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Q & A Wednesday - ID Theft Protection, Budgeting, and 401K

Today is another day of Q & A. Where I take the questions you’ve messaged on my Pain to Progression Facebook Page or the questions you email me on pain2progression@gmail.com

Q: // Kenneth, Miami Florida: I’m listening to you tell people to budget as a solution for saving money and determining and to determine how to spend your money. My question is, how do you even budget? What does that even look like and how do I start?

A: Great question Kenneth. To budget you have to write down all the money you make and all your expenses and the leftover money is what you have to budget. So for example, if you make $1000 a month and have $800 in bills, then you have $200 a month to budget or plan with. Now the question is what do you do with that money. Now with your leftover money I want you to determine how much you can comfortably put in a savings account a month and how much can determine you can spend on fun every month. And once you do that you just created a budget. Now all you have to do is follow your budget.

Q: // Omar, New York: How often does your credit report get updated? How do I know when my credit will be updated after paying off my credit card?

A: Your credit gets updated once a month. Because all bills get paid once a month, the lender, the person you have your loan from, will report to the credit agency once a month. Now any lender can report at any time so a credit card bill can report on the 25th of each month where another credit card company can report on the 29th of each month. Typically it’s in the last week of the month, but, I’ve seen banks report on the beginning of the month, too.

Q: // Evelyn, Bronx NY : I'm pretty sure my baby’s father used our son's social security to apply for a credit card. How do I find out if something was opened in my son's name and how can I stop it if he tries to do it again?

A: I’m sorry you have to go through this. So there’s a few ways you can see what’s on your credit report, but I’ll tell you the fastest way. I would recommend opening a Credit Karma Account and a Credit Sesame account and they both do the same thing. I say both because you can see all three major credit reports with both. The way the websites work is that they will give your credit score and it will show you everything on your report. The website will promote a whole bunch of credit cards or loans that you would qualify for. Do Not apply for any of them. Just use the website for its free information and there you will see if there is a credit card in your son’s name. Now this next advice is for you Evelyn, but it's also for everyone listening because even I did this. Go to the major three credit companies (That’s Experian, Transunion, and Equifax) and freeze you and your son’s credit. What it means is that your credit is frozen and no one can access it, so if anyone tried to steal you or your son’s identity and apply for a loan they would get declined because they would not have access to your credit. I have my credit frozen so I don't ever worry about identity fraud. Everyone listening, do this as soon as possible.

Q: // Jeffrey, Brooklyn NY: My mother is pushing me to go to college and I don’t think it financially makes sense, especially if I don't know what I want to do. I don’t want to take out student loans for something I may not want to do with my life. What are your thoughts?

A: Woah, I don’t want to get in trouble here but there are a few aspects to this question. There’s the going to college part and there’s the money part. Especially at a time where so many people have large amounts of student loans. Let's see... How do I want to answer this question... Just to put it out there, going to college is a financial decision. It is proven that people with college degrees make more money and are more likely to get hired than people without college degrees. Even in the field of your degree. And I also want to say, I am a HUGE advocate in getting your college degree. I don’t have my college degree and I have to go through so much more work to get the same opportunities of people with degrees and I don’t want you to go through that. So my suggestion is, go to school, take your core credits that you’ll have to take no matter what, and for those two year, work really hard on investigating what you want to get your degree on. Now, it is possible that you may end up in a different field than your degree, but it also may be that you will stay in the same field. The risk is worth the reward because there is a higher chance of you finding a good paying job with a degree than without. Now I want to disclose, I don’t think that you NEED a degree to make money and succeed. I just think you will work harder if you don’t have one which is fine and it is your choice as an adult. I hope that helps.

Q: // Shaunice, Seattle: I’m really trying to save, but I am a single mom and I just don’t know how to start or what to do. What do you recommend?

A: Shaunice, I want to start by saying that you’re a supermom. All single mothers are supermoms. All single parents are super. It’s not easy, but you are doing an amazing job and in a few years your kid will appreciate it and take care of you. So to answer your question. I would start by recommending in listening to my last episode titled “Actionable Steps to Success” in that episode I recommend writing down all your incomes and outcomes if you haven’t already, create a budget for yourself, and in your budget, budget money for savings. It won’t be easy, especially with your situation but you can do it. Try not to take big bites. If you can budget for $1 to the savings, do that. If you can budget for $5 a month, do that. Something I want you to know is that there have been people in your situation that have come out Queens making big moves. You will look back at this 2 or 5 years from now in a good financial situation helping someone else going through your situation. Pay it forward.

Q: // Tony: A friend recommended that I put my stimulus money in a CD, do you recommend that as a way to save?

A: Just to give some clarification on what a CD if for those that have never heard of it. It’s what banks call a “ Certificate of Deposit”. The way CD’s work is that you technically free you money in an account from a minimum of 3 months to a maximum of 5 years and the longer you keep your money there the more interest you make so 3 months can earn you .02% on your money where and 5 years can get you .10% which are Chase CD Rates as of today. OK, with all that in mind. To answer Tony’s question, a CD is an option, but I wouldn’t recommend it if you don’t need to. Why lock you money. In that case I would recommend an Online Savings Account. Where you can earn .10% to keep your money frozen in an account for 5 years, you can put your money in an Online savings account like HSBC Direct for 1.70%, make more on your money, and still have access to it at any time.

Q: // Keisha, Aurora CO: I have 3 % of my check going into my 401(K) right now. With all this Coronavirus going on, should I cancel my contribution to my 401(K) right now? At least until things get better?

A: I don’t think you should. Contributing to your 401(K) retirement is better to do now than when the stock is up because you are contributing to the stock at a sale price. Meaning, it’s low now and when it goes up, you will get more for your money. Now, what I want you to consider is, if you are concerned about your job and needing cash to pay bills just in case or if your spouse lost their job, for example. It makes sense to stop it. Always keep your priorities first. Shelter, food, and health.

OK pain to progression family, hopefully this was some good stuff for you. Remember you can send me your questions at my Pain To Progression Facebook Page or email me at paintoprogression@gmail.com

Now, this information is for you to use and grow financially, but it’s also for you to please share with someone you know this will help. Paying this information forward is how we build generational wealth. Let’s take this information and flip the world upside down. Let’s Get it!!!

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