Money Smarts: Building your Financial Foundation with Guest Anthony Kuefler Pt. 1

Introduction

Danielle 00:00
Welcome back to the A + You Podcast brought to you by Affinity Plus Federal Credit Union. I'm your host, Danielle Johnson.

Amber 00:07
And I'm your co host, Amber Shanley.

Danielle 00:09
Amber and I are excited to be back in the studio, I think.

Amber 00:14
I am very excited to be in the studio, especially with our guests.

April is Financial Literacy Month

Danielle 00:17
I know well, so we're here to discuss financial literacy month, which is the month of April.

Amber 00:24
And why is that important? Daniel?

Danielle 00:27
Well, thank you for asking about my job. Amber, so at Affinity Plus, actually, I just did an interview with Dave today for a publication. Well, I didn't do the interview. He was interviewed, and he talked a lot about our organization and financial literacy, and he was discussing how important it is to our organization. He was talking about Junior Achievement and our partnership with them. He was talking about our youth banking app, which we can-

Amber 01:00
For users under 13

Danielle 01:02
Under 13, who you know, parents can control it. Parents can assign chores. We can get into the details of that, but that's one of the things that we do to support financial literacy. And in general, actually, Dave said this today, and it kind of changed the way I thought about some things. He said, I prefer the term financial education, because literacy makes someone sound like illiterate

Amber 01:27
100% and I think that's where financial literacy is such a touchy topic in general, and truly it is about increasing the knowledge of everyone, not just, not just members at Affinity Plus,

Danielle 01:40
Yeah, so I might slip up a few times today, because I that was the first time I had heard that, and I thought I like that so much better, "education." We should all be learning something new every day.

Amber 01:54
Well, right? And I think with learning something new, it's giving the tools to help with what they're learning, so that way, they do develop those strong financial habits that they can have, like if they're using the youth banking app, for example, under 13, they can bring that into adulthood. Even as an adult, they can take what they've already learned and build on it to be to empower themselves, to do something more with their money, whether it's saving for a trip or budgeting for something that they want to achieve in their home, that sort of thing.

Danielle 02:28
Yeah, I think, I mean, again, we can all be learning a little bit something new. And I think education never really stops when it comes to finances, unfortunately.

Meet Anthony Kuefler, Affinity Plus Financial Coach

Amber 02:40
Oh, 100% but I do think that's a good segue to our guests.

Danielle 02:45
I do too...

Amber 02:46
Because our guest is a financial coach.

Danielle 02:48
Well, let's introduce Anthony. Anthony Kuefler, from our Bemidji branch is in the studio with us. Welcome.

Anthony 02:57
Thank you for having me. I'm excited.

Danielle 02:58
We're so happy you're here. I think that's a good introduction Amber, because Anthony tell us what a financial coach is.

What is a Financial Coach?

Anthony 03:06
So at Affinity Plus our financial coaching team is a group of individuals that work with our members to develop their our members financial plan. We cover every facet of that plan, from budgeting, savings, credit discussions, even conversations into retirement planning, debt, debt repayment, etc. The entire kind of facet of someone's financial plan, taking into account their values, setting up a specific and reachable goals and being there along to kind of help them along the way, so that they have someone to kind of go to as a resource, correct what needs to be corrected, and just kind of support them throughout their entire journey.

Danielle 03:44
So that's super exciting. So it sounds like you have a fun job

Anthony 03:47
I do, super passionate about it. So glad to be on the team. Finally, just this past year, so it's we're kind of launching now, so hopefully we'll be busy with members that are looking for our services. But it's a super fun thing to do.

Danielle 04:00
So you said, we're kind of, this is a new thing in the like last year, and we're kind of launching this. So is there something special, like, Could I be a financial coach if I wanted to be?

Anthony 04:10
I think absolutely. I think talking, you've talked to the powers that be at Affinity Plus, if you care, to join our team. But I think, I think there's financial coaches all amongst the organization. We carry that distinction just because we took our certification test and whatnot, but at the end of the day, I view it more as just we're someone there to help coach, help be a resource and an advocate for our members, helping them achieve their financial goals. So

Amber 04:35
And I think you touched on that really well, because it's not just the coaching crew that took the certification, truly, any advisor at Affinity, Plus can really help in that regard. But you all have some special tips and tricks that you're sharing internally, but also externally during the month of April, which is really exciting, because sometimes I think we forget that the smallest thing can make the biggest difference in the long run.

Anthony 04:58
Agreed, I think that's kind of the microcosm of kind of what we do, what a lot of our conversations with our members are focused on, a lot of the stuff I do now in the coaching role, it was things I've been doing for the last few years. So it hasn't really changed my day to day. It's and it's something I'm super interested in and passionate about. So but having you know specific members that you have developed more long term commitments versus just someone coming into the branch. It's kind of more the direction that the coaching goes into. It's more sustained relationships with these members, with these families, on more of a long term approach.

Danielle 05:30
And how rewarding

Anthony 05:31
It is. We've met some, I should say, I have met some awesome people been fortunate enough to, you know, I would say, develop lifelong relationships with some of the members I work with from all over the state, the country, all ages and different backgrounds. So you get to you get to work with these members, they kind of let you into their life. So it's a privileged position to be in, but it's super humbling, super rewarding.

Danielle 05:56
Well, I know when Amber and I were, like, planning this, and we were talking about it, and we're like, I was like, you know, I just read on the loop the other day, like a good story, and-

Amber 06:06
It involved cake.

Danielle 06:07
It involved cake.

Anthony 06:08
So let me stop you there. I brought you cake.

Danielle 06:11
No, you didn't.

Anthony 06:12
I did.

Danielle 06:13
Did you seriously bring his cake?

Anthony 06:15
I did

Amber 06:16
Tony's forever...

Anthony 06:18
Caveat is, I do get one of them. There was a I got three for two.

Amber 06:25
Oh, well, thank you.

Anthony 06:28
I'll take whatever's left.

Danielle 06:30
Okay, well, we'll have a little treat later. Thank you, and we'll have to tell, we'll have to tell your story. Well, we'll tell the story about why cake is so significant to you.

How a Financial Coach can Help a victim of fraud

Anthony 06:44
I knew you would bring it up, so that's why I brought it. I don't know that cake is necessarily important to me, but just because I figured we'd bring up the conversation about a member that I worked with and helped. Over the last three years, I've been working with a member at my local branch in Bemidji that went through probably one of the worst possible situations you could go through. She's a single mother. Just to kind of paint a picture three children, she fell victim to a scam involving social media that led to some fraudulent checks being deposited, and ultimately, at the end of the day, she was out about 15 grand in total. So we take that back just at the base level, $15,000 is a lot of money. I mean, $15 is a lot of money to someone. I think it's all relative, but 15 grand for any of us, I think we can kind of feel that pit in our stomach when we think about having that taken from you, not only that, the emotional and mental toll that that would take on you. So she happened to just pick me that day. I was the member advisor that was tasked with kind of helping her at that moment. Fortunately, we were able to do a loan to kind of recuperate the funds that were lost. But that didn't really clear up everything right now, she's got this debt. She's paying. She's behind on her bills, because we've lost not only did she lose the fake funds, she lost some of her actual funds too. Like I said, it totaled about 15 grand. She was facing potential delinquencies and stuff on her mortgage. It was just a really terrible situation. So we met every few weeks over, really the last three years, developing a plan on how she can generate more income, how she can pay off these debts and get her budget, kind of in order to fit this new payment and this new life that she kind of had to live, all while still being a single mother, working three jobs, trying to be just a normal everyday person, and this whole thing centered around her falling victim, did something that she thought she was helping out someone like her. It was a single mom gave her a story that she needed some checks deposited and money sent because of the life situation she was in. So there was really no monetary benefit for her to do this in the first place.

Danielle 08:49
She was just being a really good person.

Anthony 08:50
Yeah, so that was the even the tougher thing about about the whole situation is it wasn't like she was trying to gain anything financially, it was she was trying to help someone, and that that speaks to this individual's character. So that got exploited. And again, I think most people, you could find a valid reason to say, Well, I have nowhere to go from here. But that's the opposite what she did. So obviously we had some work that we did with her, with her budget, and kind of saying, this is our life now. We have to live with it. But she, she picked up a third job. She really focused and harnessed in her budget and where every dollar she had was going, still taking care of her children. And like I said, this was about three years ago, and the loan was, I think, 60 months again, about little under 15 grand was the loan. And I got a call about a month and a half ago from her. I have her name saved on my phone so I know it's her when she calls, and it was a, was a Thursday, and she called me and told me, Hey, I just want to let you know I paid off that loan. So she she so I was like, immediately, just frazzled and just had a shot of adrenaline, because I knew I'm like, That can't be right. You're, you're two and a half years ahead of pace. But sure enough, I pulled up the membership, and it was paid. And she said it so like, calm and just cool, because you could just feel the confidence radiating off of her. And it was such a change from what, where we started. So I told her, all right, I promised you when this day would come that you when you paid it off, because you told me all this time, you'll never pay this thing off, you'll never do it that we're gonna have a party. I'm gonna buy you a cake. We're gonna celebrate this because it's something worth celebrating. We're gonna take something terrible, we're gonna turn it into something we're celebrating. And I told her, All right, next Friday, I need a week to get this ready, but next Friday, can you come to the branch? And she's like, Yeah, I'll be there. I'm like, Okay, what kind of cake do you like? And we kind of worked on that second I hung up, I shut my door. I'm like, I'm not doing any more work until we get this order. So called the local bakery, and it's so funny. It was a member that answered the call. I don't think I shared this on the loop post, but I kind of filled in on the details of what I could and I just said, Look, this is someone that had the worst possible thing happen to her, and we're gonna celebrate. I want it to be a cake that screams. It needs to be chocolate first and foremost. That's the only thing I care about. But it needs to be joy and positivity. And just, I wanted to reflect the work that she put in. So I got the call on Friday to go pick up the cake, and then she came to our branch at the end of the day. We had streamers and noise makers, and it was, it was very loud. We were not going to do that much loudness. I think we scared all the members. But she was emotional. It was a happy tears. But she she told me, like no one's ever celebrated her like this. So super emotional, just because I had seen the last three years been with her, you know, every every month, kind of chatting with her, and we even just talk, just to share stuff about our families and stuff. So, like I said, complete stranger to someone I consider a friend. I'm so proud of her, but that's what the cake symbolized. I knew that you would kind of bring that up, but the key was just to celebrate those little victories and the big ones too. So-

Danielle 11:51
So we read this story, and it was, like emotional, and now I'm hearing it, and I'm I'm emotional. We're gonna have to get like, tissues in here, because Dave told a story when he was here and I was here and I was emotional, and no, you're in here.

Amber 12:05
We will not have tissues in here. There is no nothing.

Danielle 12:15
Happy tears. I mean, it is well. And I think, like that story, and there's just so many pieces to it. It's your relationship to the member, right? It's your it's showing how passionate you are about the membership, about your role, about your relationship with her. And it's also not to bring it back, but it's also a form of financial literacy. I mean fraud happens, and life events, good or bad happen, and financial education, I caught myself-

Anthony 12:44
We're gonna be okay.

Amber 12:45
No tears, no tears, happy tears are acceptable.

Amber 12:50
Yes

Danielle 12:52
But it cut. I mean, it comes in so many different forms, and just think about, like, what she learned through that experience, and how she will be able to carry that and teach her kids for, I mean, for a lifetime,

Anthony 13:04
You were spot on. So she would be the first one to tell you that, like the maturation of her the day I met her, where we are now. Like she could teach a she could teach a course on the debt snowball calculator, one of the many tools that we use as financial coaches and member consultants at the branch. And with affinity, plus, she had no idea what that was when we first met. So her growth both, both professionally and, I guess emotionally mentally, like she's never gonna fall for another scam again. And she is so vocal on that stuff. When, when I asked her actually, and this was actually the most moving part for me, I asked her because we had such a big response to the story. I did call her and I asked, Hey, you moved a lot of people, whether it's a mother that works at Affinity plus or just any human being that's been through hardship. Your story resonates, I think, across so many different mediums and backgrounds. And I said, they want to feature this on maybe the website or social media. We didn't know the specifics, but basically, do we have permission? Sure? And I was thinking she would probably say no, just because she's not a showboat anything like that, and she her, the first thing she said is, absolutely, if I can save one person from doing this, then it's worth it. And and it just speaks to who she is as a person, that is the woman I met the first day. This all started with her trying to be graceful and helping someone, and that part of her hasn't changed. And I think a lot of people that would kind of take that away, you know, you've given everything and you got screwed over in the worst possible way. So you could make the argument, why would you try to help other people in the future? She doesn't view it that way. She's not a victim anymore. She's empowering herself. So if I had any part in that, I'm I sleep just fine, but I think most of it was the work that she did, if we had to help her along the way. Some educational pieces, great, but she's still the one that did all the work, so.

Financial Coaches equip members to do what they need

Amber 13:10
Well, and I think that's something that aligns well with everything that we do at Affinity. Plus, whether it's the coaches or advisors, consultants, it doesn't really matter, title. It is just equipping; equipping members to do what they need to do. And we're here to just help facilitate it, providing that knowledge, providing some guidance, but also it's they have to do the work. And that part doesn't change. And I think that's sometimes a challenge that is met with some financial education, is it's a lot of work sometimes when you maybe don't want to or maybe now's not the right time, and all of those things, I think everyone in the coaching space is really able to help balance out. It's like, okay, maybe not today, but in three months, we can do this. And here's ways to get there. It doesn't have to be like an immediate switch.

Anthony 15:41
Yeah, our coaches are, I mean, we all have different philosophies with how we do it, and the team is so great. They're so fun to work with and bounce ideas off. There's some objective truths that all of us will share. I think with financial education, there are hard, objective truths like, yes, having debt is not ideal. It's better to be debt free, more money, technically is better, but there's nuance required in all those things. And I think with all of us, we're all going to have different philosophies and biases towards different things. There's certain financial coaches that are so good at finding every possible way to pay off debt as fast as possible, where we might have other coaches that are going to be really, really strong at saving and retirement planning and being able to advocate on those resources, but at the end of the day, all of us are so focused on what that members values are, what's important to them, and that's the driving force in everything that we do. You know, it would be unfair to the member for us to impart our bias or our beliefs on what we think is valuable, because it might not pertain to them. And yes, again, debt, we can say as a blanket is is bad, but that's kind of a lazy thing to say. There might be a reason for the debt and things, and for us to just throw that in ridicule, you're not going to get results from that, because you're going to diminish their participation and then in that. And like you said, if they're not willing to put in the work, you're not really going to go anywhere. So we can't want it more than the members. So we have to keep their values at the at the forefront and every coach that we have that is that is the one constant with all of us. So-

Setting up a budget

Amber 17:05
Well, I even remember a story from back goodness, this could be years from now, but it's like setting up a budget for someone, and they're like, they would go to Starbucks every day $5 there. And it's like, that's their only thing that they do to treat themselves, and it's like, I'm not willing to give up Starbucks today, even though I know I could save $35 a week. I That's my treat, and that's the only thing for me. And it's like, that's fine, keep your Starbucks. Let's look at something else. And that's, I think, the biggest key in all of it is just helping people see bigger beyond just one particular piece, like you said, maybe it is something they value, like Starbucks.

Anthony 17:47
I have a member that's like, that her drink is $10 it's a Trenta pink drink with the vanilla-

Danielle 17:54
72 fixings

Anthony 17:55
-syrups and all these things. And I'm like, Whoa, $10 drink. Is that what the tips like? No, not always. It might be more. I'm like, okay, ignore the expression on my face. I just getting shock over.

Danielle 18:05
I didn't even know you could order a 10 dollar drink!

Anthony 18:08
I didn't either, it might have been an exaggeration, because I've still,

Anthony 18:11
like, I've gone into the app and tried to create center, can't get to $10 but, but again, like you said, if that's important to you, then it's important to me, and let's budget that in so that you don't, you're not stressed about that, and you're not feeling guilty, I think is the biggest one. So, yeah, that's funny. It's so true, though, because it's be easy for us to go in there and say, Yeah, spending, if you go there every day, spending $520 at Starbucks or whatever every week, or whatever that math would be,

Amber 18:37
I hope not 500

Anthony 18:39
I mean, yeah, sorry if you went there once a week and spent a $10 one, but yeah, it'd be easy to say, Well, yeah, it'd be smarter to use that 520 to pay on debt. Okay, but you got to live your life. You got to do things you enjoy. I don't think that's fair. So.

Danielle 18:51
Well, we're human. I mean, if you're gonna like, you know, sit at home every day and think about, Gosh, I really wish that I could go to the movies, like, that's no way to live your life. Or I if you're gonna sit at home and be like, gosh, you know, I just would really love to be able to go to Starbucks, like, once in a while. I mean, we're human, and a lot of us pretty I mean, anybody work hard and you should be able to enjoy life while working through whatever it is you're working through, whether that's finances or your actual day to day job or whatever that is, you know, it's important to enjoy life too.

Anthony 19:33
Yeah, I think there's a, you know, I've had some members that changed my perspective on that exact thing, where I'm so anal about, like, focusing on retirement planning. And I'm, you know, I'm gonna be 34 this month, and my wife will get on me and say, like, why are you why are you so worried? Like, live a little, and she's spot on, because, why am I stressed out? Like, I need to make it to retirement to even enjoy that. And one of the members said, well, I might not be rich in retirement income, but I'm rich in life experience. And I'm like. That's such a good way to, like, think about it. He went on a random, spawning, spontaneous trip to Malaysia, like, last month, and I'm like, Okay. And at first I'm like, Did you my my gut reaction was, did you budget for it? But then when he started talking like, who cares about that for a moment, you, you're, you're gaining life experience, you're you're doing things that are valuable. You're living your life, and as long as it's not sacrificing the rest of like the financial picture for yourself, then I agree. So you can't. I don't believe in being absolute either one direction. There needs to be balance with that

Amber 20:31
Well, and I think to your point ensuring values are represented. Because we all have our own views on our budget and how we spend our money, but it's up to the member, consultant, the coach, the advisor, whomever it may be working with that member to identify that and ensure it's represented within that because otherwise, I don't think I could go on a trip to Malaysia tomorrow, but I would sure love to, but that's that's me as a person, that's not the person doing it. And I think that's the biggest key that you keep touching on is just like, ensure that members values are represented, otherwise any budget of any kind isn't going to be meaningful or wanted to be worked.

Anthony 21:14
Be easy for me to create a budget for everyone, and our all of our budgets look the exact same. But that's not realistic. It's not that's not how it's even supposed to be. So if you're someone at home that's budgeting, and you're you're watching all of the, you know, millions of videos on Instagram, Tiktok, YouTube, that are telling you, well, if you don't have 30% in this category, whatever, and you're stressing out about it, like, shut it off because your budget shouldn't. It's not always going to match what everything everyone else's is, and it shouldn't. So there's, you know, you still have to refine it and see where you can make adjustments, but people stress out too much that it's different from what they're being told or what they read online. Yours should be unique to you.

Amber 21:50
I think that's the key part too, because I know when you talk about saving for retirement, I'm like future Amber, you're going to enjoy that and at that time, but present Amber is going to Starbucks.

Anthony 22:04
Buy Starbucks stock.

Amber 22:07
Maybe we are not advisors.

Anthony 22:10
It's not financial advice...

Amber 22:11
Stock area, correct? Yep, gotta, gotta cover that.

Danielle 22:15
Okay, Anthony, you brought up a good point with the budget, and I feel like budget is a key pillar of financial education. So what are some other key pillars of financial education that we should kind of know about?

Finances are like building a house

Anthony 22:30
So I would frame it almost as budgeting being like the foundation of it all. Because I think without that, you really can't successfully go through any of the other pillars. But after the budget is set or that you have at least that drawn up, and you're at a place where you're comfortable with analyzing it, revising it, etc, the next would be savings. And I think savings is kind of the easy one to segue to, because it's kind of the one concept that as children we understand, even though we might not associate with finances. But like saving or collecting, like, I think of Pokemon cards and marbles or whatever I saved as-

Danielle 23:03
Or like you're piggy bank.

Anthony 23:03
Exactly right? So we have the concept of it. We understand what it means literally. But when we apply to finances, I think the importance of it, it kind of ties into everything else that we're doing. So you want to segue off into financial planning, retirement, that's savings, uh, investing, etc, paying off debt you're likely going to be saving to do that as well. So that is where I would start with a member, as far as, like benchmarks, or kind of how that conversation would go again, we're going to tie in, like, their goals, their values, but as a baseline, generally, you're going to be aiming at either, like $1,000 emergency fund, or, I like to say, like your highest deductible. So if it's a medical deductible. Generally, I know it's gonna be larger than 1000 almost always. But even on a smaller scale, if you don't have that be like your auto insurance. So generally, 500 to 1000 is most common in the United States. But that way, you're at least covered in the event of major incident involving something like that, the $1,000 the thing is, I think most of us know nowadays, not going to go as far as that. We'd like it to so, but it's at least something. Because what happens if we don't have anything saved and we have a life event, and that could be again, anything. It could be you missed two or three days of work because you were sick, sure, and those loss of wages, if you don't have sick pay, it could be a death in the family, not only just the financial loss, but the mourning, the emotional, the, you know, spiritual effects that it has on it. Finances is kind of the one. I don't want to say it's the best of all seven stages of wellness, but it's the one that I feel like has all the ripples everywhere. Because if you're struggling financially, it's likely, you know, you're not going to be able to feed yourself. So your physical wellness might be affected. Emotionally might be attached, because you're in a down place, because you don't have enough to pay bills, or whatever it might be that you're trying to do. So getting a savings built so you have at least some sort of security is important. If you don't have anything and you know you get into a car accident, or you do have a short paycheck this month, what's going to happen if you need bills to be paid? Likely we're going to lean. Into our debt levers that we would pull, so credit card, maybe some loans, which aren't inherently bad, but if that's what we're using as a kind of a band aid to cover either poor financial habits or just bad decisions, eventually, we're going to get to a point where we've overextended ourselves and we can no longer pull that lever, and we're back to where we are right now, but now we have even higher risks and higher vulnerability, because if we're late on our house payment, are we running the risk of being unhoused or not having, you know, heat in our house, or gas in our car, food in our stomach? So that'd be like the next stage would be your savings goals and just getting that kind of at the at the forefront for the member.

Amber 25:39
So if we are building a house. Because you said foundation is the budget, like, would savings be the walls?

Anthony 25:46
Yeah, 100% I think it ties into every kind of other piece of it, I mean, and it's in the budget too. So those kind of go hand in hand, but the budget's the roadmap for everything else that we're doing. So I think that's...

Amber 25:58
Now we're on a road. I thought we were in a house. What about the pillar?

Anthony 26:01
Sorry. I'm sorry. Yes, it is the blueprints for the house. How about that? No, no, you're right.

Danielle 26:09
It's the road to the house.

Anthony 26:10
Sure.

Amber 26:10
Paint me a Picture. See this visually?

Anthony 26:13
Yeah, this is the metaphorical road in my head.

Amber 26:15
So okay, if they so now we have the budget and we have savings and emergency funds are kind of tied together. And then you talked about levels of debt. And so would you say, like, that's like, credit and debt management would be another pillar. I know you mentioned that just a moment ago. Danielle, how would you...

Anthony 26:41
Yeah, I would say, I would like to say, oh, gosh, that's a good now. Now you got me thinking, how about the roof of the house? And I'll explain my reasoning, and you can tell me if I'm right or wrong. So credit and debt, it'd be the roof over our head that we have that's protecting us, that's there. Credit being if we need to pull that lever, like we need access to money for for an emergency, whether that is in a personal loan or using a credit card, or we're buying a vehicle or something like, we have that over our head if we have, if we have good credit, or at least well established credit, it allows us to have capacity to pull that lever when needed. As far as debt management and handling that that ties directly with your credit. So if you're poor at managing your debt, likely it's not always the case, but oftentimes you'll see correlation with lower credit score, which is going to make it harder for you to pull that lever if you need to borrow money. Obviously, we do loans for people. Of all credit scores, it's at the end of the day, just a number, but that number kind of dictates a lot. It's going to tell you what interest rate you're paying. So it's going to be potentially more expensive to borrow. It's going to tell us how you do previously with with everything when you borrow money. So I don't like to use debt as a necessarily a I don't like to refer to it as a tool, but it's a lever that we would pull, and we would use it when we need it. I don't think any time we apply for credit, I like to say it needs to be intentional. We should never just be borrowing money to borrow, and if we don't have to borrow, like if we have savings, if we have a funded emergency fund, great, because now it's one less payment, one less obligation that we need to tie into. But managing that effectively. Again, go back to your budget. On your budget, you're going to have all your obligations and your debt. So it's all tying back to that.

Is debt good or bad?

Amber 28:23
I think, um, maybe even saying like credit is there's good credit as well. Um, excuse me, good debt.

Anthony 28:33
Yeah, that's yeah.

Amber 28:34
Maybe segue into

Anthony 28:36
That's literally where I was trying to go, yeah, um, I think I, what I was going to say is that I think you'll hear some some people say all debt is bad. I kind of talked about this earlier. Again, optimally, none of us have debt. We all are debt free. That'd be the ideal-

Danielle 28:52
What a life.

Anthony 28:53
-optimal place. And I hope we all get there, and we will, right, we would hope. But not all debt is just bad, like if you have a mortgage, you're not going to generally say that it's bad debt. I think we're more thinking of higher interest debt, your credit card debt, etc, even that there might be a reason for it, and maybe you're using it for something. Now, if you have lingering, you know, high interest credit card debt, and it's something that you know is a crux, yeah, I would say that's a bad debt to have. But we look at your vehicles. You know, yes, it'd be nice to pay cash for your car. Nowadays, it's tough to do that. So having a lower interest car loan because you have good credit, having your house, being a homeowner like the American dream, I would consider those good debts. And yes, it should be a goal to pay them off, but we should be tackling those higher interest problem debts first.

Danielle 29:37
So not all debt is bad,

Anthony 29:40
Yeah, I think-

Danielle 29:41
I mean, overall-

Anthony 29:43
Yeah,

Danielle 29:44
Kinda what you're saying?

Anthony 29:44
I think it's tough. It's it's lazy to say that it's just bad. There's nuance required with that. But we, we, I think not all debt is created equals, the way I would rephrase that-

Danielle 29:55
Okay

Amber 29:56
-and I think it goes back to the values when you're setting the budget to. Like, if someone is valuing taking out certain debt over others, I think it aligns well with if they feel that's what they want at that moment in time, or there was a need, like you said, with even credit card debt, sometimes that is the option that was presented and they leveraged it.

Anthony 30:18
Yeah, yeah. It's just never where you run into issue with debt, where, I think you might have to be a little more strict on like the opinion of debt is where you it's a clear cut case where debt is a tool that they're using to cover up bad fundamental decisions or lack of budget. Because if you're not budgeting, like I said, You're guessing at everything. So what you'll cut, what you'll often see with that is you'll see multiple lots of revolving debt because we don't have an idea of what we need to save for our everyday expenses, and we end up maybe relying on credit cards to cover those, or maybe we, you know, in the rare occurrence, you do have someone that just spends compulsively, I think that gets blown out of proportion. I don't see that as much with my daily thing, where it's just someone that's spending and spending and spending usually there's a reason behind it, you know, we're just not keeping track. And it's kind of amazing how quickly you can rack up that debt. Like it starts with just using a credit card for groceries because you're short that month. And next thing you know, you have something come up. You have a car bill at the at the auto shop. You have, you know, you miss, you miss some time from work. And next thing you have a couple $1,000 in credit card debt, that's totally normal. And I'm not saying it's great to have, but that's why you need to be kind of doing all of these things and keeping track of all that.

The stigma around debt

Danielle 31:29
And I kind of like your comment just then about how it's normal, right? Like, I feel like there's such a stigma around debt or credit card debt, or this or that, but it's normal for people to be kind of like working through that. I mean, wouldn't you say?

Amber 31:47
I think it's normal, and I think it goes in phases too, because it depends on what life stage they're at or what what occurred in a moment.

Anthony 31:54
Yeah, I'll use a I'll be vulnerable, and use a personal example. Wells Fargo gave me a credit card at 18 with no job or income. So that was cool at the time, and I viewed it as a $500 bonus for myself, right? So when you're at that age, and I was immature beyond belief, financially, I didn't have my parents didn't really talk about that wasn't a household thing, luckily, like they were there to help me when I needed it, but I just spent that like it was money in my account, because I didn't understand how it worked, right? And do that over years and years, you know, and you have no idea what you're doing. You have no idea what interest is. You don't understand how what revolving debt is or what debt really is. I don't want to say that I was I would say it's immature and foolish of me, but that's a common thing. Does it make me a bad person or anything? No, that's a totally normal thing to experience. That's why we're talking about educating yourself so you understand what the cost is for you to for you to do these things. I do think too, like, it is normal. I want to say the average American, like, over the age of 18. It's like $7,000 to $10,000 on credit card debt right now. Like, that is the average. That's wild to me, but it is a normal thing. Does it mean it's the best? No, but like Amber said, there's gonna be reasons. There's gonna be phases and things for that. So just don't beat yourself up over it. That's that's like, the thing I have the biggest problem with is people are ashamed about that when they come to us, you kind of have to break those walls down, because they're not going to want to open up about it and talk about what there might be underlying issues that they don't want to open up about, because they're embarrassed, they're ashamed, so recognize that it's totally normal and just be be okay with that.

Amber 33:28
I was gonna say finances are a very emotional subject, and I think that's where, at times, it's easy to forget that, but it's buying a gift can be exciting and rewarding, and maybe that's something that brings you a lot of joy, but also it could also bring you burden too, when you get the bill in the mail, if you're using a credit card, for example. So there's a lot of emotion tied to finances that sometimes I think is forgotten about.

How do you learn about finances?

Danielle 33:55
I completely agree. I do want to go back, though, because you kind of mentioned like being 18, and I think we teased it earlier, but the youth banking app. So what that is, is it's a tool that we have kind of given to our members, for youth to start learning at an early age, so you're not 18 or, you know, and spending $500 because you have $500 now, right?

Anthony 34:29
Yeah, it is because, unfortunately, still it doesn't appear that in high school, there's a lot of emphasis put on finances, which is kind of wild when you think about it. You have kids usually starting employment for the first time, they have income for the first time. Obviously, some people, it's different, but generally speaking, and they're not being taught anything about how they're doing it, so the money coming in is just it means nothing to them to spend it, right? Not everyone, but for most of us, that's what it was. And having the youth banking app, even if it's just to check your balance. Is getting accustomed to what that is, because they don't even they might not even understand. We see it when we open up minor memberships all the time, and having those conversations with these members, you kind of get the deer in the headlight look a lot because you're talking about a debit card or, you know, savings account, and they don't really have a concept of what you're actually talking about. So allowing them to have exposure in a safe and a controlled platform, I think is phenomenal. But also, when they turn 18, when you're off into the real world, as we call it, like being out there without any education or knowledge of understanding of how all this works. It's a risky spot to be in, because then you end up paying, you know, 1000s of dollars over courses of years, so-

Amber 35:38
Well, and I think what you touched on, too is like, if your parents didn't talk to you about finances, who does?

Anthony 35:43
Yeah.

Amber 35:44
Yeah. And you learn things like through your friends, through social media now and how, how do you know it's reputable, and how to decipher what you should trust and maybe what you shouldn't. And your point Danielle, the youth banking app provides that safe environment for younger individuals to learn under 13, but then even as they grow older in our teenage years and young adults, they have the ability to look at the tools within our online banking to learn more and understand and gain some of that financial knowledge that maybe their parents aren't comfortable talking to them about it, it just depends on how they were, how they grew up.

Anthony 36:27
Yeah, you're absolutely right. That's such a good point to bring up. Like, if they're not learning it from us or their parents, where are they learning it from? And I mean, we know because we live it every day, there is an abundance of information out there for us at our fingertips, whether it's social media platforms, whether it's Internet, whether it's TV, radio, whatever it might be, and there's a lot of bad information out there. So, you know, it's, it's not that we're on a high horse or anything, but it's just, we see it every day with the things that we see online. It's a lot of illusions of grandeur. You know, make $20,000 a day by doing this and get rich quick type stuff, and it's just when you're when you're 18 and impressionable that's gonna, I mean, I was drawn to that stuff as a kid, so obviously that's more exciting than talking about a budget when you don't know what that is.

Amber 37:12
I don't know budgets sound really exciting Tony!

Anthony 37:17
Yes, but for an 18 year old who doesn't really understand it, it's not gonna jump off the page kind of like a fun Tiktok video might. So we'll work on that.

Amber 37:27
In due time. Danielle might be on Tiktok. Who knows?

Outro

Danielle 37:30
Who knows you guys, who knows? Well, I think that's a great place to pause. So we are gonna turn this into a two part?

Amber 37:39
Did we finish our house, though?

Danielle 37:41
Oh, well, we will finish it in the next episode?

Amber 37:44
Oh Okay, I just wanted to make sure I had a proper picture of the home I was building.

Danielle 37:47
Well, you have a foundation, you have walls and you have a roof.

Amber 37:51
The back door.

Anthony 37:54
That'd be the second property.

Danielle 37:56
Well, we can finish our house in the next episode. So make sure that you come back, because we are going to keep Tony on for a second episode here, and can continue the conversation of financial education and specific, you know, to the month of April as kind of that overall topic. So we'll catch you on the next episode of A + You.

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