Financial Fundamentals for Young Adults
Have you ever wished for guidance in effectively growing your business and managing your finances? Or wonder what it takes to succeed as a female entrepreneur in finance, then this is the podcast for you. Welcome to Women of Wealth, where generational wisdom meets ambition. I'm Ali Romo, your millennial host. And I'm Hollywood's Greg, your gen x host.
Intro:Using our combined backgrounds in insurance and financial services, we will share what we've learned to give you the tools you need to grow your business.
Hawley:Join us, and together, we
Intro:will help you discover practical strategies for financial leverage, business growth, and securing your future.
Hawley:Hey, wealth warriors. Are you ready to redefine wealth and master your money mindset? Welcome to Women of Wealth. I'm your Gen x host, Hollywood's Gray.
Allie:And I'm your millennial host, Ali Ramos. Today, we're discussing the start. Where do you start when you're ready to start saving? I'm excited to squeeze all the wisdom out of you today, Holly. I feel like I may just end up interviewing you.
Hawley:I'm in. Let's get started.
Allie:Alright. So let's begin with young folks. They're just starting to earn money. They're out of college, and they're starting their job. What should they be thinking about?
Hawley:Well, first of all, let's talk about that. Let's talk about, like, starting your first job and, like, how your social media might need to go from being fun and exciting and all the places you party to a more professional resume of who you are. Because I understand, and I've done this myself, is nowadays, interviewers or people that are hiring are going to social media before they're even looking at your resume. So once they, you know, find out a little bit about you, before you even get an interview, they're gonna go to your social media. So, you know, obviously, LinkedIn is more of the business side of things, so you wanna make sure you have professional there.
Hawley:But don't be surprised if your Instagram vacation photos of you, doing something, maybe that's not professional, might be the reason why you don't get the job that you wanna get. Right? You wanna make sure that you have that professionalism throughout. So I definitely say that the first thing, you know, as you're creating your resume, also update your social media to be the brand that you want it to be. Do you wanna add anything to that?
Allie:No. I mean, you make a valid point. I mean, even when we like, I started working in this industry, I wanted to make sure that my social media was reflective of the person I am now and not the person I was 10 years ago. So I think it's valid, and whether you're a business owner or you're, starting out in the professional world, your social media really does matter, and it reflects who you are. So Yeah.
Hawley:I mean, it's you know, I used to run a volleyball club, and social media was kinda just getting started whenever the club I mean, it was already out, of course. Facebook was already available, but some of these other ones weren't even out yet. And what's surprising is, you know, nowadays, football players and others are falling down the draft board or maybe not getting that scholarship because their coach sees something on their social media, that doesn't isn't in alignment with the culture of their team or their, you know, whatever. And it could just be one time where you have a random night where you drink too much or something like that, and some of those pictures show up. You know?
Hawley:So not just yours, but also, you know, what are you allowing your friends to post as well. You have more control than you think you have on that stuff, so I would just say to make sure whatever you're presenting is a professional resume as well as a professional profile. And don't just look at LinkedIn. Look at all of the different social media you're on because that's definitely something that will be looked at before. And then the other thing is I think people wanna know what, other types of skills you have, maybe from doing volunteer work or your service projects that you might have done in college or in high school?
Hawley:What are some of the other, job experience you have that maybe wasn't like working at McDonald's or something, but was a job that you had, whether that's babysitting or cleaning somebody's house or doing something, some of those odd jobs that I did whenever I was young, those can build some great skills, especially if there was some longevity in it. It.
Allie:Yeah. And, so now we I mean, I also wanted to add that you can always decide to keep certain profiles private. So just be cognizant of what's out there on the Internet. And if you do things on the weekend that your employer may not like, then maybe you keep your your Facebook, your Instagram, your TikTok private. But you display kind of that professionalism on LinkedIn.
Allie:So just just be cognizant and know that people are googling you out there. So maybe Google yourself every now and then too to see what's popping up. Who's tagging you in things? Yeah. I wanna get tagged in.
Allie:So now that we are professionals on the Internet, and we're working and earning money, what are some things like, what should I be thinking about, when I get my paychecks?
Hawley:Yeah. So, I mean, the first thing you really wanna do is you wanna make sure that you have, money set up for that unexpected event. I mean, we're both in the insurance industry, and so we hire independent contractors. And it's surprising how many flat tires a independent contractor can get when they start with a new company. I've had at least 5 agents tell me, oh, I got a flat tire on the way to like, we do luncheons for teachers or whatnot, so on the way to the luncheon.
Hawley:And I'm like, that's interesting. I set this luncheon up to show you how to do a luncheon, and you are basically sabotaging yourself with not having, you know, the money or whatever for a flat tire, right, or figuring out a different solution. So, you know, one of the great things, that I find awesome about people is how resourceful they can be. So it's really a great indicator for your employer if you're resourceful. So if you have an emergency fund, you have that set up to where, you know, the average flat tire or, you know, car incident isn't going to take you down.
Hawley:You know, my go my goal for young people is to start with to save an extra $1,000. You know? That might take you 6 months, 8 months, a year to save that. But if you just cut out a few things, like, let's say, coffee in the morning maybe, I know my coffee now is, like, $7, so I don't really buy coffee that often. I usually make it at home.
Hawley:But $7, if you if you multiply that by, you know, 4 or 5, however many times a week you do that, that's $35 a week that you could be saving, for your emergency fund. And you can still treat yourself one time on the weekend or something like that. So I think emergency fund is super important. Ideally, you wanna have you know, as you continue to work, you wanna have 3 to 6 months of funds in that emergency fund, but just getting to that first one thousand is a really great goal for people that are just starting out.
Allie:And a little trick that helped me not tap into that emergency fund when it wasn't necessarily an emergency was having a completely different bank account where I don't see that money. So I I get my paycheck, in one account, and I send it to a completely different bank that I just don't even look at. And I don't have a credit card. It's just a checking or savings account that's in that bank. And so it it is less tempting when you don't see that money every day when you're looking at your bank statements to tap into that.
Allie:But it's good to know that there is something there in case of an emergency. And so, like, I've got different different savings accounts for different things. I've got my travel savings account. I have my taxes savings account, and my emergency fund savings account. And then I've got accounts for, like, the different goals that we've got our our house fund and things like that.
Allie:And it, keeping things in buckets and having, like, a task for each of those accounts is really helpful, when you start to build things.
Hawley:Absolutely. And the other thing too, I I like that idea because I actually have a account. I don't even know how much money is in it because I haven't looked at it in a while. It's probably not much, but, like, it one of the reasons why we got it is because it took 3 days for them to deposit the money. Like, we deposit money in there, and then it takes 3 days for them to send it to our bank account.
Hawley:So every time I've thought about taking money out of there, I haven't done it because it's just inconvenient. You know what I mean? And that's okay. It's, like, convenient for my own good. You know what I mean?
Hawley:Because then it makes me think like, if it's an impulse buy or something like that, it makes me think, I guess, I really don't need this if I'm not able to get the money for, you know, 3 days. 3 business days too. So if you're shopping on Saturday, you wouldn't get the money until Wednesday. So by then, the sale's over or you don't need it anyway.
Allie:I like that. I like that. Alright. So now we're we've got good saving habits. What about debt?
Allie:I've finished college, and I've got student loan debt. Maybe it took me a little bit to get started out of college, so I racked up some credit cards. How do I tackle that when I'm just starting out?
Hawley:Well, the good thing the good thing about student loans is it's a low interest rate for a long period of time. The bad thing about it is you have to be very consistent about paying it off because it does stick with you. It's not one of those things that you can get rid of, like, you know, a credit card, like, you close the credit card and you don't you don't spend on it anymore. This is a debt that's gonna follow you basically But the best advice is, you know, just like your emergency fund, but the best advice is, you know, just like your emergency fund, put whatever the amount is plus a little bit more. So you're paying off more than just the interest, and you're getting that debt paid down.
Hawley:Now if you have credit card versus student loans, I would say pay off the credit cards first because they're gonna have a higher interest rate, and they're not gonna have as flexible, you know, as flexible options if something were to happen. Like, for example, you know, when we are going through the pandemic, one of the benefits was that student loan payments got put on hold, which is great, but your credit card payments didn't get put on hold. So you wanna make sure that you are being responsible for that. And in that type of situation, I would say that's a good time to start putting that money that you would have been paying for your student loans into some interest bearing account for a couple years so you could could save money on it. And then when they do start taking those payments again, you have a little bit extra to put towards the principal.
Hawley:So I don't know, Ali. How how about student loans that you're seeing? I mean, obviously, it's not I had a little bit of student loans. I mostly have a scholarship, so I didn't have to pay for much of my own college, but I did have a little bit, about 4 grand. And I paid it off pretty quickly, actually, but I know there are especially in the market that we serve with educators, they have 30, 40, $100,000 worth of debt sometimes.
Allie:Yeah. I mean, luckily for me, my mom worked at the college that I attended, and so I got, tuition waived for most of my college. Darn it, mom. You had to retire a semester before I graduated, though. So I ended up paying for that one.
Allie:But, yeah, I mean, I am lucky, and I don't have to worry about that. When when I'm with teachers, I mean, there are certain benefits out there for, public I can't think of the acronym right now. But it's a like a public service, student loan forgiveness program where they calculate what they're currently making. And, it's like a percentage of that that they base their payments on, and you make those payments for 10 years, and then it's automatically forgiven. So there's certain programs out there for, teachers in certain schools and public service employees.
Allie:So my, I mean, my first recommendation to is to look out there first to see what's out there, because there may be a program like that that, helps you pay something off. And, I mean, nowadays, the government's always wanting to kind of put out there to to, forgive student loans too. So if you're in a program, I it's my opinion that you're kind of on the the wait list to get your your, your loans forgiven. There's been a few people I've run into where they started that 10 year program of paying off their loans, and then randomly Congress pushed something through and the rest of their loan was forgiven. So be be diligent about paying these things off, and don't just push them back and delay them, because it will bite you in the butt if you continue to delay them.
Allie:And then same with credit cards. And we're looking at 25, 30 percent interest nowadays. Insane. So that's, like, just just pay those off.
Hawley:Yeah. I mean, it's really hard. It can be really hard. I also I would recommend, like, just knowing the difference between good debt and bad debt. Like, credit card debt is only bad if you can't afford to pay it off every month or you can't afford to pay it off within a certain period of time that you'd, like, set aside.
Hawley:There's a lot of, programs where they'll do, like, no interest for the 1st 18 months or whatever. But then once that 18 months is up, you might be in a 25, 29%. So you just wanna know, the way you make the most out of your credit cards is by knowing the interest that you're paying. And like I said, interest on your student loan is gonna be lower, but it's not also not gonna be as forgivable as, like, a credit card debt. So you know?
Hawley:And then you also wanna make your you wanna figure out how to partner with your credit score as you continue to, get older so that you have options because the better your credit is unfortunately, it's just the way that our country is ran at this time. The better your your credit is, the more favorable rates you're gonna get on those things like credit cards and home loans and car loans and all that. So we had a very favorable time for about 10 years, and now we're in a place where mortgage rates are higher. That means that debt is higher. Everything's a little bit more expensive.
Hawley:Ali?
Allie:Yeah. I wanna add to that as we're talking about debt. On the flip side, protecting ourselves from even more debt in in case of an emergency or, like, something happens to you medically, or you pass away. So what happens to all that debt if I pass away, and I'm young and I have accrued student loans and credit card debt? Who takes that on?
Hawley:Yeah. So, I mean, it really depends on your situation. You're young, however, you're married. So, you know, you live in California, so it's a community property state. However, your debt just doesn't die with you.
Hawley:So, that's why probate exists is because if you die and you have debtors, that they're gonna wanna get paid before any of your assets are distributed. So you wanna make sure that you're protected there too. In the state of California, if you own more than a $166,000 worth of assets, meaning if you own a home, no matter the size, even if it's a 1 bedroom apartment, it's probably worth more than a 166,000. So you your your case or your estate will go through probate. So, you know, there's a lot of ways to protect yourself, but most people don't know about that.
Hawley:And the other part of having a trust set up, if you like in Nevada, the limit is 20,000. So if you own a nice car, you're gonna go through probate. So, you know, and let's say I don't have a loan on my car, but that I have, you know, $20,000 in credit card debt, then my husband would have to sell my car in order to pay for that debt, because that's something that they're going to want to get collected on.
Allie:And what if I was single right out of college and I had, I had this debt accrued? What would happen?
Hawley:Well, still the same thing. You're once you pass away, once you're over 18, you know, there is the chance that that could go back to your parents. You know, there is some things that do get forgiven when somebody passes away, like property taxes and some some income taxes and whatnot. But for the most part, you know, somebody's gonna be responsible for that. So somebody that would inherit, let's say, an IRA or something for you, that's gonna go pay that debt before they inherit.
Allie:Yeah. And we've already had an episode on life insurance, but life insurance while you're young. This is kind of a one of those big reasons why you should get life insurance when you're young too is because I mean, student debt debt is really common. Credit card debt is really common in your twenties, and life insurance is cheap in your twenties. Granted your health a healthy 20 something year old, it could be as cheap as $15 a month depending on how much life insurance you get.
Allie:But if something were to happen to you, one, if your life insurance has living benefits and, you know, you're in a car accident and you're in a coma, you're able to utilize that death benefit while you're still alive to pay for medical expenses.
Hawley:If you have if you have a medical directive that says who's gonna be responsible to make decisions on your behalf, and you have a financial directive that gives somebody the permission to do that. So if you're married, you know, and your husband's not in the accident with you, then you're safe because they can make decisions for you. However, if you're a single person, and that's what we're talking about right now, single person, needs to if you're over the age of 18, even if you're a parent of somebody who's 18 years old and they're off to college or whatever, you wanna make sure you have a medical directive set up for them because you if something did happen and they're in the hospital, you want you may or may not be able to get information based on the people that are at the hospital. If there's sticklers on the law and the rules, you wouldn't be able to get information about your child. Or if you're 18 or over, you need to have that set up if you're single, especially because you want somebody to be able to make those decisions.
Hawley:And as Ally mentioned, there is life insurance. You don't have to die to use. So if you're in a coma, you wanna make sure that you have somebody who can access that money for you and and help you pay for that. So you have more options, you have more choices, and more life saving techniques can happen for you.
Allie:How does someone you're you're using big words, medical directive. What is that, and how would someone go about setting that up?
Hawley:Yeah. So, medical directive is a legal document. You can probably download you could download 1 from the Internet and, you know, have it someplace. We recommend you meet with a financial professional like myself or Ali, and, we have a whole, estate plan that's available. However, a medical directive is something that the person would need to physically have that's making those decisions for you on your behalf.
Hawley:So in the situation where it's like my 18 year old son when he goes off to college, I would wanna have that medical directive sign and notarize saying that, you know, these are different decisions that my mom can make for me if something happens to me. You know, obviously, it's a legal document once it's notarized. But, again, the person who's making those decisions would be the one that needs to have that medical directive. Same with the financial directive. Those are those are papers, you know, like, a template you could probably download if you just wanna go the easy, cheap way of doing it.
Hawley:But if you have a whole estate plan that you need to a state plan that you need to, be prepared for. You know, let's say I don't know. Let's say you had an inheritance from a grandparent or something like that. Then you'd wanna make sure that you had a full trust and will in place. Probate and trust are not just for the Michael Jacksons and the Prince of the world who did not have a trust set up.
Hawley:They're also for the average person who, has more assets than the state allows for. Like I said, in Nevada, $20,000. So most people who are driving a car, they are paying more than 20,000 for that car. So when they own it, they will go through probate for that. So, yeah, these are all different, programs and products that we could certainly help you with.
Hawley:So you can reach out to us on our social media or book appointment through, you know, the link that are on some of our social media pages at wow, women of wealth, if you're on Instagram or Facebook. Or, of course, you can get the our contact information as well through the podcast.
Allie:Awesome.
Hawley:Let's talk a little bit about auto and home loans. We talked about credit cards, talked about student loans, good versus bad debt. So auto loans. You know, some people have a question, do I lease or do I buy? Right?
Hawley:And I've always bought vehicles. I mean, you might know this better than me, Ali, since your husband's a ex car salesman, but he still has it in the blood in his blood. However, you know,
Intro:for me,
Hawley:purchasing the car has always been an option for me. There's been several times that I've had the car longer than the loan, time frame, and it's been good to me because 3, 4 years, I won't have a car payment. That's pretty nice not to have a car payment. Just have to pay for your insurance and your registration. And then you actually own it.
Hawley:It's also great if you have children that are getting close to that age group where they're gonna start driving. Kids these days don't get their, license when they, like, first turn 16. Kinda kinda trippy. Did you get your license when you turned 16?
Allie:I think so. Yeah. I have, like, my permit, I think, at 15a half and then license at 16.
Hawley:Yeah. Like, Adrian, our nephew that we raised, when he was old enough, he didn't really wanna get it right away, probably because we took him everywhere. But then we're like, you need to get your driver's license. You're gonna be a senior in high school. You need to know yourself to practice and all these other things.
Hawley:Plus, after football practice, I don't know if any of you have ever had a boy in your household that plays football, but after football practice, kids stink very badly. Yes. There are poker pads. There are all their sweatiness. It's just really disgusting, so I'd rather him have that in his car instead of mine.
Allie:Amen. I know how I smell I know how I smell after the gym, and I am so glad I have leather seats now instead of cloth.
Hawley:Alright. So, anyway, jumping into auto and home loans, I would just say this is another place where you wanna make sure that you have protected yourself with, making sure you have your debt handled because debt is the number one way. Like, let's say you have a credit card. You have a $5,000 balance on it. Your credit score is gonna drop anytime you go over 30% of that balance.
Hawley:So if you use, you know, $3,000 to buy something, then you're gonna be over the income to debt ratio that the credit companies are gonna wanna see, and your credit score will drop. As soon as you pay that off and you wait until the month goes by, then your credit score will go back up. It's very interesting the way that it works, and it happens pretty quickly, actually. But if you do miss payments or if you're late on payments, too late on payments, then you will also get affected as well. So that debt is very important when you are looking at buying home or car or whatever the case might be because the better your credit, the better rate you're gonna get.
Allie:Yeah. And I've I've played around with different strategies. Yes. My husband was in car sales. And so I had actually, I didn't even understand leasing a car until I met him because my parents haven't always been the people that, like, if you couldn't afford it, then don't buy it.
Allie:And so my parents' cars, they either bought them used or, they, like, paid for them outright with their new cars. So they never had the payments lingering. They just always paid for it outright. And so the cars that I had also were that way until I got my first quote, unquote, big girl job, as my mom calls it. I bought it, and then I just regrettably, I put a down payment.
Allie:Had I known what I know now, I wouldn't have put such a large down payment, And I just would have had the payments because money's better in my pocket today, than then giving it to them right away. And so Dylan has definitely given me different strategies for leasing. Different vehicles hold their value, and so it really depends on the kind of vehicle that you're going to lease. It may be beneficial to you to lease it. Plus, you get all of the services and things like that during your lease.
Allie:So you don't have to worry about costs there, maintenance costs. However, you do have that lingering payment every single month as your lease goes on. And then when you end your lease, depending on the car's value, it may be beneficial for you to buy the car, maybe not. It really just depends on the kind of person you are. If you're good about, like, do you have that emergency fund where if you own the car and something happens to it, are you able to pay out of pocket for a mechanic to fix it?
Allie:So there's a lot that goes into decision making of of auto loans and car sales that I just didn't ever think about because I just, you know, had the cars outright. And if I didn't have the money, I didn't have a car. But nowadays, there is a way of leveraging that credit. And, whether you put a down payment or not or how large the down payment is. And I kinda wanna say this, but never sell your car to a dealership.
Hawley:What we have. There was this, there was this dealership one time when we bought a car. There was a dealership that said you can trade in, like, any car, and you're gonna get at least a minimum of, like, $2,000 as towards your down payment or whatever. And, I mean, Bobby had a car that was worth, like, $500. And so that was actually a good move, but we did the research.
Hawley:Right? I mean, the thing about anything we're talking about is, like, do your research. I think that's the biggest problem that young people make is they kinda jump into things without doing their research. I mean, when Adrian, our nephew that we raised, first moved out to Norfolk, Virginia to be in the navy, he went to go get a car, and they were gonna charge him, like, 25.9% interest rate on this Woah. Like, 10 year old BMW.
Hawley:Plus they were gonna put plus he had to pay extra money for them to put in this, tracking device because he's in the military. And, like, sometimes the guys go away for, like, 6 months at a time, and they wanna make sure that they make their payments. And you had to have, like, the CEO sign it and all these people. Right? And then, he called me, and he's like, I'm getting ready to do this deal.
Hawley:And I'm like, no. No. No. No. No.
Hawley:No. You're not doing this deal. And, fortunately, he didn't drive it off a lot. And that is one car dealership that has still never called me back probably because I threatened to fly out there with my attorney and, pick at them until all the cars on their lot got repossessed. So that's just, you know, I don't know.
Hawley:I'm not, but, you know, I have the flexibility and liberty to do that. So, you know, But he learned a lot from that. You know, he was 18 years old, almost 19, and he just learned a lot about, you know, how people take advantage of young people because they just don't know.
Allie:For sure. Yeah. When when I bought my first new car, I traded in, my then car, and it was running great. It was just an old car. But, I mean, I could have gotten at least 2 or 3,000 out of it.
Allie:And they gave me, like, 500. And had I known what I know now, I regret that because it also could have been like a daily driver when I'm commuting to work. And and then the car that I bought was I wasn't putting as much miles on. It could have been, leveraged in different ways, or I could have just sold it for more money. But, yeah.
Allie:So definitely do your research on everything we talk about.
Hawley:Yeah. And home loans too. I mean, right now, rates are a little higher. However, there's still you know, people always tell you this, you weren't born then. But in the eighties, rates were double digits for home loans, 17, 18%.
Hawley:So those were, you know, options for people that didn't really have options. They didn't have too much too many options back then. The, property values were also a lot lower back then. So when people say say that to me, I'm like, yeah. But you bought the house for 47,000 and not 470,000, you know, with the 6% loan.
Hawley:So I think one of the trends we're gonna be seeing in the future is we're gonna be seeing people get, like, home equity line of credit to pay off whatever consumer debt they might have, so that they can keep their low 3 to 4%, loan rates. I mean, I do think that they do they did say by the end of the year, they these big people who make all these announcements, the banks and everything are looking to lower rates a couple times. However, it happened hasn't happened yet. And as inflation keeps staying high, it probably won't happen because with lower interest rates, inflation is gonna go through the roof. So, you know, we just have to look at, you know, the different I mean, you can't really do much when the government decides that they're gonna lower rates.
Hawley:It's not something you have a lot of control over. However, you do have control over when and where you spend your money. I always say that being in a house and having a a a mortgage payment instead of renting is always gonna be better than than not because eventually you can turn that into an asset for yourself. Whether you buy a new house and you sell that place to get a larger down payment or you, use it as a rental income or something like that. I mean, it's definitely I don't know anybody who has rental income who isn't at least, doing pretty well, if not wealthy.
Hawley:All the wealthy people I know own properties.
Allie:Yeah. So I feel like we covered a lot on where to start. So, really, when we're thinking about starting is creating that just to summarize, creating that that professional element that we wanna be viewed as on the Internet, really growing our emergency fund, handling bad debt. And And then,
Hawley:we did talk a little bit about life insurance, but we'll talk about that a little bit more at the end. And then how to make your credit score, one of your financial partners. And then we already talked about saving. We didn't really talk about investing early, but I I definitely think that after you have an emergency fund set up, then it's a good time for you to start, you know, saving a little bit into if you have a 401 k available at work or, let's say, you're a teacher, you have a 403 b or some of the other products that are available through, like, Roth IRA or something like that, that's really good to start saving. The IRA and Roth IRA amounts are small enough to where it's never going to break your bank as long as you have a a decent job that you're able to take some money out of and put towards your future.
Hawley:Awesome.
Allie:Yeah. Yeah. I think that if we were to give someone an actionable item today, it would really be to start paying off their debt and start with the emergency fund and start contributing to, to retirement funds and then also get just a small life insurance policy. What do you think?
Hawley:I I definitely think that that's great advice for anyone. If you had to do one thing, I would say pay yourself first before you do anything else. If that means you're only paying the minimum on your debt, then you're paying the minimum on your debt for a while until you get your first raise. Put yourself in a position to be able to climb that ladder, however that looks for you, whether that's, you know, getting job experience so you can go start your own business or getting job experience so you can climb up the ladder in that company or in that field. I definitely think that if you have the end in mind to have a strong financial house and have your house in order, You definitely wanna do all of those tips that we've shared.
Hawley:You know, sometimes there is the ability to have life insurance and some of those other products from your work. The only thing that I caution about that now, most people only stay with the same company now, 2 to 3 years, where, you know, back when my parents were working, they would stay with the same company for, you know, 30 years. They'd get the watch and they'd get the retirement, then they'd go somewhere else and get another job if they weren't old enough to retire yet. So I would definitely say that you wanna have private life insurance instead of through your work because if it's through your work, it's gonna expire or end when you leave, and usually those types of plans are very expensive to take with you. So, you know, have your set your mind early and, you know, figure out what's gonna be the best strategy for you.
Hawley:And, of course, we always do free financial analysis with any one of our agents across the country. So if that's something that you're interested in, let us know, and we can set you up with someone in your community.
Allie:Awesome. Shall we go through the lightning round? Yeah. Let's do it. Alright.
Allie:Holly, if you could have dinner with any financial guru, who would it be? So
Hawley:So I've been thinking about this. I think I'd wanna meet with one of the sharks because I'm in a place now in my business where I'm investing and starting different types of businesses that are in a lot of times, you know, like, fit in either to something that I'm passionate about or something that helps me with my business. So I would wanna meet with maybe Mark Cuban or one of the other sharks. I haven't I've seen the gal from Spanx on there. I wouldn't mind meeting with her, but I like the athletic side that, Mark Cuban brings to it being the owner of basketball team.
Hawley:And, I just think it's very interesting to look at it from a Sharp's perspective on how to build a business. Awesome. Alright. Ali, what is the best budget for Ali had to answer this question because, I just recently was on a trip, and I found out that I'm a little bougie when I travel now. I used to think I would be awesome at the amazing race, but those dreams are probably not gonna happen because I don't think I could sleep on the ground if I had to.
Hawley:Alright. So what is the best budget friendly vacation you've ever been on?
Allie:It's actually funny you say this because I was sleeping on the ground this weekend. And, actually, I think it was probably the most budget friendly, quote, unquote, vacation I've had. I don't know if it necessarily is considered a vacation. Granted, we hiked 15 miles in 2 days with 35 pound backpacks. So but we hiked just a local peak in Southern California, San Jacinto peak.
Allie:So that was fun. And when I actually was having this question in mind, it was camping. So Dylan and I love camping, and it's usually budget friendly. And so, yep, if you're wanting to fly, then in the United States, probably Cabo or something like that. But as far as budget friendly vacations, there are KOAs.
Allie:KOAs. Is that what they're called? Yeah. Like, all around, and you can just do a little quick getaway, get in touch with a little nature, sleep on the ground.
Hawley:So sleeping on the ground. So this is my idea of camping. If I'm not able to get a hotel room near the campsite, then I will get an RV delivered. They have these companies that deliver RVs, and all you have to do is bring your food and your bedding and stuff like that. I'm down with that
Allie:for sure. I literally got my my water from a spring and was treating it this weekend.
Hawley:Yeah. You could tell. Millennial, the good exer. Right? I mean, I even okay.
Hawley:So speaking about budget friendly locations, I just went on a trip. I was in Singapore and Bali. So Singapore is fairly expensive. However, one of the other gals that I was on the trip with, she got a recommendation to stay at this hotel, and I was gonna be having a roommate. So, I went to this hotel, and first of all, the elevator was about this big for 1 person and one bag, and I had 3.
Allie:Like so like a foot for those who are listening.
Hawley:Yeah. So, yeah, like a foot. Oh, I guess yeah. Like a foot and a half by a foot and a half. Like, enough room for you to get in.
Hawley:I actually left my luggage down stairs the first time I went to go look at the room because I thought if the elevator is this small, how small is the room gonna be? And it was literally, like, the beds were super small twin beds, and there was, like, basically room for the bed. You could kind of walk by it. And in the bathroom, you couldn't even, like, shut the door all the way. So I'm like, oh my gosh.
Hawley:This is not gonna work for me. Luckily, I have a lot of points, and I went from that to the Conrad.
Allie:Yeah. Holly doesn't do budget friendly vacations anymore.
Hawley:Well, I will tell you, though, it was very budget friendly in Volley. The cost I mean, I left a whole I I felt very charitable. I left a bunch of, Aces T shirts and some other really fun stuff that I had brought on the trip so I could, like, bring back, you know, the sarongs and the, dresses and stuff. Not all for me. Some of them work for other people.
Hawley:I got a bracelet for you. If I see you next week.
Allie:Hey. Hey. Hey. Alright, Holly. If you found $1,000 on the street today, what would you do with it?
Hawley:Well, first of all, I would have to check to make sure nobody around me, like, lost it. You know? And then I would most likely do something fun with my family. Maybe put a little bit I would put a little bit of it towards paying off something, and then the rest of it, I would put, you know, either towards my IUL or just doing something fun with my family. We have pretty much all of our our, retirement and everything planned out.
Hawley:So anything extra is nice, but it doesn't necessarily have to go towards that because we pay ourselves first. Yes. That's You found $1,000, what would you do? Candy?
Allie:No. I'd go in my travel fun. Travel fun and maybe a dinner because I cook a lot.
Hawley:Well, speaking of cooking, what's your go to meal when you're on a when you're saving money for something, but you want to eat something delicious?
Allie:So, I mean, I meal prep, and I meal prep for me and my husband. So money saving go to meal in general is meat and veggies. No. Like, whatever that means. So usually it's, chicken or, like, ground beef or something, and then, we get a big bag of frozen organic veggies from Costco, and it's got, like, a mixture of broccoli, cauliflower, and carrots, and we just have different seasonings that we play around with, but it keeps cooking cheap, easy, and not time consuming.
Allie:The way I make, like, mix things up is through the flavors. So, sometimes I'll add, like, a thais Thai, like, sauce to it, or we'll do different, like, garlic herbs. I have an herb garden, so when that's blooming, I'll clip from my herb garden. So I do make it fun every now and then, but, it's my go to meal prep, and I I don't get sick of it. I I try to do, like, a different veggie for lunch and a different veggie for dinner, and then also switch the meats too so that I'm not eating the same thing.
Allie:And also, I have a certification in integrative health coaching, so I do know variety is key. So I do add varieties of veggies and things like that.
Hawley:Awesome. Well, for me, I think that my meal planning is a little different now. I kinda look at the week and see what it looks like. I do say I will say that I did go to Costco as my 11 year old is on summer break, and we did plan out some healthy, not so healthy, some great, like, bulk, meals for him on the days where we're working, and he's at home. I mean, he's at home with either Bobby or me.
Hawley:What one of us is usually working from home. But he can go and get, you know, like, something like a salad or, you know, a lot of times we'll make enough to where there's leftovers for the next day. So, like, we did ribs the other night. And instead of just doing one rack of ribs, we did 3 rack of ribs. So he'll have that for lunch for the next couple days or spaghetti.
Hawley:I'll make more spaghetti than we need for the meal, and then he can go in and warm that up. And then he can pair that with, you know, something that we got, like a turkey sandwich or a tuna sandwich or something like that. Things that he can make for himself that aren't too expensive, but there is plenty of variety as well.
Allie:Yeah. And that's what my that's what my parents did. Yeah. They made
Hawley:all of choices, like the bagel pizzas, but we don't have those every day, so that's okay.
Allie:Yeah. Awesome. What's your favorite way to unwind after a long day?
Hawley:We're big sports fans. So whatever sports are on TV, just veg out in front of TV and watch it, or maybe we'll play, like, cards or something. It's easy way. We did my son taught us a new game, yesterday. It's called golf, and so he taught us how to play golf with cards.
Hawley:And, of course, Bobby, who's the golfer in the family, won both games.
Allie:I'll have to learn that one from you. I'm not familiar with it. We are
Hawley:We'll have Jackson teach you.
Allie:Nice. We are also go card game go to people. We play card monopoly. That's our go to. It gets very competitive.
Allie:I'm sure I'm sure it does in your house too. We've got some competitive spouses.
Hawley:Yes. Yeah. I've heard that the the card monopoly gets very, competitive in families. Not just yours, other families too.
Allie:So That and Catan, those are like if you wanna end the night, in a bad mood.
Hawley:Well, this is a fun last question. This is a fun last question. So what's the weirdest financial tip you've ever heard that actually works?
Allie:I would say the concept of IULs, Index Universal Life Insurance, was a weird concept to me at first. However, it works. If you've listened to the episode with our husbands, you can go into more detail about that. But, basically putting money into a life insurance policy and having it as tax free income, either in retirement or borrowing it from yourself throughout your life tax free, and then having that life insurance component on top of it. Just life insurance to me before this industry was weird and then adding cash value on top of it to be your own bank, was a weird concept, but I feel like is surprisingly helpful.
Hawley:So you're saying that the myth is to buy term and invest the rest, the cash value life insurance actually has more benefits. And I would say yes to that. I think I think the myth is to buy term and invest the rest because most people don't invest the rest. That's the biggest problem. But if you have a life insurance that you can couple with a an account that is actually gaining some interest And just the fixed index strategy, most people don't understand is fixed index is a 0% floor and then a cap or there's a lot of different strategies, but the cap and then your money performs within the range.
Hawley:That's the bottom line basic fixed index strategy. What I find is my tip so are you yes agreeing with me on the myth?
Allie:Yeah. And just to make it clear for those who are like, what the heck is she talking about? Buy term and invest the rest. What we mean is, like, you pay for term insurance, and then the rest of your savings money goes into investing, whether it like, stocks, mutual funds, those kind of things.
Hawley:Right. And there's 2 problems with that. Number 1, most people don't invest the rest. And number 2, most people live into their eighties. So if you're how old are you, Ally?
Hawley:29? Yeah. Oh, look at you. 29. Right?
Hawley:If she were to buy a 30 year term right now, it might be you know, let's say for a 30 year term, might be 28, $30 a month for her to buy this, you know, $500,000 policy. And then let's say she had, you know, $250 set aside to save. So she would spend $50 on the insurance, and $200 should go put into some sort of investment that's potentially supposed to grow. And, what really happens is most people will dip into that $200 for coffee or something else that doesn't gain them any interest. And, yes, they have the term insurance, but now when she turn when she gets to the term of that insurance, 30 years from now, she'll be 59.
Hawley:And now her cost of insurance will be triple or more, depending on her health at that time. She might not even qualify for life insurance at 59. You just never know. I mean, she will because she's young and healthy, and she's gonna continue to stay young and healthy through her life. And I just found out if you have kids in your forties, like I did, that I have a much better chance of living to a 100 than the average person.
Hawley:So okay. So my my tip is that when I first got into this business group, as I mentioned earlier, we work with teachers. And one of the interesting things about 401ks and 403bs is there is a there is a, a part of the policy where you can borrow against the cash value that you have. And so I never thought it would work. Like, you know, people talk about, like, borrowing money and then putting it back in.
Hawley:And I have seen people do that over and over and over again for little things. Like, for example, you know, the the interest rate might be 4 or 4 a half percent for them to take the loan. The cool thing is them being in that fixed indexed account, their account is still growing at whatever that balance is while they're paying back their loan as well. And so it's just a really great concept that I never thought would work, but I've seen it work over and over and over again. And on the 401 k side too, I've seen that as well.
Allie:So my the only thing with that is when they're paying it back, it's with post tax dollars. So does that
Hawley:Well, they get it they get it the loan comes to them tax free, and then they pay it back with money that they that they've already paid taxes on.
Allie:Yeah.
Hawley:That's fine. They still haven't paid taxes on the original money they borrowed. K. It works out.
Allie:We are done with our lightning ground, and now you've got some homework to do. Go start your emergency fund, pay down your debt, get some life insurance, and research before buying a car.
Hawley:There you go. Four tips for your Wednesday morning pleasure. Have a great day, everyone. Thank you for tuning in. And, again, if you want to reach out to us, you can catch us on social media, Wow Women of Wealth, and Facebook or Instagram.
Hawley:And, our contact information is in the bio. Thank you so much for tuning in, and we'll talk to you
Intro:again next week. Bye. Thank you for joining us on this week's episode.
Hawley:We'd love to hear from you, so make sure
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Hawley:Stay informed, stay inspired, and embrace your wealth. See you on the next episode.
