WEBVTT - How to Improve Your Credit Score 0:00:16.280 --> 0:00:20.000 Hey, hey, ba fan, what's up? It's your girl Mandy 0:00:20.079 --> 0:00:24.759 Money and it's time for the b a qa a 0:00:25.160 --> 0:00:28.040 the b a qa What you say the b a 0:00:28.440 --> 0:00:34.320 q and Manda the ba qa the b a qa A. 0:00:35.400 --> 0:00:36.160 What's up? 0:00:36.200 --> 0:00:38.560 Sis? How are you doing? I just want to talk 0:00:38.560 --> 0:00:41.440 to you right now. It's Friday, It's the end of 0:00:41.440 --> 0:00:45.040 another long week. I hope that you have something nice 0:00:45.120 --> 0:00:47.320 planned for this weekend. I hope you know what I 0:00:47.360 --> 0:00:48.760 hope for you. I hope that you don't have any 0:00:48.840 --> 0:00:50.479 like plans where you have to leave the house. I 0:00:50.479 --> 0:00:54.760 hope that you have time and space for curling up 0:00:55.040 --> 0:00:58.840 on the couch or in your bed. Although I prefer 0:00:59.000 --> 0:01:01.560 couch naps to naps, I just don't know. I just 0:01:01.640 --> 0:01:04.160 nat better on the couch. Don't ask me why, with 0:01:04.280 --> 0:01:08.679 a nice cozy blanket that's just for you, that doesn't 0:01:08.680 --> 0:01:12.520 have like dog fur and little honey nut cheerios stuck 0:01:12.560 --> 0:01:15.280 in it like all of my nice ones do. And 0:01:15.319 --> 0:01:17.800 I just hope for you that maybe it's a little 0:01:17.800 --> 0:01:20.240 bit like cloudy outside, you can like crill up with 0:01:20.280 --> 0:01:24.240 a nice book or podcast or nothing at all, and 0:01:24.640 --> 0:01:27.480 just a cup of tea or whatever you want and 0:01:27.760 --> 0:01:31.600 just do absolutely nothing. That's what I hope you have 0:01:32.200 --> 0:01:36.640 coming for you this weekend is actually building in some rest. 0:01:36.880 --> 0:01:39.319 And I think I read recently something about or I 0:01:39.360 --> 0:01:44.400 heard something about how hibernation is a actual It's like 0:01:44.440 --> 0:01:50.160 a natural thing in nature. Animals do it. And you know, oh, 0:01:50.200 --> 0:01:52.120 I know where it was. I follow this girl on 0:01:52.160 --> 0:01:57.200 TikTok who lives in what is it's Fallsburg Fallsborg, which 0:01:57.240 --> 0:02:00.440 is basically the North Pole, and they have these polar 0:02:00.560 --> 0:02:03.680 nights where it is just dark for days, weeks, months 0:02:03.720 --> 0:02:07.800 on end in the winter, and I'm thinking, how depressing 0:02:07.840 --> 0:02:10.119 would it be to live in that type of environment. 0:02:10.639 --> 0:02:12.920 But then I also think, like you just kind of 0:02:12.960 --> 0:02:15.600 see people set up their lives for this time of 0:02:15.680 --> 0:02:18.840 rest and unplugging. So I know that if you live 0:02:18.880 --> 0:02:20.520 in the world that I like the world that I 0:02:20.600 --> 0:02:23.920 live in, there's no months and weeks and there's no 0:02:24.080 --> 0:02:28.040 time for that much rest and recoperation, but any like 0:02:28.120 --> 0:02:30.639 small pockets of time where we can just pour back 0:02:30.639 --> 0:02:36.799 into ourselves. I hope that for you sis. Okay, all right, 0:02:36.880 --> 0:02:39.440 So getting into our questions this week, we have some 0:02:39.840 --> 0:02:44.560 doozse Just as a reminder, police send us your questions. 0:02:45.000 --> 0:02:47.360 You can hit us up at Brand Ambition Podcast on 0:02:47.520 --> 0:02:50.720 ig You can email me Brand Ambition Podcast at gmail 0:02:50.760 --> 0:02:54.600 dot com. You can remain anonymous. We are in the 0:02:54.639 --> 0:02:57.799 middle of literally I'm about to hit delete on this 0:02:58.240 --> 0:03:00.880 tab on my spreadsheet fold of questions from twenty twenty 0:03:00.880 --> 0:03:02.600 four because if they haven't been answered by now, they 0:03:02.600 --> 0:03:06.520 ain't gonna be answered. So hundreds of questions about to 0:03:06.520 --> 0:03:09.280 get deleted. So I'm starting a fresh chop for twenty 0:03:09.320 --> 0:03:12.760 twenty five. So whatever questions you have, be they related 0:03:12.800 --> 0:03:18.360 to money, to career, to finance, to relationships, to arguing 0:03:18.400 --> 0:03:21.880 with your neighbor. I don't know, whatever you like, it 0:03:22.000 --> 0:03:24.560 was the was the you know, I don't know, why 0:03:24.639 --> 0:03:27.399 is this sky blue? Whatever the questions are, send them 0:03:27.520 --> 0:03:31.720 our way. We are happy to answer them for you. Yeah, 0:03:31.800 --> 0:03:33.800 you can say anonymous. It's always fun if you come 0:03:33.880 --> 0:03:38.680 up with your own pseudonym little alias. Why not and 0:03:38.880 --> 0:03:40.920 go ahead and send your questions in and we can 0:03:40.960 --> 0:03:43.920 start the new year with a fresh batch. But for now, 0:03:44.520 --> 0:03:48.120 let's dive in to we go with triple X first. 0:03:48.400 --> 0:03:51.760 That's their anonymous name. Listen, I don't judge. You want 0:03:51.760 --> 0:03:54.920 to be called triple X. That's fine by me. Okay, Well, 0:03:55.000 --> 0:03:58.080 let me get to this question first. So Triple X 0:03:58.200 --> 0:04:02.560 is dealing with some big financial challenges, and I'm going 0:04:02.640 --> 0:04:04.760 to keep answering these types of questions because I just 0:04:04.880 --> 0:04:07.360 feel like that is what so many of us are 0:04:07.400 --> 0:04:11.800 going through right now. Is like overwhelm but overwhelmed by 0:04:12.800 --> 0:04:15.680 financial obligations. There doesn't seem to be enough money coming 0:04:15.720 --> 0:04:18.960 in to actually meet all of these bills, and all 0:04:18.960 --> 0:04:21.760 these people put their hands out wanting money from us, 0:04:21.800 --> 0:04:24.760 and I just get that really deeply. So let me 0:04:24.800 --> 0:04:28.560 start with this anonymous listener Triplex and dive on in. 0:04:28.880 --> 0:04:31.000 All right, She says, I am a black woman from 0:04:31.200 --> 0:04:33.599 NYC who just turned thirty a few weeks ago, and 0:04:33.680 --> 0:04:37.159 my financial life is a bit in shambles, but I'm 0:04:37.200 --> 0:04:39.880 trying to take back control. I grew up in a 0:04:39.920 --> 0:04:43.080 Haitian household and was taught your name and credit are 0:04:43.120 --> 0:04:46.640 extremely important in this country. In other words, pay the 0:04:46.680 --> 0:04:50.600 man and stay out of prison. My entire twenties after college, 0:04:50.640 --> 0:04:53.120 I worked hard to do everything right until I got 0:04:53.160 --> 0:04:55.679 laid off in June twenty twenty three, and I couldn't 0:04:55.680 --> 0:04:58.719 find a new position or pay my bills consistently for 0:04:58.839 --> 0:05:02.520 an entire year. My credit score that I worked very 0:05:02.520 --> 0:05:05.039 hard for dropped one hundred and fifty points and sent 0:05:05.120 --> 0:05:08.320 me into depression. Fast forward to the end of twenty 0:05:08.360 --> 0:05:10.920 twenty four, and I am still crippled by debt that 0:05:10.960 --> 0:05:14.120 I had before, and even more now from using credit 0:05:14.120 --> 0:05:17.239 cards to pay for last minute emergencies because my savings 0:05:17.240 --> 0:05:20.479 are blown. I'm working at sales position now, so things 0:05:20.480 --> 0:05:23.919 are slightly better, but not really. I'm thinking about taking 0:05:23.920 --> 0:05:26.120 out a personal loan to pay off the debt, but 0:05:26.240 --> 0:05:29.960 the APR is so high due to my low score, 0:05:30.640 --> 0:05:33.000 and my car broke down, and I need to pay 0:05:33.040 --> 0:05:36.000 down debt in order to raise my score to get 0:05:36.000 --> 0:05:39.039 another one. Or do I should I take out the 0:05:39.080 --> 0:05:41.240 loan to pay off my credit card debt even with 0:05:41.360 --> 0:05:44.960 the high APR? Are there other options? I believe I 0:05:45.000 --> 0:05:48.280 can refinance once my score gets higher, but I'm nervous. 0:05:48.360 --> 0:05:50.960 I'm in dire need of your advice and tutelage. 0:05:51.120 --> 0:05:51.520 Thank you. 0:05:52.760 --> 0:05:56.719 Oh this is stressful. What is it about vehicles, y'all? Like, 0:05:56.839 --> 0:06:00.120 what is it about your car that it can just smell? Well, 0:06:00.520 --> 0:06:02.159 first of all, it can smell if you have any 0:06:02.200 --> 0:06:04.960 money in the bank, and it's just like, m, what 0:06:05.000 --> 0:06:06.200 are we going to do. Is it going to be 0:06:06.240 --> 0:06:09.479 the check engine light? Are the brakes gonna start squeaking? 0:06:09.640 --> 0:06:11.480 Are we going to pop a tire on the blow 0:06:11.480 --> 0:06:12.840 a tire on the freeway? 0:06:12.960 --> 0:06:13.039 Like? 0:06:13.120 --> 0:06:15.080 What are we going to do? Because it doesn't seem 0:06:15.080 --> 0:06:17.800 like there's enough stress here. But even then, when you're 0:06:17.880 --> 0:06:21.240 in financial strife, it doesn't matter. Even then, that car 0:06:21.360 --> 0:06:24.320 will go out on you, It will turn on you. 0:06:25.400 --> 0:06:29.560 It should be studied by science. But I just want 0:06:29.600 --> 0:06:33.840 to say I can understand financial depression a thousand percent. 0:06:34.400 --> 0:06:38.520 You feel so isolated, so alone, And it's. 0:06:38.400 --> 0:06:39.880 One thing I think we all kind of know. 0:06:40.120 --> 0:06:43.560 Social media is not real and everyone's just showing their 0:06:43.600 --> 0:06:47.760 best self. But at the same time, we all are 0:06:47.880 --> 0:06:52.200 hiding the shadowy parts of ourselves, the parts that make 0:06:52.240 --> 0:06:54.520 it hard to get out of bed, the parts that 0:06:54.880 --> 0:06:58.359 make us say horrible things to ourselves and judge ourselves 0:06:58.360 --> 0:07:02.560 so harshly. You know, we don't mention how we are 0:07:02.600 --> 0:07:05.760 getting phone calls from eight hundred numbers that we know 0:07:06.080 --> 0:07:10.000 belong to credit card companies, or phone bill companies or 0:07:10.080 --> 0:07:13.200 light bill companies that are asking for their money. We 0:07:13.280 --> 0:07:16.680 don't mention how we are going to the grocery store 0:07:16.880 --> 0:07:20.239 and stocking up on essentials and running our credit card 0:07:20.720 --> 0:07:23.880 because what other choice do we have. We got to eat, 0:07:24.000 --> 0:07:26.720 the kids, got to have diapers, you know, got to 0:07:26.760 --> 0:07:29.680 have what you need, dogs, got to have food. Like, 0:07:29.720 --> 0:07:33.920 we don't really share that. And yet I know because 0:07:33.960 --> 0:07:37.360 I see y'all's and I see your questions, and you're 0:07:37.400 --> 0:07:40.480 so not alone. I also am living in this world too, 0:07:40.920 --> 0:07:43.360 And I mean, I'm questioning whether or not to show 0:07:43.440 --> 0:07:46.280 y'all a screenshot of our podcast revenue for the past year, 0:07:46.280 --> 0:07:49.960 because I'll tell you, for real, it's not cute, not at. 0:07:49.680 --> 0:07:52.680 All, not even a little bit. It is down so. 0:07:52.960 --> 0:07:57.280 Bad that I'm like, wait a minute, I thought I 0:07:57.360 --> 0:08:02.320 was a successful solopreneur. Well not all the time, right, 0:08:02.440 --> 0:08:08.280 So we all have these human moments and listen, especially 0:08:08.280 --> 0:08:10.800 when you're someone who's worked hard to get a good 0:08:10.800 --> 0:08:13.920 credit score, and I'm someone who's done that too, when 0:08:13.960 --> 0:08:16.840 you see those points getting knocked off and knocked off 0:08:16.880 --> 0:08:19.480 and you're so good at, you know, maintaining your high 0:08:19.520 --> 0:08:21.720 credit score that you know exactly why the points are 0:08:21.760 --> 0:08:24.200 getting knocked off. And I talked about this on a 0:08:24.240 --> 0:08:27.840 recent episode of the QA. But it's that utilization rate. 0:08:28.000 --> 0:08:30.960 It's because we're turning more to credit cards, and the 0:08:30.960 --> 0:08:34.760 more credit that we use and the less that we 0:08:34.840 --> 0:08:37.840 pay it off, the lower our score is. It's just 0:08:38.400 --> 0:08:41.320 that's how the credit scoring system is set up. Now. 0:08:41.400 --> 0:08:44.520 I do think that you can give yourself some grace 0:08:44.600 --> 0:08:47.520 on the credit score front. It is it is a tool, 0:08:47.679 --> 0:08:49.840 but it is not who you are, okay. It is 0:08:49.920 --> 0:08:56.680 a tool to get access to loans and credit. And yes, 0:08:56.920 --> 0:08:59.360 having a higher score does make it so that you 0:08:59.400 --> 0:09:02.120 can get act sss to those lines of credit at 0:09:02.160 --> 0:09:04.880 a lower price, right at a lower APR. If you 0:09:04.960 --> 0:09:07.720 have high credit. Just because you're dealing with a difficult 0:09:07.720 --> 0:09:09.880 time right now and you do have a low credit score, 0:09:10.320 --> 0:09:12.959 it doesn't mean that you're bad, doesn't mean that you're terrible, 0:09:13.040 --> 0:09:16.280 Like you have a very logical set of reasons. And 0:09:16.520 --> 0:09:19.400 I'm ready to just acknowledge the fact that one year 0:09:19.600 --> 0:09:25.079 of unemployment or one year of underemployment after getting laid off, 0:09:25.240 --> 0:09:30.679 that's not uncommon. It's not like I'm I'm not here saying, wow, 0:09:30.760 --> 0:09:33.800 a whole year, what's taken her so long? Like that 0:09:34.040 --> 0:09:38.320 is reality, Like, especially when you factor in if that 0:09:38.400 --> 0:09:41.839 layoff triggered you know, some mental health challenges, and then 0:09:41.840 --> 0:09:42.480 it's like, well. 0:09:42.320 --> 0:09:43.360 How do you get back out there? 0:09:43.360 --> 0:09:46.520 And then you start doubting yourself and you know, one 0:09:46.640 --> 0:09:48.640 last thing, this is like the last thing you need 0:09:48.679 --> 0:09:51.440 to add to that list of things to be upset 0:09:51.440 --> 0:09:54.679 with yourself about, is your credit score. Now let's get 0:09:54.679 --> 0:09:57.160 into like the nitty gritty of yes, but I still 0:09:57.160 --> 0:10:00.560 have this mountain of debt. So at this point, I 0:10:00.600 --> 0:10:05.680 actually think that a taking on more debt, like taking 0:10:05.679 --> 0:10:09.640 on taking on a more credit cards, trying to open 0:10:09.720 --> 0:10:12.160 up to get more access to credit, is only going 0:10:12.200 --> 0:10:16.520 to make your situation more perilous and more stressful for you. 0:10:18.160 --> 0:10:21.160 I like the idea of you taking out a personal 0:10:21.200 --> 0:10:24.720 loan to consolidate your credit card debt, but at that point, 0:10:25.520 --> 0:10:27.559 and I know that you're saying that the aprs for 0:10:27.600 --> 0:10:29.679 the loans that you're seeing have been on the higher side, 0:10:29.720 --> 0:10:35.600 and that definitely is due to your credit score. And 0:10:35.640 --> 0:10:39.600 that's concerning because when it comes to a personal loan, 0:10:40.040 --> 0:10:42.160 one of the benefits is that it's a fixed rate 0:10:42.800 --> 0:10:45.960 and a fixed monthly payment and a fixed timeline to 0:10:46.000 --> 0:10:49.280 pay it down. But if your credit score improves, that 0:10:49.320 --> 0:10:51.920 fixed rate means that, okay, we're not going to lower 0:10:51.960 --> 0:10:54.679 your rate down the line if your credit score goes down, 0:10:54.720 --> 0:10:56.600 so you're locking in this rate at whatever it is 0:10:56.679 --> 0:10:59.920 right now. Now, That is why I think it could 0:11:00.120 --> 0:11:02.320 be smart to take a pause and look for an 0:11:02.360 --> 0:11:04.920 alternative to whatever. I don't know what types of loans 0:11:04.920 --> 0:11:08.839 you've been looking at. I'll always go back to community 0:11:08.920 --> 0:11:12.040 and credit unions, like if community banks and credit unions 0:11:12.360 --> 0:11:16.080 when it comes to looking for alternative financing options. Also 0:11:16.559 --> 0:11:20.640 call your creditors and tell them about what you're going through. 0:11:20.679 --> 0:11:24.480 They may offer to reduce your rate. And I can 0:11:24.559 --> 0:11:27.480 say that from having read a listener's question just last 0:11:27.520 --> 0:11:30.520 week where she was able to contact her creditor and 0:11:30.600 --> 0:11:34.199 get her APR dropped to I think nine point nine percent. 0:11:34.800 --> 0:11:38.080 And in that case, they did freeze the card, which 0:11:38.120 --> 0:11:40.360 means that you wouldn't have that as a safety net. 0:11:40.440 --> 0:11:44.040 You wouldn't have access to that credit. But I think 0:11:44.160 --> 0:11:47.280 at this point it's a wake up call in terms 0:11:47.320 --> 0:11:51.800 of continuing to, you know, look for more access to 0:11:51.840 --> 0:11:54.439 credit so that you can continue to overly on those cards. 0:11:55.360 --> 0:11:57.800 It just isn't a good long term solution. And we've 0:11:57.840 --> 0:12:01.240 got to stop the bleeding. Staunch the bleeding, and I 0:12:01.280 --> 0:12:04.480 think potentially like calling your creditors seeing if you can 0:12:04.679 --> 0:12:07.679 reduce your APR, get them a payment plan, you know, 0:12:07.840 --> 0:12:11.240 something like that could It couldn't hurt to ask and 0:12:11.280 --> 0:12:13.480 to try. And you know what, I'm going to try 0:12:13.520 --> 0:12:16.160 this myself because I just want to be able to 0:12:16.160 --> 0:12:20.400 tell you guys what I've experienced. But if y'all yourselves 0:12:20.440 --> 0:12:22.640 have ever gone through this and you've called a creditor 0:12:22.640 --> 0:12:25.160 and negotiated a lower rate, you know, I'm happy to 0:12:25.960 --> 0:12:29.520 take y'all's tips, take your experiences and be able to 0:12:29.520 --> 0:12:32.080 share because I know that the rules and the like, 0:12:32.120 --> 0:12:36.080 the tolerance that banks have for that type of you know, 0:12:36.440 --> 0:12:39.360 that type of flexibility, it can change, it can be cyclical. 0:12:39.480 --> 0:12:42.280 So if that's if it feels like banks are being 0:12:42.320 --> 0:12:44.320 more flexible these days, I think we should know we 0:12:44.320 --> 0:12:47.360 should be jumping on that as an option. Okay. Other 0:12:47.800 --> 0:12:52.040 options to take care of your credit debt is to 0:12:52.720 --> 0:12:57.440 work with a debt relief organization. So there are The 0:12:57.640 --> 0:13:01.240 National Foundation for Credit Counseling is nonprofit that you can 0:13:01.280 --> 0:13:03.400 go to and I think you can set up like 0:13:03.440 --> 0:13:05.800 a free consultation and they can see if you're a 0:13:05.880 --> 0:13:10.520 good fit for their services. It's not a direct line 0:13:10.640 --> 0:13:15.920 into filing personal bankruptcy. Although personal bankruptcy is also a tool, 0:13:16.240 --> 0:13:19.679 it's a tool that can be used. It can have repercussions, 0:13:19.760 --> 0:13:24.640 big ones on your you know, your financial reputation for 0:13:24.800 --> 0:13:27.400 years to come. But it is a tool, you know, 0:13:27.520 --> 0:13:30.440 that is out there, and starting with an organization like 0:13:30.480 --> 0:13:33.920 the NFCC can at least help you weigh your options 0:13:33.960 --> 0:13:39.760 of debt settlement, debt relief, yes, personal bankruptcy, all the 0:13:39.800 --> 0:13:43.000 options and just see what works for you when it 0:13:43.000 --> 0:13:46.920 comes to like a debt relief organization. You know, we're 0:13:46.960 --> 0:13:51.040 having a guest on from the National Debt Relief National 0:13:51.040 --> 0:13:53.360 Debt Relief? Is that what it's called, Yeah, something like 0:13:53.400 --> 0:13:58.960 that in January. And you know, one of the one 0:13:59.000 --> 0:14:02.599 of the sort of cons or I think one of 0:14:02.640 --> 0:14:06.160 the suspicions or fears about an organization like that is 0:14:06.200 --> 0:14:08.920 that your credit score is going to take a huge 0:14:08.960 --> 0:14:11.319 hit because they're going to make you stop making payments 0:14:11.360 --> 0:14:14.160 on your credit. But if you're in a deep you know, 0:14:14.400 --> 0:14:16.120 if you're in a deep hole like it sounds like 0:14:16.200 --> 0:14:18.840 you are, your credit score has already taken a big hit. 0:14:19.800 --> 0:14:23.680 And if these organizations it can actually get in touch 0:14:23.720 --> 0:14:27.120 with lenders and negotiate better terms for you, or negotiate 0:14:27.560 --> 0:14:30.560 a settlement amount or a payoff amount like that actually 0:14:30.640 --> 0:14:34.400 could be something, especially in your situation, that could make 0:14:34.440 --> 0:14:39.080 some sense. So I would say some debt relief organizations 0:14:39.120 --> 0:14:42.120 like that may be a good place. But NFCC is 0:14:42.160 --> 0:14:47.840 also it's sort of like I don't know an objective 0:14:48.000 --> 0:14:50.520 party who can get on the phone with you. You 0:14:50.520 --> 0:14:53.120 can talk to a credit counselor and just start to 0:14:53.160 --> 0:14:55.400 weigh all of your options and then you can choose 0:14:55.800 --> 0:14:58.200 the path forward from there. Now, when it comes to 0:14:58.240 --> 0:15:00.240 your car, okay, so you say your car broke down 0:15:00.280 --> 0:15:01.920 and you feel like you need to pay down debts, 0:15:01.960 --> 0:15:04.280 you can raise your score and get another one. So 0:15:04.360 --> 0:15:07.720 I get it. I'm having a better credit score means 0:15:07.720 --> 0:15:09.960 you can get better terms on a loan for a car, 0:15:11.000 --> 0:15:13.880 if at all possible. Can you do without a car 0:15:14.240 --> 0:15:17.160 for a time being, because these car payments these days, 0:15:17.520 --> 0:15:23.040 especially with bad credit, are outrageous, Like American car owners 0:15:23.080 --> 0:15:26.720 are spending over seven hundred dollars a month on their 0:15:26.760 --> 0:15:30.000 car payments for a new car. And I and I 0:15:30.080 --> 0:15:31.600 know that that doesn't mean that you would go out 0:15:31.600 --> 0:15:33.840 and buy like an amazing brand new car and drive 0:15:33.840 --> 0:15:36.200 it off the lot and all of that. But if 0:15:36.240 --> 0:15:39.240 you can save you know, the five hundred to seven 0:15:39.320 --> 0:15:41.360 hundred dollars you may be putting into a car payment 0:15:41.520 --> 0:15:44.400 each month, especially with a high you know APR that 0:15:44.440 --> 0:15:47.280 you may have to have because of your credit. I 0:15:47.320 --> 0:15:51.280 think that's a better option that may seem that maybe impossible. 0:15:51.320 --> 0:15:53.040 I don't know how far your job is or how 0:15:53.120 --> 0:15:56.240 you would get there, but I would be looking for 0:15:56.760 --> 0:16:00.840 how to you know, shave expenses from your balance sheet 0:16:00.920 --> 0:16:05.000 until you can start to build it up. But yeah, 0:16:05.040 --> 0:16:08.080 I will leave it there triple X. And I hope 0:16:08.080 --> 0:16:10.480 that this was helpful. I hope that you feel less alone, 0:16:10.800 --> 0:16:14.200 that you feel seen. I'm really grateful that you've, you know, 0:16:14.920 --> 0:16:17.000 been so vulnerable to send in a question like this, 0:16:17.560 --> 0:16:21.040 because I know that it is. It can be, yeah, 0:16:21.200 --> 0:16:24.560 mentally debilitating to have that amount of debt and to 0:16:24.560 --> 0:16:28.400 see your credit score go down. But you can overcome this, 0:16:28.600 --> 0:16:32.440 and this it can just be a temporary blip. Give 0:16:32.480 --> 0:16:37.200 yourself time and grace as much as possible, and tell 0:16:37.360 --> 0:16:40.760 a friend, tell a family member, someone who maybe even 0:16:40.800 --> 0:16:43.240 can like sit side by side while you have these 0:16:43.280 --> 0:16:47.480 conversations with the credit counseling organization or with a debt 0:16:47.520 --> 0:16:49.840 relief company or with a credit union about a debt 0:16:49.880 --> 0:16:55.120 consolidation loan. And just remember that, you know, taking care 0:16:55.160 --> 0:16:58.640 of the credit issue is it's a symptom of the 0:16:58.680 --> 0:17:02.160 bigger problem, which is, you know, you're not earning enough 0:17:02.200 --> 0:17:06.120 to meet your expenses. So as you're getting a plan 0:17:06.160 --> 0:17:08.639 put together with a debt, hopefully that builds your confidence 0:17:08.640 --> 0:17:12.600 and you can, you know, reapproach your career path and 0:17:12.920 --> 0:17:15.560 find some opportunities to bring in more money so that 0:17:15.640 --> 0:17:18.160 you can chip away, not just trip away at debt, 0:17:18.160 --> 0:17:22.200 but actually rebuild your emergency savings so that they're ready 0:17:22.200 --> 0:17:25.159 for you the next time your damn car decides it 0:17:25.240 --> 0:17:28.960 wants to end its life at the worst possible moment. 0:17:29.720 --> 0:17:31.560 All right, thank you so much for your question. We're 0:17:31.560 --> 0:17:33.399 going to take a quick break and be right back 0:17:33.560 --> 0:17:40.280 with more. Baqa okay, b a fam We are back, 0:17:40.359 --> 0:17:43.040 and I am here to answer a question from listener 0:17:43.119 --> 0:17:45.480 Livronia from Los Angeles. 0:17:45.560 --> 0:17:47.080 Hey Livnia, thank. 0:17:46.880 --> 0:17:49.600 You for sending in this question. Thanks for listening to 0:17:49.680 --> 0:17:52.760 the podcast. All right, let's dive on in. You say, 0:17:52.800 --> 0:17:55.280 I am thirty one years young, child free and living 0:17:55.280 --> 0:17:58.439 in Los Angeles. I'm ready to be better with my money. 0:17:58.680 --> 0:18:00.840 I make sixty nine thousand dollars a year and I 0:18:00.880 --> 0:18:04.920 have very few expenses. My monthly expenses are about sixteen 0:18:05.000 --> 0:18:08.639 hundred dollars with rent included. I'm currently saving with my 0:18:08.680 --> 0:18:11.040 four to one K and I have a life insurance 0:18:11.080 --> 0:18:14.760 policy that has a cash value component. I currently don't 0:18:14.760 --> 0:18:17.399 have a personal savings account, and I want to change that, 0:18:17.480 --> 0:18:19.840 but I'm not sure how. I tend to have a 0:18:19.880 --> 0:18:22.399 few hundred dollars left after I paid my bills and 0:18:22.440 --> 0:18:25.960 taking care of necessities, but I always find myself broke 0:18:26.200 --> 0:18:28.960 slash living paycheck to paycheck because I blow all my 0:18:29.080 --> 0:18:32.520 extra money. My credit limit is two thousand dollars and 0:18:32.560 --> 0:18:35.280 it's currently maxed out because of revert to using it 0:18:35.320 --> 0:18:37.520 when I'm broke. I'm ready to get out of this 0:18:37.600 --> 0:18:40.480 cycle because it feels like I'm broke by choice. I 0:18:40.520 --> 0:18:42.680 guess my question is how do I start to save 0:18:42.800 --> 0:18:45.920 and how do I work the extra money without How 0:18:45.920 --> 0:18:48.680 do I work the extra money without spending it all 0:18:48.720 --> 0:18:51.480 on food and miscellaneous random items? 0:18:52.080 --> 0:18:54.440 Thank you again? All right, Larnia. 0:18:54.520 --> 0:18:57.000 Wow, this was exactly the situation I was in when 0:18:57.040 --> 0:19:00.280 I first moved to New York. I was, I mean, 0:19:00.640 --> 0:19:01.840 I don't think you're broke. 0:19:02.080 --> 0:19:03.480 I think that you're well. 0:19:03.520 --> 0:19:06.199 First of all, you're young, and that's kind of like 0:19:06.400 --> 0:19:08.119 how it is in the beginning. You don't have a 0:19:08.200 --> 0:19:11.440 high credit limit. And I remember my first credit card 0:19:12.040 --> 0:19:14.000 coming out of college and moving to New York. It 0:19:14.119 --> 0:19:17.400 was like, I think seven hundred dollars, and I kept 0:19:17.440 --> 0:19:19.600 maxing it out because it was like a barely nothing 0:19:19.640 --> 0:19:22.199 credit limit, and then they would increase it and it 0:19:22.240 --> 0:19:25.600 became a twelve hundred dollars and then it became two 0:19:25.600 --> 0:19:28.280 thousand dollars, and every time it went up, I would spend. 0:19:28.440 --> 0:19:31.000 I would spend on it, and I would max it out, 0:19:31.040 --> 0:19:33.000 and I ended up exactly where you're at. You know, 0:19:33.040 --> 0:19:35.520 I'm earning decent money, I have some money left over, 0:19:35.640 --> 0:19:39.640 but I'm constantly like, what is like chasing bad after 0:19:39.680 --> 0:19:42.960 good or chasing good after bad spending habits, and so 0:19:43.119 --> 0:19:45.520 you end up taking the extra money in your account 0:19:45.600 --> 0:19:49.159 and using it to pay off or pace down some 0:19:49.240 --> 0:19:51.359 of that credit card debt that you're accruing. And I 0:19:51.359 --> 0:19:53.760 think you're at a pivotal like juncture right now because 0:19:53.800 --> 0:19:57.280 you're recognizing this cycle is not sustained, Like you can't 0:19:57.520 --> 0:20:00.000 sustain this for much longer, and it's not a good 0:20:00.160 --> 0:20:02.680 long term strategy. I mean, I'm glad that you're saving 0:20:02.720 --> 0:20:05.679 with your four one K. You know, you're thirty one 0:20:05.720 --> 0:20:08.280 years old, you have a life insurance policy. I mean, 0:20:09.119 --> 0:20:10.840 I can kind of touch on that a little bit too. 0:20:10.880 --> 0:20:15.920 But you are making some financially responsible decisions with your money. 0:20:15.920 --> 0:20:18.320 So it's not like you're out there, like I know, 0:20:18.440 --> 0:20:20.879 you're not at the club, you know, getting bottle service 0:20:20.920 --> 0:20:23.240 all the time. You can easily blow through a few 0:20:23.280 --> 0:20:27.480 hundred dollars in la I'm sure going out to you know, drinks, 0:20:27.560 --> 0:20:29.560 or going out for food or just going. 0:20:29.400 --> 0:20:33.120 Grocery shopping or just like living life is expensive outside 0:20:33.160 --> 0:20:36.720 is so expensive, right, But in terms of like how 0:20:36.760 --> 0:20:38.639 to save, you're going to need to find more money 0:20:38.680 --> 0:20:40.560 in your budget to put toward that savings. 0:20:41.000 --> 0:20:43.000 And you're not going to find that money in your 0:20:43.040 --> 0:20:46.280 budget until you can pay off that credit card and 0:20:46.320 --> 0:20:49.199 then try to keep your credit debt as low or 0:20:49.280 --> 0:20:52.879 nonexistent as possible. Now, two thousand dollars is not a 0:20:52.920 --> 0:20:55.200 small amount of money, but it's also not that bad. 0:20:55.440 --> 0:20:58.280 And it sounds like with the amount of money you're 0:20:58.280 --> 0:21:01.240 making now, if you just dedicated yourself to paying down 0:21:01.280 --> 0:21:02.960 this credit card and getting it out of the way 0:21:02.960 --> 0:21:03.760 for the next year. 0:21:04.400 --> 0:21:05.800 Honestly, even if. 0:21:05.600 --> 0:21:08.439 You pull back a little bit from investing in your 0:21:08.440 --> 0:21:09.800 four to one K, I mean, I don't know how 0:21:09.880 --> 0:21:12.120 much you're putting away. Actually, let me run that back, 0:21:12.200 --> 0:21:15.160 because if you're making sixty nine thousand, even if you're 0:21:15.200 --> 0:21:20.159 saving like what ten percent of your your your gross 0:21:20.200 --> 0:21:22.879 pay and putting that into your four to one K, 0:21:23.000 --> 0:21:24.760 it's still not a ton of money. So like, keep 0:21:24.800 --> 0:21:27.159 saving in your four one K, but do what you 0:21:27.240 --> 0:21:29.720 can to bring in either bring in some extra money, 0:21:29.760 --> 0:21:32.159 but definitely use whatever leftover money you have in your 0:21:32.160 --> 0:21:36.000 budget to start tackling that credit card. And you're gonna 0:21:36.040 --> 0:21:39.000 have to get comfortable with the word no, especially in 0:21:39.040 --> 0:21:41.480