Latest / Life. Money. You.® Podcast / S3|E25: A Debt-Free Game Plan Before the Years Ends ft. Ericka Young

Transcript

S3|E25: A Debt-Free Game Plan Before the Years Ends ft. Ericka Young · Life. Money. You.® Podcast

• 0:14
  SPEAKER_00: If you're here for a debt-free game plan before the year ends, you're in the right spot.
• 0:19
  SPEAKER_00: This is a podcast live event hosted by Life Money You, the holistic financial well-being program of BCU.
• 0:26
  SPEAKER_00: And I'm super excited to be here today with a special guest.
• 0:30
  SPEAKER_00: I'm thrilled to welcome back Erica Young, money personality with nearly 20 years of experience as a financial coach.
• 0:38
  SPEAKER_00: Erica has helped over 500 families gain control of their finances and work toward lasting financial freedom.
• 0:45
  SPEAKER_00: And her own journey of paying off over 90,000 in debt gives her a unique perspective and a deep understanding of the challenges many of you might be facing right now.
• 0:54
  SPEAKER_00: So, Erica, thank you so much for being here.
• 0:57
  SPEAKER_01: It's so good to be here.
• 0:59
  SPEAKER_01: Thank you so much for having me.
• 1:01
  SPEAKER_01: It is a pleasure.
• 1:02
  SPEAKER_01: Really excited about the content that we're going to discuss today.
• 1:06
  SPEAKER_01: And honestly, I'm really excited about football season.
• 1:10
  SPEAKER_01: Um, I have not I have not always been a super big football fan, but um I do come from, you know, Detroit.
• 1:20
  SPEAKER_01: So I have my, this is this is my little bobblehead I got last year at a game I went to.
• 1:26
  SPEAKER_01: And so I am a Lions fan.
• 1:28
  SPEAKER_01: I'm also uh we do a lot more college sports.
• 1:31
  SPEAKER_01: We really get into college sports.
• 1:33
  SPEAKER_01: So before we get into uh what we're gonna talk about today, I want you in the chat, anybody who's here, share your team.
• 1:41
  SPEAKER_01: If you are college ball or if you are um an NFL fan, who is your team?
• 1:48
  SPEAKER_01: Because I know we have some football fans present.
• 1:51
  SPEAKER_01: The Packers, I see you.
• 1:53
  SPEAKER_01: The Chiefs, okay, Bears, Ravens, yes, Lions, I see you.
• 1:58
  SPEAKER_01: Bulldogs, okay.
• 2:00
  SPEAKER_01: The Fevers, Steelers, I see you.
• 2:02
  SPEAKER_01: I love it.
• 2:04
  SPEAKER_01: Yes, the Dolphins, Cowboys.
• 2:07
  SPEAKER_01: Listen, we're gonna have love for everybody today, okay?
• 2:10
  SPEAKER_01: We are just excited for week one.
• 2:14
  SPEAKER_01: Yes.
• 2:15
  SPEAKER_00: And the best of luck with your brackets.
• 2:17
  SPEAKER_00: I know my partner just finished his up.
• 2:19
  SPEAKER_00: So yeah, good luck, everyone.
• 2:21
  SPEAKER_01: Yes, I see you.
• 2:23
  SPEAKER_01: I love it.
• 2:24
  SPEAKER_01: I love it.
• 2:24
  SPEAKER_01: So it is an exciting time.
• 2:26
  SPEAKER_01: We love it when um we get a chance to connect on football at some point.
• 2:31
  SPEAKER_01: And so um, by the way, I don't have my Indiana stuff in here, but I do have an Indiana grad, and we've got an Indiana player in our midst.
• 2:40
  SPEAKER_01: One of my um nephews plays.
• 2:42
  SPEAKER_01: So we're just excited about the season.
• 2:44
  SPEAKER_01: So anyway, really glad that you're here.
• 2:46
  SPEAKER_01: So glad that your team is about to start playing.
• 2:50
  SPEAKER_01: Um, and we just want to ensure that you have a game plan for your year.
• 2:56
  SPEAKER_01: So we're we're gonna be talking about the game, um, but this is your financial game plan.
• 3:02
  SPEAKER_01: So we are super excited about what this is gonna do for your finances, and we really wanna make sure that your money is in the right place.
• 3:13
  SPEAKER_01: So let's get started.
• 3:16
  SPEAKER_01: Um, we are gonna be talking about your debt-free game plan.
• 3:20
  SPEAKER_01: So we are in this last third of the year, and this is when a lot of people have potentially abandoned their goals from the top of the year or forgotten about them, or it some things got challenging, or life is tough, or the kids went back to school.
• 3:40
  SPEAKER_01: And in that regard, we have just shifted focus to the season of life that we're in right now.
• 3:46
  SPEAKER_01: Um, but at the top of the year, we might have had some goals.
• 3:50
  SPEAKER_01: And so I want you to feel empowered and encouraged, but also to have some real ways that you can finish this year strong with your specifically with your debt-free game plan.
• 4:01
  SPEAKER_01: So that is what we're gonna talk about today.
• 4:04
  SPEAKER_01: So the reality of what is going on right now is not super easy.
• 4:09
  SPEAKER_01: That's the truth.
• 4:10
  SPEAKER_01: So lots of things are rising.
• 4:12
  SPEAKER_01: We have been in this space for several years now where the cost of everything is going higher.
• 4:17
  SPEAKER_01: I am seeing with people a lot now that um the buy now, pay later balances are piling up.
• 4:25
  SPEAKER_01: People have multiple uh payments that they're making for buy now, pay later.
• 4:31
  SPEAKER_01: And there's a lot of temptation out here to take dollars out of your 401k or to consider bankruptcy.
• 4:38
  SPEAKER_01: And what we really want to do today is let you know that you actually have options.
• 4:42
  SPEAKER_01: Um, BCU has options for you, and there are things that you can do right now to ensure that the money pressures, that you get some relief, let's say, from the money pressures, but also that you can make progress towards the end of this year.
• 4:57
  SPEAKER_01: So you are not alone and you do not have to stay stuck.
• 5:02
  SPEAKER_01: So we want to give you some tools and resources that you can use today.
• 5:07
  SPEAKER_01: So, this is what you're gonna learn.
• 5:08
  SPEAKER_01: This is gonna be the journey that we're on.
• 5:10
  SPEAKER_01: We are going to help you calculate a realistic debt-free date for you and give you the tool that you need to use in order to do that.
• 5:19
  SPEAKER_01: Um, apply some best credit practices.
• 5:22
  SPEAKER_01: I get lots of questions as a financial coach around how to build and protect your credit score.
• 5:29
  SPEAKER_01: And so we'll talk a bit about what that looks like.
• 5:33
  SPEAKER_01: And then I think we need to get a little creative.
• 5:35
  SPEAKER_01: We want to compare some refinancing options that people might have available to them, especially today through BCU.
• 5:42
  SPEAKER_01: There's a lot of things that you can potentially jump into that makes it easy for you to free up some cash or look at some of your finances differently.
• 5:51
  SPEAKER_01: And we really want you to leave with a focused debt reduction strategy.
• 5:55
  SPEAKER_01: So, even on a tight budget, no matter what your situation is, there's something that you can apply today to your finances, and it doesn't have to take a lot of time.
• 6:05
  SPEAKER_01: So, we're going to get right on into it.
• 6:07
  SPEAKER_01: Feel free if you have questions.
• 6:09
  SPEAKER_01: Um, we will be monitoring the chat as well.
• 6:12
  SPEAKER_01: Yes, this is going to be recorded and um sent out, and so we just want you to stay engaged.
• 6:20
  SPEAKER_01: So, chances are you know how much your debt payments are each month, right?
• 6:26
  SPEAKER_01: And so I had a student loan, and to this day I know how much that payment was.
• 6:32
  SPEAKER_01: It was$451.21.
• 6:36
  SPEAKER_01: And that debt was paid off over 20 years ago.
• 6:40
  SPEAKER_01: Um, but I remember the amount very, very well.
• 6:43
  SPEAKER_01: So a lot of people know how much they're paying each month, but they don't typically know when they could be debt-free, how much interest they'll pay over the course of that time, and how much faster they could pay it off if they make some small changes or if they just stay focused.
• 7:03
  SPEAKER_01: So, you know, you really want to understand what you have available to you.
• 7:07
  SPEAKER_01: And here's what I do understand.
• 7:09
  SPEAKER_01: Like, I've been a coach for almost 21 years.
• 7:12
  SPEAKER_01: And what I think that I have always seen with a lot of people is that we don't tend to like we push away the hard stuff, the things that we don't want to see, right?
• 7:24
  SPEAKER_01: So if we see no evil, it doesn't exist, right?
• 7:26
  SPEAKER_01: If we hear no evil, it's not there.
• 7:29
  SPEAKER_01: Um, but the challenge is not facing it doesn't make it go away, right?
• 7:34
  SPEAKER_01: We really have to face it in order for that to go away.
• 7:38
  SPEAKER_01: So I really want you to take the time um to think about what is your first step as we are giving you this information today.
• 7:45
  SPEAKER_01: We will have um about 15 minutes of QA at the very end, but I don't want you to feel like that is the only time that you'll get to engage.
• 7:55
  SPEAKER_01: There are some things that you can do even on this call, um, even on this webinar, as you're listening, wherever you are, um, to take some action.
• 8:05
  SPEAKER_01: So I believe one of the first steps that people can really do to improve their finances is to know your numbers.
• 8:13
  SPEAKER_01: And that is what we're gonna talk about.
• 8:15
  SPEAKER_01: I know there's tons of emotion that goes into our finances.
• 8:18
  SPEAKER_01: There's lots of history from our past around why we are where we are, but if you know your numbers, then you can actually know what you need to do to take some action.
• 8:28
  SPEAKER_01: So, the first tool that I want to share with you is the debt reduction calculator.
• 8:34
  SPEAKER_01: And this calculator is something that I use when I do, when I work with people one-on-one, when I train other coaches.
• 8:42
  SPEAKER_01: And there's a couple of reasons why I like it.
• 8:44
  SPEAKER_01: And we're gonna go into more depth on this particular calculator.
• 8:47
  SPEAKER_01: If you want this, just use a QR code.
• 8:50
  SPEAKER_01: You can download it onto your phone or um onto your computer.
• 8:54
  SPEAKER_01: But this is a tool that I think is really helpful if you're wanting to find your debt-free date.
• 9:01
  SPEAKER_01: So before we go any further, I want to explain a couple things.
• 9:06
  SPEAKER_01: And this might get a little technical, and again, I'm happy to answer your questions, but let me go through it really quickly so you understand what it is you're looking at.
• 9:14
  SPEAKER_01: You can pull every single creditor that you have, not including a mortgage, and put it on here.
• 9:21
  SPEAKER_01: So you name the creditor and then the total balance that you currently have in that second column.
• 9:27
  SPEAKER_01: The third column is the interest rate that you have, and then the minimum payment.
• 9:32
  SPEAKER_01: And those, that's all the information you need to know.
• 9:34
  SPEAKER_01: Um, it does the calculations for you.
• 9:38
  SPEAKER_01: So these numbers that I have here, the student loans that are$37,000 and some change, that's the average student loan debt for 2025 for an undergraduate student.
• 9:48
  SPEAKER_01: The auto loan, that's the average auto, I'm gonna specifically say used auto loan that that Americans typically have.
• 9:57
  SPEAKER_01: And that interest rate of 9.5% is about the average for that as well.
• 10:02
  SPEAKER_01: And then we have the personal loan of about 15, just under 15%.
• 10:07
  SPEAKER_01: And then the credit card, yes, typically people have around 6,000 with an interest rate of nearly 23% interest.
• 10:17
  SPEAKER_01: And so I specifically have these numbers here because these are this is what the average American has in terms of their debt.
• 10:25
  SPEAKER_01: And so they may not all have it all together, right?
• 10:28
  SPEAKER_01: So one person might have student loans, another might have um just a credit card.
• 10:33
  SPEAKER_01: But this was almost my picture exactly.
• 10:36
  SPEAKER_01: My husband and I had over$90,000 in debt, and instead of the personal loan, we had another car payment, and our student loans were slightly higher.
• 10:46
  SPEAKER_01: Um, but that credit card total was exactly it, and this was 25 years ago.
• 10:51
  SPEAKER_01: Um, so when I tell you I remember the payment, it it's this is a hard-formed core memory in my mind, and our monthly payments were over$1,100 per month.
• 11:03
  SPEAKER_01: So I feel this right here very deeply.
• 11:06
  SPEAKER_01: And you might as well.
• 11:08
  SPEAKER_01: We don't know what your situation is, but if you have um downloaded this, you can utilize this for your own personal finances.
• 11:17
  SPEAKER_01: In the middle here, you're gonna have the monthly payment.
• 11:20
  SPEAKER_01: So you'll have the total, it totals it up for you.
• 11:23
  SPEAKER_01: You can put the monthly payment here of 932, and you'll see that this particular example shows that there's 79,000 in total debt.
• 11:32
  SPEAKER_01: The bottom is calculated for you.
• 11:35
  SPEAKER_01: So this is a snowball strategy, which means that it's the lowest balance to the highest balance, and the tool itself reordered it for you.
• 11:43
  SPEAKER_01: So you do not have to do that work, it puts this in here all by itself.
• 11:47
  SPEAKER_01: And just as it stands, this will take about 11 years to pay off.
• 11:52
  SPEAKER_01: And who wants to be in debt for 11 years?
• 11:56
  SPEAKER_01: Not me.
• 11:57
  SPEAKER_01: It took us about five years to pay off all of our debt, um, our$90,000 in debt.
• 12:03
  SPEAKER_01: And if we had a coach, I believe firmly that it would have taken less time.
• 12:10
  SPEAKER_01: And so I just want to put in a little bit of um a plug here for BCU and the help that they provide internally for folks to have conversations with people, because I think that it's really important that you're gonna go faster, you're gonna avoid some pitfalls if you actually have someone to help you move along in that process.
• 12:31
  SPEAKER_01: And a coach is a person that can do that.
• 12:34
  SPEAKER_01: And BCU provides that.
• 12:36
  SPEAKER_01: I wish, honestly, that my credit union at the time had something to help us with that.
• 12:40
  SPEAKER_01: But I will say that is the reason why I became a coach because I wanted to be for someone else what I did not have.
• 12:48
  SPEAKER_01: So I let me check the chat here.
• 12:53
  SPEAKER_01: Oh, I love it.
• 12:54
  SPEAKER_01: Somebody, Maria just paid off student loans.
• 12:57
  SPEAKER_01: Come on, I love it.
• 12:58
  SPEAKER_01: That is freedom.
• 12:59
  SPEAKER_01: That is awesome.
• 13:02
  SPEAKER_01: Yes, I love that.
• 13:03
  SPEAKER_01: So good job.
• 13:05
  SPEAKER_01: We have to celebrate those wins.
• 13:08
  SPEAKER_01: So I want you to see what it a small impact of change could be, right?
• 13:14
  SPEAKER_01: So we may not, you may not think that$500 is small, but in this example, I just want you to see what it would take for this to move the needle in a way that is meaningful.
• 13:26
  SPEAKER_01: So, say for instance, what if you decided there's a few subscriptions that you don't need?
• 13:34
  SPEAKER_01: You decided, wait a minute, my dining out could be cut in half.
• 13:39
  SPEAKER_01: You decided this one time for maybe two or three months, you're not gonna going to buy any new clothing or what have you.
• 13:47
  SPEAKER_01: What could you come up with in terms of a payment?
• 13:50
  SPEAKER_01: In this example, we're saying it's about$500.
• 13:53
  SPEAKER_01: And um, I know that that takes a little bit of strategy in and of itself to see how much you can put towards it, but you will notice this debt-free date down here at the bottom changes dramatically by a good five years.
• 14:07
  SPEAKER_01: So let's go into a little bit more depth here to show you this small difference, right?
• 14:14
  SPEAKER_01: So we want to show you that$79,000 could take you 11 years.
• 14:19
  SPEAKER_01: It could take till August 22 of 37, 2037, or if you put that extra 500 on it, it could take you till April of 2032.
• 14:30
  SPEAKER_01: The biggest thing here that is super exciting, and the reason why we tend to miss some of these numbers is that we're paying interest all along the way.
• 14:41
  SPEAKER_01: So if it if it takes you 11 years, you're gonna pay for over$43,000 in interest alone, right?
• 14:49
  SPEAKER_01: But if you can cut that time in half, you're not cutting the interest in half.
• 14:54
  SPEAKER_01: You're more, it's like a third of what you would have paid.
• 14:57
  SPEAKER_01: So you're saving yourself nearly$26,000 in interest if you accelerate that debt payment.
• 15:03
  SPEAKER_01: And that is exciting.
• 15:04
  SPEAKER_01: So that's another reason why you want to slow down a little bit and see what is possible in your particular situation.
• 15:13
  SPEAKER_01: So let's see.
• 15:16
  SPEAKER_01: I want to just see really quickly, are there any questions before we move forward?
• 15:22
  SPEAKER_00: Um Erica, a lot of folks are asking about student loans right now.
• 15:27
  SPEAKER_00: And I love what you're showing us right now, which is how you can pay off the debt quicker and minimize interest due.
• 15:34
  SPEAKER_00: But a lot of folks are in this like cyclical pattern of feeling like they are stuck.
• 15:38
  SPEAKER_00: Can we talk about that a little bit more?
• 15:41
  SPEAKER_01: Yes.
• 15:41
  SPEAKER_01: So, okay, so specifically, we are gonna talk about student loans in a hot second.
• 15:47
  SPEAKER_01: Um, one of the biggest things in terms of debt reduction that you need to understand is paying the minimums at least.
• 15:54
  SPEAKER_01: So I I love budgets.
• 15:56
  SPEAKER_01: Um, my business's name, Taylor Mate Budget.
• 15:59
  SPEAKER_01: I know a lot of folks don't do not like that word.
• 16:01
  SPEAKER_01: One of the very first things that I think is important for folks to do is to see what all of your expenses total to so that you know exactly what it is you're working with.
• 16:10
  SPEAKER_01: Um, I wouldn't have you call a creditor to make arrangements for payments or try and figure out um, you know, like set up automatic payments until you know what it is that you have available to you.
• 16:22
  SPEAKER_01: And that is called budgeting.
• 16:23
  SPEAKER_01: So we'll talk a little bit more about um understanding what the student loans as well as your credit have to offer um in terms of making some improvement.
• 16:33
  SPEAKER_01: But know that you are not alone.
• 16:35
  SPEAKER_01: Um, sometimes these things aren't easy in terms of figuring out what comes first and second.
• 16:40
  SPEAKER_01: Let me see.
• 16:43
  SPEAKER_01: Are there any other questions?
• 16:48
  SPEAKER_00: I think folks are just having a little bit of difficulty accessing the link that we posted with vertex.
• 16:54
  SPEAKER_00: But um, Kim and I will continue to try to ensure everyone, like Nicole and Lori, um, are able to access it.
• 17:00
  SPEAKER_00: So we'll keep trying, folks.
• 17:02
  SPEAKER_00: But Erica, you keep chugging along.
• 17:04
  SPEAKER_01: Okay, okay, awesome.
• 17:06
  SPEAKER_01: So when you do go there, just know that there is an Excel worksheet to go to.
• 17:11
  SPEAKER_01: You can also just go to vertex42.com, debt reduction calculator, and likely you'll be able to find the the debt reduction calculator as well.
• 17:20
  SPEAKER_01: So you all I do is download the worksheet so that I don't ever have to download it again.
• 17:26
  SPEAKER_01: And then you don't necessarily have to go to the website.
• 17:30
  SPEAKER_01: All right, so let's talk about student loans.
• 17:32
  SPEAKER_01: You teed it up a little bit, so I just want to make sure that we do discuss what it looks like to tackle some student loans.
• 17:40
  SPEAKER_01: So I don't want anyone to assume that the loan servicer is going to contact you.
• 17:47
  SPEAKER_01: Right now, about 7 million people are having their student loans turned on.
• 17:51
  SPEAKER_01: Again, we have found relief in the last six years, um, not having had to pay the minimums on student loans.
• 17:59
  SPEAKER_01: The challenge with that is that that means millions of people are having their student loans turned on at the same time.
• 18:06
  SPEAKER_01: And so, although it would be nice if everything went smoothly, we would love to, you know, to believe that they're gonna all go away.
• 18:13
  SPEAKER_01: Some people are giving getting forgiveness, yes, but not everybody is.
• 18:18
  SPEAKER_01: And so, what I what I think is really important here is that you contact your loan servicer now.
• 18:24
  SPEAKER_01: Um, a lot of folks are having there's a deadline of October 31st or 30th in order for people to um start paying on those student loans.
• 18:33
  SPEAKER_01: So sometimes your first payment is in October.
• 18:35
  SPEAKER_01: Some folks I'm seeing that it is in November, but you have to contact your servicer.
• 18:40
  SPEAKER_01: So there's a few different ones.
• 18:42
  SPEAKER_01: Um, but if you have federal student loans, do not leave it up to them to contact you if they haven't yet.
• 18:48
  SPEAKER_01: Don't assume that everything's gonna be fine.
• 18:50
  SPEAKER_01: I don't want you to turn and look up in six months and wish that you had um had done something because if you do nothing, those things will now begin to reflect on your credit report as not paid.
• 19:04
  SPEAKER_01: And that affects your credit score.
• 19:07
  SPEAKER_01: So don't assume that later is coming.
• 19:10
  SPEAKER_01: Later is right now.
• 19:11
  SPEAKER_01: We've had six years.
• 19:12
  SPEAKER_01: Unfortunately, it is coming to the point where we're gonna have to start paying.
• 19:17
  SPEAKER_01: So, some slight good news is if you enroll and you may qualify for a 1% interest rate reduction if you enroll in autopay.
• 19:30
  SPEAKER_01: So 1% actually can turn out to be a decent amount of money.
• 19:34
  SPEAKER_01: And again, with that um debt reduction calculator, you can see what it would, how much it would save you in interest if you only changed the interest rate by 1%.
• 19:46
  SPEAKER_01: Um, that's motivation.
• 19:47
  SPEAKER_01: Even a few thousand dollars is big motivation to be able to have see a change in in how quickly you pay it off.
• 19:57
  SPEAKER_01: And then there are still some income-based repayment plans available for folks, but again, that is qualifying.
• 20:03
  SPEAKER_01: They will not ask you, um, you have to ask them and you have to inquire, and then you have they have to see if you qualify.
• 20:09
  SPEAKER_01: And I've seen a range of people um having student loans, payments of$25,$50, something like that.
• 20:18
  SPEAKER_01: So it can be reasonable, and I highly recommend that you um look into that.
• 20:25
  SPEAKER_01: And federal loans still have forbearance options that you might be able to take advantage of.
• 20:31
  SPEAKER_01: But again, you've got to contact them.
• 20:33
  SPEAKER_01: So you're in the driver's seat by um knowing that you have to be able to go and do those things yourself because um I'm finding that a lot of people aren't getting the information they need it by waiting.
• 20:46
  SPEAKER_01: So go to studentaid.gov to check on your loans and to see where things stand and when those payments are due and if it is needful for you in this moment to um to do something new or different to be able to handle those student loans.
• 21:02
  SPEAKER_01: So I want to see again, I'm just gonna see, are there questions?
• 21:11
  SPEAKER_01: Okay.
• 21:12
  SPEAKER_01: Awesome.
• 21:13
  SPEAKER_01: Awesome.
• 21:17
  SPEAKER_01: Yes, I know it's hard.
• 21:18
  SPEAKER_01: So I see here that Cameron's saying it's I'm in denial of student loans.
• 21:22
  SPEAKER_01: It's high, yes.
• 21:23
  SPEAKER_01: And so it might it might be that you'll be able to um see if you can have access to a remote um repayment assistance plan um and see what can happen there.
• 21:34
  SPEAKER_01: And yes.
• 21:37
  SPEAKER_00: And our coaches specialize in debt repayment plans.
• 21:40
  SPEAKER_00: So if throughout this entire conversation you want to just talk to someone, open up, get your hands dirty and figure out how to create a plan that works for you where you're not feeling static, we'll drop that link in the chat right now.
• 21:52
  SPEAKER_00: Go ahead, schedule that appointment and pick out pick your plan apart so that you can make it in a place where you're comfortable and confident it's working for you.
• 22:00
  SPEAKER_00: Absolutely.
• 22:01
  SPEAKER_01: I say now, I know a lot of people are using tools, AI, things of that nature.
• 22:07
  SPEAKER_01: And I just don't think that any of that is going to replace the human interaction.
• 22:10
  SPEAKER_01: And so, in order for you to talk through some of your options, always ensure that you take advantage of those services that are available to you for sure.
• 22:19
  SPEAKER_01: So before we move forward, I just want to see, I just want to get a little bit of motivation and inspiration from you.
• 22:26
  SPEAKER_01: If you were, let's go back.
• 22:28
  SPEAKER_01: I want to go back a little bit.
• 22:30
  SPEAKER_01: If you had this as your scenario and you were paid, you paid off your debt, you have this 932 available to you.
• 22:39
  SPEAKER_01: What would you do with that 932?
• 22:42
  SPEAKER_01: It is now freed up.
• 22:44
  SPEAKER_01: I want you to dream.
• 22:45
  SPEAKER_01: I want you to think about what would that do for your finances?
• 22:50
  SPEAKER_01: How would that change the game for you?
• 22:52
  SPEAKER_01: Just put it in the chat.
• 22:54
  SPEAKER_01: Yes, invest.
• 22:55
  SPEAKER_01: Put some money in savings.
• 22:57
  SPEAKER_01: I love it.
• 22:57
  SPEAKER_01: Travel more, save for retirement.
• 23:00
  SPEAKER_01: Yes, invest in travel.
• 23:01
  SPEAKER_01: That sounds like everything.
• 23:03
  SPEAKER_01: Yeah.
• 23:04
  SPEAKER_01: Yes.
• 23:05
  SPEAKER_01: Somebody has a small business that they want to invest in.
• 23:09
  SPEAKER_01: Yes.
• 23:10
  SPEAKER_01: Travel with their kids.
• 23:11
  SPEAKER_01: We want to get around and see the world.
• 23:13
  SPEAKER_01: I love it.
• 23:14
  SPEAKER_01: Somebody said put some money in their IRA.
• 23:16
  SPEAKER_01: Yes.
• 23:16
  SPEAKER_01: Savings for someone's car.
• 23:19
  SPEAKER_01: Yes.
• 23:19
  SPEAKER_01: College fund for their daughter.
• 23:22
  SPEAKER_01: Yes.
• 23:22
  SPEAKER_01: I love it.
• 23:23
  SPEAKER_01: I love it.
• 23:24
  SPEAKER_01: Buy a house.
• 23:25
  SPEAKER_01: That's it.
• 23:26
  SPEAKER_01: Like this is the reason why we do it.
• 23:28
  SPEAKER_01: So we're not trying to get out of debt just because it is, quote unquote, a mature, responsible thing to do.
• 23:34
  SPEAKER_01: It's so that we can do the next thing that's important to us or important to our family or to enjoy life finally.
• 23:43
  SPEAKER_01: And so I really want you to anchor yourself to the reason why it's important and not get stuck on the fact that, oh my goodness, it's going to be hard.
• 23:53
  SPEAKER_01: Yes, it's not easy, but it's worth it.
• 23:56
  SPEAKER_01: The point is that it's worth it.
• 23:59
  SPEAKER_01: So let's talk a little bit about credit here.
• 24:03
  SPEAKER_01: A lot of times I think that there's some misconceptions around credit and what that does inside of a debt reduction plan.
• 24:13
  SPEAKER_01: And so I want you to, this is the makeup of this long equation that we currently have on our credit score.
• 24:21
  SPEAKER_01: So it's just this long equation.
• 24:23
  SPEAKER_01: We we do not need to go there and to share what that equation is.
• 24:28
  SPEAKER_01: But what I will say is this is the pie chart of everything that makes up your current score.
• 24:35
  SPEAKER_01: There are some talks that it could change and adjust, but currently, this is what we're dealing with.
• 24:40
  SPEAKER_01: So the biggest pieces of the pie include your payment history and it's 35% of your score.
• 24:50
  SPEAKER_01: So paying on time every time, all the time for all of your debt is vital, even if it is simply the minimum.
• 25:00
  SPEAKER_01: So if you're looking to improve your score, the biggest piece of the pie is your payment history.
• 25:07
  SPEAKER_01: The next largest piece of that pie is how much you owe.
• 25:11
  SPEAKER_01: So a lot of people don't realize that when they have access to$10,000 in credit on a credit card, for instance, the key is to only use less than 30% of that available credit.
• 25:26
  SPEAKER_01: So ideally, when you have, you know, a travel, something you know that you're doing, you're using your credit card for and you're going to pay it off.
• 25:36
  SPEAKER_01: Try and keep that balance that you're using it for beneath 30%.
• 25:41
  SPEAKER_01: Because unfortunately, even though you have access to all 10,000, they start seeing it as potentially hazardous or something to watch out for if you spend anything over$3,000.
• 25:56
  SPEAKER_01: So just know that your amount owed, the balance that you have on your cards is an important part of this puzzle.
• 26:05
  SPEAKER_01: So as you pay down debt, you begin to see that this can improve your score over time.
• 26:11
  SPEAKER_00: Yeah.
• 26:12
  SPEAKER_00: Erica, we had a question that there are three different agencies.
• 26:15
  SPEAKER_00: Why are the scores different at the different credit agencies?
• 26:19
  SPEAKER_01: That's a really good, that's a really good question.
• 26:21
  SPEAKER_01: It's really about when they pull your credit.
• 26:25
  SPEAKER_01: So when they go to the, when they have it on their own schedule to go to the retailers and to the lenders and pull the scores.
• 26:35
  SPEAKER_01: That's the reason why it changes.
• 26:37
  SPEAKER_01: Um it's it's timing.
• 26:39
  SPEAKER_01: It's all about timing.
• 26:41
  SPEAKER_01: So if they pulled it 30 days ago and you did something different within those 30 days, it means that your score is going to change, which is why it changes so often.
• 26:51
  SPEAKER_01: Um if you have credit karma, for instance, or some other way of monitoring your score, you will notice that at least weekly, it changes.
• 27:01
  SPEAKER_01: It can change often.
• 27:02
  SPEAKER_01: Um, and it is not uncommon for it to still be within like 10 points or even 15 points difference from one another.
• 27:11
  SPEAKER_01: Um, that's not anything to be alarmed with.
• 27:13
  SPEAKER_01: Just know that it is just really the timing of when they're pulling this information and it just makes the score different because of that.
• 27:21
  SPEAKER_01: Um the other pieces of the puzzle here of the pie here are the length of credit history.
• 27:28
  SPEAKER_01: A lot of people have um really a real concern about closing an account.
• 27:32
  SPEAKER_01: Yes, you can close an account, but it's only gonna affect your score by about 15%.
• 27:37
  SPEAKER_01: You don't have to close the account, but if you're concerned that it's gonna drop your score, it's 15% of this pie.
• 27:44
  SPEAKER_01: So that means that it has an impact.
• 27:46
  SPEAKER_01: It's just not as big as the other things.
• 27:48
  SPEAKER_01: And then the types of credit, so having a variety of credit.
• 27:52
  SPEAKER_01: So having a car payment, which is an installment loan and a credit card plus a mortgage loan, those different types of credit um help it to just be stronger because when one thing um has some type of impact.
• 28:07
  SPEAKER_01: So, for instance, if you have a mortgage, but one time you relate on a credit card, it might not drop as much, if you will, because you have other types of credit.
• 28:16
  SPEAKER_01: But if the only thing you have is a credit card and you don't pay it on time, it has a huge impact because that's the only thing you have, right?
• 28:24
  SPEAKER_01: Um, and then new credit.
• 28:26
  SPEAKER_01: People are always concerned about new credit and how it's gonna affect their score.
• 28:29
  SPEAKER_01: The main place where this is something to watch out for is if you're looking for a mortgage.
• 28:35
  SPEAKER_01: Um you want to keep your credit clean of any new credit if possible within you know six months to a year, I'd say, even, um, so that it doesn't affect your score in a negative way to have new credit.
• 28:47
  SPEAKER_01: So these are the things that affect it.
• 28:49
  SPEAKER_01: My focus typically is payment history, paying it on time, as well as the amount owed, which is your credit utilization, and keeping that low if possible.
• 28:59
  SPEAKER_01: Um, and so sometimes I have seen people focus on those two things over the course of six months and see an improvement of 50 or 60 points on their credit score, and that makes the difference.
• 29:10
  SPEAKER_01: And it actually makes a difference in the next thing that I'm gonna talk about as well.
• 29:14
  SPEAKER_01: Um, I want to make sure that we get to discussing some of the other options that you you might have where it concerns your credit.
• 29:24
  SPEAKER_01: So let's see.
• 29:26
  SPEAKER_00: Really quick disclaimer too, Erica, for folks um just asking questions in the chat.
• 29:30
  SPEAKER_00: We are going to get to these questions in the final 15 minutes.
• 29:33
  SPEAKER_00: If not, Erica pulling it into the conversation uh with the slides themselves.
• 29:38
  SPEAKER_00: I do want to say though, the chat is exclusive to being here live.
• 29:42
  SPEAKER_00: So the chat is not shared after the presentation.
• 29:45
  SPEAKER_00: So Elisa, I believe you asked that.
• 29:47
  SPEAKER_00: You have exclusive rights now to have every access to the chat, but after the fact, folks that weren't here will not have access to it.
• 29:54
  SPEAKER_00: So I wanted to make sure that was disclosed.
• 29:56
  SPEAKER_00: Keep going, Erica.
• 29:58
  SPEAKER_01: Awesome, awesome.
• 29:58
  SPEAKER_01: So that's why we want to make sure that we're bringing some of the questions up because those who get the recording, we want to make sure that you get those questions answered, just like um the folks that are live.
• 30:09
  SPEAKER_01: So here are some tools that you can have for your credit to improve where you are right now.
• 30:16
  SPEAKER_01: And so we don't want you to delay, don't wait for January to come again.
• 30:20
  SPEAKER_01: There are some resources we've already mentioned.
• 30:22
  SPEAKER_01: Um, if you want to have a conversation with someone live, you can reach out to the team at BCU.
• 30:28
  SPEAKER_01: But there are some other ways for you to look at how you can handle your credit.
• 30:33
  SPEAKER_01: And so um, savvy money is built into the digital banking that um BCU members have access to.
• 30:41
  SPEAKER_01: You have some credit building options.
• 30:43
  SPEAKER_01: So if you want a secure card, I just got this.
• 30:46
  SPEAKER_01: My my daughter actually just got a secure card to help build her credit.
• 30:50
  SPEAKER_01: She's young and um she knows her limitations.
• 30:54
  SPEAKER_01: And so we discussed her best options for um a credit card.
• 30:58
  SPEAKER_01: And a secure card is a really good way for a young person to build credit, and also it's secure.
• 31:04
  SPEAKER_01: You're putting the money onto that card, making that amount available for you.
• 31:09
  SPEAKER_01: Um and it gets reported on your credit report.
• 31:12
  SPEAKER_01: And so using that wisely is important and it's helpful for your score.
• 31:16
  SPEAKER_01: And so they have access to that, plus a credit builder loan that you would be you potentially would have access to.
• 31:22
  SPEAKER_01: And so those links will be in the chat as well.
• 31:26
  SPEAKER_01: The one thing that I'll say right here is if you don't know what's going on with your credit, you can't do anything about it.
• 31:33
  SPEAKER_01: So checking your credit annually at least is really important so you know that there's no fraud or misinformation because errors happen on 20 to 30% of people's credits report.
• 31:47
  SPEAKER_01: And if an error is causing your score to be lower, that's something that is actually fixable easily to challenge some of those errors so that they can make sure that they're getting the right information.
• 32:00
  SPEAKER_01: And another option that you might have is freezing your credit when you're not using it.
• 32:05
  SPEAKER_01: So it protects you from fraud, so no one can access your credit, but it also can protect you from yourself.
• 32:11
  SPEAKER_01: So if you're looking to ensure that you're not going to get new credit cards unnecessarily, you can protect yourself from that.
• 32:19
  SPEAKER_01: And so there's a small fee to freeze your credit and to unfreeze it.
• 32:22
  SPEAKER_01: I think it's it's less than$10 for sure, but you can freeze it for a moment in order for you to gain some positive habits around your money and to ensure that you're seeing the results that you need to see and potentially paying down debt.
• 32:36
  SPEAKER_01: So I want to make sure that our our um that Danny has an opportunity to speak into some of these tools that folks can use for their credit as well.
• 32:47
  SPEAKER_00: Yeah, definitely.
• 32:48
  SPEAKER_00: So another really cool perk about our free credit score reporting tool that is embedded within digital banking.
• 32:54
  SPEAKER_00: So again, if you're just looking for a credit score reporting tool that's free and hyper secure because we do not sell your information to third parties like some other tools.
• 33:03
  SPEAKER_00: I'll name Credit Karma, for example.
• 33:05
  SPEAKER_00: So again, if you just want to download our app and use it to monitor your credit, get actionable insights, and keep tabs on your score, do it.
• 33:11
  SPEAKER_00: Do it now.
• 33:12
  SPEAKER_00: It's free.
• 33:13
  SPEAKER_00: Um, and a really, a really cool tool that we have that we actually just introduced this year, and it's more so related to just automating some of your savings opportunities.
• 33:22
  SPEAKER_00: So a little less about credit, it's called pocket change.
• 33:25
  SPEAKER_00: So every time you make a purchase with your debit card, it actually takes that remainder to round up and puts it into savings.
• 33:32
  SPEAKER_00: I know one of our um our head coach here who's on the chat right now answering some of your questions, she started it earlier this year and she's already got a bunch saved.
• 33:41
  SPEAKER_00: So it's one of those really cool, mindless ways that you can go about saving money without even having to think about it.
• 33:46
  SPEAKER_00: Um, and then Erica, you mentioned our credit builder loan again, really, really great, great way to just build your credit and do it more quickly, right?
• 33:54
  SPEAKER_00: Because as Erica shared, there are five different categories that help you do that.
• 33:58
  SPEAKER_00: But by far the largest part is making your payments in full and on time.
• 34:02
  SPEAKER_00: And so that will help you do that.
• 34:04
  SPEAKER_00: Yes.
• 34:04
  SPEAKER_01: Yes.
• 34:05
  SPEAKER_01: I see folks in the chat talking about um helping their kids build their credit.
• 34:09
  SPEAKER_01: And yes, they can be an authorized user with or without their own card.
• 34:14
  SPEAKER_01: Um, you know, I this is this is so interesting, and I appreciate someone bringing that up because I have one child for whom we did that.
• 34:21
  SPEAKER_01: We did give her recently um access to be an authorized user on one of the credit cards that we have.
• 34:28
  SPEAKER_01: And in our other child, um, we did it differently.
• 34:31
  SPEAKER_01: She got a secure card because she herself felt like she needed some more boundaries and she wanted to ensure that she didn't overspend.
• 34:39
  SPEAKER_01: And so for her, she wanted to do something different.
• 34:42
  SPEAKER_01: And so I think it's also knowing your child and what matters and what's important for them and helping them to do do well with money.
• 34:50
  SPEAKER_01: Um, so so I think that that's a good way to ensure that you are setting them up for success intentionally versus doing something automatically.
• 35:01
  SPEAKER_01: So I love that folks are putting that in the chat and talking about what they're doing to help their students, their young people.
• 35:09
  SPEAKER_01: So we want to talk about a new play.
• 35:12
  SPEAKER_01: So something else that you can uh do with your money to help relieve a little bit of the tension that might be present with your finances.
• 35:21
  SPEAKER_01: So refinancing is a really great option for a few different areas of your finances.
• 35:29
  SPEAKER_01: So typically we tend to go get a loan and we say this is what it is, and we don't think anymore about the fact that there might be other options to help you improve where you are, especially midstream.
• 35:41
  SPEAKER_01: So I utilized refinancing for student loans in order to get my interest rate down.
• 35:48
  SPEAKER_01: Um, you could consolidate them and then get the interest rate down at the same time.
• 35:53
  SPEAKER_01: A mortgage, if you know you got it, you'd purchase a home and it was a higher interest rate, you could look into seeing if the interest rates are better at any given point to see if it makes sense to refinance that.
• 36:04
  SPEAKER_01: Um, and auto loans.
• 36:05
  SPEAKER_01: So we're gonna talk about specifically an auto loan example of what is possible.
• 36:11
  SPEAKER_01: Um, but there's a lot of different ways to use refinancing to help improve your finances, especially towards the end of this year where you might need a little bit of relief.
• 36:22
  SPEAKER_01: So let's just say that in this example, a person has a$20,000 vehicle.
• 36:28
  SPEAKER_01: They, they, this is the loan that they have, um, and it's five years, so it's 60 months.
• 36:35
  SPEAKER_01: They originally got this loan at 16% interest.
• 36:38
  SPEAKER_01: So it's possible that um their credit needed a bit more refining in order to get a better interest rate, but they're at 16%, which means that their payment over the five-year loan would be 486.
• 36:53
  SPEAKER_01: They might have an opportunity in order to um to either do it.
• 36:58
  SPEAKER_01: This could do two different things to lower the interest rate so that they can have a lower payment and keep the same long term, or pay it off sooner and get a shorter term.
• 37:09
  SPEAKER_01: So at 16% interest, the total interest over the course of that loan is$9,100.
• 37:15
  SPEAKER_01: So they're gonna pay$99,100 on that loan.
• 37:20
  SPEAKER_01: If they are able to qualify and to refinance that loan at 8%, just cutting it in half.
• 37:26
  SPEAKER_01: So not going all the way down to maybe 5% or 6%, but if they could get down to 8%, their monthly payment could change by$81.
• 37:35
  SPEAKER_01: Or if they chose to keep the same payment, they could pay that off a year sooner.
• 37:40
  SPEAKER_01: So four years, and they would save about$4,800 in interest.
• 37:47
  SPEAKER_01: And so it depends on what your strategy is.
• 37:50
  SPEAKER_01: Are you looking to reduce your monthly payment by having a lower interest rate, or are you looking to save on interest over the life of the loan or shorten the time period?
• 38:03
  SPEAKER_01: So it just kind of depends on what's needed at that time.
• 38:06
  SPEAKER_01: And so I think that these are, you just need to know that this is in your toolkit.
• 38:11
  SPEAKER_01: You can do this for a mortgage loan, like I said, if interest rates are favorable.
• 38:15
  SPEAKER_01: You can also do this and thinking about this for um, do the math, I would say, even for a student loan to see if that is gonna be a help to you in that moment, because refinancing student loans is a possibility if the interest rate is favorable.
• 38:31
  SPEAKER_01: So just know that refinancing is there.
• 38:34
  SPEAKER_01: It could be a part of your strategy.
• 38:36
  SPEAKER_01: Um, and that could be really helpful.
• 38:39
  SPEAKER_01: And so there are ways, there are tools that you can use at BCU in order to ensure that you um can refinance as well.
• 38:49
  SPEAKER_01: Is there something that you wanted to add on that front, Danny?
• 38:54
  SPEAKER_00: Uh no, I'm actually looking through the chat, and we have so many exciting questions coming up here in about five minutes.
• 38:59
  SPEAKER_00: So you keep rolling, Erica.
• 39:00
  SPEAKER_00: Thank you.
• 39:01
  SPEAKER_01: Awesome.
• 39:02
  SPEAKER_01: Awesome.
• 39:02
  SPEAKER_01: So I worked with, as Danny said earlier, um, with over 500 people during my time as a coach.
• 39:10
  SPEAKER_01: And one of the things that I see is that a lot of different people have a lot of different situations.
• 39:15
  SPEAKER_01: And so um, no situation is the same.
• 39:18
  SPEAKER_01: And we want you to feel like you can walk away with a game plan that works for you.
• 39:23
  SPEAKER_01: So um single moms can be on a tight budget.
• 39:27
  SPEAKER_01: And so Jessica, she might say, you know what, I don't have$500 to put towards my debt, but um$50 could make a difference for her.
• 39:36
  SPEAKER_01: And one of the things that I would say is set up those automatic payments so that it happens all every time on time.
• 39:46
  SPEAKER_01: And it for her, that could be the one thing that would make a difference.
• 39:49
  SPEAKER_01: So she doesn't have to think about making that payment.
• 39:52
  SPEAKER_01: It could also be for her just making sure that she takes advantage of that 1% reduction on her student loan, um on that interest rate, because the interest rate that could even change the payment for her on that on that student loan.
• 40:06
  SPEAKER_01: So just know that small changes can make a big difference if you're consistent.
• 40:11
  SPEAKER_01: I think the biggest thing that can be challenging is always adjusting and modifying the plan because something else in life happens.
• 40:19
  SPEAKER_01: And so we just want you to know and feel empowered that you can stay the course no matter what's going on, even if it's just a small amount that you're setting aside or putting towards debt.
• 40:30
  SPEAKER_01: And typically when we're raising families and our kids are young and we want to have a place for the kids to maybe play in the backyard.
• 40:39
  SPEAKER_01: I heard someone in the chat who's who wants to have a home.
• 40:42
  SPEAKER_01: This family, Marcus and Emily, they might have small kids and they might want to improve their credit.
• 40:47
  SPEAKER_01: And there's a few different ways that they can do that.
• 40:49
  SPEAKER_01: It does take time.
• 40:50
  SPEAKER_01: The one thing I'll say about improving your credit is that it's not an overnight process.
• 40:54
  SPEAKER_01: So I really want you to give yourself a good six months of consistency, consistently paying your debt on time and ensuring that your balances stay beneath your credit card balances in particular, stay beneath 30% of your credit limit.
• 41:12
  SPEAKER_01: And so for that family, giving it some time, and that gives them time to save money, it gives them time to look for the areas that they want to live in.
• 41:21
  SPEAKER_01: But when we're thinking about what you can do, um, they could be improving their prep their credit while also figuring out where the best place is to live.
• 41:34
  SPEAKER_01: And then a lot of the times I'll have mid-career people or folks who are within, let's say, 10 years of retiring.
• 41:42
  SPEAKER_01: And that person, Harold, he does not want to have$932 in debt following him into retirement.
• 41:50
  SPEAKER_01: And so um, when we're thinking about a strategy for retiring with peace of mind, almost everyone in the chat here today mentioned that they want to travel, they want to be able to save money for retirement.
• 42:04
  SPEAKER_01: And sometimes debt is in the way of that.
• 42:06
  SPEAKER_01: And so we focus on ensuring wait a minute, what if instead of um throwing every single penny at retirement?
• 42:15
  SPEAKER_01: Yes, you probably need to be putting money away for retirement.
• 42:18
  SPEAKER_01: I'm definitely advocating for that.
• 42:20
  SPEAKER_01: But reducing your debt and understanding what that can do to not have money going out in your from your disposable income every single month in retirement is huge.
• 42:32
  SPEAKER_01: And so calculate what it looks like.
• 42:34
  SPEAKER_01: Harold would really appreciate knowing um how much it would take per month to pay off debt.
• 42:40
  SPEAKER_01: And sometimes I'll use that debt reduction, um, that debt reduction calculator, and I'll put in a few different scenarios.
• 42:47
  SPEAKER_01: So, what if um he reduced his interest rate, or what if he was able to refinance this loan, or what if he was able to um put an extra$200 on the debt?
• 42:59
  SPEAKER_01: How long would it take?
• 43:00
  SPEAKER_01: And when would the debt-free date um change to?
• 43:04
  SPEAKER_01: And so just knowing that you have that tool available to be able to make some of those choices and also having a conversation with someone could be a big difference maker.
• 43:14
  SPEAKER_01: So it doesn't matter where you are or what your household looks like, um, I know that you can take some action, and that gets me excited when I know that folks have some of those options available.
• 43:26
  SPEAKER_01: And before we go to our QA, the one thing that I want to really say too is that we're just under, you know, two and a half to three and a half months away from the holidays.
• 43:38
  SPEAKER_01: And I just want to make sure that as we see Thanksgiving approaching, it's kind of that tipping point to the holidays that this game plan is something that you can utilize for the rest of this year, but also into next year.
• 43:53
  SPEAKER_01: And so the holidays, those dates never change, right?
• 43:56
  SPEAKER_01: And so we don't want those dates to be a surprise, they happen every year.
• 44:00
  SPEAKER_01: And I highly encourage you to create maybe a holiday fund or a travel fund or a back to school fund.
• 44:07
  SPEAKER_01: You could use Pocket Change even right now, set it up now with BCU so that you can have some of those, some of that change going into a savings and it'll be available to you in a couple of months to utilize for your holiday fund, your holiday spending.
• 44:23
  SPEAKER_01: And so think about those things now so that you're not waiting until the last minute and then stressed out a little bit, right?
• 44:31
  SPEAKER_01: When those holidays come.
• 44:33
  SPEAKER_01: The other thing that I will say, I think that this is a big opportunity for people is just to make any payments to debt or payments to your savings automatic.
• 44:43
  SPEAKER_01: That means that it's a decision one time.
• 44:45
  SPEAKER_01: It's not a decision every single month because you've set it up and then you forget about it.
• 44:50
  SPEAKER_01: And then you live on the rest of the dollars that you have available to you.
• 44:54
  SPEAKER_01: I think when we get fatigued is because we're constantly having to make new decisions.
• 45:01
  SPEAKER_01: And we want to make that process easy by automating what we can so that we don't have to continually think about what did I say I was gonna do?
• 45:10
  SPEAKER_01: Just make it automatic and then it's automatically done for you.
• 45:14
  SPEAKER_01: So I want to make sure that we get to some of your questions and that we get you out on time.
• 45:19
  SPEAKER_01: So I want to see.
• 45:22
  SPEAKER_01: Do we have, let's see, I'll start with it.
• 45:24
  SPEAKER_00: Yeah, yeah.
• 45:25
  SPEAKER_00: Go ahead, Erica, and kick it off.
• 45:27
  SPEAKER_01: Well, I was gonna see um if there are some questions that you had teed up before I start looking at the chat here.
• 45:36
  SPEAKER_00: Yeah, so it looks like we have some specifically in the QA.
• 45:41
  SPEAKER_00: So we're gonna start with Nicole's question there, if that's okay, Erica.
• 45:45
  SPEAKER_00: She said she's seen some info about taking a loan from a 401k, not just taking money out.
• 45:51
  SPEAKER_00: What do you think about this option, Erica?
• 45:54
  SPEAKER_01: Um, honestly, it depends on the situation.
• 45:57
  SPEAKER_01: Um, I like to hold off on taking dollars out of your 401.
• 46:02
  SPEAKER_01: Yes, it is it is a possibility to take loans on a 401.
• 46:06
  SPEAKER_01: Um, you have payroll deductions that allow those dollars to go back into your account on a routine basis.
• 46:14
  SPEAKER_01: But I like to see if some of these other options are something that you can utilize first.
• 46:20
  SPEAKER_01: The reason is because when you take dollars out of the market, you're not making money on your money any, you know, those dollars that you take out.
• 46:28
  SPEAKER_01: Let's say you take 10,000 out of your 401k, it's not earning interest for you.
• 46:33
  SPEAKER_01: It's that no longer is doing it's you don't have the benefit of compound interest anymore.
• 46:38
  SPEAKER_01: Um, a hardship withdrawal is different, it is not paid back.
• 46:44
  SPEAKER_01: Um, and so typically you can't get as much in a hardship withdrawal.
• 46:48
  SPEAKER_01: Usually um companies will have a limitation on how much you can take out.
• 46:52
  SPEAKER_01: And the only time I'm actually looking at people using a hollow, um, a hardship withdrawal is if they are, in fact, in jeopardy of losing their home.
• 47:03
  SPEAKER_01: Um, you need the roof over your head, and we know long-term you can continue to live there and be able to make those payments.
• 47:10
  SPEAKER_01: I like to wait on those things to see if there are other options that work because we don't want to jeopardize your future for today.
• 47:21
  SPEAKER_00: Nice.
• 47:22
  SPEAKER_00: Thank you, Erica.
• 47:23
  SPEAKER_00: Kim asked, is it worth to freeze your credit while paying off debt?
• 47:28
  SPEAKER_01: You can, absolutely.
• 47:29
  SPEAKER_01: Um, the reason you will freeze your credit is so that you don't, you nor anyone else can take out credit in your name.
• 47:38
  SPEAKER_01: And so it's just protecting you from new credit on your name from you or fraudulently by anyone else.
• 47:47
  SPEAKER_01: Um, but it doesn't necessarily affect your score in any way.
• 47:50
  SPEAKER_01: It doesn't necessarily mean that um it doesn't affect your debt reduction habits and things like that.
• 47:56
  SPEAKER_01: Um, so it's just for a specific purpose, which is to not be able to open up new credit in your name.
• 48:02
  SPEAKER_00: Great.
• 48:03
  SPEAKER_00: Thank you.
• 48:04
  SPEAKER_00: Bethany asked, is it possible to repair my payment history if I have late payments?
• 48:09
  SPEAKER_01: Yes, it just takes time.
• 48:11
  SPEAKER_01: So um if you have late payments, they can't come off unless they're errors.
• 48:16
  SPEAKER_01: Um, but if you pay on time, and I specifically say six months at least, paying on time every time for every debt for six months is a way to heal.
• 48:29
  SPEAKER_01: It really, you really start to see a difference around one year.
• 48:33
  SPEAKER_01: Um, and the reason is because you're giving all three credit agencies time to see, oh, okay, consistency here.
• 48:42
  SPEAKER_01: You're paying on time.
• 48:43
  SPEAKER_01: The other thing that I will say is after six months, let's just say you have a credit card that is at 20% interest and you've been paying on time for six months.
• 48:53
  SPEAKER_01: You might have the option now to call them and say, hey, can you reduce my interest rate?
• 48:57
  SPEAKER_01: I've been paying on time for six months, and they will see that data.
• 49:01
  SPEAKER_01: Um, and it's it's potentially an option, especially if your credit hasn't healed as much as you'd like and you can't qualify for resources elsewhere.
• 49:10
  SPEAKER_01: Um, it it's a good strategy to just ask and see if they will reduce it.
• 49:16
  SPEAKER_01: And even reducing it from 20 down to 15 saves you interest.
• 49:20
  SPEAKER_01: It changes, it can change the game for you.
• 49:23
  SPEAKER_01: And so um, there's no harm in asking.
• 49:25
  SPEAKER_01: All they can do is say no.
• 49:26
  SPEAKER_01: Uh, but being consistent gives you more options.
• 49:30
  SPEAKER_00: Yep, totally.
• 49:32
  SPEAKER_00: Progress over perfection, one of our favorites.
• 49:34
  SPEAKER_01: Yes.
• 49:35
  SPEAKER_00: Nicole asked, how do macroeconomic, the Fed interest rates, affect personal interest rates right now?
• 49:41
  SPEAKER_00: Aren't interest rates set kind of high right now?
• 49:43
  SPEAKER_00: How feasible is it to get a lower interest rate?
• 49:47
  SPEAKER_01: Yeah, it's yes.
• 49:48
  SPEAKER_01: Um, interest rates are at a high point.
• 49:52
  SPEAKER_01: I agree with you.
• 49:53
  SPEAKER_01: Um, and yes, they're set by factors that are out of our control, sure.
• 49:58
  SPEAKER_01: But um, one thing that I will say is you can't, there are so many different lenders out here.
• 50:07
  SPEAKER_01: When we're talking specifically about credit cards, there's tons of different credit cards out here.
• 50:12
  SPEAKER_01: People have different credit cards from different phases of their life.
• 50:15
  SPEAKER_01: Um, but there's thousands of lenders out here.
• 50:18
  SPEAKER_01: Um, we know the majors.
• 50:20
  SPEAKER_01: Um, but when we're looking to potentially get a new card, I'm I'm I am definitely biased.
• 50:28
  SPEAKER_01: I am a credit union member, and credit unions have the best rates.
• 50:32
  SPEAKER_01: I'm just gonna tell you that it's from personal experience, but it's also um the truth.
• 50:37
  SPEAKER_01: And the reason is because you're a member and they're shared, you're sharing in um the potential revenues of the credit union.
• 50:45
  SPEAKER_01: And so that means that gives you access to lower interest rates.
• 50:48
  SPEAKER_01: So I would have you honestly to just see if some options are available to you at BCU for a better interest rate on any of the things that you have.
• 50:56
  SPEAKER_01: Um, because that is, you know, by and large, they are here for the community.
• 51:03
  SPEAKER_01: And so um you're always I'm my my the last auto loan that I had was through our credit union because it was the best, the best interest rate.
• 51:11
  SPEAKER_01: Um, and so just know that you can shop it, you can go ask the credit union and see is it a better interest rate than what you currently have?
• 51:21
  SPEAKER_01: Those things are um ways in which you're you can just be savvy with your money.
• 51:26
  SPEAKER_01: That's a part of your your playbook, if you will.
• 51:29
  SPEAKER_00: Yeah.
• 51:30
  SPEAKER_00: Krishna asked, Why do they take points away when you apply for something?
• 51:34
  SPEAKER_00: But when you paid it off and meet the two years on your credit, they only give you credit for one to three points.
• 51:40
  SPEAKER_01: I know, I know.
• 51:42
  SPEAKER_01: Well, the the the truth is that your score is an I love debt score, right?
• 51:47
  SPEAKER_01: Like they they it it behooves you to stay in debt.
• 51:53
  SPEAKER_01: And so um we have we paid off all of our debt, we have since paid off our mortgage, and at some point they won't have anything to give me a credit score on.
• 52:05
  SPEAKER_01: And so when that happens, you your score either stays stagnant, which is what it is right now.
• 52:12
  SPEAKER_01: Um there's not a whole lot for them to utilize.
• 52:15
  SPEAKER_01: Um, and and so it eventually goes away.
• 52:18
  SPEAKER_01: But here's the thing: if you have cash on hand, you have money saved for retirement, you have an emergency fund, um, the need for debt reduces.
• 52:28
  SPEAKER_01: The other thing is if you have income, you can still get access to get new debt or a new mortgage or what have you if you want it.
• 52:35
  SPEAKER_01: But you're right, it it is a fine line.
• 52:39
  SPEAKER_01: But there are no that I can't, there's no one can tell you if you make this move or close this account, it's gonna drop it by 10 points for sure.
• 52:49
  SPEAKER_01: Um, it that's not necessarily the way it happens.
• 52:51
  SPEAKER_01: You can't you can't do that without knowing um more of the equation and when each individual credit reporting agency is actually pulling that information.
• 53:00
  SPEAKER_01: And it could be subject to change and be updated because they are adding rental histories and um medical debt and other things to your score.
• 53:10
  SPEAKER_01: And so, you know, we're keeping a lookout for how these things are going to be adjusting for the future as well.
• 53:17
  SPEAKER_00: Yeah.
• 53:18
  SPEAKER_00: Kelly asked, is there a way to contact a credit card company to get the interest reduced, Erica?
• 53:24
  SPEAKER_00: Yes.
• 53:24
  SPEAKER_01: Um, you would use any phone number that you would utilize for um calling and making a payment online, or I should say over the phone and talk to a human.
• 53:36
  SPEAKER_01: You need to talk to a human and just see what's available.
• 53:40
  SPEAKER_01: I would I would always say, know how many times you've been on time.
• 53:43
  SPEAKER_01: Like if you're always on time, um, know what your credit report says.
• 53:47
  SPEAKER_01: Like you can, you should be able to tell them, hey, I know that my credit report says that I've been on time for the last year with all three credit bureaus.
• 53:54
  SPEAKER_01: Um, I have my payment dates and all that.
• 53:57
  SPEAKER_01: Um, but you should be able to ask them that.
• 53:59
  SPEAKER_01: There aren't any guarantees, but it is a high likelihood that there's some other program available.
• 54:05
  SPEAKER_01: Sometimes they, if you are really looking to pay things off, they will get you on a standardized plan at a lower interest rate so that you can pay that off.
• 54:13
  SPEAKER_01: And it it just means that you don't use it for that next year or what have you in order to pay that credit card off.
• 54:20
  SPEAKER_01: So they do have programs, but you have to talk to a human in order to gain access to them.
• 54:25
  SPEAKER_00: Thank you.
• 54:26
  SPEAKER_00: Emma asked, how do we go about getting something on our credit report fixed, an error?
• 54:32
  SPEAKER_01: Yes.
• 54:32
  SPEAKER_01: So sometimes you can do this virtually online.
• 54:35
  SPEAKER_01: Um a lot, all three credit bureaus, if you go online and you look at your credit report, um, or I should say, yes, you look at your credit report, you can dispute.
• 54:43
  SPEAKER_01: So the term is dispute, and you can do that online, and you can say this is an error.
• 54:47
  SPEAKER_01: What happens is they have to go confirm whether or not this is an error.
• 54:52
  SPEAKER_01: So it means that they have to go to that lender and see, wait a minute, did she pay this off?
• 54:59
  SPEAKER_01: Or is this um, did he pay this on time, or is this account closed?
• 55:04
  SPEAKER_01: Things like that.
• 55:04
  SPEAKER_01: So you're disputing that the item is in error and and you really want them to go back.
• 55:10
  SPEAKER_01: It takes 30 days, maybe 60 days in order for them to get back and do that.
• 55:14
  SPEAKER_01: And if they haven't, after that amount of time, they need to remove whatever it is, um, especially if it is a derogatory item, if it is something that's saying that you were paying late or um something you should have them remove it at that time.
• 55:30
  SPEAKER_01: And sometimes that does require um a little bit more due diligence than going online and disputing the item, um, which is a phone call, or back in the day, because I've been doing this a long time, back in the day it would be sending a letter, certified letter, but um you can take it up to the next level and have them remove that information because it is an error if they don't respond within um um a reasonable amount of time.
• 55:56
  SPEAKER_00: Awesome.
• 55:57
  SPEAKER_00: So we have four minutes left.
• 55:58
  SPEAKER_00: I have already selected our final two questions.
• 56:01
  SPEAKER_00: Awesome.
• 56:01
  SPEAKER_00: Um, the first one, both Suzanne and Jeanette wanted to ask about debt consolidation.
• 56:06
  SPEAKER_00: Is it worth it if you already have bad credit?
• 56:08
  SPEAKER_00: Um will it impact your credit?
• 56:10
  SPEAKER_00: Can you talk to them a little bit about that, Erica?
• 56:12
  SPEAKER_00: That's a really good question.
• 56:13
  SPEAKER_01: So um it it restructures your debt, so it will change your credit.
• 56:23
  SPEAKER_01: And again, this is not so what it means is something is paid off, but then you have a new loan, right?
• 56:30
  SPEAKER_01: So it has to affect the credit score because it is, in fact, a new loan.
• 56:35
  SPEAKER_01: Um, but for you, if the strategy is really, I want to pay the debt off, I want this to be easy, I want um instead of five payments, I want one, you have to think about what's best for you in that moment, right?
• 56:48
  SPEAKER_01: Um, and so yes, it could potentially affect your score, but maybe you don't care that it affects it by 10 or 20 points because your goal is truly to pay it off over time.
• 57:01
  SPEAKER_01: Um and if you don't have great credit, so and I do want to clear one thing up.
• 57:07
  SPEAKER_01: Good credit typically begins at around 680, 675, 680 or so is where you get the better interest rates.
• 57:15
  SPEAKER_01: Um, it's fair if it's in the 600s, but the good credit begins at around 680, and the best interest rates for say a mortgage loan start maybe at 700, 720.
• 57:30
  SPEAKER_01: So just know like it doesn't have to be perfect, and a perfect score is 850, and a lot of folks do not hover around 850, but but if we're looking to see what is quote unquote good or better credit, um, we're looking at around that 680 mark for most things.
• 57:49
  SPEAKER_01: Um so when if you're looking to do debt consolidation, you have to think about like you might want to ask questions first before they pull any credit.
• 57:59
  SPEAKER_01: Like, what credit score do you require in order for consolidation to be available to me?
• 58:05
  SPEAKER_01: What do you require for refinancing to be available?
• 58:09
  SPEAKER_01: And it might be that for a season, you need to improve your credit in order to get there.
• 58:14
  SPEAKER_01: Um, but typically you need to know what their standards are for who you're applying with.
• 58:22
  SPEAKER_01: I think that's important first.
• 58:24
  SPEAKER_00: Awesome.
• 58:26
  SPEAKER_00: Perfect.
• 58:26
  SPEAKER_00: Well, my final question is actually one that each of you might answer differently, but what are you gonna do?
• 58:32
  SPEAKER_00: The honest takeaway from here is actions.
• 58:35
  SPEAKER_00: So there are so many different things you can do.
• 58:37
  SPEAKER_00: I know some of you said you're overwhelmed with where to start.
• 58:39
  SPEAKER_00: That's where you just meet with a coach.
• 58:40
  SPEAKER_00: They can help you prioritize your next moves.
• 58:43
  SPEAKER_00: And I want to give three people a special shout out and a little something special.
• 58:48
  SPEAKER_00: So um we have Elisa Malo, Faustino Garcia, and Nicole Witcher in the chat.
• 58:54
  SPEAKER_00: And each of you is gonna receive one of Erica's books.
• 58:57
  SPEAKER_00: So we're gonna email you, ask for your address.
• 59:00
  SPEAKER_00: If you're a member, we might already have it and we'll send it to you.
• 59:03
  SPEAKER_00: But thank you, you three, specifically, for being so highly engaged in our chat.
• 59:07
  SPEAKER_00: We really appreciate it.
• 59:08
  SPEAKER_00: And this is a community.
• 59:09
  SPEAKER_00: We want y'all to learn from each other just as much as we're sharing our expertise as well.
• 59:13
  SPEAKER_00: So thank you so much, Erica Young, for being part of this community.
• 59:16
  SPEAKER_01: Thank you.
• 59:16
  SPEAKER_01: Thank you for having me.
• 59:18
  SPEAKER_01: And if you want to get some more motivation, learn how to talk with your partner about money, I have a podcast called For Better and Worth.
• 59:26
  SPEAKER_01: The QR code here is where you can get that information or just go to forbetterandworth.com.
• 59:34
  SPEAKER_01: It is on all of the streaming platforms as well as on YouTube.
• 59:37
  SPEAKER_01: So it's just a way for you to stay connected and see um some more ways in which you can handle your money matters and do that with the person that's probably closest to you.
• 59:49
  SPEAKER_00: Awesome.
• 59:50
  SPEAKER_00: Well, this will be uh live on the Life Money You podcast before end of the day.
• 59:54
  SPEAKER_00: So if you want to listen to it, share it with a friend, you can do that as well.
• 59:57
  SPEAKER_00: Again, thank you so much for Life Money You, the holistic financial wellbeing program of the credit union that you're already a part of, and one that you're eligible to join.
• 1:00:05
  SPEAKER_00: Thank you again, and until next time.
• 1:00:07
  SPEAKER_00: Bye, everyone.