Placeholder Image

Subtitles section Play video

  • (gentle music)

  • - Hi, I'm Melissa Bell publisher of Vox Media.

  • Welcome to Money Talks, Home Habits,

  • powered by Bank of America.

  • This is a virtual explainer event

  • centered around the new meaning of home

  • and how its purpose has suddenly shifted.

  • Today, we'll be focusing on saving when home

  • and how to manage and prioritize savings

  • during such an uncertain time.

  • People spending more time at home

  • means changing spending and saving habits,

  • but what's the proper way to save?

  • And what are we saving for?

  • For some, the transition to spending more time at home

  • comes with automatic savings.

  • The U.S. personal savings rate jumped to 33% in April,

  • the highest ever recorded.

  • Still in a June, 2020 survey,

  • 23% of Americans reported that a lack of emergency savings

  • was their biggest financial regret.

  • So how can people put any new found savings

  • to good while still at home?

  • An emergency fund should be the foundation

  • of any savings plan.

  • Emergency funds should cover six to nine months

  • of regular household expenses.

  • Saving, however, may not come as easily

  • for those whose incomes have been impacted.

  • That's why it's even more important to set aside time

  • to go through your monthly expenses

  • and identify any that can be reduced,

  • whether you've found unexpected savings in recent months,

  • or have had to cut back,

  • take the time to prepare for the future

  • by reevaluating your savings priorities, today.

  • I'm joined by Tonya Rapley,

  • a financial educator and founder of My Fab Finance.

  • Tanya, it's great to have you here today.

  • - It's wonderful to be here.

  • - One question that is really top of mind for me,

  • is centered around the folks who have been impacted

  • in a disproportionate way because of the coronavirus.

  • What financial advice do you have for them?

  • - Yeah, Melissa thank you for asking that question

  • because as a financial educator and working in this field,

  • I have seen and I've worked with people

  • who even before Corona virus

  • were financially vulnerable and what we are finding

  • are people, particularly people of color

  • and people who might be deemed essential workers

  • who are working in, whether it is required fields,

  • or essential fields such as in the grocery store,

  • farming, et cetera, things that really help ensure

  • that our economy stays voting and our needs are met,

  • are vulnerable as well and they don't often

  • have those protections, but they haven't had them.

  • And that's one of the things that I'm hoping

  • that this kind of starts a conversation

  • of what it looks like to bring people up to,

  • equally before we even have something

  • like the Coronavirus start.

  • And so when working with clients

  • and helping people kind of navigate, okay, what do I do?

  • I'm already financially vulnerable.

  • What can I do to kind of alleviate some of this?

  • If anything, the first thing

  • is we gotta comb through those expenses.

  • What was helping you or what worked before coronavirus

  • might not work now.

  • So what you could afford then

  • you might be able to afford now

  • because maybe your hours have been cut back,

  • or maybe now you have additional health cost,

  • or maybe you're responsible for your childcare and so forth.

  • So you aren't able to go into your office

  • or you're not able to do things you used to do

  • to bring in income.

  • And so we need to cut back on those expenses

  • and we can do that by looking at our budget,

  • looking at what's going out

  • of our household every single month.

  • And then cutting back on the things that aren't necessary.

  • Like during this time we really want to be focusing

  • on those essential items.

  • The next thing is I would suggest that people take advantage

  • of help or assistance that's available to them.

  • I know that sometimes we might not want to or feel like,

  • I got this, but there's any time in history

  • where there's more help available.

  • It is right now.

  • So there are resources available.

  • I know here in Los Angeles where I live,

  • they have a rental assistance program.

  • They're rolling out when everything first started happening,

  • they were forgiving student loan payments

  • for a certain amount of time

  • and mortgage payments for a certain amount of time.

  • A lot of utility companies have been understanding

  • and are working with individuals

  • or working with their customers to look to see

  • what help is available on that side.

  • But then also, if you need any social services

  • or anything of that nature,

  • find out what you need to do to make sure

  • that you're getting groceries and so forth,

  • look into, grocery co-ops or food pantries nearby

  • and so forth so that you can kind of make up

  • some of that difference

  • in what you were spending in groceries

  • and maybe you can reallocate the money from your budget

  • to something else.

  • And then the last thing I really want people to do

  • is really think about stabilizing and what it looks like

  • to stabilize your financial foundation,

  • because that's important.

  • And I know that people might be in crisis mode.

  • It's like, I just can't figure out

  • how to get to XYZ point.

  • You're not alone.

  • There's a lot of people who are trying to figure out

  • how to get to XYZ point,

  • especially when the point has been changed as it has.

  • I don't think any of us expected for 2020

  • to look this way and to have this experience this year.

  • So alter your plans.

  • It's okay to alter your plans and change your expectations

  • of what was expected for you this year.

  • And just realize that you're not alone.

  • I think that, especially for people

  • who might feel like they are vulnerable

  • or feel even more vulnerable, you're not alone.

  • There are services there to help you

  • and we'll get through this.

  • - Thanks, Tanya.

  • I think that's a great point.

  • One thing that I think you mentioned at the very beginning

  • is how a lot of these issues predate coronavirus,

  • and this moment is perhaps exacerbating them,

  • but also revealing them.

  • Now I would love to bring on some guests

  • who are excited to ask you some questions.

  • - Craig, welcome to the today's discussion.

  • I'm looking forward to what you

  • and Tanya have to talk about.

  • - Hi Tanya, my question is like a lot of other people

  • I've been saving more money than usual

  • in the past few months.

  • I'm not going out shopping as much.

  • I'm not eating out as much and spending money socializing.

  • And I'm wondering if for those reasons it's a good time

  • to spend a little bit more money

  • than I might usually on large purchases,

  • despite the fact that I still have debt

  • that I'm working towards paying off.

  • And I'm wondering if there's a balance

  • of how much more money I can spend on myself

  • and so into paying off my debt.

  • - Oh, that's well,

  • that's good news that you are saving more money.

  • I think that as we've spoken to others

  • and when I'm talking to other clients I work with,

  • that's been a positive byproducts of this entire experience,

  • but what kind of large purchases are we thinking?

  • Like what do you have in mind?

  • - I think there's kind of two categories.

  • One is just splurging a little bit more on clothes.

  • For example, every other month

  • usually I'll make an online purchase and maybe

  • I'm more prone now to spend a hundred dollars

  • more than I would have before.

  • And then the other side is just for example,

  • I'm moving apartments next month.

  • And I have my eye on a few furniture pieces

  • that probably I wouldn't have considered before,

  • but now I'm like, okay,

  • well I haven't spent so much money the last few months.

  • Maybe it's okay to buy these now.

  • - Okay, all right.

  • So furniture and additional clothes.

  • Okay, furniture makes sense to me,

  • but clothes I'm like, where are you going?

  • Like, take me with you.

  • Where are you going?

  • 'Cause I know I'm not going to any places,

  • but so just think about this,

  • so there's needs and there are wants, right?

  • So when it comes down to our needs,

  • that's shelter, that's food, that's clothing and so forth.

  • But then there's once and these things probably do fall

  • into the categories of wants.

  • You have an apartment, you're thinking about

  • how am I gonna furnish that apartment?

  • And we have clothes like, well maybe I want

  • a few different pieces of clothing.

  • So these are wants and there's nothing wrong with wants.

  • But when we're thinking about moving into priority,

  • making wants a priority,

  • then we have to look at how are we doing financially?

  • So dialing back to, okay, moving into this apartment,

  • do you have enough money set aside just in case

  • to cover that rent, because what we don't want to happen

  • is that you spend quite a bit of money

  • on furnishing this apartment.

  • We haven't put money aside and saving for this apartment.

  • And so something happens

  • and now we've got to sell the furniture.

  • We have to move out because we haven't been prioritizing

  • putting money aside to save for that.

  • So there's nothing wrong with spending money on your wants

  • and there's nothing wrong with making it a priority.

  • As long as you have already previously prioritize creating

  • that emergency fund and that savings cushion,

  • so that things were to happen,

  • you'd still be able to pay for those basic needs.

  • How are you doing on that?

  • Have you been able to save, to create that cushion?

  • - I would say I have that cushion, but like everyone else,

  • it doesn't hurt to always save more money.

  • I always want to see that number go up.

  • So I guess I'm looking for what

  • that balance could look like.

  • - Yeah, definitely.

  • And are you currently working?

  • - I am and I'm very lucky to have job security

  • for the near future at least I see my income

  • continue to come in throughout the coronavirus.

  • - Okay, well that is good news.

  • And so you're in a pretty good position.

  • The thing with furniture,

  • it doesn't mean that you're gonna have to buy

  • the most expensive furniture in the store, right.

  • It means that we're gonna shop around for a good deal

  • and make sure we're getting the best deal.

  • And so maybe there's still a way to save on that

  • and still put money aside in savings.

  • It doesn't mean we're gonna blow

  • everything out the water.

  • So keep that in mind,

  • as you're looking at your wants and so forth.

  • I think it is, there's this theory,

  • whereas in like certain major life experiences or purchases

  • lead to more expenses such as moving into apartment

  • and moving into a specific side of town,

  • now you feel like you have to have certain things

  • in that apartment or a certain lifestyle

  • or reflected lifestyle to participate in living

  • on that side of town or maybe it's certain clothes

  • and certain wardrobe.