1 00:00:46,360 --> 00:00:52,040 Suze: September 19th, 2024. Welcome everybody to What KT? 2 00:00:52,709 --> 00:00:57,240 KT: Women and Money podcast. Ask KT and Suze Anything! 3 00:00:57,349 --> 00:01:00,180 Suze: Anything you want to know what's so great about this 4 00:01:00,189 --> 00:01:03,430 Suze: particular podcast? Where are we, KT? 5 00:01:04,230 --> 00:01:05,419 KT: We're in Spain. 6 00:01:05,440 --> 00:01:08,339 Suze: We're in Spain. That's where we're really, really, 7 00:01:08,434 --> 00:01:12,444 Suze: We are and we still have three more days here 8 00:01:12,455 --> 00:01:15,934 Suze: before we come back. All right, KT, what do you 9 00:01:15,944 --> 00:01:16,385 Suze: got for 10 00:01:16,394 --> 00:01:16,735 Suze: me? 11 00:01:16,745 --> 00:01:19,613 KT: OK. My first question is from Nola. 12 00:01:19,625 --> 00:01:22,955 Suze: Look how shiny your hair is today. Why is it 13 00:01:22,964 --> 00:01:23,735 Suze: so shiny? 14 00:01:23,745 --> 00:01:28,334 KT: I used, I used one of your shampoos that makes 15 00:01:28,345 --> 00:01:28,864 KT: it real shine. 16 00:01:29,125 --> 00:01:29,885 Suze: You did? 17 00:01:29,894 --> 00:01:30,345 KT: I did. 18 00:01:31,360 --> 00:01:36,309 KT: I love Aveda everybody. I've been using that shampoo forever 19 00:01:36,319 --> 00:01:42,330 KT: because it smells so delicious. But today I used a shampoo. 20 00:01:42,339 --> 00:01:44,300 KT: I was in the garden. I made a huge mess. 21 00:01:44,309 --> 00:01:47,760 KT: So we're doing this podcast in the evening. Usually we 22 00:01:47,769 --> 00:01:50,800 KT: do these first thing in the morning, but I was 23 00:01:50,809 --> 00:01:53,889 KT: so dirty and messy. I took a really long shower 24 00:01:53,900 --> 00:01:58,010 KT: and I used one of Suze's special shampoos and it 25 00:01:58,019 --> 00:01:59,699 KT: made my hair super shiny. 26 00:02:00,456 --> 00:02:00,795 Suze: It's 27 00:02:00,805 --> 00:02:02,765 Suze: so great. I love it. All right. Anyway, 28 00:02:02,776 --> 00:02:04,545 KT: OK. So this is from Nola and 29 00:02:04,695 --> 00:02:07,676 Suze: By the way, Ask KT and Suze Anything edition as 30 00:02:07,685 --> 00:02:11,916 Suze: KT just said, if you want, you can send in 31 00:02:11,925 --> 00:02:16,895 Suze: a question to ask Suze Suze podcast at gmail.com. And 32 00:02:16,906 --> 00:02:20,475 Suze: if chosen by KT, we will answer it. I do 33 00:02:20,485 --> 00:02:24,945 Suze: just wanna let you know there are thousands and thousands 34 00:02:24,955 --> 00:02:28,276 Suze: that have been sent in. So if KT has chosen, 35 00:02:29,102 --> 00:02:30,671 Suze: oh, you are lucky. 36 00:02:30,882 --> 00:02:31,421 KT: I 37 00:02:31,431 --> 00:02:35,132 KT: chose Nola because it sounds kind of Spanish. 38 00:02:35,681 --> 00:02:38,492 Suze: And is it true you told me earlier right before 39 00:02:38,501 --> 00:02:42,322 Suze: you sat down that you chose ones that really you 40 00:02:42,332 --> 00:02:46,261 Suze: felt had never been asked before on the podcast. 41 00:02:46,292 --> 00:02:46,302 KT: I 42 00:02:46,311 --> 00:02:46,931 KT: tried to. 43 00:02:47,401 --> 00:02:49,651 Suze: So these are all like new topics. 44 00:02:50,042 --> 00:02:52,340 KT: Some of them are, some of them are, but 45 00:02:52,352 --> 00:02:55,731 Suze: a lot of them are right. So I'm so I'm 46 00:02:55,742 --> 00:02:56,772 Suze: so excited. 47 00:02:57,770 --> 00:03:04,470 KT: Ok. Are we ready? Ok. From, from Nola. She said, Suze, 48 00:03:04,479 --> 00:03:10,160 KT: I opened a Roth IRA with $500 outside of my 49 00:03:10,169 --> 00:03:14,830 KT: Roth TSP from my federal job. Do we even need, 50 00:03:14,925 --> 00:03:19,345 KT: need more than one Roth IRA? And then Noah said, 51 00:03:19,354 --> 00:03:21,615 KT: I'm trying to figure out if I should leave the 52 00:03:21,625 --> 00:03:27,835 KT: $500 or just transfer it into my work Roth TSP. 53 00:03:27,934 --> 00:03:31,945 KT: The fee is about $200. Is that ridiculous or what? 54 00:03:33,070 --> 00:03:34,210 Suze: And tell me that the, 55 00:03:35,600 --> 00:03:38,309 KT: and then, then Nola said that's 50% of what I 56 00:03:38,320 --> 00:03:44,770 KT: have in there. I have 75,000 in my federal Roth TSP. So, 57 00:03:44,779 --> 00:03:47,770 KT: what's that about? That's a new question. First time I 58 00:03:47,779 --> 00:03:48,250 KT: heard 59 00:03:48,259 --> 00:03:48,589 Suze: I was gonna, 60 00:03:49,360 --> 00:03:51,710 Suze: I was gonna say, did KT just start this podcast with 61 00:03:52,279 --> 00:03:55,080 Suze: a question about a Roth. Are you kidding me? 62 00:03:55,089 --> 00:03:55,759 KT: What about the fee business? 63 00:03:56,440 --> 00:04:00,520 Suze: Here's the thing? Nola. It's like, no, you should not 64 00:04:00,529 --> 00:04:04,139 Suze: be doing that. No. La. got it anyway. So that 65 00:04:04,149 --> 00:04:10,210 Suze: is ridiculous. It is ridiculous. In fact, most Roth IRAs 66 00:04:11,300 --> 00:04:16,428 Suze: in great companies there is no account minimum and no fee. 67 00:04:16,540 --> 00:04:20,320 Suze: If I were you, I would take that $500 out 68 00:04:20,838 --> 00:04:24,019 Suze: and I would open up a Roth IRA with Fidelity, 69 00:04:24,039 --> 00:04:29,218 Suze: Schwab e-Trade even Ally. Normally, I would also say Vanguard, 70 00:04:29,229 --> 00:04:32,799 Suze: but Vanguard can charge you a lot more. They may 71 00:04:32,808 --> 00:04:36,329 Suze: ask for a larger deposit than 500 to open and 72 00:04:36,338 --> 00:04:40,348 Suze: it's usually, I think 3000 or something. So Fidelity, Schwab, e-Trade, 73 00:04:40,759 --> 00:04:45,408 Suze: even Ally Investment go there. That's what I would do. 74 00:04:45,669 --> 00:04:48,459 Suze: But here's what's so great. KT about this question. 75 00:04:49,119 --> 00:04:55,359 Suze: Nola actually figured out that even though she had $500 76 00:04:55,369 --> 00:05:00,019 Suze: in there, her fee was almost 50% which is why 77 00:05:00,029 --> 00:05:03,779 Suze: it's really, really important that you don't look at the 78 00:05:03,790 --> 00:05:06,980 Suze: amount of money that you're paying because you might think oh, 79 00:05:06,988 --> 00:05:11,049 Suze: 200 isn't that much? You look at the percentage 80 00:05:11,339 --> 00:05:14,399 Suze: of the fee in comparison to the amount of money 81 00:05:14,410 --> 00:05:18,269 Suze: under deposit to see. Is it worth it or not? 82 00:05:18,279 --> 00:05:19,519 Suze: All right. Ok. 83 00:05:19,529 --> 00:05:22,820 KT: Next is from Gina and I picked this one in 84 00:05:22,829 --> 00:05:25,850 KT: particular because it, it rings true. With what we've been 85 00:05:25,859 --> 00:05:30,829 KT: talking about as far as relationships with money. Ready. Hi, 86 00:05:30,839 --> 00:05:34,880 KT: Suze and KT. I'm 40 years old and I'm terrified 87 00:05:34,890 --> 00:05:36,079 KT: about retirement. 88 00:05:36,410 --> 00:05:40,140 KT: I have a 401k with my employer and yes, they 89 00:05:40,149 --> 00:05:44,779 KT: match contributions. I've read your book. I've listened to the podcast. 90 00:05:44,790 --> 00:05:49,140 KT: I still feel very intimidated and lost when it comes 91 00:05:49,149 --> 00:05:51,500 KT: to getting more out of the 401k. 92 00:05:51,799 --> 00:05:57,209 KT: Meaning putting money in other investments like stocks. I'm interested 93 00:05:57,220 --> 00:06:01,099 KT: in the must have documents, but I'm also terrified, I'll 94 00:06:01,109 --> 00:06:04,929 KT: get them and won't know the first step to take. Now, 95 00:06:04,940 --> 00:06:07,420 KT: the reason I picked this is for this reason. 96 00:06:07,738 --> 00:06:10,480 KT: Then Gina goes on to say I have a partner 97 00:06:10,488 --> 00:06:14,470 KT: who's absolutely terrible with money and doesn't even have a 98 00:06:14,480 --> 00:06:18,200 KT: savings account. I try to educate her on some of 99 00:06:18,209 --> 00:06:22,760 KT: your principles that it is possible to save money even 100 00:06:22,769 --> 00:06:26,570 KT: after all the bills are paid. So she goes on 101 00:06:26,579 --> 00:06:28,880 KT: and on and on. But she wants to know is 102 00:06:28,890 --> 00:06:32,359 KT: she on the right path? What should she do? 103 00:06:32,839 --> 00:06:34,119 Suze: What path is she on? 104 00:06:34,540 --> 00:06:35,469 Suze: She's on the fear path. 105 00:06:35,480 --> 00:06:39,040 KT: Fear and fear is what... it's an obstacle, 106 00:06:39,678 --> 00:06:43,679 Suze: Fear, shame and anger the three internal obstacles to wealth. Gina, 107 00:06:44,750 --> 00:06:48,320 Suze: I have to tell you you're 40 years of age 108 00:06:49,119 --> 00:06:53,019 Suze: and yes, you have a 401k with your employer. However, 109 00:06:53,589 --> 00:06:58,279 Suze: you should have a Roth 401k with your employer and 110 00:06:58,290 --> 00:07:00,859 Suze: even if they match and they match to the traditional 111 00:07:00,869 --> 00:07:04,469 Suze: side pre-tax, that's fine. So you say that you've read 112 00:07:04,480 --> 00:07:08,099 Suze: my books and listened to my podcast, but you still 113 00:07:08,109 --> 00:07:14,450 Suze: have a traditional 401k. So let's make one tiny move 114 00:07:14,459 --> 00:07:15,660 Suze: at a time. 115 00:07:16,660 --> 00:07:19,399 Suze: What I want you to do your very first move 116 00:07:19,410 --> 00:07:22,950 Suze: is you're going to go to the hr person and 117 00:07:22,959 --> 00:07:27,380 Suze: all your new contributions are going to go in a 118 00:07:27,390 --> 00:07:32,920 Suze: Roth 401k. You're just gonna start there. You don't have 119 00:07:32,929 --> 00:07:37,160 Suze: to put money in other investments like stocks and things 120 00:07:37,170 --> 00:07:42,839 Suze: like that. If you're fully maxing out your Roth 401k 121 00:07:43,299 --> 00:07:46,920 Suze: and possibly a Roth IRA as well, 122 00:07:47,679 --> 00:07:51,260 Suze: now you say that you're afraid and terrified of the 123 00:07:51,269 --> 00:07:56,420 Suze: must have documents. I can tell you that millions and 124 00:07:56,429 --> 00:08:01,779 Suze: millions and millions have been used over the past years. 125 00:08:02,149 --> 00:08:06,679 Suze: There is nothing to be terrified about. They guide you 126 00:08:06,690 --> 00:08:10,970 Suze: every inch of the way. There's an 800 number, there's 127 00:08:10,980 --> 00:08:14,619 Suze: a live chat. There's all these things that you can 128 00:08:14,630 --> 00:08:17,140 Suze: use and you have nothing 129 00:08:17,750 --> 00:08:22,890 Suze: to lose by just trying. You don't use it, you lose. 130 00:08:23,200 --> 00:08:27,410 Suze: If you do use it now you've gained. So that's 131 00:08:27,420 --> 00:08:31,078 Suze: just something that you might want to think about. What 132 00:08:31,089 --> 00:08:33,250 Suze: I'm really, really concerned about 133 00:08:33,989 --> 00:08:38,059 Suze: is that at the age of 40 you're in a 134 00:08:38,068 --> 00:08:42,648 Suze: relationship with somebody who is absolutely terrible with money 135 00:08:43,630 --> 00:08:47,299 Suze: and doesn't have a savings account. You try to educate 136 00:08:47,309 --> 00:08:50,409 Suze: her and all of that. 137 00:08:51,210 --> 00:08:55,119 Suze: You have to look at that very, very seriously because 138 00:08:55,130 --> 00:08:59,960 Suze: if your partner isn't good with money doesn't feel like 139 00:08:59,969 --> 00:09:04,549 Suze: they can do anything with it and isn't interested in it. Remember, 140 00:09:04,559 --> 00:09:08,109 Suze: I always say that what somebody does with their money 141 00:09:08,119 --> 00:09:12,260 Suze: is how they feel about who they are. So, you 142 00:09:12,270 --> 00:09:16,109 Suze: have to really come to the understanding 143 00:09:16,789 --> 00:09:20,439 Suze: of, is this the person you really want to be with? 144 00:09:20,450 --> 00:09:23,590 Suze: Maybe it is. But I just want you to look 145 00:09:23,599 --> 00:09:26,729 Suze: at that at the age of 40. I don't like 146 00:09:26,739 --> 00:09:30,849 Suze: when you say so, basically when retirement comes, I'll most 147 00:09:30,859 --> 00:09:35,669 Suze: likely be supporting her as well. You're 40 years old 148 00:09:35,869 --> 00:09:39,489 Suze: and you have $48,000 in savings. That's it. 149 00:09:39,890 --> 00:09:43,429 Suze: That's it. You should have more than that a lot 150 00:09:43,760 --> 00:09:45,929 Suze: and you want to use it for a down payment 151 00:09:45,940 --> 00:09:49,919 Suze: on a house. Oh, no, you don't because you need 152 00:09:49,929 --> 00:09:53,599 Suze: at least 8 to 12 months of emergency savings accounts 153 00:09:53,729 --> 00:09:57,919 Suze: plus a 20% down payment. But you say that you 154 00:09:57,929 --> 00:10:02,349 Suze: have a $5000 car loan and about $300 in credit 155 00:10:02,359 --> 00:10:03,289 Suze: card debt. 156 00:10:03,840 --> 00:10:06,979 Suze: So what do you need to start doing right now? 157 00:10:06,989 --> 00:10:09,099 Suze: You have to get out of credit card debt. You 158 00:10:09,109 --> 00:10:11,468 Suze: have to stay out of credit card debt and you 159 00:10:11,479 --> 00:10:13,809 Suze: have to get rid of the car loan and start 160 00:10:13,820 --> 00:10:17,000 Suze: saving more and more money. The best place for you 161 00:10:17,010 --> 00:10:21,260 Suze: to really be doing that. Really is Alliant Credit Union. 162 00:10:21,640 --> 00:10:24,640 Suze: You put $100 a month away every month for 12 163 00:10:24,650 --> 00:10:29,689 Suze: consecutive months, they'll give you $100 fabulous. Your partner should 164 00:10:29,700 --> 00:10:33,218 Suze: be doing the same thing with you. So my suggestion 165 00:10:33,229 --> 00:10:38,010 Suze: to the two of you is this, try doing that together, 166 00:10:38,039 --> 00:10:42,739 Suze: encourage each other, show each other that anything when it 167 00:10:42,750 --> 00:10:44,719 Suze: comes to money is possible 168 00:10:45,419 --> 00:10:51,750 Suze: and go from there. So KT it's so important that 169 00:10:51,760 --> 00:10:55,830 Suze: I went into detail on that one is that please 170 00:10:56,250 --> 00:11:01,968 Suze: really look at your relationships with honesty and truth and 171 00:11:01,979 --> 00:11:02,640 Suze: make decisions... 172 00:11:03,520 --> 00:11:07,919 KT: Wait 'till you hear this one here. This is, here's why everyone needs to 173 00:11:07,929 --> 00:11:10,559 KT: really look at a relationship. This is from Joanne. 174 00:11:10,869 --> 00:11:14,969 KT: It breaks my heart. She said, Suze, my lifetime partner 175 00:11:14,979 --> 00:11:21,260 KT: passed away last November. He supported me, paid all my bills, 176 00:11:21,270 --> 00:11:25,859 KT: gave me a monthly salary to live on. I'm 70 177 00:11:25,869 --> 00:11:32,960 KT: years old, retired and since his passing, I've accumulated over 178 00:11:32,969 --> 00:11:38,250 KT: $100,000 in debt to live on and survive. 179 00:11:38,719 --> 00:11:43,739 KT: There are so many consolidation companies out there. Please tell me, Suze, 180 00:11:43,750 --> 00:11:46,700 KT: which is the best one since I will need to 181 00:11:46,710 --> 00:11:52,859 KT: consolidate this large credit card debt. There you go, people 182 00:11:52,869 --> 00:11:55,260 KT: you need to know together. 183 00:11:55,270 --> 00:12:00,140 Suze: However, what's great about this one, KT is that in 184 00:12:00,150 --> 00:12:03,780 Suze: the last email we were talking about Gina 185 00:12:04,789 --> 00:12:08,789 Suze: and her partner. But what would happen to her partner 186 00:12:08,799 --> 00:12:10,500 Suze: if Gina died? 187 00:12:10,510 --> 00:12:11,719 KT: Same as Joanne. 188 00:12:12,150 --> 00:12:17,599 Suze: If Gina died, she might end up like Joanne right now. 189 00:12:17,750 --> 00:12:21,939 Suze: So don't think you are doing people favors by not 190 00:12:21,950 --> 00:12:27,728 Suze: educating them and including them in finances. All right, Joanne, 191 00:12:27,739 --> 00:12:31,500 Suze: here's what confuses me. So at the age of 70 192 00:12:31,510 --> 00:12:32,690 Suze: you have now 193 00:12:33,159 --> 00:12:43,030 Suze: accumulated $100,000 in debt. Ok? And just simply consolidating the 194 00:12:43,039 --> 00:12:47,450 Suze: debt still means that it has to be paid. 195 00:12:48,099 --> 00:12:52,020 Suze: But if you pay it and you still don't have 196 00:12:52,030 --> 00:12:58,080 Suze: any money, how are you going to support yourself? 70 197 00:12:58,090 --> 00:13:02,640 Suze: believe it or not, is not that old? Are you working? 198 00:13:02,650 --> 00:13:06,260 Suze: Is there anything you can do to make money because 199 00:13:06,270 --> 00:13:10,919 Suze: you have to bring in obviously more money or reduce 200 00:13:10,929 --> 00:13:13,640 Suze: your expenses tremendously. 201 00:13:13,989 --> 00:13:16,380 Suze: Do you have a home that you're living in that 202 00:13:16,390 --> 00:13:19,228 Suze: maybe is paid for and maybe you need to what 203 00:13:19,239 --> 00:13:23,409 Suze: sell it, but you need to look at other things 204 00:13:23,419 --> 00:13:29,689 Suze: besides just consolidating this debt, it may be since you 205 00:13:29,700 --> 00:13:35,770 Suze: owe $100,000. Listen to me closely when you owe more 206 00:13:35,820 --> 00:13:40,909 Suze: than what you are worth, you are technically bankrupt 207 00:13:41,390 --> 00:13:44,849 Suze: that normally there is no way for you to get 208 00:13:44,859 --> 00:13:49,260 Suze: out of this debt. So you might have to and 209 00:13:49,270 --> 00:13:53,299 Suze: I don't say this lightly and I understand, but you 210 00:13:53,309 --> 00:13:57,330 Suze: may have to even look at claiming bankruptcy to get 211 00:13:57,340 --> 00:14:02,729 Suze: out of this debt. But the consolidation companies I don't 212 00:14:02,739 --> 00:14:05,330 Suze: think are the answer for you here. 213 00:14:05,869 --> 00:14:08,659 Suze: So I don't know which one is best because I 214 00:14:08,669 --> 00:14:14,049 Suze: actually don't believe in consolidation companies. If anything, I believe 215 00:14:14,059 --> 00:14:20,450 Suze: in the NFCC.org a nonprofit that looks at what you owe. 216 00:14:20,500 --> 00:14:23,869 Suze: They work with you on a five year plan to 217 00:14:23,880 --> 00:14:29,080 Suze: pay off your debt, but I'm very concerned here. Really, 218 00:14:29,090 --> 00:14:30,309 Suze: I'm concerned. 219 00:14:30,640 --> 00:14:34,219 Suze: You really need to look realistically at this and see 220 00:14:34,229 --> 00:14:37,900 Suze: what else can you do? But you obviously need to 221 00:14:37,909 --> 00:14:42,260 Suze: cut down on your expenses big time. 222 00:14:43,789 --> 00:14:44,469 Suze: I hate this. 223 00:14:44,479 --> 00:14:47,250 KT: I know you do and listen to the next one. 224 00:14:47,479 --> 00:14:49,739 Suze: What are you doing to me here, Travis? 225 00:14:49,750 --> 00:14:51,409 KT: Wait, this is from Alba 226 00:14:51,809 --> 00:14:55,710 KT: and this is something that we hear over and over 227 00:14:55,719 --> 00:14:58,900 KT: and over again. You're ready. I have a beautiful seven 228 00:14:58,909 --> 00:15:02,559 KT: month old granddaughter and I want to make sure she's 229 00:15:02,570 --> 00:15:06,239 KT: got a nice savings. What do you suggest I should 230 00:15:06,250 --> 00:15:09,030 KT: start with? And where should I put it? And what 231 00:15:09,039 --> 00:15:13,270 KT: kind of bank account? I am clueless, Suze so far 232 00:15:13,280 --> 00:15:16,450 KT: I have $1500 saved for her. 233 00:15:16,460 --> 00:15:16,919 Suze: Well, this 234 00:15:16,929 --> 00:15:19,049 Suze: one's easy. What would you tell her, KT? 235 00:15:19,059 --> 00:15:19,989 KT: No, I would. 236 00:15:20,609 --> 00:15:23,969 KT: Oh, well, first of all, she should go to Alliant. 237 00:15:23,979 --> 00:15:24,419 Suze: Here's 238 00:15:24,429 --> 00:15:26,440 Suze: what I would do if I were you. And the 239 00:15:26,450 --> 00:15:29,039 Suze: reason KT said Alliant Credit Union, 240 00:15:29,960 --> 00:15:34,880 Suze: I would take that $1500 and open up an ultimate 241 00:15:34,890 --> 00:15:40,460 Suze: opportunity savings account in your name at Alliant Credit Union. 242 00:15:40,950 --> 00:15:44,020 Suze: Then I would open up a custodian one in your 243 00:15:44,030 --> 00:15:49,179 Suze: granddaughter's name. And then I would transfer $100 a month 244 00:15:49,200 --> 00:15:50,179 Suze: into 245 00:15:50,650 --> 00:15:54,849 Suze: the Ultimate Opportunity Savings account for your granddaughter. And if 246 00:15:54,859 --> 00:15:58,619 Suze: you transfer in $100 a month, every single month, for 247 00:15:58,630 --> 00:16:05,390 Suze: 12 consecutive months, Alliant Credit Union will put in $100 248 00:16:05,400 --> 00:16:10,130 Suze: plus both of you will be earning about 3.10% on 249 00:16:10,140 --> 00:16:13,989 Suze: your money. So, that's what I would be doing if 250 00:16:14,000 --> 00:16:16,780 Suze: I were you. Because if you look at 100 a 251 00:16:16,789 --> 00:16:17,340 Suze: month 252 00:16:17,849 --> 00:16:21,500 Suze: and you get 100 it's like a 16% return on 253 00:16:21,510 --> 00:16:23,869 Suze: your money. Are you all crazy not to be doing that? 254 00:16:23,880 --> 00:16:24,659 Suze: All right, KT. 255 00:16:25,210 --> 00:16:28,020 KT: And she's only seven months old. Her granddaughter. Can you 256 00:16:28,030 --> 00:16:31,869 KT: imagine if she keeps doing it? All right. Next is 257 00:16:31,880 --> 00:16:36,479 KT: from Heather. Heather said hi, Suze. I'm a 40 year 258 00:16:36,500 --> 00:16:41,510 KT: old mom of two little ones under three. I'm married 259 00:16:41,520 --> 00:16:43,390 KT: but I'm a stay at home mom. 260 00:16:43,739 --> 00:16:48,580 KT: I have $40,000 in student loan debt and about 4000 261 00:16:48,590 --> 00:16:51,719 KT: in credit card debt. I'm trying to find the best 262 00:16:51,729 --> 00:16:55,000 KT: way to knock down the debt without taking too much 263 00:16:55,010 --> 00:16:58,190 KT: out of our food budget, which is super high. 264 00:16:58,510 --> 00:17:01,929 KT: We live in a rural area with no job options 265 00:17:01,940 --> 00:17:05,969 KT: unless I drive 70 miles away and still need to 266 00:17:05,979 --> 00:17:09,719 KT: find childcare. Would it be better to get a job 267 00:17:09,729 --> 00:17:13,640 KT: and find childcare or just to pay minimums on the 268 00:17:13,650 --> 00:17:16,810 KT: bills or stay at home and pay maybe a few 269 00:17:16,819 --> 00:17:19,280 KT: extra bucks towards our principal debt? 270 00:17:20,099 --> 00:17:22,189 KT: So they're really trying 271 00:17:23,650 --> 00:17:24,099 Suze: you notice 272 00:17:24,109 --> 00:17:25,719 Suze: the theme you've done here, right. 273 00:17:26,040 --> 00:17:27,669 KT: Help, help, 274 00:17:28,479 --> 00:17:31,339 Suze: You know, and I think KT did that because some 275 00:17:31,349 --> 00:17:35,129 Suze: of the emails that came in did say Suze, we 276 00:17:35,140 --> 00:17:38,150 Suze: understand that all the people that have listened to you 277 00:17:38,160 --> 00:17:39,810 Suze: for 20 years, 30 years 278 00:17:40,020 --> 00:17:44,649 Suze: are now multimillionaires, but we've just started listening to you. 279 00:17:44,829 --> 00:17:48,938 Suze: So you haven't been talking lately about debt and credit 280 00:17:48,949 --> 00:17:51,859 Suze: cards and we all need help. So, I guess KT 281 00:17:51,869 --> 00:17:55,429 Suze: took that to heart because that's what the theme seems 282 00:17:55,439 --> 00:17:58,859 Suze: to be today. Heather, here's what I would do if 283 00:17:58,869 --> 00:18:03,479 Suze: I were you, which is, I would look to get 284 00:18:03,489 --> 00:18:05,250 Suze: a job at home. 285 00:18:05,920 --> 00:18:09,659 Suze: There are jobs that you can do online at home 286 00:18:09,670 --> 00:18:14,129 Suze: where you can make money at home while you're staying 287 00:18:14,140 --> 00:18:17,439 Suze: with the kids. There are many things out there. So 288 00:18:17,449 --> 00:18:20,260 Suze: I would look for that type of work to bring 289 00:18:20,270 --> 00:18:21,839 Suze: in extra money. 290 00:18:22,569 --> 00:18:27,689 Suze: Obviously, you have $40,000 in student loan debt. Just so curious, 291 00:18:27,699 --> 00:18:30,790 Suze: even though you didn't say, what was that student loan 292 00:18:30,800 --> 00:18:35,630 Suze: debt for? What degree did you get that could possibly 293 00:18:35,640 --> 00:18:39,530 Suze: help you earn money. Now you say that you're married, 294 00:18:39,540 --> 00:18:43,030 Suze: you live in a rural place. The other thing is 295 00:18:43,040 --> 00:18:46,109 Suze: this and I say this with all the love in 296 00:18:46,119 --> 00:18:46,989 Suze: my heart. 297 00:18:47,849 --> 00:18:53,030 Suze: I've always noticed that when a mother isn't making enough 298 00:18:53,040 --> 00:18:57,310 Suze: money to support her kids, she not only has one job, 299 00:18:57,750 --> 00:19:02,000 Suze: she sometimes will have two jobs, three jobs, she will 300 00:19:02,010 --> 00:19:06,670 Suze: do anything to make sure that her family is ok. 301 00:19:07,180 --> 00:19:11,208 Suze: I understand that your husband is working. I don't know 302 00:19:11,219 --> 00:19:12,550 Suze: what he is doing. 303 00:19:13,150 --> 00:19:16,920 Suze: But if he's working a job where he comes home 304 00:19:16,930 --> 00:19:20,979 Suze: at five o'clock at night, then at seven o'clock at night, 305 00:19:20,989 --> 00:19:22,939 Suze: he should go be a waiter. He should go do 306 00:19:22,949 --> 00:19:27,849 Suze: anything he can do to make extra money for you 307 00:19:27,859 --> 00:19:30,729 Suze: to save money to get yourself out of debt because 308 00:19:30,739 --> 00:19:33,920 Suze: you have $4000 of credit card debt. 309 00:19:34,699 --> 00:19:38,920 Suze: So you're obviously living above your means and it's only 310 00:19:38,930 --> 00:19:43,160 Suze: going to get worse. So I have to tell you 311 00:19:43,170 --> 00:19:45,819 Suze: that's what I would do. And I just have to 312 00:19:45,829 --> 00:19:49,900 Suze: say this, Katie didn't read this part of the email 313 00:19:49,910 --> 00:19:52,280 Suze: because she just handed it to me. But you say 314 00:19:52,290 --> 00:19:55,869 Suze: we're desperately wanting to find a house to buy as 315 00:19:55,880 --> 00:19:58,899 Suze: we're in a single bedroom apartment, it's cozy, but the 316 00:19:58,910 --> 00:20:00,520 Suze: kids are getting bigger. 317 00:20:00,989 --> 00:20:05,099 Suze: You cannot afford to purchase a home when you have 318 00:20:05,109 --> 00:20:09,800 Suze: $4000 in credit card debt. Nothing in savings to pay 319 00:20:09,810 --> 00:20:12,380 Suze: down debt. You'd have to take money from the food budget. 320 00:20:12,390 --> 00:20:15,520 Suze: We have to get a realistic grasp on what is 321 00:20:15,530 --> 00:20:20,609 Suze: happening here and your husband needs to be more of 322 00:20:20,619 --> 00:20:23,780 Suze: a participant and you need to bring home money while 323 00:20:23,790 --> 00:20:26,119 Suze: staying home with the kids. 324 00:20:27,369 --> 00:20:29,140 Suze: KT don't give me any more of these. 325 00:20:29,959 --> 00:20:30,020 KT: Well, 326 00:20:31,109 --> 00:20:34,880 KT: this next one's pretty good. You ready? My husband and 327 00:20:34,890 --> 00:20:38,550 KT: I have just paid off all my credit card. Thank you. 328 00:20:39,699 --> 00:20:43,170 KT: I only want one and he only wants one. Now, 329 00:20:43,180 --> 00:20:45,379 KT: this is where Amy needs your help. She said I 330 00:20:45,390 --> 00:20:49,750 KT: heard closing a credit card can hurt our credit score. 331 00:20:49,900 --> 00:20:52,930 KT: Will it be better to transfer all balances to 332 00:20:53,015 --> 00:20:56,474 KT: one card for each or just close the ones with 333 00:20:56,484 --> 00:21:00,754 KT: higher interest rates and or annual fees. Please help. I 334 00:21:00,765 --> 00:21:04,214 KT: don't know what to do. Now I picked this because Suze, 335 00:21:04,224 --> 00:21:08,254 KT: this is like going back to credit card 101. So 336 00:21:08,265 --> 00:21:12,344 KT: let's tell Amy what you've been saying your entire career. 337 00:21:12,364 --> 00:21:12,864 Suze: So it is 338 00:21:12,875 --> 00:21:18,625 Suze: true. Closing a credit card will hurt your credit score. 339 00:21:19,010 --> 00:21:23,510 Suze: The reason it will hurt your credit score, especially if 340 00:21:23,520 --> 00:21:28,030 Suze: you still have balances on your credit card is it 341 00:21:28,040 --> 00:21:32,109 Suze: will decrease your credit limit ratio because each credit card 342 00:21:32,119 --> 00:21:37,040 Suze: has a credit limit. If you close the credit card down, 343 00:21:37,250 --> 00:21:42,229 Suze: you then close the credit limit down which increases 344 00:21:42,689 --> 00:21:46,199 Suze: your debt. What you currently owe to the total amount 345 00:21:46,209 --> 00:21:49,790 Suze: of credit limit available to you. And that accounts for 346 00:21:49,800 --> 00:21:54,829 Suze: 30 to 35% of your score. So what's important is 347 00:21:54,839 --> 00:21:59,089 Suze: number one, you shouldn't be paying a fee on any 348 00:21:59,099 --> 00:22:02,550 Suze: of these credit cards. There are credit cards out there 349 00:22:02,560 --> 00:22:06,709 Suze: that do not have an annual fee. That is number one. 350 00:22:06,859 --> 00:22:09,469 Suze: Number two, it would be great 351 00:22:09,810 --> 00:22:14,209 Suze: if you did transfer the balances to a card that 352 00:22:14,219 --> 00:22:16,949 Suze: had a 0% interest rate, 353 00:22:17,579 --> 00:22:20,819 Suze: but even gave you more of a credit limit. So 354 00:22:20,829 --> 00:22:24,380 Suze: you didn't hurt your debt to credit limit ratio score. 355 00:22:24,569 --> 00:22:27,969 Suze: So that's what I would be doing if you could. 356 00:22:28,140 --> 00:22:33,449 Suze: But again, before you close down credit cards, make sure 357 00:22:33,459 --> 00:22:36,709 Suze: that you have opened up new credit cards for no 358 00:22:36,719 --> 00:22:41,180 Suze: fees that have a higher credit limit on it so 359 00:22:41,189 --> 00:22:43,800 Suze: that when you close down the old ones, you haven't 360 00:22:44,260 --> 00:22:48,270 Suze: increased your debt to credit limit ratio. All right. 361 00:22:48,290 --> 00:22:50,680 KT: All right. This next one from James, you're gonna love 362 00:22:50,890 --> 00:22:53,599 KT: dear Suze. So great to hear you're back in the 363 00:22:53,609 --> 00:22:58,909 KT: ocean again with KT beside you. I love that James. 364 00:22:58,920 --> 00:22:59,379 Suze: She still 365 00:22:59,390 --> 00:23:01,250 Suze: hasn't used her ocean ticket. 366 00:23:02,170 --> 00:23:06,280 KT: All right, quick question. My banker recently told me long term interest rate 367 00:23:06,329 --> 00:23:09,400 KT: for CDs may actually go up. 368 00:23:09,660 --> 00:23:14,040 KT: Not sure if this relates to inverted yield curve slowly 369 00:23:14,050 --> 00:23:18,839 KT: changing again. Your thoughts, James from Seattle. 370 00:23:19,040 --> 00:23:23,300 Suze: James. Get a new banker. KT, that's the most ridiculous 371 00:23:23,310 --> 00:23:24,780 Suze: thing I've ever heard. All right. 372 00:23:24,790 --> 00:23:30,060 KT: Now, this one is from Leslie saving too much for college. Hi, 373 00:23:30,069 --> 00:23:34,239 KT: KT and Suze. I wanna help my Children two and 374 00:23:34,250 --> 00:23:37,400 KT: almost five to be successful 375 00:23:37,709 --> 00:23:40,050 KT: and pay for college for them 376 00:23:42,020 --> 00:23:42,359 KT: right 377 00:23:42,369 --> 00:23:45,329 KT: now. That's not gonna make them successful. Right now, we 378 00:23:45,339 --> 00:23:49,069 KT: have just over 38,000 between the two kids saved in 379 00:23:49,079 --> 00:23:52,890 KT: a 529. I know part of it can roll over 380 00:23:52,900 --> 00:23:55,640 KT: to a Roth IRA if they don't use it, but 381 00:23:55,650 --> 00:23:58,329 KT: not all of it. I'm worried that they might not 382 00:23:58,339 --> 00:24:02,199 KT: go to college or maybe get scholarships for this reason. 383 00:24:02,209 --> 00:24:06,239 KT: Would you recommend saving money in a market fund versus 384 00:24:06,430 --> 00:24:07,770 KT: a 529? 385 00:24:07,819 --> 00:24:08,489 Suze: Leslie, 386 00:24:09,209 --> 00:24:13,260 Suze: whether you put money in a 529 plan or not? 387 00:24:13,689 --> 00:24:17,459 Suze: What you have to really understand because it bothers me 388 00:24:17,849 --> 00:24:21,650 Suze: that you want to help your Children be successful and 389 00:24:21,660 --> 00:24:26,139 Suze: pay for college for them. The reason that I am 390 00:24:26,150 --> 00:24:28,489 Suze: as successful as I am today 391 00:24:28,849 --> 00:24:31,849 Suze: is that I knew my parents didn't have the money 392 00:24:31,859 --> 00:24:34,229 Suze: to send me to college and I had to pay 393 00:24:34,239 --> 00:24:39,500 Suze: for myself. I learned that if I wanted something, I 394 00:24:39,510 --> 00:24:43,239 Suze: had to provide it for myself, and I'm still providing 395 00:24:43,250 --> 00:24:47,290 Suze: everything for myself. And that allowed me also to take 396 00:24:47,300 --> 00:24:51,069 Suze: care of my mother to take care of things. And 397 00:24:51,079 --> 00:24:55,939 Suze: I loved that not my mother taking care of me. 398 00:24:56,609 --> 00:25:01,800 Suze: So to be successful isn't about money. To be successful 399 00:25:01,810 --> 00:25:04,929 Suze: is knowing you have what it takes to do anything 400 00:25:04,939 --> 00:25:09,270 Suze: and everything in this world you want to do with 401 00:25:09,280 --> 00:25:12,829 Suze: that said you are far better off if you are 402 00:25:12,839 --> 00:25:16,669 Suze: going to save for their college education to do it 403 00:25:16,680 --> 00:25:20,489 Suze: in a 529 plan because in many states, you didn't 404 00:25:20,500 --> 00:25:21,890 Suze: say what state you live in 405 00:25:22,119 --> 00:25:25,579 Suze: the money you put in is tax deductible. It grows 406 00:25:25,589 --> 00:25:30,540 Suze: tax free and trust me, chances are they're going to 407 00:25:30,550 --> 00:25:34,430 Suze: go to school. Why would they not? And if they 408 00:25:34,439 --> 00:25:38,050 Suze: get scholarships, you get to take the money out. And 409 00:25:38,060 --> 00:25:40,099 Suze: this thing about, you know, it could go over to 410 00:25:40,109 --> 00:25:42,879 Suze: a Roth. Oh, please. That's so ridiculous. I can't even 411 00:25:42,890 --> 00:25:43,599 Suze: tell you 412 00:25:44,069 --> 00:25:46,969 Suze: there are so many rules and regulations with that, that 413 00:25:46,979 --> 00:25:50,550 Suze: should not even be part of the equation. So do 414 00:25:50,560 --> 00:25:54,619 Suze: a 529 plan. And if, in fact you think that 415 00:25:54,630 --> 00:25:58,699 Suze: maybe they won't as time goes on, stop contributing to it. 416 00:25:58,910 --> 00:26:02,650 Suze: Just that simple. And maybe you pay for one year 417 00:26:02,660 --> 00:26:05,430 Suze: for them, or maybe two years and that's it. And 418 00:26:05,439 --> 00:26:07,500 Suze: then let them get loans for the rest 419 00:26:07,780 --> 00:26:11,939 Suze: and pay it off themselves. That's what I would tell you. 420 00:26:11,949 --> 00:26:13,530 Suze: Quizzie time, KT. 421 00:26:13,920 --> 00:26:14,160 KT: Ok. 422 00:26:14,780 --> 00:26:15,448 Suze: Are you ready? 423 00:26:15,459 --> 00:26:15,609 Suze: I'm ready. 424 00:26:16,619 --> 00:26:20,479 Suze: I love this one. I love this one so much. 425 00:26:20,969 --> 00:26:22,359 Suze: It's from Marcus. 426 00:26:22,949 --> 00:26:24,389 KT: What did Marcus need? 427 00:26:24,890 --> 00:26:29,800 Suze: He says hi, KT and Suze. I'm 17 years old. 428 00:26:30,430 --> 00:26:36,209 Suze: I made $1017 of gross pay this summer. Plus I 429 00:26:36,219 --> 00:26:40,379 Suze: did some job training stuff and got $600 in a 430 00:26:40,390 --> 00:26:47,060 Suze: visa gift card from that agency. Here's his question. Can 431 00:26:47,069 --> 00:26:51,130 Suze: I contribute $1617 432 00:26:51,219 --> 00:26:56,319 Suze: dollars into the custodial Roth? My parents set up for me. 433 00:26:56,420 --> 00:27:03,660 Suze: My net pay was $918.70. I wanna report the $600 434 00:27:03,670 --> 00:27:07,359 Suze: in gift cards on my taxes so I can invest it. 435 00:27:07,530 --> 00:27:11,979 Suze: My parents claim me as a dependent. Thank you. So, KT, 436 00:27:12,540 --> 00:27:17,589 Suze: here is your Roth kind of question for you, 437 00:27:18,310 --> 00:27:24,089 Suze: which is 17 year old made $1017 in gross pay 438 00:27:24,619 --> 00:27:30,770 Suze: after taxes. However, it was only $918 and he made 439 00:27:30,780 --> 00:27:36,448 Suze: $600 in a gift card on a visa. Can he 440 00:27:36,459 --> 00:27:37,489 Suze: contribute 441 00:27:38,390 --> 00:27:45,349 Suze: 1017 a year? Can he contribute 1617 this year or 442 00:27:45,359 --> 00:27:49,669 Suze: can he only put in $918? Because that was his 443 00:27:49,680 --> 00:27:50,589 Suze: net pay, 444 00:27:52,329 --> 00:27:57,109 KT: I think for the Roth he can put in $918. 445 00:27:58,479 --> 00:28:00,510 KT: I don't think you can put a gift, you have 446 00:28:00,520 --> 00:28:03,390 KT: to put earned income, but that's not 447 00:28:03,400 --> 00:28:04,060 KT: earned 448 00:28:04,160 --> 00:28:07,198 Suze: the gift card. Ding, ding, ding the gift card. He 449 00:28:07,209 --> 00:28:10,869 Suze: cannot convert and put into a Roth. But can he 450 00:28:11,400 --> 00:28:17,739 Suze: put in his gross pay of $1017 or only his 451 00:28:17,750 --> 00:28:21,869 Suze: net pay of $918? 452 00:28:22,689 --> 00:28:23,459 KT: I think the net, 453 00:28:23,739 --> 00:28:26,630 Suze: That's it? So he can't put in the earned income. 454 00:28:26,640 --> 00:28:27,020 Suze: Just the 455 00:28:27,030 --> 00:28:27,520 Suze: net? 456 00:28:27,530 --> 00:28:29,500 KT: I think you only put in the net, 457 00:28:31,209 --> 00:28:33,099 KT: (Suze makes the wrong answer noise) You can put, but if you... 458 00:28:35,319 --> 00:28:36,520 Suze: Don't, don't try to 459 00:28:37,199 --> 00:28:38,060 KT: put in the total 460 00:28:38,069 --> 00:28:38,479 KT: amount 461 00:28:38,890 --> 00:28:44,290 Suze: So he can put in 1017 of his gross pay because that 462 00:28:44,300 --> 00:28:49,560 Suze: is what he earned. That was his earnings. KT and 463 00:28:49,569 --> 00:28:53,239 Suze: that he can put in but not the $600 of 464 00:28:53,250 --> 00:28:58,079 Suze: his card. But here's what I want you to know Marcus. 465 00:28:58,770 --> 00:29:00,589 Suze: You are 17 years of age. 466 00:29:01,310 --> 00:29:06,209 Suze: If you just put in $1000 a year, that's it. 467 00:29:06,719 --> 00:29:13,810 Suze: $1000 a year every year for 53 years till you 468 00:29:13,819 --> 00:29:20,170 Suze: were 70 that's only $53,000 over those 53 years. And 469 00:29:20,180 --> 00:29:23,849 Suze: let's say in your Roth, you earned an average annual 470 00:29:23,859 --> 00:29:26,209 Suze: rate of return of 10%. 471 00:29:27,439 --> 00:29:31,349 Suze: Marcus, how much do you think you would have at 472 00:29:31,359 --> 00:29:36,589 Suze: the end of 53 years? I want you all to 473 00:29:36,599 --> 00:29:44,000 Suze: think about it. He put in right, $53,000. That's all 474 00:29:44,010 --> 00:29:44,660 Suze: he put in 475 00:29:45,569 --> 00:29:50,790 Suze: 53,000, over 53 years. And do all of, you know 476 00:29:51,160 --> 00:29:54,270 Suze: that at the end of 53 years, at 10% annual 477 00:29:54,280 --> 00:30:00,479 Suze: average rate of return, he would have $1.8 million at 478 00:30:00,489 --> 00:30:03,589 Suze: a 12% annual average rate of return. Marcus. You'd have 479 00:30:03,599 --> 00:30:08,390 Suze: almost $4 million in your Roth. 480 00:30:09,619 --> 00:30:14,089 Suze: I mean, do you not find that amazing? That's less 481 00:30:14,099 --> 00:30:19,250 Suze: than $100 a month. All right, KT brings us to 482 00:30:19,260 --> 00:30:22,400 Suze: the end of this podcast. Now, 483 00:30:22,959 --> 00:30:25,979 Suze: everybody knows there's only one thing that we want them 484 00:30:25,989 --> 00:30:28,199 Suze: to remember when it comes to their money and it's 485 00:30:28,209 --> 00:30:31,939 Suze: people first then money, then things. Say it in Spanish, KT: 486 00:30:32,579 --> 00:30:40,550 KT: Las personas primero, Luego, el dro e Luego, Las Cosas. 487 00:30:40,979 --> 00:30:44,989 Suze: Yeah KT and if you stay safe and healthy, you 488 00:30:45,000 --> 00:30:48,859 Suze: will be unstoppable. How do you say unstoppable? 489 00:30:48,869 --> 00:30:48,900 KT: I 490 00:30:48,910 --> 00:30:49,719 KT: think it's... 491 00:30:52,770 --> 00:30:58,189 KT: I don't know, I don't know, unstoppable. I don't know. Unstoppable. 492 00:30:58,199 --> 00:31:00,630 KT: I have to say unstoppable. 493 00:31:02,209 --> 00:31:04,310 Suze: See you next time. Bye bye.