Go to and use the promo code FINANCIALDIET to get 10% off at checkout!
Hey guys it’s chelsea from the financial diet and today’s video is brought to you by squarespace and today i’m here with shannon nichol a founder of the financial gym so the financial gym is based here where you can’t quite see but we’re in the flatiron district of new york city and it’s a physical place where people can come to normal people you don’t have to
Be like a financial expert or something to talk about money in a way that doesn’t feel scary or overwhelming yeah traditional gyms use barbells and treadmills to get you into shape and we use wine and kleenex to get you into financial shape so financial gym is kind of like a regular gym in a sense that you pay a monthly fee and you have sort of your own personal
Money trainer who works with you to talk about everything from like basic budgeting to credit for rehab student loan management to investing they also do fun events for you comment drink wine and learn about different money things and if you’re not based in new york city they also do their money training online so we felt like shannon was the perfect person where
Readers can write in they’re kind of tough or embarrassing money questions and she can answer them in a way that’s honest and also really helpful so we put out the call on twitter for our followers to send us their money questions and we picked our five favorites so without further ado let’s get started hi i’m rod moving on a small stipend 1700 a month in a large
City and was wondering what everyday tips you have to live on a small budget without feeling like i have to go without for several years is this possible or do i just need to suck it up until i’m making a living wage thank you that is a great question $1,700 doesn’t seem like a lot in a big city but you can live big on a small budget anywhere and big cities are
Actually a great opportunity for that there’s so many resources online you’re living in chicago in new york or la look for personal finance blogs in those cities with bloggers who are writing about how to live on the cheap all the time another great point is you’re in grad school there are a lot of people not making any money with you so work with your friends to
Have fun together have potluck dinners have wine we’re drinking wine out of a box 20 bucks for a lot of fun that will take you a long way on a little budget also if you’re living on a small budget you really need to think about what’s really important to you right spend your money on what’s important to you is it going out is traveling maximized what’s important
To you and spend your money on that and then save on the other areas i was actually probably at my brokest when i was in washington dc and one of the greatest things about it was that it was filled with embassies which constantly has free events so the fact that you’re in a big city to me feels almost like an advantage because there’s a way way higher chance of
Free stuff going on all the time number two i’m in my mid-20s and have a five-figure amount sitting in a money market account with my credit union i know i should do something with it but i don’t know what and the process of finding a financial adviser who won’t scan me seems daunting i already have a 401k what should i do thank first of all congratulations for
Having a five figure money market account and not a five figure student loan debt account that’s awesome in your mid-20s so congrats you’re doing amazing yes sitting in a money market account is a bad idea for your cash especially if you’re not going to use it in the next year sitting in a money market account is like having your cash than on the sofa it’s not
Doing anything if you want your money to work for you put it on the treadmill put it into shape get it to work for you invest it and i know investing sounds daunting but it’s actually really easy there are plenty of vestment options for you out there like robo advisors like well front or betterment but make it easy for you to invest you just tell them what your
Goals are when you’re going to need that 25,000 and they’ll actually pick the asset allocation and the investments you need for that period of time you don’t have to think about it you don’t have to talk to an investment advisor who is going to scam you there are plenty of them out there you want to avoid that keep your investing simple whatever you do those get
Comfortable with investing that money because leaving it in that money market account is actually losing you money it’s earning 1% or less an inflation is 2 to 3% so every year your money is losing once or 2% put it in an investment account and let that money work hard for you so it’s not be like it’s all mad on set questions but i think may be helpful for a lot
Of our viewers if you don’t even know like what a stock is what are even the words that you should google to start investing yeah i think that is actually not a dumb question i can’t even tell you how many clients we have come in and they don’t know what they hear words on the tv like all the jargon is like stocks equities bonds fixed income and their actual all
Kind of saying the same thing stocks and equities are the same thing bonds and fixed income are saying the same thing and i tell clients all the time if you’re not comfortable with it there are plenty of resources and i would advise you to actually not read about it sometimes reading financial jargon makes it more complicated there are plenty of personal finance
Podcasts out there i have one called martinis and your money but there are plenty of others out there that explain investing in real english and i would suggest that you do that they’re free it’s a great resource while you’re working out at the gym listen to something about investing 101 and and get comfortable with it question 3 my boyfriend has a great job and
I currently do not grad school long story short earning jock what he does makes me feel insecure and like a child how do i navigate a relationship where i will not be his financial equal for at least five more years if ever what do you do you get over it right you’re handing your grad degree congratulations that’s an amazing accomplishment and five years you’re
Going to do something amazing with that right so he makes more than you good he should be paying for your dinners you should be paying more in rent let them do that it’s not like you’re sitting around eating bonbons every day you’re getting your grad degree just get over it if he doesn’t have an issue with it you shouldn’t have an issue with it not to sound flippant
Though you’re on your own life journey and you’re doing something amazing be proud of that your boyfriend’s on his and he’s doing something fine in his own he should be proud of that don’t compare yourself to whoever you’re dating or whoever your friends are love the life you’re living and be happy with where you are and i would just like to speak as someone who
Used to date a guy who made me feel really really bad about the fact that i did not earn anywhere near what he did and the truth is that anyone who will make you feel that way when you are working as hard as you can to live the life that is right for you is not a good person you shouldn’t be with that person and more importantly money is a means to an end if you
Are able to live the life that makes both of you happy with the money that you have us all you need and just as an fyi no man would ever ask that question okay love what you’re doing and own it question for the 20% down payment is it a myth or is there some truth behind this magic number so i’m assuming you mean 20% down payment on your home not on your purchase
At macy’s and yes it’s a real number and what is it based on it’s based on banks wanting to have some kind of cushion in what you own so the bank’s going to lend you money to buy that home and the real estate markets going to go up and down and they want to make sure they have a cushion and how much they lend you versus how much you owe them so that way when
The market goes up and down they have a 20% gap on how much that market can move and it protects the bank’s value on your home which they technically own with the mortgage on some home loans if you put less than 20% down you’re going to have to pay what’s called pmi private mortgage insurance every month you’re going to have to make an extra payment to guarantee
The bank that extra value in their property and the only way you can actually get rid of pmi is refinancing your mortgage so before you go through the process make sure that’s not part of your mortgage payment another great benefit for you for putting 20% down is it protect you when you want to go sell your home you want to make sure that when you sell your home
Whenever you decide to sell that if it’s in one year or five years that you’re not actually going to have to owe money to the bank when you go to sell it if the market moves and you have less equity in the home you might actually fit a to sell your home that 20% protects the bank and it actually also protects you well it’s very short you don’t have to put 20% down
To buy a house and depending on your situation there may be benefits to other programs but there’s a reason why there is sort of the 20% role and if you can do it it’s usually better to do it number five what can i do as a recent high school graduate heading to college in the fall to get ahead on my finances and not fall into debt thank you i feel like a proud
Mom with that question congratulations for even asking it i always tell clients the best way to get out of financial problems is to not get into them to begin with and if you’re looking at your student loans now that’s awesome look at how you can minimize taking them if you have to take out student loan debt look at taking out the minimal possible debt that you
Can also think about working other jobs while you’re in college to pay that down the debt while you’re in school when you’re in school your debt is actually on what’s called deferment so the student loan providers are not expecting you to pay it back when you pay it back you’re actually going to be accumulating less interest and lower your payments over time i
Just talked about in other videos i’m going to a community college and when i was doing that just coming out of high school i felt like a huge loser because like everyone else at that age like you look at the college brochures and see your friends coming on their college jersey and you’re like this is what i meant to do at this age and i was ready to sign away my
Wife on student loans to go to the schools that i wanted to go to and honestly looking back thank god my parents made me go to community college first because i would have been in i mean literally an enormous amount of debt if i was choosing a school that was literally $50,000 a year my parents were like hell no yeah thank god they said and it’s also important to
Remember that colleges are out there to make money so their job is to convince you that the next four years of your life are basically the only four years that matter and there’s no after to that story so people go into it feeling like oh this is the best choice i can make for the next four years and you don’t think about what it’s going to feel like every single
Day after that so if for you that means going to the big public school instead of the fancy private one that you have your eye on remember that four years of that like the increased joy is not worth spending literally thirty years of your life pain and depression literally depression we have so many clients who are living with tens of thousands of student loan
Debt just regretting it so that’s it for us here with shannon is a financial gin you can learn more about it financial gem calm and start working out your money the way you work out your body and as always thank you for watching and don’t forget to hit the subscribe button and to come back every tuesday for new and awesome videos bye this episode is brought to
You by squarespace which lets users create custom websites or online stores with its all-in-one platform if you’re looking to make your next move on a business idea or want to launch a creative project check out squarespace with award-winning templates and 24/7 customer support you’ll have everything you need to create a website build a portfolio design an online
Store and more whether you’re an aspiring entrepreneur musician artist or designer make your next move by visiting squarespace.com and use the code financial diet for 10% off your first order you
Transcribed from video
5 Tough Money Questions From TFD Viewers, Answered | The Financial Diet By The Financial Diet