Episode 2: Pocket Change Podcast
Summary
The amount of people living paycheck to paycheck in America has increased over the years. On this episode of the Pocket Change Podcast, we talk about five financial tips on how to combat the cycle of living paycheck to paycheck and establish strong financial habits.
Chief Operations Officer at Leaders Credit Union, Karen Freeman, shares what she has learned on how to achieve and maintain financial fitness. From becoming aware to celebrating progress, these tips are sure to inspire you to take hold of your financial journey.
"You can't save $1,000 until you saved $100. Can’t save $10,000 until you've saved a $1,000 so just making those small changes really help," said Freeman.
Key Tip Takeaways
1. Be aware of your finances.
2. Make small changes.
3. Get the whole family involved.
4. Set goals and achieve them.
5. Celebrate the small wins.
With these five tips, you can learn to combat the cycle of living paycheck to paycheck, set goals, celebrate, and establish strong financial habits.
If you need help on your financial journey, Leaders Credit Union is here for you! Leaders offers a robust mobile app with built in budgeting tools, financial wellness resources, articles, calculators, and more.
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Full Transcript
Shea:
Hey, this is Shea.
Mary Helen:
and this Is Mary Helen.
Shea:
And welcome to the Pocket Change podcast.
Mary Helen:
Where you’ll learn to spend, save, and invest and take control of your financial journey.
Shea:
On this episode, we're excited to talk about financial tips for 2023. There's so many statistics and studies out there about Americans living paycheck to paycheck, and it seems that the numbers are just getting higher and higher. And so we really want to talk about some financial tips on how to combat that and how people can break the cycle of living paycheck to paycheck and establish strong financial habits.
Shea:
And so we're excited to talk about that on the podcast
Mary Helen:
Absolutely. We have a special guest, Karen Freeman, thank you for being with us today.
Karen:
Thanks for having me.
Mary Helen:
Of course. We are so excited to get started. But before we do that, can you tell us a little bit about yourself and maybe some new year financial goals that you may have?
Karen:
Absolutely. So my name is Karen Freeman. I'm the chief operations officer here at Leaders Credit Union. And I do a lot of things here at Leaders. My responsibilities are retail operations, H.R. and training, and facilities. So I stay pretty busy. And my goal this year really for financial goals is really focused on college. Right.
Karen:
So we have a 16 year old who will be a senior next year and that is looming. And so really our family is really focused on saving enough and making sure we can pay for that college expense.
Shea:
So we're discussing ways to get financially fit in 2023. This new year kicking this off. So do you have any tips or maybe pocket change that you could give us for our listeners for the new year?
Karen:
Yeah, I think when we're talking about goals, right, the first step is always awareness. If I'm going to lose 10 pounds, the first step is knowing how much I weigh today, right? So same thing when it comes to our finances. The beautiful thing about living in 2023 is that we have all kinds of tools that help us really know.
Karen:
So oftentimes I think we think, okay, well, our balance on the mobile app says I have X, right? But I don't think that really paints a full picture of what's going on. And thankfully, we live in a time where there are apps that can help us really understand how my money is moving, how I'm spending my money, how I'm saving it so that I can make real impactful change.
Karen:
And talking about apps, I mean, banks and credit unions these days have apps built into your mobile app that gives you a better picture, shows you cash flow, how I'm spending my money but there's also others out there... Mint and YNAB, which is always my favorite.
Shea:
Does anyone know what that stands for? YNAB. Any ideas?
Mary Helen:
I do not
Karen:
“You need a budget”. Don't you love that? So it's awesome. So it's my favorite one. But Dave Ramsey has some. Nerdwallet has some.
Shea:
Leaders Credit Union has a money management app that you can set up budgets for.
Karen:
And it's outstanding.
Shea:
It is outstanding. It's also terrifying because when there's the red bubble on your budgeting app, that means you've gone over in that category. And so that really gives you it's really eye-opening.
Karen:
It is! It's impactful, right
Shea:
Especially if there's just one category for Chic-Fil-A.
Karen:
Truth! #truth. So yeah, absolutely. Those are great tools and I think when we're talking about awareness, getting involved in those apps. My personal opinion is that there is plenty of free ones out there. You shouldn't have to pay for one. This morning, I just quickly scrolled through and there are dozens of apps out there depending on what you want to do.
Karen:
There's really this one that I checked out a couple of years ago, and it's called Status. Status compares you to your peers. But, it also puts your information out there for others to compare to you. That was a little intimidating. I quickly deleted that app. That was too much pressure. But yeah, so awareness and apps is probably the most important thing to do when you're getting started with financial goals
Shea:
I like that you said free because that, you know, that doesn't have to break the budget either. Budgeting shouldn’t have to break the budget because you can do that yourself with apps and even with a trusty pen and paper if that's how you want to do that, but just being aware and using the resources that are available.
Karen:
Oh, and Dave Ramsey has a great program. The envelope system is always tried and true. So if you're a cash person, you can even figure that out with cash in envelopes. Just whatever makes sense for you and where to get started is the first step.
Shea:
The first step is admitting it.
Karen:
It’s awareness. Yes. Admitting we all have a problem. And we do. I think a lot of times we think that once we get to a certain age, we've got to figure out finances and not admit that we need to restart and reevaluate. And that's really not true. We can all get more equipped and more aware of our finances and do a better job.
Mary Helen:
Yeah, and you're never too old and you're never too young to start learning. And I don't know, I feel like as I've graduated college, I'm in the real world, adulting. All the things. I wish I had, I guess, taken hold of my finances earlier and started learning more because I had never heard about any money management, any budgeting app or tool or whatever.
Mary Helen:
I just kind of did it on like an Excel sheet and created categories and different things like that. But now I use money management and I got to plug in like all the credit cards and all the different cards that I have. And then I'm not just seeing my bank account, but I'm seeing everything.
Mary Helen:
All the cards that I'm spending money on, everything.
Karen:
Mary Helen, I think that's a really good point. I think what we didn't mention earlier is that those apps really allow you to aggregate all of your data into one. So maybe I have a credit card with another financial institution and my retirement is with another. Those apps really allow you to pull it in and get a more comprehensive picture of your finances than a mobile app would really deliver.
Karen:
And you can see, okay, maybe I make purchases on my credit card and I can see how that flows and then how my retirement's growing and you can see that all in one place. So it's a really good point.
Mary Helen:
And it's what you do with what you have. It's not how much you have.
Karen:
Absolutely.
Mary Helen:
But it's how you, again…
Karen:
Being a steward.
Mary Helen:
Yes, being a good steward of your money.
Shea:
So after we've admitted it, after we're aware of what we're spending and we've plugged it all in, we can see, okay, all this money I'm spending going to Chick-Fil-A, what's my next tip? What's my next step?
Karen:
I love that you use Chick-Fil-A as the example because I think that it’s all of our problem. It's not just one person. I think the next step is much like food and dieting is making small changes. Right? We've all been on a diet and tried to go from eating fast food five days a week to not at all.
Shea:
Or should I just get one chicken sandwich instead or an 8 count instead of a 12 count?
Karen:
I love this. So same thing is true on your finances. If you make too drastic of a change, you're not going to be able to stick to it. So small changes are a big deal. So two things come to mind. Chick-Fil-A, prime example right? So I'm not giving up my sandwich and fries, but I may want to give up the drink.
Karen:
Right? Because the drink is really expensive and a quick way to save money. So what, $2 you're saving off the bat. So if you're going to Chick-Fil-A five days a week, that's $10 that you've saved over the course of the week. And once you see that incremental change, then you can make the next one, right.
Karen:
The other one that comes to mind and it's probably because it's my problem is subscriptions, right? So I don't know about you, but I have jumped on the streaming platform in every capacity. Audible, Kindle, Netflix, Hulu you know you name it. Prime - the whole nine. But, I didn't get rid of anything so I didn't get rid of my dish television either.
Karen:
So I think taking a good look at subscriptions and what you're using and what you're not using is a quick way to save $15 a month. So little small incremental changes make a big impact because once you see that change, it's easier to make the next one.
Shea:
You know, you can't save $1,000 until you saved $100. Can’t save 10,000 until you've saved, you know, a 1,000 so just making those small changes really help.
Karen:
Absolutely
Mary Helen:
I remember this so vividly whenever I was younger. This was prior to credit cards. Prior to debit cards, we would go pay with cash and have like $10, go to eat whatever. And it was funny because my friends would only care about the dollars, but they wouldn't care about the change or the quarters or the nickels or whatever. And they’re like, “oh, like, I just want the dollars”.
Mary Helen:
And I was like, “What?”. Like that's money that can go towards something. It's only $0.15, but it's $0.15 closer to a million. You know, and so-
Karen:
Good observation.
Mary Helen:
It adds up. $0.15. It's $0.15.
Karen:
And to your point, Mary Helen, as we get older, $0.15 turns into $15, right? And we're like, oh, it's only $15, but $15 adds up, right. Gets you there, to Shea’s Point, you can't save $100 million, until you save $100.
Shea:
So after we make those small changes, what's the next step to be financially fit?
Karen:
I think the next step, tip three really is getting your whole family involved, right? That's going to make sure that they understand what the goals are and what you're trying to accomplish. I know from personal experience that when I try to go it alone, it was a little harder, right? They didn't understand what I was doing and why I was asking them about their purchases and why I said we couldn't do something.
Karen:
And so I think getting the whole family involved ensures the most success.
Mary Helen:
And it's a team. It's a team effort.
Karen:
Yes. So speaking from my own personal experience, you know, I got involved in money management apps probably a decade and a half ago. And until I got my family involved, it really was fruitless, right? So I was always having these friction points. We don't need to do that. We need to make this change, etc. until I really got them involved.
Karen:
Number one, my spouse. Right? Understanding what was happening in the why behind it and for him, because he's not involved in the day to day finances. He wants to see the end result. So hey, this is how much we saved. And so that made a big difference. And then for my kids, as they've gotten older, involving them in the conversation, not a situation of fear.
Karen:
I think fear, when it comes to finances, has a negative ripple effects just like anything else. So we don't want them to fear money and not understand it and be scared of it. That creates a situation where they freeze and aren't able to make wise financial decisions in the future, but involving them in the WHY. You know, having those conversations to say, hey, this is what we're trying to accomplish.
Karen:
And here's how you can help.
Mary Helen:
And then they feel a sense of ownership.
Karen:
Yes! That's really what it boils down to is I am helping make an impact in the household.
Mary Helen:
And when you own something, you care more about it and you want to take care of it. It's kind of like the whole rental car thing of like when you rent a car, you're not going to take care of it as much as if you own the car, like that's your car. Your name is on that, like that's yours and you're going to take care of it.
Karen:
Absolutely. That's also a good reason why you get them involved in cleaning your house. Heads up. Make sure they're washing clothes and doing dishes as well. It makes a big difference.
Shea:
All right. So this is great. So we have to admit where we're at. Become aware of what we're spending and how we're managing our money, make small adjustments, get our family involved. What's the fourth tip that you have.
Karen:
I think Mary Helen really kind of summed it up. It's really that setting the goals and that ownership piece that's really tip number four right in the process, is that, to your point, that ownership is key. And so maybe for me when it comes to our overall budget, maybe it is a situation where I'm making changes to subscriptions in order to make that happen.
Karen:
But for my children who are now driving and out on their own when they stop by Sonic, what choices do they have to make? Or if they go make a choice, if they're going out with friends, what choices they make to impact our overall budget.
Shea:
Are they really hungry?
Karen:
Yes. Are they hungry? In fact, my teenager called me last night and she was bored and so she decided to go buy a local fast food restaurant to get a drink. And you're like, do you really need that?
Shea:
I mean, they probably are. I mean, if your son's anything like me as a teenager, then yes. I probably was hungry.
Karen:
It's a lot. Be ready, my friend. It's a lot.
Mary Helen:
And then it’s cool to see, you're letting your kids have this ownership so that they can make decisions now and when they grow up, they've already made decisions like that’s a practice that they've nailed down and they've practiced, you know, being financially wise. And they're going to take that on to where like it's a drink today, but it may be buying a car tomorrow.
Karen:
Absolutely. And to your point, you know, setting that framework now that my daughter has her own account. Right. She's able to make those decisions without having to ask me, well, should I or shouldn't I? She's already kind of practiced that a little bit. And now she realizes how much fuel costs and we encourage her to tithe offer her income that she has from her job.
Karen:
And so all of that makes a difference for her. And she factors those into her financial decisions.
Mary Helen:
And so after all that, like what do you do? You've learned all these lessons. You’ve held back. You've gotten water instead of a Diet Coke. So what do you do after that?
Karen:
So I think it really goes back to: We don't want anyone to be scared of money or not to be afraid of money in any way or feel like they can't make financial decisions. So we celebrate, right? So celebration looks different for everybody. So maybe you're saving up for a big vacation and the celebration is you get to go on the vacation, right?
Karen:
Or maybe it is that you're just saving in order to go to college or saving for something for the household. But you don't want to spend money necessarily as a celebration to saving it. Right. You negate your purpose. So I think it's a lot of what is important to your family. Maybe it's a situation where if we meet our financial goal, we're going to be okay with doing nothing on a Saturday.
Karen:
So we're going to stay in our pajamas. We're going to watch movies, eat popcorn, and just spend time together. Maybe it's a situation that you want to save X, but you know it's going to cost. You want to spend a little bit of money, so maybe instead of saving $1,000, you save $1,200, and then there's a little buffer so you can go out to eat and celebrate.
Karen:
So it's really up to the family what they want to do. But I think celebration is not only good for us as adults to make sure that we've celebrated that milestone and are working to the next, it motivates us, but it's also good for our kids as well.
Mary Helen:
Yeah. Who doesn't love a celebration? Right?
Shea:
Definitely. As long as you’ve built it into your budget and we don't blow it, then hey, that's the best thing to do. All right. So Karen, remind us again, remind the listeners, what are the five tips to become financially fit in 2023?
Karen:
Absolutely. So the first step is awareness, we want to make sure that we know where we are today, so we'll know where we're going. Second is to make small changes. Don't eat the elephant all at once. One small bite at a time. Right? Number three, get the whole family involved. So whether it's a spouse or fiancee, significant other, or if you have kids, get them all involved.
Karen:
That's going to ensure the best success on that part. Set goals. We can't make changes unless we know where we're going. So number four, would be set goals and finally, celebrate. Life is too short. Enjoy it and make sure that you're encouraging your whole family and yourself to keep moving forward toward financial freedom.
Shea:
Well, thank you for sharing all those tips with us today. And we want to ask you one last question.
Karen:
Okay, I'm ready.
Shea:
So if you had some extra pocket change, what would you do with it?
Karen:
So I have a 14 year old and a 16 year old. And the reality is a very little pocket change, but usually it goes to them. So if things are happening, there's always something for them. But if they don't have any request, I would say it would go toward my hobby, which I love to read. So I do collect that so that I can justify buying one more book this month.
Karen:
So that would be what I do with it.
Mary Helen:
That's awesome! Good answer.
Karen:
Thanks for having me today.
Mary Helen:
Well, thanks for being on the podcast and giving us five financially fit tips that we can take with us in 2023. Well Shea, that wraps up our second episode of the Pocket Change podcast. Listeners can find us on their favorite podcast platform and any social media, including Facebook, Instagram, Twitter, LinkedIn, and YouTube.
Shea:
The Pocket Change podcast has been presented by Leaders Credit Union.
Mary Helen:
Where we power your passion to make life better.
Shea:
Leaders is federally insured by the NCUA Equal Housing Lender.
Mary Helen:
Learn more at leaderscu.com
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