WEBVTT - Made Whole BA Q&A 0:00:06.080 --> 0:00:09.840 It's time for the b a qa a to b 0:00:09.960 --> 0:00:13.480 a q a with Tiffany, to b a qa usually 0:00:13.480 --> 0:00:18.240 with Manday, but to be a qa just made today. 0:00:19.239 --> 0:00:23.000 So I'm here by myself because Maddy had mom things 0:00:23.040 --> 0:00:23.440 to get to. 0:00:24.480 --> 0:00:25.279 But that's what right I thought. 0:00:25.360 --> 0:00:27.760 She will be back in black and brown as ever, 0:00:28.320 --> 0:00:32.479 but it is Made Whole week. My new book Made 0:00:32.479 --> 0:00:36.839 Whole came out earlier this week, and to celebrate, I 0:00:36.880 --> 0:00:40.040 am going to be answering questions that you can also 0:00:40.080 --> 0:00:43.040 find the answers to in part in Maidehole, my new 0:00:43.040 --> 0:00:45.040 book a little bit about Maidhole. 0:00:45.680 --> 0:00:47.199 It is going to teach you in. 0:00:47.280 --> 0:00:52.120 Ten steps how to create financial wholeness for yourself. That is, 0:00:52.360 --> 0:00:55.680 financial holeness is the financial foundation for the rest of 0:00:55.720 --> 0:00:59.680 your life. If you achieve these ten steps, budgeting, savings, 0:00:59.800 --> 0:01:06.920 that credit, income, investing, insurance, your financial team, net worth, 0:01:06.959 --> 0:01:11.440 and estate planning. If you learn to manage and maintain 0:01:11.600 --> 0:01:16.919 those ten steps, things can happen externally to you financially, 0:01:16.959 --> 0:01:20.399 but you'll be okay, Meaning what session can happen, you'll 0:01:20.400 --> 0:01:24.000 be okay. Job loss will happen, you could be okay. 0:01:24.280 --> 0:01:27.560 Inflation happens, you could be okay. If you master those 0:01:27.760 --> 0:01:30.880 master and maintain those ten steps, and inside of Made Whole, 0:01:31.040 --> 0:01:33.119 I walk you through, step by step by step how 0:01:33.120 --> 0:01:35.560 to do so. It is the workbook version the companion 0:01:35.600 --> 0:01:38.400 book to my New York Times bestseller Get Good with Money. 0:01:38.800 --> 0:01:40.800 It is more concise. It allows you to do the 0:01:40.840 --> 0:01:42.720 work with each and every step right away, so you 0:01:42.760 --> 0:01:46.520 don't forget the work itself. There's in real life stories 0:01:46.560 --> 0:01:49.800 of people who completed these steps via its sister book 0:01:49.840 --> 0:01:51.760 and Get Good of Money, so you can be encouraged. 0:01:52.000 --> 0:01:54.520 And I also have quick steps where if you don't 0:01:54.560 --> 0:01:56.320 want to do the whole step because you feel a 0:01:56.360 --> 0:01:58.800 little overwhelmed, if you do this one thing, it will 0:01:58.800 --> 0:02:02.919 make a huge difference in your financial life as related 0:02:02.960 --> 0:02:05.320 to that step. So that's how Madehole is a little different. 0:02:05.320 --> 0:02:07.520 So let's get into some questions. But remember this then 0:02:07.720 --> 0:02:11.600 I'm answering questions. But I'm not your doctor, your lawyer, 0:02:12.040 --> 0:02:15.480 your mama, your father. No, I'm just a smart brown 0:02:15.520 --> 0:02:17.440 girl who have some opinions that you're going to take 0:02:17.600 --> 0:02:18.799 with the smallest grain of salt. 0:02:18.840 --> 0:02:20.440 Then you are going to lean into somebody that you 0:02:20.480 --> 0:02:23.520 pay for advice. Okay, okay, let's start all. 0:02:23.480 --> 0:02:25.080 Right, So we have some. I think I might do 0:02:25.240 --> 0:02:29.640 three in you know, because it's made whole, made whole week. 0:02:29.960 --> 0:02:30.280 Okay. 0:02:30.360 --> 0:02:34.280 Oh sidebar also too, made wholes available wherever books are sold. 0:02:34.560 --> 0:02:35.639 But also you can go to. 0:02:35.840 --> 0:02:40.799 Mad Whole Workbook dot com, Maid Whole Workbook dot com and. 0:02:40.760 --> 0:02:41.600 Get yourself a copy. 0:02:41.639 --> 0:02:48.320 Okay, all right, So question from Terry from ig Terry says, 0:02:48.480 --> 0:02:50.880 good day, ladies, or anyone on the team who might 0:02:50.919 --> 0:02:52.520 be not identifying as a lady. 0:02:52.600 --> 0:02:53.359 Okay, I love that. 0:02:53.639 --> 0:02:55.880 I have a very important question that I'm sure parents 0:02:55.919 --> 0:02:58.880 are listening. Would love to know. I'm expecting my first 0:02:59.000 --> 0:03:00.600 child in three weeks. Can congratulations? 0:03:00.720 --> 0:03:01.000 Terry? 0:03:02.200 --> 0:03:04.320 Oh well you wrote this a little while ago, so 0:03:04.360 --> 0:03:08.520 the baby's here already. Congratulations. And after looking at stocks 0:03:08.520 --> 0:03:10.560 like Amazon and others, I would love to know what 0:03:10.600 --> 0:03:14.040 are things I can do to get her invested into 0:03:14.160 --> 0:03:17.600 this economy. So she's having a girl, she will absolutely 0:03:17.639 --> 0:03:19.880 be a beneficiary on my assets. 0:03:20.000 --> 0:03:23.160 Awesome. But what are some things I know to open? 0:03:23.800 --> 0:03:24.160 She said? 0:03:24.160 --> 0:03:26.280 What are some other things she said, I know to 0:03:26.320 --> 0:03:30.680 open a wrath? And when she starts to have earned income, 0:03:31.080 --> 0:03:33.079 and maybe you could speak to that as well. I'm 0:03:33.120 --> 0:03:36.400 here for any advice please and thank you love the show. Okay, first, 0:03:36.440 --> 0:03:38.680 congratulations because I know baby girls here because you wrote 0:03:38.720 --> 0:03:42.920 this to us a little while ago. So some things 0:03:42.920 --> 0:03:46.480 that you want to consider is one, what does your 0:03:46.520 --> 0:03:51.680 life insurance policy look like, Terry like, have you updated 0:03:51.680 --> 0:03:54.080 your life insurance policy? Your partner do they have a 0:03:54.120 --> 0:03:57.720 life insurance policy? How is baby girl provided for in 0:03:57.760 --> 0:03:59.000 the life insurance policy? 0:03:59.080 --> 0:04:01.200 So that's one. Is it enough? Do you feel? 0:04:01.440 --> 0:04:03.600 Here's a rule of thumb directly from Made Whole. So 0:04:04.360 --> 0:04:06.240 in the I will tell you right now and made 0:04:06.280 --> 0:04:07.880 hold of the book, I told you. 0:04:07.880 --> 0:04:08.800 This is the main whole episode. 0:04:08.880 --> 0:04:16.040 Okay, the chapter eight it's called Get Good with Insurance, right, 0:04:16.320 --> 0:04:19.599 So in it I talk about how much life insurance 0:04:19.640 --> 0:04:22.800 you have should have basic kind of where you are 0:04:22.839 --> 0:04:25.200 in life. If you have children, you want to try 0:04:25.240 --> 0:04:29.320 to provide for a minimum ten years worth of you 0:04:29.480 --> 0:04:34.240 financially supporting them. So however, you if you the rule 0:04:34.279 --> 0:04:36.440 of thumb is, let's just say you make one hundred 0:04:36.480 --> 0:04:39.560 thousand dollars a year. Ten years times one hundred thousand 0:04:39.600 --> 0:04:41.720 dollars is a million dollars. So you want to try 0:04:41.720 --> 0:04:45.000 to get a policy, ideally a term policy for a 0:04:45.080 --> 0:04:47.760 million dollars or more so that way, if you're not 0:04:47.880 --> 0:04:50.919 here for ten years, the finance, the finances that you 0:04:50.960 --> 0:04:53.400 brought into your daughter's life will still be able to continue. 0:04:53.440 --> 0:04:55.240 Does that make sense, you know? 0:04:56.360 --> 0:04:59.000 So that's one, making sure that your life insurance policies 0:04:59.240 --> 0:05:04.680 are all the way together to make sure she's looked after. Two, 0:05:04.760 --> 0:05:06.360 what does your will look like if you have a 0:05:06.440 --> 0:05:09.200 child you needed a will like yesterday? You know, like 0:05:09.240 --> 0:05:11.919 if something happens to you, something happens to your partner, 0:05:12.400 --> 0:05:15.560 you know, where would that money go or who would 0:05:15.560 --> 0:05:16.360 be looking after her? 0:05:16.400 --> 0:05:17.040 In what way? 0:05:17.440 --> 0:05:19.479 What do you want to set aside for her? So 0:05:19.560 --> 0:05:23.120 consider those things. Also, you also want to consider that 0:05:25.680 --> 0:05:28.760 the issue with just a life insurance policy directly to 0:05:28.839 --> 0:05:31.560 your daughter, if something were to happen to you, the 0:05:31.600 --> 0:05:34.159 state where you live might hold that money until she 0:05:34.200 --> 0:05:36.960 turns eighteen. So one, what that means is that money 0:05:37.000 --> 0:05:39.920 won't be as helpful to her because she's still really young. 0:05:41.520 --> 0:05:43.880 And two it might she might be getting too much 0:05:43.960 --> 0:05:45.520 money when she turns eighteen. 0:05:45.600 --> 0:05:46.760 So consider. 0:05:47.839 --> 0:05:50.359 Potentially, I don't know, like what your financial situation looks like, 0:05:50.400 --> 0:05:53.359 a trust as well, because then you can make the 0:05:53.520 --> 0:05:56.840 trust the beneficiary to that life insurance policy and then 0:05:56.839 --> 0:06:00.680 it can be pieced out to her as you as 0:06:00.720 --> 0:06:03.880 you consider, as as you deem necessary. So some to 0:06:03.920 --> 0:06:06.800 look after her while she's still young, maybe some for 0:06:07.080 --> 0:06:08.920 like you know, when she is ready to go to 0:06:08.960 --> 0:06:10.719 college or otherwise, and some beyond. 0:06:10.880 --> 0:06:12.400 So consider that as well, Terry. 0:06:12.960 --> 0:06:15.520 And another thing, I know you talked about considering maybe 0:06:15.560 --> 0:06:18.880 getting a raw iray for her and so IRA as 0:06:18.960 --> 0:06:23.480 an individual retirement account. And the only way to have 0:06:23.520 --> 0:06:25.880 a retirement account is that you have to be earning money. 0:06:26.080 --> 0:06:28.039 The great thing is is that maybies. 0:06:27.720 --> 0:06:30.680 Can earn money. So let's just say, you know, I 0:06:30.720 --> 0:06:33.479 don't know, like your child was a child model, like 0:06:33.560 --> 0:06:35.479 she could have a raw IRA because she'd be earning 0:06:35.480 --> 0:06:37.279 income as like a baby model. 0:06:37.320 --> 0:06:37.520 You know. 0:06:38.120 --> 0:06:40.560 So my step daughter works for me from time to time. 0:06:40.839 --> 0:06:42.840 I opened up an IRA for her, so I pay 0:06:42.920 --> 0:06:45.240 her and I pay her enough to make sure she 0:06:45.279 --> 0:06:48.359 can fully fund her wrath IRA every year, you know, 0:06:48.440 --> 0:06:50.800 under my guidance and the guidance of my financial advisor 0:06:50.839 --> 0:06:55.080 on Julie. You know, so consider like you know, you 0:06:55.080 --> 0:06:56.760 don't have to wait till your daughter's grown for her 0:06:56.800 --> 0:06:59.479 to have that wrath IRA. And so earned income is 0:06:59.560 --> 0:07:01.440 just that they are working. You obviously have to prove 0:07:01.760 --> 0:07:03.440 that it makes sense. I have my own business, so 0:07:03.440 --> 0:07:07.200 it's a little easier, but that's one of the ways. 0:07:07.279 --> 0:07:10.920 And lastly, consider opening. I have this for both Alyssa, 0:07:11.000 --> 0:07:13.280 my bonus daughter, but also my niece and my nephew. 0:07:13.720 --> 0:07:18.400 I have something called a not lastly, but I have 0:07:18.480 --> 0:07:21.440 something that I prefer right now over a five twenty 0:07:21.520 --> 0:07:24.560 nine plan, although five twenty nine plans can be very helpful. 0:07:24.760 --> 0:07:28.120 So just for clarity, a five to twenty nine plan is, 0:07:28.240 --> 0:07:32.040 let me get the right wording for you. Five twenty 0:07:32.160 --> 0:07:35.080 nine plan. Okay, So a five twenty nine plan is 0:07:35.080 --> 0:07:39.360 a college savings plan and it's states sponsored. It enables 0:07:39.360 --> 0:07:42.920 you to save money for beneficiary and pay for educational expenses. 0:07:42.960 --> 0:07:45.040 So the good thing is not just college expenses. You 0:07:45.040 --> 0:07:48.320 can set aside money and pay for educational expenses too. 0:07:48.440 --> 0:07:51.720 You can withdraw the funds tax free to cover nearly 0:07:51.800 --> 0:07:52.680 any type. 0:07:52.400 --> 0:07:53.400 Of college expense. 0:07:53.600 --> 0:07:56.040 Right. So what that means is is that you put 0:07:56.200 --> 0:07:58.560 say money right now into a five twenty nine plan. 0:07:58.720 --> 0:08:01.440 Not just you, but other people you know can contribute 0:08:01.440 --> 0:08:03.960 to this five twenty nine plan. Grandma and grandpa, aunties uncles, 0:08:04.240 --> 0:08:08.000 and then when it's invested and when it grows, ideally 0:08:08.320 --> 0:08:10.320 you could pull the money you put in and the 0:08:10.400 --> 0:08:14.920 investment that it's grown to out for expenses. A lot 0:08:14.920 --> 0:08:18.360 of laws have changed where it's not just for college 0:08:18.360 --> 0:08:22.120 expenses that they're even letting you use five twenty nine 0:08:22.160 --> 0:08:27.280 plan money for other educational expenses, you know. So some 0:08:27.320 --> 0:08:31.240 of the advantages are you have some federal income tax 0:08:31.280 --> 0:08:37.000 benefits and some state benefits. It's low maintenance, high contribution limits, 0:08:37.000 --> 0:08:40.840 semi flexible. And then some of the cons are the 0:08:40.880 --> 0:08:45.679 funds must be used for education, there are limitations on 0:08:45.760 --> 0:08:49.880 tax benefits. There's no self directed investment, so there's not 0:08:49.920 --> 0:08:52.720 investments that you can kind of choose yourself. There are fees, 0:08:54.280 --> 0:08:58.920 and there are some ownership rules. Although there are favorable 0:08:58.920 --> 0:09:00.839 financial aid treatments, meaning like if you have a lot 0:09:00.840 --> 0:09:02.560 of money in your five twenty nine plan, it doesn't 0:09:02.600 --> 0:09:07.199 mean that your daughter won't be eligible for financial aid treatment. Okay, 0:09:08.280 --> 0:09:10.600 But the good thing, the tax benefit that I really 0:09:10.600 --> 0:09:12.520 do like about the five twenty nine plan is that 0:09:12.720 --> 0:09:16.320 you can use it for college tuition fees, books, supplies, 0:09:16.600 --> 0:09:19.400 some room and board costs, and up to ten thousand 0:09:19.440 --> 0:09:23.960 dollars in K through twelve tuition per year, and you know, 0:09:24.080 --> 0:09:27.280 and up to ten thousand dollars in student loan repayment 0:09:28.440 --> 0:09:30.079 per beneficiary and per sibling. 0:09:30.160 --> 0:09:31.280 So that's pretty good. 0:09:32.320 --> 0:09:35.440 But the reason why I didn't open a five twenty 0:09:35.520 --> 0:09:39.120 nine plan for my nieces and nephews and my stepdaughter 0:09:39.600 --> 0:09:41.520 is because I felt like it was a little restrictive 0:09:41.520 --> 0:09:44.920 for me. So instead I have a custodial account for them. 0:09:45.120 --> 0:09:47.560 And so basically this is just an investment account that 0:09:47.720 --> 0:09:50.600 I am the custodian of and I will sign over 0:09:50.640 --> 0:09:53.560 to them or they are the beneficiaries of it when 0:09:54.800 --> 0:09:57.000 if I'm not here, and so basically it's just a 0:09:57.000 --> 0:09:59.800 brokerage account where I'm investing. I put money every single 0:09:59.880 --> 0:10:02.400 year year across the board to all four of them, 0:10:02.920 --> 0:10:05.800 and as the money grows, you know, it's for them, 0:10:05.880 --> 0:10:09.800 and then I can decide when they'll get that money 0:10:09.800 --> 0:10:12.400 while I'm here and when I am no longer here, 0:10:12.640 --> 0:10:18.040 I haven't because though the beneficiaries of that custodial account 0:10:18.120 --> 0:10:21.680 actually goes to the trust, and the trust says the 0:10:21.760 --> 0:10:24.520 money will be divvied out at age eighteen if they're 0:10:24.520 --> 0:10:27.240 going to college twenty one if they're not, and then 0:10:27.320 --> 0:10:30.800 age twenty five and then finally aged thirty. So that's 0:10:30.840 --> 0:10:34.000 how the custodia account money pays out to my nieces 0:10:34.000 --> 0:10:36.600 and nephew and Alyssa if I'm not here. If I 0:10:36.640 --> 0:10:38.800 am here, then I will sign it over to them 0:10:38.800 --> 0:10:41.080 as as I find they're responsible enough to use that 0:10:41.080 --> 0:10:44.360 money in a responsible way. So Custodial Account in five 0:10:44.400 --> 0:10:47.120 twenty nine plans the last piece of advice. So hopefully 0:10:47.160 --> 0:10:49.560 that was helpful to you. Tarry another parents, I'm gonna 0:10:49.600 --> 0:10:50.880 take you know what. I'm not going to take a 0:10:50.920 --> 0:10:53.000 quick break just yet because I want to answer this quick, quick, 0:10:53.080 --> 0:11:00.199 funny question from Ohio Raised and Cali Living. Going to 0:11:00.240 --> 0:11:03.600 take a quick break, okay, Ohio Raise in Kelli Living, 0:11:03.679 --> 0:11:07.280 says Tiffany Mandy. My company offers a five hundred dollars 0:11:07.320 --> 0:11:11.360 reimbursement on things I spend for my wellness. I'm talking 0:11:11.440 --> 0:11:14.360 from facials to student loan payments. Your girl was in 0:11:14.520 --> 0:11:17.480 it was all here for it until I read the 0:11:17.600 --> 0:11:21.040 reimbursement is taxable income. It feels like a payday loan. 0:11:21.120 --> 0:11:24.640 Am I trip in financial godmothers love that all ears 0:11:24.720 --> 0:11:26.120 Ohio Rais and Kelli living. 0:11:26.440 --> 0:11:28.640 So this is funny. Here's the thing. There's no such 0:11:28.679 --> 0:11:29.400 thing as a free lunch. 0:11:29.440 --> 0:11:32.360 I know it sounds like, wait, what, There's no such 0:11:32.360 --> 0:11:35.160 thing as a free lunch because if they reimburse that 0:11:35.240 --> 0:11:38.360 money to you, what the government says, federal and. 0:11:38.320 --> 0:11:40.599 State is that you made money. It says that you 0:11:40.679 --> 0:11:41.240 made money. 0:11:41.320 --> 0:11:45.160 So a reimbursement is still considered money being made. 0:11:45.440 --> 0:11:48.120 And one thing that this United States. 0:11:47.760 --> 0:11:50.680 Of America does not want to do is see you 0:11:50.760 --> 0:11:52.680 make money and they don't make no money off the 0:11:52.679 --> 0:11:53.480 money you made. 0:11:53.880 --> 0:11:56.240 So it's not that your company is doing something wrong. 0:11:57.120 --> 0:11:57.400 Is that. 0:11:57.640 --> 0:12:01.000 Yes, they're offering you this five hundred dollars reimbursursement, and 0:12:01.080 --> 0:12:04.440 if you use that reimbursement, it's made money. So for example, 0:12:04.840 --> 0:12:08.720 it's similar to if I get something forgiven. So this 0:12:08.840 --> 0:12:10.520 is what they were fighting about in the federal government 0:12:10.559 --> 0:12:14.959 about Biden forgiving the student loans. So some people wanted 0:12:14.960 --> 0:12:18.319 that student loan forgiveness to be taxed because they're like, 0:12:18.360 --> 0:12:22.600 you made money, like in outside of student loans, if 0:12:22.640 --> 0:12:25.920 you get anything forgiven over six hundred dollars, Like there 0:12:25.920 --> 0:12:29.000 are people who had their they lost their home to 0:12:29.040 --> 0:12:33.240 foreclosure and they still owed on it, and they got 0:12:33.240 --> 0:12:36.240 that forgiven, especially during the recession, right, and they had 0:12:36.280 --> 0:12:39.440 to pay taxes on the money that was forgiven, you know, 0:12:39.480 --> 0:12:42.080 because they lost it to foreclosure and as a result, 0:12:42.520 --> 0:12:44.800 you know, it's like, wait, I lost my house, I 0:12:44.840 --> 0:12:47.600 gave it up, I still owed one hundred thousand dollars 0:12:47.640 --> 0:12:48.920 on it, So you mean to same, I got to 0:12:48.920 --> 0:12:50.840 pay tax on one hundred thousand dollars And the government 0:12:50.880 --> 0:12:54.120 is like yes, because that forgiven money is still earned money. 0:12:54.440 --> 0:12:57.679 So reimburse money is considered earned money either way. So 0:12:57.760 --> 0:13:01.000 it's not your job that's doing that, it's the it's 0:13:01.120 --> 0:13:02.319 USA who. 0:13:02.200 --> 0:13:02.679 Is doing that. 0:13:02.800 --> 0:13:05.280 So hope that makes sense, Ohio, Rais and Kelli living 0:13:05.559 --> 0:13:07.640 that your job is trying to do something nice by 0:13:07.960 --> 0:13:11.040 giving you that money. But here's the thing, like paying 0:13:11.120 --> 0:13:14.720 taxes on it doesn't mean that you're gonna pay the 0:13:14.800 --> 0:13:17.000 full five hundred dollars in tax. So let's just say 0:13:17.000 --> 0:13:19.719 your tax rate is twenty percent, right, So if your 0:13:19.720 --> 0:13:21.840 tax rate is I don't even know, like them, that 0:13:21.920 --> 0:13:22.640 might be kind of low. 0:13:22.960 --> 0:13:25.040 Say your tax rate is thirty percent. I'm just making 0:13:25.040 --> 0:13:26.000 it up, right, So. 0:13:26.040 --> 0:13:30.080 Five hundred dollars point times point zero three taxes. That's 0:13:30.120 --> 0:13:33.120 fifteen dollars of taxes paid on five hundred dollars, So 0:13:33.200 --> 0:13:35.079 you're still are coming up. You just would have to 0:13:35.080 --> 0:13:36.800 be paying the fifteen dollars on the five hundred. 0:13:36.840 --> 0:13:38.680 Does that make sense? Hopefully that's helpful. 0:13:38.840 --> 0:13:40.840 All right, We're gonna take a quick break and we'll 0:13:40.880 --> 0:13:48.480 be back back and brown again. Okay, Hey, all my bad. 0:13:48.520 --> 0:13:50.520 So you know your girl is in her soft life error. 0:13:50.520 --> 0:13:52.560 So you might have heard some chit chat in the background. 0:13:52.600 --> 0:13:55.120 That is my cleaning lady, Ingrid and her sister. They're 0:13:55.160 --> 0:13:57.360 cleaning up by beautiful home to get it ready for 0:13:57.480 --> 0:14:00.920 Thanksgiving because I'm taping on Monday. You heard in the background. 0:14:01.000 --> 0:14:03.920 That's because your girls living good. Okay, so judge a mama. 0:14:04.120 --> 0:14:06.160 I'm just joking, but no, it really was InCred I 0:14:06.160 --> 0:14:08.280 will have to be like senior out get to please 0:14:08.320 --> 0:14:11.920 perform vod cilensia before please. But they're really dope though, 0:14:12.800 --> 0:14:15.680 So I just wanted to apologize and advance. All right, 0:14:15.800 --> 0:14:18.000 and let's get back to our final question. 0:14:19.280 --> 0:14:20.080 But see, here's the thing. 0:14:20.680 --> 0:14:22.880 You know, like, I'm giving you all three questions answer, 0:14:23.040 --> 0:14:24.720 So I mean, can you really be Manna? 0:14:24.880 --> 0:14:30.200 You can't this question is for Monique. Hey, Monique says, Hey, 0:14:30.280 --> 0:14:32.000 Tiffany and Mandy. My name is Monique and. 0:14:32.040 --> 0:14:36.120 I absolutely love your podcast. Thanks Monique. I listen faithfully 0:14:36.120 --> 0:14:38.600 every week because I'm trying to get these coins all 0:14:38.600 --> 0:14:42.280 the way together. I have several retail credit cards that 0:14:42.360 --> 0:14:44.760 I am paying off right now because I had a 0:14:44.880 --> 0:14:46.080 terrible shopping addiction. 0:14:46.240 --> 0:14:47.920 Okay, thank you for being candid. 0:14:48.360 --> 0:14:50.160 I know that credit cards can be closed if you 0:14:50.200 --> 0:14:53.560 pay them off and never use them again, which I'm 0:14:53.560 --> 0:14:55.000 assuming can affect my credit score. 0:14:55.080 --> 0:14:55.720 This is true. 0:14:55.840 --> 0:14:58.680 What is your advice regarding maintaining my credit score once 0:14:58.840 --> 0:15:02.040 I have paid off these retails cards in the future, 0:15:02.480 --> 0:15:04.320 if I do want to open cards, I only want 0:15:04.320 --> 0:15:06.440 to use cards that I can pay off monthly and 0:15:06.480 --> 0:15:10.440 then offer traveling points and rewards to think y'all. Okay, Mony, 0:15:10.560 --> 0:15:12.240 this is great because this is I can give you 0:15:12.280 --> 0:15:14.800 an answer directly out of my new book, Maidhole, the 0:15:14.840 --> 0:15:22.760 credit chapter, which is chapter chapter five, page ninety one 0:15:22.760 --> 0:15:26.440 if you have the hardcore book. Okay, so yes, if 0:15:26.480 --> 0:15:28.720 you close. So you said retail let me make sure 0:15:28.960 --> 0:15:32.680 you said retail cards. Now here's the thing. I am 0:15:32.720 --> 0:15:35.920 not a fan of retail cards. I'm not I am. 0:15:36.000 --> 0:15:36.560 I am not. 0:15:37.160 --> 0:15:38.000 Anti credit cards. 0:15:38.040 --> 0:15:40.600 I believe credit cards can be useful tools, but the 0:15:40.720 --> 0:15:44.000 problem with a general like a general credit card, to me, 0:15:44.280 --> 0:15:48.120 is better than a retail card because with a general card, you. 0:15:48.040 --> 0:15:52.120 Can use it anywhere, and you can you can. 0:15:52.200 --> 0:15:54.560 It's easier to be a little more responsible because if 0:15:54.560 --> 0:15:56.120 I have a retail card, say, for example, I have 0:15:56.160 --> 0:15:59.720 a Target credit card, like because Target only wants you 0:15:59.760 --> 0:16:02.840 to use at Target, so I can't just use it anywhere. 0:16:02.840 --> 0:16:07.360 Where with a retail card. With a general card. 0:16:07.000 --> 0:16:08.840 I can use it anywhere, and I can even use 0:16:08.880 --> 0:16:11.120 it in a way Like I tell you in the book, 0:16:11.160 --> 0:16:14.040 I teach you how to raise your credit score fairly 0:16:14.120 --> 0:16:17.320 quickly by doing this method of paying off a small 0:16:17.440 --> 0:16:20.400 balance of your card every single month, I can say, Okay, 0:16:20.480 --> 0:16:24.880 I'm going to put my Planet Fitness ten dollar membership 0:16:24.880 --> 0:16:27.160 on this card, or I'm going to put my Netflix 0:16:27.160 --> 0:16:29.320 membership on this card and paid off every month in 0:16:29.320 --> 0:16:31.720 full to see my credit score grow. If I have 0:16:31.800 --> 0:16:34.520 a Target card, then I have to buy something from 0:16:34.520 --> 0:16:36.400 Target every single month in order to do so. So 0:16:36.440 --> 0:16:39.960 that's an additional expense when I'm already I already have Netflix, 0:16:40.000 --> 0:16:40.800 I already. 0:16:40.440 --> 0:16:42.080 Have the gym membership. Does that make sense? 0:16:42.600 --> 0:16:44.920 So I would pay off these retail cards and quite honestly, 0:16:44.960 --> 0:16:47.240 I will close them. Now you have to know this. 0:16:47.320 --> 0:16:52.920 Then thirty percent of your score is really your balances. 0:16:53.200 --> 0:16:56.480 So when you close your cards, it is going to 0:16:57.080 --> 0:17:03.080 likely lower your score temporarily and pretty significantly because you 0:17:03.120 --> 0:17:08.720 won't have any limit to out to outweigh the balances 0:17:08.960 --> 0:17:10.600 on your card. If that makes sense. So I'll give 0:17:10.600 --> 0:17:13.080 you an example. Thirty percent of your score. I'm looking 0:17:13.119 --> 0:17:15.520 like directly from for those of you who might have 0:17:15.560 --> 0:17:17.680 the book in hand, let's look at it. 0:17:17.680 --> 0:17:18.760 I'm looking at. 0:17:19.119 --> 0:17:22.240 If you have the physical book, which is my favorite 0:17:22.280 --> 0:17:24.760 when it comes to a workbook. I'm looking where am 0:17:24.760 --> 0:17:25.920 I looking at the investment chapter? Girl? 0:17:25.920 --> 0:17:27.560 Give yourself offway together tipically. 0:17:27.440 --> 0:17:30.919 Earlier sis earlier, So I like, what did I tell 0:17:30.960 --> 0:17:33.360 you what page the credit chapter is on? And made 0:17:33.520 --> 0:17:43.480 whole page ninety one? Oh kind, I'm here now, okay, okay, okay, okay, 0:17:43.800 --> 0:17:48.480 reduce your amounts old? Okay, we're looking at page ninety nine. Okay, 0:17:48.640 --> 0:17:53.840 And so really I said the word amounts old or 0:17:53.880 --> 0:17:54.639 your balances. 0:17:54.840 --> 0:17:56.720 Another word for that is utilization. 0:17:57.560 --> 0:18:00.199 So thirty percent of your score is how much if 0:18:00.200 --> 0:18:03.639 your cards are you utilizing. You don't want to utilize 0:18:03.680 --> 0:18:08.600 too much of your cards. The magic number is nothing 0:18:08.640 --> 0:18:11.600 above thirty percent, but really you want to be utilizing 0:18:11.600 --> 0:18:15.160 even way less than that, like even under like fifteen 0:18:15.160 --> 0:18:17.359 to ten percent. What that means is, if you have 0:18:17.400 --> 0:18:19.879 a credit card with the balance of one hundred dollars, 0:18:20.320 --> 0:18:22.440 you want to keep the with the limit I'm sorry, 0:18:22.480 --> 0:18:25.160 of one hundred dollars, you want to keep the balance 0:18:25.440 --> 0:18:30.920 under fifteen dollars. Thirty dollars is the max fifteen ten 0:18:31.000 --> 0:18:34.760 dollars ideal paying it off even better? You know that 0:18:34.880 --> 0:18:36.439 is how you're going to raise your credit score. But 0:18:36.480 --> 0:18:39.439 the problem is with retail cards, you would have to 0:18:39.520 --> 0:18:44.000 buy something just to navigate the keeping your balance is 0:18:44.040 --> 0:18:46.240 low or paid off, and I don't want. 0:18:46.080 --> 0:18:47.280 That for you. So I want you to pay off 0:18:47.280 --> 0:18:48.159 these retail cards. 0:18:48.880 --> 0:18:51.760 Then when you feel like you're more responsible and you 0:18:51.760 --> 0:18:56.159 can automate the payments, then you can look for a 0:18:56.240 --> 0:19:01.000 regular credit card that offers travel warpoints, like for business 0:19:01.000 --> 0:19:02.920 I use AMEX. I also have a personal like gold 0:19:02.920 --> 0:19:05.040 car for AMEX, but I have a silver, not so 0:19:05.160 --> 0:19:07.160 or platinum car for business AX because I found that's 0:19:07.160 --> 0:19:11.880 my favorite card for business, but also too my personal 0:19:11.960 --> 0:19:14.600 card because I like to travel. I have where's my 0:19:14.720 --> 0:19:17.120 Let me see if I find it. Mandy always last 0:19:17.160 --> 0:19:18.800 at me because I always call it the wrong thing. 0:19:19.080 --> 0:19:20.520 So I have my wallet here. Let me call it 0:19:20.560 --> 0:19:21.159 the right thing. 0:19:21.119 --> 0:19:25.760 For once in my life. I have a what is this? 0:19:25.800 --> 0:19:25.960 Oh? 0:19:26.080 --> 0:19:26.480 Okay? 0:19:26.760 --> 0:19:30.840 So Visa has a Sapphires Reserve Card. I like this 0:19:30.920 --> 0:19:33.639 card because they give really great points for travel. I 0:19:33.720 --> 0:19:37.880 literally just use my Amex points to book my mother 0:19:38.000 --> 0:19:40.920 a flight to Nigeria. She wants to go to Nigeria 0:19:40.960 --> 0:19:42.960 for Christmas with my aunt, and so I was able 0:19:42.960 --> 0:19:44.680 to use points, like literally she didn't have to. Well, 0:19:44.680 --> 0:19:46.359 she paid a little bit out of pocket, but the 0:19:46.720 --> 0:19:49.919