(upbeat music)
Hi, I'm Tonya Rapley,
entrepreneur and financial educator.
And I can say in all honesty,
I've never seen anything like this.
My income has been disrupted.
Okay, my daughter's at home now all day every day.
We essentially lost a third of our income.
And we don't really know when it's coming back.
Which is why
we brought together this digital community.
A group from around the country,
with Bank of America specialists,
for a series of open and honest conversations.
How do I make credit work for me?
Don't get overwhelmed by the numbers.
Let me see if I can bring the bill down
at a different clip.
We have tools to help you understand contribution levels.
If you fall in love with the process itself,
then those sacrifices will pay off in the long run.
This is Better Money Habits, Money Talks.
Brought to you by Bank of America.
Alright, so this is gonna be a money conversation
like you guys probably have never had before.
We're gonna pair you with specialists from Bank of America.
And I would love to learn more about you, Rachel!
So yeah, I've had to take a huge shift.
I went from teaching in a classroom
to teaching on my computer.
I went from working five days a week
to my only stable income is once a week now,
which is scary.
Coronavirus is a lot of people's rainy day
and their big emergency.
But for me, I was in a traumatic car accident
of January 2019.
I was rear ended on the freeway,
my car flipped over onto its side.
Not only do I have the debt I had before,
I have medical debt on top of that
and it feels really overwhelming.
It's like running a marathon and not knowing
where the finish line is.
Yup!
I've been speaking with a lot of people
who are dealing with that, it feels like that.
So we were coming up with a great financial plan,
life was looking great,
and then the pandemic hit.
My main job as a design engineer,
I was asked to take a pay cut.
And then I lost my second job
as a performer inside the city during nights.
We weren't able to do the show,
so, I lost a second income entirely as a result of it.
Me and my fiancé, we're just talking about this last night...
weddings are not cheap.
No, no!
We don't know if the wedding is gonna happen anytime soon.
As our income got disrupted,
yeah, we definitely had to look at expenses
that just, come out, that you don't even realize.
I do want to shout out to my fiancé,
because she was like, "I'm not buying any new clothes
for at least a month."
She just started going on thrift sites.
Why do I want to pay full price for something,
when I might be able to get a deal on it?
And I thought that was like, really savvy.
My landlord knows that we're both
looking for full time work,
and so she's given us a laundry list of things to do.
And she says, just count your hours,
I'll pay you 25 dollars an hour
and just take it out of rent.
We did 400 dollars worth of work for her
before we even moved in.
So, we were able to take that out of
just the first month's rent.
That's amazing!
So we decided to plant a garden
and we almost half our grocery spending.
We're both chefs!
We are both chefs.
We like to eat food and make food.
We had just bought our new house,
and then we lost kind of like a third
of the income stream coming in. So...
We do all this budgeting beforehand
and you can never really budget for the unexpected.
Making spreadsheets.
Really, we're just trying to find all the little hacks
to save money.
We actually learned how to can as well.
We have sauces and vegetables and fruit compotes.
And one day we will eat them,
right?
We're gonna have to, we have so much of it now.
Meal prep and meal planning
has been the very thing that I think changed my budget.
So something really cool that has happened for us
during COVID is that my daughter and I
got to move into our own space together, our own apartment.
We have never been able to live on our own
because I couldn't do it financially on my own.
A year and a half ago, I was living paycheck to paycheck.
Like there were times where I had to ask friends
for gas money. And here we are now a year later.
And I'm really excited to change my family tree
and break those generational curses.
And that is such a fun and exciting thing
to look forward to for the future for me and my daughter.
Yes! Kudos. So much good has happened.
I know that Chelsey is a new mom.
Hi, I'm Chelsey, I live in Northeast Ohio.
So I did not have any maternity leave,
nor did I qualify for FMLA.
And my husband did not have any paternity leave.
Because both of us are working from home,
my husband is able to see our son way more
than he would if he was at work 8 hours a day.
This is where we used to eat dinner.
And now it's been our workstations.
Both of our parents are close to us
and there have been times where we've asked them
to come over and babysit so we could clean our house.
So just taking advantage of people who want to help
and not being afraid to ask for that help.
Each of you have different goals
that you're working towards,
different things that you'd like
a little more insight on how to navigate during this time.
And so what we'll be doing is you'll pair up
with a bank specialist to answer any questions that you have
and really get a plan of action.
And then from there, we will reconvene.
And so, does that sound good to you?
Yeah.
(upbeat music)
Amanda and Andrew, you are in for a treat.
We have joining us, our Bank of America specialist
Anthony Dinello.
Give Anthony a little rundown
of what your pressing questions are.
We essentially lost a third of our income
and it was right around the time we bought this house.
At this point, we've kind of normalized
and kind of stabilized a little bit
but we really had to sit down and think about
what the wants versus the needs were.
I think the first, most important thing is
what are the monthly expenses that you have?
What are the bills that you have
that you can count on having to be responsible
for every month?
That should be your floor.
Now, let's see what money we have leftover.
And what is our budget going to be for the month?
He actually helped me write my first budget
in an Excel spreadsheet.
I'm glad there's an Excel wizard in the house,
that always helps to have.
An honest mistake or two will happen along the way,
so it's very important that you set up alerts.
I actually have an alert on my phone. For every single time
a debit card is swiped,
I get a text message.
That's a good idea.
I like the alert thing, so that both of us know
that the spending would be happening
Keep the communication open!
You know, it really helps establish checks and balances
because then you're accountable
to someone other than yourself for how you're spending.
I do also have a Bank of America credit card,
which I love because the system they have on the backend
is really useful for money management.
The alerts is something I do have set up on my end,
and that's just good to know
whenever your card is being used,
or whenever your budget's close to being exceeded.
Even if it's like 14 dollars under, you know?
It feels good that you're within your means
of what you're trying to do that month.
You're gonna probably say okay,
our goal would be to save this much, this month.
I would have two numbers in mind
and I would really strive for that stretch goal
and really challenge yourselves
because I think you would be surprised
what you're capable of.
It's like the Chinese food last night.
We are close to our eating out budget for the month,
but last night I was craving Chinese food
and he looked at me, and was like,
we're close to the budget, we can't get it.
So we had leftovers.
Yeah, you guys are great.
It was good leftovers, I'm glad we did it.
There's a lot of value, right?
And starting to look at longterm and how much
overall you could save when consolidating debt.
What type of debt is it?
How much do I owe?
How much is your minimum monthly payment?
And then, what is your interest rate?
For me, it's my favorite spreadsheet.
That's the one where I'm like, things are getting done.
I think that's a pretty cool idea.
I never really thought honestly
about doing anything like that.
It allows you to see
what your most expensive debt is
or what's the smallest balance.
It allows you to focus your game plan.
Some people say start with the biggest balance first,
because the more you can knock that down the better.
Personally, I like to start with the smallest ones first.
That smaller amount, you could pay off quickly.
It feels good when you get one paid off.
And then you have that extra money to go towards
the other payments that you have.
Until now I didn't really think of it
as a bunch of small pieces.
I kind of just think of it as this big wall.
If we look more at it, more of it as like
a bunch of bricks on a wall,
and you're just taking pieces out one at a time,
I think it's gonna seem manageable.
And it will encourage you to continue to do more and more.
The first thing we're gonna do is make a spreadsheet
with our debts and interest.
So like, Date night, date night!
I'm gonna, no, it's not a date night...
It is! I need it to be fun.
It's a money date!
There's no such thing as a finance date night.
I mean,
maybe there is now.
(upbeat music)
When trying to stick to a budget,
stretch goals can be highly motivating.
Organize all of your debt by balance amount
and interest rate to help determine
the best debt reduction strategy for you.
(upbeat music)
And so Chelsea, I know that you're in good hands.
We have our bank specialist, Marcella Gallego.
I don't think there's anyone
more perfect to assist you with your goals.
So we may need to look into some childcare.
And so, wondering some different ways
that we can budget for that.
What works for me best when I was doing this exercise
was I did the decision tree.
Writing down, if I had to go with a nanny.
What exactly do I want?
If I want to do daycare, what type of daycare?
And then budget, and find out how much it will cost you.
And we landed on a hybrid option.
We do daycare in the mornings
and grandma comes in the afternoons.
I never even thought about that split.
It allows her to be social and have fun
but in the afternoons, she's with grandma, which is great.
And, and it's little bit cheaper.
How do I set a bank account for my son?
It is a lot simpler than you think.
You have a minor account which will be joined with you,
or you can open an account for them.
They are the owner, but you are the custodian.
You just go to the bank with their social security number
and open the account.
Vola, once Daniel is becoming a teenager,
now you can open a checking account with him
so you can teach him how to use his money.
Longterm, college is very important to us.
While we don't know what the education system
is gonna look like in 18 years,
or even if he gets a full ride
and all of a sudden doesn't need that money.
So we don't necessarily want to put money into a pocket
that we can't ever get out.
34% usually comes from financial aid
and parents are usually responsible
for 29 to 30% of the bill.
Don't get overwhelmed by the norms.
Time is on your side, in the sense that
you have 18 years and small amounts consistently
over that period, make a huge difference.
It sounds to me like you need a flexible options
and it might be a combination of things.
You can have savings account, then a college plan
that perhaps has some tax advantages to it.
Okay.
So you could do a combination of both.
Don't feel that you have to get married
with one or the other, because you don't.
We did buy our house about three and a half years ago.
We've been watching the mortgage rates just plummet.
And even though we had got a good rate
when we originally signed the paperwork,
does it make sense to refinance?
Refinancing is basically doing a whole new loan
for your house, all over again.
So when you first purchased your home
there were some closing costs associated
with processing that loan.
If you are going to say, let's say 200 dollars,
but the closing cost associated
with refinancing the home are 5,000 dollars,
if you are not going to stay for at least 25 months
then you're not saving any money.
Divide the closing costs by the savings
that you will obtain, and that tells you
how long you will have to be in the property
for that to be a cost effective decision.
The easy math problem makes so much sense
and makes it a lot more black and white.
Considering refinancing?
Pack your closing costs
and how long you plan to own your home into the decision.
A decision tree is a helpful tool
for making financial decisions
like selecting childcare options.
(calm music)
And Andre is joining us.
Ahmed, Andre is a Better Money Habits champion.
He is one of the Bank of America specialists.
And so Ahmed, let us know exactly what you hope
to glean from these sessions.
Once Coronavirus hit my primary job
asked us to take a 20% pay cut.
And then my second job, lost that income completely.
I did notice that you're an actor, right?
So, and you have taught before.
So is there a possibility
that you could maybe do some online acting classes
to maybe supplement some of the lost income there?
Because that's just a skill that you already have.
I like how you think Andre.
Okay, yeah, that's a really good idea.
Even my husband who's in a production
he'll hire like voiceover actors
using some of these gig hire websites, and so forth
and he'd be looking for someone to just do voiceover work.
I definitely agree with Andre
that that's something to think about
is leveraging your understanding
of like the voice and voice acting.
And maybe I'm saying if you bring in
some digital income there.
Me and my fiancé Erica had a lot of tough talks
and I had to scale down our expectations
of having a wedding.
Trying to plan for the future and make sure
that we're in a good, strong, solid financial place.
For us, that's the ultimate goal.
Being able to be in a position to make choices
rather than sort of make sacrifices.
And it's funny, you know
I was probably two or three years younger than you
when I was married, we really had to take a hard look
at our, our budget and cutting the cost where we could.
If you and your wife are fine with a smaller invite list,
also consider maybe an outside venue.
Also think about music.
Let's have your own music.
So those are just some things to consider
to help with these finances
as it relates to this wedding.
That sounds good, thank you.
(upbeat music)
Leverage your skills and experiences
to generate supplemental income.
When budgeting your wedding, look for ways to keep cost
at an amount that's comfortable for you.
(upbeat music)
Rachel, we are joined by Bruno Figueiredo.
So Bruno is a Better Money Habits champion
with Bank of America.
And Rachel, I think that you can do a better job
of really painting the picture for Bruno,
letting him know like how your personal
emergency kind of kicked off and where you are today.
Yeah absolutely.
Coronavirus has been traumatic for so many people
and kind of exposed what their rainy day funds look like.
My personal emergency, my rainy day
happened in January of 2019.
I was rear ended and it flipped my car over
onto its passenger side.
So what I'm really looking forward to diving in today,
with you today, is just how I can balance
keeping myself healthy
and keeping my bank account healthy too.
My income has been disrupted.
I don't have a consistent number coming in
and every single month it changes.
Yeah.
In that inconsistent way, how do we plan for our future?
We have freelancing resources, tracking time,
budget, taxes, and then even moving into a business aspect
and understanding the difference between
an LLC and a sole proprietor or a corporation.
I always recommend going back to an accountant
and finding out if it is right for you at certain points.
And I think what's important to you
is based on your income is inconsistent.
You still have to hate the medical debt.
Yeah, yeah.
A year ago, my wife was diagnosed with breast cancer.
We think medical debt is a bad thing, but it's not.
It's a good thing.
Cause it's the way we move her health forward.
That's a huge relief.
And if I had heard that sentence a year ago
my recovery probably would have been so different.
Okay.
Cause that was always in the forefront of my recovery.
Even as a financial educator, I have a secret,
I'm not debt free.
I'm still paying off my student loans.
So you can have debt and still have a good credit scores,
as long as you're managing that debt.
You had an emergency, something happens,
first and foremost to me was
let me see if I can bring the bill down at a different clip.
So if they are asking for a hundred dollars
could I call them and say, could we bring this payment down
at a different, a minimum amount.
Reality they could.
I just didn't know that.
You're carrying a large balance on your credit card.
So maybe you want to take advantage of
a sign on to an account opening bonus,
but maybe they have 0% interest, for 12 or 18 months
and just transfer a small amount
of your credit card balance over to that credit card
so that you can pay that aggressively
so that you're not paying interest towards it.
Just want to calculate how much is gonna cost me
to transfer this debt?
How much am I gonna save an interest
if I transfer this debt?
Does it make sense for me to do this?
So that's something to think about,
but you want to be strategic about it
cause you don't just want to like
transfer the balance over, but end up paying more money
in transfer fees than you saved an interest.
I have, it's cheesy, but it's a debt calculator.
So when I spend, I literally put like a smiley face
on the bottom, the day you hit that minimum
or you got very close to only 20% or 10%
you're achieving what you want to do.
So I think leveraging our
Better Money Habits website is great.
The eight simple ways to save,
remembering, make it simple, make it realistic,
analyze, and it's okay to use your savings when needed.
Thank you for steering me in that direction.
I'll definitely check out that Better Money Habits site
as soon as we're off this call.
Track your time and budget
to help manage a regular income as a freelancer.
Research 0% interest offers to help pay down
a portion of your debt.
It is possible to negotiate with creditors
to adjust your rate or debt payment plan.
(calm music)
So Candace, this is Courtney, Courtney Prior.
She is a senior vice president over at Bank of America.
She is a young adult program manager.
I too am a mom of a young girl
who is just gonna be seven.
And it's a lot, it's a lot to manage yourself
and to manage the wellbeing of another, you know, life.
This whole financial journey is so new to me.
And I will say within the last year and a half
is when I really dug in and took it seriously.
For my daughter, what could I continue to do
that sets her up for success?
For us, we definitely have a savings account
that we have established for her.
And she knows about it.
She feels very important that she has her own bank account.
We also have piggy bank that she puts money into.
We've started to do a contribution chart
and I also don't call it a chore chart,
I call it a contribution chart.
What do you want to do for the house this week?
What do you want to do for yourself this week?
Those all are ways that kids really learn by being involved.
I need to give my husband a contribution chart.
(all laughing)
Nobody has a toolkit for anything right now.
Like, it's just all learning as we're going.
And I really had found value
in some of what Better Money Habits has to offer.
We have tools and resources to help you prioritize.
Retirement should be always a part of your budget plan.
Because when you retire
there's no supplemental way to help your retirement,
Unless you want to get a job in retirement.
Students can take out a student loan,
when you retire, That's like your nest egg.
So my wheels are turning cause I realize as a parent,
we think about our kids first
which isn't necessarily a bad thing,
but we think about our kids first,
before we think about ourselves.
Kind of like when you fly
Put your oxygen tank on first and then help others.
It's like that, same analogy.
And it's hard because as a mom, you're like,
oh, I give everything to my baby,
but give yourself that gift of security.
Right.
Really the answer is the more I invest
and do things for my future truly helps her future.
Contribution charts and piggy banks are great tools
for teaching children financial literacy.
Don't neglect your own retirement savings.
Yay, so we are here, it's a new day.
We all, you guys have all had your individual
one on one sessions.
We had some really good conversation.
How are you guys feeling
about this entire experience together?
Learning this stuff and being able to use it and apply it
and then share with others is really like making me excited.
And it was nice to taking the taboo out
of talking about finances not being like,
ugh, this is a horrible conversation.
Be like, no, this is a conversation
that's gonna help us out in the long run.
And it's something we should
regularly talk about and look at.
Yeah.
He advised us to use an Excel sheet for our debts
and figure out how much interest is on each
and which ones we should pay off first.
I love that one.
We actually put that together last night.
He was ready to go. kinda crazy about it.
You don't always know what you don't know.
And so, I am setting up my son's bank account.
I can now articulate what it is that I need.
Well, you talked a little bit about the contribution chart
and being able to do that with my daughter,
that, it's like such a small thing
but I know it will have a huge lasting impact
on our relationship as a mom and daughter.
My action item is, look at the skills that you have now,
some of your experience in the past
and see if you can leverage that
to be able to generate some extra income.
One of the things you were talking about
for Ahmed in particular was voiceovers,
and now listening to him, if I close my eyes,
I could still hear him on the radio.
Totally. I can see it.
Or hear it, I can hear it.
I need to create a financial team
of people who can advocate for me.
Bruno is the very first person
that I'm gonna add to my team.
He talked a lot about making personal connections
with people and negotiating a rate
that's comfortable for me.
If my insurance is too much, I need to talk to a person
so that I can negotiate that rate down.
You're all so different, but you're all so committed
and so optimistic.
I feel rejuvenated, like when I get off of this,
I'm gonna go put some more money in my retirement account.
I'm so amped up for you guys.
(all laughing)
Better Money Habits offers a simple way
to connect people to relevant tools
and guidance to help them take control of their finances.
Go to Better Money Habits.com for more tips
and resources on planning your financial journey.
The way to navigate financial challenges
is to communicate with others about these challenges.
When you're ready to talk
go to bankofamerica.com to schedule time
to speak with a Bank of America specialist.
Thanks to everyone who participated
and thanks for watching Better Money Habits, Money Talks
brought to you by Bank of America.
(upbeat music)