Participants: Cordell Thomas
Series Code: TITTB
Program Code: TITTB000015
|
00:01 On Take it to the Bank,
00:02 you'll find ways to get out of debt. 00:09 Solve your credit card problems. 00:14 How to make and stick with the budget? 00:20 Simple ways to save. 00:24 Buying or selling a home and many more financial matters 00:29 on Take it to the Bank. 00:32 Hi, my name is Cordell Thomas, 00:34 and welcome to Take it to the Bank. 00:36 We're gonna talk about a couple of things today, 00:38 that will support what we've talked about previously, 00:41 but in reference to stress, what causes stress, 00:43 some of the top issues that are relevant 00:45 surrounding stress 00:46 and how it would impacts the family. 00:48 We found out that, 00:49 what is the number one stress causer 00:52 in the United States around families is finance. 00:55 In fact, the top three stress source 00:58 that get to families and break up families 01:01 has to do with relationships within the family 01:04 and all of those relationships within the family 01:05 have to do with money. 01:08 So the top one is financial issues. 01:10 Number one is stressor is being in debt 01:13 or not being able to pay, certain things or losing a job, 01:16 those type of issues. 01:17 Second relevant issue has to do with jobs 01:22 and the work environment. 01:24 There's a lot of stress going on 01:25 in people's work environs, 01:26 and all you need to do is ask your friends 01:28 and see what's going on. 01:30 What happened in Michigan, when late '80s, early '90s 01:33 when the automotive industry went through a major change, 01:36 a lot of individuals were getting pink slips 01:39 or the layouts were happening 01:40 and people were uncertain 01:42 of what was going on their lives. 01:44 Now machines are whole different place, 01:46 because of how many jobs were related 01:49 to the automotive industry, very interesting. 01:52 As I lived through it between 80, 1988 and 1994, 01:58 and I saw the dynamics of people 02:00 and how there was an increase in violence within families. 02:06 And we saw some statistics that were relevant 02:08 and supported some of those issues. 02:09 So finance and debt can cause a lot of stress 02:14 and now we want to focus on in this program, 02:18 the relevance of what causes those financial problems. 02:23 What is the cause underlying that top stress factor 02:27 of finance. 02:28 As we're gonna talk through six specific issues. 02:32 Those six issues are: 02:34 The first one would be poor personal planning. 02:38 We'll go into it a little bit more depth 02:39 on that one in a minute. 02:41 Well, number two is unemployment or loss of income. 02:45 Number three would be expensive emergencies. 02:50 Number four would be bad financial advice. 02:53 Number five, risky investments. 02:56 I will talk a lot about that in a minute 02:58 and number six, 03:00 inadequate planning for retirement. 03:02 Those are the six issues we're going to talk about. 03:07 Now when we talk about these causes 03:10 of financial problems, 03:12 a lot of things resonate. 03:15 When we look at what's going on out there 03:18 and the causes of stress. 03:19 A lot of these causes of stress we talked about 03:23 could be an irritant, it could be a variety of things 03:25 but more so it has to do with finances. 03:28 And you are going to find that a lot of what we talk about 03:31 is helping to prevent certain financial issues 03:34 to happen before they do. 03:36 Because I am sure that you receive calls 03:38 and the mail with the pitch like saying, 03:40 "We'll protect you from scammers, 03:41 who would run up huge debts on your credit cards 03:43 without you knowing. 03:45 Just send us your credit card numbers 03:46 and we'll take care of you." 03:48 If someone calls you on the phone 03:50 and asks you for credit card number, 03:51 there is a problem, 03:53 because most legitimate business owners 03:54 do not ask for it. 03:55 They may ask for an identifying number, 03:58 they may ask for something separate, 03:59 but they do not ask for credit card numbers 04:02 or any type of financial or private information 04:05 that you would have. 04:07 You know that's a warning sign, so you try not to, 04:10 or you try to avoid those type of problems. 04:13 Now the facts are, offers of credit protection 04:16 or insurance against fraud 04:17 are attempts to get your personal data. 04:20 And if someone calls you out of the blue 04:22 that you don't know, 04:24 that's a warning sign to stay away from them. 04:27 They are just after your identity, 04:30 and after your money, 04:32 and after any type of finance, financial issue 04:36 that they can get their hands on. 04:38 So watch those type of things, so let's go through it. 04:41 Number one, we talked about 04:43 had to do with personal planning. 04:45 Poor budgeting is one of the reasons 04:48 why many people get into these financial strains. 04:52 If you are spending more money than you bring in, 04:55 you are setting yourself up. 04:57 If you are single and you are doing so, 04:59 it's a simple issue of figuring out 05:01 where your money is coming from 05:02 and figuring out where your money is going. 05:05 Those are the major items to think about. 05:08 A budget that solve that issue because you have your income, 05:11 your paycheck, your expenses, your rent, the car now, 05:13 and whatever the case may be. 05:15 Now, as you look at these issues, 05:18 it can be solved relatively easily. 05:20 Now, if you are married 05:21 and you are running to this type of issues, 05:23 you have a relationship with someone 05:24 and you're spending more than you bring in, 05:27 that causes a whole host of other problems. 05:30 That can even lead down to divorce 05:32 and a variety of other things, 05:33 so when you're talking about planning. 05:36 If you are married, look at a prenuptial agreement. 05:39 Whoa, Cordell, prenuptial agreement, 05:41 we are married, we are Christians. 05:42 Did you know 05:43 some of the statistics on divorce? 05:45 When you know, 05:47 then you'll probably make some substantive change. 05:49 I am going to get into that later time, 05:51 but did you know that we're around 30 to 33 percent 05:54 in divorce rates and that have to do with finances? 05:59 These are significant issues 06:00 and it can cause break up in relationships 06:03 if we don't address the issue. 06:06 Use of credit cards, 06:08 use of loans to pay certain debt. 06:12 One of the things that people used to offset 06:16 short-term concerns and short-term expenses 06:19 is to use credit cards to pay that off. 06:21 And you know that you are in a danger area 06:23 when you are using credit to pay off certain thing 06:26 that you should be using your paychecks 06:29 or the income to take care of. 06:32 In most situations if you're doing that, 06:33 it can tell several things are at stake. 06:36 It means that you are not preparing for 06:38 or taking care of future possible emergencies. 06:43 And we're gonna talk about expensive emergencies 06:46 in the next couple of steps, 06:47 but in this situation you are setting yourself up. 06:50 If you're using debt to pay off, 06:54 using credit to pay off debt, 06:55 you're running into a dangerous area. 06:58 Because once that interest start piling up, 07:01 it becomes more difficult to pay off, 07:02 and then the whole cycle repeats itself. 07:05 And then of course, 07:07 what you must do to alleviate some of these problems 07:09 is to deal with a household budget. 07:11 Household budget is key. 07:12 We try to emphasize this on an ongoing basis. 07:16 If we don't deal with budgets, 07:18 if you don't deal with knowing where things are 07:20 and knowing how much money is coming in 07:22 and how much goes out, and where it goes. 07:25 And if you don't have a buffer between your expenses 07:28 which should be lower than your paycheck. 07:31 We hope that's the case. 07:32 If you are upside down 07:34 and you're spending more than you bring in, 07:37 I would say 07:38 take a serious look at trying to cut those expenses. 07:40 What type of expenses you might ask. 07:42 Well, 07:44 if you cannot make your mortgage payment, 07:46 why don't you cut back on you cable bill 07:50 or your satellite bill, 07:51 or try to talk to your cell phone company 07:54 and get rid of your landline, 07:56 and try to cut out certain things 07:57 that may not be necessary at this point in time. 08:00 Let's look at needs versus wants. 08:02 Your need is shelter, clothing. 08:05 Shelter, clothing and food. 08:07 If you have those three things, you have your needs met. 08:09 So let's try to keep a roof over your head, 08:11 but then at the same time 08:13 let's take a look at specific issues 08:15 that drive the stress that we are talking about, 08:19 this financial stress. 08:20 Cut back on those expenses you don't need 08:22 and try to look at a way to invert that bubble 08:27 from being spending more than you have, 08:29 to spending less than you bring in. 08:34 Now, the second key concept that we should look at 08:36 is there is understanding your paycheck 08:39 where it's coming from, 08:40 and possibly developing other revenue streams. 08:45 For example I play the piano, I play the violin. 08:48 And at times people ask me to help teach 08:51 their young people an instrument, 08:53 and I picked that up. 08:55 It can pay if you look at the statistics that are out, 08:57 they can pay between $35 an hour up to $60 an hour. 09:00 That's revenue, that's extra income, 09:02 that's something that you can do 09:04 to bring more money and if it's necessary 09:06 and you're currently not meeting those expenses 09:09 on an ongoing basis. 09:11 So those are things that you should think about 09:13 concern yourself with. 09:14 And then of course, looking down 09:16 on where your money goes, expenses. 09:18 This is a simple budget that we're talking about 09:19 at this point and it tells you that, 09:22 okay, where is my money going. 09:25 Certain banks have the ability online 09:29 to actually track your expenses, 09:32 track where your money goes, 09:34 track where your income comes in 09:35 and give you graphics. 09:37 So you got a pie chart of where your money goes. 09:39 This much goes to rent, 09:40 this much goes to the mortgage payment, 09:42 this much goes to car payments, 09:43 this much goes to household improvement, 09:45 this goes to a variety of different, 09:47 to heat, gas, light, those type of things, 09:49 and then it gives you a better ability 09:52 to track what happens, track where the money goes 09:55 and get a context of where things are going. 09:58 One of the great things that are out there right now 10:00 is in reference to cell phones. 10:03 Cell phones and as well iPads, they provide you these apps 10:08 that you can use to track your expenses. 10:10 Expensify, mint.com, 10:12 many of these are associated with helping you get a grab of, 10:18 a grasp of your finances. 10:21 Grab or grasp whatever you can use 10:23 that makes it better for you, use it. 10:27 That the context is 10:28 understanding where your money goes 10:30 is key to bringing in line your budget. 10:34 And then of course, 10:36 don't spend more than you bring in. 10:40 That's key and ensuring that will help you have that buffer, 10:45 additional funds that you can put into savings 10:49 and prepare for that unexpected emergency. 10:53 Unemployment and loss of income is a next step 10:58 to take a look at. 10:59 And it also goes back to why we budget now? 11:02 Some people are not quite sure 11:08 of if their job will last a year, 11:11 another 10 years. 11:12 You remember way back in the day, 11:13 the baby boomers could go to work 11:15 and work at a job for 45 years and retire 11:18 and get the golden watch is no longer the key 11:20 with millennials and gen-xers coming into play, 11:23 the whole dynamic of the work environment 11:26 has changed. 11:27 So you no longer have the capacity to trust 11:29 that you'll be in one job for 45 years. 11:32 As a matter of fact as the gen-xers are, 11:36 and I think that's where I'm at, 11:37 that's my generation. 11:39 We are more apt to go through seven to ten different jobs 11:42 through the course of our lifetime. 11:44 And as risk takers based on when we were born, 11:47 we were latchkey kids and coming home 11:51 because both parents were out working 11:53 and bringing in revenue. 11:54 So gen-xers by their profile are more risk takers, 11:58 so you find that my group and my generation 12:02 would actually go to work 12:03 initially between the ages of 20 to 35, 20 to 40. 12:06 But during that timeframe, they're getting ideas 12:09 of how they can begin their own business 12:11 and develop their own concept 12:13 and they branch off later off in life 12:16 with a business concept and a thought process 12:18 of what they can do to be successful on their own. 12:21 So we find that most people now and especially with millennials 12:25 now that are coming into the work environment 12:27 are more apt to be selective in the jobs that they go into. 12:31 They are more apt to change jobs 12:34 on an ongoing basis based on their skill 12:37 and their education, so you no longer 12:40 going to be doing one job for 45 years. 12:46 Retirement is always key. 12:48 Planning for retirement 12:49 is the other thing we'll talk about 12:50 is something that most people are not planning for. 12:53 But we're getting ahead of ourselves. 12:54 Unemployment and loss of income 12:57 is another relevant area to discuss. 12:59 A complete loss of income and cash can destroy 13:03 even the best-laid budgets. 13:06 It's key to understand, that you lose a job, 13:11 they tell you many investment gurus 13:14 and financial literacy trainers will tell you it's important 13:18 to have an emergency savings of between three to six months. 13:22 Now let me ask you the question. 13:25 How long are most people unemployed as you took a look 13:29 of the past three to four years? 13:32 I can tell you and we work with EDD, 13:34 different organizations that help people find jobs 13:39 and work through the context of job loss. 13:43 It will tell you that most people 13:44 are getting unemployment insurance 13:47 for the course of up to two years. 13:50 People are unemployed for even a lot longer than that, 13:54 so if you go through a job loss with the state of the economy, 13:58 you will probably be looking for work 14:02 for an extended amount of time. 14:04 And so that three to six month emergency savings account 14:07 will be burnt out. 14:09 How do you handle those specific issues 14:11 when you take a look at-- 14:14 this long timeframe where you don't have a job 14:19 and you don't have income coming in? 14:22 Well, that's a major issue. 14:23 You don't have any type of income coming in, 14:25 and that's what causes a lot of stress. 14:29 So what are some of the resources 14:32 we can go through when you're dealing with that? 14:34 Well, if you have a well-laid budget, 14:36 you're putting money away. 14:38 I would suggest that is not even three to six months 14:42 worth of expenses. 14:44 But you're dealing more so with three to eight months, 14:48 eight to ten months, 14:50 putting away as much as you possibly can 14:53 into a savings account 14:54 that you can access if you necessarily have to. 14:58 You can help to phrase some of those concerns. 15:00 So if you have three to six months worth of savings 15:03 or ten months worth of savings, 15:05 you can actually go and do a part-time job somewhere, 15:08 you can go and do some other type of work. 15:10 You can teach the piano if you that type of skill. 15:13 You can do a variety of things that may not bring in 15:15 as much money as you would have liked it to, 15:18 but at least it's not cutting into your expenses, 15:22 cuttings into your savings as quickly as it would 15:24 if you just don't have anything coming in. 15:27 So look for multiple streams of income 15:30 during those times you're down 15:32 and you don't have the specific job 15:34 you had to go to on a daily basis. 15:37 You can get the meaning 15:38 because you can talk to many people as I have 15:40 about job loss, 15:42 and it is very depressing to hear the comments 15:44 they have to say about going through that experience. 15:47 I know that I have-- 15:50 went through back about ten to twelve years ago, 15:54 the company that I was working with consolidated. 15:57 And so the job positioning that I had, 15:59 the position that was labeled 16:00 as a strategic marketing manager went away, 16:03 and so they no longer needed one, 16:05 and so you were out and I had a great severance package 16:08 and I took that severance package and I traveled. 16:11 So many different things you can do 16:13 as you go through the job loss 16:14 because many companies provide you 16:17 a large sum of money if they have that to 16:21 as a severance package or a pay out 16:23 as you leave the job. 16:26 Now, what I will tell you in all of these is 16:29 don't do what I did, because back in that day 16:33 I took that severance package which is substantive 16:35 and I traveled Europe. 16:37 Do I regret it? 16:38 No, because I enjoyed myself, I was single at the time. 16:41 I didn't have major over expenses 16:43 and I didn't own a home. 16:45 So I didn't have those specific problems to deal with 16:48 at that time. 16:50 And I enjoyed the trip. 16:51 I saw places that I've never imagined 16:54 and experienced something that I will never regret. 16:57 But I do regret this that a portion of that money 17:00 that I got as a severance to that job 17:03 should have been put away into some type of retirement 17:07 or some type of investment, because using up that money 17:12 at that time was fun, 17:14 but I look back and that was a time 17:16 that I could really dug into a retirement account 17:20 that could have paid many dividends for me later on. 17:24 But that's just my advice, okay. 17:26 Unemployment and loss of income, 17:27 there are many things that we can do. 17:30 There are things I would suggest you do, 17:32 and I would ask you to do one thing 17:34 is don't get depressed, don't let it get you, 17:36 don't let the stress get to you. 17:38 Take an active role in finding something else 17:41 that can bring in additional revenue, 17:43 additional paycheck, additional moneys 17:45 that can support 17:46 as you are using up that emergency savings, 17:50 and with God's help you will find something soon 17:55 to help support you and your family 17:58 get through the crisis that you're dealing with. 18:01 Number three would have to do with expensive emergencies. 18:05 Even the greatest financial planner 18:07 deals with expensive emergencies. 18:11 Costly emergencies that have to deal with medical expenses, 18:15 that have to do with educational costs. 18:18 I never realized this, but when I want away to school, 18:22 to college, the funness of being away from home 18:26 I guess after getting through the homesickness 18:28 was interesting. 18:29 Because at college you had these freedoms, 18:32 you had this student ID card 18:34 that you could utilize at the bookstore. 18:36 So you are buying these jerseys, 18:38 you are buying the books, 18:39 you are buying all of these types of things, 18:40 and then of course student financial aid 18:43 is paying for some of it, 18:44 but yes, your parents are also paying 18:46 for a substantive part of your education. 18:49 And at that time as a student, 18:50 you really don't understand the full context 18:53 of what you're dealing with it. 18:54 I tell you the story about my son. 18:56 And when he bought his first bike 18:58 and I go back on that, or when I bought my first car, 19:02 there is a certain sense of obligation 19:05 when you have to save for something, 19:07 and you have to pay for it. 19:09 You take care of it a lot better. 19:11 When you are not paying for something 19:13 and you deal with student loan 19:14 there's a certain type of psychology 19:17 that comes to play that, you know, 19:19 I didn't use my own money for it, 19:20 therefore it's not really mine 19:22 and I don't treat it with the same type of care 19:25 that I treat something 19:26 that I spent the sweat and handwork doing. 19:31 Now 19:32 what I would tell you is this. 19:36 The key to understanding 19:38 how to deal with all of these expenses 19:41 is making your children, 19:43 your young people a part of everything you do. 19:46 Education is key because a lot of these concerns 19:51 such as medical emergencies. 19:53 If you tell them the importance of wearing a helmet 19:56 when they are riding their bike, 19:58 and we iterate the importance of their part 20:01 in the full finance of the home, 20:03 tends to provide them an awareness factor 20:06 that this is not really just this game that we play, 20:09 that I don't have any obligations 20:12 because we all do 20:14 when it comes to the family unit. 20:15 Medical emergencies come up and they can wipe people out. 20:19 Medical emergencies have put many people in debt 20:22 for years and years and years. 20:24 And many can't even dig out of it 20:26 because there was inadequate planning, 20:28 and even when you plan for it, 20:30 it takes a substantive chunk of money 20:32 out of your revenue stream for a long time. 20:36 Medical problems even cause concerns. 20:40 If you forget to make a payment on a medical concern 20:43 that you are charged that you got 20:45 when you went to urgent care. 20:49 That missed payment will hurt you tremendously 20:51 from the standpoint of credit because those medical agencies 20:56 take all of your payments and your non-payments 20:59 and report them into your credit history. 21:01 These are major things to be aware of 21:03 and to prepare for as much as we possibly can. 21:07 So we have the major ones 21:08 I was talking about is home expenses. 21:12 A water heater, it will come up believe me 21:15 because we really don't own that water, we don't know 21:17 when that water heater is gonna break down 21:19 as I found out. 21:20 And then I went into buy the water heater 21:22 and found out that someone else had the same type 21:24 that lasted 22 years 21:26 and mine only lasted seven which is an irritant for me, 21:30 and I'm gonna put it aside right now, 21:33 and we'll continue our conversation 21:34 on the things that matter. 21:36 But I'll bring it up again, 21:37 because I think it's really important to realize 21:38 that these emergencies that come up are relevant, 21:42 they're relevant as small or as large as they can be, 21:46 if your are prepared with an emergency savings account, 21:50 these expensive emergencies can be planned for 21:54 and you can take care of them 21:56 without it hurting your financial status 22:00 within your the conference of your budget. 22:02 Poor budgeting will cause concerns 22:05 all the way down the road from loss of income, 22:08 when you don't have a job to those medical emergencies 22:11 as well as to financial advice. 22:14 Don't ask a baker for advice 22:20 when you need advice on building something. 22:24 Don't ask a friend 22:27 who doesn't have any experience at managing money for advice 22:32 when they really don't have 22:34 what it takes to give you the qualified advice 22:37 that a financial planner and someone in that area 22:40 can actually provide on a qualified basis. 22:45 I will just let that go because I think that 22:48 we tend to rely on parents, 22:51 we tend to rely on people we know, 22:53 we tend to rely on ourselves. 22:55 Many of the interviews that you will see will tell you 22:58 that most people, 23:00 when your are looking at a crisis who do you go to. 23:04 They will tell you, I go to myself. 23:07 I try to figure it out. 23:08 I am having a financial crisis. 23:10 Well, when you are having a financial crisis, 23:14 it means you caused it. 23:16 And then you are going to ask yourself, 23:17 how do I get out of it, 23:19 or should I ask an expert how to get out of this crisis. 23:23 It would make more sense 23:25 to ask a baker to bake your bread 23:27 and not have a builder bake your bread, 23:29 and that's pretty much a concise approach 23:32 I would suggest seek the resources necessary 23:35 to give you the qualified advice. 23:37 And then we go to number five, risky investments. 23:42 Risky investments through either fraud 23:46 or investments that the market cannot and doesn't insure. 23:50 If you plan a budget 23:53 and right now you're barely making it, 23:55 and you can save maybe $200 a month, 23:58 save the $200. 23:59 Save the money and build your emergency savings account. 24:04 At that point in time, 24:05 it's probably not the best advice 24:07 to start investing in the markets, 24:09 because you'll realize that the market is a market 24:11 and you can lose a lot if you are not prepared 24:16 for what could happen. 24:18 So the advice I would give is, 24:20 there are a lot of things going on 24:23 in reference to investment areas. 24:25 There are a lot of scam artists that are out there 24:28 that provide their expertise and what needs to happen 24:32 and what you need to do, 24:34 and I will give you a couple of examples. 24:35 For example, a call comes in, 24:39 a letter or an email can come in, 24:41 and a highly placed official of a foreign government 24:44 request your assistance 24:46 in transferring a large amount of money, 24:48 if you can help, you'll earn a huge fee. 24:52 Now, 24:54 if you get something like that, 24:55 I would ask you to ignore the email or to call 25:00 and report it. 25:03 Get information that you can from them, 25:05 find out what they're doing and report it. 25:09 These checks are almost always counterfeit 25:11 that they provide you. 25:12 You put it into their account into your account 25:14 and the check looks legitimate, they can do a lot of things 25:18 to make it look real and tangible, 25:20 but the check will bounce a few days later. 25:22 And then of course your bank will then ask you 25:24 how you intend to cover the money 25:25 you transferred to the scammers 25:29 and it can take up to 21 days for that check to clear 25:32 and create a major cause of stress in your life, 25:37 when a lot of money is at stake. 25:39 These are things 25:41 you don't want to get involved in. 25:42 How about number two? And I'll pick one. 25:45 We get this all the time, fraud, 25:48 and what you can do to prevent it. 25:50 And I would suggest that if you are interested 25:52 in getting some of these samples 25:53 at end of the show, 25:55 will provide you an email address 25:58 and a website if you would like to checkout 26:01 some of the same specific information 26:03 and we can support you with. 26:05 The last one I'll share with you is this. 26:08 The con job is an unemployment advertisement 26:11 offers a work at home opportunity, 26:14 a multilevel marketing plan 26:17 or another way of becoming your own boss. 26:22 It will increase your income. 26:23 Where all interest gets it in working for ourselves. 26:27 But there are things that are out there 26:28 that you should be aware of when you're looking at 26:30 this work for yourself type of thing. 26:32 There are lot of scams that are out there. 26:34 In fact, the facts are this. 26:36 Sending fees for job guarantees is very risky. 26:43 If someone ask you to pay a fee 26:44 to get something that typically just free is very risky. 26:48 In many cases, 26:50 scammers advertise all kinds of job opportunities 26:53 from envelop stuffing to a craft assembly 26:58 to a variety of all of these, a variety of different jobs. 27:02 And in most instances the ad makes promises 27:04 that they cannot keep. 27:06 You lose more money instead of making more money, 27:09 and there are tips that we should all be aware of 27:11 when you're looking at risky investments. 27:15 The last one is to plan for retirement, 27:18 to save money, 27:19 to get the budget in place 27:22 so that you can have an adequate amount of money 27:25 you can put away into an account 27:28 of 401k or 403B an investment account 27:31 that can prepare you for a retirement 27:33 that you can enjoy. 27:35 Those are the six things 27:38 that cause financial crisis in your life. 27:41 When you prepare for these things by starting 27:45 and planning a budget 27:47 and watching the emails that come in 27:51 and avoiding a lot of these concerns, 27:54 you are better prepared 27:55 of taking that extra money to the bank and save. 27:59 God bless you. |
Revised 2016-06-16