The Therapy for Black Girls Podcast is a weekly conversation with Dr. Joy Harden Bradford, a licensed Psychologist in Atlanta, Georgia, about all things mental health, personal development, and all the small decisions we can make to become the best possible versions of ourselves.
There’s no better time than the start of the new year to get your financial house in order. Budgeting, retirement, emergency savings, and investing are all keywords we throw around when talking about money…but how can we apply them to our lives? Today I’m joined by Tiffany “The Budgetnista” Aliche, America’s favorite personal financial educator and author of the New York Times Best Seller, Get Good with Money. Tiffany got candid about financial planning, gave us tips to prepare for a recession, and ten components of financial wholeness.
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Session 291: Getting Good With Money
Dr. Joy: Hey, y'all! Thanks so much for joining me for Session 291 of the Therapy for Black Girls podcast. We'll get right into our conversation after a word from our sponsors.
Dr. Joy: What did Diddy and Missy say? It's all about the Benjamins, baby. There is no better time than the start of the new year to get your financial house in order. Budgeting, retirement, emergency savings and investing are all keywords we throw around when talking about money. But how can we apply them to our lives? Today, I'm joined by Tiffany “The Budgetnista” Aliche, America's favorite personal financial educator and author of The New York Times best seller, Get Good with Money. Tiffany got candid about financial planning, gave us tips to prepare for a recession, and 10 components of financial wholeness. If something resonates with you while enjoying our conversation, please share it with us on social media using the hashtag #TBGinSession or come on over and join us in the Sister Circle to talk about the episode. You can join us at Community.TherapyForBlackGirls.com. Here's our conversation.
Dr. Joy: So excited to be chatting with you today, Tiffany.
Tiffany: I'm excited to be here.
Dr. Joy: It feels like we are way overdue for a chat on how to get our money together. You are affectionately known as the Phil Jackson of financial education coaching. A lot of our community was very excited to hear that we were chatting with you, and I just personally love your approach because I feel like whenever you talk about money, I don't feel embarrassed or ashamed. I feel like some people approach this very critically and I feel like you do it in a very loving and inviting but very serious way. And so people are wanting to start working with maybe like a financial coach or somebody. What kinds of accreditations or training should people look for to make sure they're working with somebody who's credible and knowledgeable?
Tiffany: This is actually a really great question that I get all the time, Dr. Joy. It's important to understand that, like I'm a financial educator and so I typically don't work one on one with people. But if I was going to, it would be on the basics. So like, this is how you budget, save, this is how you raise your credit. But if you're wanting someone who's going to take a deeper dive for things like investing and insurance, I highly suggest getting someone who's not just a financial advisor - that's like in general, they’ve passed some tests. You are going to want the gold standard, which is a certified financial planner. They're a financial advisor that's had a certain number of years in, has passed a certain number of tests.
A certified financial planner will holistically look at your life. Like I have a dope sister, Anjalee, who is my certified financial planner. Even me, with all that I know about personal finance, I just assumed we were going to get right to the money and get right to the investing. And no, we didn't for the first year. The first year, we worked on getting my insurance together and figuring out what my goals were and looking even at my businesses because Anjalee helps with that, too, financially. And so that's what you're looking for - a certified financial planner - if you're wanting someone to walk you through the rooter to the tooter when it comes to your money.
Dr. Joy: Love it, thank you for that. Adding on that, Tiffany, I do feel like money can be something that a lot of people feel like they can kind of just talk about without necessarily having the appropriate accreditations and training and stuff like that. Are there ways that we can be careful or red flags we should look out for, or scams related to people who want to be financial planning, financial coaching and that kind of thing?
Tiffany: Absolutely. Anyone who makes it seem that you're going to be able to be rich overnight... Because there are some people, as the kids say, who hit a lick. You get famous on social media overnight and you've made some money. But typically, financial transformation takes time, so someone who does not acknowledge that it takes time, that's a red flag. Someone who is irritated by your questions. I was a school teacher before I started The Budgetnista and so I love educating and teaching, so I look for an educator. But why? But when? But how?
When I first met Anjalee, I thought that she was gonna be like, girl, get off my line. Because I like to ask a lot of questions, whether it's a social media person that you are reaching out to, or someone that you're working with intimately, they should be educating. Can they explain something simply, because that's a hallmark that they understand the thing. If I can't explain it to my five year old niece, Amelia, then I don't know it well enough. And also, if they're selling too much of like this rich lifestyle. Not to say that they don't know what they're talking about, but I caution people to think that that is something they're going to be able to replicate.
A few years ago, I stopped talking and teaching about financial freedom because I felt like the educator in me was like, will the average person have a lump sum of money one day where they never have to work? For many people, that's not going to be the reality and the teacher in me likes to teach to where every student can succeed. And so I came up with something else called financial wholeness. Which is where these 10 components of your financial life, if you master them, you might not have that lump sum, but you'll still be able to go on vacation, you'll still be able to look after your parents and your friends and your family, you'll still be able to be okay and live well now. And so you want someone who is not just teaching to the tiny 1% - that their lessons and their tasks and the things that they're teaching you really can apply to a wider range of people. That's what you're going to look for.
Dr. Joy: Can you give us a crash course in these 10 components of financial wholeness?
Tiffany: You know what, let me go ahead and get good money. This is my Dana Black moment. This is my New York Times bestselling book, Get Good with Money and I wrote it in response to the literally tens of thousands of questions I used to get every day. The teacher in me was just like, oh man, I wish I had a tool to give people when I'm not here. I wanted something like a legacy that they could hear my voice and go through the lessons without having me to sit next to them like I used to when I first started Budgetnistsa.
First thing is budgeting, you have to get your budget under control. That's number one. And each of these 10 will let you know if you have reached 100% of financial wholeness. So do you have a budget? Is it semi automated. Two is saving. Have you mastered saving and is that automated as well? Three is debt. You don't have to be debt free, but do you have a debt plan in place that is actively working on your behalf? Automated as well. You’ll have to set it and semi-forget it so you have a debt plan in place that's working for you. Four is your credit. Ideally, you want to have a credit score of 740 or above. 740 is the beginning of perfect credit. Some of your friends are like oh, I got a 800. That's cute, sis, we don't need all that. Once you have a 740, you and I can get the same interest rate. So that's four. Five is learning to earn. This is critical, because I think everyone thinks that the key to mastering their money (especially for black folks) is to spend less, and that's not true. You have to sometimes learn to bring more income in. Sometimes that's the solution. So learning to earn, whether it's getting a raise at work, or finding external income from your normal job.
Six is investing for both retirement and wealth. There's a distinction because when you invest for retirement, that is so you can maintain your current lifestyle. So look around. This is how you’re going to live when you are older. Your current lifestyle. Investing for wealth, though, allows you to increase your lifestyle and to leave a legacy. But retirement comes first, so solidify your current lifestyle first. [She repeats six but it should be seven] Seven is getting good with insurance. Many people don't understand the power and the purpose of insurance. Insurance is there to protect your assets. When I first started working with Anjalee, she was like, girl, you are insured like you're 25. I was like, but I look 25. She's like, but you're not. She was like you now have this successful business, you have properties, and you don't have enough insurance to protect your assets in case something happens to you, or something happens on your properties. And so I had to increase my insurance. So understanding and having enough insurance.
Eight is net worth. Your net worth is just what you own minus what you owe, and you want to have a positive net worth. You want to own more than you owe. You do this by increasing your assets and decreasing your liabilities. Nine is your financial team. Money is a team sport. You should not be out here doing it alone. At the very least, you should have an accountability partner. It could be your work hubby, it could be your bestie, your cousin, your mom or your dad - someone that you're connected with, that wants to see you win, and you want to see them win as well. But also, it might be an insurance agent, it might be a certified financial planner, it might be your accountant, it might be an attorney. But having a financial team in place is going to be critical.
And last but not least, 10 is estate planning. This is really important, especially for us as a black community. Because so many of us don't have the estate in place that if something should happen to us... Many of you know my husband passed away like a little over a year ago. Candidly, we didn't have a will because he was 41 and we were literally working on it two weeks before he passed away. Anjalee was like you guys really need to get your will together. Just because we had been working through all of our finances and we were like, okay, okay, okay. Because you think to yourself, no one passes away at 41. But he had an aneurysm, and he was here on Tuesday and gone by Saturday. Of all the components of financial wholeness, that's the one component that we dragged our feet on. Thankfully, because we did have the nine other components of financial wholeness done, it made the financial transition of him not being here, not as hard. But that little part that the will covered, it made me realize, I got mine together within a week of him passing away. I sat down with my parents and made them get theirs together. They had one but not since my sisters and I were kids. My trust is finally complete because I own businesses.
That estate planning component, you might think to yourself, well, I don't have an estate. But do you have children? What do you want to happen with your children? Do you own a home? Maybe you have like a jewelry collection. You want to be able to say that when you're no longer here, your family can just miss you. I'm grateful, I have an amazing black therapist, and Dr. Green has reminded me through all of this that I am allowed to feel gratefulness even through the grief. And so that's the space that I'm in now. Because of all of the financial choices that we made collectively and individually, I get to just miss my husband. And I want that for everyone because death is the most uncommon common thing. It's like everyone passes away at one point, but it feels like not your people until they do. And so I want us to be prepared for that.
Dr. Joy: Thank you so much for that. We've heard raving reviews, I have a copy of your book and love it, so I definitely would encourage people to dig more into the 10 components that you shared. But we will talk I'm sure about some more of those today as well. I know that you have been paying attention on social media and just probably in your own grocery stores to the rising prices of everything. All the jokes about eggs and we're gonna have to paint potatoes for Easter this year. All of the things, like there's clearly lots of inflation, people are preparing for a recession. What kinds of things would you advise people to do in terms of making a tighter grocery budget as they prepare for a recession?
Tiffany: Even before recessions ever come, you should have mentally, and just even physically, have something that I call a noodle budget prepared. This is your “break the glass in case of emergency” budget. You're not to live at your noodle budget, but you should know what it is. I call it your ramen noodle budget, meaning that if you had to cut out the bells and whistles of your life… So it's like, I'm just going to take care of my necessities, bills and things I have to maintain - how much would my life cost me? Knowing what that is, so that way, when something happens - you lose your job, a recession comes - you can quickly drop down and get your noodle on, girl. Because too many of us when financial trauma happens, still live at that same level for far too long. That's what I would suggest first and foremost. Even if you're like I've got a great job, even with the rise in prices, I'm still able to maintain, you should still know what your noodle budget is because it's just a preparation tool that you can temporarily live at while you ride the wave through whatever financial hardships are happening externally. That's first and foremost.
Second, if you're still gainfully employed, I want you to be mindful about beefing up your emergency savings. You have to get a little creative. My mom and dad raised five girls and my mom went to the butcher for meat, the baker for bread, there are places you could go to cut back on prices. Ask yourself, do the kids really need Froot Loops? Isn't there a Fruity O, a generic brand that you could do? My mom used to put the Fruity Os in the Froot Loops box or else we wouldn’t eat it! And so like leaning in. And also there's so many meal preps and meal plans of things that you can make with relatively inexpensive things - like rice and beans and like cutting back on your groceries intentionally. But using that extra money, if you do have it, to beef up your emergency savings. At least three months is what you want to have as a baseline. And then you ask yourself, hey self, based upon the industry I'm in, this is how quickly I could get new income, should I lose my job.
Let's just say you're a nurse, my mom was a nurse before she retired. For her, three months is plenty because nurses back then and now are in super high demand. If you're a nurse, you're never going to not have a job. But my sister is a mechanical engineer. As a black woman, it took her two years to get her first job. She might need six months to a year's worth of emergency savings. So the baseline is three and then you look at your industry. I want, before we hit what’s seemingly looking like a pretty bad recession, if you have the means, to really start stacking up your emergency fund so you have it with you. And start having the conversations with your family, especially if you have children. I think that we think, especially in black folk how we are when it comes to talking to kids about money, we think that it's inappropriate to talk to our kids about money. And I say it's inappropriate not to. Just because the kids don't hear you doesn't mean they don't feel the financial crunch.
There’s ways to do it in a way that's age appropriate. My father, who was a CFO (this is where I learned all of my financial things as a child), he would talk to us. We would have weekly family meetings about homework, about chores, but also about the state of our family's finances and it was never from a place of deprivation and fear. Just matter of fact - here's where we stand. It was always goal-oriented too. You guys said you want to go to Disneyland, but the light bill keeps going up and up and up. Do you know if you turn the lights off, the bill goes down and down and down? And if you do that, then we could put the money in our vacation jar and we can go to Disneyland. I didn't hear, oh my gosh, we're spending too much on the light bill. I heard we're going to Disney. So that's a great way to phrase it and position it for younger kids.
And as your child is older, you can use allowance if that's something that you do, to help have the conversation. I have a 16-year-old bonus daughter, she was just here with me this week. I've hired her to do my TikToks. Although I don't even want to be on TikTok, but it's an opportunity for us to talk about money. So I told her, I'm like now you have a job, we can start setting aside for retirement. What's that? Why is my check lower? So it opens up that conversation. And so that's what I would say is intentionally reducing your expenses by being creative when it comes to food shopping and food planning. Know what your noodle budget is, you don't have to live there, but know what it is so if you do experience financial trauma, you can quickly get to it. Start having the conversations with your family, that should just be something you want to do anyway, and make that normal.
Dr. Joy: More from our conversation after the break.
Dr. Joy: You talked a lot about preparing for the loss of a job. Unfortunately, we know that even recently there have been significant amounts of layoffs. And so I would imagine there may be some people listening who were maybe preparing to put this plan in place and now have found themselves with a total loss of income. Yeah. Are there other suggestions besides the things that you shared that you would offer to someone who is maybe facing a recent layoff?
Tiffany: During the last major recession, the one in 2009-2010, I was a schoolteacher and I suddenly lost my job about three days before the school year started. The things I did right were that like, I immediately lowered my home expenses. I was fortunate that I could move back home. I know everyone does not have that option. But you have to make drastic changes. Is that getting a roommate? Is that moving to a smaller place? Is that seeing is there family that you could move in with? Because unemployment, as we all know, is not going to enable you to manage. So one, committing to making drastic changes and trying not to wait. Two, reaching out to your service providers like your electric bill. Any bill that you're paying, one good thing that COVID brought into the zeitgeist is that almost every provider has some sort of plan in place for “you ain't got it.” So you could start to have that conversation now and say, here's what's happened, what plan do you have to help me see this through? Everyone came up with a plan. There were places like credit card companies and mortgage companies, they had something, but now everyone has that. So don't be afraid to have that conversation.
And three, if you are in dire straits, then forget the noodle budget. You're going to get down to your health and safety budget. That is when you only pay for things that are related to your safety and your health. Meaning, I need to pay my rent, because where will I live? I don't want to be unhoused. I need my asthma medication because this allows me to breathe. You know what, this other bill like maybe my cable bill, I'm wanting to cancel it and I did cancel it, but I'm back-owed, let it be back owed. I know it sounds crazy to say. I can't tell you how many people didn't get their money because I didn't have it. And I had to be okay with temporarily saying, when I get it, you get it. Right now, I'm focused on my health and safety expenses. So I give you the permission to be late because to be late is better than for you to be unsafe and unhealthy. And then once you start to rebuild, you revisit with them. So you don't want to just stop paying, you want to have the conversation and saying, I'm not going to be able to send this in - is there something you could do to help? If not, if the answer is no, it's like when I have it, I'll reach back out again.
And if you find that people are harassing you… Because I want you to understand and hear me well. Just because you owe someone does not mean they have the right to harass you. You're going to get something called a cease-and-desist letter. This is what I had to do myself because my phone was blowing up with debt collectors when I was on my health and safety budget. I found a cease-and-desist letter online and I went to Staples and faxed them that what you're not going to do is… Because by law, there are a set of laws in place that do not allow creditors to harass you in that way. You send them a cease-and-desist letter and say here's how you can communicate with me. Via email, via written letter. You have to let them communicate with you, but you can say you are not allowed to call me.
And instantly. Faxing is better than anything else because, although it's very old school, it gives you that return receipt. And they know if we go to court and you bring that return receipt, they will be found liable for harassment. They're not allowed to do that. Those cease-and-desist letters will allow your phone to be quiet. You'll still get those letters in the mail and your emails, but that's fine. And when you're ready to pay, then you do. That’s what I would suggest if you find yourself in dire straits. Sometimes it looks like you have to just huddle down. Be still and actively work toward finding a job, but not putting yourself in further harm's way.
Dr. Joy: Thank you for that. I did not know about the set of laws that do not allow for harassment. I think that's super helpful. You talked a little bit about one of your components around investing and saving, and I do feel like there's some confusion. I've often heard people say like, oh, don't save your money, because it'll end up losing you money in the long run. Can you talk to us about the benefits of saving as we are in an economy that's ebbing and flowing?
Tiffany: I want people to think about saving the way you think about a seatbelt. Savings is here as a protective tool. It is not there to make you money. It is not there to gain or whatever. We get it. We know inflation happens. But if you invest your savings and then the water heater goes out, what are you going to do, sis? The purpose of saving, that's why having your three months or whatever it is that you think you're going to need that's necessary to hold you over until you find another job, that is the purpose of saving. It's a seatbelt. It is not your cute Gucci belt. No one ever says, I'm not wearing a seatbelt. Girl, it is not cute. It's like it saves lives, that's what it's here for. So allow savings to save you during those times. I think what people are confusing savings with is that there are people who over save. I'm raising my hand. It's like the law of depreciating return.
After a certain limit, it's not helpful anymore. Like at one point, I had two years worth of savings. Why Tiffany? Why? So now I have one year which is still too much but I'm like, I need it! Because I have post traumatic broke syndrome. I'm not going back! Anjalee is slowly easing my hands open to be like let's just get to six months. I'm like, we’re going to see. But past a year, anything excess, I do not allow myself to save. I invest. If yours is three months, anything in excess, you can invest. That's the key. You save first so you can have that safety net in case of an emergency. And then go ahead and get you that Gucci belt for cuteness. But the purpose of savings is to literally save you; it is not to make you money.
Dr. Joy: Got it. We have sisters in our community from early twenties, well into their sixties and maybe sometimes even older. I love that you've already talked about talking to your 16 year old about setting up for retirement. And so that's something I would love for you to share with our community. If there's one tip that you could give to sisters in each of those clusters. In your twenties, in your thirties, in your forties, in your fifties, in your sixties, what should they be doing to prepare for retirement?
Tiffany: In your twenties, you're likely getting your first real job. So I want you to start - because you already had no money now anyway - start maxing out your retirement account. Because once you get grown, you have some grown people bills and kids. It's hard to max out. But if you're 21, it’s your first job, max it out, sis. You've been broke, like you have not seen that money, start the practice of maxing out. Right now I think it's 6,000 or maybe 6,500 is what you can put in the max if you have a 401K at work. Or a Roth IRA. What you want to think about is that if your company matches, then put up to the match at your current company. If it doesn't, then I would open up an external Roth IRA. An IRA is an individual retirement account, and a Roth IRA is money set aside for retirement from your take-home pay money. Meaning like the government has already taken their taxes and everything else and this is what's landing in your actual paycheck, and then you put some of it into your retirement account. The beauty of a Roth IRA is when you go to retire, you can withdraw the money tax free, even though it's grown. Because they’re like, well, you pay taxes on the back end so you can withdraw the money you put in plus the interest that it's earned tax free.
Now, a traditional IRA is something where the government says, okay, you can put money that you make at work before taxes. So it will actually lower your current taxes, because the way taxes work is you get taxed on what's left over. It's like I made 100,000, I put 6,000 in my IRA, and so the government says we're not going to tax you on 100,000, we're going to tax you on 94,000. So it lowers your taxes currently now. But unlike putting my money in a Roth first... Because with Roth, typically, there is a cap of how much you can make before you can't do a Roth anymore. Although there's something called a backdoor Roth. But if I'm speaking plainly that there's a cap, last time I checked, it was like $139,000. That after that, they don't like you to put money in a Roth IRA. So 20-year-old, put your money in retirement, max it out. Start with a Roth first if your company doesn't match, and then do that.
In your thirties, I want you to focus on earning. Because this is when like maybe you have your second degree, you may or may not be considering getting married, maybe you're considering children, but this is really your peak. Focus on making sure that every single interview, you are maxing out. You should be doing this anyway, no matter what your age, but you are squeezing as much as you can out of the job that you have. So get your raises, ask for them. Create a Go Me file where you have a file of all the things that you do and you bring to the company. And quantify. Because of me, we've made this much. Because of me, I saved you this much. So I'm not really asking for a raise, we’re just trying to even the playing field here. And so your thirties, focus on earning. Ask yourself, what else can I do to increase my income? Not necessarily more work for you, but getting more clever about earning more in your thirties.
In your forties, I want you to really start thinking about how do you want life to go. Because once you really hit your forties, hopefully you've earned a good amount of money, you have money set aside for retirement, maybe by now you're married and you have children. And you can start to see that your kids are going to be going off to school maybe in 10 years or so. You might start to be thinking about like I'm in my Sade era, I used to be in my Beyonce era. By any means necessary grump out here working. And now I'm 43, I’m in my Sade era where I would just want to come out with an album every 10 years. And so in your forties, I want you to start thinking forward because retirement is closer than you think. In your forties, you might want to sit down and say, you know what, I think we should get a financial planner, I think it's time to update maybe we need a trust because now we have more wealth, let's start thinking about what our assets look like. Let's start really dreaming, either by yourself or with a partner, about how we want life to move forward.
In your fifties, you should really be… It's hard to say because I'm not 50 yet. In my fifties, I would say for myself, I would like to be really focused on leaving what my financial legacy is going to be. Like, okay, I've got nieces, I've got a nephew. My parents are still here and God willing, they'll still be here in my fifties. And like, what do I really want my financial legacy to be, not just internally with my family, but externally. I just came back from Kenya and it was an amazing, amazing trip. It was a retreat for black women and it just was awesome. We did a service project where we went to this compound, this home for young teen moms and some of them were young as 11, 12 years old. Clearly, taken advantage of. And in Africa, although school is free, you have to pay school fees in order to advance to the next grade to get your exam results. And I wanted to know how much do the school fees cost for all the girls here. And then I paid them and I really have the intention of doing that every year. And I was like, that's the next level for me in my fifties. It's like, what is my external legacy financially, and putting those things in place, now that you hopefully have taken care of your family.
And then in your sixties and beyond, hopefully, unless you're wanting, you don't have to work anymore and you're revisiting your finances to make sure they can see you through. You're updating any wills, any trusts and things like that and you're really just leaning into day to day life with your personal finances. I like working a little bit, but figuring out in your sixties like, okay, now that I'm here, what do I want to leave behind but what do I also want to enjoy? Because you know what, someone’s going to spend that money! Sis, you worked hard for it, you don't have to leave the family all the money. You know what I mean? I would really be leaning into enjoying the hard work that I put in. And so that's what I see for those age ranges.
Dr. Joy: Perfect. Thank you so much for that, Tiffany. Now we do have some questions from our community. Again, they were super excited to hear that you were coming so they submitted some questions to us for you. The first one is, Stacy is 35. She recently picked up some high-interest loans because she had several unexpected bills simultaneously hit her. She's an hourly worker and doesn't have large sums of money coming in anytime soon or fast. She's considering enrolling in a debt consolidation program. She's unsure how to tell what programs are beneficial and which are predatory. What financial advice would you have for Stacy?
Tiffany: Stacy, you're right. There are many debt consolidation programs that are the worst. But there is one called NFCC.org. National Foundation of Credit Counseling. NFCC.org will have like sister nonprofits in different states. So you'll be able to reach out to them and they will be able to find you their sister nonprofit in your state or even in your city. I think that's not necessarily a bad idea. But the key with debt consolidation is you cannot open up new debt. Because then you have old debt plus this new debt, and it's just like, uh-uh. And so, yes, I think that might be a good idea for you if you promise to me and yourself that you're not going to borrow additional debt.
And it sounds like to me, Stacy, you have a “don't make enough” issue. So I want you to ask yourself, what are ways that I can bring additional income into my life? Is it a raise where I currently work? Do you have a LinkedIn page where you're like, I can update this to find additional work? My podcast partner for Brown Ambition, Mandi… You should follow her - @MandiMoney on everything. Mandi with an i, she teaches negotiating but also how to look for additional work that pays more. She's awesome at that. If you just follow her on social, she gives some great tips about how do I increase my income, because that's what it sounds like you're needing to do.
Dr. Joy: Thank you. More from our conversation after the break.
Dr. Joy: Kim is a vivacious 50-year-old. She's single and the hottest grandma you've ever witnessed. Due to a lack of resources, always taking care of other folks and some poor planning, she has no retirement account to look forward to. She wants to retire with dignity and have a fly and fabulous funeral when the Lord finally calls her home. What kinds of services or programs might she want to look into to help secure her future?
Tiffany: One, Kim, I would say do you have life insurance? If you're fly and you're healthy, you could still get life insurance. One of the core purposes of life insurance is, yes, to look after your family when you're no longer here. If you're flying single, I don't know if maybe you have grown kids. But your life insurance can be the policy that they can use to put you away in the fashion that you'd like to be put away. And so that's one - consider life insurance for that component. Term life insurance. I know some of my financial advisors who sell whole life are like, no. I'm like boo, tomato, tomatoe. Now, I don't like whole life. It's super expensive. And the purpose of term life insurance, it's supposed to be for a term.
It's so frustrating, Dr. Joy, because it's like when you get insurance for your car, you don't say “I didn't get into a car accident, give me my money back.” So why is life insurance? Because it's a difference between term and whole life is that whole life you keep paying and it never expires or whatever. But for term, it's meant to expire. Because it's meant to be for a specific time period. Typically, the time period of like 20 to 30 years when you're actively taking care of your family financially. By the time you're 50 or 60, like if my parents don't leave me life insurance, okay. Because I’m not 10 anymore. And it's way less expensive. A 40-year old woman who doesn't smoke, a million-dollar policy for term, you're looking at 40 bucks a month. A 40-year old woman who doesn't smoke, a million-dollar policy for whole life, you're looking at 740 a month. That's $700 that that woman can use to make her life better now and invest.
So anyway. What I would say, Miss 50 and vivacious, life insurance. You because you're 50, they have this catch up policy when it comes to retirement. Meaning that you can put in more. I think it's about like $1,000 more or $1,500 more, into a retirement account. So I'll be sitting down with a financial advisor to ask like, okay, I'm assuming you're still working, how do you max out your retirement? Because you have 15 years before you officially retire as far as the government is concerned. And so how, for the next 15 years, how can you max out your retirement funds to make sure that you can see yourself through?
Dr. Joy: Perfect. And then one last one. Peach is 18 and just graduated from high school. She's not planning to go to college because she's already been offered a full time salaried job in the industry she wants to work in. She's motivated to build financial wealth, but doesn't want to become a CEO, the world's 10th black woman billionaire to do it. Peach wants to know, is there a way to become financially independent for folks who just want to do a job and don't want to own a business?
Tiffany: Absolutely. You don't have to own a business. It sometimes can expedite it, just because the tax code is written for business owners. Because this is the way the government looks. When I was Teacher Tiffany, the government said, Tiffany… I was making like $36,000 a year and they said, if you put money in your retirement account, say 6,000, we're going to tax you on $30,000. And it's like, ugh, I don't have a choice, that's what it is. Now, business owner Tiffany, the government says (I'm just making up a number) you make $500,000 a year in business. Actually, the Budgetnista makes multiple million dollars a year in business. But I'm like, before you tax me, I just bought this car for the business. And they're like, okay, well, now you made a little less. And I bought this building, and I pay this salary, and I redid my office, and, and, and… So you can make $10 million in business, spend $9.9 million, and what's left over is $100,000 - that's what you get taxed on.
That's why it's typically faster to grow wealth as a business owner, but it's not impossible to grow wealth as someone who is not a business owner. The key is… I love this 18 year old. The key is this – one, you have to have an income which you have the salary, which is great. But I caution you to, in your field, find a mentor in your field to see what additional education might be required to make more money. It might not be a college degree, but it might be a certificate or something. If you want to move up the ladder and make more, consider that. So, one, you have to make income. Two, you have to spend less than you make. My dad would always say you cut your coat according to your size. You have to spend less than you make. And with the excess between what I make and what I spend, you're going to save some, that’s how you get your emergency fund funded, and then you're going to invest. It's the investing that's going to grow you wealth.
I wish more people understood that the purpose of working, aside from paying your bills and things, is to own. It is to work - you pay your bills, you go on vacation, you have a little fun, you save some - and then you invest to own. Whether you invest in real estate, in the market, in a business. But you invest to own and if you keep doing that, eventually the things that you own will make you enough money to put you out of business, to put you out of work. And so now me as Tiffany at 43, I don't have to work anymore if I don't want to. Because the things that I own work for me. And so if you keep that in mind, young 18-year-old, you will be just fine. Make your money, spend less than you make, save some until you get to your savings account, invest the rest. If you don't know how to invest, you’re 18, girl, get a book. It’s in a book, it’s reading, like take a class, take a course. Start to learn to invest and invest to own, and you will be just fine. And you know, I'll see you on Wealth Island, sis. It's cute over here.
Dr. Joy: Thank you so much for that, Tiffany. You have been dropping resources the whole conversation, but are there other people we should follow, books besides your own, other podcasts that people should be tapped into, to learn more about the things that you've been discussing?
Tiffany: I love Earn Your Leisure. Those young brothers are doing a great job. They have something called Market Mondays with Ian Dunlap who's the master investor. He really breaks down like the market and what's happening in a simple way. I love Jaspreet, I think it's Singh. He's on Instagram, it’s Minority Mindset. That’s really great, especially for beginners because he breaks down, like what's happening in the economy? What's the economy? Minority Mindset is awesome. If you're just looking for budgets, the Budget Mom, her name is Kumiko, I really like her. I like Her First $100K, Tori Dunlap. She's very much like, down with the patriarchy so if you know you need that pro-girl sisterhood, she's great.
Some books to read. I really like David Bach. This is very throwback, but David Bach, he doesn't do as much with books anymore but he's got this great series called Live Rich. So he has Smart Women Finish Rich, The Automatic Millionaire, those are great books that I read when I was very young, like 20, 21. He actually inspired the way I show up. Because I knew I was silly and fun, and I read this book and was like, this doesn't seem stuffy and mean. And so I love the David Bach books, so definitely look into those. And also, in general, if you're wanting just success in general, it's really an internal job. So it's not just working on your money. I'm sure Dr. Joy would agree as a therapist that the better I am as Tiffany, the better I show up holistically, and a rising tide lifts all boats. And so I’d spend a lot of time getting better as me. Like setting boundaries, having tough conversations, you know. Like I read to expand just the way that I think, because in doing so I'm able to take advantage of financial opportunities.
So it's not just money. I love the podcast on How I Built This. Even if you don't have a business, it's a great podcast to hear how these major businesses were built, like from the ground up, because it expands your mind to think differently. And so that's what I really would encourage. Like, yes, as you're working on your finances, that you remember that really you're working on yourself. It's discipline, it's consistency, it's communication. These are just tools that you can apply to your personal finances, but will help you across the board.
Dr. Joy: I definitely agree. Thank you for that, Tiffany. So where can we stay connected with you? Where should we follow you online as well as any websites you want to share?
Tiffany: I am The Budgetnista on all the things, right? If you see me TikTok, just know it’s under duress. If I could teach this girl some lessons... I'm on TikTok. Instagram, which is my current favorite, although I'm not there as much. Facebook, and I'm still old school Twitter. I'm The Budgetnista at TheBudgetnista.com. And if you want to get the book, it’s Get Good with Money and it’s available at GetGoodWithMoney.com. There's a toolkit there that I made that's totally free and it will help you. Like even if you don't get the book, it's this awesome toolkit with all the resources from the book. That you can like find a financial advisor, my budget worksheet, all of that is for free via the kit.
And I do have one more tool, Dr. Joy. I just did something called the Live Richer Challenge with my audience and almost 300,000 people signed up for the challenge. Because, you know, it’s the beginning of the year, everyone's hyped. And so it's totally free. I used to do them… If you're old school, Dream Catcher, that's what I named my audience. Then you remember, I used to do the challenge every year some years ago, and I brought it back because of this looming recession. This year's challenge is the savings edition. Ninety percent of people who took the challenge said that they were helped, 86% saved money. And so if you're wanting to do it, it's totally free. It's always been free. It's my way of giving back to especially my community, it’s 90% Black women who might not have access to the tools and resources to help themselves. So I'm always committed to keeping it free. It's available at LRCsave.com (LRC for Live Richer Challenge.) It's automated now because we just went through the live version, but there's a community attached on the back end. I don't believe in navigating this world alone and so you will be surrounded by loving sisters just like you who are also working on their finances. Hopefully we'll see you at the challenge at LRCsave.com.
Dr. Joy: Perfect. We'll be sure to include all of those in the show notes. Thank you so much, Tiffany, I really appreciate you sharing with us today.
Tiffany: No, thanks for having me.
Dr. Joy: I'm so glad Tiffany was able to join us today to break down the ins and outs of personal finance. If you want more, join her Live Richer movement, where she's helped 2 million women save over $350 million and pay off over $200,000 in debt. To learn more and to sign up for her challenge, visit TherapyForBlackGirls.com/session291. And don't forget to text two of your girls and tell them to check out the episode right now. If you're looking for a therapist in your area, check out our therapist directory at TherapyForBlackGirls.com/directory.
And if you want to continue digging into this topic or just be in community with other sisters, come on over and join us in the Sister Circle. It's our cozy corner of the internet design just for black women. You can join us at Community.TherapyForBlackGirls.com. This episode was produced by Fredia Lucas and Ellice Ellis, and editing was done by Dennison Bradford. Thank y’all so much for joining me again this week. I look forward to continuing this conversation with you all real soon. Take good care.