Home Real Estate The Secret to Saving More, Spending Less, and a Perfect Credit Score
Real EstateTravel

The Secret to Saving More, Spending Less, and a Perfect Credit Score


Building wealth, saving money, getting rich—it’s much more straightforward than most people think. You don’t need to be a financial expert or millionaire to know what you should do with your money. But if you’ve found yourself in a spot where saving and investing just isn’t happening or you want to build wealth but don’t know where to start, we’ve got the perfect guest for you!

Tiffany Aliche, AKA “The Budgetnista,” is on track to help more than 300,000 people start their journey to financial freedom with her Live Richer Challenge, following the same steps she took to get out of over $30,000 in credit card debt, fix her trashed credit score, and save and invest her way to serious wealth. In today’s show, Tiffany will talk about the ten steps you can take to go from money mayhem to net worth nirvana so you can build generational wealth, achieve financial freedom, and leave a legacy for your family.

If you liked today’s episode, grab a copy of Tiffany’s Made Whole financial workbook that’ll help you get good with money no matter where you’re starting!

Mindy:
Welcome to the BiggerPockets Money podcast where we interview Tiffany Aliche, The Budgetnista, and talk about financial wholeness and how to achieve it.
Hello, hello, hello. My name is Mindy Jensen and joining me today is my, not nearly as cool as Tiffany Aliche, co-host Kyle Mast. Sorry Kyle, but come on, you just spent an hour talking to Tiffany. You know I’m right.

Kyle:
So true. So true.

Mindy:
All right. Kyle and I are here to make financial independence less scary, less stress for somebody else, to introduce you to every money story, because we truly believe financial freedom is attainable for everyone no matter when or where you are starting.

Kyle:
Whether you want to retire early, travel the world, go on to make big time investments in assets like real estate, start your own business. We will help you reach your financial goals, get money out of the way so that you can just launch yourself towards your dreams.

Mindy:
Now is the time for our segment of the show called The Money Moment, where we share a money hack, tip, or trick to help you on your financial journey. Today’s money moment is a lot of us buy way more food per week than we consume. To avoid this, go grocery shopping more than once a week. In many parts of the world, people buy their food daily. Not all of us will be able to do that, but if you can increase the amount of times you go food shopping, your food will be fresh and you won’t be buying more than you need.
Do you have a money tip for us? Email [email protected].
Kyle, I am so excited to talk to Tiffany today. She has a new book out, it’s called Made Whole/ and it isn’t a book, it’s a workbook, kind of a companion to her book from two years ago called Get Good with Money, and it is really just filled with her signature brand of compassionate information in a nonjudgmental format.

Kyle:
Yeah, we just need to get this interview out for people to listen to. She has infectious personality. She just is so good at making things a lot lighter and a lot more approachable, so this is a great interview.

Mindy:
Tiffany Aliche is a former preschool teacher who is now devoted to the financial education of millions. Tiffany is the founder of the Live Richer Academy, the co-host of the Brown Ambition Podcast and the author of several books, including The New York Times Bestseller, Get Good With Money, and the new workbook, Made Whole.
Tiffany, welcome back to the BiggerPockets Money podcast. I’m so excited to talk to you today.

Tiffany:
Thank you, Mindy. Thank you, Kyle. Thanks for having me back for the third time. It’s a three-peat.

Mindy:
It’s a three-peat. Yes. If you did not catch Tiffany on episode eight or episode 187, you need to go back and listen to those because Tiffany is a rockstar. Tiffany, let’s start out with who is The Budgetnista and the Live Richer Challenge?

Tiffany:
So The Budgetnista is essentially me, which is I’m a financial educator, a former preschool teacher, and I like to educate a myriad of ways. So whether it’s books like my new book Made Whole, whether it’s my podcast, I have an online school, the Live Richer Academy, and then I do a free challenge, financial challenge, every year in January called the Live Richer Challenge. I

Mindy:
I love the way that your Live Richer Challenge works because it’s so non-judgmental and it’s easy. You’re not throwing like, “Here’s a hundred hours of stuff to do, I’ll see you tomorrow.” It’s like, “Here’s a minute, here’s five minutes, here’s a small task, and I’ll see you tomorrow.”

Tiffany:
Yes. And honestly, it’s the reason why I initially wrote Get Good with Money, which the companion book is the new book, Made Whole, is because as I was doing the challenges, people were asking additional questions like, “What about budgeting? What about savings? What about…”
And I thought, what if I could put together a book that answers all these foundational financial questions, but then walks you through the work, like the way the Live Richer Challenge did? And so I wrote Get Good with Money about two years ago, and literally hundreds of thousands of people have purchased that book, almost 300,000 people in two years. It became a New York Times bestseller, but then I got feedback that they were like, “This is a really great textbook, but I want to get to the work sooner rather than later.”
And so I made its companion copy, Made Whole where it’s like, all right, as soon as you learn the lesson, I give you the space to practice the work, like a real teacher. I know low-key we all hated homework, but the reason why you got homework is because you learned something in school that day and your teacher wanted you to immediately put it to practice so you wouldn’t lose the knowledge. And so that’s what the Made Whole workbook allows you to do, learn a thing, practice a thing, keep that knowledge.

Kyle:
That’s awesome. I’m a sucker for workbooks. I remember being in college and flying home for spring break or back for the summer and in the airports if there was any financial book that had a workbook in it, that was basically the criteria that I would purchase that to do it on the plane. And what’s really cool is years later, if you keep any of those things, it’s pretty funny to look back at them and what your goals were. One of the reasons… Journaling is such a good thing too, but tell us a little bit more about this Made Whole. What do you cover in it? Is this something that people can get a really good picture of their whole financial goals, future, where they’re at now? What’s it really intended to do, and what are the details of it?

Tiffany:
It’s holistically looking at your financial life over 10 steps, and each step is worth 10%. So by the end you are a hundred percent whole. And so the first five steps are budgeting, savings, credit, debt, earning. And the second five steps are investing for both retirement and wealth, insurance, it is your net worth, your financial team, and estate planning. So those 10 steps collectively make your holistic financial life, and if you can master them, you don’t have to be super wealthy, you can master them as a mechanic, as a teacher, as a nurse, as a doctor, as a CEO. But anyone can master, for the most part, those 10 steps and in doing so, have a strong financial foundation that they can live the rest of their lives on.

Mindy:
Tiffany, what are some of the steps that you advise people to take emotionally before they can embark on these financial 10 steps?

Tiffany:
So that’s something that one of the things I wanted to make sure that I addressed in Made Whole was that part. Before you actually get to the work, we talk about that part, and one of those things is that so many of us are carrying shame when it comes to some of the choices we’ve made. Because I know I have made every mistake possible.
For those of you who read Get Good with Money, remember Jake the Thief, who’s still in jail by the way. For those who didn’t read Get Good with Money, he was someone who scammed me and left me $35,000 in credit card debt. And it was like the worst time, because then the next year the recession happened, and I lost my job, and then I lost my condo because I bought one when I was 25 and I thought like, “Oh, I’m so financially grown.” And then I had to move back home with my parents. It was a series of remarkable challenges between the age of 26 and 31. Life was really, really hard financially. And so I had a hard time moving past those mistakes. So I want to address that for folks who are feeling down on themselves to the mistakes they made.
And one of those things is that I learned that the only way… I learned this in therapy. The only way to release shame is to give voice to it. You have to tell someone, whether it’s your bestie, your mom. For me, it was my best friend Linda, and I remember crying to her and being like, “Oh my God, I owe all this money on my credit card. And I got to move back home with my parents.” And she was like, “Well, I’m currently sitting on my mom’s couch where I currently live, so welcome to the Couch Club.” And she literally said that and made me laugh, and it allowed me to release some of that shame. And in so doing, I was able to look around and realize, you know what? I actually do know how to budget really well, and even though I’m on unemployment, if I navigate in this way, I could save something. And so shame shield solutions and releasing that through sharing it with someone really helps for you to see what those solutions are. So I open the book with giving yourself grace and space, and sharing the shame.

Kyle:
That’s really good. That’s our next question that we wanted to ask you was about the B word in personal finance: budgeting. And that’s just, people hear that, especially if they don’t live in this world of personal finance, they’re like, that stinks. That sounds terrible. I got to see what I bought on Amazon for the last three months? That’s going to be very depressing. And talk about shame coming in from all those packages arriving on my doorstep.
What are some tips that you give people when they’re sitting down to budget and everyone has heard of, you need a budget. That’s something that is out there. Someone has heard that somewhere, whether it’s from their boss, from a friend, on an advertisement on TV, but people don’t know how to get started. What is something that can help people get past maybe whether it’s fear or shame or reluctance? How do you get people to just at least take the first step on that?

Tiffany:
I like first to, Kyle, to reframe. So in the book, I don’t, even though I’m The Budgetnista, I call it your money list. Whatever it’s going to be like, “Okay, it’s like woo. We don’t have to call it the B word.” So I don’t really call it that in the book. I’m like, here’s your money list. And then I like to remind you that your money list or your budget is really, I want you to think about it as your mom growing up as a kid or whoever raised you. So you might be like, “Mom, can I have dessert?” “Yes, after you eat dinner.” Or, “Mom, can I play outside with my friends?” “Yes, if you do your homework.” And so your money list or your budget is not there to say no, just like your mom, your money list is there to say yes in a way that is sustainable and healthy and safe. So yes, you can go on vacation. Yes, when you save for this. Yes, if you reduce some of your expenses. Yes, in conjunction with X, Y, Z. So I don’t like to think of my budget as a… That’s why I like to reframe. I don’t like to think of my budget as a restriction. It’s my say yes plan. It’s here to say yes in a way that’s sustainable.

Mindy:
Let’s talk about people’s problems with saving, because they have the issue with budgeting. We’ve already reframed that. Thank you for giving us a way to look at that in a different way. What are people’s biggest struggles with savings and how do you tackle these in the book?

Tiffany:
So people struggle with savings, is people are usually good at… Well, they’re not good at saving. They’re good at delayed spending. If you’re anything like me, I used to put something in my savings account only to go to Target and be like, “Girl, just come on over here to checking so we can use you,” in the line. And so it wasn’t saving, it was just delayed spending. And so, one of the ways to tackle that, and I tackle that in the book, is I share this tool that I call split it before you get it. And this is when you go to HR and you say, “Hey,” and most payroll departments can do this, not all but most. “Instead of giving me all my money and my checking account, I’d like you to split it into two checking accounts at this one bank, my regular brick and mortar bank and two savings accounts at my online-only, high-yield savings bank.”
And so when you have this money you’re saving separate from your checking, if you are going to want to make a transfer from this online-only bank to where your checking account is, you’re looking at it about 24-hour, sometimes up to 72-hour, wait depending on what day. So that means you’re not going to do any impulse buying with your savings. It’s going to make you stop and pause and leave your savings alone. So that’s one of the ways to help you automate savings, one, and then leave it alone because you’ve made your money inconvenient, and inconvenient money gets saved.

Mindy:
Oh, I love that. Inconvenient money gets saved.

Tiffany:
And I’m not saying that you can’t do those purchases, Mindy, right? So that’s why I like to have two checking accounts, one for bills because it’s like, let’s be real. We’re an adult. I don’t want anyone knocking on my door. And then another checking account for spending, so for groceries and some impulse purchases, because we’re still human, so you want to leave space for that. But at least you know, whenever I swipe my debit card, one, I dislodge my debit card from my bills account. The bank won’t tell you this, but you actually don’t have to have a debit card attached to a checking account. You can actually break that connection. So I know when I swipe my debit card, it’s not my bill money, it’s not my savings, it’s only money that I’ve set aside for spending on things like groceries and grooming, but also maybe some unexpected things that I just want for myself. And then it allows me to be like, I can only be as reckless as the money that’s set aside in that account. And I know it’s never going to be savings, it’s never going to be bills, so it can’t be that bad.

Kyle:
This is such a good… Let’s hit home on this a little bit. This split it before you forget it. Well, say it again. Split it. No, split it before you get it.

Tiffany:
Split it before you get it.

Kyle:
There we go. Oh, and then you forget it.

Tiffany:
It’s like split it, get it, forget it. Oh, I like that.

Kyle:
Yes, that’s right. Then it works. But this is so powerful, and we’ve talked about it before on the podcast and people talk about it all the time, why does the government have your employer withhold taxes from your paycheck? Because you’re not going to pay it 12 months from now. You’re not going to save 25% of your paycheck to pay the federal government, your local government, your state government. They pull it out right away. You don’t even know it’s there. And sometimes people will be like, “Ah, two checking accounts. I got to keep track of two or three savings accounts. Oh my goodness, I’m going to lose track of it.” Well, that’s probably good, but if you can set these things up automatically, it’s just that lazy person budget.
It’s going to solve so many of your problems, especially when a lot of times you’ll read an awesome workbook or a book that’s put out by someone like you and be gung-ho for a certain amount of time. And once you get past the initial excitement, if you can have automated as much of that as possible, it will keep you on the train. And when you get busy, when you have little kids, when the summer happens and you’re running everywhere, and Christmas is coming and the gifts are coming, it’s that automation. I love how you hammer it out on that. I just think that is so, so huge.
And even the splitting of your checking accounts from the adult account, I love that. Let’s be adults with this one, and then let’s have fun with this one. But you’ve already predetermined that and there’s no shame, there’s no guilt there. And you’re not having to try to argue with yourself, should I spend this or not? It’s already there, or it’s not.

Tiffany:
Exactly. Exactly. It’s almost like for those people who might meal plan. If you meal plan on Sundays, it’s like basically you’re automating your money and then throughout the week you can just pull the meals out of the refrigerator. And so you’re right, Kyle, people are most excited when they first start. So if you can lean in on that excitement and set up all these automations, because we’re all going to get lazy again. It’s happening. Then it’s like, “I’m so glad that,” I call her responsible Tiffany. I’m like, “I’m so glad responsible Tiffany set up her automations because real Tiffany is back.”

Kyle:
Yes, yes, totally. Yes.

Mindy:
Okay, so there’s a lot of different ways to get out of debt. Which one did you follow in your own life?

Tiffany:
So when I had the $35,000, and it was mostly credit card debt. Well, it was credit card debt. Then I also had a $200,000 mortgage, and then I also had a $52,000 student loan debt. So I started off with the snowball method, which I found to be really helpful, especially. Snowball is when you pay off the smallest balances first, and as you pay them off, then you roll over whatever that balance was to the next smallest debt on your list, whatever you were paying, that payment. And so I started off there and snowball works great if you’re just starting out and you need a little motivation because you get some early wins.
As I got really good at Snowball, then I switched over to Avalanche. That method is when you pay off the debt with the highest interest rate first. Because I had done snowball for a year or so. And then I was like, “Oh, okay, so now I’ve gotten pretty good at it. I don’t necessarily need the pat on the back. Let me do the most impactful debt. Let me get rid of that first.” And so I started to do that.
Then most recently, and I wish I would’ve heard about this before the book came out, I forget the name of it, snowball, avalanche. There’s another term which I wrote it down, but essentially it’s when you take care of the debt with the most emotional weight. And I can’t remember the name of it. It’s some other snow name. And I remember being like, I love that. Basically you start to… For example, let’s just say you borrow money from your grandmother and you’re like, “I’ve got to give Granny her money back,” even though you’re like… Because you’re like, Chase Bank, I’ll see you later, but not Granny. And so I have to figure out the name of that. But I love that to integrate that to then look at debt to say, “Okay, which one do I have that’s giving me the most emotional distress?” And focus on paying that debt off first.
So a mix of those three, depending on who you are, is really going to be, I think, work best. And I say starting with the snowball method first is probably best, and then intermingling, avalanche and the other method where you work on the debt that gives you the most stress and anxiety second.

Kyle:
I love that emotional debt piece. I have not heard that before. I think that is just incredible. And as soon as you said that, I thought relatives, friends. If you’ve borrowed anything from anybody that you value a relationship with, nail that one first, because most likely that’s going to have the emotional burden and it’s going to impact that relationship in a way that’s different than your relationship with Chase Bank. That’s really cool.
I think that’s a really neat thing, and I agree with you too, the snowball effect to get those quick wins. If you’ve got a $75 a month debt and all of a sudden you knock it out and then you knock out a $200 a month debt, like these little ones, it really gives you some psychological motivation that you can actually get this done.
But just to transition to another kind of situation when it comes to debt, how do you talk to people who have done something or multiple things where their credit is just trashed? Someone where maybe it was a debt thing, maybe it was a medical bill thing, maybe it was their fault, maybe it was life just happened. But where do people start with something like that? What do you tell people both from probably an emotional standpoint, but then first actions to take to start getting on the right path to where you can then move into a different financial stage of life after that?

Tiffany:
So Kyle, first things first. I tell people that if credit is your main issue, breathe easy, because to me it is the easiest thing to fix. That is like, “Well, we’re going to be here for a while, buckle up.” Budgeting is also like, okay, budgeting is a lot of discipline and even savings, but credit is really just tips and tricks. And typically that’s the thing that people are most freaked out about. I’m just like, honestly, I want you to breathe easy if that’s your biggest issue. Because with some tips and tricks, we can get you right as rain.
So I start with there, just like we got this when it comes to credit, and then I like to put what I call on the board where it’s like, here is the goal on the board. Once you get to about 750, 760, you start to enter what they call perfect credit. Meaning 800 is great, 850 is great, but truthfully, once you get to that 740, 750 and above, for the most part you’re in the A plus class either way. So don’t try to stress yourself like, “But I really want 800.” I’m like, “Eh, focus someplace else once you get to 760.” So that’s the second thing that I do is let’s set the number so that way we know where we’re actually chasing.
And then third, we break down the components of your credit score. 35% of your credit score is payment history. And if you set up that separate checking account for your bills and automate your bill payment, cha-ching, look how much work you’ve done already with no real work. Literally automating your payments is going to tremendously help your credit score. And then 30% of your credit score is amounts owed. So that’s just really paying down debt. So if you start to automate through that avalanche, through snowball, and I can’t remember the other one, I’m going to figure out the other one and then it’s going to be my claim to fame that I made it up. So you heard it here folks. And then the other one, whatever the other snow reference one, once you set up and automate a debt pay down plan, you’re taking care of 65% of the things that positively affect your credit score. And then once you get that and it’s automated, then we can start to get into some of the tricks instead of just the tips.
And so, one of my favorite tricks that I use is I call it… So I’m 44. So I grew up with Jordan. I know everybody loves LeBron, but I’m like, have you watched Jordan play in his prime?

Kyle:
Yes.

Tiffany:
Yes. So I call it the jump like Jordan method, because remember Jordan used to jump and it was like he was frozen in the air. Yes, with the tongue out.

Mindy:
With the tongue out.

Tiffany:
Jump like Jordan method is this, is that you get a credit card that you ideally already have or maybe you were going to get one anyway. It has a zero balance and you’re going to look at your budget or your money list and find the lowest reoccurring bill. So let’s just say it’s Planet Fitness for 15 bucks or Netflix or whatever. Whatever your lowest reoccurring bill is, and you’re going to put it on that card and nothing else. That card’s going to stay home. And then every month you’re going to pay that card off in full, because I don’t know what it is, but the credit bureaus ring the alarm like, “Oh my gosh, Mindy paid it off, Kyle paid it off in full every single month.” And in so doing, it gives an extra boost. It doesn’t matter if it’s $5, $500, $5,000. And I did that when my credit score dropped really low after Jake the Thief left me in all that credit card debt, and I had a foreclosure, and in two years I went from a 530, it took me two years because of the foreclosure to get up to a 750, and now I’m in the eight hundreds.
And so that is one of the tricks that you can use paying off a credit card in full every single month, but it doesn’t have to be a lot of money. And so Made Whole is full of here are some tips and tricks to raise your credit score, and most of them are automated so you don’t have to stress yourself out.

Mindy:
I love that tip. I didn’t know about that, and I always pay off my credit cards, because I am a nerd like that. I am responsible like that. Let’s reframe this because this is a good thing to pay off your credit cards. I didn’t know that was an option. When I got my first credit card, I was 17, I graduated, I have a late birthday. You can’t get a credit card when you’re 17. So my parents got a credit card and added me to the credit card as an authorized user. I had my own card, and when I turned 18, I inherited their credit score, which I didn’t even know was a thing, which is now called adding somebody onto your card as an authorized user. And then after, I don’t know how long it takes for you to inherit their credit score, but that’s another way to get your credit score. The issue is I believe when you are no longer on that card, you no longer have that score.

Tiffany:
So yes, this is true. And so I did this for my sister, my dad, same thing Mindy. I too was 17. I have a late birthday when I graduated high school, and my dad did that for me. That I was added on as an authorized user and his good behavior became my good behavior as long as you’re on that card. Now the key is, because I did this for my sister, and because I thought, “Oh, you know what? I’m going to pass the love along.” I was in my twenties and I forgot to make a payment. So she called me fussing. I was like, “What’s your problem?” “My credit score.” I was like, “Oh yeah, forgot to make that payment,” because you inherit the good or the bad.

Mindy:
And you know what? That’s a great point that I wanted to bring up. You were talking about payment history is 35% of your score, so you need to make sure that you’re paying your payments on time. When you miss a payment, one payment, you’re perfect forever, you miss one payment, you are horrible. Your score drops so much.

Tiffany:
I want you to think of your credit score like I tell people like your GPA in high school. And so you have straight A’s and you just got a big F. So you’re not going to go down to F, but that F is going to be averaged into your credit score GPA.

Mindy:
Rounding out the credit score, what comes into it, is credit inquiries, credit history, and credit mix. So the credit history I want to highlight, some people will say, “Okay, I got out of debt now I’m canceling my credit card.” Ooh, hold off, don’t cancel the very first card you ever had. My husband and I have a card from like 27 years ago. We use it zero of the time, because it doesn’t give us anything. We do these benefits and credit card points and all of that, but we keep it open, and every once in a while we’ll put gas on it and then go pay it off right away because it’s been open for 27 years. When we close that, then our credit history shrinks a little bit. Other cards we open and close a lot, but having that open long enough or that long really makes us look like sure bets.
Let’s switch gears and talk about retirement. Can you break down how to invest for retirement and how to invest for wealth building into the present?

Tiffany:
So one of my favorite chapters and the longest chapters in Made Whole is the investment chapter. It’s the sixth step on the Made Whole kind of checklist. And I like to distinguish between investing for wealth and investing for retirement. When people say, “I’m saving for retirement,” I’m like, “Maybe initially you saved, but ultimately your retirement money is meant to be grown.” And so I like to change or reframe that language that you’re really investing for retirement.
And the difference between the two is this, is that if you want to start with investing for retirement with any excess money that you might have after bills are paid, and you know that you’re investing for retirement because if you can look around with how your life looks now and investing for retirement means you will be able to maintain your current lifestyle. That’s the purpose behind investing for retirement. It’s not going to put you on a private island. It’s like, oh, this chair? I’ll have that chair in retirement. I’m talking about metaphorically. Your life now, you can currently maintain that life.
And investing for wealth is different. It is to raise your current lifestyle and to leave a legacy. But I want you to do the foundational part first, which is retirement first. So when you’re going to invest for retirement, you’re going to figure out what there are investment vehicles that are available to you. Well one, you’re going to figure out what type of investor are you? Are you someone who is passive? Are you an active investor? Are you somebody who’s kind of in between? So I have a fun set of quizzes to identify what kind of investor you are so you can figure out which vehicle that you should invest in. So it’s like understanding, oh, for me, I’m kind of in between. I’ll do a little bit of research, but your girl is busy. Some people are, a friend of mine is an active trader. Tila, so she’s active. So for her, stocks are perfect. For me, I’m more an ETF girl or mutual funds, because I want to kind of set it and semi-forget it.
So you take the quiz inside the book, you figure out what kind of investor you are, and then you figure out what vehicles are available to you. So I like to first and foremost, when it’s investing for retirement, ask yourself, does my company offer a match wherever I work? Because if so, there’s money on the table. Go get it. So if your company… A match looks like this. The percentage of your income that you make, they will put up if you put up as well. So if the match is say 5%, if you put up 1%, they’ll put up one. If you put up four, they put up four. If you put up five, they put up five. If you put up six, they put up five, because that’s their cap. So if your company offers a match, you want to at least put up enough to max out the match that they’re giving you. And so because that’s technically… People say free money, but nothing’s ever free. But at least it’s like…
Because ideally you want to set aside 10 to depending these days, maybe even upwards of 20% if possible, of your income to set aside for depending what kind of retirement you want to have. And so if 10% is your goal, then if you put up five and they put up five, you’ve met your goal without having to put the whole amount up yourself. But I also want you to consider external retirement accounts like an IRA, an Individual Retirement Account, and a Roth IRA.
So I can’t remember, when I wrote the book at the time I want to say if you made under 130,000 or $140,000, I don’t know what it is now, I’d have to Google it, then you’re eligible to put money up for a Roth IRA. Although there’s backdoor Roths and ways to get around it, but on the front end, Roth IRAs you have to make under a certain amount to qualify. So the difference between traditional retirement on IRA and a Roth IRA is traditional retirement, you get your savings now. You put money in that account, it reduces your income, and you pay less taxes now. And then when you pull the money out later, you pay taxes on the money later.
A Roth IRA is your money has already been taxed and you put money into your Roth IRA, and then later you don’t have to pay taxes on the money you pull out. And so it’s really ideal to be putting money into pre-tax, like your retirement account at your job or an IRA and also a Roth IRA, having some in both. So that way when it’s time to retire, you’ve gotten some tax benefits upfront. And then because you might have a Roth, you’ve gotten some tax benefits when it’s time to retire. So these are things to consider when you are investing for retirement.
Now investing for wealth, this is where you could be a little bit more aggressive. For those folks who have bills paid on time, debt is fully managed, they’re doing great with retirement investing, and now they’re ready to invest to currently increase their level of living and setting aside money for their heirs or their legacy. And so it looks similar to investing for retirement, except for there’s not going to be tax benefits, because the accounts that you’re going to be using, the brokerage accounts you’re going to be using, they’re like, whatever, you have enough money to do this. We’re not going to give you a tax benefit.
But you want to identify for yourself what type of investor you are. Are you going to be heavily into stocks? Maybe investing looks like real estate for you. Investing might be looking like investing into businesses for you. Identifying what that kind of looks like for you. And I help you in the book to identify the avenues to go through and then putting that excess money there consistently. If you do those things, then you might not be the richest, but you’ll certainly have more than enough to take care of yourself and your family.

Kyle:
Yeah, thanks for clarifying between the two items there for retirement and wealth building, that’s a completely different goal.

Mindy:
Okay, let’s talk about chapter nine, my favorite chapter, Grow Rich-ish. First of all, I love that title. Ish, rich-ish, because you’re not promising the world. One thing I love about you, everything I love about you, Tiffany, but one thing I love about you is you don’t promise the world. You’re not promising, “Hey, if you do everything, you’re going to be a billionaire.” You’re not probably going to be a billionaire, but you can be rich-ish if you follow all these steps. And in this chapter you’re talking about increasing your net worth and it is peppered with reassurances, which I love because we’re all feeling the shame, like you said earlier. The S-H word, the shame of not knowing about your money. And if you didn’t know about it, if you didn’t learn about it, how do you know? Don’t feel shame.
So many people feel bad about their lack of knowledge and their financial situation and they shouldn’t. And you’ve got reassurances, and this is a quote, “Net worth isn’t a number that says anything about what kind of person you are or accomplishments you’ve had in your life. Whatever your net worth is, it’s okay. All you have now is a number that gives you something to work with, a place to start from.”

Tiffany:
Yeah, net worth really is what you own minus what you owe. That’s just that simple. I own these things. I have a house, well at least the equity in my house, the value of my car. I don’t know, maybe it’s like your wedding ring, maybe you have some art in the house. It’s cash, businesses. So I own these things, and then I owe these things. So it’s like my actual mortgage. Maybe there’s money left on the car that you actually owe, credit card debt, student loan debt. And so I owe these things. So if you subtract what you owe from what you own, you will have a number that’s your net worth. It is not your value number of who you are as a person. A net worth is a really great way to just kind of do a financial checkup to say, “Ooh.” Because there are people who own millions and millions and millions and millions and millions and millions, millions of dollars. They own $50 million. You’re like, “Wow, you must be rich.” But they owe $250 million. You’re like, “Oh, you’re broker than my five-year-old nephew.” Because you owe way more than you own.
And so the key, why I love that net worth is near the end is because what I tell you is if you do all the works in the prior chapters, once you get to net worth, you have all the tools to increase what you own and decrease what you owe.

Mindy:
So somebody going through this workbook, how long do you anticipate them spending with the book? It’s not just pick it up and you’re done in a day.

Tiffany:
It depends, right? So I’m someone who I love to read. And I probably wouldn’t suggest that somebody race through it in a week. You certainly could. There are some people like this, they’re like, first round, I just want to listen. So maybe it’s like this first week you’re just going to listen, you’re not going to do anything. And then second round I’m going to work through it. And so maybe that’s like a month. I suggest a book club with some friends so you can actually work through it together. That’d be really fun. And then some people want to, me too, actually, sometimes I like to read and do. So if I’m a read and doer, then I go much slower and I’m looking at about a month, a month and a half to kind of really work through.
Or you might also, because I love that it’s 10 steps. You might say, “Well, every week I’m going to work on a step.” So then that’s 10 weeks. So there’s so many ways.
For me, I like to create a system for myself so I don’t fall off when it comes to workbooks. I’m like, okay, here’s my system. Typically, I find a friend to do along with me, and then even now I’m reading a book called Attached. It’s about attachment styles and about how do you show up? Are you anxious when you show up for people in your life? Are you kind of aloof and avoidant, or are you secure? And so I’m trying to figure out who am I and how do I show up differently? And so a friend of mine, we’re reading it together and every week we go through two chapters and we’ll talk through it. And so even though the book Attached is not a workbook, but because I’m trying to do work, so I’m forcing it to be a workbook, but the good thing about Made Whole is that you don’t have to force it. You could check in weekly with yourself or whoever you’re working through it with in order to do the work.

Kyle:
So do you have a book club set up that people can join?

Tiffany:
Absolutely. So when I first did Made Whole, that came out. When I first did Get Good with Money, it’s companion book, people wanted it. So a few months later I created a sheet, like a kit. Not a kit. Yeah, really like a book club kit. And so I’m going to do the same thing for Made Whole, where it’s literally like a series of videos and questions you can ask because I find that, which I’m so glad people agree with me, that money is not a solo sport, that you ought to do it along with other people. So yeah, there’ll be a free downloadable book club kit on the site so that way you can do it with other people.

Mindy:
Tiffany, it is always a joy to talk to you. I really have to keep myself in check, so I just fan girl all over you. But this was so helpful. Anybody who needs help with their finances, anybody who knows somebody who needs help with their finances, hey, Christmas is coming. When does this book come out, and where can people find it?

Tiffany:
So the book comes out November 21st, and folks can find it wherever books are sold. And if you’re like me, I like to support local bookstores. So if you go to madewholeworkbook.com, that’s madewholeworkbook.com, you will see a list of all of these different places from the big box places to smaller places where you can purchase the book.

Kyle:
Tiffany, it is so good to talk with you today. Thank you so much for being on. Thank you for being just a joy to talk to and just so much fun. I feel like we could just keep going for a long time here. Where can people find you? What’s the best place for people to connect with you if they want to learn more? Not just about your book, but about who you are, all these other resources you have?

Tiffany:
Well, Kyle, thank you so much. I am, The Budgetnista everywhere, thebudgetnista.com, The Budgetnista on TikTok, although I don’t TikTok much. But Instagram, Facebook still, YouTube, Twitter or X or whatever they’re calling it now, and LinkedIn. But yeah, just The Budgetnista wherever social media and sites are found.

Mindy:
Tiffany, thank you so much for your time today, and we will talk to you again soon.

Tiffany:
Bye.

Mindy:
Holy cats, Kyle, that was Tiffany and she is amazing. What was your biggest takeaway?

Kyle:
Man, there’s so much in here. It was just really good to hear her talk about everything. If I had to pick one thing, I usually, whenever I learn something or hear a new terminology that I’ve never heard anymore. Terminology, hear a new term that I’ve never heard before, she talked about the emotional debt snowball or snowflake or whatever we want to call it. I think she’s going to try to think of something to call it, but I just thought that was a really neat concept, when you’re starting to pay off your debt to look at different strategies to do that, but to keep in mind the emotional weight that some sort of debt may hold on you, whether that’s a debt to a family member or a friend, some sort of relation, or maybe it has something to do with something that was hard, like a divorce or something like that. But that was just a really cool concept. So I liked that she pulled that out, and I haven’t heard that talked about very much before.

Mindy:
I really liked how she encourages you to reframe your thinking. Tiffany gave us a lot of ways to do this, most notably budgeting. Budgeting isn’t a limitation, it’s your mother. Yes, yes, but. Yes, you can do this, but first you have to do that. And that is such a great way to reframe the thinking about budgeting. She’s got a lot of ways to reframe your thinking.
The money one, to split it before you get it. So you split your income before it comes into your bank account. So you go to your HR person and you say, “Hey, instead of giving me my entire paycheck, put X amount of dollars into this account, and X amount of dollars into that account.” So you’ve got your money for your bills and you’ve got your money for your discretionary or more discretionary spending, and you pay your bills from here. You never have to worry about going negative in that account because that’s just for bills. And you even have it at different banks, which I think is a huge key point to make to people who are having trouble getting started. If your money is easily transferred between your accounts, it’s going to be a lot easier for you to just be like, “Oh, I’ll just move over these $500.” No, if it’s really, really hard to make that money move, that can be such a slam down to you making that money move. “Oh, it’s going to take three days. Forget it. I’ll just do something else.”
And I love the way she thinks, and I love these little mind tricks that she has to help you change your mindset about money. She’s just great. All right, Kyle, should we get out of here?

Kyle:
Sounds good to me.

Mindy:
That wraps up this episode of the BiggerPockets Money Podcast. He is Kyle Mast. Kyle, where can people find more about you?

Kyle:
The best place is just kylemast.com. I write a newsletter sometimes, and I’ve got some other stuff on there. But yeah, I’m on Twitter a little bit, but usually my website is the easiest way.

Mindy:
Kylemast.com. And I am Mindy Jensen saying, “Got to go, beagle.”

Speaker 4:
If you enjoyed today’s episode, please give us a five star review on Spotify or Apple. And if you’re looking for even more money content, feel free to visit our YouTube channel at youtube.com/biggerpocketsmoney.

Mindy:
BiggerPockets money was created by Mindy Jensen and Scott Trench, produced by Kailyn Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.

 

 

Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds. Thanks! We really appreciate it!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.



Source link

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Articles

Real EstateTravel

The 6 Beginner Steps to Take Before Investing in Real Estate

If you want to start investing in real estate and buy your...

Real EstateTravel

$4K/Month & Financial Stability From Rentals

For some people, real estate investing is “too risky.” But what if...

Real EstateTravel

4 Real Estate Investing Trends That Could Take Over in 2024

In this article Which investing trends could make you wealthy in 2024?...

Travel

Elevate Your Celebration with Punctual’s Party Bus Rentals

Get ready to transform your next celebration into an epic event with...