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We sat down with financial author and expert Stephanie O’Connell Rodriguez, to discuss how the COVID-19 stimulus bill may benefit you, how to navigate finances during job loss or in a bear market, among other personal finance tips and resources – saving for retirement, debt, smart shopping habits and more!

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Transcribed Interview

Stephanie: Hi, everybody, my name is Stefanie O'Connell Rodriguez. I write about personal finance for a living. I am doing that over on Instagram. I have a book writing a lot about what's happening right now especially just because it's like, if there's one thing to bring urgency to your money, it's your income flailing. It's worrying about how you're going to make rent. It's worrying about the stock market. And I think those are some of the topics we're going to dig into. Those are the topics I talk about all the time. And so, I'm glad to be able to hopefully share some insight into what's happening right now.

Ewa: Yay! Very excited.

Stephanie: Thank you. I’m very excited too. I do too.

Ewa: Cool. So, just so everyone is aware of the structure of today will be as follows. Similar to last week, we'll start with COVID-19 related questions. Then we'll move into general bear market-related questions. And then we'll conclude with just broad personal finance stuff that I think is just helpful for people to know the context of the situation, and then we'll do a name-your-favorite where you and I will take turns in providing resources for people to bookmark or just continue learning about personal finance in general, if they're looking to educate themselves. So, yeah, so let's get started. There's a lot of questions, hopefully, we can get to a lot of them.

Stephanie: Awesome.

Ewa: The first question I have is, with the passing of a Stimulus Bill, aka the Care Act or anything else, like the Paycheck Protection Program, how do individuals benefit from it? Whether it's the general public, the unemployed, freelancers, gig workers?

Stephanie: Yeah, so there's so many different pieces to this bill. And in addition to this federal bill, there's also a lot going on on a state and local level. So, in addition to everything I'm talking about here today, I would really encourage everyone to look up what their state and city policies are as well because there's just resources at every level and they can feel a little disjointed. And the best way to make sure you're taking full advantage of it is to look specifically at your situation in your state and in your city. That said, on the federal level, let's talk about what is happening. So, one of the things that most of us were like-- an alarm bell goes up right away is this, we're going to get a check for $1,200, some of us. And what that is, is like what it sounds. It's a check for $1,200 for individuals whose adjusted gross income is less than $75,000. If you make more than that, you can still qualify for a lesser payment, up until I think, $99,000 a year. If your salary is under $99,000 a year, you'll still get something. It just won't be the full $1,200 if you're single. If you're married, if you make less than $150,000 a year and in that case, you'll receive $2,400 but again, that payment decreases up until the $190,000 a year mark.

Now, if you file your taxes regularly and you have your direct deposit information there on file with the IRS, that payment should be coming to you automatically. If you haven't filed your taxes yet, I would make that a priority, especially if you didn't file for 2018. Because if you haven't filed for 2018 or 2019, I don't believe you will get that check. I think the only exception is people who are on Social Security. So, if you’re a young person, you want to make sure you file your taxes, they have your information. That way you're going to get that money as soon as possible. I know the IRS is going to send some paper checks, but that could take longer to process. So, it's all about getting money in the bank immediately. And having that information on file is really important.

Now the other piece of this is we're looking at unemployment, huge levels of unemployment. It’s over 6 million last week, over 3 million the week before, new claims. So, we're looking at 10 million people unemployed. And this week, I'm sure there'll be a similarly huge level. So, my husband's actually one of the people who's currently furloughed from his job because he works on Broadway. And guess what, they're not gathering 500 people together right now. So, he filed for unemployment. And what's really great about this new package is that the unemployment benefit, whatever it is in your state, the federal government is adding $600 a week to whatever you get approved for, for your state. So, if you get approved for $300 a week, you're going to get $900 a week. That is real money you can live on. So, that's really good news. And the other really great news about unemployment is that even if you're a 1099, or if you're a single person, LLC, you can apply for this. So, if you're a gig worker, if you're someone who's always been shut out of these programs, you can continue to now apply for unemployment.

Now, if we're talking about small business owners, that's when we're going to look at the Small Business Administration. That's when we're going to look at things like the paycheck protection program where you can maybe get a loan, a potentially forgivable loan for two and a half months of payroll through something like the Paycheck Protection Program. To get more information specifically on small business just because there's a lot of in and outs on small ownership, I would go to SBA, Small Business Administration and look specifically at their policies just because it depends so much on your business, and it depends so much on what specific resources are available there. That said, the banks are now giving out those loans. There was a big holding pattern for a long time. And as of, I think it was as of Friday, they started taking applications for those loans. So, all of these things like I feel like we've been in kind of a holding pattern, but getting educated on what's available, understanding what your resources are and in addition to these federal resources, checking your state and local policies is a really good way to make sure you're taking full advantage of what resources are available.

Ewa: Yeah, as a small business, I know the SBA is something that we're trying to pursue for just Lo & Sons in general. And then for my husband, he's a freelancer and has been for some years. And this is the first time, it’s very unheard of that you could get unemployment. So, I was finally able to get through the website yesterday and help him out with that.

Stephanie: Yes. If you're in New York State, this is a very bizarre tip. The way we got through was we used a browser called Microsoft Edge. Yeah, yeah. I've now shared this tip like 10 times because it's the most archaic thing. Like it's not working on Chrome or Safari like, no. Like, if you're having trouble, New York State try Microsoft Edge.

Ewa: If there's one thing you take away from this conversation it’s that.

Stephanie: Yeah, it's funny.

Ewa: Okay, great. That's really helpful and elaborating on that. And I do hope that a bunch of our viewers are able to partake in some sort of benefit if they're in need at this time. Do you have any advice for people out of work in the gig economy who are hit especially hard and out of work at this time?

Stephanie: Yeah. So, for-- I've been having this friends-- this conversation a lot with a lot of my friends, because a lot of them are in the gig economy. And my biggest tip is, utilize your resources. What I find is that people feel a lot of guilt, like applying for unemployment. That's what it's there for. This is what we pay taxes for. And the idea is that everyone wants you to stay home and not be out and about doing your job. And I know that really can feel uncomfortable. I know I personally take a lot of pride in what I do. But the fact is the best thing we can do for healthcare workers, for the country right now is stay home. And that's why the government is expanding these resources like unemployment and jacking up those benefits and sending out stimulus checks so you can still hopefully cover your bills, but that you stay home doing it. So, that's what I would say is, just utilize that unemployment resource. And maybe if you're feeling like you have a little bit of energy and you're feeling in a positive place you can work on creating new work, you can work on improving a skill, you can work on polishing a resume, updating your LinkedIn. But also, I've seen a lot of things like, “This is the time to write your novel.” And I want to say if you're feeling really distressed and depressed, maybe it's not the time to write your novel. Maybe you just need to sit and cry and have a drink and watch Netflix or whatever it is. That’s okay too. So, I just want to give credence to both of those approaches. Those are okay.

Ewa: Okay. Yeah, I think that's really great. And I do know, I've been doing my fellowship in the evenings, like after taking all the news I'm just like, all right, Netflix is all I’m going to be doing now.

Stephanie: Yep. Yep. Especially after reading 12 hours of daily news updates or Twitter updates. I think a little Ozark or Tiger King is okay.

Ewa: Yeah, definitely. So, what are your thoughts for someone that is especially hurting hard this time and they can't afford rent despite, like trying to get employment or whatever it might be, they just can’t make ends meet?

Stephanie: Yeah. So, the first thing that I did when my husband lost work, and I personally, as a small business owner have lost a ton of work that's like, similar small businesses. It's just really affecting everybody. The first thing we did is like, we really just stopped and took stock of everything we spend money on. So, I am a geek, I write down every dollar I spend in a spreadsheet. And so I went through the last three months, and I tracked where every dollar went. And anything that I didn't need to survive, I was just like, okay, I'm going to just put this on hold for just a second, and just track what I need to live. So, I made a list of things like my rent, my insurance, my food costs, you know basic things. And then I took stock of that and then I was like, okay, based on what's here and what we have in savings or what resources we're going to qualify for through unemployment, like, where is there a gap? Do I need to put something on a credit card? Do I need to get on the phone with my landlord? Do I need to get on the phone with my credit card company or my utility company to figure out a payment plan that works for me at this time?

And I think that's the process everybody needs to take right now is to take that financial inventory, take a look at what resources you already have in your financial world. So, savings, for example, and then also take a look at the government resources like the stimulus check, like the unemployment program, and then where are those gaps? Where are you not going to be able to meet your obligations and at that point, that's when you really want to get on the phone and call the landlord.If you can't make rent, just be upfront with them. Now, coming back to this idea of policy really bearing from a federal state and local level, in New York, they can't evict you right now. But if you don't pay your rent for the next three months, well, they might evict you when this is all over.

So, I think rather than just assuming that they can't evict me so I'm not going to pay my rent or just assuming nobody cares and there's nothing I can do about it. Call any service provider whose payment obligation you can't meet, whether it's-- And even if it's something that you have seen is going to be policy, for example, on a student loan, there's a deferment on federal loans of interest in payments. But it's still a good idea to call your loan servicer and be like, I just want you to confirm that I read about or heard about this policy, and I want to understand what's happening with my payments? Do I need to do anything? Should I pause something? What's my obligation? Because the reality is that doesn't apply to all student loan payments, it doesn't apply to private loan payments. So, it's just better to do your due diligence and always get on the phone and get ahead of it, rather than just feeling like there's nothing you can do about it or rather than just trying to put out fires later.

Ewa: Yeah, there's two things that actually bring up a good point, one is something I heard on the news today. It was some auto insurers, if you have a car they are lowering their insurance-- because there's so much savings, people aren’t on the roads, aren't getting in accidents, I heard, which I didn't even think of, if you call your auto insurance, they might be able to give you a discount for the next month or something. So, it's definitely a conversation to consider and think about for those kinds of line items within your budget.

Stephanie: And that's such a great point on that specifically, because some insurers are automatically reducing the payments. But some are only doing it upon request, and then some are not doing it at all. So, that's just a perfect illustration of like, it's always worth calling and getting on the phone. And then just asking all the questions you want to ask. There's no better source, I'm not going to be as good a source as your insurance company or is your student loan servicer. It's always better to go directly to the source so you understand what options are available to you. I saw a comment here like, paying your student loans right now, actually might still be a good idea because if interest is being deferred, all of the payment goes to the principal, which is actually a really effective strategy. So, maybe you decide that after you speak to your lender and you understand exactly what the terms are that like, yeah, you are going to choose to continue making payments because you really want to make a dent in that principal. But if you're someone who lost their job, then maybe you do want to take advantage of the fact that you don't want to pay your loans right now and you want to use that stimulus money to beef up your savings account. So, this is the individuality of every situation. This is always true in personal finance, the answer is always it depends. But in this scenario, that’s why it's so important to talk to your specific lenders.

Ewa: That's really good advice. I think I'll probably be making some phone calls later.

Stephanie: Yes.

Ewa: Great. So, the next two questions I have are actually customer questions that we had from our IG stories when we were posting and promoting this chat. So, the first one is, and I think you kind of touched on it, was the tax filing date was pushed to July 15th. Should someone hold off on filing their personal taxes until a later date, or should they still aim to file now?

Stephanie: So, like all answers, it depends. My husband and I personally made less money in 2019 than we did in 2018. So, for us, there was an incentive to file our taxes for 2019 as soon as possible because we would get more stimulus check money by doing it. That said, if you're not going to qualify for the stimulus check anyway, or if you would qualify for the same amount, and if you think you're going to owe a lot of money come tax time and you don't have the funds in your account, well, maybe you do want to hold off a little bit. So, you wait until that stimulus check comes or you wait until that unemployment comes, and therefore, you have the funds to actually pay your tax bill in July. So, again, it depends. Weigh the circumstances. In my case, it was like as soon as I found out that we made too much money in 2018, I was like we have to file our 2019 taxes stat.

Ewa: Yeah, that's good advice. I didn't even think to consider what you made in 2018 versus 2019. And whether you should hold off and consider that. So, I'll definitely have to crunch some numbers after this.

Stephanie: Yeah, crunch some numbers and it might be worth hiring an accountant. Also, this is true for unemployment. So, for example, if you made more money in 2019, maybe it won't help you for the stimulus, but maybe it'll help you qualify for a larger share of unemployment. So, all of these things are things to weigh and that's why it's so contingent upon your specific situation.

Ewa: So, would your recommendation be for someone to speak to their accountant on that, like talk to someone else?

Stephanie: Oh, yeah. Even as someone who writes about my full time, I have an accountant, because taxes and bookkeeping are very different from personal financial planning. They're very connected, but the tax law changes all the time. Especially since there was a huge tax overhaul two years ago. But even in this last tax year, there were new changes from that tax overhaul two years ago. And that requires a full-time job just to stay on top of that. So, I'm big on having a professional accountant.

Ewa: Okay, awesome. The next question I have is, again, a customer asked this, if someone's company has temporarily halted IRA matching for workers during the crisis, should they still contribute?

Stephanie: That's a great question. So, obviously the incentive of getting your employer match isn't there. That said, contributing to a retirement account is a good financial practice. What my-- I can't give specific investing advice. It's a legal thing. But what my thought is on all of this is like most investors are not going to need, hopefully, not going to be touching their retirement accounts for many, many years still, especially we're speaking right now we're relatively young. Even my parents are in their 60s, they're going to have at least 10 years before they're really withdrawing from those retirement accounts. And the average recovery time is around two years for a down market. So, my investor approach personally is to make contributions as I would be at any other time, even if you're not getting the employer match, yeah, that's a bummer. But, you still want to be contributing to your retirement account, because you want to get the benefit of compounding over time. You want to do some dollar-cost averaging, which is basically making the same contributions all the time. And eventually, you're going to get the best value for the stock you're buying because you're just kind of doing it consistently over time.

Now, the one exception that I am making to this now is, having more cash on hand, is I think, really, really important. So, there's been a big emphasis on investing and that's really important. Investing makes your money grow. But what I think this crisis has really shown us is that the economy and our financial lives are so much more fragile than we thought. And so, the standard of advice of having a three months emergency fund, like three months’ worth of living expenses, I don't think that's enough anymore. I think, if you're in a position where you just went from making six figures to zero dollars, you probably feel a lot of anxiety if you only have three months of living expenses in the bank right now because we're already on month two, and who knows if you're going to go back to work next month. So, the only adjustment I might make and if you're not getting your employer match, maybe this is the time to do it is to boost short term liquid savings, in general. And if that means scaling back temporarily and employer-sponsored retirement account or any kind of retirement savings, that might be okay just for a little bit so that you feel like you have enough cash on hand to weather this emergency and other future emergencies like it.

Ewa: That's really great advice. So, now at this point, if it's okay, we'll move into just navigating a bear market. And I think all those questions will still be pertinent to know, considering that the economy has a lot more uncertainty and things are kind of going down a little bit. Up some days, downs some days, but in general, it seems like overall, things have fallen. So, I guess we should just start with what is the bear market at all, if you could explain that.

Stephanie: Yes, the sun is shining very brightly on my face right now. So, I'm going to just pull down my blind. Okay. All right. Bear market is a technical term, but in layman's terms, it's just the going down for a while, right? So, these headlines that you keep seeing, like Dow drops, Dow drops, S&P 500 is down, blah, blah, blah like doom and gloom, we're losing all this value. This is a bear market, right? And the opposite is a bull market, right? So, this was the last 10 years, it was a bull market, the last recession. So, that's growing. And that's what-- I like to take these kinds of technical terms and the jargon and try to just strip it down to its most simple form. So, I can think of it in terms of how does this apply to me and how does it become actionable? So, when I'm seeing bear market, how does this apply to me? Well, I know the market’s going down. And the fact is, the market’s going to go up and down in the short term, there's going to be a lot of volatility. But my strategy as an investor is I'm in it as a buy and hold for the long term.

And even though, in the short term, there might be a bear, or there might be bull, there might be a lot of volatility, ups, and downs; over the course of history, if you hold long enough, the market generally performs pretty well historically around 7% growth over time, which is much better than anything you're going to get in a savings account. So, I know the headlines make it scary. I know that even the word bear market can make it seem scary, these drops are really scary. But if you can kind of create an investment strategy that it's based on long term growth, then these short-term fluctuations shouldn't be a concern so much unless you're retiring tomorrow, because then you need that money. Like you still own the same amount of stock that you did two months ago, provided you haven't sold any of it. So, continue if you continue holding on to it, and you continue contributing over time, generally speaking, those investments are going to outperform a savings account.

Ewa: Okay, great. So, another thing that I keep hearing economists keep talking about possible recession or depression going through a V, U, or L shape. Could you explain what that means? And in your opinion, what scenario do you think we're in?

Stephanie: Yeah, so in terms of the recession, and like the shapes, it's all about the speed of the recession, and then the speed of the recovery. So, a V-shape would be a quick recession and a relatively quick recovery. If we're looking at a U shape, it might be a little bit slower recession, and then a little bit slower recovery, but it's going from these steep curves to kind of like these curves. Obviously, everyone knows what Vs and Us look, I don't know what I'm doing with my fingers. But, just a visual, right? Well, the L is a problem, right? Because then you have the steep drop off and then you have this zero recovery for a really long time. And the L is what’s really scary. In terms of what's happening now, I can't predict the future, I think so much of this is like, we definitely saw at least the downslope of this was extremely sharp.

So, I'll take the L, the top part of the L, but in terms of the recovery, I think a lot of that's going to be informed by how long this lasts, in terms of the health actual aspect of it. That said, the government is putting a lot of money into the economy like they're putting money into people's wallets and bank accounts, so that they continue to spend money, right. And so, I think that's a really good step. But I cannot predict whether recovery is going to be like this, or like this or like this. That said, the market’s doing surprisingly well, given how grim the news is. So, it seems like investors are pretty optimistic. And what I will say is, I do have a lot of faith that this will recover. And at least from an investing perspective, I'm certainly not selling any of my investments. I'm holding them because I believe this will recover way before I retire. And also, not that far into the future.

Ewa: Okay, great. And so, during a certain time, what is your view on debt? Should someone defer their debts, refinance, keep paying, what are your thoughts?

Stephanie: Yeah. So, again, it depends on I think, coming back to this idea of cash on hand, I think this is like the big question of the moment is like, how much cash if you needed it now could you actually access and I don't mean money that you've invested in your retirement accounts. Yes, there have been some changes to the rules. Usually, if you access that money before retirement, you have to pay a penalty. Some of those penalties had been waived, so you can access that. But still, that's really a last resort. That money needs to kind of sit there and grow and compound. So, independently of that money that you really saved for the long term that you've invested, how much money do you have on hand? And if you don't have cash savings, that's several months worth of your monthly cost of living up to I would say even almost a year, which to be fair, I don't have that. I've had a six months emergency fund for a long time. But that was the gold standard. But this has shown me that we all need more. So, if you don't have significant cash savings, I think this is a time to really focus on doing that, on building that up. And if you're in a position where you have a federal student loan, for example, and you have been really, really aggressive about paying it off, you might be like, “Oh, yay, I can make payments right now and it'll all go toward the principal.”

But I would suggest if you don't have savings, use this opportunity to get a couple months worth of savings in the bank because you can always-- Sorry, you're going to have the interest deferred anyway, on that federal student loan, you are having those payments deferred on the federal student loan. And so, this is a really huge opportunity to prioritize beefing up those savings. And then you can get back to your debt repayment plan in a month or two, as scheduled. And then you'll have some cash savings in the bank so that even if you have your job right now, should you lose it next month, there is something to fall back on. Everybody needs something to fall back on, even if you're still working. Because even when everything is normal, you break a tooth, that's $5,000, right? So, if you don't have any savings, or if you don't have substantial savings, what you're left to rely on typically is very high-interest financing, whether it's a credit card or a personal loan or something else. So, my big preaching, if anyone takes anything away from this today, is if you can, I know it's hard right now. But if there is any opportunity for you to build liquid savings, this is a really good time to prioritize that.

Ewa: Okay. And then where should, like on the topic of their savings, where should they keep that money? Should I hide it under my mattress?

Stephanie: No. Okay. I'm a big fan of high yield online savings accounts. Generally speaking, the savings accounts, at the big brick and mortar national big names, everybody knows banks, they pay .1% interest on savings, as opposed to the online-only banks, or even some of the banks that people might be more familiar with. But their online-only accounts. I have a Discovery account, for example, and they have much, much higher interest rates. A few months ago, some of those interest rates on those accounts were around two to 3%. Now, they're much lower.

Ewa: That’s way more than a normal account, I feel like for sure.

Stephanie: Yeah, but point 1% compared to two and 3%, that's a huge difference. Even when I started my high yield savings account, this was in the last recession. So, the interest rates were still low, but it was still like 1%, which compared to .1% it’s a big difference. And so, I'm a big fan, not only of keeping your savings in and a high yield online savings account, so it can just grow more substantially. But also, I think it's important that while your savings needs to be accessible, meaning that it's not tied up in an investment account that you can't touch, I would say that what makes the online-only savings accounts great is that it's just a little bit further out of reach. So, it's not directly connected to your debit card, and you can't spend it too easily. So, you want that money to be liquid, you want it to be accessible, you want it to be growing, but you also don't want it to be too liquid or too inaccessible.

Ewa: Okay, cool. I think there's a question down here. So, would you recommend putting your stimulus check towards savings or lowering debt?

Stephanie: So, I think that everybody should continue making the minimum payments on their debts at a minimum, with the exception of if your payments are being deferred, and your interest is being deferred. If your payments and interest are being deferred, that's a great deal, I would take advantage of it and I would build my savings. If you have very high-interest debt, like let's say you have a credit card with a 15% interest rate, I would make sure I had some savings like you have zero savings, you still need some money in savings. So, I would put it towards savings. But if you do have at least some savings, and you have like a 15% interest rate, credit card, I would try to pay down that debt. So, it's all about the interest rate game, right? if you can really eliminate something that's super high interest, that tends to be a priority. The only exception is if you have zero savings, because then if something does happen, you're only going to accrue more extremely high-interest rate debt, if that makes sense.

Ewa: Yeah, it totally does. I think thinking about the interest and then whether you can defer and if there is that forgiveness of deferring is definitely helpful.

Stephanie: Yeah, and I just want to make another quick point on that, because this is also true, not just for loans, but I know a lot of credit card companies, if you call them, a lot of personal lenders, auto lenders, some of them are also willing to defer payments, probably not automatically. So, it’s something you would need to call, you would need to explain your situation. But even in that scenario, I think it's really important to be very, very clear. One, can I defer a payment or can I make a lesser payment? Two, if I do that, is the interest also deferred, or am I just not going to be charged a late fee, and then the interest is going to continue to accrue on that balance because that might not make it worth it. And then three, will this affect my credit? And so that is, is the credit card company going to report the fact that you didn't make that payment to the credit bureau. So, those are three things that I would check with as you're speaking to each lender and kind of making these considerations.

Ewa: That's so helpful. Thank you.So, I think you already touched on the answer to this to some extent, but I'm going to ask it anyways. Because let's be real, if I log into my retirement account right now, the number I see is going to look a lot different than it did at the start of the year. Should I sell everything or should I stay the course?

Stephanie: Okay. So, I can't again give any specific investment advice, but I can speak about it from my personal experience and I am not touching anything. I am going to continue my investing strategy as usual, hopefully, everyone's investing strategy is informed by a long-term approach, because that's where the market generally performs well, over the long term. I can't speak to anything like day trading, stuff like that, that's not what I do. And there's a reason I don't do it because people don't, they generally lose money trying to time the market. So, I do not time the market, I do not recommend timing the market. And that's why I would not recommend selling anything. I'm not going to sell anything. I'm just going to continue my investing strategy as usual. Because the fact is, I'm not going to touch that money for at least another 30 years. And in the next 30 years. I believe that the course of investing will hopefully follow the course of investing history, which is that the market generally returns around 7% over the long term.

Ewa: Okay, that's helpful to know. I won’t sell any. So, are there any resources you might suggest or proactive steps people can take and try to control their spending during this time? And relatedly, what are some ways someone can be a smarter shopper?

Stephanie: Yeah, so I think what we were saying before about kind of taking an inventory of where your money typically goes is a really good starting point. And then from there, it's not just about getting on the phone with lenders, if you can't make payments, this is also a great time to get on the phone with service providers and see if you can get a better deal. Like you were talking about the auto insurance policy like what a great time to get on the phone and be like, “Hey, I'm not driving, I read that this company is lowering their billing for their customers. I wanted to see if you would match it.” So, this is an opportunity to take inventory of where your money goes, and then go line by line on where can I maybe negotiate a better deal, where can I find a more flexible payment plan? And then, where am I not spending in alignment with my values? Have I been paying for something that I really don't care about for the last five years without really realizing it? It's kind of incredible how much we tend to disconnect from our spending until we actually see it. And I say this from experience.

I started tracking all of my money, literally every dollar I spent about seven years ago, it's the most life-changing thing that I have done for myself. Because when you see where your money is going, you have to confront the way that you prioritize your limited resources, and what you spend money on says what you will ultimately value. Because every dollar you spend somewhere as $1, you don't spend somewhere else. And so, every time you're making a spending decision, you're making a choice about what you value most. And I am someone who personally loves to spend money. I love nice things right? Like, I love nice clothes, I love nice vacations, I love going out to eat. I love all those things. I'm not-- I'm doing those things and in a lesser proportion now like I'm not going on vacation right now, obviously. But I also make really conscious decisions about what I don't spend money on to be able to afford that. And I think that's a lesson that we can all take well past this is like, I spend zero dollars on manicures as you can probably tell, like my hair, like my beauty routine is pretty basic. And that's not saying that spending money on beauty is a waste of money. It's just not a priority for me. If it's a priority for you, that's great, but figure out where in your life, you're not going to spend money to make that value work with your spending plan. So, that money that I'm not spending on beauty, I'm spending it on my wardrobe or I’m spending it on my vacation. So, I think it's really valuable to take inventory not just for this moment, but generally, to make sure that you're really spending in alignment with the things you value.

Ewa: That's really, really great advice. That's something that I've been trying to focus on over the last six months or a year. It's just really looking at things when I'm purchasing and thinking, does this align with my values. So, if I care about a product, trying to shop for things that are more sustainable, because that's important to me. I’m sure a lot of people can relate to that. It is looking at the items that you do purchase and thinking about does this fit into my value structure in life?

Stephanie: Exactly.

Ewa: It's such helpful information. So, in this segment, we're going to pretend like we're in more certain times where someone may feel safer and more comfortable at their jobs, just because I think that context is helpful in answering a few of these questions. Because a lot of the circumstances that we're in now, the answers would change. So, normally, how much should someone be saving for their retirement or how much should they have saved by the age that they're at?

Stephanie: Yeah. So, this is, again, one of those questions where it depends. But one of the benchmarks, for example, that I find helpful, even if it totally doesn't apply to you, but one of the old rules of thumb was by the time you're 30, trying to have a year of your salary saved for retirement is a good benchmark. And then by the time you're 35, two years worth. Now, I understand that's really unrealistic for a lot of people. We’re in school a lot longer, there's a lot of debt, a lot of the 30 somethings I know have a negative net worth because they still have $50,000 in student loans. And that person might be a doctor and they might start earning $300,000 a year at age 33. So, they're going to still be fine, even if they're not hitting that benchmark at 30. And that's true even if you're not a doctor. So, while I'm just throwing out some of those standard rules of thumb, I’m also saying that with the huge caveat that there is no single roadmap. And it so depends on your circumstances. So, what I would tell everyone to really try to focus on is creating a habit and creating consistency. And even if you're at a point where you're just trying to get out of your loans, or out of your debt, or whatever it is, just simply establishing the habit of saving and setting money aside, even if it's $5 a week is more important than the amount you've saved. Because you can always then scale those contributions as you're able. And then when you get to a point where you can set aside 10% of every paycheck. Great. What about the next time you get a raise? How about half of that raise, you automatically just say I'm going to increase my retirement contribution by 3% with some of this raise, and then I'll use the rest in my lifestyle. So, even if you can't do something right now, if you already have the habit in place, you can then just scale that habit up and up and up as you're able. And so that's the thing. I really like to focus on. Helpful to have a benchmark, but more important to have a habit.

Ewa: Okay. Yeah, that's really helpful. I think, yeah, creating it into a habit even like you were saying, tracking your personal finances and the output of the things that you're purchasing, those are habits that you can create that create a positive feedback loop and make things happen.

Stephanie: Yes.

Ewa: Great. So, in regard to debt, is there such a thing as good debt or bad debt? And what's your strategy for paying off debt?

Stephanie: Yeah, so I know there's some discussion about good debt and bad debt. And I don't think demonizing debt is really helpful. The fact is, if I get hit by a bus tomorrow, I'm probably going to get into a lot of medical debt, right? It's just going to happen. And so, I think the idea of being like, this is bad is not helpful for anybody, like debt happens. What I think is really important is just about kind of letting go of any personal shame or feeling like it's about you and some failing of yours. And then starting to think about personal responsibility, what can I do about this? That's a much better approach to death and feeling a personal shame about it. And so, the first thing I do, when I'm talking to people about debt is similar to the thing of spending is I happen to take inventory. So, what debts do you actually have? A lot of people have debt with a lot of different lenders. And so, I think it's really important to get very clear on what you owe to whom, the minimum monthly payment, the interest rate, and the balance. And then from there, once you've taken that inventory, you can make a plan of action. So, before we were saying this, talking about interest rates, we're talking about savings accounts and investment accounts and we want to get those higher growth rates for our money.

Well, with debt it's the opposite. We want lower interest debt because that higher interest debt is going to cost us more over the life of the loan. So, one of the debt repayment strategies is to really make minimum payments on all debts, and then prioritize more aggressive payments toward the higher interest rates, debts, and then kind of work towards paying them off until you get all the balances down to zero. The other strategy is a similar strategy and in that one, you prioritize, you still make minimum payments on all your debts, but then you put any extra payments towards the debt with the lowest balance first. So, you get that kind of momentum of knocking out a smaller debt sooner, and then you get the ball rolling and the psychology of having a quick win, that you can then bring into some of your bigger debts. So, my philosophy on debt is really that it's not good, it's not bad it is what it is, how are we going to deal with it? Let's take inventory, let's create a plan of action, and let's stay motivated.

Ewa: Awesome. And then how do you suggest for someone to start tracking their expenses?

Stephanie: So, I saw somebody here as far as it was asking about apps and stuff like that. So, for tracking expenses, there are many apps like there's the classic one, old school is Mint. I think you were talking about YNAB [You need a budget] before you need a budget. That's a paid software or somebody was talking about YNAB earlier. I've been on a lot of calls today. So, that's another software. There are just-- there's so many if you look up budgeting apps on your phone, you will see just a plethora to choose from. I personally use a spreadsheet. I'm a geek, so for me having to do the manual process of going in and writing it down every day creates more mindfulness. Personal Capital is another one that I use and then I cross-reference my app on Personal Capital, which has the automatic categorization of my spending with my spreadsheet, which is the manual version. And for me, I like that because it just forces me to spend more time reflecting on where my money is going, because I'm doing it manually.

Ewa: Okay. So, I think at this point, we can move into name-your-favorite. I think that's actually one of the questions was, in this section, we'll take turns answering questions. I'll have you lead, and then I'll follow afterwards. And I guess the first one we could lead with is your favorite financial app and why. I know you touched on some so I'll let you talk about it if it is those ones or not.

Stephanie: Yeah. Well, I think I stole yours, but I really do use it. I use Personal Capital quite a bit. The other thing I like about them, specifically is Personal Capital has a lot of tools for investing. So, you can do an investment portfolio checkup, and the tool is totally free. You can also work with an advisor, that's a premium add on, but the tool is free. And one of the things that's great about the investment checkup tool on Personal Capital is that it tells me exactly how much more or how much less, I should invest in a certain asset class, like US stocks versus, US bonds or alternatives versus international stocks. It'll tell me exactly how I should rebalance my portfolio based on my goals. And I love that, I use it all the time. Because as much as I know about investing, I still want a second pair of eyes. It's really helpful for me to have those models telling me exactly what I should do to better align with my goals. So, I like personal capital because they have that budgeting kind of element and track… Sorry, they also have a broader picture of looking at the investing strategy.

Ewa: Yeah, so I would agree, Personal Capital is something I personally use. That's where I track my net worth. So, basically, all the insight that I have on my retirement accounts actually had created an account that's like with my husband and mine. So, we just merge all our information into one place but we keep our own separate accounts. And that has been super helpful. So, you can look at everything as a family all in one space. And then I don't link in any of my credit cards, though. Even though you can, I just don't want to see the individual spends and how things are. I keep that separately in a different place. And similarly, I'm using Google Sheets or Airtable that has been where I track all my expenses. So, it’s similar to you. That's the habit that I made sure to create for myself last year. It was my new year's resolution. I'm going to do this and get a little bit better ahead of my spending so I can be more mindful and intentional with the purchases I'm making. So, basically anytime I buy anything, I take a photo of that receipt, input it in there. And then I'm like, was that a good idea?

Stephanie: Yeah I feel like my spreadsheet is a journal for my money.

Ewa: Yeah. Which is fun because now looking at last year, I'm able to be like, wow, I go out and eat too much. Or you know, you can see habits that you do.

Stephanie: It’s also a fun memory though. I remember I was looking something up, I needed to look up for my taxes, something that was two years old. And I was going through and I was looking at all these expenses, it's like you were in Australia. And I was like “Oh, my gosh, I was in Australia.”

Ewa: Yeah. And then you have a place written down that you ate or whatever.

Stephanie: Yeah. And then it brings back all these memories because it's so specific, it brings back things that I would never have remembered otherwise. So, I think of this as an opportunity and a really positive reflection rather than just something that's kind of a pain in the butt to do.

Ewa: Yeah, and I feel like it's very empowering when you're in control of your situation, you know what you're doing. You're not just foolishly buying things. You're smart about it, right? And all you’re trying to do.

Stephanie: Just try to be smart.

Ewa: So, the next question I have is your favorite finance book and why?

Stephanie: I am going to give a shout out to one of my friends. Her book’s called Broke Millennial. And she has a second book called Broke Millennial Takes on Investing, and her third book is coming out next year, it's about Managing Money in Relationships. And she's just-- what I really like about her writing is she takes-- She does what I try to do, which is taking a big idea and just making the very straightforward, very simple like, okay, we're talking all about these crazy stocks with these indices, like bear market, L curve, like what is all this? How does this actually apply to my life? What does this mean for me and what do I need to do? So, Broke Millennial is a great money series and I would recommend it.

Ewa: I'm going to definitely put that in my Amazon cart.

Stephanie: Yeah, it's a good one.

Ewa: Awesome. So, mine is Your Money or Your Life by Vicki Robin and Joe Dominguez. I think that's a quintessential finance book. Yeah. What I love about it is that they talk about the concept of what is enough and really looking at exactly what you said, like your money, or sorry, your life is value, and you can equate every hour that you have of your day into money, and an hourly wage. And it just talks about things really eloquently. I really appreciate it and then it’s something that really felt life-changing for me to read and think about things in a different perspective.

Stephanie: Yes, Vicki’s book is really great for that for the kind of just exactly what you're saying, reconceptualizing even the way you just think about money, and that's a really important thing to understand, in addition to the tactical how-to.

Ewa: Right, right, right. Great. So, the next one is your favorite finance podcast?

Stephanie: Yes. Okay. So, I very much like to get the full scope. So, for the economic big picture understanding of like, what is the Fed? What is the interest? For that stuff, I love Planet Money, and I love The Indicator. I think they're both NPR. One that I really love for kind of the more personal and the emotional things is called This Is Uncomfortable, and that is from Marketplace. And it's very, very well done. And it's almost the opposite of the big picture. It's really nitty-gritty and talking about things that you don't hear a lot of people talk about, there's things like talking about financial abuse and what you need to do in that scenario. Talking about shame, like what do you do if you feel so ashamed, you can't even open your bills. And then I'm going to give one more. I have so many because I love podcasts.

Ewa: I love it. I haven't listened to any of these. So, I'm definitely going to be.

Stephanie: Yeah, this is a little bit broader, but Death, Sex, & Money. Anna Sale is the host and it covers all of those topics. But again, I just kind of like it because it kind of gives you the real, how does this actually apply to my life? And how does it tie in with how I feel, because that's kind of like the stuff that I think gets really ignored. We talked about these things like save 10%, do this or that. And then you're like, wait, wait a minute, how am I supposed to do this when my husband is divorcing me and he's taking all my assets? Right? So, I just like those stories that kind of bring it into reality and help us kind of find a coping mechanism for that.

Ewa: Okay, awesome. I'm definitely going to have to listen to all those because I haven’t yet so I’m really excited. And then the one I have written down is called Afford Anything. It's by Paula Pant.

Stephanie: Oh, yes. Paula just had Corona, by the way.

Ewa: I know, I know.

Stephanie: Paula’s a friend of mine.

Ewa: I’m signing in every day being like, “Oh my God, is she okay? Is she okay?”

Stephanie: Yes, she’s okay. Thank goodness.

Ewa: Yeah. So, the reason I love her podcast and just the intro to it is you can afford anything but not everything. And I think that was just something very refreshing to hear because it's so true. But what I love about her is she takes things like explaining a Roth IRA or traditional IRA, like all these things that I don't know, like way above my head and simplifies them in a really nice way. And she interviews different subjects quite frequently, but she also takes your questions. And I like those episodes a lot because you hear case studies basically of her advice on what to do. And sometimes she has guests on there helping answer so you hear multiple perspectives, so I found that really helpful.

Stephanie: Yeah, Paula's great. I would second her podcast as well.

Ewa: Okay. So, the last one is your favorite dish you learned to make while in quarantine?

Stephanie: I have been doing a lot of experimenting, one of which is our crockpot, which we used to once before because we never pulled it out. We live in New York, we have a small apartment so it’s a pain in the but to pull out, but now there's nothing else to do. So, I would say of the things we've made in the crockpot, which has been all of our meals, I made, I'm a vegetarian, I made a Lentil Bolognese Sauce, which I was very impressed with. I can’t remember where I found the recipe, but if you Google it, you'll probably find it.

Ewa: Awesome. So, for me, I haven't made it yet, but I'm in the process of starting a sourdough starter.

Stephanie: I knew you were going to say bread. I feel like everyone's making sourdough right now.

Ewa: But literally, that's just my goal. I've been wanting to do it for 10 years and I keep telling my husband about it. And he's like, “Maybe now's the time.” I'm like, I” think it's the time.”

Stephanie: It is the time. It totally is the time.

Ewa: Yeah, so I feel like around noon every single day I have this little moment for myself just adding the flour and water literally stirring it up. And I started three days ago and it finally started bubbling for the first time and I'm like, “Yay, my little my little bubbler!”

Stephanie: It’s going to be so satisfying.

Ewa: I know. I'm so excited. I mean, if I don't mess it up, which I still can but let's hope not. Cool. So, yeah, let me just see if there's any other question. I know time’s limited now. We went over apps. Just seeing if anyone asked anything. I think we answered everything. Okay, perfect. So, yeah, thank you so much for taking the time to talk to us, to our audience. It's been so helpful. I definitely learned a lot and I'm really going to listen to all those podcasts that you recommended. Call my accountant.

Stephanie: Yes. I’m so glad to hear it. It’s a pleasure to be here.

Ewa: Yeah. And thank you. And thank you everyone else for taking the time to listen today. It's been so fun, a lot of great questions here. And hopefully, we can have another session next week. I think the tentative subject is going to be spring cleaning and organizing and re-looking at your life. So, I highly recommend people to sign in for that. And then we do have our sale going on right now, which is 40% off everything. And then as a thank you for anyone supporting our business at this time, we have an additional 15% off and as a small business, literally every dollar counts, and it's why I can be here today. So, thank you so much for being with us, Stefanie. Thank you everyone for listening.

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