April 1, 2025 • 35 mins
It is Financial Literacy month and it's time to start building it! Financial literacy means understanding how money works and making strategic decisions about spending, saving, and investing. This episode is your guide to building financial knowledge, perfect for beginners and first-generation immigrants who may not have received financial education growing up.
• Focus first on learning about financial issues directly affecting you now
• Understand how inflation and taxes affect your money
• Learn to differentiate between "good debt" and "bad debt"
• Understand what affects your credit score
• Invest in retirement accounts
• Plus financial literacy resources from Latino voices including books, podcasts, and online content
Don't forget to share this episode with someone who might benefit, and tag me if you share it on social media to help reach more of our community with financial literacy information.
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Disclaimer:
I’m not a financial advisor. The information contained in this video is for entertainment purposes only. Please consult a licensed professional before making any financial decisions. I shall not be held liable for any losses you may incur for information provided in this video. Please be careful! This video is for general information purposes only and is not financial advice.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
It is Financial Literacy Month, and what better
time than now to start learninghow your finances work.
So I'm going to give you kindof like a to-do list, a list of
all the big major areas of youso you can start learning about
how your finances works as abeginner, plus a few tips and
(00:20):
tricks and some resources.
Hola, mi gente, welcome to themoney chisme podcast, where we
spill the real chisme onbuilding wealth without the
bullshit.
Whether you're trying to invest, grow that side, hustle finally
get your money right or, myfavorite, buy rental properties,
(00:41):
you're in the right place.
I'm your host, violeta, afirst-gen Mexican immigrant,
real estate investor,entrepreneur and your financial
hype woman.
Get ready for tips, tricks andexpert advice straight from
nuestra comunidad, porque eldinero es power and we're here
to claim it.
Don't forget, you can alwaysfind helpful resources down in
(01:05):
the show notes and indescriptions, so make sure you
check that out.
Hola, hola, welcome to anotherepisode.
It is April, it is financialliteracy month.
The day that I am releasingthis episode is April 1st, so
happy April Fool's Day, perosabes que we are not going to be
(01:28):
fools about our money.
I know it's a little corny,pero you know, staying on theme
with, you know, financialliteracy month.
I am going to, you know, sharesome tips and tricks of you know
, how to learn and about howyour finances work and build
(01:49):
that financial literacy.
But first, I always forget todo this, siempre se me olvida.
But do me a favor and sharethis episode with someone that
you think you know it might behelpful, or maybe on your social
media or whatever, anddefinitely tag me on there.
I think you should be able totag me, but you know, it helps
(02:10):
me grow and reach more of ourcommunity.
So that way we can, you know,uh, keep building this financial
literacy for um in ourcommunity, because, you know, um
, we are pretty behind with it.
So, which is the point of thisepisode, and so, yeah, and if
you have some time, rate theshow, rate the episode, it also
(02:33):
helps.
All right.
So April is financial literacymonth and, um, this is very
important in the Latinocommunity because most of us,
especially if you are first gen,uh, we didn't really get much
of, you know, a financialeducation.
Um, we basically just, you know, know a little bit of the
(02:57):
basics, like you know, save yourmoney and basically just avoid
debt.
But oh, you know, now, growingup there, you find out that
finances is a little bit morecomplicated and there is a lot
and it could get overwhelming.
So I wanted to make kind of likea quick como to-do list or
(03:17):
guide of the big majorcategories that you can start
off with to start learning ofhow your finances works and
start building financialliteracy.
And with that, let's firststart off with what you know.
What is financial literacy?
(03:38):
¿qué es eso?
Like what does that mean?
And financial literacybasically just means that you
can understand how money works,how your finances work, and you
manage your money and makebetter financial decisions and
(03:58):
you basically learn how tostrategize and plan on how you
spend your money, things likeknowing how to create a budget,
knowing about how investingworks, like a 401k retirement,
knowing how money works, likewhat about inflation and things
(04:19):
like that.
So all of that kind of fallsunder financial literacy.
It's a pretty big umbrella Y,como te digo, it can be pretty
complicated and sounds prettyoverwhelming at first.
Okay, like it does.
I felt the same way alprincipio when I had to start
learning about everything andyou feel so behind.
(04:42):
But let me tell you todo, pocoa poco, you know, paso, paso,
like, just take your time andyou will eventually learn pretty
much a lot of it, like I.
It's crazy how much I know now.
I mean, look over here, I'mover here con este podcast, but
I started off with not knowingshit, like no sabía nada, and it
(05:02):
was scary and it was a lot,pero you can do it.
Lo bueno que we have a wholebunch of resources now, que I'll
get to uh later in this episode, but let's talk about the first
thing to do as someone, thatonly que you, you know barely
the basics.
Okay, also, if you hear mydaughter in the background, she
(05:26):
just woke up from a two-hour nap.
She had a good-ass nap, soahorita tiene una energía.
And pobrecito my husband.
He's over there in thebackground trying to, like you
know, keep her entertained.
So I could do this episode realquick, so you might hear her in
the background, okay, so thebest way to get started in, you
know, building financialliteracy is to start with your
(05:50):
current finances.
You're going to audit yourfinances and this is going to do
two things, because as youaudit your finances, you're
going to go through and startlooking up about what's going on
, right, like, look up terms andthings like that.
(06:10):
But as you're auditing yourfinances, you're also setting
your foundation of what you'redoing with your money, and then
you're going to, as you learnmore, you're going to adjust and
set financial goals and allthat.
So we're going to start offwith auditing your finances, but
before you start, quiero quetengas, like you know, take a
(06:34):
moment and set, you know, Iguess, the mood.
I would say pon una musica orsomething that's calming.
I like to do things when I needa focus, to do like lo-fi music
.
But the thing is que whenyou're going through your
finances, some emotions mightcome up.
(06:57):
Right Is that we have our, youknow, our community deals with
some financial anxiety andfinancial trauma.
Sometimes, and la verdad,sometimes you just feel bad for
past financial decisions thatmay not have been so good.
Now, you know hindsight and Iknow I did every time I do that,
(07:18):
even to this day, like I wasyou know I'll feel guilty for
spending something, and thatmight happen as you go through
this, because you are going togo through your finances and see
where your money has been goingand you might see something and
then, like, towards the end,you'll see that oh, wow, I'm
(07:39):
thinking que gaste, you know,$20 a week on food and really
I've been spending way more thanthat.
You know, feelings might comeup, you might feel guilty, pero
the goal is not to do that, youknow, not to beat yourself up.
Those feelings are going tocome up, but don't let them
overwhelm you and and take awayfrom what you're trying to
(08:02):
accomplish, because you mightend up going into a negative
mindset.
So that's why I say, you know,mentally, prepare yourself and
do whatever it is, go outside orwhatever that's going to help
you maintain focus on what we'reactually trying to do and not,
you know, relive all these pasttraumas or have your anxiety
(08:25):
come up.
So just a little quickdisclaimer okay, okay, and so
what you're going to do is gopull up like maybe two to three
months worth of bank statements,credit card statements,
whatever financial statementsyou have.
You're going to, you know,print them out or just pull them
(08:46):
up or whatever, and you'regoing to go through, whether
it's you you use like a piece ofpaper, or maybe you go get like
a spreadsheet, create one orwhatever.
The idea is to start figuringout what have you been doing
with your finances right now.
What kind of financialobligations do you have like, do
(09:09):
you have a mortgage, do youhave student loans, a car
payment or whatever?
And so you're going tobasically create a budget, but I
don't want you to do anythingyet.
Like, don't change anythingright now.
Just pull up.
Maybe, if you want to do like apiece of paper, if you like
(09:30):
spreadsheets, if there's appsout there as well just go and
put everything in the differentcategories like income, debt,
savings, all that right, andjust put what you are currently
doing.
Don't focus yet anything about,you know, figuring out debt or
(09:50):
interest or anything like that.
I just want you to set up the,like I said, the foundation,
basically.
So set up your little budget andput whatever it is that you're
doing currently, and so you'llhave like a rough draft of a
budget of what you are currentlydoing right now, and so I want
(10:12):
you to look at it and see of thethings that are affecting you
right now.
Is it like debt?
Do you have a lot of debt?
Are you just not saving enough?
Did you find out that, okay, Idon't have a lot of debt, or I
don't have a lot of credit cardsor whatever, and but you know
(10:34):
what?
I'm not saving up as much orwhatever Like, figure that out.
Because I want you to focus onlearning about those things
first, the things that areactually affecting you right now
, because I don't want you toget distracted Again.
Like you know, I talked aboutreal estate, investing or
whatever.
Or you might see on socialmedia that so-and-so is, you
(10:56):
know, investing in blah blah orcryptocurrency or whatever.
Those things, ahorita, no, like, are not affecting you right
now, but something that'saffecting you right now might be
that you have, um, a lot a highbalance on your credit cards
and it's messing up your creditscore and blah, blah, blah.
So I want you to focus onlearning those things first, so
(11:18):
that way you can start adjustingand creating a plan on how to,
um, you know, make changes andthings like that.
And so now I'm going to go intothe I don't want to call it a
step-by-step because it's notnecessarily like hey, step one,
(11:40):
you're going to do this, steptwo, you're going to do that.
It's more of a guide, a kind oflike checkoff list, I guess, of
the big major areas that youwant to focus as a beginner on,
on building financial literacyand knowing how finances work,
and so that's why I had you goand audit your finances, so that
(12:03):
way you can see, okay, you knowwhat.
I have a lot of debt.
I want to learn about debt, howI could reduce my debt and how
it works and blah, blah, blah.
And you know, go focus on that,because I don't want you to go
like step by step here, becauseI don't want to be like, hey, go
figure out about cryptocurrencywhen, uh, you should focus
(12:28):
first on, you know, reducingdebt or maybe boosting your
credit score or whatever.
So, um, pick whatever is goingto help you right now, and then
you're going to build on that.
So one of the areas that youwant to understand is about your
income.
Uh, you want to know how moneyworks, uh, how things like
(12:51):
inflation, what is inflation andhow it affects your money,
because that comes later intoplay when you look at things of
investing and savings and thingslike that, because inflation is
going to affect how you knowthe buying power of the dollar,
(13:12):
of your money, affect how youknow the buying power of the
dollar, of your money, and soyou're going to want to take
steps to reduce the impact ofinflation, and so you want to
know what that is and know howit affects you so you could make
you know, educated decisions onwhat you want to do with your
(13:32):
money.
The other thing that affectsyour money is taxes.
So you want to learn just thebasics of taxes, because it can
get a little bit complicated.
So at the beginning you justwant to know how taxes work,
because there is a misconceptionthat if you're in a tax bracket
it's like a flat fee when it'smore of a ladder, so it let's
(13:57):
say you make a hundred thousanda year and there's different tax
brackets.
Now I don't have it in front ofme to off the top of my head.
So, um, but you know there'sdifferent tax brackets.
Let's say, from $15,000 andunder, let's say it's 5% taxes
(14:19):
and then $30,000 is like 10%.
So it's not that you're goingto get.
And let's say $100,000 is 25%.
It doesn't mean that you'regoing to get 25% of your income,
the whole 100,000 tax.
It's going to get laddered.
So your whole 15,000 and belowis taxed at the 5% that I said,
(14:44):
and 30,000 below but above15,000 is going to be taxed at
the 10% or whatever it may be.
And so it goes there all theway to a hundred thousand.
So you're not taxed 25% for thefull 100,000.
And again, so understandingthis can help you make decisions
, because there's some peoplethat will not take a pay raise
(15:09):
or whatever because they feelit's going to put them at the
next tax bracket and they don'twant to fall into a higher tax
bracket and have their wholeincome taxed in that tax bracket
when really the only thingthat's going to get taxed at
that higher amount is going tobe that extra amount that is
(15:30):
above the previous tax bracket,if that makes sense.
So, yeah, just get a basicunderstanding of what taxes are,
how it works, how what you knowa tax return is and you know,
for example, april 15 is thedeadline, and you know what kind
(15:50):
of deductions and things youmight be eligible for.
And don't get too in depth withit, because later on you will
start learning as you startdoing more things with your
money on how you can reduce yourtax liability and things like
that.
But once you get to that,usually you want to talk to like
(16:13):
a CPA to help you strategizewith that, because you don't
want to take no chances and youdon't want to leave money on the
table.
So I always use the CPA becausewith all my investments and
stuff.
It gets kind of likecomplicated.
The next category is debt andcredit cards, and I'm lumping
(16:34):
them together because they areboth, you know, debt and the
second part of credit cards.
I'll talk in the next category,but for here, you want to learn
of you know, how to manage debt, what is debt and how it
affects you.
So there's two types of debt.
(16:55):
There's the good debt and thenthere's bad debt.
Bad debt is consumer debt, likeyou know, having a credit card
for Kohl's or something, or Rossor TJ Maxx or whatever.
They're always, you know,trying to get me to get their
credit card.
And you know debt can be likestudent loans, any other type of
loan, like a car loan orwhatever.
(17:16):
And understanding thedifferences of that debt,
because some debt can be usedfor the positive, to your
benefit, for example, creditcards.
A lot of credit cards haverewards and certain type of, you
know, perks that you can use,like you know, for travel or
(17:38):
cash back.
But the idea is to do itstrategically and that's what I
want you to learn is understand.
You know, okay, if I put abalance on this credit card,
when do I need to pay it off?
When I need to pay off thebalance, so that way the
interest doesn't hit, but I getthose points, I get that cash
(18:00):
back.
So I do that with one of mycredit cards.
That I have for cash back is Ipay bills on it little things
and I pay it off and I have yetto be charged interest, but I
get cash back all the time on it.
I think right now I'm at likealmost $400 at this point and I
(18:21):
use that, you know, to buy mesomething nice or towards
something that I might be savingup for, and so you want to be
strategic and that's what youwant to learn about.
Also, if you have bad debt, howare you going to pay it off and
what kind of strategies do youwant to use?
Because you might want totarget high interest debt first.
(18:44):
You also want to understandthat minimum payments just going
to keep you paying that debtfor a really long time.
So you want to know, like, howmuch extra do you need to pay on
top of the minimum payments sothat way you actually pay it off
and stop accruing that interest?
So that's the big major thingswith credit card and debt, which
(19:11):
brings me to the next categorythat you know goes along with it
, but I want to have it as itsown category because other
things affect credit score yourcredit, affect credit score,
your credit.
So you want to start learning ofwhat a credit score is, how
(19:32):
it's calculated and what affectsit.
And you know there's the mainone, fico score, and I will
include that in the blog, whichI always forget to mention, that
most of my episodes always havea blog on my website and that's
where I'll put like extraresources and things that I find
that might be useful.
(19:53):
But that usually doesn't fit inthe description or the show
notes of this episode or of theepisodes.
So make sure you always checkthose out if you want more like
tools and resources.
But I'll put the FICO websiteon there or you could just like
Google it.
But there's a lot of goodresources and it gives pretty
(20:13):
good breakdowns of what you knowthe score is, how it's
calculated and how things affectit.
Because one of the things that Ididn't know is they'll say like
, hey, you know, don't go above30% of your credit limit because
it negatively impacts yourcredit score.
(20:33):
Well, I assumed that it wasyour credit limit combined.
So if you have like two creditcards, you know 5000 credit.
Each.
That means 10,000.
And I was like, okay, you know30% of that, but no, it's 30% of
each credit card.
So, um, I I had to learn that,uh, the hard way.
(20:55):
Um, so, just understandingthese things and that way you
can make better financialdecisions when you're using your
credit cards or you're usingdebt, things like that,
understanding how debt affectsyour debt to income ratio, which
that comes into play whenyou're trying to get, you know,
(21:15):
loans to buy a house, things orinvest in real estate.
And lastly, the last thing I'llmention about credit is to make
sure that you go check yourcredit report, at least yearly,
I would say, because you couldget a free credit report
annually at I think it'sannualcreditreportcom, but again
(21:40):
, I'll have that on the blog, alink to that.
But you could pull that reportfor free every year and just go
through it and make sure thateverything that uh is there
should be there and, if not,disputed things like that also.
You know another.
That's another one, like figureout, um, what you can dispute
and how, um, things that go intocollections, how that works and
(22:04):
how you may want to addressthat, because paying the
collection agency that doesn'tmean that they'll remove that
from your credit score.
Most of them are, you know areassholes.
They purposely put those thingson your credit report to scare
you into paying them and stufflike that.
But there are certain thingsthat I won't get into that you
(22:27):
could figure out how andactually in that FICO website
actually has a list of peoplethat you can talk to for things
like that.
So check that out.
But that's pretty much it withcredit.
And the last big major categoryI am lumping together investing
(22:48):
and savings because they can gohand in hand.
You can be saving up forcollege for your kids through an
investment account, right.
You could be saving up forretirement through retirement
investment accounts.
So that's why I have themlumped together.
And with that you want to knowwhat is available to you and
(23:16):
what you are trying to do.
So the first thing I would checkis to see if, where you're
working or maybe you alreadyknow this if you have a 401k,
make sure and audit that as wellto make sure that you are
contributing to it to the maxpotential.
(23:38):
So, whatever you can afford toinvest and that you could take
advantage of, afford to investand that you could take
advantage of.
Make sure that you are puttingmoney to it and check if your
company matches your investmentthat way and, if so, how much
and for how long.
Blah, blah, blah.
(23:59):
Check all of that and make surethat you are taking full
advantage of that, but also makesure that it's getting put into
an actual investment, because Iknow sometimes they'll pull the
money but you still have to gointo your account and allocate
those funds to whateverinvestments investments you want
(24:22):
and I did that with my thriftsavings plan, which is basically
kind of like 401k for themilitary, and I was contributing
.
But the problem is that itdefaults to the safest fund,
which is the G fund, is calledgovernment fund which gave me
(24:45):
very low return and I had itthere for like eight years.
So make sure you're not doingthat.
Finally moved it after I figuredit out, which is why I say,
like, start with your ownfinances, start learning about
your own stuff, and so learnabout what an index fund is
stocks just the basics.
What an index fund is stocksjust the basics.
Avoid falling into the traps of.
(25:08):
I call them, you know, they'recalled the stock bros.
You know the ones that aretelling you, like you know, get
this stock or that stock, likeavoid going into individual
stocks, especially as a beginner.
That's more of like expertlevel and to me, like a lot of
that takes a lot of time andeffort and most of us you know
(25:30):
we are working, you knowfamilies or pets or whatever
that we have to take care of.
Like I do not have time to belike tracking all this stuff for
individual stocks so I can makea few extra bucks, like for the
most part, just doing basicinvesting is going to be
(25:51):
sufficient enough for retirement.
And understand just the basicsof the stock market, especially
with the recent, I guess, dramaof the stock market taking a
nosedive.
But understand that you areinvesting for the long term.
(26:16):
So it's going to go up and down.
So don't you know panic, selland things like that, because
then when you come back you'repaying higher and you know it's
historically it's going to comeback up.
So, um, understand things likethat.
Uh, figure out what your goalsare as far as investing and what
(26:36):
investment options are there.
Because, like I said, there'sthe 401k, that's for your
retirement.
You can, if you're likeself-employed, find out what, um
, you know what uh investmentsare available to you?
Uh, cause I know there's some.
I forget what they're called.
They're like self-employed,self-directed IRAs or something
(26:59):
like that.
I forgot what they're calledoff the top of my head.
But figure out what youroptions are.
If you have, you know, kids, ifyou want to save up for college,
look up things like a 529,which is an investment account
that saves up for a college.
(27:19):
There's also investmentaccounts for your kids that, if
they're working, you could putmoney in there, and things like
that.
So just you know, start withthe basics of yourself.
What can help you right now?
And then expand from that asyou get more knowledgeable and
(27:40):
start wanting to make you knowbigger money moves and then you
can even get things into thingslike real estate investing.
And when you get to that point,you know, let me know and I'll
help you out, because I lovereal estate investing.
That's probably how you foundme for the most part.
But yeah, understand that.
And then, when it comes tosavings, which kind of goes back
(28:04):
a little bit with the inflationpart, because you want to
understand to not have it in ageneral bank account savings
account If you want to keep itthere, have it for certain
things like maybe you're savingup for new tires or whatever.
That's very short term.
(28:26):
But if you're having it therefor an emergency fund in case
like there's a leak in the roofor whatever extra emergency that
you don't, you know first ofall it's an emergency, so you
never know when it's going tohit.
It might be, you know, nextweek, it might be in a year from
now.
So you don't want to have thosefunds in a regular savings
(28:46):
account because these bankaccounts are not going to give
you much of percentage back isusually less than 1%.
You want to move those types offunds over to a high yields
savings account.
So if you're like saving up fora down payment for a house,
saving up for a new car, thingslike that, move those types of
(29:08):
savings or again, your emergencyfund, move that over to a high
yield savings account becausethat's going to at least keep up
with inflation.
The one I use is called upgrade.
Right now I think it's at 4.14%.
I believe it's gone up over 5%.
(29:28):
That was last year, but that'sthe one I use.
It's online, it's so easy.
If you're interested, the linkis in the show notes or in the
description, and the good newsis we both get a kickback if you
sign up and start using itAgain.
That's down below.
So those are the big majorcategories to start building
(29:52):
your financial literacy and thebest part is that we have so
many more resources available tous, whether it's books,
podcasts, youtube, things likethat that are, you know, from
our own uh community.
(30:12):
There's Latinas, there's otherminorities that are out here
writing books, like you know,cultura en Cash um Financially
Lit, which, by the way, she justreleased it in Spanish, so if
you know anyone that wants theSpanish version she just
released that.
Get good with money and weshould all be millionaires are
(30:34):
two other favorites of mine, ifyou want to.
You know, build a business.
There's Hefei in training.
If you want to learn more aboutyou know the stock market, you
can read Wealth Warrior.
That's a good one, and she alsohas a podcast as well for that.
And speaking of podcasts, youhave of course I'm going to plug
(30:57):
this one in you know MoneyChisme.
You have Yo Quiero Dineropodcast.
You have Say Hola, wealthpodcast, like so many different
podcasts now available from ourown community that you know talk
about all types of finances,building businesses, investing,
(31:19):
things like that.
And again, I'll have all theseresources and a list of books to
read that I've been creating onthe blog.
So if you're interested in allthat, I'll have all that there,
but overall, remember it's goingto.
(31:40):
You know, take some time likeyou're not going to know
everything you know.
Take some time like you're notgoing to know everything like
off the bat.
Some things might be easierthan other topics.
Just take your time and don'tlet yourself get so overwhelmed,
because then when that happensyou tend to avoid.
I know I did like, for example,with, you know, investing in my
(32:02):
TSP, which again is similar tothe 401k, because that just
sounded so overwhelming to meand then when I actually started
learning about it, like I stuckto the basics and I was like,
okay, this is actually not thatbad, like I could just do
something simple.
And I did.
I moved it into an index fund,yeah, and I've been making great
returns since and I still keepthat mentality to this day.
(32:26):
I like to always say that I'm alazy investor.
I do things the easier and mostsimple way.
That's still going to bebeneficial to me.
I'm not over here trying to be aday trader and be a flipper or
anything like that, uh, and sodo the same, start with the
(32:49):
basics with yourself and, um,figure out what you can do, uh,
what changes you can do rightnow.
That little small steps again,little by little, uh, and then
you know, build from there andthen, if you're interested, then
you could get into the morecomplicated financial stuff.
(33:09):
But really, just all thesebasics are good enough, like we
don't all have to be out heredoing all this crazy day trading
and cryptocurrency stuff, likelittle things that we can do now
.
It still works right.
So don't let yourself getoverwhelmed, don't let it get
(33:30):
too complicated.
And, yeah, hopefully this washelpful.
Again, don't forget, the blogwill have all the resources that
I talked about and more and alittle bit more information.
But other than that, don'tforget to share this episode.
Tag me if you share it onsocial media and I will see
(33:52):
y'all in the next episode.
Bye.
It is Financial Literacy Month, and what better
time than now to start learninghow your finances work.
So I'm going to give you kindof like a to-do list, a list of
all the big major areas of youso you can start learning about
how your finances works as abeginner, plus a few tips and
(00:20):
tricks and some resources.
Hola, mi gente, welcome to themoney chisme podcast, where we
spill the real chisme onbuilding wealth without the
bullshit.
Whether you're trying to invest, grow that side, hustle finally
get your money right or, myfavorite, buy rental properties,
(00:41):
you're in the right place.
I'm your host, violeta, afirst-gen Mexican immigrant,
real estate investor,entrepreneur and your financial
hype woman.
Get ready for tips, tricks andexpert advice straight from
nuestra comunidad, porque eldinero es power and we're here
to claim it.
Don't forget, you can alwaysfind helpful resources down in
(01:05):
the show notes and indescriptions, so make sure you
check that out.
Hola, hola, welcome to anotherepisode.
It is April, it is financialliteracy month.
The day that I am releasingthis episode is April 1st, so
happy April Fool's Day, perosabes que we are not going to be
(01:28):
fools about our money.
I know it's a little corny,pero you know, staying on theme
with, you know, financialliteracy month.
I am going to, you know, sharesome tips and tricks of you know
, how to learn and about howyour finances work and build
(01:49):
that financial literacy.
But first, I always forget todo this, siempre se me olvida.
But do me a favor and sharethis episode with someone that
you think you know it might behelpful, or maybe on your social
media or whatever, anddefinitely tag me on there.
I think you should be able totag me, but you know, it helps
(02:10):
me grow and reach more of ourcommunity.
So that way we can, you know,uh, keep building this financial
literacy for um in ourcommunity, because, you know, um
, we are pretty behind with it.
So, which is the point of thisepisode, and so, yeah, and if
you have some time, rate theshow, rate the episode, it also
(02:33):
helps.
All right.
So April is financial literacymonth and, um, this is very
important in the Latinocommunity because most of us,
especially if you are first gen,uh, we didn't really get much
of, you know, a financialeducation.
Um, we basically just, you know, know a little bit of the
(02:57):
basics, like you know, save yourmoney and basically just avoid
debt.
But oh, you know, now, growingup there, you find out that
finances is a little bit morecomplicated and there is a lot
and it could get overwhelming.
So I wanted to make kind of likea quick como to-do list or
(03:17):
guide of the big majorcategories that you can start
off with to start learning ofhow your finances works and
start building financialliteracy.
And with that, let's firststart off with what you know.
What is financial literacy?
(03:38):
¿qué es eso?
Like what does that mean?
And financial literacybasically just means that you
can understand how money works,how your finances work, and you
manage your money and makebetter financial decisions and
(03:58):
you basically learn how tostrategize and plan on how you
spend your money, things likeknowing how to create a budget,
knowing about how investingworks, like a 401k retirement,
knowing how money works, likewhat about inflation and things
(04:19):
like that.
So all of that kind of fallsunder financial literacy.
It's a pretty big umbrella Y,como te digo, it can be pretty
complicated and sounds prettyoverwhelming at first.
Okay, like it does.
I felt the same way alprincipio when I had to start
learning about everything andyou feel so behind.
(04:42):
But let me tell you todo, pocoa poco, you know, paso, paso,
like, just take your time andyou will eventually learn pretty
much a lot of it, like I.
It's crazy how much I know now.
I mean, look over here, I'mover here con este podcast, but
I started off with not knowingshit, like no sabía nada, and it
(05:02):
was scary and it was a lot,pero you can do it.
Lo bueno que we have a wholebunch of resources now, que I'll
get to uh later in this episode, but let's talk about the first
thing to do as someone, thatonly que you, you know barely
the basics.
Okay, also, if you hear mydaughter in the background, she
(05:26):
just woke up from a two-hour nap.
She had a good-ass nap, soahorita tiene una energía.
And pobrecito my husband.
He's over there in thebackground trying to, like you
know, keep her entertained.
So I could do this episode realquick, so you might hear her in
the background, okay, so thebest way to get started in, you
know, building financialliteracy is to start with your
(05:50):
current finances.
You're going to audit yourfinances and this is going to do
two things, because as youaudit your finances, you're
going to go through and startlooking up about what's going on
, right, like, look up terms andthings like that.
(06:10):
But as you're auditing yourfinances, you're also setting
your foundation of what you'redoing with your money, and then
you're going to, as you learnmore, you're going to adjust and
set financial goals and allthat.
So we're going to start offwith auditing your finances, but
before you start, quiero quetengas, like you know, take a
(06:34):
moment and set, you know, Iguess, the mood.
I would say pon una musica orsomething that's calming.
I like to do things when I needa focus, to do like lo-fi music
.
But the thing is que whenyou're going through your
finances, some emotions mightcome up.
(06:57):
Right Is that we have our, youknow, our community deals with
some financial anxiety andfinancial trauma.
Sometimes, and la verdad,sometimes you just feel bad for
past financial decisions thatmay not have been so good.
Now, you know hindsight and Iknow I did every time I do that,
(07:18):
even to this day, like I wasyou know I'll feel guilty for
spending something, and thatmight happen as you go through
this, because you are going togo through your finances and see
where your money has been goingand you might see something and
then, like, towards the end,you'll see that oh, wow, I'm
(07:39):
thinking que gaste, you know,$20 a week on food and really
I've been spending way more thanthat.
You know, feelings might comeup, you might feel guilty, pero
the goal is not to do that, youknow, not to beat yourself up.
Those feelings are going tocome up, but don't let them
overwhelm you and and take awayfrom what you're trying to
(08:02):
accomplish, because you mightend up going into a negative
mindset.
So that's why I say, you know,mentally, prepare yourself and
do whatever it is, go outside orwhatever that's going to help
you maintain focus on what we'reactually trying to do and not,
you know, relive all these pasttraumas or have your anxiety
(08:25):
come up.
So just a little quickdisclaimer okay, okay, and so
what you're going to do is gopull up like maybe two to three
months worth of bank statements,credit card statements,
whatever financial statementsyou have.
You're going to, you know,print them out or just pull them
(08:46):
up or whatever, and you'regoing to go through, whether
it's you you use like a piece ofpaper, or maybe you go get like
a spreadsheet, create one orwhatever.
The idea is to start figuringout what have you been doing
with your finances right now.
What kind of financialobligations do you have like, do
(09:09):
you have a mortgage, do youhave student loans, a car
payment or whatever?
And so you're going tobasically create a budget, but I
don't want you to do anythingyet.
Like, don't change anythingright now.
Just pull up.
Maybe, if you want to do like apiece of paper, if you like
(09:30):
spreadsheets, if there's appsout there as well just go and
put everything in the differentcategories like income, debt,
savings, all that right, andjust put what you are currently
doing.
Don't focus yet anything about,you know, figuring out debt or
(09:50):
interest or anything like that.
I just want you to set up the,like I said, the foundation,
basically.
So set up your little budget andput whatever it is that you're
doing currently, and so you'llhave like a rough draft of a
budget of what you are currentlydoing right now, and so I want
(10:12):
you to look at it and see of thethings that are affecting you
right now.
Is it like debt?
Do you have a lot of debt?
Are you just not saving enough?
Did you find out that, okay, Idon't have a lot of debt, or I
don't have a lot of credit cardsor whatever, and but you know
(10:34):
what?
I'm not saving up as much orwhatever Like, figure that out.
Because I want you to focus onlearning about those things
first, the things that areactually affecting you right now
, because I don't want you toget distracted Again.
Like you know, I talked aboutreal estate, investing or
whatever.
Or you might see on socialmedia that so-and-so is, you
(10:56):
know, investing in blah blah orcryptocurrency or whatever.
Those things, ahorita, no, like, are not affecting you right
now, but something that'saffecting you right now might be
that you have, um, a lot a highbalance on your credit cards
and it's messing up your creditscore and blah, blah, blah.
So I want you to focus onlearning those things first, so
(11:18):
that way you can start adjustingand creating a plan on how to,
um, you know, make changes andthings like that.
And so now I'm going to go intothe I don't want to call it a
step-by-step because it's notnecessarily like hey, step one,
(11:40):
you're going to do this, steptwo, you're going to do that.
It's more of a guide, a kind oflike checkoff list, I guess, of
the big major areas that youwant to focus as a beginner on,
on building financial literacyand knowing how finances work,
and so that's why I had you goand audit your finances, so that
(12:03):
way you can see, okay, you knowwhat.
I have a lot of debt.
I want to learn about debt, howI could reduce my debt and how
it works and blah, blah, blah.
And you know, go focus on that,because I don't want you to go
like step by step here, becauseI don't want to be like, hey, go
figure out about cryptocurrencywhen, uh, you should focus
(12:28):
first on, you know, reducingdebt or maybe boosting your
credit score or whatever.
So, um, pick whatever is goingto help you right now, and then
you're going to build on that.
So one of the areas that youwant to understand is about your
income.
Uh, you want to know how moneyworks, uh, how things like
(12:51):
inflation, what is inflation andhow it affects your money,
because that comes later intoplay when you look at things of
investing and savings and thingslike that, because inflation is
going to affect how you knowthe buying power of the dollar,
(13:12):
of your money, affect how youknow the buying power of the
dollar, of your money, and soyou're going to want to take
steps to reduce the impact ofinflation, and so you want to
know what that is and know howit affects you so you could make
you know, educated decisions onwhat you want to do with your
(13:32):
money.
The other thing that affectsyour money is taxes.
So you want to learn just thebasics of taxes, because it can
get a little bit complicated.
So at the beginning you justwant to know how taxes work,
because there is a misconceptionthat if you're in a tax bracket
it's like a flat fee when it'smore of a ladder, so it let's
(13:57):
say you make a hundred thousanda year and there's different tax
brackets.
Now I don't have it in front ofme to off the top of my head.
So, um, but you know there'sdifferent tax brackets.
Let's say, from $15,000 andunder, let's say it's 5% taxes
(14:19):
and then $30,000 is like 10%.
So it's not that you're goingto get.
And let's say $100,000 is 25%.
It doesn't mean that you'regoing to get 25% of your income,
the whole 100,000 tax.
It's going to get laddered.
So your whole 15,000 and belowis taxed at the 5% that I said,
(14:44):
and 30,000 below but above15,000 is going to be taxed at
the 10% or whatever it may be.
And so it goes there all theway to a hundred thousand.
So you're not taxed 25% for thefull 100,000.
And again, so understandingthis can help you make decisions
, because there's some peoplethat will not take a pay raise
(15:09):
or whatever because they feelit's going to put them at the
next tax bracket and they don'twant to fall into a higher tax
bracket and have their wholeincome taxed in that tax bracket
when really the only thingthat's going to get taxed at
that higher amount is going tobe that extra amount that is
(15:30):
above the previous tax bracket,if that makes sense.
So, yeah, just get a basicunderstanding of what taxes are,
how it works, how what you knowa tax return is and you know,
for example, april 15 is thedeadline, and you know what kind
(15:50):
of deductions and things youmight be eligible for.
And don't get too in depth withit, because later on you will
start learning as you startdoing more things with your
money on how you can reduce yourtax liability and things like
that.
But once you get to that,usually you want to talk to like
(16:13):
a CPA to help you strategizewith that, because you don't
want to take no chances and youdon't want to leave money on the
table.
So I always use the CPA becausewith all my investments and
stuff.
It gets kind of likecomplicated.
The next category is debt andcredit cards, and I'm lumping
(16:34):
them together because they areboth, you know, debt and the
second part of credit cards.
I'll talk in the next category,but for here, you want to learn
of you know, how to manage debt, what is debt and how it
affects you.
So there's two types of debt.
(16:55):
There's the good debt and thenthere's bad debt.
Bad debt is consumer debt, likeyou know, having a credit card
for Kohl's or something, or Rossor TJ Maxx or whatever.
They're always, you know,trying to get me to get their
credit card.
And you know debt can be likestudent loans, any other type of
loan, like a car loan orwhatever.
(17:16):
And understanding thedifferences of that debt,
because some debt can be usedfor the positive, to your
benefit, for example, creditcards.
A lot of credit cards haverewards and certain type of, you
know, perks that you can use,like you know, for travel or
(17:38):
cash back.
But the idea is to do itstrategically and that's what I
want you to learn is understand.
You know, okay, if I put abalance on this credit card,
when do I need to pay it off?
When I need to pay off thebalance, so that way the
interest doesn't hit, but I getthose points, I get that cash
(18:00):
back.
So I do that with one of mycredit cards.
That I have for cash back is Ipay bills on it little things
and I pay it off and I have yetto be charged interest, but I
get cash back all the time on it.
I think right now I'm at likealmost $400 at this point and I
(18:21):
use that, you know, to buy mesomething nice or towards
something that I might be savingup for, and so you want to be
strategic and that's what youwant to learn about.
Also, if you have bad debt, howare you going to pay it off and
what kind of strategies do youwant to use?
Because you might want totarget high interest debt first.
(18:44):
You also want to understandthat minimum payments just going
to keep you paying that debtfor a really long time.
So you want to know, like, howmuch extra do you need to pay on
top of the minimum payments sothat way you actually pay it off
and stop accruing that interest?
So that's the big major thingswith credit card and debt, which
(19:11):
brings me to the next categorythat you know goes along with it
, but I want to have it as itsown category because other
things affect credit score yourcredit, affect credit score,
your credit.
So you want to start learning ofwhat a credit score is, how
(19:32):
it's calculated and what affectsit.
And you know there's the mainone, fico score, and I will
include that in the blog, whichI always forget to mention, that
most of my episodes always havea blog on my website and that's
where I'll put like extraresources and things that I find
that might be useful.
(19:53):
But that usually doesn't fit inthe description or the show
notes of this episode or of theepisodes.
So make sure you always checkthose out if you want more like
tools and resources.
But I'll put the FICO websiteon there or you could just like
Google it.
But there's a lot of goodresources and it gives pretty
(20:13):
good breakdowns of what you knowthe score is, how it's
calculated and how things affectit.
Because one of the things that Ididn't know is they'll say like
, hey, you know, don't go above30% of your credit limit because
it negatively impacts yourcredit score.
(20:33):
Well, I assumed that it wasyour credit limit combined.
So if you have like two creditcards, you know 5000 credit.
Each.
That means 10,000.
And I was like, okay, you know30% of that, but no, it's 30% of
each credit card.
So, um, I I had to learn that,uh, the hard way.
(20:55):
Um, so, just understandingthese things and that way you
can make better financialdecisions when you're using your
credit cards or you're usingdebt, things like that,
understanding how debt affectsyour debt to income ratio, which
that comes into play whenyou're trying to get, you know,
(21:15):
loans to buy a house, things orinvest in real estate.
And lastly, the last thing I'llmention about credit is to make
sure that you go check yourcredit report, at least yearly,
I would say, because you couldget a free credit report
annually at I think it'sannualcreditreportcom, but again
(21:40):
, I'll have that on the blog, alink to that.
But you could pull that reportfor free every year and just go
through it and make sure thateverything that uh is there
should be there and, if not,disputed things like that also.
You know another.
That's another one, like figureout, um, what you can dispute
and how, um, things that go intocollections, how that works and
(22:04):
how you may want to addressthat, because paying the
collection agency that doesn'tmean that they'll remove that
from your credit score.
Most of them are, you know areassholes.
They purposely put those thingson your credit report to scare
you into paying them and stufflike that.
But there are certain thingsthat I won't get into that you
(22:27):
could figure out how andactually in that FICO website
actually has a list of peoplethat you can talk to for things
like that.
So check that out.
But that's pretty much it withcredit.
And the last big major categoryI am lumping together investing
(22:48):
and savings because they can gohand in hand.
You can be saving up forcollege for your kids through an
investment account, right.
You could be saving up forretirement through retirement
investment accounts.
So that's why I have themlumped together.
And with that you want to knowwhat is available to you and
(23:16):
what you are trying to do.
So the first thing I would checkis to see if, where you're
working or maybe you alreadyknow this if you have a 401k,
make sure and audit that as wellto make sure that you are
contributing to it to the maxpotential.
(23:38):
So, whatever you can afford toinvest and that you could take
advantage of, afford to investand that you could take
advantage of.
Make sure that you are puttingmoney to it and check if your
company matches your investmentthat way and, if so, how much
and for how long.
Blah, blah, blah.
(23:59):
Check all of that and make surethat you are taking full
advantage of that, but also makesure that it's getting put into
an actual investment, because Iknow sometimes they'll pull the
money but you still have to gointo your account and allocate
those funds to whateverinvestments investments you want
(24:22):
and I did that with my thriftsavings plan, which is basically
kind of like 401k for themilitary, and I was contributing
.
But the problem is that itdefaults to the safest fund,
which is the G fund, is calledgovernment fund which gave me
(24:45):
very low return and I had itthere for like eight years.
So make sure you're not doingthat.
Finally moved it after I figuredit out, which is why I say,
like, start with your ownfinances, start learning about
your own stuff, and so learnabout what an index fund is
stocks just the basics.
What an index fund is stocksjust the basics.
Avoid falling into the traps of.
(25:08):
I call them, you know, they'recalled the stock bros.
You know the ones that aretelling you, like you know, get
this stock or that stock, likeavoid going into individual
stocks, especially as a beginner.
That's more of like expertlevel and to me, like a lot of
that takes a lot of time andeffort and most of us you know
(25:30):
we are working, you knowfamilies or pets or whatever
that we have to take care of.
Like I do not have time to belike tracking all this stuff for
individual stocks so I can makea few extra bucks, like for the
most part, just doing basicinvesting is going to be
(25:51):
sufficient enough for retirement.
And understand just the basicsof the stock market, especially
with the recent, I guess, dramaof the stock market taking a
nosedive.
But understand that you areinvesting for the long term.
(26:16):
So it's going to go up and down.
So don't you know panic, selland things like that, because
then when you come back you'repaying higher and you know it's
historically it's going to comeback up.
So, um, understand things likethat.
Uh, figure out what your goalsare as far as investing and what
(26:36):
investment options are there.
Because, like I said, there'sthe 401k, that's for your
retirement.
You can, if you're likeself-employed, find out what, um
, you know what uh investmentsare available to you?
Uh, cause I know there's some.
I forget what they're called.
They're like self-employed,self-directed IRAs or something
(26:59):
like that.
I forgot what they're calledoff the top of my head.
But figure out what youroptions are.
If you have, you know, kids, ifyou want to save up for college,
look up things like a 529,which is an investment account
that saves up for a college.
(27:19):
There's also investmentaccounts for your kids that, if
they're working, you could putmoney in there, and things like
that.
So just you know, start withthe basics of yourself.
What can help you right now?
And then expand from that asyou get more knowledgeable and
(27:40):
start wanting to make you knowbigger money moves and then you
can even get things into thingslike real estate investing.
And when you get to that point,you know, let me know and I'll
help you out, because I lovereal estate investing.
That's probably how you foundme for the most part.
But yeah, understand that.
And then, when it comes tosavings, which kind of goes back
(28:04):
a little bit with the inflationpart, because you want to
understand to not have it in ageneral bank account savings
account If you want to keep itthere, have it for certain
things like maybe you're savingup for new tires or whatever.
That's very short term.
(28:26):
But if you're having it therefor an emergency fund in case
like there's a leak in the roofor whatever extra emergency that
you don't, you know first ofall it's an emergency, so you
never know when it's going tohit.
It might be, you know, nextweek, it might be in a year from
now.
So you don't want to have thosefunds in a regular savings
(28:46):
account because these bankaccounts are not going to give
you much of percentage back isusually less than 1%.
You want to move those types offunds over to a high yields
savings account.
So if you're like saving up fora down payment for a house,
saving up for a new car, thingslike that, move those types of
(29:08):
savings or again, your emergencyfund, move that over to a high
yield savings account becausethat's going to at least keep up
with inflation.
The one I use is called upgrade.
Right now I think it's at 4.14%.
I believe it's gone up over 5%.
(29:28):
That was last year, but that'sthe one I use.
It's online, it's so easy.
If you're interested, the linkis in the show notes or in the
description, and the good newsis we both get a kickback if you
sign up and start using itAgain.
That's down below.
So those are the big majorcategories to start building
(29:52):
your financial literacy and thebest part is that we have so
many more resources available tous, whether it's books,
podcasts, youtube, things likethat that are, you know, from
our own uh community.
(30:12):
There's Latinas, there's otherminorities that are out here
writing books, like you know,cultura en Cash um Financially
Lit, which, by the way, she justreleased it in Spanish, so if
you know anyone that wants theSpanish version she just
released that.
Get good with money and weshould all be millionaires are
(30:34):
two other favorites of mine, ifyou want to.
You know, build a business.
There's Hefei in training.
If you want to learn more aboutyou know the stock market, you
can read Wealth Warrior.
That's a good one, and she alsohas a podcast as well for that.
And speaking of podcasts, youhave of course I'm going to plug
(30:57):
this one in you know MoneyChisme.
You have Yo Quiero Dineropodcast.
You have Say Hola, wealthpodcast, like so many different
podcasts now available from ourown community that you know talk
about all types of finances,building businesses, investing,
(31:19):
things like that.
And again, I'll have all theseresources and a list of books to
read that I've been creating onthe blog.
So if you're interested in allthat, I'll have all that there,
but overall, remember it's goingto.
(31:40):
You know, take some time likeyou're not going to know
everything you know.
Take some time like you're notgoing to know everything like
off the bat.
Some things might be easierthan other topics.
Just take your time and don'tlet yourself get so overwhelmed,
because then when that happensyou tend to avoid.
I know I did like, for example,with, you know, investing in my
(32:02):
TSP, which again is similar tothe 401k, because that just
sounded so overwhelming to meand then when I actually started
learning about it, like I stuckto the basics and I was like,
okay, this is actually not thatbad, like I could just do
something simple.
And I did.
I moved it into an index fund,yeah, and I've been making great
returns since and I still keepthat mentality to this day.
(32:26):
I like to always say that I'm alazy investor.
I do things the easier and mostsimple way.
That's still going to bebeneficial to me.
I'm not over here trying to be aday trader and be a flipper or
anything like that, uh, and sodo the same, start with the
(32:49):
basics with yourself and, um,figure out what you can do, uh,
what changes you can do rightnow.
That little small steps again,little by little, uh, and then
you know, build from there andthen, if you're interested, then
you could get into the morecomplicated financial stuff.
(33:09):
But really, just all thesebasics are good enough, like we
don't all have to be out heredoing all this crazy day trading
and cryptocurrency stuff, likelittle things that we can do now
.
It still works right.
So don't let yourself getoverwhelmed, don't let it get
(33:30):
too complicated.
And, yeah, hopefully this washelpful.
Again, don't forget, the blogwill have all the resources that
I talked about and more and alittle bit more information.
But other than that, don'tforget to share this episode.
Tag me if you share it onsocial media and I will see
(33:52):
y'all in the next episode.
Bye.
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