How to Stop Living Paycheck to Paycheck & Finally Get Ahead

Hey, it's your friend Mel, and welcome to the Mel Robbins Podcast. I am so excited for the conversation today because you're going to learn how to stop living paycheck to paycheck and exactly what to do right now. And you're going to learn it from Vivian too. She is known to millions of people online as your rich BFF. And today, she is here for one reason. She is here to help you. She's one of the most respected and popular personal finance educators in the world. And here's what I love about her. She's been there. She knows the struggle you're feeling because just a decade ago, she was living paycheck to paycheck herself. And she's going to tell you, when you're trying to pay off debt and keep up with bills and live your life at the same time, one of the hardest questions can be, where do I even start? And if you're wondering, is it harder right now to get ahead? You're not crazy. Vivian will tell you it is harder to get ahead right now. But that doesn't mean you're powerless. You're going to learn where to start if you've got nothing saved, how to pay off debt when it feels overwhelming, when it makes sense to start investing, and what to do if you're worried you'll never be able to afford to buy a house or you're behind on retirement. Today, you're going to learn how to get ahead when advice like, well, just cut back. It doesn't cut it. See, you don't need to fix your entire financial life. You just need to know your next right move. And today, Vivian, too, is here to show you how to make it. I am so glad that you're here. It's always such an honor to be together and spend this time with you. And if you're new or somebody sent you this episode, I just want to personally welcome you to the Mel Robbins Podcast family. You have picked an extraordinary episode to listen to because today you're learning how to stop living paycheck to paycheck and what to do right now. From one of the most popular financial educators in the world, Vivian, too, has more than 10 million followers on social media where she is better known as Your Rich BFF. Vivian is a former Wall Street trader at J.P. Morgan, and she's the author of two New York Times bestsellers. And Time Magazine has named her to the Time 100 Creators List. Thank you so much for having me. When I told everybody that you were coming on, the team went crazy. And I wanted you on this show because my daughters follow you. And so many people around the world love you because you have this very rare ability to be able to empower us to feel like we're not the same. And so I want you to be able to empower us to feel like we're not the same. And so I want you to be able to empower us to feel like we're not we can take control of our money. And at the same time, you also are a realist about what's actually going on in the world right now. And so I'm grateful that you're here. And I'd like to start by having you paint the picture. So if the person who is listening right now is living paycheck to paycheck, what is going to happen? What will change in their life if they take everything to heart that their new Rich BFF is going to teach them today? This episode is going to give them power. We talk a lot about wanting money, wanting richness. And I think everybody pictures the lime green Lamborghini and the new designer bag. But that's not what this is all for, right? We should want money. Because when you have money, you have the power, you have the freedom, you get to be the captain of your own ship. Something that so many people are feeling these days is this lack of agency, that so many things are changing around them. But they don't actually get a say in their life. And to me, that's the most frustrating thing ever, because if you can't fix it, then what's the point? So I hope everybody listening will realize by the end of this, you will have actionable things that you can do. And that no matter where you are in your financial journey, there are very few mistakes you can't come back from. It's never too early to start, but it's also never too late. I love that. When you have money, you have power and freedom. Yeah. If somebody is listening right now and they're saying, I am struggling so profoundly right now, it feels impossible to get ahead. What do you want to say to that person? I do think that there are very few mistakes, especially in the financial sphere, that you can't come back from. Because I'm someone who made a lot of them. I'm the person who would overspend. I'm the person who had to wait at a bar until 1201 when my direct deposit hit to be able to afford my bar tab. Like the scariest words to me at 21 were your card declined. And I am not someone who grew up with money. I am the only daughter to two Chinese immigrant parents. We grew up incredibly frugally. They really valued education. I did everything the way I was supposed to. I went to the right type of college. I got the right type of job. I got the Wall Street job. I mean, trust me, my Asian parents were very, very proud. And I made a lot of money mistakes. So for me to be able to sit here now and talk to you about all of these things, I'm so proud. It's an honor being able to show that I have battle scars and I came out bigger and better and braver. And I feel the same way. I mean, I have millions of followers who DM me and tell me the things that they were able to fix because they put this work into action. I would love to have you, Vivian, just speak to this moment. And what is the person who really does feel like they're never going to get their head above water? What is available to them in the things that you're about to teach to us today? First and foremost, let's address what you just said. Like, these people aren't crazy. If I can address the audience, you are not crazy. If we actually look at the stats, right, we've seen that over the past century, the housing market, exponential increase. The cost to get higher education, exponential increase. The cost of living, exponential increase. You know what? You know what hasn't exponentially increased? Wages. So you're being asked to do more with less. If I can kind of wrap this all in a nice big bow. Please. There are macroeconomic forces, whether that be politics, you know, geopolitical conflict, things like legislation. The way our economy is currently designed really benefits people who have money and, you know, those things that are going to impact your money, but you are not necessarily going to be able to flip a light switch and be better at. Tomorrow, and hopefully, depending on when you listen to this, today, if you actually can make changes in your own life, you can always end better than you started. And I think that's what we're missing, is that internal locus of control, you have an external locus of control, think things are happening to them. And people with an internal locus of control think things are happening because of them. And when you think that things can happen because of you, now you're very, very incentivized to try and make every smart move, every good decision to put yourself in a better financial position than you were yesterday. I love that. And here's what I love about it. When I was really struggling financially, it was very easy to be angry at the world. And to not look in the mirror and go, well, there are some pretty dumb things I've been doing. And on the converse to go, wait, there are actually things in my control that will empower me. There are things that in my control, if I change some small habits day to day, will give me power back around money and around how I feel in my life and around the freedom I can create over time. What are three things you wish you knew when you were broke? One, it's very expensive to be broke. Think about it, right? Who gets charged overdraft fees from their bank? Oh, it's the people who are overdrafting on their accounts. They don't have the money. The second thing is, is that there's a little bit of a frustration that comes when you're playing this comparison game of you're broke, but you're trying to prove to people that you're not broke. And I very much had this because I had the brand name job, I had the fancy title, but I didn't have the money. And I did not come from a family that was going to be able to bail me out like that. And so I would see some of my peers from college, they would be moving into an apartment that they bought. And I'd be like, man, like, what am I doing wrong? FYI, their parents bought the apartment for them. I wasn't 100% sure about that at the time. I am now. I'm very sure about that. And I think I got myself on this consumption hamster wheel, trying so hard to fit in, because I wanted to prove so badly that I wasn't broke. Because right now, money for us is very much a moral measuring stick. People feel like if you have money, you are a good person, you are a smart person, you do good things. And if you don't, it's a moral failure. Like, you are not smart, you've made bad choices. You are irresponsible. And that's just not always true. And I think keeping up with the Joneses, in my case, keeping up with all of the hot, flashy, cool things that were happening around me was a big problem. And last but not least, I would say the third thing I really wish I knew when I was broke was that you don't have to be broke forever. It felt like I was going to be stuck in a bad spot for eternity. So I found this apartment and it's teeny tiny. My bed touches three walls, but it was going to be this beautiful Soho apartment. And my sex in the city dreams were about to start. Finally, that apartment ended up having a severe German cockroach infestation. Oh, my God. And I was so horrified because we had to pay to break our lease. And that was every dollar that I had saved from the first full calendar year of work. And I was like, I'm going to be broke forever. And you can do it from any starting point. So does it start with that like, damn it, I'm sick of this? Yeah. Are you sick and tired of being sick and tired of being broke? Is there a reality check that you also have for the person who's saying I'm paycheck to paycheck, saying that I'm struggling, saying it, but there are hidden buffers, so to speak, of stuff you don't need? Ask yourself honestly. When you say you are paycheck to paycheck, are you spending all of your money after taxes on necessities? Or can you think of multiple instances where you have spent money that you have had regret about? Let us do an audit of your spending of the past month. First and foremost, if there's a bunch of stuff that you bought and regret, can you return it? Two, if you are seeing that there is a trend of feeling like you're in a situation where you're in a situation where you're in a situation where you are hand to mouth, oh, but by the way, there was that lash appointment, that nail appointment, maybe you were sports betting, maybe you bought those concert tickets that you didn't necessarily need to get front row seats to, you could have just gotten a GA ticket. I'm not asking you to cut out every little thing in your life that brings you joy forever. I'm asking you to cut it out for the next couple months to see what type of blessing you have for the next couple months. If you're in a situation where you have spent money after taxes on necessities, one of the best pieces of spending related advice I've ever gotten was to ask myself this question. Sometimes when we invest in luxury items or upgrades, a big part of the appeal is being able to tell others we have them. This question cuts to the core of that. Would I want the BMW as much if everyone else thought I had a Kia? So talk to me about this. Would I still buy this if I couldn't tell anyone about it? That's such a powerful spending exercise because I've actually bought a lot of stuff that I don't like. And it's kind of crazy to say that part out loud, but I have bought shoes that were incredibly uncomfortable because they were from a specific designer and I wanted people to know that I could afford that specific designer. The stuff where I've actually spent money to improve my life in a meaningful way has always paid off. I've bought a lot of stuff that I don't like. I've bought a lot of paid off and had a bigger ROI in terms of my joy and my satisfaction than stuff that I bought just so that I could tell people that I had the thing. I love a little three-month challenge because I also think we don't have a clue what we're spending money on because you just swipe and then you tap and then you do this and it feels good in the moment. And then you're like, wait, where did all my money go? Can I tell you a secret? Please. Even as someone who feels very financially literate, I had a med spa subscription. For laser hair removal that I forgot that I had had because I had finished my cycle of laser hair removal and I just kept paying for it. I just forgot to cancel it. And I was so embarrassed, but I knew that I wasn't going to be able to get that money back. Spilt milk. We're not going to cry about it. So what did I do? I canceled the subscription. I made sure the next month I didn't show up on my screen. I was like, I'm not going to be able to get that money back. I'm not going to And going forward, I made a more concerted effort essentially to check my statement every month to make sure that that wasn't something that I was seeing slip through the cracks in other parts of my life. And the exercise of just saying no to stupid things or things you don't actually need in order to build a little bit of a mound versus continuing to dig deeper, I think would give you power just right there. So have you ever, you always hear this advice from people who are out of touch. If you want to save money, just spend less. Like sick, cool, good advice. I'm cured. Like that is the dumbest thing I've ever heard because it is not actually a willpower thing. And frankly, you cannot willpower your way to good decisions. So what I actually encourage people to do is build a system. Okay. So most of us these days, you're not getting a physical check from your boss. Most of us get an electronic deposit of some sort, whether you are a W-2 employee and you get a bi-weekly paycheck, or if you are a freelancer and you send in an invoice and they direct deposit the cash into your account. Here's what you're going to do. If you work for a company with a workplace portal, you can actually set aside part of that paycheck to not your checking account. So most of us just have a hundred percent of that paycheck go into your checking account. You see it, you spend it. Hell yeah. Wrong. What we're going to do is we're actually going to set aside 95 or 90%. And it's going to go to that checking account. You're going to pay your rent. You are going to take care of the needs for your family. You are going to pay for the things that you need to pay for. And that 10%, that 5%, if you want to start small, we're going to have that immediately go to a savings account. No matter how much money I had in that checking account, by the end of the month, by the end of that pay period, somehow I'd found a way to spend it. And I'm just like, how did that happen? And the more I made, I found the more I was spending. But if you are automatically paying yourself first and setting money aside into that savings account, today you is literally taking care of future you. Let's say you don't have a portal. Let's say that you're working a retail job or you're working at a restaurant, you got a bunch of side hustles or retail job, you're a freelancer, all that stuff. Most banks these days can allow you to do an auto transfer. So maybe it, Oh, I work a retail job. So I know for the most part, I can expect this much money to be hitting my bank account every month. If there is a convenient date or maybe two convenient dates, you can say, Hey, let's transfer a hundred dollars once this check clears or by the end of the week. Okay. If you are someone who is a freelancer, who's like, okay, I've just sent in my invoice. I know I have net 30. When that money comes in, you can say, Hey, let's go ahead and transfer 10% of that into savings. Also, by the way, maybe also good to split off 30 to 40% of it for taxes and put that into a high yield savings account. So before your quarterly taxes are due, you're making money on the tax man's money. You're able to earn more interest. And that's great. That is extra money in your pocket that comes out of thin air. Like most banks that are traditional brick and mortar are offering you the FDIC national average right now is 0.37%. So you put a hundred bucks in at the end of the year, you got a hundred bucks and 37 cents. What are you buying with 37 cents? Nothing. Okay. But high yield savings accounts are offering somewhere between three to 4% right now. And so a hundred bucks in at the beginning of the year, at the end of the year, you have a hundred and three hundred four dollars and that scales. So you put in more money, you get the bigger percentage. And so you will be earning more and more money. And so I think that is a way that you can essentially start to bridge that gap. I want to really highlight something because I want to make sure as you're listening or watching, you got the power of one small thing that you said, and I want to be sure you did not miss this. So you said your money's coming in, right? And I love when you were like, great paycheck, let's spend it. Wrong. No, when the money comes in, the first thing you should do is have a savings account. High yield savings account. High yield, if you can get it, to pay yourself. And I had this like download in my mind as you were talking, sometimes this happens like magically in the studio, where Vivian, I saw broke ass you without a manicure, getting your paycheck. And then I imagined broke you paying the rich you. That you become your own rich BFF. You take on this mindset that broke me is going to start paying rich me. Yep. And I am going to do that every time money comes in, I am going to start paying the rich me in this savings account because the rich me in the future knows that's the thing to do. And I will tell you, people often ask me, how did you get out of $800,000 in debt? I was like, I got three jobs and I cut all my expenses that I could. And I then, literally every dollar that I could, I would put 25 cents on every dollar into a savings account. Yeah. And then when I could start to get above water, it was 50 cents. And I started getting payment, like you just do it over time. It took me like seven or eight years to get my head above water. But broke me was paying the future rich me. And if you can think about that moment, paying yourself, that is so. Powerful. And you know what, Mel? It's not sexy to be like, ah, yes, I've saved three months of living expenses. But you know what is sexy? Being able to sleep better at night. Knowing that if something were to happen, you got it like that. A couple years after the cockroach apartment, I actually, I don't know if you can see it, I cut off the tip of my finger with a bread knife. Oh, whoa. It was the night of my 25th birthday. It was a very crusty baguette. I end up, spending my 25th birthday, shout out to the Mount Sinai Emergency Department. Like, I was in there, tears. And to add insult to injury, the total bill for that trip to the emergency department was $13,000. Oh my God. I had really decent insurance. So my portion was $1,600. And man, that birthday party sucked. But you know what sucked less? Being able to pay the bill and move on with my life. And imagine, at the time, this was years and years ago, but like, I don't want to have that bill hanging over my head for the worst birthday party ever. I want to be done. And I was lucky because I had the emergency fund to pay it. It comes back to power. Power. Power. You cannot budget your way out of paycheck to paycheck. You need to increase how much money is coming in the door. Like, this is not a spending problem. Well, hopefully it's not. But this is a, how do I get more money in the door? If you're truly living paycheck to paycheck, you're not doing the $600 Sephora haul every month, and that's why you're paycheck to paycheck. If you actually are spending only on necessities, you feel like you're being worked to the bone, I don't think it's fair that you cannot make ends meet with a 40-hour-a-week job. I think it's not fair. This is what we're going to do. You got two options. One, you need to make more money at what you are currently doing. So what does that look like? That looks like negotiating a raise. That looks like getting a promotion. That looks like potentially job hopping somewhere else to get a more competitive salary or bonus. And then the second option is you have to pick up a side hustle. And I know what everybody listening is probably thinking. Like, I'm working 40 hours already. I'm exhausted. I come home. I have to cook for my kids. I have to take care of everybody. I know. I'm not saying it's okay, and I'm not saying it's fair. I know. I'm not saying it's fair. Hmm. How are you going to put food on the table? That is a bigger concern than putting money into your 401k. That's a bigger concern than, huh, what do I really want my career trajectory to be in 10 years? You're not thinking about that. You are thinking, I got to clock in, clock out, get my money, and do the things that I need to do, which is pay my rent, buy my food, and hopefully have everything else in my life maintained because not one single unexpected expense can come up. When you have more money, you buy the buffer. Vivian, thank you so much. This is the perfect moment to hit the pause so we can give our sponsors a chance to share a few words and to give you a chance to share this with people in your life who are living paycheck to paycheck because, as you know, you do not have to stay broke, and what you're learning will help you take control of your financial life. And don't go anywhere. When we come back, Vivian is going to teach you exactly what to do with debt. And even if you think you're doing it correctly, you definitely want to hear this, so stay with me. Once you have more money coming in the door, you finally get a second to breathe. When you're going hand-mouth, hand-mouth, hand-mouth, it's very hard to think about the right decision because you're thinking about the right now decision. Welcome back. It's your friend, Mel. Today, you are learning how to stop living paycheck to paycheck and what to do right now with Vivian Tu, one of the most influential voices in personal finance today. She's breaking it all down, she's making it feel doable, and she is removing the shame that is so easy to feel when you find yourself struggling financially. So, Vivian, this is what I want to talk about next. What would you say if you're in your 20s, crazy challenging job market, and you are not getting paid well because you've had to take whatever job you've had to take? What is your advice? Some jobs are for learning and some jobs are for earning. If you are able to take a job that will give you some job experience, that'll get your foot in the door, that'll give you that inertia, and you have a familial structure that allows you to move home, that'll help subsidize some of those costs because they are expensive, you'll be able to get some of that on-the-job experience that'll then hopefully translate to your next option. And so sometimes the thing you need to do to get paid more is to leave, even in a tough job market. But I also think that can happen with department changes. I think that can happen if you want to maybe change different industries, so you're in marketing for one type of company and then you go to a different type of company, but all companies need marketing teams. It is about understanding, are you here to make as much money as possible or are you here to actually learn something? And I think at the beginning of your career, it should be about learning something. That's not to say you shouldn't be asking for more, but expecting a monstrous number out the gate may mean you have to give up other parts of your lifestyle that very few people actually are fully aware of what those sacrifices will be. What do you think the best way is to ask for a raise? Come with receipts, Mel. We are coming prepared. You better come in with everything that you've already done. Winter raises, winter promotions are made in the summer. At the beginning of the year, I'm talking January, February, you make sure that you know what your goal is for the year. You sit down with your boss, you set some goals, you're going to revisit them in a J month, like June, July. Cool. So yeah, it's about six months. In the summer, you're like, hey Mel, I know at the beginning of the year, we discussed that we were setting goals for me for this year. I'm happy to report that I've already accomplished X, Y, and Z. I would love to know what other things would you need to see from me for me to make a difference in the future? And I think that's to be in a good position to be promoted at the end of the year, for me to reach the next level of X, Y, Z, for me to be given a new territory. Okay. I'm going to let you as my boss tell me. I'm going to say, great. I love that suggestion. I'm also going to focus on a couple of these other things that I know have just been a thorn in your side so I can help make your job easier. Great. We leave. I crush it. Okay. June, July through. October, we'll call it. I am just grinding. I get it all done. And then in November, I come back with all of my receipts. I've built something called a brag book in my inbox. So I've titled it. It's a little folder. It says brag book, 2026, whatever. Anytime someone congratulates me, anytime someone's like, wow, Vivian is amazing, right? Then in October, I sit down with you and I'm like, hey, Mel. I'm so happy. We have done such a great job this year as a team. Everything has been going super well. I'd love to show you a couple of examples of how I was able to achieve all of these goals. And then after I've shown you all of my bells and whistles, all the things I've already crushed, I go, given the amount of assistance, given the amount of success I've been able to bring to the team, a raise of X, Y, Z would be commensurate with my performance. Or a promotion makes sense given that I'm already operating at this level. Then I shut up. In one of my first negotiations, I gave this incredible pitch of how hard I was working. Everything was amazing. I asked for my raise. And then I said, but if not, that's okay. Vivian, stop talking. What is wrong with you? Stop talking. Let you tell me no. I don't tell myself no. Now you're actually showing that you earned it and that you're worth investing in. It's the you show. It's not about what other people are making. It's not about what the person sitting next to you is because you can't just be like, well, Johnny told me they made that. Now you've snitched on Johnny. You are going to show why you deserve the number. I think the advice is absolutely fantastic. And I love the idea of the brag book because you forget. You forget all the things that you're doing and you should assume that the person that you're working for isn't aware of absolutely all the different things that you're doing. Now let's talk about debt. If you have several different sources of debt, how do you know what to pay off first? Debt is genuinely one of the biggest, scariest topics in personal finance because we've demonized it like it's a four-letter word. It is, but not that kind of four-letter word. What we forget is that there are types of debt that compound very quickly. And types of debt that compound slower. And for the person who doesn't know what compound means, what does that mean? It's essentially snowballs. Okay. Like how scary and how growy is that debt? Got it. Long story short, the way you want to think about it is it's a number line. Okay. You rank the interest rates from highest to lowest. You make the minimum payment across everything. And then any additional debt paid on funds go towards the debt with the highest interest rate until it's done. Then you move on to the next thing. And that is called the avalanche method. It is the most mathematically advantageous way to pay down your debt because you will spend the least in interest and get your debt paid down in the shortest possible window. Amazing. The avalanche method. If the person listening right now just got hit with a bill, does this happen to people, especially medical bills? What is your advice about how to fight it? Okay. So before we even fight the medical bill, let's see if it's even right. Bad stat, 80% of medical bills have errors in them. 80%? Eight zero. So first I would say, first thing you do is make sure that you are asking for an itemized bill. You want to see every single thing they're charging, not just the number at the end. Tell me everything that you did to me. Then I would say, check to see if that's fair. There are tools online now, like a fair health consumer that you can go and check to be like, what is a normal cost for an x-ray? So then after that, you're going to call, not email, but you're going to call and you're going to call and you're going to call and you're going to email. They will ghost you, by the way. You want to call the hospital that you went and you went to the emergency department and you're like, hey, I would like to have a discussion about this. Like what waivers, relief programs, charity care, what is available to me? From there, I want you to say, I'd actually really be interested in paying this bill in full, but I'm not going to be able to do the whole thing. Would there be any sort of discount available if I can get that paid today? Then they know they're actually getting some money. And this all works if you don't have insurance. If you have insurance, those rates are typically pre-negotiated. Vivian, what do you say to the person who is listening, who has very little money saved for retirement? Maybe they're more my age and they're starting to get really worried, or maybe they've come out of a divorce and they're starting over and they're starting to get worried about their future. You can catch up. I think tactically, you have to talk about catch up. After you turn 50, you have actual access to something that the rest of us don't, called catch up contributions. You can actually put more away because they want you to, and I quote, catch up. That is literally what it's called, catch up contributions. How much money do I need to retire? People have no idea what they actually need and have no idea what they actually want. So what I like to advise everyone to think about is your FU number. FU number. Okay. Your FU number, Matt. Yes, of course. Okay. Yes. The reason we call it the FU number is because it really is going to give you true financial freedom. Okay. And we want your money from investments to replace your money from labor. So you'll never have to work again. So how do we do this? I don't know. Close your eyes. We are having a Zen moment. I want everyone to visualize a perfect year. Where do you live? What does your house look like? Are you supporting anybody? Maybe it's a partner. Maybe it's kids. Maybe it's an adorable furry little pet. Are you traveling? Are there things you are spending on? What does your dining out situation look like? What kind of car do you drive? Envision your perfect little universe. Now open your eyes. And this is a hard question. What do you think perfect year in that perfect little universe would cost you? That is your perfect year number. Okay. We are going to take this number and we are going to divide it by 0.04. You're going to get a bigger number. Okay. People think you're going to get a smaller number. Okay. That is the amount of dollars you would need to have invested for you to have this life. So if you had a million dollars in savings, what is 4% interest? Is that $40,000? That is correct. Well, that kind of puts it in perspective. And I don't want people to freak out because we have to remember that in retirement, oftentimes we are getting more assistance, right? There is social security, there is Medicare. And so you may not necessarily need as much to be able to live that happily ever after, but this is a good jump off point for us to start calculating where we're trying to get to. Thank you so much for sharing that. I hate to interrupt. I have so many more things I want to dig into with you, but I have to give our sponsors a chance to share a few words. If what Vivian is sharing with you is helping you, or you're thinking about somebody in your life who really could use both the tough love and the tactics, this is the perfect free resource to send to them. Don't go anywhere. other people are making, it's not about what the person's sitting next to you is, because you can't just be like, well, Johnny told me they made that. Welcome back. It's your friend Mel Robbins. Today, you and I are learning from Vivian, too, and she is teaching you how to stop living paycheck to paycheck and what to do right now. Vivian, this is the next thing I want to talk about. Talk to me about the sandwich generation. So a lot of us these days are feeling sandwiched. We are starting to build our own families, our partners, our kids. All the while, our parents are actually coming to us and saying, we are underfunded for retirement. And so not only are you supporting your family unit, you are also then supporting the family unit you grew up with. And you're feeling a lot of that pressure. And I think the number one thing I encourage everybody listening to do is have the conversation with your family unit. And I think that's the number one thing I encourage everybody to do is have the conversation with your parents about their retirement funding. If your parents are behind on retirement, it is better to know now so that you can help them set up contributions that are going to then support them so that you can help them potentially think about downsizing their home. So you can think about all the other options and pull those levers now when you still have that runway. So give me the opening line of this conversation. I would say something along the lines of, you know that I'm always here to support you. I'm always here to support you. I'm always here to support and help you. I want to get ahead of this because so many people are underfunded for retirement. And I have no intention of letting you suffer. But for me to help you get you to where you need to be, we got to do it together. So let's sit down and talk about it. This is the first step that we need to take to make sure that you get the retirement you deserve. I love that. So if you're intimidated by the word investing, how would you explain it to somebody who doesn't think they're smart enough to understand it? And where do you start if you can only have a few extra dollars every month to do it? You work hard for your money through labor, whether that be mental labor, physical labor, whatever. Your money can also work for you. We as human beings are really bad actually at making money because you can work maximum 14, 15, 16 hours a day. At a certain point, you still need to get sleep. You need to eat food. You are a human. You are not a good money-making machine, no matter how much money you make. You know what's a better money-making machine? Your money. Your money works 24-7. It doesn't take a lunch break. It doesn't need holidays or vacations off. It is working day in, day out, 24-7. And it can. Okay, great. Because I want to see if I can, give this back to you in a way that somebody who has always been intimidated by this idea of investing can really grasp. So we've talked about, which I find personally helpful. Broke you is going to start paying from the money that comes in the future rich you in the savings. This is like your little fund. This creates the buffer. This is like the money you're going to start to use to climb out of where you are. Investing is where the rich you takes that savings account and takes the money that's in there and puts it to work. And that's where you're going to start paying from the money to work. Yep, exactly. Got it. Yep. Okay, so how do we start? So first off, I want to make a distinction. Okay. Saving and investing are not the same thing. They are not the same action, should not be treated the same. Today you is paying rich you for savings. So that's what you save to have the buffer so you have power and freedom to leave. Yep. Or to deal with an emergency. Yep. And so that you can sleep at night. Correct. What you need to do to actually start investing is first, you need to find a brokerage. Okay. So you need to find a brokerage. You then are able to choose an account type. So maybe this is a Roth IRA, an IRA. This could just be a traditional individual brokerage account. These different types of accounts, some have different benefits. Okay. Others are more classic, general, not as many tax benefits, but still definitely worth using. You will make the decision based on what you are investing for. If it's for retirement, a retirement account might make sense. If it's for, hey, I just want to invest for the next 20, 25 years. This is not for retirement. Great. And an individual brokerage account might make sense. Then once you choose the account type, you open the account and you contribute dollars from a checking account or maybe even a savings account. Okay. You're funding the account with the cash. This is where people get messed up. They put the cash in the account and they're like, I'm done. No, you're not. You have not even bought anything. It's just cash in an account right now. Okay. So you've opened the account. You actually have to put the money in into a fund. Correct. You have to actually, you have to choose investments. So like you can't just put cash into an account. You have to then use that cash to buy stuff. Okay. Okay. In the same way that you go to the grocery store and you have cash in your wallet, you're not going to do a hot lap around the grocery store, go home, open the fridge and be like, where's my food? You didn't buy anything. You have to actually buy meats and cheeses and breads. Gotcha. Okay. So what you can do there is then say, hey, I'm interested in investing. I'm interested in investing. I'm really interested in investing. I really want to focus on the overall stock market because I don't want to have to cherry pick. Get into something that allows you to have exposure to a lot of things. This is called diversification. Basically mitigating the risk. Correct. Of picking the wrong stock. Correct. By buying a fund that invests in the whole thing. Yep. Invest in everything. Okay. There is a constituency of folks who are probably listening to this. Yeah. And their eyes are like, what the hell is she saying? I still don't know how to invest. They've been yapping for 10 minutes and I still don't get it. Okay, fine. I will give you the cheat code. The cheat code is now because we have such incredible technology, you don't actually have to go and pick your own investments. You can sign up for something called a robo-advisor. And this can be done in 45 minutes. You sign up for this robo-advisor. You pick the account type. It's going to ask you a bunch of questions. Things like, hey, Mel, how much do you make every year? How much do you make every year? How much debt do you have? How would you feel if your portfolio lost this much money? When do you plan on retiring? All this stuff about you. Okay. And then it is going to provide you a portfolio that makes sense for you. You're going to pay, likely, a small fee for this to happen. But I would rather someone use a robo-advisor and pay that small fee and be invested now than say, I'll figure it out this weekend and do it myself. What if you're worried about losing the money? I mean, the market seems crazy. Like, the world seems crazy. Like, do I jump it now? Do I wait for things to crash? Like, trying to get a sense of timing? Or do you just, you're just planting seeds? I am very much a buy and hold investor. The day you plant the seed is not the day you eat the fruit. Okay? If you're currently renting and you've always dreamt of owning a home. Yep. And now you're thinking, based on the insane costs and the rise in the housing market, particularly here in the United States and around the world, I may never be able to buy a home. What do you need to know? Buying a home for so many of us is still so core to that American dream. It is still so core to success. And if you want a home, I think you should have every right to get one. But I ask you first, why do you want a home? Do you want a home because you know you're in the right place and you plan on living there for at least five to seven years, at least? You don't want to go to a different city for any other job opportunities? Is it because you want to make that house your home and do a bunch of renovations to personalize it to yourself? These are all good reasons. But if you are someone who's like, well, I hate having to fix my own toilet at two o'clock in the morning. I don't want to do that. And I also hate the idea of paying a homeowner's association fee. And I also hate the idea of paying property taxes. And I also hate the idea of being stuck somewhere. And oh, by the way, I might be in the market to expand my family in the next year or two. Maybe it's not the right time to buy. That is the perfect question when you're looking at home ownership as a lifestyle decision. You know, when you ask yourself, why do you want a home? Why do you want a home? Why do I want a home? You're basically making yourself go, wait, why do I want a home right now? And does this make sense? Like, am I going to stay somewhere for a long time? Can I actually afford what it's going to take to keep a home up? Because if you're going to be moving around a lot or it's way too expensive for you to both buy it and then maintain it, maybe now is not the right time. That's a lifestyle decision that then becomes personal to you instead of chasing it because you think you should buy it by now because your parents did or your friends did or your but let's not ignore the truth that at least in the United States, buying a home and home ownership is one of the most important ways that people build generational wealth because it forces you to save. And then the other thing that people forget is at some point, you want to be able to not have to pay rent. So if you're never going to buy a home in retirement, you're going to have to have to pay rent. So if you're never going to have to pay rent, you're going to have to pay rent. So keeping the facts in front of you, which this is one of the most important assets that you could have in the long term, and it also forces you to save. Correct. As for folks who are sure they want to buy, you need to get creative, okay? Because right now, it is true. In almost all major metros, it is cheaper to rent than buy. Buying a house is hard right now. Let's not pretend like it's not. People need to start thinking, do I need to buy my primary home? I know someone who actually cannot afford to own their primary residence in Los Angeles, but he grew up in Oklahoma and has family there and ended up buying an investment property in Oklahoma. He can afford the mortgage in a lower cost of living area, and he rents because in L.A., he's going to get a lot more with rental dollars than buying dollars. Another option. Let's think about those unique. Unique mortgages. Everybody thinks you've got to put 20% down. Yeah, I think that is the norm because then it helps to make the monthly payment very, very manageable. But if you're someone who just doesn't have a lot saved, you're trying to get into a neighborhood before you're priced out of the neighborhood, and you have a good job that you can count on and you think you can make decent monthly payments, what about an FHA loan? What about a conventional 97? These are all different types of mortgages that either help you if you have a low credit score or basically give you a. A little prize, a little treat for having a high credit score. What about if you're buying in a rural area, a USDA loan? For our veterans listening, there is nothing better than a VA loan. You put nothing down. You don't need to pay PMI to essentially insure that mortgage. That is the best possible option. But I think people don't talk about those things enough. I would love to have you speak directly to the person who is listening and they're in their 20s. They're doing everything that they were told to do. Yeah. Yeah. Yeah. They still can't get ahead. Yeah. Sucks, doesn't it? I think a lot of us were sold a promise and a dream that if we put our heads down, if we worked hard, that we went to the right school and we got the right job, we'd eventually get to have happily ever after. It's kind of looking like that's not necessarily true. The new American dream doesn't look like anything. It's whatever you close your eyes and want it to be. It's not about what has already happened. It's about what can you do today to make tomorrow different. That's the same answer you need to hear right now if you're in your 50s or 60s. Yeah. And you're starting over. Mm-hmm. Or you are dealing with a setback after divorce or a health diagnosis. A thousand percent. You have to take it. Like, it is true that life is not fair and it sucks. And you can do something next that changes where you end up in the future. Yeah. What do you want to say to the person who is back home living with their parents? Nearly half of all Americans under 30 live with a parent, according to the Federal Reserve data, which as a parent, I kind of think is cool. But I know as a person who had a vision that you would be somewhere else, maybe it doesn't feel that cool. Yeah. I would say you're a genius. Like, and one, you should go kiss and hug your guardians or parents or whatever and say, thank you. Because if you are able to move back home, you already have a level of generational wealth that people don't talk about. Yeah. People think generational wealth is, ah, I am bequeathing Mel a million dollars when I pass. No, no, no. Generational wealth is, you can move home, is anti-daycare, I'm going to take care of your kid. Or, hmm, don't worry, Nana and Papa don't use the car as much. Don't worry, Mel, you can drive it. That's generational wealth. Yeah. And so I think if you are currently living with your parents, you can move back home, is anti-daycare, I'm going to take care of your kid. But if you are currently living at home, you have a sweet setup. What I ask is for you to do a couple things. One, the money that you would have spent on rent, put it aside for yourself. Pay future rich you. Two, set a move-out number, not a move-out date. Do not put yourself on a timeline that you cannot hit and actually be comfortable. You don't move out until you have the number you need. And three, you don't move out until you have the number you need. And four, use this as an opportunity to maximize all of the financial advantages you have. So that means if you are paying no rent or less rent to live at home with your parents, you should be putting more money into your 401k, more money into that Roth IRA. I absolutely love that you called moving home with your parents the new generational wealth because one of our kids just moved home. Yeah. And I see it as an enormous opportunity. It's an enormous opportunity and launching pad to set yourself up for the next chapter. Huge. Because you don't want to move out and then build your financial foundation on sand. You want to build that financial foundation on brick. I just absolutely love that this is the new generational wealth and looking at it as a power move versus something that means your life isn't working. Yeah. No, you're being smart. Yeah. What is the single biggest financial decision you make in your life? Kind of a hot take here, but I think it's who your spouse is. We talk a lot about saving and budgeting and spending and investing, but your spouse is the person that you are going to spend the vast majority of your life, hopefully, with. Why would you not make sure that the two of you are on the same financial page? It is crazy to me because the top two reasons why couples fight, sex and money. What if I told you if you had the conversation early? If you opened up? If you opened up a blank slate, if you opened the doorway, if you didn't argue but instead sat down and laid it all bare and figured out a plan forward together, you could avoid 50% of those really hot-button topics. Wouldn't you naturally assume it would make your relationship stronger? You would fight less and just be happier? So what are the questions I'm asking if I'm dating somebody? Well, Mel, how long have we been dating, okay? Like, are we first date? Are we? Oh, I'm not going to ask you financial stuff on the first date. I am. You are? Yeah. Okay, what are you going to say? If tomorrow, more money than you knew what to do with fell out of the sky, what would you do for work? The same thing I'm doing right now. At the time, would you have said that? Yes. I loved what I did. I just hated how little money I had. Then that would tell me something about you. If someone is making a really high-earning job right now and they're like, oh, man, if enough money fell out of the sky, I'd become a social worker, that tells you something about them. Yeah. If someone who's super broke right now says, I would still do the same thing, that also tells you something about them. I would also say, okay, Mel, if I gave you a budget of $100,000 to take the best vacation of your lifetime, what would you do? Oh, well, it would be an adventure trip. I would either go to Africa or I'd go to India or I would do the trip that I just did with my family, which was rafting the Grand Canyon. Mm-hmm. I would 1,000%. I would 1,000% spend it on some sort of experience. Yeah. If you were on a date with someone that said, my dream vacation is to spend a month on the beach and every single day my step count is zero on my Apple Watch, that person and you should not be together. Because you're out here being like, I'm going to climb this. I'm going to do this. I'm going to hike this. I'm going to trek this. You now know something about that person, about how they value their money and how they value their time. So here's what I'm hearing. I'm hearing that one of you wants to spend $100,000 to go to like an eight-star resort and lay on the beach and do nothing, which means, in my mind, you like status and luxury. Whereas I want to go on a really extraordinary experience. And that tells you that we have very different values and we want to spend our money doing very different things. You can talk about money on the first date. Don't be like, hey, bring your pay stub. Don't be a weirdo. But you can talk about money as soon as the first date. So when you're starting to get like more committed and you're in that, is this the end of the aisle person? Yeah. What is the conversations you need to have that most people don't? Well, the first legal document that bonds you and someone usually is not a marriage license. It's a lease. You move in together. And so that is a really good time to actually have this conversation because at some point you will have to provide a pay stub. And the credit check and all of that. And you can't lie about it at that point. And so it's, hey, you know, we've been dating now for however much time. And I know we're talking about potentially moving in together. Like, just so that we're able to look at apartments that make sense for both of us. Roughly, what are you willing to spend on rent? And, you know, let's have a conversation about how we're going to split this. That then can lead into, I make. This much money. This is what I'm comfortable spending on rent. What about you? You share first. Then they give you the number. So what is your advice if your boyfriend or girlfriend is not as ambitious as you wish they were and you're trying to decide your future? If you are in a relationship where you are already trying to change somebody, it's probably not the right relationship, unfortunately. And I know people don't like to hear that. But you can't make somebody do something. You can't make somebody do something. they have to want it themselves. And unfortunately, if you are the one forcing the issue, oftentimes that'll lead to resentment. And so you can't force your spouse to want more. You just need to meet somebody and be with someone who values a dollar the same way you do, who values work-life balance the same way you do, and who has the same goals as you do. Or you need to get very clear about what you actually want in a partner and whether or not the ambition that you want in them is ambition that you need to unleash in yourself. True. And that you recognize that you want to and see the value of other attributes in somebody. I've been married for 30 years, but I would say that I was in that classic situation where I just assumed my husband would make all the money. And he's not a guy that's driven by money. He's driven by something else. I mean, the man is a death doula and he leads men's retreats, and he would live in a one-bedroom apartment. The ambition was mine. And I think when you are a ambitious person, it is a mistake to apply your ambition and aim it at somebody else and make it their responsibility. Something that I have seen in both genders, but sometimes, you know, often from women, is that they are looking, for traits in a partner that they do not personally possess. And that really bothers me. What do you mean? I need to date a man who makes over half a million dollars. Do you make over half a million dollars? I need a man who's very generous and willing to buy me gifts. Are you a generous person? Do you buy the people in your life gifts? We oftentimes expect the world, but aren't willing to give it ourselves. And so I just encourage anybody, especially with a partner, is like, they don't necessarily need to buy me gifts. They don't necessarily need to buy me gifts. They don't necessarily need to match your income, but you need to match each other's effort. And if you don't, it's not going to work. In terms of effort, it can look very different, though. It could be one person being the breadwinner and the other person taking care of the home. It could be both people going out and working and splitting the household unpaid labor. But you have to be very clear about what the defined roles in your relationship are. I love that you come down to roles and values. I love that you come down to roles and values because roles and values come down to conversations, knowing yourself and skills you can build, not gender assignment. No, never. Be your own sugar daddy. Yeah, of course. Be your own rich BFF. Exactly. And that gives you control and really define what do you want and what do you value in life? And does this person give you that? And if they don't, we're out of here. But if they do, maybe it isn't the financial thing. Maybe it's something money can't buy. Yes. And can I just say, yes, I fear that we as women, we need to fire our publicist. What does that mean? So we have been basically brainwashed into thinking we are actually bad with money. Women are told dad will take care of money until my husband takes care of money. And one day my son will take care of it for me. You need to be an active participant in your own life. I hate to say this, but the media has brainwashed us and our publicist is not doing a very good job as women. They have let us be described by shows and movies like Confessions of a Shopaholic. We have been shown TV shows like Two Broke Girls. Where's Two Broke Guys? There are just as many young men who don't have money as young women. Confessions of a Shopaholic. Yeah, OK, I got a lip gloss. Like, what about that PS5 and the sports betting and the Super Bowl tickets and all the other stuff in the golf clubs that you bought? Those are just as expensive, if not more expensive. I don't see anybody giving you crap about it. OK, but instead, we are seeing, oh, men, claim your power, step into your wealth. Like, OK, but that's not what the numbers show us, actually. What do the numbers show us? More single women than single men own homes in all 50 states. We have less debt across every single category except student loans because we're getting more and more educated. And Fidelity actually went through the portfolios of a test set of men and women, and the women's portfolios actually outperformed the men's. So if we've got less debt, we're going to have less debt. We're going to have less debt. We're going to have less debt if we own more homes and our money is growing more intelligently and doing a better job. Don't you think that's the headline that should be in the news? Oh, my gosh. Vivian, too. What are your parting words? You are the person who gets to change your life. Money is a tool. It does not get to shame you. It does not make you bad. And having a lot does not make you good. But having it does mean, you get to do whatever you want with your life. And man, doesn't that freedom feel nice? It sure does. I just want to thank you. Thank you for showing up and slapping us across the face and then giving us a hug and then slapping us again with the truth. And I feel fired up and I cannot wait to give this to the world as a free resource because I agree with you that when you take control of your money, it gives you the power to do the right thing. And I think that's power and freedom to live your life and to make decisions that you want to make. And isn't that an extraordinary thing? So thank you. You're welcome. And thank you. Thank you for making the time to listen to an episode that will empower you through the simple things you can start doing right now. If you're sick of living paycheck to paycheck, if you're sick of feeling broke, if you're sick of shaming yourself about the past, then be really sick of it and make a decision. If you're sick of feeling broke, make a decision that you're going to get good with money. And so I want you to leave this conversation saying, you know what? I'm done with that part of my life and I'm going to lean in and I'm going to start acting like my own rich BFF. I'm going to apply what I learned. I'm going to share this with the people in my life that need it. And I promise you, you and I are going to bump into each other a couple of years from now and you're going to be like, Mel, oh my gosh, power, freedom. I'm now in control of my money. And in case no one else tells you today, I wanted to be sure to tell you as your friend, that I love you and believe in you and believe in your power to create a better life and having control over your finances and the freedom to make decisions that you want to make and live your life how you want to live it is the definition of power. And I really want that for you. All right. I will see you in the next episode. I'm going to welcome you in the moment you hit play. Vivian, just a decade ago, was page, and if you're feeling, and if you're, and if you're wondering, is it harder right now to get ahead? You're not crazy. And after this, and after this, and after listening today in terms of what it is that you want. Oh, pause for coffee. Okay. This is really good. A promotion makes sense given that I'm already operating at this level. Then I shut up. You're killing it. How are you feeling? Yeah, great. You're dynamite. Can you repeat the question? This is the perfect free resource to send to them because chances are, and when we come back, and then I thought I better check my subscriptions. And then I thought, does laser hair removal really work? Maybe I should try that, but not get a subscription. Oh, and one more thing. And no, this is not a blooper. This is the legal language. You know what the lawyers write and what I need to read to you. This podcast is presented solely for educational and entertainment purposes. I'm just your friend. I am not a licensed therapist. And this podcast is not intended as a substitute for the advice of a physician, professional coach, psychotherapist, or other qualified professional. Got it? Good. I'll see you in the next episode.