This content emphasizes the critical importance of financial literacy and responsible money management for young people, highlighting common pitfalls and offering practical strategies for building a secure financial future.
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a lot of us love to go shopping and we
sure don't have a problem spending money
but holding on to it and living within
our means can be a real challenge
hi i'm donald faison and if you're like
me dealing with money was not something
you learned in school
i picked it up by trial and error and
i'm still learning
we live in a society that sells every
new toy that's their job to sell you a
toy one you don't need so young people
have to make choices
you have to know what your financial
goals are
we want our restaurant to take us to our
retirement but i have to be realistic
and like you have to start planning now
i decided to break off into my own business
business
because i personally love having
creative control
and a close relationship with the
clients from start to finish
whether times are good or bad we all
need help managing our money and it's up
to each of us to get it right
with interest late fees penalties i
acquired over thirty thousand dollars in
debt i'm trying to get things situated so
so
i don't go into my life with all this
debt and i can actually have credit good credit
credit
being in debt it's bad
but staying in debt is worse
i started small and i worked my way up
you'll meet folks just like you with
money issues of their own and you'll
hear from people with the know-how to
help them stay on track
there is never going to be a good time
to get started on your financial life so
you might as well get started today
when you're young the good news is
you're just starting out and it's really
easy to get organized right now because
pretty much everything is online
you always heard don't sweat the small
stuff but when it comes to your money
you have to sweat the small stuff
if you're in school or working full-time
we've got news for you
basic info on banking credit cards taxes
and insurance
this show is all about your life and
funding for your life your money has
been provided by a grant from the hsbc
when i got my first big movie role i
took that paycheck and bought myself a
shiny new jeep man i love that car but
by the time the third payment came due i
was out of money and had to hustle to
try and hold on to it the fact is most
of us are carrying debt and lots of it
it's no wonder we have money problems
when you factor in inflation the average
person makes less money than their
parents did 30 years ago it's a jungle
out there a financial jungle and it's
easy to get lost unless you have the
skills to find your way
i've grown up with a family that's
always been in debt and always had
trouble with finances and always worried
about money i've kind of turned away
from that and just
tried not to think about it in high
school i remembered a couple of speakers about
about
you know managing your credit and your
money and you know looking for a job and
all that but it didn't really have a
great impact just because it was at one
time my mom was a single parent so when
she did get money in
tended to spend it right away and so i
kind of grew up with the mindset of when
you have money you know go out to eat go
buy something i really haven't had
anybody to show me how to manage my
here's a man who can show you a thing or
two about making and managing money
russell simmons started out hustling on
the streets in queens new york
now he's a multi-millionaire but he
learned about money the same way i did
the hard way
when i grew up i always wanted every toy
that i saw
i see young people on the same way today
i made some bad choices early on but i
was a little conservative i was lucky
enough that my parents taught me some
things you learned about managing your life
life
you know kind of a trial and error
when russell began his business career
he had little to guide him except street sense
sense
and a keen interest in a new music genre
that would come to be known as hip hop
when the major labels paid no attention
to hip-hop music russell wasn't daunted
by that he sold records out of the trunk
of a car literally
in 1984 russell and a partner launched
the first hip-hop record label death gym
he went on to manage some of hip-hop's
greatest stars but he didn't stop there
he brought hip-hop into the mainstream
creating television shows films and
clothing lines
but he also wanted to start giving back
russell was determined to give young
people the skills to succeed in managing
their money
financial literacy is not taught in
schools and it's not necessarily handed
down from
generation to generation so we got a
supplement for that [Applause]
[Applause]
russell co-founded the hip-hop summit
action network which puts on the get
your money right seminar on personal finance
finance
it brings together stars of the hip-hop
world music industry execs and financial
experts to help young folks learn that
managing their money is an essential
life skill
one of my financial mistakes just being
wild with the money
save your money live within your means
he's known as the godfather of hip-hop [Applause]
[Applause]
if you're here you've already taken the
first step you know you taking stock in
yourself taking responsibility for yourself
yourself
today's summit will be the 78th summit
that we've had in eight years
when we first started the hip-hop summit
we found out we had underestimated
the readiness the thirst and hunger of
young people for this material
the good news for people who are
starting out is that it actually isn't
all that complicated to get your
finances in order you know i just said
this is all about getting you on the
right path now before you make all the
mistakes that your parents made or their
peers made
i grew up with a rusted spoon in my mouth
mouth
i was poor
i'm the first generation of money in my
family i started with hard work i
started with getting my mind right i got
signed to noontime music when i was 19
and got my first forty thousand dollars
the only smart thing i did with that
forty thousand dollars i went to bangkok
bank account the most important thing is
discipline you have to know the
difference between needs and wants
the louis vuitton the gucci product and
that's not really what it's about life
is about being able to create a
foundation for yourself [Applause]
[Applause]
on my journey trying to become
your own job
it dawned on me that because i didn't
have i had no choice but to budget
financial literacy and financial
responsibility is not something you
should take lightly it may not only save
your life it will help you live a better
quality of life hang around people who
know more than you and get in groups of
people who are like-minded so that you
guys can elevate together
you come here now for inspiration
you see it the eyes have taken these
steps you see that you have experts here
to teach you and you find out it's easy
this information can get lost it's everywhere
everywhere
no matter how rich you are you need to
be able to afford your lifestyle so
that's something we have to teach young
people the summit has given many people
their first steps
they come out in power connected
feeling like they can get their
financial situation in order get their
you too can get your money right but
those first steps are up to you
it seems like a lot to deal with but
you're about to meet some folks who are
doing it and profiting from the power it
when i moved out to la i was really on
my own for the first time my mom wasn't
around to help me out i was running from
one audition to the next doing
commercials to pay the rent
when you're really into the daily grind
it can be hard to keep up with your finances
finances
the trick is
make your money work for you
mid lewin has a job at an engineering
firm in chicago he's on his own for the
first time and managing his own money
and it's up to him to make sure his
salary covers all his expenses [Music]
[Music]
i've been working for three months first
paycheck came about a week into it i was
like wow
this is nice
i graduated college and i wanted
something to reward myself so i got a 46
inch lcd i was about 2 000
my mom was definitely worried why are
you spending so much money already once
i turn it on you know had the cubs game
on my dad was like yeah this is pretty cool
cool
i don't need like
new everything although i have a nice
new tv
one of the best things to think about
when you're young when you're right out
of college or still in college is that
you know you want to be deliberate about
your spending you want to be deliberate
about your saving i have no problem with
people spending what they make you know
when you have your first job you want to
reward yourself the problem comes when
you're spending money that you don't have
have
both men and his girlfriend teresa are
on tight budgets so they need to make
every dollar count
anytime you go shopping to do anything i
mean even to buy a pack of gum you
should ask yourself is this a need or is
this a want when i go shopping by the
time i get to the counter i have asked
myself this question from every item
about 50 of my card i have put back i
mean the tellers hate me but it really
does help keep you in check
i didn't have any furniture when i came
in i got a futon it works as a couch and
a bed which is kind of nice a couple
tables shelves
things on sale everything's more
expensive in the city so rent is about
710 a month and utilities are 20
cell phone is another 50 amount i'm
living on my own so no more roommates so
i can't split any of the expenses like
cable and internet and i'm paying the
full you know hundred dollars
i buy a monthly pass on the metra it's
about 63 dollars a month [Music]
so how can you figure out how much money
is coming in and how much is going out
check this out [Music]
[Music]
first step
keep track of everything you spend money
on from car payments to cappuccino
once you've done this for at least two
weeks you'll have a good idea of what
then subtract the total from your
monthly income if you get a negative
number you're spending more than you're
taking in and you need to make some changes
changes
you also need to distinguish between
what you want
the first thing i did when i got my
offer letter from work i made an excel
spreadsheet and i said okay this is the
amount of money i'm getting and these
are the expenses that i'm going to
anticipate i decided you know i wanted
to save like ten thousand dollars and to
reach that goal then i'd have to try to
keep you know my weekly expenditures for
a certain amount but the problem is it's
really hard to anticipate expenses
it's not like you're spending the same
amount every week every penny ought to
have a purpose when you have the first
job suddenly you're buying coffee you're
buying water every day you could easily
spend a thousand dollars a year on water
which you can get for free [Music]
[Music]
i have a budget for myself i just don't
go beyond what i can i mean
obviously i like to have certain things
that i probably can't have we're on a
bi-weekly pay so
i get a couple hundred dollars
every two weeks and that usually goes
straight to groceries
gas his biggest expense is his
girlfriend so yeah
as you can see yeah so you got me a nice
nice gift today
you want to spend no more than 20
of your monthly take-home pay on debt
payment pay no more than a third of your
take-home pay on housing costs you want
to save 10 of your take-home pay that's
the goal and if you could do more even
do more
to help him manage his money men looked
for a bank
there were plenty to choose from both
online and traditional
with a wide range of services
and charges
i think when you look for a bank you
ought to look at it just like you're
looking for a mate you have to look at
your banking habits and choose an
institution that meets the things that
are important to you just like when you
go out on a date
what i was looking for was interest
rates and maybe any kind of benefits or bonuses
bonuses
the first goal was to pay off the
student loans and to do that you know i
wanted to take my paycheck and put it
into an account where i was getting a
good interest rate i found some online
banks and found a pretty good savings
account checking account that are tied together
together
it's very important for people to
realize a bank account is a good place
to start your financial life you want to
find a bank that doesn't charge you in
order to keep a checking account there
with a low minimum i'm old-fashioned i
don't want to deposit my money my cash
into a machine i want to hand it to
someone and get her name so if it
doesn't enter my account i can come back
and say gladys you didn't deposit my money
the thing with the online bank is you
can't really write paper checks you
could send checks to people but to write
a check quickly that option wasn't
available there's a bank really close to
my house here so now i have a checking
account with this bank and a credit card
and the combination of the two gives me
more rewards
you probably want to find a bank that
has a lot of atms in your neighborhood
either where you work or where you live
and that's because banks often charge
you on average almost two dollars to use
another bank's atm every time you get money
money
i would say you should want to use your
atm say once a week because you don't
want to go to the atm every day take out
twenty dollars here forty dollars there
you can really lose track of your money
most checking accounts come with an atm
card or debit card that allows you to
access the cash you deposit into your account
account
like a credit card you can use a debit
card to make purchases but you're not
borrowing money from a bank or a credit
card company you're just withdrawing it
from your own bank account
but be careful not to spend more money
than you have in your account
if you do it's like balancing the check
and the bank is likely to charge you a
big overdraft fee
the biggest thing that trips young
people up with banks is the fees there
are fees for having too low of a balance
there's fees for using too many checks
so that's what you want to look for an
institution that is going to charge you
the least amount of money to have a relationship
relationship
if you like a lot of people these days
you probably do some of your banking online
online
you can have your paycheck deposited
directly into your account
saving you the trouble of going to the bank
bank
and giving you access to your money a
lot sooner
you may also be able to have regular
monthly bills like phone or cable
automatically deducted from your
checking account
that way you never miss a payment [Music]
[Music]
even if you've got the best bank in the
world it's still going to be up to you
to manage your money wisely
i think the most important thing is you
have to know what your financial goals are
are
i had a goal of how much i wanted to save
save
i'll probably have about maybe 700 to a
thousand dollars saved per month
priorities lead to prosperity if you put
your priorities first then you will prosper
prosper
i'm only 22 and i still am trying to get
a feel for exactly what i want to do but
i have a general plan for my life [Music]
[Music]
min is working hard to keep his
financial act together but he knows
there are plenty of ways to mess up for
instance any time you spend more than
you're taking in you're probably making
up the difference by going into debt
amanda mccormick a senior at florida
state in tallahassee can tell you all
about it she's deep in debt
i go to florida state university fourth year
year
creative writing and sociology major
i completely support myself so i came
into college without any money i didn't
have a job
financial aid didn't exactly cut it as
far as bills are concerned so nowhere
else to turn i finally got my first
credit card which was a 2 000 credit limit
limit
actually has florida state decor on it
they sent it to me in the mail i
activated it in 45 seconds spend money
things i spent the 2 000 on um
food transportation rent for my student
dorm books just bare necessities that i
need to be a successful student in college
college
at this point i was using the credit
to help me survive over about six months
between five cards i spent less than
four thousand dollars with interest late
fees penalties i acquired over thirty
thousand dollars in debt
i had maybe five thousand dollars
that's not bad right that's good oh god
no one's gonna want to marry me
i have a lot of things it's about five
thousand dollars debt that you're
racking up on your cards it's only
gaining interest and it's just gonna put
even more stress and anxiety in your life
life
people don't understand that this is
alone and it's a very very expensive
loan you use a credit card you get your
bill you pay it off in full
that's going to keep you out of trouble
most people don't plan to get into
trouble with their debts
situations would occur life would happen
and i would have to use that money to
fix my car or whatever it is like things
happen all the time i would make very
sporadic payments on the cards but they
weren't really consistent because i
needed that money for other things
and you come out of work and you have 12
missed calls from creditors
why haven't you called me back miss
mccormick well i'm sorry i was at work
for the past three days straight trying
i'm amanda i'll be taking care of you
i'm a server at applebee's i like the
job a lot it's more fast paced so it's
more my style
i work about 30 to 35 hours a week and
make money that's all i try to do i'm a hustler
this is pretty much my only source of
income besides grants and scholarships
that i've gotten through school
amanda's situation is not that unusual
most young people use credit cards so
it's important to pick the right one
when you're comparing credit card offers
you want to get the lowest interest rate
possible and you don't want to pay
annual fees but when you get a card you
might find yourself slapped with all
kinds of fees that you never expected
credit card companies and that little
fine print that you don't read reserve
the right to change that interest rate
at any time
given the pitfalls of credit cards it's
no surprise that some experts advise
young people to avoid using them all together
together
there was a study out of mit that showed
that when you use credit you tend to
spend anywhere from 30 to 100 percent
more than if you use cash if you can
starting out in your life avoid using
credit it is a trap it is a game you
cannot win for the big things put it on
the credit card but you better darn well
be able to pay it off that next month
even if you pay just ten dollars more
than the minimum monthly payment you
could significantly reduce the number of
years you're paying it back and the
amount of interest you're paying back
if you're having problems paying off
your credit card don't panic
there's lots of help available
today i'm going to see a consumer credit counselor
counselor
and basically
what they do is they help you alleviate
your debt yourself so you want to get
your bills paid off and then try to get
your credit score turned back around
then is that what your objective is yes
it was years ago before i became a
credit counselor that i was involved
with helping students get credit cards
we'd have 10 people at a time signing up
for four and five cards
when the upperclassmen came it was a
whole different story they were avoiding
me like the plague and as i talked to
them i learned that most of them were
already in credit card debt
and i was just so upset by that i had to
quit that job what are they saying you
owe now uh
over thirty thousand dollars so that's
quite a substantial amount of money that
you have more than you did okay you know
if they've gotten i had people come in i
said you're going to be writing a check
from your grave you're never going to
get this paid off
those companies are going to want a
minimum payment of about three to three
and a half percent of the balance that's
going to range somewhere in the
neighborhood of about 700 a month that's
obviously not in a position i'm in right
now i mean i'm a student so
so
what are my other options i wish that
you'd been able to get into us a little
sooner because typically what we can do
for people when they're still with the
original creditors they work very well
with us and they reduce those interest
rates significantly and then we put that
into one monthly payment typically that
payment is less than when you
are in debt when anyone is in debt it's
looming over you you know that you owe
something to someone you know that if
you were to drop dead
one of your loved ones is going to owe
something to someone it follows you everywhere
everywhere
i feel for amanda because i know how
credit cards can get you in trouble
i had to get rid of my credit card early
on to keep from running it up
but credit can be a good thing when used properly
properly
if you're a student like amanda or a
college grad chances are you couldn't
have gotten your education without the
help of student loans
tuition is at least two and a half times
what it was when our parents went to college
college
so even if you have a job while you're
in school a student loan may be the only
way you can pay your bills
typically most student loans are going
to be due six months after
you are no longer a full-time student
the payments are going to start then
it's about five thousand dollars
peter billigas is a financial counselor
who travels the country talking to
students about money matters
and he's an expert on student loans
and in the studio with us this morning
we have peter villages who is a
financial guru
for the past couple days we've been at
georgia southern university here in
statesboro georgia and i've been
visiting classrooms teaching classes or
freshman orientation classes start
before you need to start if you forget
everything that i'm going to say i want
you to remember this one thing
there is never going to be a good time
to get started on your financial life so
you might as well get started today
peter spends a lot of time during his
campus visits counseling students
one-on-one doing if anything most
students peter meets have questions
about their student loans always done a
good job do you know that you were able
to get subsidized loans or unsubsidized
actually have a mixture of both okay
subsidized student loans are those loans
where the government is paying the
interest while you are in school an
unsubsidized loan is when the payments
are deferred but the interest still
keeps accruing so you graduate and that
10 000 has grown to 14 000.
one of the things that i might suggest
is find out what are the monthly
payments going to be
on those loans when you go to apply for
your first job that they offer you a
salary of x you need to know well quite
frankly that salary is not going to
cover what i've taken out
if you come out of college and you find
that you're not making enough a lot of
the student loans now give you options
you can do a deferment you can do a
forbearance they even have some that are
income sensitive so that your payments
are based on how much income you're making
making [Music]
[Music]
between student loans and credit cards
many young people leave college or trade
school with significant debt
that debt can affect the rest of their
lives because it's reflected in
something called a credit score
that score may be one of the most
i don't know what a credit score is i've
seen commercials for it but
i think it depends on how much of a loan
you can get but i'm not sure
basically can tell people how good or
bad your credit is that's basically all
i know about it i think the score that
you want to have is like 700
i have no idea what my score is um
but i know it's probably nowhere close
when you use your credit card you have
to repay
what you use
use
when you do it on time
[Music]
your credit report contains a history of
every credit relationship you have
credit cards debit cards student loans
car loans you name it
when you pay your bills on time or
reduce your credit card balance your
credit score gets better
if you miss a payment or max out on your
credit card
your score goes down
your credit score literally sets the
interest rate on any money that you borrow
borrow
maybe tomorrow you and i both go to buy
the exact same car on the exact same day
because of my terrible credit score i
will pay 7 000 more dollars in interest
to buy that car than he will simply
because of this one number one of the
best things that you can do
is to check that credit report every
year for the rest of your life [Music]
[Music]
there are three companies that keep
track of your credit history you're
entitled to get a free copy of your
credit report annually from each company
so you can see what the lenders will see
when you apply for a loan or a credit card
if you decide to use a credit card
remember to compare offers carefully
pay your whole bill on time to avoid
penalty charges and check your credit
report at least once a year
your financial future is riding on it so
make sure it's right [Music]
[Music]
that's my girl d woods from atlanta i
first met her when she was a member of
danny kane the platinum selling pop
group that got its start on the tv
series making the band now she's trying
to make it on her own
she's already gained fame but she's
still working on her fortune [Music]
[Music]
i've been a part of the
entertainment world since i was very
young i started off in dance school when
i was about three years old my sister
and i got into theater
i got into recording music
i didn't even think about really getting
paid from it it was just what i wanted
to do for
for ever
ever
danny kane was formed on a reality show
contest thousands of girls tried out and
i was one of the five girls that were
chosen our debut album debuted at number
one on the billboard charts which was
totally unexpected
by some but it was what i meant to do
from the very beginning
it takes a lot of money to support a pop group
group
especially being females because there's
the glam squad there's the war joke so
he gets really expensive and you know
the record label either has to pay for
it or we pay for it out of our pockets
i saved just to be able to conduct business
business
so there's a lot of things i have to pay
before joining danny kane dee was trying
to make it on her own in new york city
but she was having trouble making ends meet
meet
so i decided to move back home to
atlanta i was like
but then who wants to live at home my
mother's gonna be in my face she's all
my business but sometimes you just have
to make that sacrifice
it was a really
good decision because it took a lot of
pressure off of me it was definitely
good for me to save because i was able
to get the car that i really wanted i
call her
the mercedes
once i did start making money me and my
mother decided to refinance the home
and so
i'm paying part of the mortgage so it's
like i have equity in this house as well
by joining forces with her mom
dee was able to begin saving
my mother definitely sat me down when i
got my first big check and she said look
take this and put it over here forget
that you even had it and it definitely
came in handy because it was a big dry
spell and it was scary
today she has three different bank
accounts which keeps her organized and
makes it easier for her to budget and save
save
first i have a checking account and i
have a savings account attached to that
checking account but then i have another
savings account and that's at a credit
union then i have a cd which i can't touch
touch
and that gains more interest
a cd or certificate of deposit is like a
savings account except that you promise
that you'll keep your money in there for
a set longer period amount of time maybe
a year or even as long as five years and
you get usually a higher rate on a
one-year cd than you would get from a
bank savings account
i guess the concern is just how to
number one get the money before you can
save it being in the entertainment
industry it's not a secured income
sometimes you'll make a lot of money in
the month of november and you won't make
any money until
february 5 6 7 with your one two that's
the beautiful thing about how i was
trained because my instructors always
instilled in me to be a well-rounded artist
artist
so i go from being a recording artist to
being a choreographer to being an
actress to being a writer
always thinking of ways to keep working
i am taking over the world
in tough economic times people really
need to have a set savings cushion for
themselves of money and the key is to
save three months worth of living
while it may take you a while to build
that fund remember that your savings
will be earning you money
the bank pays you interest for the use
of your money while it's deposited
the interest rate may be just two or
three percent a year but if you just
stashed it at home you'd actually be
losing money since the cost of
everything is going up
when it comes to
seeing my interest grow and knowing that
i'm saving and knowing that i'm building
equity it does feel good
you know you see those stories about
people who were
on top of the world at one point and
then it's like where are they now
they're broke or they died in debt
i definitely don't want to be one of
those stories
so i'm just going to keep saving
dee's got her act together
but a lot of us have a hard time
thinking long term when we're young
i like to go out so i spend most of my
money and i don't really save anything i
definitely put a lot of money away for
uh any type of emergencies especially
within a savings account my mom feels
like you want to like spend that
paycheck on coffee or do you want to
save it for later so
i usually choose the coffee though i'm
not saving any money right now
i'm living basically paycheck to paycheck
paycheck
those who do start saving early are
my name is maria luisa cortes
and i'm currently a co-owner of a
mexican restaurant called miguela tuna
it's a family-run restaurant
we've existed since 1992.
maria worked in the corporate world but
was drawn back to the family business
where she put all her skills to work
this is a tradition that we do every
morning like our first customer we go
like this today we have a first sale and
they paid us
but a hundred pretty good
the mission of the restaurant is to be
the number one mexican restaurant here
in the lower east side
it's very rare for someone my age to
know these traditional dishes
the mullet sauces that's what we have to
offer to the lorry side to new york city
my mom does the moles the traditional
our chiles we do not use canned
or preservative we grind them we roast
them we have certain machinery from back
we want a restaurant to take us to our retirement
retirement
when you're working with people that
want to retire you start thinking like
what they did right and what they did wrong
wrong
my mom just showed me what she's going
to be getting for social security and
honestly it's very little i'm not going
to depend on social security
i want to be in a better situation
when considering retirement it can pay
to talk to an expert
maria sat down with the financial
advisor to discuss her options and learn
so i'm not only thinking about myself i
got us to think about my mom my dad
thinking about how they're going to
retire from this business i understood
there are two approaches one approach is
to open up a retirement plan through
your business alternatively you can
establish an ira account
an individual retirement account or ira
is a private savings plan set up with a
bank broker or other financial institution
institution
like all other retirement plans iras
allow individuals to set aside money
each year that will earn interest tax-free
tax-free
when money is able to grow without you
having to pay tax on it it grows even
faster my first day on my job i went to
my benefits office and i set up so that
automatically a certain percentage was
taken out of my paycheck before i saw it
every single paycheck
another great way to save if you work
for a company that offers one is a
retirement plan that may be called a 401k
401k
if your job offers one
you should absolutely take advantage of it
it
for every dollar you contribute to it
your company may match it in full or in part
part
think there's no such thing as free money
money wrong
wrong
this is it
you should start saving for retirement
the day you get your first job
if they have a retirement plan join it
that day you start
when you start in your 20s and start to
save long term even starting at 23 can
make a huge difference between starting
at 33 you can end up with tens of
thousands of dollars more just by
all of these investment options feature
a little bit of magic called compound
interest here's how it works
let's say when you're 23 you start
saving 50 bucks a month in a tax
shielded account that earns 7 interest
as interest gets added to the account
each month your money grows
so the next time around you're getting
seven percent of a little more money
interest on your interest
by the time you're 65
compound interest will turn your monthly
investment of fifty dollars into a
hundred and fifty four thousand dollars
but start saving early if you waited
until you were thirty three to start
you'd only end up with about seventy two
thousand dollars [Music]
maria has a lot to consider as she helps
her parents prepare for retirement and
plans her own
i would like to retire at 55.
i would like to live in mexico i want to
go back and forth to new york because i
want to see my family i see myself
relaxed in my summer home
i didn't get serious about saving for
retirement until i turned 30. but i wish
i had started sooner not just for myself
but for my kids
kids give you something to think about
besides yourself
but how can you provide for them if you
get sick or unable to work
you got to have insurance
whether you're a parent or not
you're about to meet a woman who's been
through life's ups and downs she's a
single mom with two kids and a good job
but she's seen the other side of life
so now she's ready for whatever comes
her way meet rochelle james from my
we're at the south fairy train station
which is underneath staten island fair
what we're doing is building a whole
i can point to several buildings across
new york city
and show my family my friends that i
work there that i put the lights in
and i'm very proud of that
rochelle is an electrician with a union
job that gives her many fringe benefits
most importantly
health insurance
we have an excellent medical plan that
covers my whole family
my daughter's eight years old
thank god she's healthy but you know
suppose she had asthma or suppose she
had some kind of ailment that would have
needed special care
our union provides excellent health care
so i wouldn't have to worry about it
things weren't always so good for rochelle
rochelle
i didn't come from a poor background but
because of unfortunate circumstances i
did end up at the very bottom
when my mom passed away i fell into like
a depression state
at 22 with a new baby and a younger
sister to support rochelle was soon
facing financial disaster
i took dead-end jobs just to make a
little bit of money to get ahead
so it was very frustrating
and it seemed like there was no hope but
i kept pushing
rochelle not only needed a higher paying job
job
but one with good benefits
she found out about an innovative
program called non-traditional
employment for women
or new
which trains women to compete for
skilled jobs in construction and other
blue-collar trades [Music]
[Music]
after successfully completing the
program she's now a journeyman electrician
electrician
am on my way to security i won't say
that i'm fully secure yet i hope to stay
with this company they're making it happen
happen
and build this wonderful relationship
[Music]
thank you keep up the good work
thank you
my paycheck
get paid uh 47 an hour
so it's a nice check at the end of the
week it feels great
i feel independent financially and
and
when it's overtime it's even better
so i enjoy working and i enjoy paydays
the union is local union number three
ibew which stands for international
brotherhood of electrical workers
maybe one day they'll change it to
brother and sisterhood
our union provides
excellent healthcare
healthcare should be necessity not an option
option
you know it's amazing to me with all the
talk in our country about health
insurance 20 million people age 18 to 34
still don't have it it's a huge problem
ideally you get it from your job but if
you don't have a job that gives you
health insurance see if there's some
organization you can join to get health
insurance whatever it is you want to
make sure to have health insurance
i got a doctor like every two weeks a
month so i really need to have my health
coverage i'm not extremely concerned
about not being on the health plan i'd
like to get a job that actually has
insurance benefits higher salary i
currently do not have health insurance
which is very sad i did a few months ago
and i'm in the process of shopping it
when you're young and healthy it's hard
to imagine that a serious illness or
accident can bring you down
health insurance isn't cheap but the
cost of not having it can be very expensive
expensive
if you're uninsured you can end up with
if you can't pay them you could
literally lose everything
insurance is complicated with all those
applications and forms but you can find
a lot of expert help online [Music]
[Music]
if you have dependents like rochelle
you also need protection if something
should happen to you
life insurance is very important my
children are going to be depending on my
same income if i die
i have 350 000 worth of insurance it's
still a little low but i figured as time
goes on and the more money that i make i
can increase my insurance
so if anything happens to me now in 20
years my children will be fine separate
because i'll get on the internet and
like say rochelle is intent on helping
other women become economically self-sufficient
self-sufficient
so she serves as a mentor in a financial
literacy class sponsored by financial
women's association of new york
that she went through just a few years ago
ago
most of the women in this class are
union employees they will get their
health insurance that way they have come
to be trained so that will be looking at
their cash flow looking at their goal list
list
and figuring out how we can get them the
help that they need
let's give some examples of what needs
might be
i'll say the first one could be food
medical shelter
let's go 12 once jewelry car
car
eating out and then we have to decide
what are we going to sacrifice in order
to get our wants
the biggest reason people go bankrupt is
because they had a health emergency and
the bills are so overwhelming that
there's no way they could possibly pay them
them
the fact is we all need to have health
insurance because you cannot just go
from emergency to emergency and expect
to get anywhere thank you all for being
here tonight
but of course there's a lot more to
insurance than just medical coverage and
life insurance
rentals insurance is the only thing that
i don't have
that i'm really considering
because i've taken my hard earned money
and bought certain things for myself
certain toys and if something happens to
it you know how am i going to replace it
that's thousands of dollars down the drain
drain
it does make sense to get renters
insurance because it covers you for any
damage that happens and the truth is
it's not that expensive
rochelle has turned her life around
and now she is serving as an inspiration
to others
her photo will be seen in new york city
subways encouraging other women to get
the training they need to compete for
skilled jobs [Music]
[Music]
i realize now how it is out here how
hard it is
to make a living and take care of a
family so whatever you have to do get up
if you have to
go and sell shoelaces just to make some
money for that day to eat do what you
have to do don't sit around and feeling
sorry for yourself that's the one thing
i didn't do i didn't sit around and i
didn't beg
i went out and i worked every day until
i got to this point
it's a lot easier to plan your finances
when you're getting a regular paycheck
but a lot of people choose the freelance
life or they run their own businesses
and the internet has made it a lot
easier to do this
but being your own boss brings with a
lot of financial responsibilities that's
what timber shard of buffalo is finding out
coming out of school i got the normal
professional office job
i was hired by a web design firm to take
on design work and help complete the projects
projects
after picking up tricks of the trade i
decided to break off into my own
business because i personally love
having creative control and a close
relationship with the clients from start
to finish i set up my office in the sun
room of my apartment
my company's name is sharp cut media
it offers web design and consulting
services to a lot of small business
clients the office furniture center is
the most trafficked followed up by bgi
interiors everything should be in my
eyes colorful and stand out vibrant but
not gaudy and obnoxious
right now i'm in a building process
building my clients how building my
relationships with local businessmen and
as those progress my prices can progress
no problem you know where to find me
while tim enjoys the freedom of being
his own boss and the potential for a
good income he's found that getting new
business is a job all in itself
one of the downsides to being
self-employed are that workflow is not
always consistent
i spend about 20 percent of my week
searching out new jobs
many of tim's job leads come from
friends and colleagues and he is often
able to return the favor by partnering
with them on projects
but see them what i do is marketing
design illustration brochures small
businesses you need logos whatever
business comes my way pretty much i mean
is there a limit on how many design
concepts that i can actually post
on there i can keep going all the way
down to have someone else to collaborate
with like mike is a great resource to
have and it offers the clients more
options as well
another thing to consider when running
your own business is how much it will
cost to operate on a day-to-day basis
you can't make money without spending money
money
so a lot of the things like copy paper
pens cost you money and you have to take
that into consideration
some of the more costly things of
running your business are making sure
that you have the latest technologies
and the latest programs
you do get some tax breaks like
deductions for equipment
mileage basic necessities that you need
to perform your business tasks on a
daily basis
while you can claim tax deductions for
your business expenses
you also have to keep careful records
[Music]
the government expects you to pay your
taxes as you earn your income
if you work for a company your taxes are
usually withheld from your paycheck
same thing with social security and
medicare that item called fica on your
pay stub
and if you have a medical plan at work
your portion of the premium is also withheld
withheld
but if you're self-employed like tim
you get to enjoy the freedom to make
your own hours and be your own boss
but when you get paid for your work
there's usually nothing withheld you
have to take care of all of that yourself
yourself [Music]
[Music]
a lot of people think you get a check
for a thousand dollars and you can run
to the mall and buy whatever you want
but a lot of that money should be saved
for taxes for health insurance for
business costs if you don't prepare
yourself for that you might owe a few
thousand dollars at the end of the year
and that's a big expense to pull out of nowhere
nowhere
it's a pay-as-you-go tax system meaning
the government wants their money as you
earn your money if you have not paid
enough into the tax system based on your
income you are penalized for that the
irs does not play they will come after
you and the penalties for not paying are stiff
stiff
i have a 30 rule i at least make sure i
take 30 to 35 percent and save that
specifically for taxes i'd take anywhere
from 15 to 20 percent to save towards
business expenses and health insurance
while rachelle james gets health
insurance from her job if you're
self-employed like tim you have to do it yourself
yourself
if you're on your own if you don't have
employer provided health insurance one
thing you can do for yourself is buy
some kind of policy that takes care of
you in a catastrophe so you're stuck
with the first thousand dollars in bills
or the first five thousand dollars in
bills those won't ruin you probably if
you don't have a job that gives you
benefits see if there's some
organization you can join if you're an
actor maybe an actors organization or a
writer a writer's guild [Music]
[Music]
tim joined the buffalo niagara
partnership a kind of regional chamber
of commerce that helps out companies and
self-employed folks like him
with things like health insurance and more
more
what health insurance plan back to that uh
uh
the community blue okay uh i have
a low enough deductible that it's pretty
much perfect for what i'm doing if you
heard about the higher deductible health
savings account plans no what that does
is it lowers your premium by the amount
generally of a higher deductible small
employers freelancers are a big part of
our membership because we offer them
great options in their health care for
instance we offer them great
opportunities to network with other
companies to connect with job
opportunities them to learn about doing business
business
most self-employed people can use
regular solid financial advice
tim is lucky because he gets personal assistance
assistance
from his dad at the end of the year
we're going to take a look at donald
bouchard is a financial planner
we saw how much you're saving for your
health and your dental right we paid
your estimated taxes
but you really should be saving 10 of
your income for retirement
i'm 19 years old i haven't thought about
retirement yet i have the 401k there
which invests in various stocks and i
also have my own personal savings
account in terms of retirement now i'm
putting money to the side you know every
check no matter if it's 20
or 15 i'm just making sure i'm putting
something into my savings you know what
i haven't really thought about retiring
um i'm 22 years old it's something that
should be on people's minds
you work for someone they have a pension
and a 401k plan but when you're
self-employed you have to produce your
own pension no one's giving it to you
he's right
no one is giving it to you when you're
in business for yourself
but if you're itching to do your own thing
thing
research your options carefully yes give
it a try
for anyone that's thinking about
freelancing the number one thing is will
you be able to support yourself if you
don't have an idea of what your business
plan is
you have nothing to build on you need
the cornerstone from there you can build
the rest of the business and hit the
ground running
whether you're self-employed or you're
working for somebody else everybody
could take a page from tim's book we all
need to get a good handle on our
finances before it's too late remember
that carmine i told you about well i got
my money right just in time to keep the
bank from taking it back
i kept it for years and i ran that bad
boy into the ground
i learned from my mistakes and you can too
too
even better get good advice when you're
starting out just
just
be real with yourself
don't think that you have to like live
like people in the videos or on
television or even the people next door
to you you know someone's got a new
iphone a nice new laptop when you see
them you're like well why can't i have
that like that's really cool i want that
sometimes you got to look at your own
situation and say well maybe
you know if i save up a little bit you
know work a little harder then i can
have that a little later you should ask
yourself is this a need or is this a
want and then weigh it against your
financial future
those supposed needs
have led us deeper into debt than any
generation before us
it's time for us to take control of our
financial life and live within our means
no matter how rich you are you need to
be able to afford your lifestyle don't
spend any money that you do not have you
never know what's going to happen you
could get fired from your job tomorrow
and what are you going to do you're
going to be in debt that's what's going
to happen the last thing you want is a
big pile of credit card debt weighing
you down when you're just starting off
in life so it's best to save for things
before you buy them but i've got no
problem with buying them once you've
saved making a habit of saving is one of
the most important things we can do
not only for the good times
but for the times when we're out of work
or sick
finally ready to retire
you can't just spend your money and hope
g at the end of the month maybe you'll
have something left over to save the
truth is saving small amounts every day
every week every month can really add up
and it's very empowering
saving is the most important thing to do
it's hard to save because you think you
need to live check to check number one
stay away from credit cards definitely
leave the credit card at home you have
to do your needs first
you're one second and that's the way
life goes never try to live above your means
means
you don't have to have all these really
nice things to be happy spend your money
wisely i guess this would be the best
advice i could give
we're going to have times of plenty and
times of famine and your role
now is to set yourself up that you can
ride no matter what happens
if you get on the right path now i tell
you at the end of that road you'll be so
prosperous we've given you a lot to
think about because there's a lot to
take care of but it's really all about
taking care of yourself nobody else can
make you financially secure not your
parents not your boss not the government
bottom line is you need to manage your
money or your money is going to manage you
you
for more information on everything
you've heard about in this hour check
out our website and yes
there will be a test
i owe money lots of money most of the
time i'm learning from my daughter she's
more frugal than me she's only 11. just
because you have a credit card does not
mean you have money
managing money is not what i'm good at
i'm very good at spending money i
i
live like a monk i don't
really indulge
in much it's not really sexy to put away
money to save and i think that it's
really responsible though i'm trying to
be a little unsexy you know i mean i'm
not a rockefeller but i don't have any
financial problems because i don't have
funding for your life your money has
been provided by a grant from the hsbc
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