Participants: Cordell Thomas
Series Code: TITTB
Program Code: TITTB000006
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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. |
Revised 2016-06-09