Take it to the Bank

Living On Your Own

Three Angels Broadcasting Network

Program transcript

Participants: Cordell Thomas

Home

Series Code: TITTB

Program Code: TITTB000006


00:01 On Take It To The Bank,
00:02 you will find ways to get out of debt.
00:09 Solve your credit card problems.
00:14 How to make and stick with a budget.
00:19 Simple ways to save.
00:24 Buying or selling a home,
00:26 and many more financial matters on Take It To The Bank.
00:32 Hi, am Cordell Thomas,
00:34 and I welcome you to Take It To The Bank.
00:37 Toady, we're going to talk
00:38 about something that's kind of interesting to me,
00:40 kind of, it really is interesting
00:42 because its take me back to a time in my life
00:44 that I have to leave home.
00:46 I stayed and leaved at home until I was well into my 20's.
00:49 But when its time to leave home,
00:51 it was an trigging prospective
00:53 on understanding the real expense of living on your own.
00:58 Its kind of intriguing
01:00 because we do financial literacy courses
01:02 as part of our organization and teach young people
01:06 about what financial literacy is all about.
01:09 It was interesting to me, at one of those programs
01:12 we talked to a group of young people
01:14 and we invite the parents come in to the program.
01:16 And we have one parents sitting in the back,
01:18 and she came out with a question
01:21 that I had to respond to.
01:23 In the conversation, she...
01:25 I asked her the question about,
01:28 "Does your child know about how much money
01:30 you spend in your budget?"
01:32 And it was interesting, her response
01:35 because, "No, the child didn't know."
01:37 And her child was sitting right in front of me.
01:40 And then I asked, "How much do you spend
01:43 for food every month?"
01:45 Now the mother was good because she said,
01:47 "We keep a good budget
01:49 and we spend approx $750 a month
01:52 for food."
01:54 The response from the child was interesting
01:56 because she had no clue that was what's spend.
02:00 And it takes us back to generational differences
02:03 in how we approach the educational
02:05 of our young people on financial literacy issues.
02:07 When I was a child, I had baby-boomer parent
02:10 who, the mom stayed at home and the dad went to work
02:14 and he kept the finances
02:16 and mom kept this comfortable at home,
02:18 and I dint really hear too much between the two
02:21 about how much was spent on food
02:24 and what was utility cost,
02:26 and those type of issues.
02:27 So I ran kind of blind.
02:28 And then me as an individual,
02:30 the Gen-X are growing up through,
02:32 the '70s, '80s, and '90s,
02:34 I gained the prospective
02:36 from the communities we live in,
02:40 from of the media that it was good to be a consumers.
02:43 So I grew up as a consumer,
02:45 wanting to keep up with the Jones'
02:47 on the other yards and those types of things.
02:49 And then, going to the college and coming home,
02:51 staying home for a little while was a good way of saving money.
02:54 Okay.
02:55 So, then came the time in my life
02:57 where I went back and completed my degree,
03:01 my postgraduate degree and found a job in California.
03:07 So, the company, as a part of the offer,
03:13 offered moving expenses, offered a car when I got their,
03:17 offered a vary of things.
03:19 So I was still a little jaded as I moved out to California
03:22 and didn't realize how much went into actual moving costs,
03:26 went into the actual purchase of a car
03:29 and the resultant expenses associated with that.
03:32 And it became a learning experience for me.
03:34 I still remembered that day that I left,
03:36 I mean, I remembered the movers
03:37 had all stuff over all our front yard,
03:39 they were boxing things up, putting things on a truck.
03:42 My mom was a little upset
03:43 because she said her little baby boy was leaving home.
03:46 I am 29, mom, and I'm still a little boy.
03:48 But that's okay.
03:49 I left home and realize that the context of what I was doing
03:53 was actually growing up to a certain extend
03:56 and beginning to take responsibility for my life.
03:58 But what happen over the next few months
04:01 and the next few years was very enlightening to me,
04:04 because I learnt a lot of things
04:07 on an ongoing bases
04:09 that were relevant that I should share with you.
04:15 Consider when you moved on your own,
04:16 consider what you did to find the apartment.
04:20 Did you rent the apartment?
04:22 Did you lease the apartment?
04:23 Is renting and leasing the same thing?
04:25 Did you understand the context of what clauses are
04:28 in the use of signing a lease agreement?
04:31 Buying a car.
04:32 How much does it cost to buy a car?
04:34 Do I put zero down?
04:35 Do I put the most amount of money down on a car?
04:38 Do I... and how do I pay off the balances?
04:40 What are the cost associated with using a car
04:44 and having a car?
04:45 Is it better for me to just use public transportation?
04:47 Is...
04:49 are their other expenses in the car acquisition
04:51 that I need to be aware of?
04:53 What are the things are there out there
04:55 that I need to aware of?
04:56 How do I buy groceries?
04:57 Well, as a single adult,
04:59 I didn't necessary buy as much glossaries,
05:01 I lived on my own,
05:02 and I went out constantly to eat
05:05 because I didn't want to spend time cooking at home.
05:08 I spend a lot of money out in restaurants,
05:10 that's what we did back in those days,
05:12 because I had extra money to do what I need to do
05:14 and that type of thing.
05:16 So I didn't really consider this issue called Saving.
05:20 And I was young, I was up in coming,
05:22 and I was doing a great job in marketing
05:25 with this organization.
05:27 All of these experiences in your life
05:29 tell you that there's a lots of things that go into living.
05:32 I didn't have roommate
05:34 because I have specific concerns
05:37 about are they going be like me,
05:39 are they going to be loud,
05:41 you know, play weird kind of music?
05:44 And so I decided you know, I'm going to wing it on my own.
05:46 Did you know that my rental expenses back in 1996
05:51 for two-bedroom apartment was $950 a month?
05:55 And I rent it initially
05:59 and I didn't have control over the increase in rent.
06:04 In fact, because I was renting
06:05 I didn't sign a lease agreement,
06:07 they had every right to raise the rent,
06:09 and it went up to almost $1,150
06:12 within the first six to seven months.
06:15 I did sign a lease agreement
06:16 and then staying there for additional year,
06:19 but in leasing verses renting
06:22 your lease tells you that they cant increase the rent
06:26 or the amount you pay for that apartment
06:29 while you're in the clause of that lease.
06:31 Lots of little things that I have to learn
06:34 as a young person.
06:36 And I think that as we take a look
06:38 at living within your means,
06:40 it's essential that we begin the conversation
06:42 with our young people
06:43 about the cost of owning a car,
06:47 and the cost of owning a bike, a bicycle.
06:52 Making sure you have the helmet and the safety attire
06:55 that are important to keep kids as safer as possible.
06:59 If your children are watching you and emulating what you do,
07:04 the key to living on your own and teaching kids about that
07:10 concern of breaking away from the household
07:13 and moving out on their own is key.
07:16 Credit is also another issue
07:18 that most people don't think about,
07:20 and how we educate our young people
07:21 on these credit issue.
07:23 We also haven't thought about the fact that debit card exists
07:28 and can also provide opportunities
07:32 for decreasing amount of interest you pay
07:37 on the use of a specific card.
07:41 We find that a lot of credit card companies
07:44 are pushing, are pushing credit
07:47 as the way to live and that you need that.
07:50 I don't think that's necessary the case.
07:52 And I think we need to take a look collectively
07:56 at living on your own and understanding the context
08:00 of how we educate our young people.
08:02 Not only on credit but on making the right decision
08:05 and understanding that it's essential
08:07 that they read the fine print
08:10 and understand the context of what they're getting into
08:12 as an obligations to that other company.
08:17 Let's take a moment
08:20 and look at what the Bible actually says
08:24 about being responsible.
08:28 We see in Luke 12:13, 14, and 15.
08:34 It talks about man's life,
08:39 it does not consistent in the abundance
08:41 of one's possession.
08:43 Luke is the book in the New Testament,
08:46 Matthew, Mark, Luke, Luke 12:13-15.
08:50 Possession isn't the key idem here,
08:53 but it is something that I got caught up in.
08:55 I got caught up in the consumerable...
08:58 consumerism environment of California
09:02 and begin the process of buying things,
09:06 and acquiring things that really had no place to play
09:11 in developing my talents
09:15 that God has given me.
09:18 It is an embracement at certain times
09:20 because I went out and did frivolous things with money.
09:24 And in learning from my past, I now can look forward and say,
09:29 I am trying to do what's right
09:31 with the funds there are entrusted upon me.
09:35 There's a second verse
09:37 that I really want you to look out and that's key.
09:40 Its in 1 Corinthians,
09:41 1 Corinthians is after Acts and Romans,
09:44 and those two books are after the gospels.
09:47 1 Corinthians 4:2, and it basically states that,
09:51 "A steward is that is faithful."
09:56 A steward, one that is entrusted,
09:58 is trusted with something.
10:00 And you find that being key in the Parable of the Talent.
10:06 So as you look at your life and look at your children,
10:10 make sure that you begin the process
10:12 of conveying to them the importance of giving back,
10:15 of tithing, of understanding the capacity of what financial,
10:20 management financial literacy is all about.
10:23 I talk to Regain Manning about the same issue
10:26 and I'd like to bring her into this conversation
10:28 and ask the question about,
10:31 "What do you consider a parent's role?"
10:33 Regina.
10:36 Start teaching your child today
10:38 and start teaching yourself today,
10:40 prepare yourself to teach your child.
10:42 You wait till they are in high school,
10:45 as far as or close to high school for driving,
10:48 you teach them everything.
10:49 From the minute your child receives a penny
10:51 is the beginning of when you start,
10:53 showing them what money is,
10:55 and that the value of it,
10:57 but not everything in the world.
10:58 So start today, educating yourself and your children.
11:04 The process of educating yourself on budgeting
11:06 and as well as living on your own is constant process
11:09 because things change.
11:10 Cost of living changes,
11:11 many different things come into our lives
11:13 and put hiccups in through your budgets
11:15 or theoretical budgets because many of us don't keep budgets.
11:18 But the first thing that we should be always do
11:21 is to have a budget.
11:22 And to teach your kids about the benefits of budgeting
11:26 and planning for unexpected.
11:30 The other issue is we should teach them
11:32 about living their own, about what it costs to live,
11:35 about how much it cost for groceries,
11:38 and how much it cost to spend money on heating bills
11:41 and what the water cost bill be.
11:43 You know, some times you're just like
11:44 standing in the shower
11:46 and letting the water run over us,
11:47 and the water runs and runs and runs,
11:49 and don't realize that
11:51 water conservation is the key issue,
11:53 its not having to be spent thrift,
11:56 but using the resources we're given in the right type of way.
12:01 So here are some thing I would talk to you
12:03 about talking, teaching your kids about living on their own
12:07 and what to budget for.
12:08 Number one is, how much will your bedroom furnishings cost?
12:12 Where will you get your bedroom furnishings?
12:15 What budget have you put in place
12:18 to pay for your bedroom furnishing?
12:21 Many of us don't even think about that,
12:22 we get into the place and we go out
12:24 without even thinking about it
12:26 and buy, consume, based on what is in the best bet for us.
12:30 There are discount change that can offer benefits
12:35 and offer resources that can help support
12:37 those specific cost.
12:39 But when your looking at what a bedroom cost to furnish,
12:43 you have to take a look at what?
12:44 Is it just a bed? No.
12:46 It could cost for furniture, a night stand,
12:49 you can talk about rugs,
12:51 and then off course you need the linens to put on the bed.
12:53 And then off course,
12:55 there may be electronic such as,
12:56 oh, yes, teach your student about that alarm clock
12:59 because they need to wake up on time to get the school.
13:02 You know it's interesting about this new generation,
13:05 because they go away to school
13:07 and they wake up
13:08 because parents are now called helicopter mom's and dad's
13:12 that are constantly hovering around your kids
13:14 to insure they are as successful as possible.
13:17 So you call your kids up all the time, and you say,
13:19 "Hey, how are the things at school?
13:20 Is everything okay?"
13:21 "Yeah, mom, everything is cool.
13:24 Everything is great.
13:25 I got my room, everything is comfortable.
13:27 But, hey, could you log on to my account
13:31 and can you wire me a couple of hundred dollars?
13:33 Can you actually buy my books charges to your credit card?
13:37 And oh, by the way, can you get online
13:39 and sign me up for the classes that I've missed?"
13:41 Many of the kids are independent
13:44 but very dependent.
13:45 And in fact, when we look at the millennial generation,
13:48 they are extremely closed to their parents.
13:51 And even with independents and moving on,
13:53 you still have the capacity for the parents
13:55 to monitor their behavior,
13:57 to monitor what's going on and to keep in real time
14:00 and real touch with the young people
14:02 that are off at school.
14:04 So they can get access to funds they needed,
14:06 they may have the credit card,
14:08 which is another issue we need to talk about.
14:09 But in furnishing their rooms, you got to teach them,
14:12 its not just about a bed, its about the bed,
14:14 the furnishings and all those other elements
14:16 that go along with it.
14:18 And of course, now kids are talking about
14:20 stereos and speakers and iPads and iPods
14:24 and all these other type of elements
14:26 that may not be as necessary as we think they are.
14:30 Okay, so you are in your two-bedroom apartment
14:32 and you got to consider a couple of different issues.
14:35 What goes in to a two-bedroom apartment?
14:39 Oh, there is a kitchen?
14:41 Yes, there is a living room, there is a dinning room.
14:44 Possibly, they t could be merge.
14:46 There's a bedroom one, there's bedroom two,
14:49 there is a bathroom.
14:50 There are creature comforts that you need to bring in
14:54 to your new living place.
14:56 And many of us don't think and consider
14:59 that in that living space it costs to furnished.
15:03 I learnt that, I learnt it the real way,
15:05 because not only did I have that overhead expense
15:08 of $950 a month in rent
15:11 but I also had heat, I had cable, I had light.
15:14 Oh, yes, I was making a relatively good salary,
15:17 but all of that begin to get eroded from
15:19 because one, I didn't have my budget set,
15:22 so I didn't know exactly
15:24 how much I am going to allocate to rent,
15:27 for the acquisition...
15:28 And I did not save for the acquisition
15:30 of this property that I need to furnished the apartment.
15:34 So what happened was I would take out my credit card
15:40 and I would go and get the immediate gratification
15:43 of all that I needed and put it in the apartment.
15:46 It was a wrong move because I got immediately in debt,
15:49 took my time buying that kind of stuff off.
15:51 It was my first and immediate exposure
15:54 to what it was to furnish a two-bedroom apartment.
15:59 And then of course, you have to live the lifestyle,
16:01 you can let the people know you're having a problem
16:03 and there's a concern with that lifestyle.
16:05 These are conversation
16:07 that you need to actively have with your young people
16:09 and teach them about money and how money is handled,
16:13 and what you need to do in certain circumstances
16:16 that things are key.
16:18 And one of the things I would definitely recommend is,
16:23 why don't we start playing money games
16:27 instead of some of these other video games that are out there.
16:30 Lets interact with our young people across a table
16:33 and discuss specific issues as they deal with cash flow.
16:41 Number three in this area is,
16:43 teach them about ways to cut costs.
16:48 Used equipment and furnitures out their,
16:50 you can buy used equipment.
16:53 As a student go off to school,
16:55 we talk, we can talk about the dilemma of,
16:57 oh, they're going to have an emergency
16:59 so lets give them a credit card.
17:01 Yes, that's possible
17:03 but I would probably references giving them a debit card
17:06 and saying, hey,
17:08 your debit card has this amount of money to access.
17:11 You need to find a job to put more money into the account.
17:14 Manage that account properly
17:16 because it's essential that you understand
17:18 that you need to save for what you need
17:23 and if you don't save, you can't just relay on credit
17:25 because that's were the dangerous signal
17:27 start going off all over the place.
17:30 There are second hand stores,
17:32 there are donations from relatives that,
17:35 hey, my nephew is going off to school,
17:37 he has a need of this.
17:38 I would recommended start with your students at age 16,
17:41 give them access to may be a debit card
17:44 or may be credit card,
17:46 but teach them concepts
17:47 and have them put together a list of things
17:50 that they will need for school
17:52 or for moving out on their own when they hit 18
17:55 or whatever the case may be.
17:56 Those type of tips are essential
17:58 as they being to learn
18:01 how they can relate to credit, to managing their funds,
18:05 and finishing their first apartment.
18:10 The cost of moving will include the rent.
18:17 Your first and last month rent is typically the case.
18:21 So in my case it was about $1,800 dollars
18:24 that I came out of pocket to get into that apartment.
18:28 There's a cleaning deposit
18:30 that typically comes up on to your rent.
18:32 Though you have to put that in there
18:33 because at the end of your lease
18:34 or at the end of your rental period
18:37 they going to have to clean the apartment.
18:38 So they automatically put that in their.
18:40 There is a security deposit.
18:41 What does that mean? Have you asked that question?
18:43 You read and you ask what's necessary about
18:46 what goes into that apartment
18:48 and how much it's going to cost.
18:50 There is a telephone deposit, there are utilities depots.
18:54 All of these things play a factor,
18:56 and it's key to teach your child
18:58 and/or young adult that this factor play a part.
19:02 And in most instances it's essential that you allow them
19:06 the opportunity of handling it themselves.
19:10 Helicopter parents are people that hover around
19:12 is the good thing
19:14 because you're concern about your child,
19:15 but don't let your concern
19:18 cloud the issue of an education
19:21 in how money works
19:23 and what it costs to live on your own.
19:27 Moving costs, its cost me 70... it didn't cost me,
19:31 it was $7,200 to move me over there.
19:34 But when I moved a short distance from a home
19:40 that I owned about 25 miles away,
19:45 back to a specific apartment
19:47 that I wanted to be close to the work,
19:50 the cost of moving with two man
19:53 and a small truck
19:54 and the time involved was the well over $1,200.
19:58 $1,200 to move me 25 miles into an apartment,
20:03 and it was kind of an intriguing
20:05 when you take a look at
20:06 how much it cost to hire the movers
20:08 and what it cost for packing supplies
20:10 and to physically move you with two people
20:12 from one place to the next.
20:14 I'm constantly trying to think of the fact of whether or not I
20:17 increase the number to four people
20:19 if it would decrease the time substantially enough
20:22 so that I could save some money on the hourly cost
20:24 to what it cost to move me.
20:26 I didn't study any of that, I just called them up and said,
20:28 I need to two movers,
20:29 and they came in and took care of things.
20:31 So I didn't do a lot of research,
20:33 I didn't do enough to plan,
20:36 I didn't understand the full context
20:37 of what it costs to move,
20:39 I didn't know the information necessary about researching.
20:44 First and last month deposits, what it is to rent,
20:47 what it is to lease,
20:48 and I was left that the mercy of those
20:50 that I was working with.
20:52 Without the research I am at odds,
20:55 and then its key to take a step back and said,
20:58 without having a budget in place,
21:01 and I am going to continue the process of hammering
21:04 what it means to budget.
21:06 A budget would have taught me
21:07 that I am not going beyond this expense.
21:11 I can only afford $800 apartment
21:13 but yet I am paying $950,
21:16 and then again they increased it
21:18 because I rented and didn't lease,
21:20 obviously, $1,150 before I actually
21:22 establish a 13 month lease agreement.
21:25 We are right now in a difficult situation
21:30 in our economy.
21:31 And we know that job are hard to come by,
21:34 and its now an education in understanding that
21:38 many to 40 to 44 years old are having credit problems
21:41 because they were dealing with the greatness
21:46 of the early years of 2000
21:48 when houses were going up in value
21:50 and when they were leveraging
21:54 the equity in their homes to buy and do different things.
21:58 And then, once the market crashed
22:00 and things happened,
22:02 they found themselves in debt,
22:04 they found that if they lost their job
22:06 they, it took them more time to find a new job,
22:09 they couldn't pay back their debts,
22:12 and they find themselves taking jobs
22:15 that our young people would have typically taken.
22:16 And you see 40 to 42 years olds doing $12 to $14 an hour jobs,
22:20 which is not a bad thing
22:23 but it does tell you that in this economy
22:26 we have to measure and watch our money even that much more,
22:31 and watch what we do with our money
22:33 because that is a talent that we're given.
22:36 I go to several comparisons that we can look at.
22:43 But I don't wanna get caught up
22:47 in the specific concerns
22:51 that people have in reference to jobs
22:53 and finding the new job.
22:54 I am praying that you find the job
22:56 that's appropriate for you.
22:58 And that I don't criticize you as an individual
23:01 because you make $10 or $12 or $14 an hour,
23:06 I give you credit
23:08 for going to work on a daily bases
23:10 and teaching your young people the ethics of work.
23:12 And if you don't have a job,
23:14 I ask you to go out there and look for one
23:16 and find what your skills are,
23:18 and do what's right for your family.
23:21 The context of what I'm chatting with you is
23:24 if you are working
23:26 and you're incurring specific expenses,
23:29 you are an example for your young people.
23:31 Your kids are watching you as an example
23:34 and they are gaining specific insides
23:36 about how you manage your money.
23:40 How do you manage your money?
23:43 Do you have a budget?
23:45 Have you taken a look at what your pay is,
23:49 your payroll, your pay check that comes in?
23:51 And have you evaluated
23:53 where your expenses are going out?
23:55 Have you begun the process of saving for that rainy day?
23:59 Do you know what that difference is
24:01 between your revenue and you pay cheque,
24:05 and the expenses,
24:06 those things that go on a monthly bases?
24:08 Have you put some money aside to a specific savings account?
24:13 Do you have a checking account?
24:15 Do you take look at trying to take that money
24:20 that you're saving and making it work for you?
24:24 Are you investing,
24:25 are planning long-term for retirement?
24:29 These are all questions that we need to take a look at
24:32 when we talk about living on our own.
24:35 So what I like you to take a chance now
24:37 and do is write down for me,
24:39 write down how much its gonna cost you as an individual,
24:43 as a student to move into an apartment.
24:45 Or as an adult that is in a home,
24:48 write down what your mortgage or your rent is?
24:53 I ask you to do that for a purpose
24:55 because when you start writing down what your expenses are,
24:59 it gives you a perspective
25:02 as to what your finances are actually about.
25:07 If you are a student,
25:09 take a look at the cost
25:12 of being single in an apartment
25:15 and what it may cost for a roommate?
25:18 The savings will be substantive
25:20 and make sure you find the right type of roommate.
25:23 It can be very frustrating if you sign a 13 months lease
25:25 with somebody that is not trustworthy
25:29 and is not willing to keep their end of the bargain.
25:33 Key, make sure you understand
25:35 the pros and cons of having the roommate,
25:39 take a look at specific costs
25:42 it takes to furnish an apartment,
25:45 and then make sure you setup a budget.
25:48 You begun the process now, you know what your revenue is,
25:52 you know what some of your expense are.
25:55 Spell them all out, add them up,
25:57 and see whether or not your expenses
25:59 exceeds your revenue, you have a problem.
26:02 Or see how much you can actually cut from your expenses
26:05 to increase the amount of money that your saving.
26:08 I'd like you to also take a chance, as a student,
26:12 go out there in your specific community
26:15 before you actually move out on your own
26:17 and start evaluating different properties.
26:20 Take a look at the location, is location important to you?
26:24 You have access to urban thing that you like to do?
26:28 Do you like to go on recreational activities
26:31 where you like to see the zoo and different things like that.
26:36 Location is a very important facet of living.
26:41 Two, take a look at how the building looks,
26:43 the exterior, the interior.
26:44 Is it not well kept?
26:46 It will give you an idea of what type of landlord
26:48 is holding on to that or controlling that facility.
26:53 Take a look at the apartment layouts and the facilities.
26:56 Does it have a gym?
26:58 It is important for you to stay in shape?
27:00 What are the other issues involved with living expenses
27:05 and living on your own.
27:07 And then, of course, finally and most importantly,
27:11 look at the financial aspects of living in that place.
27:14 Does it cost extra to park?
27:17 Is there an extra cost
27:18 for bringing in certain amenities?
27:21 What are the part of the clauses associated
27:24 with renting that specific facility?
27:27 How far is it from work?
27:28 Will you spend a little bit more in gas
27:33 and maintenance of a car?
27:35 Is it close to work so you can just jump on a bus
27:39 and go to work so you can save the expense in a car?
27:43 Take a look at all of these elements,
27:45 put it together and you have your budget.
27:48 And if in fact, you need a car,
27:51 you now know where you need to start
27:54 to begin budgeting for that car.
27:57 Remember, Take It To The Bank and save.
28:00 God bless.


Home

Revised 2016-06-09