Spend Less Or Make More (BA Q&A)

too smart and brilliant beautiful brown girls. But you're gonna use the smallest grain of salt and then you're gonna lean into people that you do pay for the rest of the information you need. Okay, aka sue your grandmother, not us. All right.

I'm forty six, my husband's forty eight. He's working full time again but only making about sixty five K. I work from home and make about thirty K. We have two kids, one in private school on a scholarship, okay, and part of the reason that we moved here, but it's still expensive. Basically, I'm feeling overwhelmed all the time, and I don't know where to start to get out of debt, to save, to get financially independent, and to plan for retirement, which isn't far away. Seriously, what should

I do? Woof ben for a couple of years. That's your business to COVID.

that I'm overspending. So maybe sit down with your partner and just take a look like do we really need this? Can we you know, can we trade in the car for something with a smaller you know, can we refinance? You know? Well, I don't know about these days, because you know, the interest rates are crazy, but I would just start there, is that, like, let me look at what my life's costing me and is there any place where, especially the obvious places, where I can make financial adjustment?

So that's one, and then and probably most importantly, asking yourself, is there are there ways to make additional income or increase the income where you're currently making, And so Mandy will tell you, like, you know, one of the best places to make more money is that your job. I'm sure Manday's got to go over hopefully some negotiating tactics

for asking for more money. Do you have like a brag book or go meet file that kind of illustrate your open the value, the overwhelming value that you bring to the table, so you can go in asking for more money? Is your LinkedIn updated in a way that you know, you can apply for another job that maybe similar skill set, but you can make more money. And

so those are the places that I would start. I wouldn't you know, if you are already feeling tight, like we really don't spend and don't spend a lot of time on cutting back, if you really feel confident you're not hugely overspending, but everyone is spending a little bit, you know, like more than what's necessary, and that's okay. But I would lean a lot of my time and energy into like learning and figuring out how we can

make additional income so you can create that space. And in the beginning it's really just I mean I don't know if you're making enough to cover your basic bills. It sounds like if you're leaning on debt a lot. That's not necessarily the case. So first order of business getting clear about how much money you need to make to cover your basic bills. Once you get that income coming in, you can start to put your debt on

kind of like an automated system for yourself. Look into the snowball method and the avalanche method at paying down debt, and once you get pretty secure on that, then you can start to look into setting aside money for savings and retirement, especially the retirement component, because you are you're not quite over fifty yet, but once you get over fifty, it's only four forty six. For some time, I saw

forty eight. Okay, her husband's forty eight. That's her hobby, you know, So you can start to think about in two years he will be able to do something called catch up contributions, which means not only can you contribute you know, your regular retirement maximount, but then you can

also contribute above and beyond that, you know. So that would be my aim is to make more money, cut back, you know, by looking at what I'm currently spending make more money by either looking for another job, asking for a raise. I'm doing. You know, you don't always necessarily have to have a side hustle, because I know I could be really stressful, especially if you're overwhelmed. You know, once you get to a safer space, starting to save

and set aside for you know, for retirement. I know this is hard because sometimes these days you just be like it'll never get better. And I just hope you give yourself a little grace in space and make sure you don't do this alone and if you just need some like support support. I have this free group called the Dream Catchers with an s group. It's just other mostly women, but we have some guys in there who are navigating similar circumstances. Because the answer these days to

personal finances that you can't do it alone. You know, you you.

your books. Yes, it will tank your credit and there's all these downsides, of course, but.

business files for bankruptcy. I don't know what type of business entity that you that you have, but that is a potential. I don't know what so much debt is. Is it thirty thousand, is it three hundred thousand? Is it student loan debt? You know, federal student loan debt that doesn't qualify for bankruptcy dismissal. So looking at that debt and really getting an understanding about like who, like who do you owe and can you call and negotiate

maybe like a pause and payment. It's really going to be step by step to all.

But could you rent to get some income even if you know, just rent it out potentially to drum up some income and it Yeah, I wouldn't say sell because I imagine it must be really hard to sell your home. It's the last time you have left right. But my as far as like negotiating for more, you're only making thirty K. I mean, I hate to say only we're working from home. I wish we had more details. But what are you doing and how can you ramp it up?

And I think you'll be able to think more clearly if you just like take a breath and give yourself permission for this to take a little bit of time. You haven't said that you guys aren't able to like pay your rent or whatever. It is like you're able to keep it sounds like you're just like you're making ends meet, but it's you have this like this cloud hanging over you, which is like retirement saving debt. If

you're making ends meet, just like that's okay. The the most important thing is for you to have savings set aside so that you guys can cover your own you know. And then I would say, look at what types of debt you have, Maybe get in touch with a credit counseling organization like the NFCC National or NFCC or whatever. Does she say where she lives in the US, because there may be some state programs, community programs. Don't be afraid to reach out a hand and ask for help

and look for resources. And yeah, you're in a place now where you're going to need to open up ask for help. You're feeling overwhelmed because I think you are and maybe doing it alone? You know, does your husband?

it probably can't. You are going to have to make more money from your business or find other sources of income. Your husband maybe he will after he gets you know, this this work experience. He can find another job and negotiate for more and increase his income that way. But it's not something you can snap your fingers and do immediately, which may be frustrating, but we keep it one hundred. You just have to make a plan, ye execute that plan.

Whatever the plan is make a plan. A credit counselor can help you make that plan and.

oldiesh 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 h 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 WROTH or mutual fund. Now, like I said prior, oldiest, 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, sus don't do this, So unsure. I al really like employ 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 a 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 save this gown, not even because Savis accounts these days are at least giving you one percent. Sis says, says, So I would if it's eighty three dollars.

even think. But I would say, just like Tiffany said earlier to our previous almost 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. That's a really good question. Thank you. What are we calling her smart but unsure? Yes, smart but unsure, savvy and unsure?

to get from traditional brokerage account. The main one is, so when you're contributing to a wroth 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 roth 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 need to dip into your wrath 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 many other benefits I've.

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 a 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 taxed 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 check 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.

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