Latest / Life. Money. You.® Podcast / S3|E8: Spring Forward with Your Credit & Debt Strategy

Transcript

S3|E8: Spring Forward with Your Credit & Debt Strategy · Life. Money. You.® Podcast

• 0:12
  SPEAKER_03: Welcome everyone to our Credit and Debt Strategy podcast live event.
• 0:16
  SPEAKER_03: Just as a reminder for new folks and returning folks, we are Life Money You.
• 0:21
  SPEAKER_03: We're a financial well-being program provided by BCU, a credit union fiercely committed to your financial well-being.
• 0:28
  SPEAKER_03: These live events are intended to create a community of like-minded folks who are trying to build their financial confidence and learn more about certain topics.
• 0:38
  SPEAKER_03: And today's is about credit and debt and how they are so closely intertwined.
• 0:44
  SPEAKER_03: And we have two amazing coaches here today, both Sam and Shannon, who are going to talk through both practical examples and real life stories to help you get a better grasp on your current situation.
• 0:57
  SPEAKER_03: And with that, I'm going to let Shannon introduce herself first and then Sam.
• 1:03
  SPEAKER_02: Thank you, Danny.
• 1:03
  SPEAKER_02: So yes, my name is Shannon.
• 1:05
  SPEAKER_02: I've been here at the credit union for um a little over six years.
• 1:08
  SPEAKER_02: I am a certified financial coach, and that is my favorite part of my job.
• 1:13
  SPEAKER_02: So happy this is springtime is the best time to consider all of this, especially if you are a budgeter and you do like an annual review at the beginning of the year.
• 1:22
  SPEAKER_02: Now's the time to really uh solidify your plans and reach those goals.
• 1:27
  SPEAKER_00: Hey guys, my name's Sam.
• 1:29
  SPEAKER_00: I'm an area manager for BCU.
• 1:31
  SPEAKER_00: I had I too have been with BCU for a little over six years now.
• 1:34
  SPEAKER_00: Um I am a dad of two boys and married for 15 years.
• 1:39
  SPEAKER_00: So I know what it's like to deal with a budget and probably most of the things that you guys deal with that can be thrown at you, I've probably had thrown at me.
• 1:47
  SPEAKER_00: So um I love to share stories and help you guys create those financial strategies and just be really successful.
• 1:54
  SPEAKER_03: And I myself always learn something new uh in these events.
• 1:58
  SPEAKER_03: So I'm excited for that today.
• 2:00
  SPEAKER_03: And to kick things off, um, let's start with Sam, just breaking down credit for everyone here.
• 2:06
  SPEAKER_03: We hear all the time how important it is.
• 2:08
  SPEAKER_03: So whether it's getting approved for a loan or an apartment or qualifying for just a better rate, um, what does the credit score itself comprise of?
• 2:17
  SPEAKER_03: Or what is it made up of?
• 2:19
  SPEAKER_00: Yeah, great question.
• 2:19
  SPEAKER_00: So, you know, a lot of people think, oh, you know, the the the credit score is just a mysterious number, smoke and mirrors.
• 2:25
  SPEAKER_00: Nobody knows what happens.
• 2:26
  SPEAKER_00: And then something happens, and you're like, why did it go up?
• 2:28
  SPEAKER_00: Why did it go down?
• 2:29
  SPEAKER_00: You know, and nobody ever really knows, but they're I'm I'm gonna bring a little bit of context to it.
• 2:33
  SPEAKER_00: So um your credit score is divided into five main buckets, basically.
• 2:38
  SPEAKER_00: And that those five main buckets are what decides how your credit score is created.
• 2:42
  SPEAKER_00: Um, your largest bucket is is probably one of the most obvious buckets, it's your it's your payment history.
• 2:47
  SPEAKER_00: It's a do I make on-time payments?
• 2:49
  SPEAKER_00: Um and it's just that simple.
• 2:50
  SPEAKER_00: Um, and that's 40% of your score.
• 2:52
  SPEAKER_00: So that is a majority of your credit score.
• 2:54
  SPEAKER_00: So when you do make a late payment, and but and when I when I say late payment, it doesn't mean that you're one day late on your credit card payment.
• 3:01
  SPEAKER_00: It's when you hit that 30-day mark and they actually report it to the credit bureaus.
• 3:05
  SPEAKER_00: So that's when you're gonna get that technical late payment um on your credit reports, but that can really weigh down your credit score.
• 3:13
  SPEAKER_00: I've seen people's credit scores drop, you know, five points, I've seen them drop a hundred points just because of one late payment.
• 3:20
  SPEAKER_00: It depends on you know how much weight that credit account weighed on your credit score.
• 3:24
  SPEAKER_00: If you only have two or three credit accounts, it's gonna weigh more.
• 3:27
  SPEAKER_00: Um, your second biggest bucket, and this is the one that most people miss out on, is your credit utilization bucket.
• 3:32
  SPEAKER_00: So you had it that's probably one of the most delicate buckets that there is because that literally changes on like a month-by-month basis.
• 3:40
  SPEAKER_00: Um, because if you if you don't have any credit cards at all, a lot of people come to me as they say, hey, I don't have a credit card, I shouldn't have any bad debt.
• 3:46
  SPEAKER_00: Well, you also missed out on that entire bucket on your credit score.
• 3:49
  SPEAKER_00: And that credit utilization bucket, that compromise, that that consists of about 26% of your credit score.
• 3:56
  SPEAKER_00: So if you don't have a credit card, you have to have credit cards.
• 3:58
  SPEAKER_00: You have to have revolving lines of credit to have a healthy credit score.
• 4:01
  SPEAKER_00: And and ideally about three healthy revolving lines of credit.
• 4:04
  SPEAKER_00: Um, but if you if you uh don't have the credit score, credit card at all, you don't get anything in that bucket, if you use all of the capacity of your credit score, of your credit cards, you're using 100% of the utilization on them, you're you're maxing it out, and you lose all the points in that bucket again.
• 4:18
  SPEAKER_00: So what you really ideally need to have is at least three revolving lines of credit that are that are responsibly used at less than 30% utilization.
• 4:27
  SPEAKER_00: Um, and then that will still fluctuate on a month-by-month basis.
• 4:30
  SPEAKER_00: If you have like 10% utilization and you get a 13%, all of a sudden your your your score goes down eight points or something like that, or it goes up 10 points, you're like, that could probably contribute to it.
• 4:40
  SPEAKER_00: Um your third biggest score, or your third biggest bucket out of all of those is your account mix.
• 4:45
  SPEAKER_00: And basically that's just how many um how many revolving lines of credit do I have, which is like your credit cards or lines of credit or something like that.
• 4:53
  SPEAKER_00: How many in installment loans do I have?
• 4:55
  SPEAKER_00: And just making sure that you've got a healthy balance of both.
• 4:57
  SPEAKER_00: Because if you don't hey, if you got just 15 credit cards and you got zero installment loans, we can't really point to, you know, when you apply for an installment loan, does that does that do you have anything in the in the history that would point towards you paying that back?
• 5:10
  SPEAKER_00: So um that is another score that compromise that consists of about I don't know, about 18 to 20% of your score.
• 5:17
  SPEAKER_00: Your fourth biggest bucket, and it's just purely time bound, is how old is my oldest credit score or how old is my average credit account?
• 5:25
  SPEAKER_00: And so if you've got old cards from like college or something like that, you know, as long as you're not paying like a uh an annual fee on it or something like that, keep that card open, you know, even if it's got a zero balance on it and you haven't used it in forever, you know, keep it from going dormant, you know, put an auto payment on it or something, or buy a Coke or a tank of gas every once in a while just to keep it going.
• 5:45
  SPEAKER_00: But I've got accounts that are like 18 years old now at this point.
• 5:49
  SPEAKER_00: And I don't I don't want to get rid of them because if I pull that out of the mix, my score in that bucket's gonna go down.
• 5:54
  SPEAKER_00: And all of a sudden, my you know, average average 15 years of credit age goes down to like nine years all of a sudden.
• 6:00
  SPEAKER_00: So that can make a big impact as well.
• 6:02
  SPEAKER_00: And then the very last one, this is what most people freak out about the most, is the is the inquiries.
• 6:06
  SPEAKER_00: Um that only accounts for 5% of your score.
• 6:09
  SPEAKER_00: Inquiries aren't bad, they fall off after a little while.
• 6:13
  SPEAKER_00: Um, but the what when they're bad is when you're trying to apply for a new home and you're you're putting in an application for a$300,000 house, and then you're also over here trying to get a$90,000 car and a$50,000 credit card, that's when the mortgage companies are like, eh, that's probably not a good idea, that you're just shopping around for money at this point.
• 6:32
  SPEAKER_00: Um yeah, that's that's really how um credit scores are decided.
• 6:36
  SPEAKER_00: But the credit score doesn't just decide whether or not you get approved for a loan or not, it has so much more impact on you.
• 6:43
  SPEAKER_00: Um if you go down to Verizon and you want to get the new iPhone 17 Pro Max, you know, they're gonna do a credit check on you.
• 6:49
  SPEAKER_00: And if you've got a good credit score, you'll get approved for it, right?
• 6:51
  SPEAKER_00: Or you might get approved for that really cool retro flip phone LG, you know, from like 19, the indestructible ones from like 2000.
• 7:00
  SPEAKER_00: Um, those are cool.
• 7:01
  SPEAKER_00: I like retro, but not when it comes to cell phones.
• 7:03
  SPEAKER_00: I like my smartphones these days.
• 7:05
  SPEAKER_00: Um you go down to the utility, maybe you got a new, a new apartment.
• 7:09
  SPEAKER_00: You go down to the utility company, get that electricity put in your name, right?
• 7:12
  SPEAKER_00: Are you gonna pay that$350 um deposit, or do you have really great credit and you get away with a zero dollar deposit?
• 7:18
  SPEAKER_00: That's you know, that's a lot of money, you know, that you have to tie up all because of a credit score.
• 7:23
  SPEAKER_00: Or if you go down to um to rent the apartment and then they do a credit check for you as well.
• 7:28
  SPEAKER_00: They're gonna see if you're worthy to rent their rent their apartment that decides whether you get the apartment or not.
• 7:32
  SPEAKER_00: That's just like one day's worth of errands that could possibly happen that if you had a great credit score, you wouldn't have to worry about or you would save a lot of money.
• 7:40
  SPEAKER_00: But that's kind of a credit score in a nutshell beyond just the that mystical number.
• 7:46
  SPEAKER_03: Yeah.
• 7:47
  SPEAKER_03: Um, I want to remind everyone and thank you, Ashley, for your first question in our chat.
• 7:51
  SPEAKER_03: But another part of these live events is to allow y'all to ask your questions.
• 7:56
  SPEAKER_03: We have these coaches live and ready.
• 7:58
  SPEAKER_03: I'm also a certified financial coach, but we're here to share our experiences and help provide examples for you to take advantage of your financial wellness.
• 8:06
  SPEAKER_03: Uh, Ashley asked us the reporting part for credit.
• 8:10
  SPEAKER_03: How do you know which credit score to trust or pay attention to?
• 8:14
  SPEAKER_03: Um, Sam, I'll let you take this one.
• 8:16
  SPEAKER_00: Yeah, so we we here the credit union, we typically use transunion.
• 8:20
  SPEAKER_00: Um, and then any of the three bureaus are are reliable.
• 8:24
  SPEAKER_00: I I so you got TransUnion, Equifax, and remind me of the third one.
• 8:29
  SPEAKER_00: Just Droblank.
• 8:30
  SPEAKER_00: Experian.
• 8:31
  SPEAKER_00: Experian, yeah.
• 8:32
  SPEAKER_00: So those are the three main ones.
• 8:33
  SPEAKER_00: And you can pull free credit reports from each of those every year for free.
• 8:37
  SPEAKER_00: And so you can actually see what they've got, and they're all going to report similar um numbers, likely.
• 8:42
  SPEAKER_00: The only time I ever find a discrepancy is with FICO.
• 8:44
  SPEAKER_00: FICO, to me, at least in my experience, FICO has always um been inflated.
• 8:50
  SPEAKER_00: So a lot of times a lot of banks will use, oh, your FICO's 800, but then we go pull an actual credit report from Experian or something, and it's like, no, it's a 680.
• 8:58
  SPEAKER_00: Um, and so there's a lot of discrepancies there on how they create that.
• 9:01
  SPEAKER_00: But I know that the Experian, those the the big three credit bureaus use that same five bucket uh scenario system when they're deciding those.
• 9:09
  SPEAKER_00: So those those can be used and they're reliable.
• 9:11
  SPEAKER_00: And a lot of cases, you know, if one is better than the other, then a lot of cases we can use that that other um number as well.
• 9:18
  SPEAKER_00: And it just just depending if it makes a big difference on your pricing or not.
• 9:23
  SPEAKER_03: Yeah.
• 9:24
  SPEAKER_03: Thank you, Sam.
• 9:25
  SPEAKER_03: Shannon, I'm gonna throw the next one your way.
• 9:28
  SPEAKER_03: Melissa asked, what are our thoughts on freezing your credit?
• 9:33
  SPEAKER_02: Um, in this day and age, it's a good thought.
• 9:35
  SPEAKER_02: It's a good thing to do.
• 9:36
  SPEAKER_02: It's an easy thing to do.
• 9:37
  SPEAKER_02: Equifax, um, transunion and Xperian all have really quick easy access tools to freeze and then unfreeze it really quickly if you need to apply for a loan or do something even with a soft credit poll.
• 9:49
  SPEAKER_02: Like if you open membership with us, it's just a soft credit poll, but you do have to have transunion unfrozen.
• 9:56
  SPEAKER_02: Um, so definitely a good thing to do, and it should be a free thing for you for you to be able to do.
• 10:01
  SPEAKER_03: Yeah, and I want to add to that, it's great because it does help protect you from fraud.
• 10:06
  SPEAKER_03: As long as you're not planning to make any actions that require a credit poll, it's a great way for you to just keep your credit secure and protected from fraudsters who are attempting to pull credit with your information.
• 10:19
  SPEAKER_03: Gosh, I love these questions, everyone.
• 10:21
  SPEAKER_03: Okay, I'm gonna move next to let's see.
• 10:24
  SPEAKER_03: Um, we have Genesis.
• 10:26
  SPEAKER_03: Uh, how does it affect the credit reporting if the oldest credit card goes dormant?
• 10:32
  SPEAKER_03: Ooh, great question.
• 10:33
  SPEAKER_03: Sam, I'm gonna let you answer this one.
• 10:35
  SPEAKER_00: Um, eventually it'll so it'll go dormant and then they'll eventually close it out in a lot of cases where the the it'll show a close by lender or whatever on your credit report.
• 10:43
  SPEAKER_00: So that will come out of your your oldest age bucket, so uh your average credit age bucket bucket.
• 10:49
  SPEAKER_00: So I would just be careful not to let them go dormant.
• 10:51
  SPEAKER_00: Like I said, just make a purchase every once in a while, throw buy lunch on it, put something that you're gonna auto-charge every month on it and just pay it off, anyways.
• 10:59
  SPEAKER_00: Um, maybe it's your cell phone bill, your internet, or something like that, but just something that keeps it live and active.
• 11:05
  SPEAKER_03: Yeah, I'm gonna jump around some of our content topics, Sam and Shannon, but I think this is a great place to talk about strategic credit card use.
• 11:14
  SPEAKER_03: So I know we talked about, right, our travel rewards, cash rewards.
• 11:19
  SPEAKER_03: Um, we talked about secured cards, right?
• 11:22
  SPEAKER_03: Um, Sam, can you talk around how you can strategically use these cards to really benefit your credit?
• 11:28
  SPEAKER_00: Yeah.
• 11:28
  SPEAKER_00: So I I I like to keep uh, so you got your, you know, you got your cash, your live cash in your in your bank accounts.
• 11:34
  SPEAKER_00: You got your debit card tied to it.
• 11:35
  SPEAKER_00: I like to keep one mode, one, one, one, one step away from like fraudsters or anything.
• 11:40
  SPEAKER_00: So when I'm using my credit card, Visa is going to go after their own money, you know, a lot more aggressive than a lot, you know, when you have a fraud situation.
• 11:48
  SPEAKER_00: So I don't like people having access to my direct liquid funds.
• 11:51
  SPEAKER_00: So I like to run everything I got through a credit card first.
• 11:55
  SPEAKER_00: And the cool thing is that you will get that cash back rewards or you'll get that travel, the travel rewards points.
• 12:00
  SPEAKER_00: The the optimal thing is to pay it off each month because you know, even though you may be re-earning rewards, if you're paying interest on it, then you kind of cancel each other out.
• 12:08
  SPEAKER_00: Um, but I like to use the cash rewards.
• 12:11
  SPEAKER_00: That's my favorite, because you get liquid cash, you can you can cash it in after any$25 balance is is put on it.
• 12:17
  SPEAKER_00: Um, but here at the credit union, that's a that's a great way to build up some savings.
• 12:21
  SPEAKER_00: But I like to let mine build up.
• 12:23
  SPEAKER_00: So I make like a hundred, I've been trending out, I make like a hundred bucks a month in in rewards off of it, which is really good because you just let it pile up on there, and then you're like, oh look, there's you know, you transfer it over and we're done.
• 12:34
  SPEAKER_00: Um, but yeah, as long as you use it responsibly, you know, make sure that you're using those accounts at 30% or less utilization, you're paying off the balance each month.
• 12:42
  SPEAKER_00: But you can also be strategic too.
• 12:44
  SPEAKER_00: Um, if you like, for example, look with our travel rewards cards, um, you can redeem them for Amazon gift cards, which is fantastic because I mean Amazon's king, right?
• 12:53
  SPEAKER_00: Um, and then on the cash rewards side, cash is king too, because you can just go buy Amazon cards if you want to, or just you know, put it you can you can apply this credit credits towards your uh towards your bill every each month.
• 13:04
  SPEAKER_00: You it can almost like help you make payments, you know, on the balances that you spent, which is really nice.
• 13:09
  SPEAKER_00: But yeah, as long as you use them responsibly, you can use them strategically.
• 13:12
  SPEAKER_00: Um, but that's what we're here for to help you figure that out.
• 13:15
  SPEAKER_00: So if you ever have questions about it, call us up.
• 13:17
  SPEAKER_00: We'll give you perfect examples of how to use it, how to make it work for you, um, and just make sure that you maximize every bit of savings that you can.
• 13:25
  SPEAKER_03: Yeah.
• 13:26
  SPEAKER_03: Shannon, do you have anything to add to that reply?
• 13:28
  SPEAKER_02: Yeah, I was gonna say when it comes to to using credit cards, especially when you're thinking about like the debt, the debt side of the conversation, you want to lean on those to earn rewards.
• 13:41
  SPEAKER_02: Like and like Sam said, whenever you're spending, if you are not paying that balance off in full each month, you want to calculate what that true cost is for whatever it is that you're purchasing.
• 13:51
  SPEAKER_02: But like Sam said, the credit bureaus like to see you use 30% or less of your total credit limit in order to effectively build credit.
• 13:58
  SPEAKER_02: So we have definitely had members who, you know, maybe they're maxing out their cards and they can qualify for a personal loan where they can consolidate their debt into, you know, a 60-month term loan.
• 14:10
  SPEAKER_02: The nice thing about that is one, you know that you're paying it off in 60 months.
• 14:14
  SPEAKER_02: That's not going to haunt you long term.
• 14:16
  SPEAKER_02: But two, that might be a really quick turnaround to see a boost in your score.
• 14:21
  SPEAKER_02: So if you're trying to position for like a home purchase in a couple of years, now's a great time to look into either doing that or maybe even leaning on the equity in your auto loan.
• 14:30
  SPEAKER_02: I was speaking with a member the other day and he didn't realize that you could do a cash out refinance.
• 14:35
  SPEAKER_02: So he had like a$30,000 vehicle on Kelly Blue Book.
• 14:39
  SPEAKER_02: That's what it was worth on today's market.
• 14:41
  SPEAKER_02: He only had like$12,000 left to pay off and he had credit card debt.
• 14:45
  SPEAKER_02: So we did a refinance.
• 14:47
  SPEAKER_02: He financed the full amount, the full Kelly Blue Book amount, and he just rolled his credit card debt into that.
• 14:52
  SPEAKER_02: So it saved him a bit of money.
• 14:55
  SPEAKER_02: You know, and you might see a boost in your credit score in just a couple of months because, like Sam said, that is being reported on a month-to-month basis of, you know, how much of your limit are you using each month.
• 15:06
  SPEAKER_02: And again, Sam and I can have these conversations.
• 15:08
  SPEAKER_02: You know, you can bring your portfolio to the table to see, okay, what's my debt look like?
• 15:12
  SPEAKER_02: What's my budget look like?
• 15:14
  SPEAKER_02: And we can walk you through, you know, maybe your next one or two best steps to get you on your way.
• 15:19
  SPEAKER_00: Yeah.
• 15:20
  SPEAKER_00: And to Shannon's point, re-characterizing debt like that is so smart sometimes.
• 15:23
  SPEAKER_00: Because if you can take, remember we talked about the credit card bucket, right?
• 15:27
  SPEAKER_00: So even though we're not talking about specifically paying off all of your credit cards, if we just re-characterize that credit card debt from the credit card bucket and put it into like a personal loan, like what Shannon was talking about, or with like a title loan or something where we were cashing out money on his car, um, it's taking that all those balances out of that 26% bucket and pulling your utilization from like whatever it was, maybe it was 50 or 60% all the way down to zero.
• 15:50
  SPEAKER_00: And the coolest thing is that in 60 days, that's going to reflect on your credit score.
• 15:53
  SPEAKER_00: So you might see a hundred.
• 15:55
  SPEAKER_00: I've seen so many members have like a 60, 80, 100 point jump in their credit score, which then in turn allows you to get better interest rates on your pro on your loans.
• 16:04
  SPEAKER_00: So the cool thing about the credit union, too, is that on top of that, not only do we help you get that higher credit score, we recharacterize the debt, we do these strategic things for you.
• 16:13
  SPEAKER_00: We can go back into your loan that you got.
• 16:15
  SPEAKER_00: So, for example, you know, Shannon used that that auto cash out re uh example.
• 16:21
  SPEAKER_00: Maybe at the time that we did that cash out refinance for him, that you know, we got him into like an eight or nine percent you know interest rate.
• 16:28
  SPEAKER_00: But then his up his credit score upgrades from like a 650 to a 750 or 780 or something.
• 16:33
  SPEAKER_00: Now all of a sudden he qualifies for a better rate on that loan that he got.
• 16:37
  SPEAKER_00: So we can go back into the loan and do a rate modification, which not a lot of financial institutions do that these days, and we can give him the interest rate that he qualifies for with the new credit score and bring his payments, just solely bring his payments that we don't have to refinance, we have to do another credit check.
• 16:54
  SPEAKER_00: It's just a it's a workflow we run on our own.
• 16:57
  SPEAKER_03: Yeah.
• 16:58
  SPEAKER_03: Um, I want to keep going to the questions, so we're gonna hop back and forth.
• 17:02
  SPEAKER_03: Eric asked, Does it really take seven years for a late payment to drop off your credit score?
• 17:08
  SPEAKER_03: Shannon, I'll let you take this one.
• 17:10
  SPEAKER_02: Yeah, it does.
• 17:11
  SPEAKER_02: However, the further you away you get from that late payment, the less of an impact it has on your score.
• 17:18
  SPEAKER_02: But yeah, the the negative type of reporting does stay on your report for seven years.
• 17:24
  SPEAKER_00: And a lot of cases too, like when you put that application in, like if you were to talk to me or Shannon and we put an application in for you, and you can say, hey, you know, I I missed a payment because of this, this one time, you know, if we can we can put that in the in the notes so the underwriters know.
• 17:37
  SPEAKER_00: And then I mean, if it's not like a if it's not like a habitual trend, we're not gonna hold it against you.
• 17:42
  SPEAKER_00: Yeah, it does pull your score down from that from what happened, but we're not gonna be like, what happened right here?
• 17:47
  SPEAKER_00: What what is this?
• 17:48
  SPEAKER_00: You know, if you can explain it or something like that, then I mean it's not that big of a deal.
• 17:51
  SPEAKER_00: So it's not detrimental in terms of an approval process.
• 17:55
  SPEAKER_03: Awesome.
• 17:56
  SPEAKER_03: And Sean asked, would you recommend taking out a personal loan to pay off high credit card debt or using one of the debt pay down methods?
• 18:06
  SPEAKER_02: Combination of both.
• 18:07
  SPEAKER_02: So I yeah, look, you I'm a know your resources type of person.
• 18:12
  SPEAKER_02: And that's what I love about the financial coaching aspect is you know, you can have these conversations and really talk one-on-one about your best options.
• 18:19
  SPEAKER_02: You want to you want to look at the overview of, you know, maybe it could, maybe you'll save an interest over the life of the loan if you do roll it into a personal loan.
• 18:29
  SPEAKER_02: Again, you have that benefit of knowing that you're gonna pay it off in a certain amount of time.
• 18:33
  SPEAKER_02: But both of these conversations, the debt conversation, the credit building conversation, it all starts with your budget.
• 18:40
  SPEAKER_02: It really does.
• 18:40
  SPEAKER_02: So, how much can you put towards your monthly payments?
• 18:44
  SPEAKER_02: You know, obviously you want to meet your minimums, but how much additional can you put towards it?
• 18:48
  SPEAKER_02: And Danny, I know that we had it on our roadmap to talk about um like zero percent offers on credit cards and doing balance transfers.
• 18:56
  SPEAKER_02: That's a game that you can play.
• 18:57
  SPEAKER_02: But anytime that, and if you're not familiar with it, there are cards out there that have 0% APR offers for a limited period of time.
• 19:05
  SPEAKER_02: Like we've got two or two of them where you have a 0% APR for the first 12 months.
• 19:10
  SPEAKER_02: So you could do like a balanced transfer to move those funds, move your balances over to the 0% card.
• 19:16
  SPEAKER_02: Um, for us, it's a 3% fee.
• 19:18
  SPEAKER_02: So you really want to math it out.
• 19:19
  SPEAKER_02: You know, put put your budget on paper, put everything on paper, and the data will show you the way.
• 19:25
  SPEAKER_02: Um, but you want to math it out and make sure, okay, what does my budget look like if I'm if I have 12 months to not accrue interest and just really focus on paying down my balance?
• 19:34
  SPEAKER_02: How much can I realistically put towards that each month?
• 19:38
  SPEAKER_02: And can I keep myself honest?
• 19:40
  SPEAKER_02: You know, we've had some hard conversations with people who do a balance transfer and then they don't keep to their budget.
• 19:48
  SPEAKER_02: And at the end of that 12-month period or whatever month introductory period, now they have the same amount of debt.
• 19:54
  SPEAKER_02: Or a lot of the times what we see is more debt and they're just stuck in that higher interest um debt.
• 20:01
  SPEAKER_02: And when it comes to like your credit score, and you you might not be approved, you know, maybe maybe you've done zero percent balance transfers for three, you know, three different times, but that fourth time you might not get approved.
• 20:14
  SPEAKER_02: And if you're not approved, then you're just stuck in that higher interest credit card debt.
• 20:19
  SPEAKER_02: So um it's it's a dual conversation and and both are looking are worth looking into.
• 20:25
  SPEAKER_00: And and just to give some context on like how much money you can actually save, um, to Shannon's examples, um, you know, if you've got a$10,000, I don't know, store card at, I don't know, we'll call it Best Buy, you know, they and then you can probably rack up$10,000 pretty easy with their TV and an Xbox and we're talking about$10,000, right?
• 20:44
  SPEAKER_00: Um, but then the thing is though, if you've got a$10,000 balance over there and you're paying 25% interest, which is typical interest rates for like a big box store like that, you know, you're paying$2,500 a year in interest.
• 20:55
  SPEAKER_00: So think about that much savings.
• 20:57
  SPEAKER_00: If you were to do a uh if you were to do a balance transfer over to a zero percent for the first year alone in interest, you're saving 25% of what you would have paid on that balance over there.
• 21:07
  SPEAKER_00: So you get you're getting a huge jump.
• 21:09
  SPEAKER_00: And that's not even talking about the the principal payments you would have been making.
• 21:12
  SPEAKER_00: So you can really pay down interest or uh pay down your balances a lot quicker with a balance transfer, as long as like Shannon was saying, you use them responsibly.
• 21:20
  SPEAKER_00: You know, when we do that, when I do that for with members, I always tell them I always advocate for the balance transfer first, um, if they're in a position to do that, um, because you get that zero percent.
• 21:30
  SPEAKER_00: Nothing's better than free money, right?
• 21:32
  SPEAKER_00: Um, so doing that is gonna save you the most amount of interest.
• 21:34
  SPEAKER_00: But then what I like to tell them too, you know, at the end of a year, let's uh you make these great payments, you know, let's keep the credit score up and we'll make sure we tweak it wherever we can to keep that credit score up.
• 21:43
  SPEAKER_00: If you still have a balance at the end of a year, at the end of that promotional period, let's roll it into a personal loan at that point.
• 21:49
  SPEAKER_00: So at least you can take 12 months of zero percent, and then we can get it into the installment loan, which then that pulls it out of the that pulls it out of the credit card bucket, right?
• 21:56
  SPEAKER_00: On your credit score.
• 21:57
  SPEAKER_00: So now we're talking about everything going.
• 22:00
  SPEAKER_00: Up, your debt's going down, your credit score's going up, you get into a payment plan that works for you.
• 22:04
  SPEAKER_00: Um, so but yeah, that's a great example.
• 22:07
  SPEAKER_03: Yeah.
• 22:08
  SPEAKER_03: I'm gonna pivot just a slight bit.
• 22:11
  SPEAKER_03: Some of our questions are talking about student loans and students saving for college or trying to build their credit.
• 22:17
  SPEAKER_03: I like to say that we actually just released an episode about um higher education and financial wellness.
• 22:24
  SPEAKER_03: So go tune into that.
• 22:25
  SPEAKER_03: We also have an episode from last season about minimizing student loan debt.
• 22:30
  SPEAKER_03: Um that one is both of those.
• 22:32
  SPEAKER_03: It's so good.
• 22:32
  SPEAKER_03: There are so many cool ways.
• 22:34
  SPEAKER_03: Um, but without getting in too detailed, I'm gonna ask Shannon to answer what is some advice for college students trying to build their credit?
• 22:43
  SPEAKER_02: So there are a lot of um young adults are leaning on secured credit cards.
• 22:50
  SPEAKER_02: So that is where you're bringing the security deposit to the table.
• 22:53
  SPEAKER_02: Um, and your limit, your credit card limit is going to be what your security deposit is.
• 22:59
  SPEAKER_02: We have a card that has no annual fee.
• 23:02
  SPEAKER_02: The security deposit is refundable.
• 23:04
  SPEAKER_02: So, you know, if you have that card open until you can position for maybe like an unsecured rewards card, you can close that card out.
• 23:13
  SPEAKER_02: Um, always have a conversation with a financial coach before you close any credit cards out, just because, like Sam mentioned earlier, it might have an impact on your score, but it might be worth it just to get your security deposit back.
• 23:24
  SPEAKER_02: But lean on things like that where you can focus on building credit as you're and have that positive payment history as reported to the credit bureaus as you're getting started with your your adulting life.
• 23:37
  SPEAKER_02: And then I will also say we also have a um personal loan whose sole purpose is to help you either establish or rebuild credit.
• 23:44
  SPEAKER_02: So, like Sam said, there are lines of credit and then there are installment loans that the credit bureaus like to see reported.
• 23:50
  SPEAKER_02: So that ticks both of those boxes to help you build credit.
• 23:53
  SPEAKER_00: And the cool thing is too, is that we we realize that you know poor poor college kids ain't got a bunch of money.
• 24:00
  SPEAKER_00: So it doesn't take a lot.
• 24:02
  SPEAKER_00: It doesn't take a lot to get started.
• 24:03
  SPEAKER_00: So we can actually design the the secured lines of credit or the secure the secure credit card.
• 24:09
  SPEAKER_00: It's only 150 bucks.
• 24:10
  SPEAKER_00: It starts at 150.
• 24:11
  SPEAKER_00: You know, that's the all that's the minimum security positive.
• 24:14
  SPEAKER_00: A lot of those out there nowadays are like$300 or$500.
• 24:16
  SPEAKER_00: That's a lot of money to tie up when you're you know 18, 19 years old, you know, getting going into college.
• 24:22
  SPEAKER_00: Um and then uh of course, too, with the with the credit builder loan, we can design payments down to like 30 bucks.
• 24:27
  SPEAKER_00: And what happens is you make those payments into the into the into the loan, and at the end of the loan term, you get a majority of that back.
• 24:35
  SPEAKER_00: Um, as like a thanks, you've you've made it here to the finish line.
• 24:39
  SPEAKER_00: Let's give you your savings back.
• 24:40
  SPEAKER_00: So it's kind of like a forced savings account, but it counts on your credit score as a an installment loan.
• 24:46
  SPEAKER_00: So you're getting the best of both worlds.
• 24:48
  SPEAKER_00: Savings plus a plus a loan completion.
• 24:50
  SPEAKER_03: Yeah.
• 24:51
  SPEAKER_03: You know what you made me think of?
• 24:52
  SPEAKER_03: Another topic we have, but I'm not sure if this audience has heard of buy now pay later solutions.
• 24:59
  SPEAKER_03: What's interesting is that if you pay, let's say, um, it's okay, first let me describe what it is.
• 25:05
  SPEAKER_03: That might help.
• 25:05
  SPEAKER_03: So you're shopping and you see that instead of$100 for that really cool gadget you want to get, you could make four equal payments of$25 instead.
• 25:16
  SPEAKER_03: And so you're like, ooh, that sounds a lot nicer.
• 25:19
  SPEAKER_03: What's interesting, and I want to let our coaches dive in a little bit, but if you make those four equal payments, you are not going to be contributing to your credit score in a positive way.
• 25:28
  SPEAKER_03: However, if you don't make those four equal payments without that interest, you will affect your net your credit score negatively.
• 25:37
  SPEAKER_03: So, with that, again, I'm not sure if anyone here is using buy now pay later.
• 25:41
  SPEAKER_03: When used correctly, it's successful, but when it is not, it can be hurtful.
• 25:45
  SPEAKER_03: So, um, Sam, I'm gonna let you run with this one a little bit.
• 25:48
  SPEAKER_00: Yeah.
• 25:48
  SPEAKER_00: Yeah.
• 25:48
  SPEAKER_00: So okay, I finally broke down.
• 25:50
  SPEAKER_00: I tried it the other day.
• 25:52
  SPEAKER_00: Um so you get like a uh, I think Amazon has a firm, and then the either I saw Kalarna, which was was mentioned in the chat there.
• 25:59
  SPEAKER_00: And they're cool.
• 26:00
  SPEAKER_00: They're cool if you use them responsibly, but they also get like with great power comes great responsibility, right?
• 26:05
  SPEAKER_00: Let me cool some Spider-Man here.
• 26:06
  SPEAKER_00: Um but um yeah, so uh when you're on there and you're shopping, I'm like, oh wow, that's cool.
• 26:11
  SPEAKER_00: I can make three or four or six, or you know, they got different payment plans you can do, but you have to really eyeball them because sometimes on specific items it'll say, oh, this is an interest-free payment plan.
• 26:21
  SPEAKER_00: And then some of them say, Oh, this is a 10 to 36 percent interest payment plan.
• 26:26
  SPEAKER_00: And so it'll break it down, but you have to really pay attention to and just a lot of us will we all anytime there's terms and conditions, what do we do?
• 26:33
  SPEAKER_00: We scroll to the bottom, hit accept, and then get me through it.
• 26:35
  SPEAKER_00: I'm not reading through 97 pages.
• 26:37
  SPEAKER_00: I started, I read like at least through three pages there, but um, yeah, so it'll tell you how much interest you're gonna pay, and it's a minimum of 10%.
• 26:45
  SPEAKER_00: So um on some of them, some of them are interest-free, it just depends on the item and how much you're spending and all that kind of stuff.
• 26:51
  SPEAKER_00: But like like Danny was saying, it does not report positively on your credit accounts, but it does report negatively.
• 26:57
  SPEAKER_00: So if you're getting to that 30 to 90 to you know, day late, it's gonna report as late payments and it's gonna report as a collections account eventually if you don't pay it off.
• 27:08
  SPEAKER_00: Um, but just be very careful with it, especially if you're like one of those that becomes a habitual pay by now pay later and you've got like nine of them all of a sudden, and then that you've got a car payments worth of binal pay laders that are really weighing on you because you've gotten the item, you've used it, you're not getting you're not gonna send it back.
• 27:26
  SPEAKER_00: You own that now.
• 27:27
  SPEAKER_00: So um, yeah, and some of them go out to like um six months, 12 months.
• 27:32
  SPEAKER_00: And I even saw some of the limits would go almost out to like 14 or 15,000.
• 27:38
  SPEAKER_00: Could you imagine a$15,000 buy now pay later?
• 27:41
  SPEAKER_00: It's buy now pay forever.
• 27:43
  SPEAKER_02: And let's say you can't like like let's say it eventually isn't working for your budget and you can't keep up.
• 27:50
  SPEAKER_02: A lot of them are gonna tack on all of that, you know.
• 27:53
  SPEAKER_02: Maybe it's interest free to begin with, but if you start missing your payments, they're gonna tack that interest on.
• 28:00
  SPEAKER_02: So it's not just gonna be that four payments of$25 that you've missed out on.
• 28:04
  SPEAKER_02: It's gonna be more than that that you owe.
• 28:05
  SPEAKER_00: And late payments or uh they had fees, like late fees in there.
• 28:09
  SPEAKER_03: Yes.
• 28:10
  SPEAKER_03: Yeah.
• 28:10
  SPEAKER_03: So just one, we'll sprinkle in some cautionary stuff with modern day transactions, but that's just one that comes to mind.
• 28:17
  SPEAKER_03: I'm gonna move to some more questions.
• 28:19
  SPEAKER_03: So Kristen asked, what is the difference between a regular credit pull and a soft poll?
• 28:24
  SPEAKER_03: I'll let Shannon take this.
• 28:26
  SPEAKER_02: So the soft poll, from my understanding, it usually has more up-to-date data.
• 28:32
  SPEAKER_02: So um, like if you do a credit card um into an installment loan, if you consolidate that way, you might see that on your soft credit poll quicker than you'll see it on the hard credit credit poll.
• 28:45
  SPEAKER_02: Um, but I think anyone can pull a soft credit poll on you.
• 28:50
  SPEAKER_02: So, like whenever you open up membership here, it'll be a soft credit poll.
• 28:53
  SPEAKER_02: Whenever you um maybe apply for, or maybe whenever you're applying for housing, you know, a lot of the times that's a hard credit poll, but utilities might be a soft credit poll.
• 29:02
  SPEAKER_02: So um the hard credit poll, you're giving permission for the soft credit poll, anyone can pull on it.
• 29:08
  SPEAKER_02: And it's just limited, more limited data that they're seeing there.
• 29:12
  SPEAKER_02: Sam, add on to that if you can think of anything else.
• 29:14
  SPEAKER_00: Yeah.
• 29:14
  SPEAKER_00: So and the hard pull is going to be the one that actually affects your credit score.
• 29:17
  SPEAKER_00: So that's going to be the one that drags it down four to five points typically.
• 29:20
  SPEAKER_00: Um, it's gonna be the one that actually shows up as an inquiry on your credit report.
• 29:24
  SPEAKER_00: The soft pulls do not show up, they're just kind of like uh just what it is.
• 29:28
  SPEAKER_00: It's a soft pull.
• 29:29
  SPEAKER_00: It's not like an actual pool of your credit report, they're not reporting it to the credit bureaus that you're shopping around for credit or anything like that.
• 29:35
  SPEAKER_00: So those are easy to do.
• 29:36
  SPEAKER_00: Um that's what a lot of services like.
• 29:38
  SPEAKER_00: Um, like for example, we have Savvy Money Credit Score built into our online app, which will use a soft score to give you a live credit score whenever you want, but it does not affect your score at all.
• 29:47
  SPEAKER_00: Um, hard pools are usually associated with actual applications.
• 29:50
  SPEAKER_00: So if you're applying for a car or you're applying for a credit card or something like that, that's when you're going to hit those hard applications or hard inquiries.
• 29:58
  SPEAKER_00: You do have to be careful too, like when you go to an auto dealership or something like that, they might run your credit like eight times sometimes.
• 30:03
  SPEAKER_00: So be careful when that when that happens, because I've seen that, you know, have come back with some some pretty big drops in people's credit score before.
• 30:11
  SPEAKER_03: Yeah, yeah.
• 30:13
  SPEAKER_03: And I'm thinking of equity right now, but a very similar question Deborah asked.
• 30:17
  SPEAKER_03: Um, I'll give this one to Sam.
• 30:19
  SPEAKER_03: If you have a paid vehicle, is there a way to use that value as well?
• 30:23
  SPEAKER_00: Yeah, that's an awesome question.
• 30:24
  SPEAKER_00: Because so they call that a title loan.
• 30:26
  SPEAKER_00: And so basically, what we go in, let's say you've got a 2020 Toyota Camry, uh, you've paid it off, and all of a sudden you're like, man, I need I need 10,000 bucks.
• 30:34
  SPEAKER_00: What we do is we go in there, you you put you you give us the the VIN number, the mileage and everything.
• 30:39
  SPEAKER_00: We value the car, and let's say your Toyota Camry is worth$20,000 still.
• 30:42
  SPEAKER_00: Um, we can lend up to$20,000 on that car again.
• 30:44
  SPEAKER_00: They call it a title loan.
• 30:46
  SPEAKER_00: So basically, we're just re we're refinancing the car and getting the cash out of it.
• 30:52
  SPEAKER_00: So basically, we would just give you a$20,000 balance, we put our name on the title as a lien holder on it, we hold the title until you pay it off, just like you were getting a car loan all over again.
• 31:01
  SPEAKER_00: Um, so yeah, that's a great way.
• 31:02
  SPEAKER_00: And and that's also one of the cheapest ways to get money as well, or to do lending and financing, because that's a that's called a secured account.
• 31:10
  SPEAKER_00: So it's secured by that property of the car.
• 31:12
  SPEAKER_00: And so your interest rate's likely going to be way, way, way less, less less than that of like uh an installment loan or like a credit card or cash advance or anything like that.
• 31:21
  SPEAKER_00: You're probably talking like sub six or seven percent in some cases versus like teens and and twenties on like cash advances or installment loans.
• 31:30
  SPEAKER_00: So huge difference there because just because the property is what's secure in that loan.
• 31:35
  SPEAKER_02: I have a good example of this.
• 31:37
  SPEAKER_02: I actually just worked with a member on this.
• 31:39
  SPEAKER_02: He was gonna do a personal loan and he was gonna be around 17%.
• 31:43
  SPEAKER_02: He had a vehicle that he owned outright, and he we ended up going that route and he got 10% less on his interest rate.
• 31:51
  SPEAKER_02: So he just had like a major life event going on.
• 31:54
  SPEAKER_02: He thought he was only gonna need this loan for just a few years, but he actually went out to 75 months because we don't charge people for paying early on their loans.
• 32:03
  SPEAKER_02: So if you're looking into that and you think, you know, maybe I don't need it for the full term that I would normally do an auto financing for, that's okay if you know that you can pay it down without any prepayment penalty.
• 32:16
  SPEAKER_02: But he was also like his vehicle is a little bit older.
• 32:19
  SPEAKER_02: He included um an extended warranty and a prepaid maintenance policy.
• 32:23
  SPEAKER_02: So a lot of financial institutions, us included, you can get some of those same dealership protections, usually at lower cost, lower value.
• 32:31
  SPEAKER_02: So or higher value, lower cost.
• 32:34
  SPEAKER_02: So um his overall plan was, okay, I've got, you know, major breaks, it's built within my monthly payment.
• 32:42
  SPEAKER_02: So it's not going to break his budget if something comes up.
• 32:44
  SPEAKER_02: He's gonna lean on this for a solid two years if he needs it.
• 32:47
  SPEAKER_02: But if he needs to go out to that 60 or 75 month term, he absolutely can.
• 32:52
  SPEAKER_02: And he knows that it's within his budget to do so.
• 32:54
  SPEAKER_02: So again, like if you guys ever want to dig into the budgeting talk, the debt consolidation, if you just want tips and tricks on how to maybe boost your credit score, our whole financial coaching team is here for that.
• 33:05
  SPEAKER_02: And we've got a lot of them here at the company.
• 33:07
  SPEAKER_02: So lean on us.
• 33:09
  SPEAKER_03: And I'll continue to tout that because as I'm scrolling through our chat here, again, love your questions and keep them.
• 33:16
  SPEAKER_03: And we don't so good.
• 33:17
  SPEAKER_03: Again, we will find a way to get to you, but try to get to us so we can help make it easier.
• 33:21
  SPEAKER_03: Again, our technical host will drop the link to schedule time with either Sam or Shannon in the chat.
• 33:27
  SPEAKER_03: But some of y'all's questions are very detailed.
• 33:29
  SPEAKER_03: And so in order to give really good responses from our coaches, I think it requires a more one-on-one conversation.
• 33:35
  SPEAKER_03: That does not mean don't drop your questions in the chat, though, because the person online next to you might also have the same question.
• 33:41
  SPEAKER_03: So keep them coming.
• 33:42
  SPEAKER_03: On that note, however, we're talking about all these different loan options and which is the best for your situation.
• 33:48
  SPEAKER_03: I'm gonna ask a question from an anonymous uh user.
• 33:52
  SPEAKER_03: Is a 401k loan better a better choice than a personal loan to pay off credit card debt, especially if they are similar interest rates at nine and a half to 10%?
• 34:02
  SPEAKER_03: I'll let Sam take this one.
• 34:05
  SPEAKER_00: Um I always think 401k loans, in my opinion, are probably the last option you want to do.
• 34:10
  SPEAKER_00: Um that's kind of like the Hail Mary when, you know, if you've run out of every other option, I would most definitely take anything else over that just because you're losing out on so much potential in terms of, you know, yeah, the the interest rates are the still are similar, but what were your returns on the 401k?
• 34:26
  SPEAKER_02: Um the magic of compounding interest.
• 34:29
  SPEAKER_02: You're missing out on all of that.
• 34:30
  SPEAKER_00: Exactly.
• 34:31
  SPEAKER_00: So yeah, so that's the you gotta think, you know, in 60 months, what would I have made off of that?
• 34:36
  SPEAKER_00: Um, especially if you got if you're if you're in one of those um high-risk 401ks, like I like to roll a dice on, and you're got you know, you've got like 15, 20 return that sometimes.
• 34:46
  SPEAKER_00: That's a lot of money because then you're paying interest and then you're losing the gains.
• 34:50
  SPEAKER_00: So I mean you might be paying like 30% in the end.
• 34:53
  unknown: Yeah.
• 34:53
  SPEAKER_02: And also the fine details of that loan that you take out, what happens if you're let go from your job?
• 34:59
  SPEAKER_02: You know, most of us are not planning for that, but that loan might be due in full within a short period of time after you're no longer working there.
• 35:07
  SPEAKER_02: And if you can't pay it off in full at that point, then it's gonna be a withdrawal with all of those taxes and penalties stacked onto it.
• 35:15
  SPEAKER_00: And you got a 20% income tax.
• 35:18
  SPEAKER_00: Not true.
• 35:20
  SPEAKER_03: Yeah, yeah.
• 35:20
  SPEAKER_03: Definitely be cautious of that one.
• 35:23
  SPEAKER_03: Kristen asked, will there be talks of more student loan debt payoff?
• 35:26
  SPEAKER_03: We love it.
• 35:27
  SPEAKER_03: Um, she actually mentioned both the snowball and avalanche.
• 35:30
  SPEAKER_03: So, Shannon, I'll ask you, is there a better, better strategy when it comes to paying off student loan debt, the avalanche or snowball method?
• 35:37
  SPEAKER_03: Which would you recommend?
• 35:39
  SPEAKER_02: It it depends on you.
• 35:41
  SPEAKER_02: Um, so generally speaking, paying down the most expensive debt first is the most financially advantageous because you're going to pay less than interest over the life of the loan.
• 35:51
  SPEAKER_02: Again, put all the the numbers on paper just to see, you know, what does the interest payments look like over time?
• 35:57
  SPEAKER_02: But a lot of us need to see um some movement, yeah, some progress to stay motivated.
• 36:06
  SPEAKER_02: So if if that's what you need to cater to to make sure that you keep yourself motivated to pay it down, then do so.
• 36:12
  SPEAKER_02: And then, of course, even with these, you want to look into like refinances if it if it works out in your favor.
• 36:18
  SPEAKER_02: But keep in mind that if you have federal loans, some of those might have additional benefits that if you refinance to a private lender, you're not gonna have those any longer.
• 36:28
  SPEAKER_02: So you just really want to make sure, like before you you make any changes, you want to know what you're leaving behind and what you're getting into.
• 36:37
  SPEAKER_03: Awesome.
• 36:38
  SPEAKER_03: Um, I'm gonna go back to our kind of topics here.
• 36:41
  SPEAKER_03: So um I know we wanted to talk through just some cautionary tales, right?
• 36:46
  SPEAKER_03: So there is no quick fix, right, when it comes to your credit and paying off debt.
• 36:51
  SPEAKER_03: This is a this is a journey and we're here for it with you.
• 36:54
  SPEAKER_03: So I'd like to pass it to Sam to share one of his cautionary tales when it comes to building credit.
• 37:01
  SPEAKER_00: Yeah, building credit's gonna definitely gonna be a journey.
• 37:03
  SPEAKER_00: It's not something that you're gonna, I mean, in some cases we can make tweaks that will, you know, get your score to boost up.
• 37:08
  SPEAKER_00: But when it comes to like, you know, if you're recovering, you're trying to build credit or something like that, a lot of it's gonna be time bound in the beginning.
• 37:14
  SPEAKER_00: So you really want those positive payments on the front end.
• 37:17
  SPEAKER_00: Um, you really want to be aware of where your money's going.
• 37:21
  SPEAKER_00: Um, if you don't have that awareness, um you're never gonna get, you're never gonna even know where to start.
• 37:26
  SPEAKER_00: But awareness is one of the biggest things that I like to bring to the table when we start having these conversations because um using like a five, like a spend and analysis tool to see where your money's going.
• 37:36
  SPEAKER_00: You know, there's so many times that I've talked to people where, you know, they're trying, they're in they're in a situation where their credit's bad, they're having problems making payments, they're trying to dig out of a hole, and they don't have any awareness of where their money goes.
• 37:46
  SPEAKER_00: And all of a sudden we start doing these epiphany conversations of like, oh wow, I spend 300 bucks a month on Uber Eats, or I spend$400 a month on, you know, whatever it may be.
• 37:56
  SPEAKER_00: Um, and so having that awareness of where your money goes, you can start transition from making like singular decisions of, oh, I just want to eat out on Tuesday night, it's not a big deal, Uber Eats, whatever.
• 38:06
  SPEAKER_00: Or you'll start making a con you'll start making decisions of, oh, I spend 300 bucks a month on Uber Eats.
• 38:11
  SPEAKER_00: Do I need to eat out this Tuesday night specifically?
• 38:15
  SPEAKER_00: Or do I, you know, so you'll you'll reset your mind about your budget without actually even having to put a budget on paper.
• 38:21
  SPEAKER_00: Just but gaining that awareness of where does my money go?
• 38:23
  SPEAKER_00: That's the first step in creating that awareness and it's uh on your financial journey.
• 38:29
  SPEAKER_00: It's it's it's definitely a um it's definitely a process.
• 38:32
  SPEAKER_00: But once we start getting you on track and finding those places where you can start building savings and start you know, cutting some of the spending, um, that's going to give us the opportunity to really start building that credit um with the on-down payments and with the budgeting and with the with the awareness and the confidence and everything going from there to just snowballs all the way down into great credit scores, good payment history, um, good habits.
• 38:54
  SPEAKER_00: Um, you know, once we get those established, we we're here for that.
• 38:58
  SPEAKER_00: You know, the financial coaching is absolutely free for you guys.
• 39:00
  SPEAKER_00: Anyone who wants to call us up, you don't have to pay anything to do that.
• 39:04
  SPEAKER_00: Um, it's it's completely free.
• 39:06
  SPEAKER_00: You don't even have to have a membership here with us.
• 39:07
  SPEAKER_00: If you know your finances good enough, call me up.
• 39:10
  SPEAKER_00: You can name all your finances, we'll put them on paper, we'll have a conversation, and then we'll see what you want to do.
• 39:14
  SPEAKER_00: We'll always give you options, and we'll never pressure you either.
• 39:17
  SPEAKER_00: Um, but that's just what we're here.
• 39:19
  SPEAKER_00: We're a not-for-profit, so we're not looking to make money off of you.
• 39:21
  SPEAKER_00: We're looking to make sure that you're financially successful, successful.
• 39:25
  SPEAKER_00: Um, but yeah, at the end of the day, whenever I hear those success stories of like, hey, you helped me do this, or hey, here's a picture of my new ride because I was able to get a good credit score.
• 39:34
  SPEAKER_00: Um it's so it's super rewarding for us on our end, but that's that's our main goal here.
• 39:38
  SPEAKER_03: Sam, you answered like three questions at once.
• 39:41
  SPEAKER_03: I'm like, I'm scrolling through, I'm like, who did I miss here?
• 39:44
  SPEAKER_03: And you're like one.
• 39:45
  SPEAKER_01: I was like, I've gotta stay the financial coaching freeze.
• 39:47
  SPEAKER_01: Oh my gosh, I love it.
• 39:49
  SPEAKER_03: Um Aubrey asked, is placing a fraud alert with the credit bureaus helpful if you have not placed a freeze?
• 39:56
  SPEAKER_03: Shannon, I'll pass this one to you.
• 39:58
  SPEAKER_02: It is.
• 39:59
  SPEAKER_02: So anytime a hard credit poll happens, if there is a fraud alert, the the financial institution sees that.
• 40:05
  SPEAKER_02: So you put the best phone number to reach you at.
• 40:08
  SPEAKER_02: Um, and then we call that number separately.
• 40:11
  SPEAKER_02: So you'll you'll submit your application, we'll see that number listed, we'll give you a call and say, Hey, are you submitting this application?
• 40:18
  SPEAKER_02: Is this legitimate?
• 40:19
  SPEAKER_02: And then you'll confirm yes and you move forward from there.
• 40:21
  SPEAKER_02: So it's just an extra step that the financial institution has to take before they open up a loan or whatever it is in your name.
• 40:29
  SPEAKER_03: Yeah.
• 40:29
  SPEAKER_03: Ashley, really great segue.
• 40:31
  SPEAKER_03: So we had some um content ready for just like lifestyle uh frugalness, right?
• 40:37
  SPEAKER_03: And and how we can maintain the quality of life we want while saving more money.
• 40:41
  SPEAKER_03: And so I'm gonna pass it to Sam to start with utilities and insurance shopping.
• 40:46
  SPEAKER_03: He always brings up these topics when it comes to saving more money.
• 40:50
  SPEAKER_00: Gotcha.
• 40:51
  SPEAKER_00: Yes.
• 40:51
  SPEAKER_00: All right.
• 40:52
  SPEAKER_00: This is my favorite part.
• 40:53
  SPEAKER_00: Umtilities.
• 40:55
  SPEAKER_00: So uh trend out your utilities.
• 40:56
  SPEAKER_00: If you're not on like an equal pay plan or something like that with your utility company, try to see if they've got one.
• 41:01
  SPEAKER_00: Um, be aware though, when you do an equal pay plan, typically in January of every year, they're gonna recalculate did they use more or less than the average last year?
• 41:10
  SPEAKER_00: And then you're gonna have a bill due that January for, you know, an extra 200 bucks or something like that.
• 41:15
  SPEAKER_00: Mine has steadily gone up, you know, as my kids leave more and more lights on in the house over the years.
• 41:21
  SPEAKER_00: So uh that's a really good way to do it, but also trend out seasonal, seasonal costs of your utility.
• 41:27
  SPEAKER_00: So if you've you know, we don't use uh depending on where you live, here in the south, we don't use heat or air conditioner usually that much.
• 41:34
  SPEAKER_00: And like Lucky for you, a lot of us are up north, Sam.
• 41:38
  SPEAKER_01: Okay, keep going.
• 41:39
  SPEAKER_00: We can get away sometimes, it just depends on what your comfort level is.
• 41:43
  SPEAKER_00: But your your your utility bills are a lot less in like September, October, March, and February, you know, April, versus you know, those hardcore December's and that middle of August where it's like blasting cold air all day.
• 41:55
  SPEAKER_00: So trend those out.
• 41:56
  SPEAKER_00: I usually recommend trending it out for a year.
• 41:58
  SPEAKER_00: If you're paying on a month-by-month basis, trend out your utilities for a year, trend out any of your seasonal costs for a year so that you can put that into your budget.
• 42:05
  SPEAKER_00: So you can say, okay, on average I spend$150 a month, even though September might be$60, but then December's$300.
• 42:11
  SPEAKER_00: Um, so definitely look at that.
• 42:13
  SPEAKER_00: One of the things too is that um bundle what you can.
• 42:17
  SPEAKER_00: If you can bundle, there's so many ways that you can do some some great bundling.
• 42:20
  SPEAKER_00: One of the my favorite ways of bundling is going through Verizon.
• 42:23
  SPEAKER_00: So yeah, I pay a little bit more for a Verizon Unlimited plan.
• 42:26
  SPEAKER_00: Cool, whatever.
• 42:28
  SPEAKER_00: But the cool thing is that I get, you know, Hulu and Netflix and all these things for either reduced costs or if you're really if you've got one of the old plans, um, see if you can still get those old school um grandfathered-in free ones.
• 42:41
  SPEAKER_00: I used to get Netflix for free and Hulu and Disney Plus all that stuff for free.
• 42:45
  SPEAKER_00: Um, so if you can bundle anything like that, I think the first year I started bundling all my stuff, I saved like six or eight hundred bucks in a year.
• 42:52
  SPEAKER_00: Um, your internet, for example, uh, you think I'd work for Verizon, but Verizon has a 5G internet box that you just get.
• 42:59
  SPEAKER_00: You don't have to have a guy come out to your house and wire it up for fiber or anything like that.
• 43:03
  SPEAKER_00: You just plug this box into the wall.
• 43:05
  SPEAKER_00: It broadcasts a 5G Wi-Fi network.
• 43:07
  SPEAKER_00: I do all my you know um webinars and everything on it.
• 43:11
  SPEAKER_00: We've got the the the Nintendo Switch and they're blasting and all of the other streaming services at the same time, so it's not slow or anything, but I get 35 bucks a month on that, and it's locked in for 10 years.
• 43:23
  SPEAKER_00: I get 10 years of internet for 35 bucks a month.
• 43:25
  SPEAKER_00: That's huge.
• 43:26
  SPEAKER_00: Yeah, so I was paying a hundred bucks a month for that that cable, whatever from whatever the other place was, and yeah, that's 65 bucks a month that you're saving just in one bill.
• 43:39
  SPEAKER_01: Seriously.
• 43:40
  SPEAKER_00: Keep in mind, too, that your dollar at one company might be two dollars at a different company.
• 43:45
  SPEAKER_00: Um, if you shop around a lot, a lot of times, you can get better deals for moving, welcome customer kind of things, whatever they especially in spring, right?
• 43:53
  SPEAKER_03: Sam, you said especially in spring, yeah.
• 43:55
  SPEAKER_00: Exactly.
• 43:56
  SPEAKER_00: They're looking for they're looking to make some deals and they'll negotiate and don't be don't be afraid to call them up and ask for a deal.
• 44:03
  SPEAKER_00: I had people come out for the garage doors out there.
• 44:05
  SPEAKER_00: I was like, hey, can you do it for half that?
• 44:06
  SPEAKER_00: And he's like, yeah, cool.
• 44:08
  SPEAKER_00: Of course.
• 44:08
  SPEAKER_00: No big deal.
• 44:09
  SPEAKER_00: I was like, all right.
• 44:10
  SPEAKER_00: I got my garage door service for half the price.
• 44:13
  SPEAKER_00: But yeah, be a be a haggler.
• 44:15
  SPEAKER_00: Be a haggler and start asking for better deals.
• 44:18
  SPEAKER_00: Even if it's like a big company, don't be afraid to call up customer service and ask them for a, you know, a one-time exception.
• 44:23
  SPEAKER_00: That's the that's the term they like to use.
• 44:25
  SPEAKER_00: Can I get a one-time you know exception just to get you know a year's worth of internet for$10?
• 44:30
  SPEAKER_00: You know, and they may give it to you.
• 44:32
  SPEAKER_00: Just to keep you as a company as a customer.
• 44:34
  SPEAKER_00: But um shop around for insurance.
• 44:36
  SPEAKER_00: You know, if you've had your auto loan insurance for multiple years, I flip-flop between progressive and geico like every two years because they're the least expensive that have a brand name behind them.
• 44:46
  SPEAKER_00: But you can get into the bottom of their pricing structure.
• 44:49
  SPEAKER_00: Every time your policy renews it's like oh it's an extra 50 bucks this year for insurance or extra 60 bucks.
• 44:54
  SPEAKER_00: But that happens two or three times and you know all of a sudden you've got three or four hundred dollars tacked onto your premium.
• 45:00
  SPEAKER_00: If you switch companies every two years you get back into the bottom of their pricing structure um you get those welcome back customer discounts and you're like yeah I'll be there for like two years.
• 45:09
  SPEAKER_00: So welcome welcome back for two years.
• 45:12
  SPEAKER_00: But yeah shop around look to spend your dollar the the smartest way that you can um but there's so many ways that's just that's just my main ones if you guys want to call us up set an appointment we'll get into the weeds on it we'll start talking about some really side hustles and all kinds of stuff you guys can do.
• 45:28
  SPEAKER_03: I know Shannon you have a bunch to share but I want to really quick see all of these are recorded yes and they are on our podcasts.
• 45:36
  SPEAKER_03: So again just as of this year in January we started translating these specific episodes as well as others right that we don't do live with video.
• 45:44
  SPEAKER_03: We just record like podcasts do.
• 45:47
  SPEAKER_03: So if you go to uh Life Money You Apple Podcasts you can listen to this one as well as all those other segments I mentioned earlier the minimizing student loan debt the mortgages and insurance the um uh higher education and financial wellness so all of these and so much more are housed on Life Money You podcast so go there subscribe and you'll be informed of all our new episodes Shannon please keep talking about frugal lifestyle because I know you have more yeah so I my family we are single income purposefully I've got a four year old my husband stays home with them so we are natural homebodies which that makes it a little bit easier to kind of keep the cost down but every single thing that we do we're really waiting like is it worth our money to us right now in this moment.
• 46:30
  SPEAKER_02: I did want to point out that outside of so think about your employee benefits.
• 46:34
  SPEAKER_02: You know everyone usually leans on their health dental vision but there's also your employer might have like some daycare support in your area that you can take advantage of or maybe you're trying to get your will established maybe they have you know a discount on legal services that you can use.
• 46:50
  SPEAKER_02: So always just make sure to know the resources that you have both you know at your employer but also in your community we go to our library all the time.
• 46:59
  SPEAKER_02: Use your local library if you are lucky enough to have one that you can use.
• 47:04
  SPEAKER_02: They've got toddler classes that we use all the time but I like to knit and crochet and there's also like craft classes that I can get into you can also rent like games and sports equipment and things like that.
• 47:16
  SPEAKER_02: So just lean on the resources that you have available.
• 47:19
  SPEAKER_02: And then for us groceries is always the big thing that we're trying to cut back on.
• 47:24
  SPEAKER_02: I feel like I'm probably not alone given the the chats that we know that we've had before but um we're always trying to shop the sales and shop multiple stores and things like that.
• 47:34
  SPEAKER_02: But even when it comes to like holiday spending it is not uncommon for us to celebrate after the fact.
• 47:41
  SPEAKER_02: So Valentine's Day just happened we bought a bunch of chocolates half off right afterwards and then we set up our own um like taste test.
• 47:49
  SPEAKER_02: So my son and I created like a little organization chart and we taste tested everyone and and rated it one through five he was a five across the board which was pretty funny.
• 47:57
  SPEAKER_02: Like not surprising but pretty funny chocolate.
• 48:00
  SPEAKER_02: Yeah yeah but that's that's probably going to be our new thing and it's much cheaper and it's still fun you're still creating those memories so don't hesitate to think outside of the box or just you know do what works for your family even if it's not the traditional way that most people celebrate.
• 48:16
  SPEAKER_03: I love that so I will say we have covered so much in such a short period of time and as we have reiterated Shannon and Sam are here.
• 48:27
  SPEAKER_03: They're waiting they're ready for your appointments ready to talk to you one-on-one and get even more personal with your situation I will say just to leave our listeners um Shannon and Sam if there's someone out there feeling very overwhelmed they have all this info now but they don't know where to start they want to boost their credit quickly um they want to start making big strides and paying off debt I'll you know I'll I'll let Sam take this one first but what is one thing you would leave that listener with to help um relieve them of any of that overwhelming feeling yeah you know that's a question I get all the time people call up and they're like embarrassed about their finances or something and I always tell them you know you're an expert at what you do I'm an expert at what I do.
• 49:08
  SPEAKER_00: I'm like you know you if you go to the doctor and the doctor doesn't know what's what your symptoms are how can how can they you know diagnose what's going on?
• 49:16
  SPEAKER_00: So never feel embarrassed every I guarantee you mean Shannon have been in it long enough that whatever your situation is it's not the worst situation we've ever heard of and there's nothing to be embarrassed about.
• 49:24
  SPEAKER_00: You know some people don't know what they don't know.
• 49:26
  SPEAKER_00: And so asking those questions that's what we're here for.
• 49:28
  SPEAKER_00: I'll take you from like whatever level you have in terms of your financial knowledge I'll take you from whatever that is I'll bring you up to whatever I can get you to um I'll teach you everything I know about whatever topic you want to talk about.
• 49:39
  SPEAKER_00: But um it's it's it's a it's a fun experience it's it's never judgmental it's never you know any any of that never come to the table with reservations with us.
• 49:47
  SPEAKER_00: We're probably the easiest two people to talk to on the earth um especially when it comes to like finances and stuff like that easy easy to talk to it doesn't have to be serious and we can just have a 10 minute conversation typically and just kind of get a really good understanding of what you got what you have going on.
• 50:03
  SPEAKER_00: And the nice thing too is that we're not just the people that give you information or or anything like that.
• 50:08
  SPEAKER_00: We're the people that actually are going to handle your finances for you.
• 50:10
  SPEAKER_00: So we would build that relationship with you.
• 50:13
  SPEAKER_00: We would know you years down the road I've had so many people go through like huge life events of I'm saving them up so I can be a mom and dad now and then all of a sudden they're like hey here's my new baby and then you know it's really cool.
• 50:23
  SPEAKER_00: But yeah we we will we're here for you.
• 50:25
  SPEAKER_00: We're here for you in every regard.
• 50:27
  SPEAKER_02: And that's my ad is schedule your financial coaching appointment and know that like we mentioned earlier it is a process.
• 50:34
  SPEAKER_02: So it's for a lot of people it's not going to be a quick fix and that's okay.
• 50:38
  SPEAKER_02: But what these these financial coaching sessions are free.
• 50:41
  SPEAKER_02: You don't have to be a member and we can hold your hand as much or as little as you need us to so I have some members who they like to check in once a year.
• 50:49
  SPEAKER_02: I have some members who are really trying to focus on budgeting and they want to check in every six weeks and that's okay.
• 50:54
  SPEAKER_02: You guys will you know reach out to us we'll get you your our scheduler link and you can just throw a 30 minute chat on our calendar whenever you want to but what we can do is you know thinking this is a long-term plan, we can we can have a a large scope of okay this is what we hope to do within the next year or two.
• 51:11
  SPEAKER_02: But also what is that next best step?
• 51:14
  SPEAKER_02: What's that one thing that you want to do right now to get on your way and when you break it down into those smaller sections that's where the overwhelm kind of relieves itself a little bit and you think okay this is my next actionable step I'm gonna focus on this and then we can talk again to talk about that next step.
• 51:32
  SPEAKER_02: So let us take you know not to say that we're gonna take all the burden off your shoulders but we'll take some of it off there and we'll help create that roadmap that is truly yours.
• 51:42
  SPEAKER_03: Yeah.
• 51:43
  SPEAKER_00: And the other thing too I just want to add one more thing you know it it always helps to have somebody in your corner when it comes to like finances in a lot of cases you know it's always like at least in in my experience I've always seen like it's everybody versus the banks or everybody versus whatever it is.
• 51:56
  SPEAKER_00: But when you've got somebody like me and Shannon we fight your corner for whatever we can you know we we're gonna make sure that we're your financial advocate when it goes to doing an auto loan application or personal application or making sure that your finances are set up correctly your budget or whatever it is but having somebody to fight in your corner like that goes a long way even if it's just to support or advise or or whatever it may be, you know, that's exactly what we're here for.
• 52:19
  SPEAKER_03: Yeah, definitely and I can add to that right not everyone is going to be your best accountability partners but the folks you have right now here in front of you are experts, certified and have your best interest at heart.
• 52:33
  SPEAKER_03: So a great example for me is I'll use the name Sally, but her name's not Sally whenever I'm having a hard time emotionally and she is two, we'll get together and she really wants to go shop, right?
• 52:44
  SPEAKER_03: She really wants to go get something new and then we'll feel better temporarily.
• 52:48
  SPEAKER_03: But instead if I were to call maybe Sam or Shannon and say, you know what, I'm not feeling well I'm really being tempted to go do this or that.
• 52:55
  SPEAKER_03: What can I do instead to get the same amount of relief?
• 52:57
  SPEAKER_03: I guarantee you they will be able to help me through it in a way that's not going to make me feel awful and I will not be financially hung over from whatever I do to help myself feel better in that moment.
• 53:08
  SPEAKER_03: We were asked is the podcast only available on Apple no we're available on Spotify as well as BuzzSprout which you can visit our website at lifemoneyu.com listen to any episodes there.
• 53:20
  SPEAKER_03: And we're on season three guys so we're building a lot of traction here with the podcast.
• 53:25
  SPEAKER_03: We know you are busy right now.
• 53:26
  SPEAKER_03: Many of you right now listening are probably doing something else while you're listening to us.
• 53:30
  SPEAKER_03: We're fully aware of it we love to multitask too but that is why we wanted to make ourselves even easier for you to engage with and that's via the podcast.
• 53:39
  SPEAKER_03: So please subscribe a couple closing notes here we are Life Money You're the financial well-being program of your credit union who is fiercely committed to your financial wellness we not only offer content and tools like our podcast and newsletter but we have a fully staffed team of certified financial coaches just like Sam and Shannon who can help you relate to your money and take full control of it so you can get that much closer to your next financial goal.
• 54:07
  SPEAKER_03: I will say that membership is free.
• 54:09
  SPEAKER_03: And one thing I really want to make known is even if you don't want that new product, that new savings account, our digital banking app has so many solutions that Mint now retired, rocket money, all of those really cool savvy financial wellness apps that you're using, we have it in digital banking and you do not need to engage with a product to be able to use it.
• 54:29
  SPEAKER_03: You just have to become a member and that's free.
• 54:31
  SPEAKER_03: So really again leave with that peace of mind if you just need a new tool we're here for you.
• 54:36
  SPEAKER_03: If you need a person to help you we're here for you too Sam Shannon any last closing thoughts before we say bye to our audience today don't hesitate to reach out.
• 54:47
  SPEAKER_02: We're here 100% whatever it is you want to talk about you bring it to the table if you want to talk about our products and services if you want to dig into the financial coaching if you want to explore what a refi might look like but you're not ready to commit to that hard credit poll we have all of those conversations sam and I have our hands in every almost everything and if we don't we've got a favorite that we'll point you towards favorite favorites no I echo I echo what Shannon said you know just just make that appointment um give us a chance give us a chance to see what kind of difference we can make in your financial life.
• 55:18
  SPEAKER_03: Yeah love it and July 1st is our next scheduled event like this I will say between now and then subscribe to the podcast because we have episodes um queued up and ready for you with more information like this heck you might even hear Shannon Narcim's voice as well as my own on one of them.
• 55:35
  SPEAKER_03: Thank you all so much for joining and we look forward to seeing you at the next one.
• 55:40
  SPEAKER_03: Hi guys thank you for the