Speaker 1: You need a twelve month emergency fund. And if you
have all of that stuff in place and you don't
have credit card debt, then you start to figure out
what you can actually afford to spend your money on.
But you've got to put the household budget into place.
We need to run our households like small businesses easily. Easily,
you know, twenty five fifty, maybe one hundred transactions every
single week. Again, if you have children, it could be
much much higher than that.
Speaker 2: You're listening to Carrie Let'sa's Financial Survival Network where you
get valuable information. You just can't find anywhere else to
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Speaker 3: Ed Welcome.
Speaker 4: You aren't listening to the Financial Survival Network. I'm your host,
Kerry Let's Hey, it's only December third. We're just getting
into the season. You know, it's the season to be
buying fa la la la la. Deck the halls with advertising,
and you've got to protect yourself because they're biohacking you.
You don't even know they're doing it, but they're doing
it things like buy now, pay later and all that
good stuff. And our good friend Paul Ausker is with
us now from better Qualified dot com. You got a
question for myself or fall, please shoot me an email
k el at kerry Let's dot com. Paul, welcome back.
So is the season to be buying and going in
deeper into debt? And now that the election's over, at
least some portion of the population seems to be very
happy about it. And what can we expect here?
Speaker 1: Well, unfortunately, I think we're going to expect, you know,
the same thing that happened last year, that a lot
of consumers are going to wake up with a hangover
in January. And it's not going to be from you know,
the Christmas punch. It's going to be from putting more
money on their credit cards, increasing their credit card balances.
You know, it's almost like this, you know, cyclical every year,
people in a crisis or in a crisis mode at
this point in time, and they just fall back and
again lean on credit cards. They lean on you know.
Now you have this buy now, pay later option which
seems almost too good to be true, and it is
right they make it seamless, you get approved instantly. But
the problem is, you know, just like when they had
first introduced credit cards, where you get asked, you know,
if you want to get a discount on your purchases today,
all you have to do is apply for a point
of sale credit card. And these are marketing geniuses, So
what they know are two things. A, You're going to
spend more money than you normally would if you open
that card or you do something through buy now, Pay later,
And B you're ultimately going to carry a balance and
you're paying you know, interest rates probably above twenty percent
at this point. So whatever discounts that you get, whatever
you know, uh, motivation that you had when you when
you open the card or you use to buy now,
pay later program, it just quickly gets eaten up and
washed away and consumers are left, you know, holding the
bag or holding the gift, so to speak. Look, there
are some consumers carry that still have debt on their
credit cards from last holiday season, and this is not
an uncommon, you know situation. You I'm sure you've seen.
Credit card debt is growing and raising at a rate
that we've never seen before. So it's a very very
scary situation.
Speaker 3: Credit cards going like government.
Speaker 4: Debts going up, and it's unsustainable and really like on
a macro level, it's unsustainable. On a micro level, you
can do things to deal with your consumer debt and
make it go away.
Speaker 3: Right.
Speaker 1: Well, yeah, so the first thing is that when people
are coming into this holiday season and look, we're already
in it. We we all. You know, cost Go had
had Christmas stuff up I think around Halloween, right, so
this elongate.
Speaker 3: I thought it was Labor Day. This year they Christmas.
Speaker 1: Yeah, so it's it's certainly an extended you know, buying season,
and that only leads to consumers again spending more money.
I spoke the other day. Uh, I was on the
news and they were asking me about Cyber Monday. But
Cyber Monday Day is now Cyber Monday, Tuesday, Wednesday, Thursday.
Look at Black Friday, they don't really call it Black Friday.
It's now Black Friday week, right, So Amazon and all
the online giants, it's not just one day anymore. It's
an entire week to entice people to spend money that
they don't have. And again, the average consumer, they don't understand,
you know, credit cards are the gift that keep on taking,
not keep on giving. So you know, we have to
have a budget. How much money can you actually afford
to spend on gifts this holiday season? And that answer
maybe zero. If you have any credit card debt on
your credit cards right now. This might be the year
that you make something or bake something. And this is
something else that I've been stressing. If you give somebody
a personalized gift, if it costs you five dollars, you know,
maybe their favorite thing, isanut, butter, or chocolate. If you
give that person a really personable, customized gift, they will
remember that you made them feel good. Think about the
gifts that you got last year. You might not be
able to remember anything that you actually got or who
gave it to you. So we really have to take
a step back and be disciplined this year. Again, I've
heard this coming into this season, Paul. We've been down
this road before and we always seem to, you know,
pull ourselves out of it. But this is a very
very different road. There are more twists and turns. We're
traveling at warp speed, and there are just that many
more potholes you know that we're going to hit along
the way. So it's up to us as individuals figure
out the number. If the number zero, well then start
making cards, start doing things to help people, and figure
it out that way. If the number is two hundred, okay,
now how many people are on you know, your good list?
And divide that number up. If you've divided equally, it's
easy if you have to, you know, give a couple
of people a little bit more than just do it
that way. But if you go in and you just
have a number of people in your head names and
you're going to pick out the gifts online or when
you get to the store, that is just simply not
the way.
Speaker 3: To do it. Yeah.
Speaker 4: Yeah, So the budget thing, when you have somebody come
in and you know what's going on with them, how
do you help somebody create a budget who's never had
one in their lives.
Speaker 1: It's actually really simple. It's much easier said than done.
But look, this is not complicated. I'm not saying it's easy,
but it's not complicated. You have to figure out basically,
we're all on a fixed income. If your income varies,
take the last twenty four months and you know, divide
it up by twenty four and that'll be your monthly income.
And then you have to figure out your expenses, and
I mean all of your expenses. You and I had
one of the last shows recently that we talked about
we've become this nation of subscriptions, and the average household
is now over two hundred dollars a month in subscriptions Netflix, Spotify, Hulu, Roadblocks, Xbox,
PS three. It just goes on and on and on. Then,
if you have a couple of kids, you're easily over
two hundred bucks a month in subscriptions. So figure out
how to cancel your subscriptions. Again, you and I spoke
about it. You don't need a company, You don't need
to pay a subscription to a company to figure out
how many subscriptions you actually have. Do it on your own.
Go through your credit card statements and your bank statements
and figure out what you're spending your money on every
single month. And then it's just a it's a numbers game.
This is how much money I take home. It's not
gross pay, it's net after taxes. This is how much
income and revenue is coming into my household. These are
our expenses. Are you putting money into a retirement plan?
Do you have we used to say a six month
emergency fund. We all now know that's not enough time.
You need a twelve month emergency fund. And if you
have all of that stuff in place and you don't
have credit card debt, then you start to figure out
what you can actually afford to spend your money on.
But you've got to put the household budget into place.
We need to run our households like small businesses easily easily,
you know, twenty five fifty maybe one hundred transactions every
single week. Again, if you have children, it could be
much much higher than that. Who is the CFO of
your household? Who's watching the numbers to make sure you
can't figure out after you know everyone has spent the money.
Oh dad, by the way, Uh, you know I needed
new tires. Oh, by the way, we had to do this,
by the way, we and then at the end of
the month we're like, wait a second, we went way
way over our budget. So someone has to be watching
this and monitoring it almost on a daily basis for sure. Again, unfortunately,
spend more. Most people spend more time on social media
and doing all the things that you know aren't going
to help them. So you got to help yourself.
Speaker 3: Yeah, yeah, I love it.
Speaker 4: And it's too common sense, right, and but common sense
is in very scarce supply these days, isn't it.
Speaker 1: Common sense always isn't always common So and look when
we talk about budgets too, Carrie, I now say you
need you need two budgets because one is the money,
the other one is time. The amount of people right
now consumer are spending an average of six hours a
week shopping online, and that number goes way up during
the holiday season. Six hours of our lives every single
week are spent shopping online. That's crazy. So you have
to budget your money and you have to budget your time.
Do not go down these you know, rabbit holes looking
you know, what's the next best thing, what's the latest
and greatest, what's the shiniest thing? Oh, look over here,
look over there. You can get pinged back and forth,
you know again, for hours and hours and hours looking
for a gift or something for yourself. Look, if you
need something, you find it within minutes. If you're just
browsing and looking and hoping that something pops up again,
you could be hours into that exercise. And by the way,
you know, probably wasting your hard earned money when you
actually click you know.
Speaker 3: Now, Yeah, so true, Wow, so true.
Speaker 4: The case of the out of preventions with the with
the bankruptcy filing.
Speaker 1: Right, and again, I always talk about consumers. You know,
credit card debt is really really hurting us five thousand
dollars if you only and right now, the average person
is over six thousand dollars in credit card debt. If
you have five thousand dollars in credit card debts and
you only pay the minimum payment towards that credit card,
it'll take you almost thirty years. That is not an exaggeration.
It's going to take you about thirty years to pay
it off, and it's going to wind up costing you
over twenty thousand dollars. Think about that. Those are those
are real numbers. That's real time. So the problem is
it's become painless. Apple pay, I mean I think there's
I think it's already available.
Speaker 3: Now.
Speaker 1: You can pay with scanning the palm of your hand,
your fingerprints, clicks of a button.
Speaker 3: You know.
Speaker 4: Again, I want to pay by sitting in their faces.
Can we do that?
Speaker 1: Yeah? Well, but then you're going to have to pay
a lawyer and you have to post bail. So you
got to be careful, got to be really really careful.
Speaker 4: But yeah, like you go to Whole Food and you
can so you can pay biometrically. I refuse to do that.
It's like I can take out my iPhone and scan
it or my watch.
Speaker 3: I don't need to be doing that.
Speaker 4: But you know, one serious note, like there is a
watch dog out there that does perfect you as a consumer.
Speaker 3: And we could.
Speaker 4: Debate how effective they've been since their formation in two
thousand and eight. It was Liz Warren's little brainchild called
the Consumer Financial Protection Bureau and spent a lot of
the existence mired and litigation. They have done some things,
arguably to help consumers. A lot of what they've done
is completely useless. What's you know, the incoming and men
want to kind.
Speaker 3: Of do away with this organization.
Speaker 4: They say it's torments and torture banks.
Speaker 3: What's you're feeling about it?
Speaker 1: Well, you know, I think it's like everything right. They
you just mentioned that they have done some good things.
One of the things, because we're you know, very very
involved in the real estate industry, they're going after data
brokers who literally have access, unbeknownst to us, to our
most sensitive non public information, our names, our addresses, dates
of birth, so security numbers. Those things get sold. Are
our annual household incomes? All of this stuff, how many
bank accounts we have, Do we have a checkings or
savings account? All that information is sold to other marketing
companies without our knowledge. And we just had one of
the biggest data breaches in history. And again I think
you and I I spoke about it. It almost got
no fanfare. It wasn't picked up. It wasn't people weren't
screaming from the tops of their lungs that some third
party data broker who should never have had access to
over two hundred million files again with all of that
very sensitive, sensitive data, and they failed to change the
password on their website. They used the default password when
they when they accepted that file and access, you know,
to that to that information, didn't change the password. I mean,
it was like the cyber security criminals must have been like,
this is this is crazy.
Speaker 3: They must have.
Speaker 1: Thought it was like clickbait or something like, there's no
way they didn't change the password. But it came up.
You know, when they run their scans, there's an actual
software that will tell you this person didn't change the
default password, there's still using the same password that was
given to them when they open the account, and it
just makes it very very simple for people to gain access.
So the CFPP is going after data brokers, specifically within
the real estate industry. When you apply for a mortgage,
when you fill out an application, when someone pulls your credit,
it's called the trigger lead. That information then gets sold
to other banks and companies without your permission. So that's
one of the good things they've done. But unfortunately, like
you said, what we've talked about, they also impose a
tremendous and maybe a ridiculous amount of restrictions and you know,
they put all of these you know, things in place,
and it really hinders our ability and the bank's ability
to lend money for people to start new businesses. So
I think the organization has to be cleaned up. I
think they're a ridge. You know, maybe the original intent
we've lost. They've lost their way, right, So they got
to go back to protecting the consumers from the bad guys,
the real bad guys, and you know, not be involved
in every single you know, in corporate America the way
that they have been.
Speaker 4: Yeah, agreed, agreed, you know, the overreach, and you know
they're they're very existent from the get go.
Speaker 3: Is really in question.
Speaker 4: It comes from attacks on federal institutions that never even gets.
Speaker 3: Allocated by Congress.
Speaker 4: And you know, the Supreme Court partially partially turned them
down that they weren't constitutional. But if they picked that,
and you know, like one of the things I am
from the government, I'm here.
Speaker 1: To help you, Paul, Yeah, with smoking mirrors and one
hand out this side and taking the money you know,
directly or indirectly out of your pockets with the other hand, so.
Speaker 4: Rain in these credit card rates which are absolutely outrageous.
And because that I can get twenty plus percent interest,
they won't make loans businesses, you know, they allocate their
funds toorts, computers towards consumers rather and that's really the
worst thing for the economy, isn't it.
Speaker 3: It is?
Speaker 1: And look, I've now been saying this when I've really
started to step back and take a look how that
industry has been behaving and the fees and the amount
of money that they've been making, and they just keep
pushing the envelope right, And when you think about it,
they're doing that because there is about to be a dramatic,
you know, change in the way that we pay for things.
You have companies like Plaid and Stripe and Haypal and
zell and it's going to be bank to bank without
paying the middleman. And the middleman are are you know,
the big big credit card companies Visa, MasterCard, Amex, Why
do I need Why do I need to pay them?
You know, especially debit cards, debit cards that are credit cards.
You know the merchant has to pay a transaction fee.
Why that money is coming directly out of my checking account. So, uh,
there's going to be very, very sooner than later, a
dramatic shift in the way that we pay for goods
and services, and the credit card companies might become extinct obsolete.
We don't really need them at this point in time.
There are technologies and softwares that that they can, you know,
verify and validate that you have the money in your
account in milliseconds. So it'll be bank to bank with
minimal or no fees for sure. So these credit card
companies are saying, we better make as much money as
we possibly can right now. Until the government steps in
and stops us or finds us, they're just going to
continue to push the envelope, and unfortunately consumers and merchants
who accept credit cards will wind up paying the price.
And look, you saw it. One of the really really
bad things that happened, you know, after COVID is now
the merchants figured out, well, why don't I just pass
that fee on to my consumer? And now that's so
many merchants are doing it. There's no pushback from the consumer.
Everyone just says, oh yeah, it says it right on
the bottom. If you're using a credit card, you're going
to pay three point eight percent, you're going to pay
four percent, whatever that number is. The merchants are now
just passing that on to the consumer, and we don't
need it right now. Right One of the other things
that we have to you know, consider and talk about.
Interest rates are coming down, albeit slowly, but I know,
you know, the cost of goods and services hasn't changed
at all. It's probably ticked up even more so. Inflation
is still a real, real, real concern, uh for not
just myself, but you know many of the other analysts
that are out there. The cost of goods and services
have increased so quickly over the past two years. The
average family is paying well over five hundred dollars for
the same exact goods and services that they were paying
for two years ago. Now, when you couple that coming
into the holiday season with hidden expenses, the cost of
going out restaurants have you know, the price to go
out to eat has jumped. You know, it's double digits.
It's not it's not three percent, it's not the rate
of it's eighteen percent, twenty two percent. So all of
those hidden expenses. Travel is way up, you know, clothing,
everything costs that much more. And during the holiday season,
all of those activities you know, have a tendency to
increase along with just spending money on gifts. So it's
all those hidden expenses that come into the holiday season again, uh, recreation, socializing, travel, clothing.
You just really really have to be careful here.
Speaker 4: Yeah, they're a target. Well, I find it interesting that
the credit card business to exist because right now, if
you have a phone, you know, Apple can just go
right to the bank. They don't really use I mean,
I guess these are after card get their cut no
matter what. But Apple doesn't need doesn't care what it said,
whether it's these are a Master car American Express. They
can just go right to the bank, any bank in
the country that's in their network Apple Pay, and they're
taking the money. But with all these other ways to pay,
the sult's going to be gone to.
Speaker 1: You know, there's no doubt. So you know that's that's
like the perfect example. Sooner than later, Apple's going to say,
we do not have to pay visa for that transaction.
We can be linked directly to every consumer who uses
Apple Pay, we can be linked directly to their bank
again through plaids Strip, there's other companies out there, Finicity,
and they'll verify that the funds are there and the
transaction will go through. You don't have to pay literally
three percent on every single transaction. And when it's Starbucks
or you know, ten Bucks here it all adds up.
But then when you start to think about people are
putting big ticket items on their credit cards, it's it
could be hundreds of dollars in transaction fees. Why do
I have to pay that much? It's not like they
have to. It's not like digging a hole. The bank
and the credit card company don't have to work harder
to process a transaction that's that much more money. It's
the same amount of work, same amount of software and
effort that has to go into it, and yet they
charged the same the same They charge the same percentage
transaction fee, whether it's two dollars or two thousand dollars.
Speaker 4: I couldn't agree with you more. It's a big grip.
Maybe you didn't start out as a grif because originally,
you know, credit cards, it was.
Speaker 3: All about convenience. You didn't have to carry the cash.
Speaker 4: And then you know, even the original American Express cards
were not credit cards, they were charge cards a lot different.
So I think we'll go back to some charging medium,
whether it's the.
Speaker 3: Apple Pay or whatever it might be.
Speaker 1: You know, that's right. We're never going to go We're
never going to sacrifice the convenience that we've all have
now been accustomed to. So you don't walk around with cash,
you can literally carry your phone, you don't even need
the physical card anymore. None of that stuff's going away.
It's just going to be how it's processed. And again,
it could be a very very good thing, or should
be a very very good thing for the consumer. And
you're right, you know, the story about the diners Club card,
which was the first credit's been around forever right, you
could go back to the early early seventeen eighteen hundreds
and credit was being used, you know back then. Now
it's just gotten to a point. The day that the
banks figured out we can allow the consumer to carry
a balance and charge them interest on it, that was
a really bad day in this So it's not having
a card for convenience. You don't have you don't have
enough cash on you, or you don't have enough cash
in your account right now, but you need to make
this purchase. So you used a charge card and you
have thirty days to pay it off. That's what we
need to do.
Speaker 4: Yeah, yeah, yeah, and yeah, it's amazing. You know, I
just went to Europe to visit my son and it's
the first time. Well, I've never even changed any money.
I didn't change anything because every place I just swipe
you know, my iPhone and I.
Speaker 3: Have the wallet. Whether you have a Google Android, that
doesn't really matter. And I never.
Speaker 4: Converted any currency. I've never done that before anytime on
a trip overseas.
Speaker 1: Yep, Nope, then you shouldn't have to. You shouldn't have
to if I didn't.
Speaker 4: Do it, and nobody even now I carried.
Speaker 3: Cash, even though I know, you know.
Speaker 4: You use it to pay Yesterday, I pay for my
haircut and I pay for the need and that's the
only thing I really use.
Speaker 1: Well, you know, I hope your listeners, you know, take
that advice and try and adopt, you know, that that
lifestyle and that approach to finance's personal finances, because you're
that much less likely to get yourself in a pinch
and in debt by operating that way.
Speaker 4: All right, Paul, it's better qualified dot com and there's
a lot of free resources available. I would suggest if
you're having issues or you think you might, you really
want to visit there, and you can always call Paul
as well. And if you have any questions for Paul
or myself, shoot me an email Heyl at Terry Lufs
dot com. You'll find a link to better qualified dot
com in the show that this interview on Financial Survive.
Speaker 3: Network dot com.
Speaker 4: And I would just ask if you visit the site,
please sign up for your free weekly newsletter. Like over
sixty thousand of your fellow FSI and community members have
wish everybody happy, healthy and financially and fiscally saying holiday, Paul,
It's always a pleasure be well.
Speaker 2: Thanks j having me back on Kerry, thanks for listening to
carry Lets's Financial Survival Network, your solution to today's trying times.
For the latest, go to Financial Survivalnetwork dot com. Financial
Survival Network
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