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WEBINAR RECORDING

Are You Ready for an Unexpected Expense

Recorded on January 20, 2022

Good afternoon everybody and just want to welcome you all to this spring semester Financial Wellness course brought to you by Finpath really want to think everybody for going through the process of entering the questions on our poll Thank You Darrell for putting that up and the responses there, appreciate it. Just again want to thank you all for being here today. My name is Matt Escalante. I’ll be the moderator for today’s presentation. I want to go through before we get into the content and just highlight a couple of areas and some exciting things that we have going on with side inside of the Finpath program first as you see on your screen. I want to invite everybody to join our Facebook group called money. Megaphone. This group is moderated by TCG. It’s open for discussions about all different types of money manners that are important to you here you can vent you can chat you can get support and anything about personal finances where you can just use a little more encouragement and coaching. We’re happy to be here to help to join. All you’ll need to do is either look for the money megaphone on your Facebook search or you can use this QR code that you have on your screen to to scan the QR code and have it loaded directly into your into your Facebook account. Obviously, we believe that no one should be facing Financial issues alone, financial decisions don’t have to be uncomfortable. Even though they often times are we’re here to support you there. Obviously, we believe that strong financial education is critical and we want to help guide you and answer your important Financial questions as much as possible. A couple of housekeeping items. I just wanted to mention along the way is one. We are recording this presentation. So anybody that is registered will have access to will be sent this recording. So you have access it to review again second is that if you have any questions, please feel please feel free to submit them through the Q&A function and I will be monitoring those Q&A questions as we go along and Darrell’s presenting the content to answer any questions that you have immediately. We will also have a Q&A kind of a live Q&A session at the very end if you want to save your question for for that portion in time. Also, if you have not done so already just want to recommend that everybody registers for the Finn path platform at Finn path wellness. com by going to Finn path wellness. com clicking register putting your your email provided by provided to us by your employer. You’ll be able to complete the thin path registration and access all the tools and resources thatThat are available to you. We do have a upcoming course that I want to just highlight for everybody for next month as we’re going through. I will I’ll make sure I share the link to to next month’s course. So you’ll have you’ll have that information and we look forward for you to joining us again. So we have a topic here that we think is really really important. Are you ready for an unexpected expense? We find that you know, it often takes one unexpected expense to put us in a position to where you know, it starts a cycle of debt that are unwanted debt that we oftentimes don’t want to deal with and it could be the littlest thing from you know, having a tire blowout and having to get that repaired. The refrigerator goes down the kid ends up in an urgent care and you know having that unexpected bill that you didn’t necessarily plan for so, you know, we’re excited to have Darrell Smith bring us through the content today to talk about how we can be preparing ourselves for those unexpected expenses. And I guess making them a little bit more a little bit more planned for so we don’t we don’t find ourselves in a situation that that we don’t want to be in. So I’m really excited to introduce Darrell Smith. He’s a financial coach with Foundation and with the Finn path. Program you see him here on your screen presenting. Also just want to make sure that everybody knows that they have access to financial coaching and having a personal confidential conversation with Daryl about your individual situation or the question that you might have and you can you can schedule that virtual session through foundation. com/telewell or by scanning the QR code on your screen. So as we jump into it, thank You Darrell. I appreciate you being the content expert here and leading us through this the presentation. Well, thank you so much Matt, and I want to Echo Matt’s thoughts and appreciate everybody showing up for this content. And this webinar. Look forward to getting through all these slides with you got some good information for you today. So with that let’s go ahead and kick it off. So, you know, we’re talking about financial hardship, you know, what is that? You know, basically what that is that’s anything that’s gonna affect, you know, your family’s particular financial situation, you know part of the thing that we did the before we started we had the little poll there and it was really interesting the results on you know, our eye opening about how many Americans do not have $ save for an emergency. Now this group of folks were pretty good. They were they were prepared. You know, they had most I think % of the folks had over for had over dollars say for a financial emergency. Whereas the average for most people you’re looking. % one thing that I want to talk about is, you know these Financial hardships that come along if you think about how everything was humming before covid happened, you know, we had an unemployment rate of . percent which is really really good. But as soon as covid hit and throughout the year, you’ll notice it went up to % Well, that is a financial hardship that hit a lot of people really really hard the way they affected people, you know, nearly one in three Americans experienced either job loss or reduction in hours reduction in Pay, um, you know, it’s something that happened because of covid so, you know, just some sobering things that can happen and and they are in there they’re on plan they’re unexpected and this is an perfect example of what we’re talking about. So with that in mind if those those hardships do happen to you how comfortable with you are with the amount of money that you have saved, you know, it’s you know bank rate does a lot of good surveys good good side for some financial information. But you know, how how satisfied are you with, you know where you stand if you look in the one thing I really want you to think about in reference to this slide is that if you add the three bottom amounts there they equal % and what the reason why I say that is it’s % of the folks are not very comfortable with where they’re saving stand now, that’s three out of four people who are not comfortable with where they’re savings or at or they don’t have them where they want them to be. So that’s that’s really something that you on and think about you know, where are you at? And when it comes to this this part of your savings, So throughout this conversation, we’re going to be talking about the pillow test and the pillow test is how comfortable are you at night? You know, how are you able to sleep and I do you have Financial stress or things keeping you up? The pillow test is a really really good way to measure how you are feeling about your finances, you know, is your family prepared, you know, there’s things that you really really need to consider when when you’re thinking about financial stress one thing is, you know, you you want to consider your family obviously, you know, who is depending on your income. Do you have dependence? Do you have a spouse? Um, you know, and then, you know, secondly you want to consider what your actual essential basic expenses are, you know, everybody’s got expenses, you know, maybe some people feel like it’s essentially basic to have Netflix as an expense. That’s something you got to have. But really what could what would you have to do without if you were out of a job for a long period of time so understanding and knowing what you’re essential? Basic expenses are is really important. Also, it’s time to take you know account of what are your assets? You have a car you have a home you have investment accounts. What are the things that can help you know and understand where your financial status is and what your what your net you your net income is and what you have available to you. And then also you might want to consider your job security just like I showed on the last slide. You know, we went from three and a half percent almost fifteen percent just with one catastrophe this pandemic that’s going on. So, you know, how how good is your job status? Are you able to find a job easily? If something were to happen to you in particularly, you know, if you take somebody like myself who’s who’s an older person and you look at you know, I look at it and I was like, well, I don’t want to start all over what if I lost my job. Am I going to the bottom wrong? Am I going to the you know to the the bottom of the barrel? Is it gonna be hard for me to start again? Those are really things that you have to keep in mind, you know, and think aboutSo hardships come in in many sizes shapes and colors, you know, the one thing though with it’s really important is trying to be prepared for those types of hardships, you know, these types that I have listed here, you know, these can happen anybody, you know owing owing taxes to Uncle Sam, you know that can happen, you know, you get a bonus at work and your work doesn’t take out the taxes for and all sudden you’re hit with the two thousand dollar tax penalty or you you owe that at the end of the year. Where does that money come from? You know the average cost of an emergency room visit $. That’s a lot of money. Maybe you have insurance and maybe it covers % of that. Well, guess what? You’re still left with dollars. Where do you come up with that money? And then think about one of the most important assets that you have your vehicle how you get back and forth to work and how you accomplish, you know, keeping your your family financially healthy. Your vehicle is really really important. You know, if your flux capacitor goes out. What are you going to do? That’s a that’s a back to the future reference for us old folks. So hopefully I got a few laughs there, but you know what? I mean timing belt new tires radiator. What happens how do you pay for that? These are really important things to think about and be prepared forSo emergency funds how much is enough, you know, most experts say three to six months worth of basic expenses. Again. There’s that that phrase again basic expenses knowing what your basic expenses is is a common theme Here something that you do need to know. But here’s the way that you you can generally think about it. If you’re a single person with no dependence, you’re only depending on yourself. Maybe three months of salary is a good is a good measuring stick for you to have as far as emergency funds for those basic expenses. Now if you are married and maybe one of the spouses one of you or your spouse makes a higher income that’s stable. Maybe you only need three months or four months of salary. So it was a really depends on your particular situation when it comes to that. And then the other more important one, I think that can hit a lot of people really hard is if you’re a single earner with multiple dependents. Six months of expenses is really expected because if you think about it and you’re the only person providing the financial support to this family. And something goes you go down. You lose a job. You have a injury something happens where you don’t have income? You know, it might take you a little bit a little while to get back on your feet. So these are just general guidelines, but you know it this is good advice, but everyone’s paycheck their priorities, their obligations are obviously unique and different. So those are just things that you want to keep in mind. So what are the benefits of an emergency fund? Well, you know, one of the things is, you know, knowing that you actually have an emergency fund one immediate benefit of that is peace of mind. If something were to happen like your flux capacitor goes out. You’ve got the money to pay for a new one. You know, Mr. Fusion is on the way you’re good to go. So thinking about what you have to pay and what you’re going to have to do and having that and having that on hand can really provide you some mental relief. You know, one of the another benefit of a emergency fund is keeping it helps keep your spending under control. You’re you’re putting that money towards savings account to fund that emergency fund and you’re not funding the retailer down the street on things that you may or may not need. So keeping your money in check. Also, you know it helps you and avoid making bad financial decisions, you know, if you have an emergency fund in place, you don’t have to rely on high interest rate credit cards to fund your emergency expenses. You’ve already got that money set aside. So these are really really big benefits of having that fund available for yourself. So I get this question quite a bit. Hey, Darrell, you know do I pay off my debt first because that bothers me or do I, you know start saving for my emergency fund. Well, here’s where that pillow test comes back into play now, which one is causing you more stress? You know is is your it does your having debt? Cause you more stress or having not having an emergency fund cause you more stress, you know, whether you need to pay off your debt first or contribute to your emergency fund you want to consider the type of debt that you have. A lot of people have credit card debt Auto dead student loan debt mortgages revolving credit. I mean, there’s all types of debt that you might be out that you might have personally. You want to consider a couple things your income your lifestyle and your health situation. But one thing I want to do is I want to just look a little bit closer into the type of debt that you have if you’re debt is mortgage and is Mortgage Debt or student loan debt or even auto loans if you if you know and understand the currentInterest rate environment right. Now those types of debt are they they are generally a lot lower in number lower carrying charges to have that type of debt. It doesn’t cost you as much money to carry a balance on that type of debt. So if you’re worried about your emergency fund this may and and these are the types of debts that you have you may lean towards funding your emergency fund first and then worry about your student loan your Auto and your mortgage at a later date. Now the exact opposite of that is revolving debt credit cards payday loans those tend to be very high carrying charge interest rates. If you have that type of debt, it may be more beneficial to you to pay that type of debt off initially before you start funding your emergency fund. So just think about it this way low interest rates. You want to lean towards your emergency fund higher interest rate debt. You want to try to pay some of that debt off. So this is really really key. The more savings you have equate to less stress. You know establishing emergency fund. It’s going to give you peace of mind. Think about it this way. It’s really really less expensive not to mention less stressful if you are borrowing from yourself at zero percentWhat does that mean? Well, if you don’t have the money in your emergency fund you’re gonna have to get that money from somewhere whether it’s a credit card or whether it’s from A lender, so think about Gathering documents going to A lender. Maybe getting approved maybe not and if you have good credit, you might get you might get to borrow at % But if your credit is not on the good side, you could spend upwards of to percent. So those are really things to think about that’s one of the things that that emergency fund does for you. You don’t have to worry about going to somebody else to get that loan to get that money. You’ve you’ve got that money sourced in your in your savings account. You know if you have an emergency fund. That unexpected expense. Never never comes into play you’ll never have you’ll never be required to use a credit card to pay for a high carrying charge because you’ve got the emergency fund already in place. So keep that in mind. So Darryl, you’re such a smarty. How do I build that emergency fund? Well, there’s a lot of easy ways that you can do that. You know you want to set some monthly savings goals, you know treat these contributions that you’re putting away as a monthly expense just like you would pay the cable bill or the electric bill think of your emergency fun as an expense. If it’s dollars dollars dollars, whatever you’re putting away. If you treat it as an expense. It’s gonna get paid every month just like your other bills are paying you can set up a funding schedule to automatically transfer from a lot of accounts have that where you can do automatic transfers, you know, and these come directly out of your check or directly from one savings account or checking account to a savings account. So these are ways that you can you can get this goal going other ways to do that are supplemental income, you know, you can really think about it. Think about it this way consider getting a park by part-time job, maybe even a seasonal job or a job over the summer during the holidays do some Landscaping over the summer or even some pet sitting. Think about it this way. If you are trying to fund your emergency fund you can make it a goal for yourself to get this secondary supplemental income. Maybe you’re gonna you know, Do some Landscaping over the summer every penny of that money goes to your emergency fund. So you spent your summer maybe working, but now you’ve got your emergency fund all in place. You don’t have to worry about where that money is going to come from. Now this one should be their easy one, but it’s tends to be really hard for a lot of folks review your spending and find ways to cut back. The reason why it’s hard is becausepeople like what they like they want to do what they want to do. So kind of cutting into some of the things that we like to do that make life enjoyable isn’t isn’t the easiest thing to do. But there are some small tweaks that you can do, you know, and you’ve this is not anything new, you know, this is you know pack your lunch a couple times a week instead of eating out five times a week review your reevaluate, you know your cable plan. Do you need every movie channel that’s out there in the world. Maybe you just need one or two these types of small changes. They really yield significant significant amounts of money over time. Now this one you can also think about making a game out of it, you know say yes to the  week step up challenge. What is that? Well think about it this way. take one dollar put it away in week one in week two increase aptitude dollars in week three increase after three dollars and continue to do that over a week periodso a year from now at the end you have now established an emergency fund of, dollars. You’ve got a great start on your emergency fund if that’s your goal or if you’ve already met your goal at a thousand dollars and you are already done. This was a easy way to do this. Now a lot of you might think like, how am I gonna keep track a week one week two is this week? what week is it? Well, if that’s if that’s a little too tough for you think about it this way. What if what if I decide to just put away $ a week for the same period for weeks. I don’t have to keep track of the weeks by the end of that time frame. I will have a similar amount dollars. So very similar to the  dollars a week. I put it away and now I’m setUm, so two two nice ways to do that without causing you a lot of stress living on less. You know, this isn’t always a struggle that people think it is. When you do your automatic payments from your checking account to an emergency fund. You don’t have the money they’re available to spend you are automatically changing the way your lifestyle the way you spend money if the money is not there. It can’t be spent there’s no money to spend you have to change. So it’s not as hard as most people think it take does take a little adjustment. But over time you will tend to get used to that new level of income that you have left in your account. Carol I love this idea of the challenge and you know taking just in just small wins, right? I’m taking a dollar here two dollars tomorrow three dollars and so forth and creating that inertia and that challenge and you know, I bet for people that do that and they they are they’re challenging themselves and they’re needing that challenge just the the level of financial stress probably just you know, as the as the account is climbing. The stress is probably coming down at the same time, which is great. But you hit on something that I think is really important is, you know, we can almost take the the human element or the reluctancy out of it through a lot of our our Automation and our banking right? So if I can set up to where if I get paid on the first and then my my challenge dollars for that month get automatically moved over from my checking to my savings account on the second then you know, I never had to go in there. I never had to think about it. It was just something that was already done for me. It’s kind of the equivalent of you know, taking a few bucks out of your wallet. Putting it into the piggy bank, but it’s it’s something that you don’t have to think about. You don’t have to get the anxiety about going through that process. It’s already done for you. So the Automation and the and the setup there I think is something that everybody should take advantage ofYou’re right, Matt, you know, it’s one of those. Things that’s also that out of side out of mind, you know, if you’re never seeing it you’re not used to having it. You know it you never missed it. So good points there Matt appreciate that. Mr. Smarty Darrow where do I put my money once I decide to save it. I know how much I need to save. What am I doing with it? Well, there’s a lot of options to put your money. So we’re gonna go through them fairly quickly here and most of you know about most of these but we’re gonna go through each one of them individually. now checking accountsPretty much everybody has a checking how they know what they are. So I’m not gonna go through each of these things and what they what they have as far as a checking account is concerned but I do want to point out one thing a checking account is generally a transactional account. So it’s where you pay your bills from. It’s you where you maybe take your cash out of for an ATM so funds and you’re checking account tend to be really really variable they go up and down up and down your check get supposit deposited you pay bills out of that. So it’s a really hard place to keep track of your emergency funds. So it’s not always the best idea to co-mingle your emergency funds and your checking account. You know, this is really going to be for the person that is very very disciplined if they want to do that. Now a savings account on the other hand is an account that is a non-transactional account. So it’s you know a good way to separate that emergency fund and have it how those funds away from your normal bill paying transactional account, you know typically savings accounts have limits on the number withdrawals. It’s a great place to keep your money with liquidity which means you have availability or access to that money and savings accounts tend to be interest-bearing but it is very minimal as many of you know, you know one this may not work for the person who wants to get some type of return on there. They’re safe their emergency fund savings because they know it’s gonna be sitting there until they emergency happens and they’re always gonna replenish that emergency fund soThis may not be the best choice for that type of person. Now money market accounts, so I want to make sure that everybody is not is not confused that with the investment type of money market accounts. This is an account that may be at your bank or credit union. I know I have one of these at my credit unionYou know and you know, these accounts are very similar the savings and checking accounts. You can make transactions out of them. You can put your money in there. They’re insured. They’re an interest bearing account, you know, the rates on money market accounts tend to be a little bit higher than savings accounts because the amount of balance that you keep in there the higher the balance the higher the rate you can get so these are tiered accounts that each Credit Union or bank will set their own rates on that and you can you can research those if you have access to a money market account again, these are very liquid. So there’s low restrictions of fun. So, you know, you could be tempted to use these funds for other things. Now this next one. Is something that most people hadn’t really thought about but prepaid debit cards. Prepaid debit cards, you know you load the funds up on the debit card yourself, but you have to be really disciplined you have to take that money and you have to put that and maybe in the sock drawer and you only use it when the emergency happens, you know, they can serve as a budgeting tool, you know, you’re keeping your spending in check, you know you in some cases they can be a replacement for a bank account. If you specially if you had trouble or poor banking history, you know, these these really give you the liquidity that you really need with emergency funds they’re easy to get there’s no credit credit check required, you know, you can use them at an APA ATM or any place where you have to pay for that emergency. No minimum balances need to be met and there’s no monthly fees on them. You know, the one thing I do want to say about a prepaid debit card. This is suggested for the discipline user ease of access and low restrictions to the funds maybe too tempting for personal use. Oh, yeah. I’ve got a thousand dollars on my emergency fund. Card, you know, I I’ll replace it next month. Let’s go do this. You don’t want to have that Temptation if that’s something if you’re not disciplined that may not be the right source for you. Another one. That’s fairly. New is the online digital account. So online digital Savings Bank bank accounts are similar to that of regular savings and checking accounts, you know, they typically come with more tools and features than your normal regular banking accounts. You can you know, they help you to budget your money. They have Cutting Edge mobile apps that can help you set savings goals. You can track spending save automatically through rounding up programs that they may have and reoccurring transfers as we talked about a little earlier most digital banks have low overhead, which means that they you know, theoretically can pass those savings on to you with lower fees, you know one unfortunately one of the downfalls of that is because there is no brick and mortar or physical locations, you know, customer support can be limited to live chat or or via phone. So, you know, that’s something that you want to consider some digital banks have advertised, you know, High annual percentage race with minimum or tiered balances. Or variable rates. So you really need to read the fine print. You know, the last thing I want to say about this is these types of checking money market and savings accounts each have their own specific rules and restrictions. So you have to be really careful and make sure you read the fine print on all thoseso this is also a different thing that most that has been around forever CDs. Everybody knows when CDs were paying out really really good rates. Well nowadays are not paying out hardly at all, but they do have a a much better rate of return than your savings account. So certificates of deposits, you know, or when you save your money in a subject and when a CD when you save your money in a CD you’re agreeing to lock your money up for a specific amount of time, you know, the terms on CDs can range anywhere from three to years. They do offer less liquidity than you may need. You know, it’s it is impossible to know when you’ll need to use your emergency funds. You may not you may not want to lock up your all your money into a CD one way that you can get around. The liquidity issue is using a CD ladder strategy to help you with liquidity and what that is is, you know, if you want to invest your money in a CD and you still wantMaintain access to your fund you can open up several CDs with staggered terms and this strategy will allow you to have different maturity dates. So they become mature at different times of the year. So you do have access to some of the funds and then you just re-up them. And then the next time you the fun matures you have access to another one. So there’s a bunch of different ways that you can do this. CDs deliver one of the highest annual percentage yields of any Bank product theif you want to keep your money at a federally insured Bank a CD will offer you, you know, that higher rate of return the annual percentage yield does not change with the CD. So unlike your savings and checking accounts, which are variable can change over time CD rates are set once you lock in the term. And then, you know, there are some early withdrawal penalties with CDs. So if you need to access the full amount of your money, you know. Be prepared to pay a hefty penalty for that. So all the good diligent work you did may go to nod if you have to access that entire amount of the money before it matures, you know, these are available at most institutions, you know, and you can open them for as little as a hundred dollars or as high as $, just depending on which institution you use. And this is also a little bit different one. This is a Roth IRA. So a lot of you have heard of what Roth IRAs are so Roth IRAs. It’s a retirement vehicle that’s funded with after-tax dollars, but they can also be a great place to store your emergency fund. You know, your Roth IRA is invested in the markets meaning that you could earn a higher rate of return than you might with a savings account or money market or even a CD. umreturns are not guaranteed. So that’s one thing that you really really need to understand Roth accounts are not federally insured. You could lose some or all of your principal balance. So you need to really really be careful in what you’re investing and you want to invest in something that’s saved that’s gonna bring you a moderate rate of return that’s not very risky or unless you plan to and you know and understand what the risk are when you’re investing your money in a CD the ability to withdraw the principal balance at any time is available. So you can always withdraw the money that you put into your Roth IRA at any time without penalty. Now there are possible early which all penalties for any of the rate of return that you get you could pay a % early which all penalty for that for that interest that you have gained over that time also, It’s it’s you know, there are also tax-free withdrawals from there because remember what a Roth is Roth is is after tax dollars. So when you open up a Roth account you have already paid the taxes on it. So when you take your money out of a Roth as long as it’s a principle before five years you’re going to be able to get that money tax-free. So that’s all a plus. One thing that is a negative is it takes time to withdraw money from a Roth IRA, um accessing your Roth IRA could take a couple, you know, three to five business days for your custodian if he needs to sell off some of your Investments and then transfer the money to your designated bank account or account that you have at that at that. Custodian so they offer less liquidity than you may need. But one thing to really think about emergency funds are put in place just for that in emergency. So the liquidity part of that. You can weigh that way that for yourself to see if that works for you. You know, there are other potential less liquid sources for emergency funds but these all these types of accounts that we’re going to talk about here traditional IRAs, four five seven, four four three, b’s ks catching out refinancing and home equity lines of credit all these can can really entail High fees High penalties and lack a lot more liquidity than you may need. This should be a last thought of Last Resort. So just you know some quick things I’m just going to roll through these pretty quickly but individual retirement plans and your pre-tax contributions, you know, you have contribution limits as stated here $, as a variety of investment options on them, but distribution before your and a half years old, you’re gonna be subject to a % early which all penalty all so with a traditional IRA. You cannot borrow against your IRA. So again, not a lot of flexibility when it comes to this type of plan employ your sponsored retirement plan. So four five sevens bs and K is what you might have at your current employer there you they some some places or some employers offer both pre-tax and roths availability contribution limits. If you’re under , should say, if you’re over, it’s five if you’re under, sorry, we need to update that. Oops go back. Um, you know, there are a variety of investment options for those but again, you’re gonna run into the same type of distribution issues if you’re under and a half and then also one thing that’s nice about a four five seven is if you are terminate if you terminate employment from your employer and you are maybe going to another District or another job or even in the private sector you will have full access to your four five seven, but you need to use that wisely because again, it’s really important if it’s a pre-tax contribution that may that may cause an income gain on your side. So you always want to make sure you want to reinvest that into your new employer if you’re going to access that money. So again, there’s a possible % early withdrawal penalty depending on your plan. So there’s a lot again a lot of inflexibility and a lot of costs involved in these. You can make some hardship withdrawals out of pocket medical expenses down payment on a primary home and so on and so forth some of the retirement plans if you’re under and a half years of age are going to be subject again to that % early withdrawal penalty. So you got a really really consider what you’re doing if you’re doing any of these withdrawalsBorrowing from yourself barring against yourself, you know, if you’ve got a sponsored retirement plan, you know, you don’t have to qualify. There’s no credit history involved. You can take out maximum loans of % of the assets that you have in there or up to five or up to $, . Whichever is less. They are tax-free unless of course you do not pay those loans back. So if you’re borrowing that money from your retirement savings, you don’t pay it back you will start you will be charged tax by the IRS. So it’s something and you you may be penalized as well. So very very important that you follow through with the program that’s available with most plans interest that you pay back on those plans. You’re paying it back to yourself not to a company. But again, each one is is specifically you need to check with them. Generally. It’s gonna cost you less than paying. Real interest on a bank on a bank type of loan fees and and minimum requirements vary by institution. So again, just read your fine print and know what you’re getting into. Cash out refinances this is how to do with your mortgage if you have equity in your home. It’s a lump sum of cash. They offer some fixed and adjustable rates, you know made mainly for large expensive emergencies. So not something you’re going to do every day something that you want to really really think hard about and consult somebody about before you do something like this. Most lenders won’t give you this loan if it’s under, and there are a lot of costs associated with this so loan processing feeds origination fees appraisals points a lot of things. So again Last Resort major expense Dire Straits, There are some penalty free early Ira withdrawals. So there’s you can do those for unreimbursed medical expenses disability inherited IRAs and home purchases similar to the b’s ks and four five sevens. Last thing that we have here is the home let equity line of credit. You’ll see more similar to like being a credit card and funds are available. If you need them the ability to borrow at a later date without having to apply for a new loan. So you’re carrying that line of credit you have it available to you very few folded closing costs, but they are variable rates in the repayment process has a couple of phases interest payments are only required during the first years and then after that the payment increases and it increases substantially so you have to be aware of that. You take a breath that was a lot of stuff a lot of stuff. A lot of information really good stuff is important to is you show us a lot of lovely good options from folks to have access to some money that you may not have that they had even to emergency like, you know focused on making sure that I folks are you know, kind of doing the primary I’m saying that money aside the savings account as liquid in an access to it. So they because you have to go to the retirement accounting or any of those types of things and you are essentially disrupting another another goal that you might have. In right away so important to consider that as well. Hey Matt, I think your your video or your audio isbreaking up a little bit there. Sorry about that. Hope that it there you there you go. Okay, just making the point that I you know, just consider that you know any of these alternative access to some money May disinter, you know may disrupt any type of you know, financial plan. You have around paying down you paying off your home or retirement or all those kind of things. So the primary focus, you know, really should be on having that dedicated emergency savings account that’s liquid so you don’t have to access those alternative sources. exactly, MattMatt did you want to talk about then path the platform? Yeah, absolutely. So, you know as we mentioned in the beginning in our in our housekeeping out, I just want to remind everybody they have access to the Finn path Financial Wellness platform in addition to Fantastic coaches like Daryl, you know the platform is there as a way to you know for you to educate yourself on different areas of personal finance that could be some of these topics around, you know budgeting or emergency savings debt management credit scores or even some of the more advanced things such as tax planning or estate planning, but done in a really simple way you have access to a the wellness score analyzer. We recommend that you get your Wellness score and that’ll kind of help guide the conversation moving forward of hey, where should you be? Where should you be spending your time is should you be spending your time on savings or budgeting or or spending or debt or protection like on the insurance side? So definitely recommend going to Finn path wellness. com to register your account and having access to the tools and resources there. Awesome. That’s a great tool Matt. We use it almost daily here when we’re doing our coaching session. So something good something that’s free for you something that you all have access to so, you know take advantage of that resource. Again, just want to make sure that everybody had access to the the money megaphone. We’re really excited about offering this platform for folks to get connected with our with our coaching service and just ask a question. Ask something that’s on your mind that we can get back to you on and again something that’s confidential and as a comfortable conversation to just you know, we want to get that inertia moving of having, you know, starting that initial conversation and see what comes out of it and how we can assist you. So please scan the QR code on the screen or find us at money megaphone I searching on Facebook. Awesome, Matt great new great new entry point there really really like that. So here you have another QR code which you can scan, but you can get thin path coaching sessions through the Finn path wellness. com/coaching. You can scan this QR code for an employment where you’ll meet up with a with the coach one on one to discuss anything in particular that you want to discuss anything having to do with finances. We want to help educate you with those questions and needs that you have. Again, here is my information. If you want to talk to me individually or personally and everybody again, everybody here that’s on the call is going to get this this webinar email to them. So if you don’t have enough time to jot this information down, we’ll have it here, but we’re gonna I think we’re gonna go to the Q&A session or is that right? Matt? Are we ready for that? Yeah, absolutely. We appreciate everybody submitting questions along the way and the both in the chat and the Q&A. If you have a question that you’d like for us to address right now, please type it into the the Q&A function and we will we will live answer it for for everybody. Of course. We’ll leave the person that asked it Anonymous but we’d be happy to answer it in front of the group. So we’ll leave that. We’ll leave that open. You can also we have some questions coming in through the chat. We did have one question come through the chat right now that just ask if we do you charge by session and the answer is no there’s no charge to have a consultation to you know have a session to ask a question to engage with the Finn path resources and the the coaches that are involved. This is a benefit that’s often being provided to you provided to you by your employer. So the thankful for them for caring very much about you and your financial well-being and financial stress, but there isNo chart, there’s no charge to the individuals that are on the platform and utilizing the coaching. Yeah, but that’s not. Um, it’s you know, it’s really really the thing that we get out of it. You know, you might ask what it well what do you guys get of it? You’re not charging. Well, I get satisfaction of helping people answer their you know, Financial questions. It’s really really satisfying to talk to people every day and help them through a financial issue that they have and giving them some insight and some Pathways to get their information the information that they need to answer their questions and and set them on the path to a lot of times just show that you know, there is a path because a lot of times I run into people who just feel like they’re buried and they’re not going to get out of it. And you know, if you talk it out there’s usually some Pathway to get out of it and you know, that’s what we’re here for to provide that information. Daryl have a question for you. Here is the question is should I have a savings account and an emergency fund account? You know it really depends thank good question. It really depends on what your goals are. I would say. Yes, and the reason why is because a lot of people like to have some liquidity, you know, your emergency fund is not necessarily necessarily for liquid things. Like if you’re trying to do something maybe you want to fund Christmas starting at the beginning of the year. That’s not going to be a part of your emergency fund but that can be a part of your savings. So a lot of times you can put that  dollars away every month. And then when you get to Christmas time, you’ve got six hundred dollars built up and you’re able to use that money for Christmas and not use credit card. So at the beginning of the year, you can start your Christmas fun all over again. So my answer to that is yes, I think it’s a good thing keeping. Your emergency funds separate is always a good thing because they are for that just just for that emergency. So it’s really important. Yeah, I think that’s a good advice the you know, it’s easy for something that for their to be a creep in the definition of what’s an emergency. Right of is a is my my friends want to have a last-minute vacation to Las Vegas that that’s probably not an emergency even though it’s last minute. So I think that separation and clear like this is this is my money for this purpose. And this is my money for a different purpose is is a good is a good way to go about it. I did launch the another survey poll our Poll for everybody to answer. So I appreciate everybody going through and answering that as well just helps us understand the situation provide better coaching and inside for the group. So so thank you for going on and answering those quick questions. We did one other question about what is the the wellness score basically the wellness score inside of the thin path platform. What it does is it’s asked you questions. There’s about questions and ask you about different areas of your financial life. So, you know doHave a checking account or in a savings account or one or the other or both or do you not have a banking relationship? Do you own a house or do you rent or if you own a house is it paid off or you near getting is it you know halfway paid do you do you have disability coverage? Do you have life insurance? Do you budget like these types of kind of broad-based questions and then it assigns you a score that score is out of a hundred. So, you know, it’s close to is going to be your best score. And then from there it’s going to break it down into subcategories of spending savings protection debt. And so then it’ll allow you to to know where to focus your time. So if I get a score of I say hey, I got some work to do but I can look at the subcategories and see where where the areas that I need to spend. You know the most of my time and where do I start my my financial Journey? Have another question here. Do you still earn? an AP ayp on a CDs at maturityso I can take that. So with that maturity that term is then over. So what you’re going to want to do is you’re going to want to take that money in either redo another CD for the same or even a different term, but it’ll just be sitting there out of out of yourIt won’t be in that particular because it has matured. It’s for a specific time time. Whatever you you chose in the in the beginning. Okay. Let’s see. One question about the Finpath platform. It says it says is there a specific login I have with the district or do I register on the website? You would just register your account on the Finpath? Wellness. com website. It’s Finpath wellness. com on the top, right you’ll hit register. You will then input your your employer email address and then you will look for the email inside of your email account to complete the registration process. Question for you, Darryl, do we do you have evening appointments? Yes, we have multiple evening appointments. So what we would suggest is usually my calendar is from eight to five but I’m willing to meet with folks evenings before school, you know, but what I would want to do is I’d want you to shoot me an email and let’s try to arrange something that’s beneficial for both of us. But sure. I’d be happy to me with people evenings mornings. Even on a Saturday from time to time. And also we we have other coaches that will also be able to meet with you if I’m not available. Daryl this individual has a question. They have a b that takes money out, you know through payroll deduction on a pre-tax basis and they want to know does it appropriate for them to switch to a Roth IRA. So I think there’s a couple a couple things in there as one tax treatment and then the other part is account type. Yeah, so you’re b that you’re having that money taken out every paycheck on the pretext. So that is helping you in one way. So one of the things is doing its lowering your taxable income. So as you save that money for retirement, you’re not being charged any taxes on that particular they pick particular amount of money that you’re you’re taking out each paycheck. So when you add those all up at the end of the year say if it equaled up to dollars, if you’re saying a hundred dollars per paycheck or per month, you’re gross income would be reduced by dollars. So that’s one way that the b is helping you now, if you decided that you wanted to do a Roth IRA, you could then from your own individual checking savings account or whatever Source where you’re getting the money from you could then open that up open that up at TCG or any other financial institution and open up an IRA and have that money available or have that money go towards the Roth? Array, but those would be kind of two separate things. You don’t have to close your b account. That’s an account. That normally will have a specific term kind of like we were talking about with CDs the longer usually when you open up your you have a contracted term with a b so it may be a eight year term. It may be a year term. It just depends on what your specific contract has that you signed when you opened it up, but it doesn’t state that you actually have to keep contributing to that particular b. You’re always in charge of your money. You can always stop start increase decrease take a break whatever you want with your contributions. That’s up to you. You’re in control with that. And I just wanted to make one thing really just clear and I was reading some questions. So I apologize if you already did this is I just want to make sure that everybody knows that they can they can payroll the duct either on a you know, pre-tax basis or an after-tax basis. For you know in a Roth right for a b or a or a k those can all be payroll deducted. You cannot payroll deduct to fund an IRA, whether it’s whether it’s a traditional IRA or a Roth IRA. I just want to make sure that everybody’s clear that you know, your employer sponsored retirement accounts b or K. Those can be pre-tax or Roth. The other thing is that if you have an IRA those can also be that can that can be a traditional or Roth, so don’t get hung up necessarily on. Roth being specifically with an IRA. You can also have Roth contributions that go into a group retirement plan as well. We’re getting a lot of questions about CDs coming through which is which is good. You know, here’s here’s my thoughts on CDs and and you and you mentioned it is that you know rates are so low right now. So a couple things is one rates are so low and then you kind of have this this emergence of these online like high yield savings accounts, right? So I think it’d be worth the kind of do a comparison to figure out what is what is a six-month or a month CD pay out in terms of Interest versus being in some kind of a high yield savings account. Um, I would imagine they’re probably pretty similar. It’s probably something we can we should look into a little bit more. But but remember with the CD you’re losing that liquiditySo even if it’s paying just slightly more a quarter of a percent a tenth percent or whatever it is. For the specific need that we’re addressing here on the emergency savings and a big part of emergency savings is liquidity is you know, because I think we’re kind of we’re done in the middle of the road. We’re almost talking about investing right for return versus emergency savings for liquidity. So what I would always say is that, you know, maybe the the CD while an option is maybe a secondary option to a savings or a high-yield savings where you can really use that liquidity to encase that unexpected expense arises. Right and just like kind of that slide said just a piggyback on that mat that you don’t know when the emergency is gonna happen. And with the CD unless you’ve got ladders going and some elaborate type of plan to make sure you have money coming available every, you know one to two months. It’s really really hard to plan for that. So that’s right those online accounts. You can get a you know, I’ve seen some upwards of in the one and a half two percent range. Whereas your savings account is, you know point two percent. Yeah, so a lot less a lot different. So they’re just new and a lot of people don’t know about them, but CDs have been around for a long time and you know the rates tend to go up with when the interest rates go up in regular Society, soThey change from time to time but you know, it’s just like with everything else if there’s inflation those rates are going to go up. Yeah, absolutely. Love the questions everybody. These are really good. You know, we’ll power through a few more and and you know be happy to support everybody’s questions here again, we’re big on it starts with a question. It starts with a conversation we so we love we love going through this. One question. Do you have webinars about paying for children’s college and planning for retirement? Absolutely. We have those we have some modules on on the Finpath portal inside of thin path University that you can watch. We all so are planning to do several more live courses as a part of our our Core Series, I believe College funding is gonna be a few months out and I think we’re doing a lot in April around retirement planning and we do spend a lot of time on retirement planning because we do get a lot of questions about that and a happy to so there are there are resources for you around that. Um, so I have a this question says I have a save I have savings sitting in a Roth IRA and investment accounts. We all do coaching on investing. Just the short answer there is yes, so well, we’ll typically do there is meet with somebody to understand the risk tolerance. What is their time Horizon for when they will need access to that money and then really look at the investment allocation between the different type of investment asset classes on the stock side and the bond side to make sure that it’s a proper mix to to reach your goals. So yeah, we can’t we can absolutely help around there. A question Darrell Darrell question for you. What is the what are the benefits of pre-tax or post tax on ks? SoYou heard me a little bit in my talking about the b earlier, but pretext contributions tend to lower your taxable income in your current year that you’re in. So for example, you know some of the limits on doing contributions to your to any your your k. If you’re under years old you can you can put up to, away per year into that k now. If you do a pre-tax contribution you have now effectively lowered your income by that amount of money. You’re not gonna be taxed on that nineteen thousand five hundred dollars so that can that can move you in move you down a couple of tax brackets, especially if you’re doing it with a spouse at the same time. So if they’re doing the same thing and you’re doing the same thing and you’ve now contributed, into your retirement savings fund free tax is going to help you lower your income or your taxes your income. So your taxes won’t be as high. So that’s a that’s a big benefit. Now one of the things that’s a benefit of a Roth contribution is one of the things I really like about Roth contributions are thatBecause you are paying the tax up front. So, you know unlike a pre-tax contribution. They don’t they don’t give you that tax break up front. But the one thing that does happen with a Roth contribution into a k b or four five seven, is that as that as that contribution is done month after month year after year in your timeline any interest or any gains or Returns on investment during that time frame are now not taxable because you have already paid the tax on that raw contribution up front one thing that you know, I just this is just a fact. I don’t know if it’s better or worse. We know what the tax rate is right now. We don’t know what the tax rate is years from now years from now is it gonna be higher? Is it gonna be lower? You know, none of us can see into the future. So knowing what you’re paying on your taxes with a Roth contribution and knowing that the investment gains on those contributions. You get to keep you don’t have to pay taxes on that’s kind of a neat thing. What is the reason why you put away for retirement in the first place? You want to grow that income over time? Having that income growth with no taxes on it is kind of a nice thing. That’s why I like it so much now there are some limits imposed by the IRS. So you can’t make a super high high amount of income to there’s some limitations on on putting in for Rob. But you know, that’s something you can talk with one of our coaches about individually your particular situation. That’s something that we talk about with people every day. So I really urge you to you know, take the take the link and you know meet with one of our coaches and we’d be happy to discuss that with you your specific and situation. Absolutely. We did have a question related to TRS and Social Security and that can be a kind of a little bit of an individualized discussion. There’s some there’s some Concepts there that are that I think are really important. If you have a TRS retirement system and social security question, we are experts in that area and we can definitely Provide support our administrator on the on the program right now is just posted a link obviously back to our coaching. We recommend that if you have a TRS social security question, please get connected with our coach. It’s probably theThe most asked question that we get. So we’re pretty familiar with helping people through through that discussion. Can’t wait for those College savings modules greats. Let’s see going through the questions. So many questions really appreciated everybody. Here’s one that’s kind of a little bit off topic but I think is some what relative they’re all kind of past this one to you and I’m happy to chime in is what’s the best use if you’re somebody that’s eligible for stimulus money, or maybe it says unexpected money. So maybe it’s a tax refund tax refund stimulus money and that comes in. What’s the best use for it? So, you know, obviously this is one of those it depends right? But what is your what is your situation? You know, do you have high debt? Do you not have any debt at all? Have you saved enough for retirement? I’m looking at our poll here. And one of the big things that people are worried about in the poll is saving for retirement on saving enough for retirement % or one out of three people are worried about saving for retirement. So do you have enough put away for retirement? Those are things that you can use that money for if you have high interest rate debt, you know, my suggestion would be to pay off debt. I’m always into the paying off debt because when you pay out that debt, you’re not caring those interest fees those interests charges with you that is freeing up cash flow for you to do with whatever you want to do with that you’re in that makes you in control of what your future earnings are, you know, you’re living on money from you know months back versus today’s money or letting paycheck. Paycheck so you know it, you know and it a surplus and money coming your way. It’s always good to think about how you can fund a retirement pay off debt get yourself financially stable anything. That’s been you, you know been causing you toYou know our example of you know, the pillow are you sleeping at night anything that’s causing you stress those are things that you can address with that type of money. Obviously, you know, you might feel like you need to to treat yourself to something maybe just use a portion of that but you know because you did that and your discipline you’re able to put it away in retirement or any other investment vehicle. I know, you know, if you maxed out your retirement contributions for the year. Have you thought about doing an IRA you can do an extra six thousand sixty five hundred six thousand Matt or, , if you’re over, , right so you can you can use that money towards that have you done that for your spouse, you know, one thing with an IRA you can do up until April th. You can still contribute to the year in an IRA. So last year’s and then you can contribute to this years as well. So there’s you can do that for yourself and you can do that for your spouse. So there’s a lot of places where you can you can makeUse of that money without having to you know have it sit in a checking or savings account that it works not doing anything for you. Anything you’d like to add to that Matt? No, I think that’s all good stuff. I mean, you’re right. It’s kind of one of those. It depends questions, but I think the answer is you shouldn’t you you definitely shouldn’t go buy a new flat screen TV or anything. There’s probably some there’s a there’s a really, you know, a fundamental thing that you could be doing paying down debt building an emergency savings putting towards a future goal. Like if those things are all lined up, there’s some really thoughtful things that you can be doing to propelling yourself towards, you know, Financial Independence and that’s ultimately the goal for for all of us here. Daryl we’ve had a we’ve had a ton of questions. They’re starting to wind down. We still have a number of people on here. Now, we’ve had % of the folks answer the poll question. So we really appreciate all the feedback. Yes. Thank you here. And so yeah, so we want to use that to just deliver better content and information out and the things that you want to hear about. I’m excited that everybody’s excited for upcoming webinars. And you know, I would just I would just encourage you toTell your friends and your colleagues like if this was good information, and this was a valuable resource, please tell your colleagues that you know, they have access to finpath as well both the platform and these the sessions and you know, please encourage them to to join and start that conversation and you know, we’re happy to help. However, we can and Matt I just want to add it remember. This is a this is a benefit provided by your employer. So this is not costing money, you know all it’s gonna cost us your time and your commitment if you want to get your goal establish, you know, you want to meet with one of us. We are happy more than happy to me with you and try to work out a plan for whatever it is that you need to do again. Think about it, you know, it’s it’s really important the earlier that you do these kinds of things the better off you’re gonna be in the future. So, you know, take the time, you know reassess where you’re at get your get yourself together and get yourself going because you know, it’s really important especially when we have these. Unexpected expenses and unexpected things that are happening like this covid thing that’s happening to everybody. You know, it’s not just one person. It doesn’t you know, it doesn’t see color doesn’t see age doesn’t see anything. It’s it’s everybody so these things are going to happen and you know, this probably isn’t the last thing is gonna happen in our lifetime. So being prepared is Paramount. Absolutely. Hey just want to again thank everybody again, please utilize the resources whether it’s the the coaching or the platform, you know, really excited to have everybody joining the the money megaphone and being able to use as an opportunity to get connected and and share ideas and ask questions around these topics. You know, we I think we often are raised to not really want to have conversations about money because it’s a little bit of a stigma and all those types of things but I think we can we can have really fun conversations and learn more about these topics, you know without having to to spare some of the details with with everybody, but certainly we can do that and commerce confidential private conversations with with a coach or by utilizing some of the tools on the platform. But you know again folks when you are done you will see there’s a there’s an exit survey, you know, we just we know we’ve asked you a lot of questions. You’ve asked us a lot of questions we’re asking youIn return we’d appreciate if you could if you could fill that out and just let us know how we’re doing. So, you know Daryl thank you so much for your expertise today. And thank you everybody for participating in this this conversation about about financial Wellness. Matt appreciate you appreciate the you moderating for me here today and all you folks who took the time to stay to the end and ask all those questions. If we didn’t get your question at questions answered. We will be reaching out to you through email to try to answer those questions for you. So really appreciate your time really appreciate your attendance. So, thank you very much.

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