there we go. All right, Trudy says, hey, hey, ladies, I love the podcast and love to remain anonymous. Okay, Truty, we got you. My question is how much money do you think is realistic for a twenty five year old single mom of one who makes around sixty thousand dollars a year to save. I've got about twenty three hundred dollars in bills and part of that is covered by the eleven thousand or sorry, eleven thousand, like deck, who's
your baby dead? Anyway? Uh? The one thousand, one hundred and fifty dollars I get a month in child support, So twenty three hundred dollars in bills and like about half of that is covered by child support. Okay. I do plan to get a new job this year to hopefully boost my salary by a minimum of fifteen k after listening to the advice on you All's podcast. But I do really want to set a realistic savings goal, savings goal to set up for me and my kiddo.
I haven't had any examples in my family if anyone ever said saving, let alone for retirement, future college, et cetera. And I want to do better because I know better, I just don't know where to start. Please help. I want something realistic and feasible because I do enjoy being able to spend on things me and my kid enjoy all right, Trudy should.
Say you know, actually had a friend in high school. Her name was Trudy and it wasn't until like graduation when they said her name Gertrude. We were like, gtruth, we did, that was her name. Sorry to you, Trudy. I feel like gird truths are just born old. I'm like, are you just a grandmother? I mean, how do you how do you look at a little ladies said we were gonna name this birth baby?
Got true? Every Gertrude listening right now, I.
Know, Sorryruths.
Well, the lady names are back in style though, Eleanor's and all that, you know. But Trudy girl, So I was just quickly doing a little mathematicals. I was just about to slay. Okay, So I just did like six sixty three thousand divided by twenty six to see what you're working with, like on a by bi weekly basis. So that's about twenty four hundred dollars that's gross twice a month, yeah, gross before taxes all that, so times two that would be so she's working with like forty
eight hundred pre tax so let's call one thousand ish. Yeah, four thousand ish. I was trying to remember what the tax bracket was for six under whatever her income is. It can't be thirty DAGM no eleven. I'm curious, what is the tax bracket? Google answer me, show me the power um incomes. She should be like max twenty twenty two percent. Okay, so yeah, something like that, like about four thousand and her bills, so that leaves her with about so Trudy, this math is what you should be doing,
Like what's your take home pay? Because you know what your taxes are. You subtracted your bills from that twenty three hundred dollars. We're gonna guesstimate your left with like between fifteen hundred to two thousand, and then that thank here is.
Eight forty. But she does get eleven fifty in child support, and child support is not text. So if we add the four thousand plus eleven fifty, what is that fifty one to fifty fifty one fifty minus twenty three hundred minus eight forty Where are we at?
Oh I thought you were doing that. You sound like you're shit minus minus eight forty minus twenty three hundred. Get right on that. Tivity twenty ten dollars.
Okay, so that's a good amount of money left over. But I mean, I'm assuming those are just bills, you know. I'm sure you have like other things. You got groceries and things like that.
Gas.
So from that two thousand, what was it, two.
Thousand, twenty ten dollars twenty.
I wouldn't be mad at saving five hundred bucks a month.
Well how do you start? Because she's like, where do I feel her? On? Like, where does she start? Would that be like cash in the bank?
Or I would start with what I call the budget without budgeting, I would say, once I did the math mathematics, you know what I mean, and I got this number, I would say, I'm going to go to HR and then I'm gonna say, hey, HR, or you look real cute today. Could you, instead of dropping all of my take home pay into this checking account, could you split it before I get it and put some here and put five hundred dollars into this online only saves account,
you know, the highest deal that you can find. You can go to like a website magnified money dot com to find like a savings account and then put that other five hundred dollars there. And because of the purpose. To me, there's a few purposes of saving. You save for security, so you want to get your you know, your emergency savings game up three to six months. You have a kid, so probably might am will probably be
like six months. And then you save for big purchases so you know, you want to put a down payment on a car or a house or whatever. And then you save for pre investing for wealth, you know, so truy. First, I would ask you, are you setting aside for retirement
through your job? You know, so if you have this excess money left over, if you're not setting aside or you're not setting aside you know, whatever the max is, whether it's through your job or maybe you have a raw fire ray, whatever your retirement account is, are you maxing it out if you have excess money left over, because I probably would work toward that as well as putting aside for savings. If you're like, yes, I'm I'm setting aside for retirement. Great, because you're twenty five, super
younger and snatched. I'm sure right, so that's great. And then I would say, okay, I would look at my numbers and say I can comfortably say like I said, like I wouldn't be mad at five hundred dollars, so basically like a quarter of what's left over in the pot. But I wouldn't do the work myself. I would have hr if if they let you split before you get and many people do, even small like even my company. We're not a big old company, and we have the
capability of doing that. So I put my money into my online owning savings account and then I would decide from there, like, Okay, after I get to the place where I have my three to six months, is there maybe you want to also simultaneously save firm to purchase something. But once I max out, like I'm max and I think Mandy has shared too that she's maxed out for her emergency savings, and then I would roll over. So any excess money that comes to my life now my
emergency account is fully funded. I'm not trying to buy anything anything right now, So any money that would normally go to my savings for savings sake goes to now like my pre savings to invest. So I put it into a pot. My financial advisor, I'll message her and say, hey, Angelie, you know I've got some money into the end that savings account, you know, when you get a chance to keep pull it out and she will slowly start to integrate it into my other and my other into the
market via my investments. So that's what it kind of looks like for me. And so you can start that, but start with, am I maxing out my retirement account? Do I have emergency savings? Is there something I want to purchase you know, you know, for the baby or whatever or something major? And then pre savings for pre investing savings.
So that's that's what you say, max out your four to one K, Like for you feel like for so many people, especially when you're earning sixty three thousand, like that's a lot of money. Like what is it twenty two thousand to max out your four to one K?
I feel like if that's overwhelming or sounds overwhelming, I mean that would be like a quarter of her pre tax pay I feel like setting the bar super low, Like could you like set up a direct like if you have your five hundred dollars earmarked for your cash savings while you're building that up, like just doing something simple like five percent of my salary, you know, automated through HR going toward retirement and not worry so much about like how what that dollar amount is because you
are so young. I feel like when I was your.
Age, oh.
Oh my god, when I was your age, I started doing the same thing I was making about what you're making. Actually I was like making fifty five or sixty thousand dollars, and that's how I started. I was just like, you know, take this five percent. It was what I felt comfortable doing. And then see how that feels, you know, not having that five percent. I didn't. Did I get a match at that point? I think I might have gotten a
little match which helped. But even if you do or don't, like I feel like starting with five percent, And for me, what was so powerful is that I never didn't save a retirement after that. Like as I went to different jobs, I just had it in my mind, I'm going to do five percent. And then when I got comfortable, I
was like, okay, ten percent. And as you said, like your next job, you can have been making fifteen k more or you know, however much more, And as long as you're still saving that percentage, it's always going to go up, you know, because your income is going to go up. So it's a really good habit. I feel like to start early, but I can see why people get like overwhelmed and instead of like, they'll hear Max like your four one K and just be like, oh, there's no way, I'll just try to be fair.
Sorry, I didn't mean like I meant when I was thinking of Max, I meant that to me, the ideal is to to get to ten percent, you know, not the twenty thine, you know what I mean? Or I was thinking that whatever her if she didn't have a four one because I don't. If I don't have a four to one K match, then I'm jumping straight to Wroth. And which is six is what is it sixty five? Is it six thousand or sixty five hundred?
Right now?
I think Wroth is around six thousand, you know. So that's what I was thinking of that. I wasn't thinking about like the the full full full. I was like, Okay, if you can get to ten percent, that's what I should have specified ten percent of your you know what you're making into your four one K if they have a match. I like to do this. I'm like, do I have a four on one K? Yes? Do they have a match? No? Let me max out my wrath. Do I have a four O one K? Yes? Do
they max? Yeah? Do they match? Yes? Okay, let me
put my money up to the match. Like work toward getting my money put up to the match and then going to a raw IRA because there are tax benefits for a regular you know, four to one K regular retirement plan, which means that it lowers your tax burden now and then later when you retire, you get taxed on you know, the money you pull out, but then the wrath allows you although it doesn't lower your tax burden now, you get to pull that money out and the growth tax free later, you know, because you pay
taxes ahead of time, and so like, I like to have that mix. But if you're not getting a match, I like to jump to the raw first and then come on back to four one K and kind of finish business there. But yeah, so hopefully we did not totally confuse you.
If we did, I'm like, key, takeaway five hundred dollars is a good goal, and then you can decide how much of that because she didn't really share if she had emergency savings, you know, if she does already, maybe you just start beefing up your retirement. But you know the point is just to start, and I feel like my second, my my whatever number we're on. Like, biggest tip when you're at that stage is your fragile like it's it's you want to protect what you're building, So
debt is the enemy. As much as you can avoid credit card debt and keeping your budget nice so that you're not leaning on credit card debt, you'll your future self will thank you so much because then the money you're actually making will be yours. You know, it's true wealth building, all right, Trudy girl, Congratulations, wait, congratulations on
what on having your answer your question? Answer with the lowercase A, with your sprinkle of salt from us, thank you so much for sending your question, and again shout out to single moms. I have a special place in my heart.
Real one.
Should we take a quick breaking break and come back with question number two and bonus question?
We sure you should?
All right, see y'all back here.
And we're blacking back. So this is fuddy because this question is from oldish and unsure. I love this because first of all, oldest, you ain't oldest, only thirty nine years overall, don't make me feel old I have a question. My job not career she specified right, office of four one K, but no employer match. Were just looking about this and I have almost been there one year and was automatically set up to deduct three percent for my paycheck to go to the four one K.
Okay.
In my latest statement, glad you're looking at it, I noticed each quarter I'm being charged administrative fees. How many of y'all didn't realize that you get admin fees on your former K. Really, any retirement investment account is typically going to have some sort of fees yep hm, which total twenty five dollars to one hundred dollars a year. I'm thirty nine and have a wroth IRA and several
mutual funds established for my retirement. Should I continue to invest the eighty three dollars per paycheck in my four one K or should I automate that amount and then some to a pre existing wrowth or mutual fund. Now, like I said prior, oldest and I'm sure we're not gonna call you older, We're gonna call you fabulous, but unsure because you're thirty nine, says forty two. Don't do this, sas don't do this, so unsure I really like employe man. I don't really like four one k's or making four
one k's a priority if there's no match. So to answer your question, I honestly, especially now that these you know, you have these admin fees which is not gonna offset anything. So you know you're if you're putting in let's just say eighty three, you know what is that times Let's do the math we're mathing today. Eighty three pre times twelve is nine hundred ninety six. So basically one thousand dollars a year's what you're putting in, and of the thousand,
they're taking ten percent in fees. So in order for you to come up, you would you would have to make more than ten percent on your investments. Right, because you're putting in one thousand, you're losing one hundred one
hundred is ten percent of one thousand. That means your money would have to grow beyond that loss in administration fees, which the average the market has been averaging for the last hundred years eight to ten percent, So you're gonna end up like net even, right, So, like the money you put in is literally the money you'll get out it's looking like instead of a four one K plan,
you looking like you put money to savings gown. Not even because savings accounts these days are at least giving you one percent, Si says, says, So I would if it's eighty.
Three dollars actually read her fine print, a girl, I'm so, I'm proud of you.
Honestly, I'm unsure ish we gonna call you smart, smart, but unsure that. Yes, I would redirect that eighty three someplace els and I would not consider that four one k again unless I had enough to offset the administrative fees. So if I was putting in safe, you were putting in four hundred bucks a month, you know, then the administrative fees would be a smaller percentage of what you put in, and it might make sense.
So yeah, this is exactly why I don't even love like some investing apps because they have like a dollar amount fee that they charge, which if you're like, if you're investing your pocket change, that's a that's a big like Tiffany said, when you break it down by the fee divided by what you're actually investing, like, it's a
big it's a big amount of fees. So I can't even think, but I would say, just like Tiffany said earlier to our previous homos, said caller to our previous listener about going to like Magnify money, but going and doing your googles and research to find a brokerage account and being realistic about how much you can contribute and then see what kind of fees they have, because the fee may be different depending on like how much you're
going to contribute a month. Each month, it might be a little bit more if you're contributing less, and then less if you're contributing more. It's twisted and rude of them to do it that way, but that's how a lot of them. It's how a bees sometimes. But that's a really good question, thank you. What are we calling her smart? But then sure, yes, smart, but I'm sure savvy and unsure.
We have a really really really quick question. Yes, what I do that one?
We on the same page. Yeah, let's get yesen Yeah, I love this name from ig Yesenya says should I max out my wroth IRA before investing in a brokerage account? I'm not sure that I can do both right now.
It's about that time hit him Ama was here with this.
Yeah, I think that that's a good idea. I mean, there's some benefits to a roth iray that you're not going to get from traditional brokerage account. The main one is, so when you're contributing to a wrath, you're using dot You're using money that you've already paid taxes on and you're putting it into a wrath. The limit is like sixty five hundreds, depends on your age, it can be a little bit more, but with a wroth iray it's a little bit it's a lot more flexible than a
brokerage account. So the money that you put in because you've already paid taxes on it. One of the big benefits is that if and I'm not saying you should, but if you needed to dip into your wroth ira in the future, you'd be able to take out your contribution without getting hit with like tax penalties and fees. So that's one benefit that it has over a brokerage account.
And you know, the cap on a wroth ira being like what it is now sixty five hundred to seven thousand, you know, obviously not knowing how much you have to put aside, but if you're able to yeah, hit that cap, and then you can at least feel good like, Okay, I've ticked this box, and you can take your whatever proceeds you have left over and shift that into a brokerage account. At that point, I think, like any other benefits i've.
Yeah, Well, here's the thing I always say, like to me, there's two, Like, there's two purposes of investing, investing for retirement and investing for wealth. And I think that you should prioritize always investing for retirement first because one day your eighty year ol sself is gonna be like, oh wow, so because of you, I'm eating you know, I'm fighting these these these birds at the park for these for
these breadcrumbs. You know what I mean. Like, we don't want to put our older self in a position to have to work so hard because our younger self was like, oh yikes, my bad. So because it's your younger self's job to look after your older self. So you know, I want you to prioritize investing for retirement first. Typically when people put money in a brokerage account, they're investing for wealth, which is what we want you to get to.
But that's after you've done the foundational work of investing for retirement, and roth iray is retirement investing. That's the purpose of it. And to Mandy's point, you put money in after tax and you get to withdraw it later, you know, tax free, because one you've gotten tax on what you contribute already, but also the growth you get to pull out tax free as well. So there's a huge benefit to a WROTH. And there's an income max so I think last time I checked it was like
one hundred and twenty five thousand dollars a year. If you make more than that, although there's some ways around it with like a backdoor WROTH and YadA YadA YadA, you would sit down with your financial advisor for that. But on the surface there's an income max of I think it's one hundred and twenty five thousand at least that's what it was like last year or the year before, So you know you might over time start making more than that, so you want to take advantage of that.
Why you can, So just in general for everyone, take care of your retirement first. After you've taken care of that, then start looking to invest for wealth. Retirement means you get to take care of your older self. Investing for wealth means you get you get to leave a legacy and then increase your lifestyle. Now, but you, as a younger person, younger than your older self, can wait on the luxurious life, whereas your older self cannot wait on
basic accommodations and living. So take care of that old self.
Okay, dang, but I want nice things now.
I know you can have nice things, but you got to make sure that. Like because I call my older self Wanda, and I'm like, you gotta make sure Wanda is good because Wanda is like, I know, Derek gone, well, she and I have sushi again. So she eats sushi and I eat baloney. Got it.
I'm going to think about myself fighting for breadcrumbs from the pigeons and time. Rio is like, I want that new tuck new talck.
Like do you want to pray for break croups at the park?
They be like, what give me the truck? Lady here? Make you look at bad mom from everybody? Oh my goodness.
So we hope you enjoyed the b a q A. If you have questions, we certainly will try our best to answer something. You can hit us up on Insta in the d ms or even just in the comments at we are Brand Ambition and pod is It pot of podcasts on podcast right, Branda Bichon podcasts on Insta, Full Good the b A the BA podcast on Twitter and we are Brandabision podcast dot com. You can click like an ask us to ask us anything button and
we'll try our best to get to your questions. If you want to be remain remain anonymous, we we will allow it, but we prefer you give us a fun name to call you.
Sparkling.
Do you sad exactly? Because if you don't give us a name, I'm gonna give you a name.
It ain't go keep either.
Oh well, hopefully the baby will give you some peace. He's like, I don't want peace, I want problems.
I really didn't know if I was going to get through today's show. So thank you Tiffany and everyone else for being very patient. And yeah, my nerves are shot and it's all right. How many more hours still? Bedtime? Seven? That's all I gotta hat gain there. See y'all next week, See y'all next week. Don't forget to check out Tiffany's new documentary Get Smart with Money September.
Six, on Netflix yep, September six But you can go there now and polae press like notify me or like remind me or whatever the little button says, so you can get that email from Netflix to say it's out.
It's out, it's out, and where can we get the deeds on your party? Where's that going to go?
So I'm gonna be posting it. It'll be on all of my socials by now, it'll be out. So if you go to my social media page, you'll be able to see like there'll be a link. The party will be free. I'm trying to have a digital option, but at the very least like it's going to be in Newark, New Jersey at NJPAS on September sixth. It will be free popcorns on me. We'll watch together, have a panel afterward. It's gonna be good times.
Ah so fun. All right, congrats Tive Bye, We'll see you guys next week. Bye bye bye, Hey ba fan. We could not do this show without your support or the support of our team behind the scenes. The Brown Emission podcast is produced by Cumulus Podcast Network. It's edited by the wonderful Emani Crosby and produced by Tanya Bustos. Dennis Stimplinsky is our in house tech guru, and I am Bandy Woodrid Santos your co host, and I will see y'all next week