Unknown Speaker 0:01

Welcome to the pocket change investments podcast with your host Basheer Abdul-Malik. The pocket change investments podcast reflects the opinions of our host Basheer Abdul-Malik and is for informational and entertainment purposes only listeners to the podcast should not interpret the shears opinions as a recommendation to buy or sell any security. And it is not an offer for a sale of a security. The pocket change podcast is also not a research report and is not meant to be used for any decision making processes.

Unknown Speaker 0:34

Good afternoon. Good evening. And Good morning. Welcome to the pocket change investments podcast. I’m your host Basheer and today, we’re going to talk about $500 emergency, we’re going to talk about what they are and how to deal with them. So a little bit of background that you may not know, this episode came about, because I actually experienced the $500 emergency. At the end of August, I was in the middle of recording an update to our apple stock series. And out of nowhere, turn my computer on the next morning and my video card in my computer burnt out.

I don’t even know what a video card is. But it burnt out, I took it to the guy, the guy said, I can’t fix it, you need to buy a new computer. And now for disclosure, this computer was a laptop that I had brought in 2010. So it had miles on it, it had its wear and tear, it had fully depreciated, yet I neglected to replace it. So when this computer went down, I did not have any replacement. And I was stuck with the options of buying a cheap computer or buying a good computer. And, you know, I’m mulled over, you know, my decision for a couple of weeks. And then it turned into a month and a half.

But I finally got up and running. I’ve got a new computer eventually. And the funny thing is that, you know, I actually had money, but it’s just I just didn’t want to pull the trigger on buying a new computer. Because as my luck goes, it seems like every time that things are going well, every time that I make a big purchase, I always have one of these $500 emergencies pop up. And for me, I’ve been traumatized by those $500 emergencies. I’ve been traumatized by, you know, needing money just after I spent it, which I’m pretty sure a lot of you can, you know relate to that, you know, as soon as you you know, spend that extra money.

As soon as you go buy something, as soon as you go enjoy yourself, that’s when you get hit with some type of bill or some type of expense. And that’s exactly what a $500 emergency is this just random, you know, things that happen in life when life happens. And for me, my number is $500 It seems like every thing that happens to me every time something goes wrong, and I hate to sound like I’m complaining, but

Unknown Speaker 3:17

I’m happy to they’re not $1,000 emergencies or $2,000 emergencies. But it seems like for me, every time something happens, it’s $500. So an example of this would be back in my days as a prep cook, you know, washing dishes, and I cut my finger and have to go to the emergency room to get the glass out of my finger and had to get stitches and x rays and things like that. And what do you know, when I got the bill $500 I’m glad that they got the glass off my finger. I’m glad none got stuck in there. And I’m really glad that I didn’t get an infection.

But that $500 was something at the time I could not afford it. You know, restaurant workers generally aren’t paid well. So another example of that would be when I finally started driving, and this was in my mid 20s, you know, started driving in, you know, everything’s going well in my life, everything’s great. And then all of a sudden, I get a flat tire and I take it to this tire shop and the guy he tells me like do you need a new tire and then he looks at the rest of my tire and say you really need for a new tire.

So I suggest you just go buy for right now, as he said you could buy one but you went up jammed up later. So what do you know, I go to the store and drive in the truck. What do you know the tires cost about $125 each after taxes and installation and all of that. So that’s about another $500 emergency. They always seem to happen when you know I’m waiting for my next paycheck and that’s one of the downsides of living check to check paycheck to paycheck is that you You know, these $500 emergencies can really derail your finances.

And they can not only set you back, I mean, they can really, you know, cause stress or lead to financial ruin, because you get into a habit or you get into a cycle of borrowing, or you just is impossible to catch up when every time you turn around, you’re owing or paying $500 for something in Sydney and college where you know how my tuition paid. And then I get my syllabi, and I see that, oh, man, I need a calculator from a math class I need to books and you know, next thing I know, $500 is spent or you know, they’re expecting me to spend $500 for that.

And that’s just something that troubles A lot of us. And I really don’t care how rich or poor you are, I mean, everybody has a number, where if they spend, it will set them back. However, for me, like I said, it’s $500. And even if I had the $500, I would rather spend that on, you know, something that I like, something that I will enjoy, rather than paying a bill or, you know, paying the doctors right handed that money away. Because if I had $500 extra my account best believed that I would like to have fun and enjoy that money.

So that’s the concept of a $500 emergency, I hate to drone on and beat you over the head with that. But that got me started with this episode. And so I started doing research. And one of the first articles that I came across was an article from the Atlantic, it’s the secret shame of middle class Americans. And in that article, the author states that he was surprised at how many people have these and his number was 400 knees or $400 emergencies are these emergencies that really set them back. And

Unknown Speaker 6:55

it all just came from the Federal Reserve survey, the Federal Reserve Board since 2013. They do a survey and they just try and conclude, you know, how the American consumer is doing, they try and figure out and a lot of this stuff may seem like it’s obvious, but without actually doing the homework or doing the research. It’s just an educated guess I can you know, honestly say that, pretty sure most Americans don’t have $500.

But until I actually go out and do the survey and get the results, there’s no way for me to actually conclusively come to that conclusion. But the Federal Reserve has been since 2013. They do a survey and they ask people things like Americans, things like do you expect to earn a higher income in the next year? Or if you’re a homeowner and you own your home for over one year?

Do you believe that your house has increased in value? They also ask, how would you pay for $400 emergency, the results are kind of depressing. But there’s a ton of bright side or bright lighting to that is that 47% of Americans said that they would either cover the expense by borrowing money or selling something. And when you say borrowing money that also includes using a credit card or you know, asking your mom, dad, sister, brother best friend, or selling something, you know, pawn shops exist.

Funny story when I was a little less economically stable in my teenage years, this is back in the x box and three Xbox days. I one day my little brother came into my apartment. And he as he said, why you got all these Xbox is, you know, and that and you know, I just say hey, you know, just in case one break, but the truth of the matter is that, you know, I realized that, you know, and the pitch, I could sell an Xbox. So when I got a little bit of money out by two xboxes. And guess what, if I will go broke, I will sell one Xbox and I still have one to play. But yeah, it was a struggle. Like I said, I always been, I ain’t always been where I am today.

But I’m happy that I’m here today. Most Americans or you know, almost most Americans 47% of Americans are living check the check and don’t know how they would produce $400 for this emergency if it pops up. And the results, like you said was shocking. And one of the reasons why it’s shocking is because our economists really have it hasn’t really tracked this type of data, and ever and it’s like a brand new field of economics. I mean, it’s not brand new, but just to get into the weeds and to really drill down on exactly how the consumer is doing. They haven’t really did that in the past.

So the first time they did this study, they said since 2013, and obviously that’s coming out of the The Great Recession. And the great recession was an eye opener because after the Great Recession, economists were really interested in, you know, what’s going on with the consumer. From that data, they found out that even though the economy may be doing well, and even though jobs may be, no, this is maybe doing well, employment numbers may be high that Americans still tend to be financially vulnerable, because most of us are either in debt or live in check the check.

And it’s just really mind blowing, because people don’t talk about their finances in that way. And that, that goes back to the intro, you know, nobody likes to talk about the dollars and cents of their money. You know, when we get paid, or when we are broke, we say I got paid, I got broke, it’s not too many people who I would tell how much money I am in debt to how much my I get paid. You know, we guard that type of information. And

Unknown Speaker 11:06

as a society, it hurts us. Because we think that we’re the only ones that are struggling with these things, we assume that we are personally bad with money, but in all actuality, I mean, it’s a lot of people who are struggling, struggling. And from our homes. From our perspective, we don’t even realize that, you know, it’s the majority of the society. So it’s the societal problems, most people are dealing with these money shortages and these emergencies, they can bankrupt them.

And that’s very important to remember, because these aren’t people who are making peanuts, these are little minimum wage workers. These are people who are making, from my opinion, a decent salary, because like I said, I haven’t always been where I am, I am not in the middle class. And I’m not ashamed of it. Because I might not make $148,000 a year. However, the real stat that you need to pay attention to is not your tax bracket, you need to pay attention to how much you make a year versus how much you spend a year.

So if you are constantly bringing in $20 but you’re constantly spending $25 that just that $5 you know that is that that’s going into debt that’s going to create a cycle where you know, by the end of the year, you are in debt more than just that $5 per week is is tax because you got entrusted is that is the opposite. I mean, when you think about interest in compounding, most people like to think about, you know, gaining money, but and debt will snowball when you get on top of you quicker you will ever really consider it. If you don’t believe me just also money to the IRS, you’ll see how they put on those penalties or anything, and it’ll get away from the IRS. No.

You can’t get away from the IRS. They are a super creditor. But anyway, so in this Atlantic article, it just goes on to say that they just were really shot at, you know, the financial and they use words like financial impotence, financial fragility, financially insecure, financially distress, and basically they just talking about how, you know, a sizable minority or a slim majority of Americans are basically just on thin ice. And, you know, another example is this when bankrate did a survey in 2014, and this is a little bit dated, but in 2014, you know, it just echoes the same fed data that they found it 38% of Americans would cover a $1,000 emergency room visit or a $500 car repair.

They wouldn’t do my essay, they said there are two reports published by the Pew Charitable Trust, found that 55% of American households didn’t have enough liquid savings to replace a month worth of lost income. So if you lose your job today, will you be able to at least cover the bills for a month because if you know like I know, unemployment even before in in great times, and good times, it could take a two weeks to a month for you to get your first check.

And then that first check doesn’t want to be like, you know, your regular paycheck is so we’ve seen this in 2008. during the financial crisis, we seen this in you know, early 2000s when the mortgage crisis banking crisis, whatever you want to call it. We’ve seen that happen. And then we seen that happen again with this recent recession that we were in that you just can’t expect for your unemployment benefits to kick in the moment you lose your job. I mean, it’s a blessing if it does, but

Unknown Speaker 14:59

you A lot of times they get swamped during these economic events and are just in normal times, you can’t depend on it, you don’t want to depend on it. So we want to stay away from that. And one of the easiest ways to get away from that is just, you know, living within your means.

And I don’t want to say like, it’s easy, but a $500 emergency, it’s exactly what it sounds like, you know, textbooks, emergency room, visit new tires, computer for job, work, unexpected bill, or even vacation, you got to make it, you know, save the whole year for your vacation, and then you go out of town or you go out of the country, and, you know, what, what’s your urge to do? Your urges that immediately throw everything on a credit card, or either, you know, empty out your your savings account, and then we get back home, you’re trying to figure out, what do you want to do for money, that’s not the best situation to be in.

So with that being said, you know, just we just tried to avoid these $500 emergencies. And, you know, we don’t want to be a part of that 70% of Americans who have less than $1,000 in their account, and that’s a reference from statistical where, you know, they did the survey, and it’s just shocking to see, I mean, most Americans have literally under like, even get beyond 70%, when you start talking about who has, you know, $5,000 in their bank account, and then you start getting into about the 20% of Americans who can actually, yeah, about 20% of Americans who, you know, have more than 5%. And there are $5,000 in their account. So, you know, we try, we want to try and start saving, and we’ll give you some strategies, real quick on how to work on that, and how to better your financial situation.

And I know, we can’t stop these $500 emergencies from happening, but we can definitely manage toll they take on us financially, and, you know, just increase our reserves over time, so that when one of those $500 emergencies hit, that we either have money in our savings, or that we have our debt paid off, so that we can just throw it on our credit card. And I’m not a big fan of telling people to, you know, charge things to their credit card, you know, the old saying is keep your credit card, balance low. It’ll help your credit score, but it’ll also be good to use your credit card in emergencies. And I didn’t have emergencies where I didn’t have any room left on my credit card to put it on.

So I had to use extra cash. And most of the time, it’s better to use cash. But you know, sometimes, if you have low debt, it’s better to keep your money in your savings account and just use that credit card. But and pay to make sure you pay it off over time. Because I know if I got have a $500 emergency and I have a low credit card balance and a low interest rate is thrown on a car because I can’t pay my student loan with a credit card, I can’t pay my mortgage with a credit card.

So even though I have that $500 that $1,000 in my bank account, if I did, I would still have to take the paid in cash. Because one, I can pay it off installments on my credit card and I can build a positive credit history, but to is because you want to keep cash reserve in your savings account as much as possible. And like I said, pay that debt off that you owe the credit card company. That’s the most important thing if you want to put it on a credit card company, but you don’t want to be out here, not having any money. Or you know, not being able to pay your rent, because you had an emergency room visit.

If you are living check the check. And even if you’re not, sometimes it’s better just to keep money in your account. And you know, pay off the credit card to build that positive payment history that that’s the one thing about credit cards, they get you both ways. If you use a yo money, if you don’t use it, you’re not building credit. So use those credit cards sparingly. Use them strategically keep money in your savings or your checking account. So you can always have something to fall back on and keep a low balance on your credit card.

Unknown Speaker 19:15

Another interesting Washington Post, doing my research, I found that Americans who can actually afford to hoard cash are waiting for a better thing to spend. So you got two dynamics going here. And that really shows like where the economy is going because when you look at the economy as a whole, we like to say Oh, the economy is doing great and nobody really knows what that mean unless you’re an economist but I don’t care what is going on with the employment rate.

I don’t care what’s going on with job jobs and other people saying that you know when I need money when I am suffering when I have problems, mee mee mee mee I know I hate to sound like that, but you know When it hits home, I don’t care what’s going on with the Academy, I want to make sure that I have money. So you got two dynamics going on right here, the stock market can be up, everybody could have jobs, but you’re still living in check the checks. So these $500 mercies, they hit you and you’re not willing to or able to pay them immediately and you end up jammed up and, you know, end up in a debt cycle. So we like to stay away from that.

But also, when we get above the median income honors of the people who are middle class, when we get beyond that, it said that, even if people can’t afford, they aren’t spending money. So that’s just something to keep in mind that even the people who have money, you know, they we don’t, we’re not trying to spend it because we’ve never been through COVID before. I mean, we read about the black plague and all these other robotic plagues, and Ebola and all of these things, but we’re not used to dealing with that right now.

So people who actually have cash and can afford to save it, and don’t have any immediate use for their money. They’re waiting to save their I mean, so that’s really hits on the saving rate. So I encourage everybody, especially right now to say keep money on hand, keep your debt low. And I personally, for myself, I prioritize saving over paying off debt. And you know, I do both, but there was a time where I would do to 5050 50% goes to my debt 50% goes to my savings.

Right now that dynamic has changed right now I prioritize keeping money in my pocket. And you know, I’m more inclined to make something closer to the minimum payment than, you know, try and pay all my credit cards off or, or any debt off right now. Because, you know, we don’t know what’s going to happen in the next couple of months. So keep cash on hand, but still find ways to pay off your debt. You know, you got to chip away, you know, it’s important note that CNBC, they had an article and and their article they ask, and this is another bank rate survey, but they said, Yeah, so Americans, how would they pay for their emergencies?

And this was $1,000 emergency, you know, and 41% of people said, they will do it from there, save in 16% said that, they will find I said what a credit card 14% said they will borrow it. Couple people said they reduce spending on other things, and I am a big fan of reducing money on other things, I don’t want to have to be in that bracket where I have to ask somebody for money. And I want to be in that bracket where I have to take out a personal loan.

So there have been times where I was in debt or if I had an emergency or if I just couldn’t afford things, you know, I call the cable company I call I look at all the subscriptions that I have, and I’ll cut them, I look at my grocery bills and I’ll cut that expense and I live like a Buddhist monk. I’m not a stoic or pious or anything like that, but I just really hate being in debt. And like I said, I’d prioritize you know, at this point in my life, I prioritize and have cash on hand and available I also prioritize having a mobile credit for when needed.

So those may sound like conflicting interests but basically I try and pay for everything that I can pay for right now in cash. And I try not to use my credit card so if I have this choice between swiping my credit card, or going without something I will make sure to have my bills paid on time. And I would just go without you know something that’s frivolous or something that can be cut, you know, Netflix or you know, my Amazon account or something.

Unknown Speaker 23:58

My Adobe subscription, I will find a way I will find a way to lower my car insurance. I am the king of you know reducing spending on other things I will sit at home I have no problem being at home. things that don’t work and my nieces This is my opinion right now. And it’s it’s partially research base. But I think that it’s important just to know that a lot of people think that getting a second job is key to financial success, but I’m here to tell you that I’ve done it I’ve worked two jobs for most of my adult life. And that’s not very long.

But the one thing that did realize firsthand experience from that one is that it takes forever for you to get your first check when you’re working at a job because they have to add you well first of all you got to get interviewed and hired and all of that but but Tommy do all that you still got to work a week or two weeks before you get your first check. Then what happens, you get your check, and it’s text and you run into you, they put you in a higher tax bracket.

So you pay more money out in taxes, you’re actually spending more time away from home. So you’re probably eating eating out more, or you’re probably just eating more, you have a second job, you were doing more traveling, because we have to go between job to job. And I mean, the extra income is good, but you will end up running yourself ragged. And it’s not the same as having one job because just the taxes will eat you alive. And all of the expenses, you know, gas money, or whatever it is, you carfare you increase your bills.

So it’s kind of diminishing returns of getting a second job and bringing in more money, because a lot of times that extra money doesn’t help you and then you end up in a situation where you have all the money in the world. And you don’t have any time. So no, what’s the point of having a cable subscription when you’re never home? I’ve been in that situation. Using debt borrowing money, you don’t want to use debt or borrowing money that does not work in a $500 emergency situation.

It’ll get you out your trouble. But the worst thing in the world the worst feeling in the world is borrowing money from someone or using your credit card. And then as soon as you get paid, you got to pay it back. Your Money is even yours, you already spent the money before you even received it. So I try to stay away from using that credit cards or loans or even borrowing money selling things up. Earlier, I told you the story about all the xboxes I had in my apartment, I’m not a good habit, it’s not a good look. I mean, you look like you’re a

Unknown Speaker 26:45

pawn shops and all of that that’s not really good place to be. And the PlayStation was about to come out Xbox 360 I’m sorry, Xbox. Elmo struck an Xbox number. But you know, these new systems are about to come out, they’re gonna be $500 each, I’m kind of tempted to buy one and you know, just hold on to it for collateral, I guess.

But that’s not a good deal. You don’t want to have to rely on selling things. I mean, the problem of selling thing is that you generally never get the price that you pay for, for it for retail, because you’re selling us things anytime you sell us, us and let us know in the box. But then you have to go through the hassle of you know, it actually becomes a job of trying to sell things and getting getting your money back on the right price. So I suggest the guest, you know, having selling things be your go to thing.

neglecting to pay bills or paying bills late spoken at earlier with the IRS, I owe the IRS before it’s not fun, he sent you all types of threatening letters. And as a super creditor, they can garnish your wages, they will take the money out of your account before you get it. And you still and you still owe them taxes for the next year. And so don’t take them out your check to so you don’t want to know why reaching in your account before you can overdrafting your account over deputy account is never a good strategy.

Or, you know, even coming close to a point in your account where you might overdraft your account because personally, I have about five bank accounts, most of them are you know, pretty much empty. So I mean, I’m not rich, but, um, that was this is a process of over the years, you know, not closing accounts, and you know, then relocating and you know, you always want to have a bank close to you, but overdraft me accounts I have lots of experience was that 2019, I actually had to look that up was the first year that I did not overdraft my account. And that was a huge financial milestone for me. And I pride myself in being good with finances and being fastidious.

But I have to warn you, and this is the reason why a lot of people don’t trust banks, because you have to be careful when dealing with banks, because they will get you with the smallest of the small print and your banking agreement that they send out every year. And they change the terms some of them don’t. And this is not a fault of the bank. But you know, I’ve had situations where I’ve came close to overdraft in my account. And then the bank hit me with a fee and a bank calls me to overdraft my account because my account was under a certain limit or somebody decided to take something out of my account, willy nilly a subscription is something like that.

So I really, really want you to stay away from overdrafting your accounts because that $35 will add up and then some some banks, they’ll hit you with multiple overdraft fees if things are taken out of your account. And another thing that a lot of people I’ve heard complain about and I’ve experienced myself where you go around swiping your card, and you’re hoping that you know overdraft your account and then you go look at your bank statement and you see that overdraft and you’re not too disappointed about the overdraft, because you know, you’re being risky at the time.

But then when you look at your bank account, you see that, you know, wait a minute, this is not the order that I spent this money. And so you know, some banks, they have a different priority of charge and account, some banks will charge or process the higher amount of charges first. So, if you have a fee for $35, and one for $2, some banks will charge at $35.

First in the morning, before they charge $2 or debt, you try to $2 first, second. And third. And I don’t know it’s just really, really weird. I’ve seen some really, really tricky, really, really sketchy banking maneuvers that have ended up in two overdraft. And instead of overdraft in my account by, you know, one or $2 I’ve been overdraft and had multiple overdraft fees. And so I just got to really know your banks as they look over your banking data.

Unknown Speaker 30:58

One thing I suggest that if you have a bank account, I really suggest you get multiple checking accounts, and multiple themes accounts. So you obviously go to two banks get two free checking and savings accounts to free checking and savings accounts. So when you get your paycheck, you can automatically have whatever your bills are deposited to one account, and then you have all your free play money, go to your other account. And that’s how I overcame overdraft charges.

And I was like getting hit up with overdraft charges back to back because I only had one bank and they hit you with fees. I had problems, you know, withdrawing money from you know, the he would withdraw limits and all types of stuff, when you mess with banks, I would say the best thing to do is you know, have your money automatically saved, and have your money automatically even split up into your account.

So you don’t have to be like Kevin Hart, moving money from account to account and all of that I’ve been there too. So when I get my paycheck, you know when I go to my job, and I fill out my direct deposit form. And I got, for example $100, electric bill $100, water bill $100 cable bill, and I got that $300 forwarded to that account, maybe 350. Just in case, you know my electric bill 111 week, and then everything else goes to my account where I know I can spend anything in that account. And that helps me a lot.

So I would recommend, you know having more than one bank and use a real bank bill, those prepaid debit cards, all those fake banks, cash app and all that they’re good, it’s good to have. But nothing beats a real bank, especially if it’s a free checking or free savings account, nothing beats that. And most recently, my favorite example of a banking account has turned out to be actually discovered they have a banking account with a high interest checking account. And they have the high interest savings, and they also give you cash back on all the money spent.

So that’s another way I got rid of all of my credit card that because I stopped using my credit cards for one back to using debt and borrowing money I stopped that I stopped using my credit card that’s already using my cashback debit card, and it feels just as good to get money back from my debit card cashback from my debit card, then it as it feels from getting the cash back from my credit card. So I would advise you to check that out. I’m not sure if anybody else had that. But um, no Capital One has a really good online banking account.

And that’s another reason for you to keep to accounts because you can have online banking account with the high interest rates because they’re saving all this money from me in the strictly online bank, and then support your local banks, I highly encourage you to support your local banks. There’s nothing like actually being able to go into a bank if you have a problem with any of your accounts and cash a check withdraw money or write a check to yourself, do whatever you have to do. There’s nothing like supporting a small local bank. So I encourage you to support small local bank but just any local bank, any bank, keep a real bank.

And I also encourage you to keep an online bank because although rates are ridiculously stupidly low, some of them have perks. Some of the online banks have perks like discover and I do not endorse them because I’m getting paid. I just thought that I’ll throw that out there because I use it. And I trust discover I trust discover and Capital One, mostly because I have credit cards from them, so I know they’re legit, and it really saves me a lot of hassle when I’m Trying to pay my credit card bill or something like that?

Because I can just transfer it that way, what should you do open a real bank account, I would say keep to use direct deposit up. And while you’re using direct deposit, put your savings account on there and automatically say, you know, $25 a month or something like that, that’s always handy. reduce your cost of living, you don’t have to be a Buddhist monk, you don’t have to be stoic. You don’t have to, you know, go to the extremes. But if you can just cut

Unknown Speaker 35:31

out some of your expenses for one to maybe six months, that can save you a whole lot of money and hope you get caught up, you know, I’m saying make a budget, find out how much electric UK will your cell phone bill, some of these bills are predictable, you get the same thing every month. And you know, some of those are really predictable. And it really hopes to you to figure out where you are and how much money can you spend, especially if you automatically get your job to direct deposit the money, your bill money into one account and you play money into another account.

Stop borrowing money, borrowing money is probably the worst thing you can do to yourself, because you ended up paying that and that’s my paying interest or you end up having to pay it back. And you don’t get to enjoy your new money because you’re spending your new money on things that you’ve already consumed or money that you’ve already spent. So don’t borrow money. And if you don’t borrow money, you won’t have that the pay off. So that’s my second one, pay off your debt. And then my last but not least, actually save money. And that sounds like a no brainer.

But a lot of people when you say save money, and when we say save money, we don’t know what it means. And you know, we put it up, put it away we in save money. A lot of people think save money means not to spend it. Just because you’re not spending money doesn’t mean you’re saving it. And one of the best examples of this is shopping. Only in America can you go broke, while saving money, you can go to the mall, and you can save money all day and still come home broke.

Because in order to save money, you have to not only not spend it, but you actually have to save it, you actually have to put it somewhere you actually have to not touch it. So I was like actually save money, start a savings account and have to separate from all your other savings account. And this will be your no touch saving Council. Yes, multiple savings account. That’s what I’m getting at. It’s always good to have a savings account. But you know, touch savings account.

I can’t tell you how many times that having a no touch savings account has saved my life. And I haven’t not by touching it. But just having that security knowing that even if I’m flat out broken normal accounts, I’m down to my last $5 you know, nothing but lunch, meaning a refrigerator, I know that I have a no touch savings account money stress, that’s what I’m getting at. Just knowing that you have some money even though you know you’re not going to spend it. That reduces money, stress and money.

Stress is the worst stress in the world. It’s a relationship killer. A lot of people say that money you know, ruins family relationships or ruins no romantic relationships. But But no, it’s really just the stress caused by it. Because when you’re broke, you’re irritated, you’re you’re ready to snap ready to go up and money stress, it weighs on you. And your it causes you to think being poor is not easy. Not having money is not easy. And it’s actually very expensive to be poor.

But when you’re having money stress, you feel poor. When you’re in debt, you feel poor. So I say actually save money and keep some money that you just don’t touch or anything because who knows, you might actually need to touch it. And you will rather have that $1,000 or $2,000 and you know, touch account and you don’t want to be like those individuals who don’t know where they will come up with, you know, $2,000 if they needed it within 30 days.

And I mean it sounds silly, but you know, if I gave you 30 days to come up with $2,000 could you do it? That’s that’s how you have to think I mean, we’re we’re adults, we make money. I mean, if you make $15,000 a year, I know it’s gonna be tight. It’s just really, really hard to look at your end of year. You know how much money you pay stub and see you will see on the pace of Oh, I made this much money per year and I’ll have nothing to show for and that’s

Unknown Speaker 39:50

what we want to end we want to end that cycle of you know, just having the money run through our hands run through our accounts as best as we can gain it because like I said, it doesn’t matter if You’re a millionaire, if you spend $2 million a year, you will always be broke, you have to spend less than you make.

And hopefully, while you’re not spending the money, you’re saving it. And then after you save, and you get to the place where you can invest, and then after you get to the point where you can invest, maybe you start looking at some type of insurance or something like that, or do it either way around. But the most important thing is just make sure you have cash on hand.

So that’s why I always start with saving because if you don’t have cash on your hands, you’re more likely to go into debt, you’re more likely to get into financial trouble, you’re more likely to have financial stress, and it’s just not a good way to live. So thank you for listening. If you have any questions or comments, reach out to us on our Facebook group. We’re on Facebook, Twitter, Instagram. We are everywhere you need to be soon to be on every podcast station. Thank you and have a great day.

Unknown Speaker 41:03

Subscribe to the pocket change investment podcast on Apple podcasts, Spotify, or wherever you get your podcasts follow Bashir and pocket change investments at his website, www dot pocket change dot investments and on Facebook and Twitter.