One year ago, perennial personal finance expert Suze Orman was doling out her tough-love financial advice, including haggling with creditors for lower interest rates and delayed payments.
But now? She’s changing her tune.
“We’re out of options. You can’t call your creditors. They’re done … So you have to generate less expenses and somehow find more money. That’s the goal here,” says Orman.
Um?
Finding more money is a tall order, to say the least. Amid the runaway pandemic, the government has gone bust with a record-breaking $572 billion debt and an economy in free fall with nearly 11 million and counting unemployed.
It’s grim and apocalyptic AF. The Pantone 2021 color is a red called That Bitch 2020 Isn’t Over Yet (just kidding, but it literally is gray). And on kitchen tables across America, the bills are piling up — that is, for those lucky enough to still have a kitchen table.
“The eviction moratorium is over,” Orman says. “Very shortly, unless it’s extended, the student loan payment moratorium is over, the mortgage payment moratorium is over, and now you have got to pay your car payments and your car insurance and your life insurance. All of those moratoriums where you had months where you did not have to pay any of those bills, now you do.”
It’s seriously daunting. So, what’s a broke-ass betch to do?
“You have to live below your means but within your needs,” Orman advises. “If you are finding yourself in a situation where you have no money coming in, you’re living off unemployment, and you can’t wait until the stimulus check gets there, then you’re going to have to make some very, very hard decisions in your life.”
No kidding…
Don’t Use Your Stimulus Check For Back Rent
Orman says fans have been sending her pictures of their empty fridges.
“If you are waiting for that stimulus check and you don’t have another penny to your name, I would go and buy canned food with it. I’m not joking. At least if you bought canned chicken, canned salmon, you can feed yourself and your kids. At least project two months’ worth of food for yourself and your family and take care of that and take that one concern off the table.”
If you do owe back rent, Orman says do not use your stimulus to pay it. With no end to the pandemic in sight, you’ll need as much cash reserves as possible. If you can, she suggests moving back in with Mom or Dad, a sibling or a friend until you can get back on your feet.
“If you do not have a job, and you don’t know what you’re going to do, sorry everybody, you have to move out.”
If you’re fortunate enough to be on the other end of the financial spectrum, and your finances are in order, Orman says, be selfless. “If you have a paycheck coming in, you’re relatively secure, you have an apartment, you have food, and you have your next-door neighbor or a friend or a relative, and they’re about to be evicted, they can’t keep their electricity on because it’s been shut off in the middle of winter — help them.” That might be a tall order coming from a country of people who won’t even put a piece of cloth over their face to save lives, but hey, we can dream.
Don’t Take A 401K Loan
Thinking about tapping your 401K for a hardship loan in 2021? Orman says, “Never.” The CARES Act that allowed Americans to withdraw up to $100,000 penalty-free and take up to three years to repay the income tax has expired, so you’ll have to pay your withdrawal back pronto. Plus, in case sh*t really hits the fan, your 401k is protected from bankruptcy.
“If it’s between taking money out of your 401k to get you by, and all you have is enough for one month at most, and you don’t have any prospects on the horizon, I would much rather see you claim bankruptcy now for your credit card debt, and all your debts — except student loan debt, obviously — and be able to keep your 401k money intact and not have any debt. Which is why you want a Roth IRA, because if you had a Roth IRA now and you needed money, you could withdraw it penalty and tax-free.”
Don’t Forget About Saving
Pre-pandemic, Orman said an 8- to 12-month emergency savings is crucial. Today, she says a three-year stash is necessary. It’s a lofty goal for those living hand-to-mouth, but starting somewhere, with any leftover money, is still a start. Orman says she’s partnered with Alliant Credit Union to incentivize people to save $100 in a high yield savings account every month. At the end of 12 months, the credit union will reward brand-new account holders who have a $1,200 balance with a $100 bonus.
Don’t Bank On Student Loan Forgiveness
It remains to be seen if President Biden will succeed in his plan to cancel $10,000 of student loan debt for every borrower. “You have to get that this is not a done deal,” she says. “You should continue to do exactly what you can do and act as if is not going to happen. If you’re out of work, just pay as you go, or do an income-based repayment program. Just don’t go into default.”
There’s also an IRS loophole to be aware of. “Don’t be afraid that the amount accruing gets added to the back end of the loan. If nothing changes in 20, 25 years, if you owe more on the student loan than what you’re technically worth, you’re insolvent, and the IRS will most likely forgive it.” Adds Orman, “If you’re making money, you want to be on the standard repayment method.”
Do Consider A Career Change
These tough times are as much about survival in the present as they are about making smart pivots to safeguard yourself financially in the future. Orman says that the pandemic wiping away jobs shouldn’t be your only worry. In case we didn’t have enough to be anxious over, there’s also the threat of artificial intelligence replacing human workers, further destabilizing the gig economy.
“You have to take this time to reimagine yourself, to recreate yourself. And what can you do? Who can you become, where you cannot be replaced by artificial intelligence or a robot? What can you do to create yourself so that you never find yourself in this position again? Because you’re going to have to make the decision. Do you do a temporary fix and just get anything that brings in money? Maybe. But at the same time, what can you do to make this be a permanent fix so that this couldn’t happen to you? Not because of the pandemic, but because of the onslaught of the technological revolution that will absolutely do away with jobs in the future.”
When in doubt, Orman says saving is the name of the game. So, chill with the online shopping. (No, you don’t need the new SKIMS collection.) Paying your bills on time will keep your credit report happy. And stash your cash, in a high yield savings account, preferably. Bottom line, even if you haven’t worn pants in months, you’d better tighten your belt.
Images: Annie Spratt / Unsplash
In plain and simple terms, investing is putting money down now in hopes for more money later. But why do we hear time and time again that it’s so important? Well, whether it be to pay off your student loans, save up for your older, richer self, or even for your girls’ trip to Hawaii, investing is a great way to make your money work so you don’t have to. We know it can be scary, but we are here to break it down for you, so you can be well on your way to becoming wealthy like a finance bro… without the douchey attitude.
General Strategies For Investing
Early bird gets the worm: Time in the market always beats “timing” the market. Thanks to the power of compounding, small contributions in the present will reap higher returns than larger contributions later. So start today!
Make a clear plan: Think about your budget. Are you setting aside a part of your monthly savings to invest? Take baby steps even with a small amount of money. For instance, instead of going on an impulsive online shopping spree (been there, done that), set that money aside and invest that bonus. Some apps even allow you to invest using pocket change—who wants coins jangling around in your wallet anyway?
Assess your level of risk: Depending on whether you are 18 or 60, you are going to have vastly different approaches. If your golden days are near, you are better off placing your capital in safer investments, like bonds. If you still have 50 years until retirement, gear your investments toward riskier, but high-yielding investments, like stocks. Allocate your investments according to how much risk you can tolerate.
Different Investment Vehicles
Brokerage Accounts: To buy and sell your investments, you’re going to need a broker. Luckily, opening an online brokerage account is super simple and only takes a few minutes (quicker than your skin care routine, we promise). TD Ameritrade and E*TRADE are great places to begin since they’re user-friendly with a huge wealth of resources.
Mutual Funds: Mutual funds are professionally managed investments that pool money from different investors—almost like a potluck of the finance world where you just show up with whatever the host tells you to bring. They are often one of the best investments you can make, given their low cost and risk. This is because mutual funds spread themselves across a collection of different investments, allowing you to capture the returns of different markets through just one single purchase. As such, these are great for those who want to leave the decisions up to professionals and not go through the work of buying individual stocks and bonds.
Traditional IRA: An Individual Retirement Account (IRA), as the name suggests, is an account for you to save any and all retirement money. These are open to anyone with an income (internships and part-time jobs included). You don’t have to pay tax today on the money you put into this account, which means your money can grow tax-deferred until you start taking it out—aka extra $$ for those golden years. Not to mention that many employers offer to match your IRA contributions, which means even. more. free. money. Why would you not sign up for this?!
Now that we’ve gone over the most common types of investments, let’s hone in on the big money-maker: stocks.
Stocks
Like pieces of a pie, buying a “share” in a company entitles you to partial ownership of the company. If the company’s value increases, your investment increases too. Bigger pie, bigger slice! Stocks are awesome investments because amongst the most common securities, they reap the highest returns over the long run. Here are some tips to help you get started.
Consider how active you want to be. Some of us check Instagram every week, some of us check every hour (what else can you do during quarantine?). Similarly, ask yourself how active you want to be with your investments. If you see yourself being an active investor, that means dedicating a bit of energy each week into researching new investments and individually curating your own portfolio. If you see yourself being more passive, go with a robo-advisor, an automated investment management service that can customize a portfolio according to your goals. Betterment is one robo-advisor you can look into.
Choosing a company. When you invest in a company, it is because you believe in their long-term growth. If you are just starting, go with the companies whose products you love, rather than the “hottest” stock at the moment. A great stock comes hand-in-hand with a strong company—think management, strategy, and financials. What is their revenue like? Are they on top of industry trends? What experience does their C-Suite have? Have they been in headlines lately for product launches? There’s quite a bit of research that can go into this, and websites like Seeking Alpha are great places to get your feet wet. But when it comes down to it, just ask yourself—would you be proud to own this company?
Don’t put all your eggs in one basket. Investing is like applying to colleges. You do not just apply to one, even if you are sure about getting in. You hedge your bets and wait for the results. Be sure to diversify and invest in different industries.
That’s all for today—thanks for reading, folks. If you have more questions or want to learn more (why would you not?!), the team at HerCapital would love to help! Comment below, check out our website here and follow us on instagram for more tools and resources @her.capital!
HerCapital’s mission is to empower women to invest in their future. Through virtual events and an online knowledge base, we hope to help women with money management all while building a community of strong women who lift each other up. Click here to check out our website and follow us on our instagram @her.capital!
Images: Austin Distel on Unsplash; her.capital / Instagram (2)
As if being a twentysomething in 2019 wasn’t hard enough already, about halfway through a decade full of major changes, financial independence, and student loan repayment, life offers yet another thing for you to go into debt for: wedding season. Whether you are the bride, the bridesmaid, or just a lowly guest, your priorities after 25 start to look a lot less like student loans and happy hours, and a lot more like wedding gifts, destination flights, and ugly dresses. Before you swear off having any friends (and therefore, nuptial obligations), we have some good news on the pre-wedding front. You can breathe a sigh of relief, because it might not be expensive as you think—at least for the bachelorette party.
WeddingWire just dropped a new study* on bachelor and bachelorette parties (because people study those, apparently) and, unlike most new information on wedding festivities, this one isn’t a total bummer for your finances! As it turns out, Instagram tends to exaggerate the extravagance of the pre-nuptial parties (shocker!), and everyone your age isn’t emptying out their life savings to fly to the Caribbean for all their friends’ bachelorette parties (though the same cannot be said for the heinous bridesmaid gowns they have to shell out their cash for). What’s more, women are actually likely to spend less on the bachelorette than men are on the bachelor party (to which I reiterate: bridesmaid dresses, we’ve earned this). Rest assured that you can have your Chippendales stripper, and throw money at him too (though I recommend sticking to throwing singles. You’re not a millionaire).
Whether the festivities be the always-popular club scene or the more laid back spa day, women on average are only dishing out around $708 to celebrate their girlfriends’ last days of singledom (men spend $1,044 on average). That’s a lot of money, but somehow, not as much as I would expect when you consider airfare, hotels, entertainment, etc. This is, in part, a result of most parties remaining local. 92% of bachelor and bachelorettes remain in the U.S. and don’t last longer than 2 to 3 days. Again, contrary to what Instagram would have you believe, most bachelorette parties aren’t whipping out their passport. Sure, some women splurge a bit more and bathe in the sun with their betches on the coasts of the Caribbean or Mexico, but most stick to the following U.S. bachelorette party destinations. In order, these are WeddingWire’s most popular bachelorette party spots:
- Las Vegas, NV (Because, duh.)
- Los Angeles, CA (Maybe it’s not tropical, but it’s still pretty glamorous. Plus, clubs. Sooo many clubs.)
- New York, NY (As someone who lives here, I can assure you this is a destination that is only economical for its residents. Especially if your festivities include shopping.)
- Miami (More clubbing. Also South Beach.)
- Nashville, TN (Multi-story bars, live music, fried chicken, what’s not to love? Though be forewarned, this destination is becoming a bit of a cliche for wedding parties)
- Dallas, TX (Can someone please explain why Dallas is on this list, but not Austin?)
- Orlando, FL (I sincerely hope this is not on the list because of Disney World. Just think of the children, people.)
- New Orleans, LA (Okay, I guess ghosts and witchcraft aren’t everyone’s thing, but the fact that Dallas somehow topped NOLA truly offends me)
- Philadelphia, PA (Someone once described Philly to me as an arts and crafts version of NYC. Take that as you will)
- Atlanta, GA (Another destination with great nightlife, and great Southern food. Dieting brides beware!)
Bachelorette party gifts tend to remain on the cheap side as well. In order to celebrate their bestie’s commitment to sleeping with one man for the rest of her life, most women go with the tried and true gifts of lingerie and sex toys. But honestly, can we just pause for a moment and contemplate the thought of your friends picking out lingerie for you? I don’t want them picking out my outfits, let alone my underwear. That said, underwear looks like a dream next to the typical bachelor gift of… drumroll please… outdoor gear. I guess it’s better than strippers, but unless your man is like, a bear hunter or something, please take the time to reevaluate this union if his boys gift him a fishing rod or a tent or something.
No matter what you end up doing or gifting for the party to end all (single) parties, try to kick back and enjoy one of the best aspects of getting hitched. And if you find yourself in a financial stress spiral thinking about all of the student and wedding debt you have to pay down after the fact, take another shot and stuff another bill in that stripper’s jock strap.
*The WeddingWire 2019 Bachelor & Bachelorette Study is based on data collected from more than 1,000 respondents who attended a bachelor or bachelorette party in the last 24 months.
Images: Shutterstock.com; betchesbrides / Instagram (2)
For some reason, the biggest wedding faux pas of all time is to straight-up ask for a cash gift. This isn’t the 1950s, so it isn’t everyone’s dream to get a Crock Pot or a new set of knives as a wedding gift (but both of those things are awesome IMO, #adulting). Chances are you and your soon-to-be spouse have been shacking up for a while now (forgive me Father for I have sinned), and your place is probably furnished. So like, you don’t really need another KitchenAid mixer or a bunch of plates because you bought that stuff years ago. Thankfully it’s 2019 and we’ve finally figured out how couples can get what they really want from their guests: money. Here’s how to do it tactfully.
Cash Registry
Websites like Zola and Honeyfund have ushered the concept of wedding gifts into the 21st century by giving couples an option to register for items unrelated to houseware. You can ask for money towards your honeymoon, home renovations, an activity, or another large purchase. Guests will feel better about gifting money when you tell them how you’re planning on spending their money. Without enough context, older guests might be convinced they’re funding your next kegger, so be as explicit as possible by asking for things like a couple’s massage on your honeymoon, or a new couch for your living room, so they don’t shy away from giving you that sweet cash.
Don’t Put It On Your Invitation
Guests probably won’t react well if your wedding invitation has your Venmo handle on the bottom of it. You might be tempted to stamp “bring me cash!!!” on the envelope, but try your best to resist. On your wedding website you can provide a link to your cash registry, which will heavily imply what you’d like (which in this case, is cash). We’re moving into the 21st century by being able to give money, but let’s keep things classy when it comes to invitation language.
Spread The Word
me to my family: can you just write me a check and leave me the F alone?
— betchesbrides (@betchesbrides) April 16, 2019
We all have that bridesmaid who doesn’t STFU. Normally she’s the only one you can’t tell anything to, but we’ve actually got the perfect job for her. Let her know that you and your fiancé would prefer a cash gift, and (mouthing) off she’ll go. If people ask you what you’d like for your wedding, don’t be afraid to be honest. Let them know you have a lot of home goods already and you’d love them to contribute to your honeymoon or a big furniture purchase. Again, telling them explicitly where their check will go will make them feel better about not giving a physical gift.
Set Out A Card Box At The Wedding
Let’s be real, when you see “cards” written on a wooden box at a wedding, what the couple really means is, “Help me, I’m poor”. Setting one of these by the guest book or the escort card table will let guests know you’re open to receiving checks. Don’t go as far as having the ushers walk up to guests during cocktail hour asking for donations (this isn’t church), but setting it out as an option for guests is a subtle way to ask for dolla dolla bills.
Give People Options
once you accept you’re going to be bleeding money, the entire wedding process will start to get a litttttle bit easier
— betchesbrides (@betchesbrides) July 25, 2019
No matter how badly you don’t want a traditional registry, you’ll probably have guests that are sticklers when it comes to tradition (for example, my mother), so it’s a good idea to create one in case people are committed to giving you a physical gift. There are still dozens of options for non-traditional registry gifts, like sports equipment or bar accessories, so you don’t have to get stuck asking for baking trays or a mixing stand if you’d never use those. At the end of the day, people are going to give you whatever gift they feel most comfortable with, so you might as well be prepared with a traditional registry in case.
Images: betchesbrides / Twitter; betchesbrides / Instagram
Interviewer: Why do you want to work here?
Me: Because I have 10 friends getting married this year and that shit ain’t cheap.
— betchesbrides (@betchesbrides) July 30, 2019
Images: Orlova Maria / Unsplash; betchesbrides / Instagram; betchesbrides / Twitter; Giphy
