Nicole Lapin’s Money Hacks to Rehab Your Finances & Say Goodbye to Bad Debt

Mindy:
Welcome to the BiggerPockets Money podcast, where we interview Nicole Lapin from Money Rehab and talk about rehabbing your finances.
Hello, hello, hello. My name is Mindy Jensen and with me as always is my financial Mr. Fix-it co-host, Scott Trench.

Scott:
Thanks, Mindy. Great to be here and we’re going to hammer home a lot of financial tips today.

Mindy:
That was good. I like that one.

Scott:
I nailed it, right?

Mindy:
Oh my God, and again. All right. Scott and I are here to make financial independence less scary, less just for somebody else. To introduce you to every money story, because we truly believe financial freedom is attainable for everyone, no matter when or where you’re starting or how much you love a good dad joke.

Scott:
That’s right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business, or just become a little bit more financially literate, we’ll help you reach your financial goals and get money out of the way so you can launch yourself towards those dreams.

Mindy:
All right, Scott, you know me. You know I love a good rehab project and you know I love money, so of course I’m going to be in love with this show today. We talk to Nicole Lapin from Money Rehab, and we talk about fixing your finances, getting your finances in order, and all things money.

Scott:
Love it. It was a great episode. We really learned a lot from Nicole, and what a treat to have her on the show today.

Mindy:
It was a treat. Before we bring in Nicole, we have a new segment called the Money Moment, where we share a money hack tip or trick to help you on your financial journey. Today’s Money Moment is, are you done with a book or a textbook? Rather than donate it or have it collect dust, sell it. Create an eBay account, use Facebook Marketplace, or go to a local used bookstore. Do you have a money tip to share with us? Email moneymomentbiggerpockets.com.
All right, before we bring in, Nicole, let’s take a quick break. Nicole Lapin is a New York Times bestselling author, the host of the podcast Money Rehab, and the only financial expert you don’t need a dictionary to understand. You may have seen her as a news anchor on CNBC, CNN and Bloomberg, as well as a financial correspondent for Morning Joe and the Today Show. Nicole, welcome to the BiggerPockets Money podcast. I’m so excited to talk to you today.

Nicole:
I’m more excited. Mindy, thanks so much for having me.

Mindy:
If we’re going to have an excite off, I’m going to win.

Nicole:
Okay [inaudible 00:02:17], it’s your show, you win.

Mindy:
I’m always excited about everything and I am excited about your money story. Let’s look at where your journey with money begins.

Nicole:
Whoo. Well, I’m the least likely person to be a money expert or to have my own money together, much less teach other people about money. I grew up in an immigrant family, so first generation American. No discussion about the Wall Street Journal or stocks or bonds or any of that. My family just used cash. We didn’t have a lot of it, but that was the idea, that if you didn’t have money, you didn’t buy something.
And so I was super scared of all traditional money concepts. My boyfriend in high school said he wanted to be a hedge fund manager and I thought he wanted to be in gardening. So I was the most clueless and I just needed a job. And when I was 18 I was offered a job on the floor of the Chicago Merc, which at the time I thought was a mall. It’s not a mall, it’s a stock exchange in Chicago. And I lied and said that I knew about money news and I figured it out.
And so what I realized is that money is language, like anything else. We just don’t have a Rosetta Stone for this language growing up. I didn’t in my family, if you guys are like me. Some families do and that’s awesome, but we don’t learn this stuff in school. So I learned it at the School of Hard Knocks. And if you go to Wall Street and you don’t speak the language of money, you’ll be confused. If you go to Japan and you don’t speak Japanese, you will be confused, until you learn the language and then you’re like, “Oh yeah, duh. All those words that I thought were so complicated, obviously I know what that means,” but only after you learn it.

Scott:
How about the world of personal finance? Did you find that that was foreign to you as well? Maybe you learned corporate finance or the language of stocks and trading, but maybe did you find that that correlated to personal finance or that was a separate journey in addition to that?

Nicole:
Oh, great question, Scott. Totally separate journey. While I was covering business news, my personal finances were totally in shambles. And I say this, oh gosh, 20 years later with a badge of honor, but at the time I was so embarrassed. Because I was talking about money news to the world and I had a boatload of debt myself. Once I finally got a credit card, because my family didn’t believe in debt or credit cards or mortgages or anything, I went balls to the wall, racked up a bunch of credit card debt, and was still saving green cash under the sink like my parents did.
And yeah, I had to figure out how to get out of it the hard way. And once I did, I came up with a little plan for myself. I said, “I’m never going back.” And when I was on those news networks, talking to a lot of old rich white dudes about money, which is not an editorialization, it’s just like what the Nielsen numbers show, I wasn’t talking to the people who needed that information most, which were my former self. The girl that was freaked out, didn’t know what hedge funds were, super clueless, gotten in a bunch of debt, and that became my mission.

Scott:
What was your journey to paying off this debt and getting your financial act together and those types of things? What transformed, what lifestyle components or career items changed?

Nicole:
Totally. I came up with a plan, and I love alliteration, so I actually started as a poetry major, fun fact. So I often say, “Really, if I could do this, anyone can do this.” The whole thing of saying that you don’t know math or you’re not a numbers person, I was a poetry major to start out. And I love alliteration so I came up with a lot of financial tools around alliteration. So prioritize to pulverize was how I got out of debt specifically. And so there are two methods that experts will talk about when getting out of personal debt, the avalanche method and the snowball method. The avalanche method just means paying off the highest interest rate debt first. The snowball method is like, oh, you have little bills, cut those up. That will give you more momentum to pay off the bigger bills.
And so I used the avalanche method, which was for me prioritizing to pulverize it. And I ranked my highest interest rate debt, which was my credit card debt, and I broke it down into baby steps, because I think anything with personal finance, super overwhelming. The only way to tackle that is to break it down into baby steps, and then those little baby steps into even babier steps. And so I came up with I think it was $7 a day. Even the year goal was too overwhelming for me, and the month goal was too overwhelming. So I literally broke it down to the smallest number possible and I was like, “Seven bucks a day, I can do that.” And that’s what I did, until it was done.

Mindy:
How much debt did you have and how long did it take you to pay this off?

Nicole:
This was 20 years ago, so I had about $5,000 of debt, and I think it took me two years to pay it off.

Mindy:
Do you think there’s a lack of financial literacy in this country?

Nicole:
1000%. Don’t you?

Mindy:
I do.

Nicole:
I think it’s an epidemic, Mindy, this is what I get excited about. I’m going to win this excitement battle, by the way, because it really works me up. I think it’s a total epidemic. I think it’s actually the thing that is standing in the way of us fixing a lot of macroeconomic issues. The gender wage gap, the racial wage gap, the wealth gap, the home-ownership gap that you guys are all about. I think that the answer to fixing these issues is through financial literacy. And if I were in charge of the world, financial literacy would be taught in schools, also emotional wellness but that’s a whole other podcast, instead of geometry, your Pythagorean theorem or how to dissect a frog or all this BS stuff that is not helpful.
Yeah, I mean, I said this so often that I ended up creating The Money School because I was like, gosh, I keep saying, “If I were in charge of the world I’d teach a class on it.” So I ended up doing that, but truly I think it’s the biggest issue standing in the way of us closing a lot of those gaps.

Scott:
How do you define financial literacy? What does “done” look like in terms of someone’s education on financial literacy, at least maybe in the context of good coming out of high school, college or entering adulthood?

Nicole:
Also a really good question. I don’t think there’s “done,” I think it’s constantly evolving. In the same way that I think about balance. Oftentimes balance, vis-a-vis work, is used as a noun. And so back to my poetry where it’s like, balance can be a noun or a verb, and oftentimes we use it as a noun. We found balance and we’re done.I think of it more as a verb. It’s constantly in motion, it’s something you constantly have to cultivate.
I think the same thing applies to financial literacy. I mean, guys, when I was learning financial literacy, there was no NFTs or crypto, it’s constantly evolving. In the back of my books I rewrite financial dictionaries. This is maybe why I’m also single because this is what I do for fun on a Friday night, is rewrite financial dictionaries in real English. In Rich Bitch, I did it in Boss Bitch, I did it in Miss Independent, I think I squeezed in NFTs as we were going to the printer. But it’s a language that keeps evolving. And so I don’t think there’s “done.”

Scott:
Maybe “done” is when you want to go work at a hedge fund and actually clip shrubbery. You make the right decision.

Nicole:
I think that yeah, if you leave your clippers at home, then you’re good enough, but you’re never done.

Mindy:
Wwho is responsible for teaching financial literacy? Is it the parents or is it the schools?

Nicole:
Well, I think it’s the schools, but that doesn’t happen. I mean, we’re actually doing a financial literacy effort with the states that has to go state by state. I mean, I could tell you more about these sort of lobbying efforts, which I think are being done in parallel with parents needing to teach their kids about it. I think it’s incumbent on parents unfortunately because they’re not learning it in school. So you could cry about it or you could just do it yourself. And it’s also not an excuse for adults to say, “My parents didn’t teach me. I didn’t learn it at school.” You know what? That doesn’t pay the bills.
So put your big girl boy pants on and figure it out yourself. And it’s not an excuse. I think there’s a combination when you’re thinking about this, because most of not getting your financial life together is the enemies between your ears. So if you tell the mean girl or the mean guy to take several seats, then you can approach it, with a combination of what I think is compassion and tough love.
So compassion for your former self or for what he or she didn’t know. Okay, I’m compassionate. We didn’t learn it in school. My family was cuckoo bananas. They used cash and got into a bunch of … I bailed my mother out of jail using cash underneath the sink, behind the maxi pads, for instance, growing up. These were my early financial moments, and that’s like a lot of trauma that I just threw down on you guys. But a lot of our money story is around how we grew up with money. And so it’s saying, I have compassion for that girl who went through those financial traumas or had that experience, but also it’s not okay moving forward, now that you have the resources, now that you have the opportunities to do better.

Mindy:
Well, there is a point where, yes, you have to have compassion because this is scary and we didn’t learn it in school and we didn’t … I remember my mom taught me how to pay bills by just, “This is where you put the name on the check and this is where you put the amount and here’s how you balance your checkbook.” But she didn’t talk about how much was coming in and we didn’t talk about how much was going out, it was just, “This is this week’s bills.”
And they led by example, but there was not a lot of, “Don’t spend more than you earn because of this reason.” It was just, “Don’t spend more than you earn.” And it wasn’t really like, “Invest in the stock market,” it was just, “You should say for your future.” I don’t want to throw her under the bus, although I know she doesn’t listen to this show because she can’t figure out podcasts, so that’s okay too.

Nicole:
Bless her heart.

Mindy:
Bless her heart. But there’s compassion and I want to have compassion for people who are still trying to figure it out. But there’s also this like, hey, if you want to get your financial self together, get your financial self together. Why do you think people find rehabbing their finances so scary?

Nicole:
Because of all of those stories that we’ve told ourselves, I think the most common ones are, “I don’t have enough money to start,” “I’m not a math person,” or, “I’m not a numbers person,” and that, “I can’t do it,” for whatever reason. And so I think that tackling those stories and recognizing that those are just stories we tell ourselves is the first step. The reason that I have Money Rehab and the reason that all of my books are 12-step plans is because I truly believe the first step to any recovery is admitting you have a problem so. Let your problems speak, they are probably taunting you or haunting you. Once you let that narrative come out you can confront it.
And I’ve thrown out a lot of emotional wellness tactics and I’m going to throw down some philosophy right now, which forgive me, but I think that it’s all connected. I don’t think you can get financial literacy and wellness together without emotional wellness. I think it’s very intertwined. And I believe that stoicism plays a big role in getting our financial life together too, because we suffer more in imagination, I believe, than in reality. And so once we let that worst-case scenario have a voice, have a platform, it’s oftentimes that we can then take the necessary steps to confront it.
This happens with taxes a lot. What is your biggest fear? Just say it. People think they’re going to go to jail. And so it’s playing out that worst-case scenario and debunking it. Most folks do not go to jail, it’s just not a thing. And most folks that don’t have under a certain amount of money don’t get audited. Just look at the numbers, look at the reality there. And then let’s say somehow you do get in trouble with the IRS, what’s going to happen next? Play out those steps, or if you … And the answer ultimately is, it’s going to be okay.
Same thing happens. I used to catastrophize a lot if I lost a gig or if I didn’t have money. I still have an irrational fear of being broke, alone and homeless and dying in the gutter. And it still exists, it will never be done, Scott. It will not shut up. But I know it’s there and when it comes out I’m like, “I see you. I see you, thought, about being homeless.” And you know what? If I did not get this job or this project, I will not be homeless. I will go live with Sarah, my best friend. It will be okay, I will not be in the gutter. And so I think some of those exercises are really important to calm the mind you know what, that we do to ourselves around money.

Scott:
I love that. I think everyone feels that way. I’m sure, Mindy, you feel the same way from time to time. I certainly do, and I’m supposed to be good at this, just like you, Nicole. I do wonder however, your books, many of them are targeted towards women, like Miss Independent, Rich Bitch, Boss Bitch. Do you think that-

Nicole:
You can read them too, Scott.

Scott:
Yeah, of course. I’m sure they’re for everyone. But do you feel that women maybe perhaps experience some of these feelings more acutely or that they have less access to financial literacy? Is that one of the reasons why you particularly emphasize women in finance in your work?

Nicole:
Yeah, there’s a couple of reasons. First I think with the book Medium in particular, and a lot of media, you can’t be all things to all people or you’re nothing to anyone. I needed to really know who that person was and get her. And I’m not for everybody and that’s okay. I wish I actually had more controversy around the launch of Rich Bitch. I wanted more people to hate it because of the title and whatever. But you know what, it’s not for everyone. I knew who I was reaching and I wanted to go deep with her. She was my former self, I knew everything about her. And so I wanted to make an impact on a smaller group of people than trying to go wide.
I actually, it took me 10 years to get my first book published. I went through four agents, I talk about this I think in Boss Bitch, four false starts. I sold manuscripts and then weird things happen, like over the holidays the editor got fired and then come New Year the book was gone. It was stuff. And I just thought it was never going to happen for me. And the book before Rich Bitch that I sold and the holiday thing happened, was called Making Bank. I recently found this proposal. It was all things to all people, cool, fun, finance. That book would’ve been terrible. It would’ve been dead on arrival. Who wants to read a vague book like that?
And so that’s part of it. To answer the question around do women have less access? I think there’s just more fear. Studies have shown, and I put some of these in Miss Independent, that little boys and little girls associate different words with money. Little boys associate ambitious words, aspirational words. Little girls associate scarcity words, just fear words when it comes to money. And so I think we’ve been socialized a lot around that. And it just is what it is, it’s just a different conversation.
And I wanted to go first because I think that money is still one of our last taboos in society. We’ll talk about sex at the dinner table, no problem. We’ll talk about politics, no problem, with our girlfriends. I talk about wild sex stuff with my girlfriends all the time, and then I’ll ask them about what’s in their bank account and it’s crickets. And I’m like, “Hey sister, you just told me about your bikini wax and this is taboo? Asking you what you make is taboo?” If we don’t open up this conversation we’re not going to be able to fix these problems. And I get that it’s hard to have it, so that’s why I said I’ll go first. Somebody has to go first with hard money talks, so let that be me.

Mindy:
Well, let’s talk about investing. Let’s talk about your new book, Miss Independent and your 12-step plan to start investing and grow your own wealth. What are you investing in?

Nicole:
I have a cup, I just put it away, but it’s part of our merch that’s Index Funds and Chill. And I advocate index funds and chilling a lot. This is what Warren Buffet himself put in his will for his own family to invest in, low cost S&P 500 index funds. And I think that especially if you’re a first-time investor, picking individual stocks is not awesome. Like during the pandemic people would slip into my DMs, and listen guys, these are the fun sexy DMs I get, like, “Should I buy Zoom? What about Peloton?” Everybody was becoming an investor. We saw the first-time brokerages accounts open at record levels, but it was this idea that still folks think there is a get-rich-quick plan. There is not.
I do a fun, sexy conversation. When it comes to my money I don’t actually want it to be fun and sexy. I want it to be so boring, the most boring possible. I get asked about, “How about gamification for blah-la-la” and all this exotic stuff, I’m like, “Hard pass. You want a game or you want to fund …” Go on Tinder. Go get a weekly magazine. I don’t know, go read Page Six. If I want to look at my Schwab account, I want it to be so basic, boring, slow, steady. And I think that’s the best way to grow long-term wealth.

Mindy:
Okay, I have two things for you. First is a hot stock tip. It’s this little tiny company, maybe you’ve heard of it, it’s called Berkshire Hathaway. They sell A and B shares. I want you to get at least one share of B so you can then go to the most boring meeting ever, the Berkshire Hathaway Annual Meeting. Yes.

Nicole:
No, it’s fun. Have you been to Omaha?

Mindy:
Multiple times.

Nicole:
Oh, awesome. I’m going again this year, and you can listen to Mr. Warren Buffet talk in person, potentially ask him a question, and listen to him and Charlie talk about financial stuff. It’s fascinating, unless you’re my 16 and 13-year-old and they’re like, “Oh my god, mom, do I have to go? It’s so boring.” But yeah, if you want to talk about a world-class financial seminar for the bargain price of, I don’t know what a B share is, 100 200 bucks, and then you could sell it afterwards.
I just looked up A shares. A shares are $492,000, it’s one of the most expensive individual stocks there are. And yeah, Berkshire Hathaway B shares are 317 bucks. You’re right. You know what? I’ll go with you on that one. Buy a Berkshire Hathaway B share.

Mindy:
And then go to the annual meeting. It is live and in person again this year in Omaha, Nebraska.

Nicole:
Yeah, shareholder meeting. Charlie Munger, his partner of super smart dudes. That’s just a great tip.

Scott:
I’ve never been to the conference, but my portfolio, my stock portfolio, is VOO and then one share of Berkshire B. That’s the [inaudible 00:23:17]-

Nicole:
Oh, I love this. I’m done with this portfolio. I think VOO is even better than SPY now, I was just looking at my portfolio. So for anyone listening, VOO is the ticker symbol for an ETF that’s an S&P 500 index fund essentially. SPY is another one. There are a bunch. You can also find tickers that associate with mutual fund index funds. There are two varieties of index funds, ETF varietal and the mutual fund varietal.

Scott:
Yeah, this is a great example. I just threw out jargon, VOO. Thank you for clarifying that. I

Nicole:
Can’t help myself.

Scott:
But that’s it, that’s it. One of the things that you do better than maybe anybody else is making finance feel this accessible. We just went into a very tactical VOO, what’s that? That’s going to be overwhelming just as one point to somebody who’s brand new to finance. What is the first thing you’d recommend for someone just starting to rehab their finances? Where do they begin to dive in and immerse themselves in this world?

Nicole:
Yeah, I think we’re all in different places. Yeah, and thank you for saying that, it’s something that I can’t help myself but to just decode as I go, because I was that person who would … My eyes would glaze over and it would totally go over my head when any of this conversation would come up. And I just remember what that was like. And so I’m not embarrassed at all of even asking questions about acronyms because there’s so many. There’s new ones. If I don’t know it … And I did this when I was on the news, much to others dismay I think because people like to hide behind jargon and sound smart, and I just don’t, I just am like … I’m a really smart person, I have good self-awareness. And if I don’t know whatever that thing is, I don’t think other people watching are going to know either.
So yeah, I love the decoding, so thank you for that. I think when you’re getting your financial life together, you need to know and take inventory of where you are. Like Rich Bitch, my first book, was a 12-step plan to get your financial life together, and that was basic personal finance. Budgeting, buying a house or renting, and sort of tips and thoughts around that, if you’re doing it for the first time. Car leasing, buying whatever, basic retirement, basic estate planning and things like that.
And then Miss Independent went into actual investing. That was part two, once you got your basic infrastructure in place. You kind of can’t skip steps. I get questions a lot and I relevance especially, “How do I buy a house?” And I’m like, “Hold on, sister.” Often it’s a woman, and I say, “Do you have debt? I have a thousand more questions.” And so I think that knowing where you’re starting from, it’s going to be different. I know that sounds like a cop out answer, but I like the Choose Your Own Adventure books. I don’t know if you guys read those back in the day, but that’s how I have set up a lot of my, well, especially my books, but a lot of my content. It’s like, yeah, at different points you’ll go back to this when you need something else. And that’s how a financial journey really looks. I don’t think it’s a ladder, I don’t think there’s a career ladder. I think it’s more of a rope swing or a rock climbing.

Scott:
No, I love it. What we see, and maybe this is the same for some folks in personal finance, what we see in real estate investing for example, is folks just need to start immersing themselves. Passively at first and just absorbing information for dozens, or even some cases hundreds of hours, before they feel fully comfortable with the ins and outs of real estate investing.
And maybe that’s the parallel that you’re getting towards in personal finance. Wherever you’re starting, just dive in and start absorbing and the direction will become clearer after a couple dozen podcasts, for example, or a book or three.

Nicole:
Yeah, totally. I think that yes and. You don’t want to say, “Okay, on Saturday I’m going to just sit down and binge listen to BiggerPockets and Money Rehab, and at the end of the day I’m going to get my financial life together.” I did this around my taxes for the first time where I was like, “Okay, I was just going to do it on Saturday, get it done, and here’s all the receipts and here’s all the blah-la-la. And then it will all begin.”
And what happened at the end of that Saturday was I ended up drinking an entire bottle of wine and I think a whole thing of maybe Häagen-Dazs at the time. Nothing was done. Because I was so overwhelmed by this idea of, I need to do all of these things in one day. And so I tackled that by the baby steps thing. Just one day I only gave myself the task of uncrinkling my receipts. That was it. I’m like, if I uncrinkled my receipts, I checked it off. That’s all. The next day I was, put them in little bundles. That’s it. And so I think it’s smaller, manageable goals that you can actually stick to.
And also, to your point of listening to a podcast, obviously we all love ourselves a financial podcast for obvious reasons and we are biased around it, but there is always time. There truly is. If you take an inventory of your time, like P&L, you will see where you can cut. People spend more time researching boots that they’re going to buy or the vacation that they’re about to take than they do researching a mutual fund or an index fund or whatever, around this.

Mindy:
I love when people say, “Oh, does anybody have a mutual fund recommendation or a index fund recommendation?” I’m like, “No, do your own research. I’m investing in this because we’ve done a lot of research.” Or, “This is what we are interested in,” or, “T§his is where we feel is a good fit for our money.”
But what works for me might not work for you or might not work for Scott. It doesn’t matter what I’m doing. My risk tolerance is different than your risk tolerance, and it’s different than Scott’s. My goals are different. I’m way older than Scott so my needs are different. It’s what you need for your situation and your specific set of circumstances at this exact time. I love that you suggest to break it down into baby steps, but that name has already been taken, Nicole, you need to come up with a new name.

Nicole:
Oh, oh, yeah.

Mindy:
Dave Ramsey has the baby steps, so you’re going to need-

Nicole:
Yeah, my least favorite person. I’m not trying to step in his territory. Yeah, little toddler steps.

Scott:
Maybe diving one level deeper here, I know you do a lot of live Q&A on your show. What are some of the questions that you get most frequently from folks that are new to personal finance?

Nicole:
So many. I mean, usually it’s around the stock pick stuff because they think … People just want a secret, and the secret is … I think there’s this dad joke, if you want to double your money quickly, just fold it in half. I’m like, I love a dad joke. It was one of my I think most popular TikToks. I just folded money in half and I was like, “Easiest, quickest way to double your money.” It’s a joke, and I do love a dad joke, but-

Scott:
These people are on a tear with their money. I tried. Thank you for the-

Nicole:
It was great.

Scott:
… pity applause there.

Nicole:
Yeah. Can we put in a sound effect, please? Yeah. I think that that’s often the question I get, because we are just conditioned to want to skip steps. When I used to be on these morning shows like the Today Show I remember producers would say, “Our audience wants to get fit without working out, make gourmet meals without cooking, and get rich without doing anything.” You’re kind of conditioned to think that there is a cheat code. And the cheat code that I give is, you might not love, it might not be a quick fix, but the cheat code is, take advantage of compound interest. It’s often used against us in the financial system with debt. That same cool force can be used in your favor.
And so I think it’s more about time in the market than timing the market and picking a stock. You don’t need a lot of money to start. You need the more time possible to take advantage of this beautiest, glorious force of compound interest. That is literally your money makes money for you while you’re sleeping, while you’re doing nothing, while you’re listening to BiggerPockets, while you’re buying real estate.

Mindy:
But you have to have some of that money set aside so it can start growing for you. You can’t just spend it all.

Nicole:
Well, that’s the thing. I mean, it’s also the adage. I like to rethink conventional financial wisdom across the board and help … Well, because I did this myself and to think for myself and help others think for themselves. And it’s not really living within your means, it’s living below your means. Nobody wants to hear that, but living within your means doesn’t work.
And then you have this lifestyle creep, so when you make more money then your nice-to-haves become your need-to-haves. And it’s this lifestyle creep thing that ultimately people that get raises, they increase their lifestyle more, and so they don’t actually keep more money. It’s really not how much you make, but how much you keep, how much you save, how much you invest that matters the most.

Scott:
I love the answer around is this about the fundamentals. Spend less than you earn. Invest in index funds. You can’t get fit without working out.
That said, I’m going to go there and say, I think you also champion a large number of money hacks and tips and tricks, and you do have some shortcuts and good strategies that help people move ahead with their money. Would you mind sharing a few of your favorite tactical items that people that are powerful levers that people can pull?

Nicole:
Sure.

Scott:
In the context of those great fundamentals you mentioned.

Nicole:
Yeah. In personal finance investing?

Scott:
Yeah, let’s start with personal finance.

Nicole:
Yeah. So coming up with a basic budget for the first time I break it down into the three Es, which is essentials, endgame, and extras, where 70% of your overall … I call it a spending plan because it feels easier to stick to than a budget. In the same way as an eating plan, feels more likely that you’re going to continue it than a crash diet. You allow yourself a small piece of chocolate so you don’t end up noshing on a big o’ hunk of chocolate cake in the middle of the night because you’re so hungry and deprived on the crash diet.
And so that spending plan allows for extras. So 15% to the extras, which is whatever does it for you, the latte that people will tell you not to buy, I think that’s ridiculous, that’s not sustainable. And then 15% to the endgame, so your future self, your savings, your retirement, your investing, all of that good stuff.

Scott:
Awesome. How about investing? What are some of the ones on the investment side that you have there? What are some of your frameworks there?

Nicole:
Yeah, I think that it depends first on your risk tolerance. Mindy, as you so smartly noted, everybody has a different risk tolerance and everybody has a different balance to how long they need the money, how long it’s going to be until retirement, and all of that stuff. But I think that there are low-risk ways to start. CDs are really good right now. So what happens, I was just explaining this to somebody, with interest rates going up, mortgages are higher, and so that sucks if you are getting debt. But if you are saving, it’s awesome because interest rates are up. So on the flip side, you’re getting way higher rates than we have been for the last more than decade. We got nothing in a savings account. Well, that’s changing it. CDs are changing. Some are four and 5% right now. That’s great.
So I think that the lower cost ways are good gateways into higher risk. Even if you’re just starting to get into bonds, you can look into TIPS, which are Treasury Inflation-Protected Securities, which are super basic bonds from the government, or T-bills or T-notes or T-bonds. They’re all the same, treasuries from the government. And so I think that there are a lot of different options. It’s not a hack, it’s just know you are fighter.

Scott:
Ooh, I have one quick comment on that. I’ve been thinking, hey, interest rates are rising. That has problems for so many asset classes. Real estate is not a fan of rising interest rates, for example. Neither are stocks, nor are private businesses, nor are bond funds, because that decreases the value of bonds when interest rates rise.
But one obvious conclusion is, what’s the lowest risk investment you can think of in a practical sense? Well, it’s maybe your friend or family member who has an 800 credit score, makes 100,000, in household income and just bought a house and is paying their mortgage. That mortgage is at 7%, six and a half, 7%. So there’s a way to get 7% return right there. Now that may not be achievable, but that begins to open it up like, “Oh, bonds are back, debt’s back. How can I take advantage of that?”
And your thoughts around treasuries or other very safe debt instruments I think are great. I don’t think enough people are thinking about this very, very simple, logical way to just rebalance their portfolio. You shouldn’t, in my opinion, have had a lot of money in bonds the last 10 years at 0% federal funds rate, but now maybe they’re back. So I completely agree and think it’s a great way to think about it.

Mindy:
Nicole, this was so much fun and I really appreciate your time today. Please share with our listeners where they can find more about you.

Nicole:
You can subscribe to Money Rehab, daily personal finance podcast advice show wherever you get your favorite podcasts, or any of the other shows on our Network, Money News Network. We have seven shows in the slate that cover a lot of different personal finance topics in a deeper dive. So find those wherever you get your favorite podcasts. Or find me on the Instagrams. Slip into my DMs with those nerdy questions @NicoleLapin, or you can find our network, @moneynews. Yeah, that is our handle, it’s super cool, @moneynews. What a great handle is that.

Mindy:
That’s an awesome handle.

Nicole:
Thanks.

Mindy:
And easy to remember, if you know how to spell money and who doesn’t. Sometimes I’ll be spelling Mindy and I type out “money” instead.

Nicole:
Look at that subconscious at work.

Mindy:
Yeah. Sometimes that happens, and sometimes I feel rather silly doing that because I’ve known Mindy a lot longer than I’ve known money. All right, Nicole, thank you so much for your time today and we will talk to you soon.
All right, Scott, that was Nicole Lapin from the Money Rehab podcast. That was so much fun.

Scott:
Yeah, that was great. I really think she’s doing a lot to really spread the message of financial literacy in a fun and engaging way. And if you haven’t already, go check out her show at Money Rehab.

Mindy:
Yep, the only financial expert, you don’t need a dictionary to understand. All right, Scott, should we get out of here?

Scott:
Let’s do it.

Mindy:
That wraps up this episode of the BiggerPockets Money Podcast. He is Scott Trench and I am Mindy Jensen, saying hasta mañana [inaudible 00:39:04]. BiggerPockets Money was created by Mindy Jensen and Scott Trench. Produced by Kailyn Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.