Latest / Own It with Angie Hicks / Buying a Home for Who You Are Now Is the Biggest Mistake You Can Make

Transcript

Buying a Home for Who You Are Now Is the Biggest Mistake You Can Make · Own It with Angie Hicks

• 0:00
  - The biggest mistake that homeowners make
• 0:02
  is buying a home for just who they are right now,
• 0:06
  not who they might grow into.
• 0:08
  - My guest today is Tiffany Aliche,
• 0:10
  better known as the Budgetnista.
• 0:12
  In her late 20s, she was over $300,000 in debt,
• 0:16
  but her climb back made her one of the most trusted voices
• 0:20
  in personal finance.
• 0:22
  Today, she's a New York Times bestselling author.
• 0:25
  And she's here to share with us
• 0:27
  what most people don't understand
• 0:29
  about budgeting for a home.
• 0:31
  Welcome back to "Own It."
• 0:32
  I'm Angie Hicks, Co-Founder of Angie.
• 0:35
  Own It is everything you need to know about owning a home
• 0:38
  without it owning you.
• 0:40
  In today's episode, we talk about the real math
• 0:43
  about owning a home,
• 0:44
  the rule that keeps you from buying too much,
• 0:47
  and the one mistake homeowners make
• 0:49
  that has nothing to do with the house.
• 0:51
  Let's get into it with Tiffany Aliche.
• 0:54
  Tiffany, it's great to have you on the show.
• 0:57
  I love to talk budgets.
• 0:59
  In learning about your background,
• 1:01
  you grew up talking budgets, budgets, budgets.
• 1:04
  You said your dad was a CFO,
• 1:06
  so dinner table conversation revolved around finances.
• 1:10
  - All the time.
• 1:11
  I'm one of five girls, so you can imagine the expense.
• 1:13
  (both laughing)
• 1:16
  So, we talked about money all the time.
• 1:18
  I didn't know that other families didn't.
• 1:21
  Specifically, we would have like a game night/family night
• 1:25
  on Thursdays where we would play like board games
• 1:27
  and things, but also talk about grades and behavior,
• 1:30
  me, (laughs) but then also money.
• 1:34
  I can remember just as basic as we're saving for vacation,
• 1:38
  or I remember in high school,
• 1:39
  my father had his financial advisor
• 1:41
  come sit at the table with us.
• 1:43
  I had made like a bunch of babysitting money
• 1:45
  and I invested for the first time
• 1:47
  with the financial advisor.
• 1:48
  We didn't get to be 16s. - I love that.
• 1:49
  - At 16, you got to walk to the bank with my dad
• 1:52
  and he would open up your first bank account.
• 1:54
  This is back when we had passbooks.
• 1:56
  Remember, I'm dating myself.
• 1:57
  (both laughing)
• 2:00
  - Yes, I do, I remember that.
• 2:02
  - And what I really loved about my parents
• 2:04
  is they didn't approach money from the scary place,
• 2:06
  just very matter of fact.
• 2:08
  I worked every summer since I turned 14, every pay period,
• 2:12
  my dad would, he would have you come and sit with him
• 2:15
  and you would have to explain all the withdrawals
• 2:17
  from your passbook.
• 2:18
  You can spend your money how you like,
• 2:20
  but you have to be able to back it up.
• 2:21
  And I was a mess in the beginning.
• 2:24
  But it really taught me to be more responsible.
• 2:26
  And really, I appreciated it once I hit college.
• 2:29
  And my college roommate had debt collectors calling
• 2:32
  our dorm room.
• 2:34
  At 17, 18, we thought it was hilarious.
• 2:36
  - Like, how is that possible at 17 or 18, right?
• 2:39
  - The sad news was that her father had passed away.
• 2:41
  And so her mother was struggling to raise her and her sister
• 2:45
  and had opened up credit cards in her name.
• 2:47
  I didn't even know that was a thing.
• 2:49
  So that was the first time that I thought, oh, wow.
• 2:52
  And so I was casually telling my dad,
• 2:55
  "Oh, you know, dad, you know,
• 2:56
  debt collectors call the dorm room,
• 2:57
  but don't worry, we make funny voices
• 2:59
  so they won't know that it's us."
• 3:01
  And he's like, "Yeah, that's not..."
• 3:02
  (both laughing)
• 3:04
  - They're going to keep calling.
• 3:06
  - And so he gave me some really solid advice
• 3:08
  and I shared it with her and it helped.
• 3:10
  Whenever she had other financial questions,
• 3:13
  she would ask me and I would ask him.
• 3:14
  And then, because I lived, I went to Rutgers,
• 3:17
  but I lived on a girls campus, Douglas.
• 3:19
  And so all the girls on the floor started saying,
• 3:21
  "Can you ask your dad this?
• 3:22
  "Can you ask your dad that?"
• 3:23
  And I thought, "Well, I want to be the person."
• 3:26
  And so that's how it really started for me,
• 3:28
  that it was this thirst to also have the knowledge
• 3:31
  because I saw how powerful it was and helpful.
• 3:33
  - So did you end up studying financing or business
• 3:36
  while you were at Rutgers? - Yeah.
• 3:37
  - So I took a lot of finance classes
• 3:39
  and I got my bachelor's in business.
• 3:41
  And then after graduating college,
• 3:44
  I decided that I hated corporate America
• 3:46
  because I had a bunch of internships.
• 3:47
  I said, "Oh no, my soul is shriveling up here."
• 3:51
  And (laughs) 'cause I was a fun girl.
• 3:53
  And so, but I really loved kids.
• 3:56
  And so I said, "Maybe I'll be a teacher."
• 3:58
  And so, I went back to school and became a teacher.
• 4:02
  I taught preschool for 10 years.
• 4:04
  I got my master's.
• 4:06
  I thought I was gonna be a principal,
• 4:07
  but I realized that you don't actually get to teach
• 4:09
  when you're a principal.
• 4:10
  So I got my master's in education,
• 4:12
  which was still helpful for starting the business,
• 4:14
  the Budgetnista.
• 4:16
  But yeah, I loved it.
• 4:19
  To me, the foundation of the Budgetnista
• 4:21
  is that I learned how to teach these little people
• 4:25
  to take them from a place of no knowledge to knowledge.
• 4:28
  And so that's what I do with money.
• 4:30
  People come to me like they're three and four essentially,
• 4:32
  and I get to do so in a way that's fun
• 4:34
  and engaging and non-judgmental.
• 4:36
  So I really learned that in the classroom.
• 4:38
  - You know, your idea around the Budgetnista
• 4:40
  kind of started with the housing crisis of 2008, right?
• 4:45
  So walk us through what happened to you during that time.
• 4:48
  - So up until '23, '24-ish, '25,
• 4:51
  I did whatever my parents told me to do.
• 4:53
  You know, like they told me when it came to my finances.
• 4:56
  And then about '25, I said, "You know what?
• 4:58
  I'm a full-grown adult, let me blow up my life."
• 5:01
  (both laughing)
• 5:03
  I didn't say it like that,
• 5:04
  I thought I was just being mature.
• 5:06
  And so, I had just gotten my master's in education.
• 5:09
  And instead of listening to my parents
• 5:11
  to apply for scholarships, I got student loans.
• 5:13
  So that left me $52,000 in student loan debt.
• 5:17
  Which I was like, no biggie,
• 5:18
  because they'd helped me with undergraduates,
• 5:20
  so I didn't have any undergraduate debt.
• 5:22
  After that I decided, you know, I've got my master's
• 5:24
  and I was living with my sister,
• 5:26
  and I said, "I think I'm gonna buy my first property."
• 5:28
  I'd saved like $30,000.
• 5:30
  And that was enough for like, yeah,
• 5:31
  and I was making $39,000 as a preschool teacher,
• 5:35
  but then like an additional-
• 5:37
  - So you were a good saver.
• 5:38
  - An amazing saver,
• 5:39
  because I was making additional like five,
• 5:42
  $6,000 a year babysitting and tutoring.
• 5:45
  So I was really hustling to save.
• 5:47
  And so I had this 30,000 and I said, you know what?
• 5:49
  You know, I want to buy my first place.
• 5:53
  And so a condo and my sister
• 5:55
  who was my roommate at the time, my older sister,
• 5:57
  I said, great, she'll help me with the mortgage.
• 5:59
  And she said, okay.
• 6:00
  And so I bought a condo for $220,000.
• 6:03
  My mortgage, I'll never forget, was 1660.
• 6:06
  And she paid me like 600.
• 6:07
  So I'm like, oh.
• 6:08
  So essentially,
• 6:09
  I was paying a thousand bucks a month for this property.
• 6:11
  And that wasn't necessarily a bad decision.
• 6:13
  I just didn't know the market was going to crash.
• 6:16
  And then a friend of mine who I thought was wealthy,
• 6:18
  because in your 20s you think nice car,
• 6:20
  nice apartment, you're rich.
• 6:21
  He was not.
• 6:22
  I like to call him "Jake the Thief."
• 6:24
  I did not know he was a thief and that's why he had money.
• 6:28
  So he convinced me.
• 6:29
  I said, "Jake, you're rich."
• 6:30
  He said, "Sure."
• 6:32
  I said, "Could you show me how you got rich?"
• 6:34
  And he said, "Well, I invest with other people's money."
• 6:37
  And I was like, "Oh, what's that?"
• 6:38
  I didn't know he meant mine.
• 6:39
  He said, "You could take money off of a credit card."
• 6:41
  I didn't know that.
• 6:42
  I had a credit card,
• 6:44
  but my dad had always instructed me
• 6:45
  to pay it off every month in full, so I did.
• 6:48
  My credit score then was like a 802,
• 6:50
  'cause I paid off my credit card every month.
• 6:51
  - Which is fantastic. - And he said,
• 6:53
  "Take the money off your credit card.
• 6:54
  "As a matter of fact, open up two more
• 6:56
  "and take the money off all these credit cards.
• 6:58
  "Give it to me, I will invest it,
• 7:01
  "and then pay you monthly from this investment."
• 7:04
  And I was like, "Oh my gosh, I'm gonna be rich!"
• 7:07
  I was not, $35,000 in credit card debt later,
• 7:11
  I was crying.
• 7:12
  And he ran off with the money.
• 7:15
  I'll never forget, I mean, it was such a,
• 7:17
  I just ignore red flags apparently,
• 7:19
  because I remember at the time,
• 7:21
  there was a bank down the street
• 7:22
  where I was taking the money out of off my cards.
• 7:25
  And I used to, for preschool,
• 7:27
  we used to have to get dressed in nurses scrubs
• 7:29
  so you could play with the kids without like,
• 7:31
  you know, worrying about your clothes.
• 7:32
  And I had on like these pink scrub bottoms
• 7:35
  and a teddy bear scrub top.
• 7:38
  I probably just look like a baby.
• 7:39
  I'm at the bank asking,
• 7:40
  "Can I please take $35,000 off my card?"
• 7:43
  - Oh my God. - They were like,
• 7:44
  "Are you okay?" And I was like, "Yeah."
• 7:46
  Meanwhile, I'm like, 25. - They're like,
• 7:47
  what's going on? People don't do this-
• 7:49
  - Yes, and they were like,
• 7:51
  "Are you sure it's not a scam?"
• 7:52
  I'm like, "No, this is my friend."
• 7:54
  You know, but I was an adult, so they said, "Okay."
• 7:57
  I mean, you think it would have had
• 7:58
  like an alarm ringing in my head, it didn't.
• 8:00
  And then right when the housing market started to crash,
• 8:04
  my school, which was non-profit based,
• 8:06
  lost their funding and my school closed.
• 8:08
  So now I had no job, $35,000 in credit card debt,
• 8:12
  $220,000 mortgage, and $50,000 in student loan debt
• 8:18
  and no way to pay it.
• 8:20
  And the debt collector started rolling in
• 8:23
  and I just remember feeling panicked.
• 8:25
  And I didn't want to tell my parents
• 8:27
  because I was like, "Oh my gosh."
• 8:28
  I had not consulted them on any of these things really.
• 8:30
  My sister was like, "Well, what if they take your house,
• 8:33
  what will you do?"
• 8:33
  I said, "I guess I could move back home."
• 8:36
  She's like, "Well, why wait?
• 8:37
  'Cause what if they lock you out, you know,
• 8:39
  and then you can't get your things."
• 8:40
  So I remember like bringing my lamp home
• 8:43
  and then bringing like my blanket and then my mattress.
• 8:46
  My dad was like, "What?
• 8:47
  Do you live here?"
• 8:48
  - You just slowly moving back in.
• 8:50
  They're like, what's going on? - Yes, and so
• 8:53
  what I told him at the time was, "Oh, I lost my job."
• 8:55
  And he was like, "Okay."
• 8:56
  I didn't tell him about the other things.
• 8:57
  And I was like too ashamed.
• 8:59
  'Cause I knew, I mean, they're my parents, they love me,
• 9:01
  so, but I was ashamed that I didn't ask for advice
• 9:04
  and had made these mistakes.
• 9:06
  But I fell into this financial depression
• 9:09
  because I just felt so overwhelmed.
• 9:11
  And finally, I remember my best friend Linda called me.
• 9:15
  She was like, "You're not picking up your phone.
• 9:16
  "Is everything okay?"
• 9:17
  And I was like, "No."
• 9:18
  And I told her everything.
• 9:19
  I'm like, "I'm living back home."
• 9:21
  By then, I was like 28 going on 29.
• 9:24
  I was like, "I'm gonna be spending my 30th birthday
• 9:27
  "in my middle school bed."
• 9:29
  You know, I was like, "I owe this money.
• 9:31
  "They're gonna take my house!"
• 9:32
  And she started laughing.
• 9:33
  I said, "Mm, I fail to see what's so funny."
• 9:36
  And she was like, "I'm back home too.
• 9:38
  "I also lost my job."
• 9:40
  I kind of looked around,
• 9:41
  all my friends were struggling financially,
• 9:43
  and I was always the go-to.
• 9:45
  And I thought, "Well, Tiffany, you know how to budget
• 9:46
  "and save and you know how to navigate your debt
• 9:49
  and credit."
• 9:50
  And so I started doing that for myself and then them.
• 9:53
  And then before I knew it, a friend said,
• 9:55
  "You should make this into a business."
• 9:56
  And so I started The Budgetnista.
• 9:58
  - So tell me a little bit about what that process
• 10:00
  of coming back from that low was like?
• 10:04
  What did it take to kind of rebuild?
• 10:06
  - The one, it started by I had to release the shame.
• 10:09
  Because shame shields solutions.
• 10:13
  And the only way to release the shame,
• 10:15
  I didn't know that at the time,
• 10:16
  but I had to give voice to it.
• 10:18
  Because shame is like, "Don't tell anybody.
• 10:20
  Don't say anything."
• 10:21
  And so when I told Linda,
• 10:24
  and she wasn't like wagging her finger at me,
• 10:26
  I thought, "Oh, it released some of that."
• 10:29
  I said, "Oh, this is not so bad."
• 10:31
  I'm not like, you know, I didn't kick anyone's puppy.
• 10:34
  You know, they mean like Tiffany, you know,
• 10:36
  and so, I started to realize wait you made a mistake,
• 10:40
  but you're not a mistake
• 10:42
  because that's what I realized I was saying like, you know,
• 10:45
  I was beating myself up so bad
• 10:47
  and she gave me the permission to forgive myself,
• 10:50
  and in releasing that shame I said,
• 10:52
  like the lessons you learned as a kid are still here,
• 10:55
  you know, and so I, first things first,
• 10:58
  I was like, okay something with this debt.
• 11:00
  You have to get it off your back.
• 11:02
  Debt collectors calling you 24/7, there has to be a way.
• 11:05
  And so a friend of mine was a bankruptcy and debt lawyer.
• 11:08
  And I was like, how do I navigate these debt collectors?
• 11:10
  He said, "You know, by law, you can ask
• 11:13
  "that they not call you, that they email you
• 11:16
  "or send you letters instead."
• 11:17
  I'm like, "Really?"
• 11:18
  He said, "Yeah, there's something called
• 11:19
  "a cease and desist letter."
• 11:20
  What, I ran to my Staples and faxed,
• 11:23
  you know, we faxed back then, you know?
• 11:26
  - Yeah, I'm like, I need this, I need this,
• 11:28
  I need the calls to stop, right?
• 11:30
  - And so I just said, "Hey,
• 11:31
  you can communicate with me via email.
• 11:33
  "Here's the email and via letter, but no more calls."
• 11:36
  So that gave me a little peace of mind
• 11:38
  where I was like, "Okay."
• 11:39
  And then I realized at the time,
• 11:41
  this was right before the foreclosure was about to hit
• 11:44
  'cause it took a while.
• 11:45
  So many people were losing their homes,
• 11:47
  they actually didn't foreclose on my home
• 11:49
  for some months later.
• 11:51
  So it didn't hit my credit score.
• 11:53
  And I realized, I could do a balance transfer
• 11:55
  before this great credit score tanks
• 11:57
  because of this foreclosure that's pending.
• 12:00
  You know, and so that's what I did.
• 12:01
  I transferred as much as I could from my credit cards
• 12:05
  with higher interest rates.
• 12:07
  I was able to get, because my credit score
• 12:08
  was still so high, I think it was almost like 18 months,
• 12:12
  it was something crazy, of zero interest.
• 12:15
  So I was like, okay, it wasn't all of the credit card debt,
• 12:18
  but most of it, maybe like $20,000 or so.
• 12:21
  So now every penny I paid to the 20,000
• 12:24
  I was able to transfer actually went to the credit card.
• 12:27
  - [Angie] Was going to paying off the debt.
• 12:28
  - So that helped a lot.
• 12:29
  It took me three years to get out of that credit card debt.
• 12:32
  And then when it came to the student loans, I was like,
• 12:33
  "I can't do anything about it."
• 12:34
  So I did, because they weren't private,
• 12:37
  they were federal student loans.
• 12:39
  So I was able to defer them and forbearance,
• 12:42
  which just meant basically freeze.
• 12:44
  You know, so I just focused on the credit card debt.
• 12:47
  And then I was looking for a job I couldn't find,
• 12:50
  like especially when I was let go,
• 12:52
  it was the beginning of the school year,
• 12:54
  so they already had their teachers, you know?
• 12:56
  So instead I was like, I just did everything.
• 12:58
  I babysat, I tutored.
• 13:00
  Thankfully, I was still on unemployment for a while.
• 13:03
  And so I kind of cobbled together this new financial life
• 13:06
  where I dropped down to what I call my ramen noodle budget,
• 13:10
  which is like, you know, your college budget
• 13:11
  where you're like, I learned to do my own hair.
• 13:14
  You know, like I didn't go out.
• 13:16
  I mean, I walked a lot of places.
• 13:17
  I was in the best shape of my life.
• 13:18
  I had a car, but who had gas money?
• 13:20
  (both laughing)
• 13:22
  And so I really pared down.
• 13:24
  I lived with my parents for like a year.
• 13:26
  Then I moved in with one of my sisters, Tracy,
• 13:29
  who's two years younger than me.
• 13:30
  I slept on her couch
• 13:32
  because she had a one bedroom for another year.
• 13:34
  It took about five years for me
• 13:36
  to dig my way out of all of that I owed.
• 13:40
  I mean, I still owed my student loan debt,
• 13:42
  but the credit card, the house was gone,
• 13:46
  and I kind of at least was at a baseline of basically zero.
• 13:48
  - I feel like I'm starting again.
• 13:49
  - Yes, yes.
• 13:51
  And so it was not easy.
• 13:52
  So when people tell me some of their financial mistakes,
• 13:55
  I'm like, "Well, let me tell you
• 13:56
  about Tiffany's financial fiascos."
• 13:58
  (both laughing)
• 14:01
  - I mean, there's something to be said,
• 14:03
  and I think you bring a good point up,
• 14:05
  is that, like,
• 14:06
  sometimes you have to be allowed to make your own mistakes.
• 14:09
  - Going through that, I will never forget,
• 14:13
  you know, the lesson of, like, ramen noodles again,
• 14:17
  my sister's couch.
• 14:18
  It built the financial responsibility in me.
• 14:20
  I need it for myself, versus just, like,
• 14:23
  just doing what my parents said.
• 14:25
  - We're a lot tougher than we think we are.
• 14:27
  And sometimes we gotta kind of see what we're made of.
• 14:29
  So let's talk about houses.
• 14:32
  So, like, you came back.
• 14:34
  You weren't afraid to go and get another house
• 14:36
  at some point in the future.
• 14:37
  But you have a new rule.
• 14:39
  So it's called, "Is your mortgage rentable?"
• 14:41
  So explain that to me.
• 14:42
  - So I told myself,
• 14:43
  if I was ever gonna buy another place again,
• 14:46
  if I was gonna get a mortgage, it had to be rentable,
• 14:49
  which meant that I could get between $1300 and $1500,
• 14:56
  which meant that if I couldn't afford,
• 14:59
  my mortgage could somebody cover it if I had to rent it out,
• 15:01
  and at the very least, ideally try to cover my mortgage.
• 15:05
  So the second property that I purchased
• 15:06
  with my late husband, we got, it was a foreclosure,
• 15:12
  and it was worth about 320 at the time,
• 15:15
  but the bank owned it and they just wanted the money
• 15:16
  that was owed to them, which was about 180.
• 15:19
  So we got really fortunate.
• 15:22
  But it needed a lot of work.
• 15:24
  Like whoever they had, it was a mess in there.
• 15:28
  So, and it's funny because I used, Angie, to be like,
• 15:32
  we need a contractor, we need an electrician, we need...
• 15:35
  You know, and so we were able to fix it up.
• 15:40
  And now that investment of 180, we put about 180 into it.
• 15:44
  And so you figure that's like 360,
• 15:45
  but now, so that house we purchased in 2017,
• 15:49
  renovated like a year or so later,
• 15:51
  now that house is worth about 550.
• 15:55
  Yeah, so you think to yourself,
• 15:57
  like that was such a great investment.
• 15:59
  For example, I bought my,
• 16:00
  I live in a condo around the corner from the house
• 16:03
  after sadly my husband passed away in 2021,
• 16:07
  he had a brain aneurysm.
• 16:08
  So literally, he was here on Monday
• 16:11
  and saying he had like a terrible headache
• 16:12
  and then on Friday he was gone.
• 16:15
  41. - Oh, that's horrible.
• 16:16
  I'm so sorry to hear that. - Thank you.
• 16:18
  So the condo that I purchased,
• 16:19
  and I'm always like free with numbers.
• 16:20
  I purchased it for 520, 2023, it's now worth 820.
• 16:27
  Isn't that crazy?
• 16:29
  New Jersey is something else.
• 16:30
  So, I've been fortunate that if purchased properly,
• 16:35
  you have to know your market.
• 16:36
  And if it makes sense that yes,
• 16:38
  home ownership can be a conduit for wealth.
• 16:40
  - So, I think you bring up a really good point though
• 16:42
  on carrying costs, you know,
• 16:44
  so like, let's go back over that again,
• 16:46
  just so people understand,
• 16:47
  'cause I think sometimes people think
• 16:49
  it's just the mortgage.
• 16:50
  You know, let's talk about
• 16:51
  what the carrying cost of a home is.
• 16:53
  - So there's your mortgage, obviously if you have one.
• 16:56
  There are your taxes for that house.
• 16:58
  There's also insurance for that house.
• 17:01
  So for example, that house, I have a landscaper.
• 17:04
  They don't have a big lawn, but still the landscaper.
• 17:07
  Also too, because my sister has two kids, I was like,
• 17:10
  "Ugh, don't mess up my house."
• 17:12
  So I have a cleaning lady that comes every two weeks.
• 17:14
  (both laughing)
• 17:15
  - Right, right. - You know?
• 17:16
  I'm trying to think of what else.
• 17:17
  I mean, it depends.
• 17:18
  Some municipalities, some people pay sewage
• 17:20
  and garbage separately,
• 17:21
  but yeah, it equals about for that house,
• 17:23
  about $1500 a month.
• 17:25
  - Tell me about the noodle budget.
• 17:27
  When I was learning about you, Tiffany,
• 17:29
  I was like, I love the name.
• 17:31
  So let's talk about that one too.
• 17:33
  - Yeah, so I wrote this book, Angie,
• 17:35
  called "Get Good With Money" in 2021.
• 17:38
  And actually, the paperback just came out.
• 17:40
  And I talk about like the noodle budget,
• 17:44
  which really just is if you had to eat ramen noodles,
• 17:49
  meaning, if you just had to get down to the bare bones,
• 17:52
  I do not believe that you should live
• 17:54
  at your noodle budget long-term, forever,
• 17:56
  it's just a temporary drop.
• 17:58
  So let's just say you're hearing the whispers
• 18:00
  that they're going to be letting people go at your job.
• 18:03
  Well, then you might say, oh my gosh,
• 18:05
  you know, I was actually hired just a couple of years ago.
• 18:08
  I'm likely to be let go.
• 18:09
  Let me drop down to my noodle budget,
• 18:11
  which means I'm gonna let go of my streaming platforms.
• 18:14
  I'm gonna make sure I have food.
• 18:15
  I'm gonna make sure that I have a place to live
• 18:17
  and my medicine and things like that.
• 18:18
  The money that, you know, ideally you have saved
• 18:21
  that's coming in can stretch longer.
• 18:23
  So your regular life save might cost you $5,000 a month.
• 18:27
  But maybe your noodle budget life
• 18:29
  with everything cut out is 3,500.
• 18:31
  And so, like you temporarily live at that 3500
• 18:34
  until you're back on your feet again,
• 18:35
  and then you can go back to your 5,000.
• 18:37
  So it's just a temporary safeguard
• 18:41
  to extend the life of your savings.
• 18:43
  - Which is also another good point,
• 18:44
  'cause you can also, not only are you able to stay longer,
• 18:47
  but if that time, if the job doesn't go away,
• 18:51
  you're actually saving
• 18:51
  a bunch of money too. - Exactly, exactly.
• 18:53
  - You're adding to that saving.
• 18:54
  So let's go to this point.
• 18:55
  Like so, what kind of savings level,
• 18:57
  or what should they keep as a cushion
• 18:59
  when they're out there
• 19:00
  and kind of making that house decision?
• 19:02
  - So ideally, I mean, most people,
• 19:03
  this is gonna be very difficult for,
• 19:05
  but ideally, even if you do put your savings
• 19:07
  into your house, how quickly can you get back
• 19:10
  to minimum three months of noodle budget savings?
• 19:14
  So that's what's so great about it, right?
• 19:15
  Because remember, we're gonna drop down to it
• 19:18
  if we hit hard times.
• 19:19
  So my assumption is if you have to dip into your savings,
• 19:21
  you've hit hard times.
• 19:23
  So you multiply your noodle budget times three,
• 19:26
  and that's the bare minimum,
• 19:29
  but ideally upwards of six months.
• 19:33
  And I tell people, if you're an entrepreneur,
• 19:34
  you might want to do a year, but no more than a year.
• 19:37
  So I keep a year
• 19:38
  because I could literally have a downturn that hits us hard.
• 19:42
  And I'm like, okay, I need to buckle down.
• 19:43
  It's going to take a year for me to turn the business around
• 19:46
  and I've done that before.
• 19:47
  - Right, makes total sense.
• 19:49
  So, you know, so if you're thinking about
• 19:52
  buying your first house and you're like,
• 19:53
  hey, I saved up for my down payment,
• 19:55
  don't stop there.
• 19:56
  Like don't rush and buy then, wait a little bit longer
• 19:59
  till you get a little more cushion
• 20:01
  so you're not draining all your savings.
• 20:03
  - Because I promise you, the city or the town you live in,
• 20:06
  they love to say, "Oh, is that what taxes were
• 20:08
  "when the other person lived here?"
• 20:09
  Not for you. (chuckles)
• 20:11
  I remember I called my dad in a panic
• 20:13
  when I bought my condo, my first condo.
• 20:15
  I was like, "Daddy, my taxes went up $120 a month."
• 20:20
  He said, "Welcome to the real world."
• 20:23
  So you wanna have that buffer
• 20:25
  because you just don't know what comes up.
• 20:27
  You know, people buy a house
• 20:28
  and the boiler goes out, then what?
• 20:30
  So you want that buffer, mm-hmm.
• 20:32
  - As the budgetnista, you've had women tell you,
• 20:35
  I went from homeless to homeowner because of you.
• 20:38
  What did you teach them that made the difference?
• 20:41
  - So, well, I think in the beginning,
• 20:43
  it was just, it was possible to do.
• 20:46
  I remember the first time it happened,
• 20:48
  a woman wrote me and said,
• 20:49
  "I'm currently living in a shelter and I am working."
• 20:54
  It was kind of like the first time I really,
• 20:55
  really felt like, wow, you could be working.
• 20:58
  It's still not enough, you know?
• 21:00
  And she said, I am working.
• 21:01
  And at the time I had these free challenges every January.
• 21:04
  It would be like anywhere from a week to like a month
• 21:07
  where it's a financial challenge
• 21:09
  where I would walk you through either budgeting or savings,
• 21:11
  or even we had a home buying edition of that challenge.
• 21:14
  And she said, "Do you think I should do the challenge?
• 21:16
  'Cause I don't really have much money."
• 21:18
  I said, "Well, one, it's free.
• 21:19
  And even if you do it just on paper,
• 21:22
  like you can't save, you can't do the things just yet."
• 21:25
  I said, "Because, you know,
• 21:27
  unless you know how to do something different,
• 21:29
  you never will do anything different."
• 21:31
  So I encouraged her to do that.
• 21:32
  And then Linda, my best friend that I was talking about,
• 21:35
  she has her master's in social work.
• 21:38
  She's a certified social worker.
• 21:40
  So I asked Linda, what are some tools and resources
• 21:43
  just in the state and city where she lived
• 21:46
  that she could look into?
• 21:46
  So Linda gave me a list of them and I shared them with her.
• 21:49
  And this is a woman, just via literally Facebook message,
• 21:53
  which is messaging back and forth.
• 21:54
  And then I didn't think about it.
• 21:55
  I hadn't heard from her for some years.
• 21:57
  And then I got a ping one day
• 21:59
  and I could see the old messages.
• 22:01
  She said, "Tiffany, I don't know if you remember me,"
• 22:03
  so I looked at the old messages.
• 22:04
  I was like, "Oh, that's right.
• 22:05
  The young woman in the shelter."
• 22:07
  And she's like, "I just want to say thank you so much.
• 22:09
  I'm closing on my home today."
• 22:11
  Oh my gosh. - Oh my gosh.
• 22:13
  I love that. - I was like, what?
• 22:15
  'Cause I'm a big crybaby.
• 22:15
  (both laughing)
• 22:17
  So I gave her my number, I was like, "Call me."
• 22:19
  And we cried like babies on the phone.
• 22:22
  And I was like, "I'm so proud of you."
• 22:23
  And I literally said, "What did I say?"
• 22:26
  And she said, "No, Tiffany,"
• 22:28
  she's like, "One, you gave me that there was hope
• 22:31
  "that I could do it.
• 22:32
  "Then you gave me the step-by-step tools
• 22:34
  "about here is how you budget and start to save
• 22:37
  "and manage your debt and pay down your debt
• 22:41
  "and manage your credit."
• 22:42
  And she was just like, you know, "Slowly but surely,
• 22:44
  "I started to make more money,
• 22:46
  "but I didn't forget how to budget,
• 22:47
  "how you showed me how to save, how to set aside,
• 22:50
  "how not to live over my means."
• 22:52
  And she signed up for a program
• 22:55
  where they help with down payments.
• 22:57
  And she said, "Because I'd been really consistent
• 22:58
  "and my credit score was good, I qualified."
• 23:01
  And she's like, "You changed the trajectory of my life
• 23:03
  "and my children's lives."
• 23:04
  And so she was just the first.
• 23:06
  That's happened at least three or four times after that,
• 23:09
  it's just blown my mind.
• 23:10
  - That's fantastic.
• 23:11
  And you have done a wonderful job,
• 23:13
  you know, taking the shame out of not being in control
• 23:17
  of your finances and being willing to kind of seek help.
• 23:20
  So I think leading by example as you have
• 23:23
  and being so open about your experiences,
• 23:25
  I think that tells people a ton.
• 23:28
  Last question I've got here for,
• 23:29
  what's the biggest mistake homeowners make?
• 23:32
  Not because they don't know better,
• 23:34
  but because life gets in the way.
• 23:36
  - I think the biggest mistake that homeowners make
• 23:39
  is buying a home for just who they are right now,
• 23:43
  not who they might grow into.
• 23:45
  - Oh, that's a great point. - So I'll give you an example.
• 23:47
  My podcast partner, when I had my podcast, "Brown Ambition,"
• 23:51
  Mandy, she bought this cute little house,
• 23:54
  her and her husband.
• 23:55
  And it's like, I think I want to say
• 23:57
  it's two or three bedrooms.
• 23:58
  And at the time they had one son, one rambunctious son.
• 24:02
  It was really cute.
• 24:03
  And then the pandemic happened
• 24:04
  and they were able to refinance for like two, 3%.
• 24:08
  Amazing!
• 24:09
  And then they had a second son, two boys.
• 24:12
  Oh my gosh.
• 24:13
  - Yeah, and they're working out of their house
• 24:15
  and they're, and- - And she's like,
• 24:18
  but where are we going to go? We have 3%.
• 24:21
  So she's like, if I would have known
• 24:23
  I would have gotten, you know,
• 24:25
  like they knew they were going to grow their family.
• 24:27
  She's like, I wish we would have gotten a house
• 24:29
  that made sense for where we're going
• 24:30
  and then locked in that 3%.
• 24:32
  And so, I think that's one of the biggest mistakes
• 24:34
  because, you know, you think like, oh, you know,
• 24:38
  this two bedroom is going to be enough.
• 24:40
  What, are you planning to get married?
• 24:43
  Are you trying to have additional children?
• 24:45
  So just keeping that in mind.
• 24:47
  - So Tiffany, if people want to learn more
• 24:50
  about all of your great advice when it comes to budgeting,
• 24:53
  where should they go?
• 24:54
  - So I am the Budgetnista on all the platforms
• 24:57
  from LinkedIn, YouTube, Instagram, TikTok.
• 25:00
  And if you'd like to get a copy of my new paperback,
• 25:03
  it's out on paperback now,
• 25:05
  my New York Times bestselling book, "Get Good with Money."
• 25:08
  It's available at getgoodwithmoney.com.
• 25:13
  - It's very fun, Tiffany.
• 25:15
  I really enjoyed it. - Thank you, Angie.
• 25:17
  - Here's what I'm taking away from my conversation
• 25:19
  with Tiffany.
• 25:20
  A house isn't just a mortgage.
• 25:22
  It's the taxes, the insurance, the landscaper,
• 25:26
  even the boiler that goes out the week before you move in.
• 25:29
  But the mortgage is only one piece of the puzzle.
• 25:32
  What's important is to understand the full budget.
• 25:35
  It's not actually about renting,
• 25:37
  it's about not letting a house own you.
• 25:40
  The mortgage you can carry, the cushion you don't drain,
• 25:43
  the decisions you make on purpose,
• 25:46
  that's what owning it actually means.
• 25:48
  Thanks for watching.
• 25:50
  And if you enjoyed it, please subscribe
• 25:52
  and share it with someone who needs it.
• 25:54
  The biggest thing I took away from Tiffany
• 25:57
  was that shame shields solutions.
• 25:59
  We have to talk about money.
• 26:01
  Talk about it with your partner, your kids, your friends.
• 26:04
  That's how you actually own it.
• 26:07
  Until next time, I'm Angie Hicks with "Own It."