The Mel Robbins PodcastHow to Stop Living Paycheck to Paycheck & Finally Get Ahead
EVERY SPOKEN WORD
60 min read · 11,541 words- 0:00 – 6:44
Introduction
- VTVivian Tu
The American dream is dead, and it was designed that way because we are feeding the rich and starving the poor.
- MRMel Robbins
Today, on The Mel Robbins Podcast, world-leading personal finance educator and Your Rich BFF, Vivian Tu, is here to teach you how to stop living paycheck to paycheck.
- VTVivian Tu
You are not crazy. The housing market? Exponential increase. Higher education? Exponential increase. The cost of living? Exponential increase.
- MRMel Robbins
This is the exact episode you need right now.
- VTVivian Tu
There are very few mistakes you can't come back from. It's never too early to start, but it's also never too late. When you have money, you have the power, you have the freedom. You get to be the captain of your own ship. [intro music]
- MRMel Robbins
Please help me welcome Vivian Tu to The Mel Robbins Podcast.
- VTVivian Tu
Thank you so much for having me.
- MRMel Robbins
When I told everybody that, uh, you were coming on, the team went crazy, and I wanted you on this show because my daughters follow you.
- VTVivian Tu
Yay. [laughs] I love that.
- MRMel Robbins
And so many people around the world love you because you have this very rare ability to be able to empower us to feel like we can take control of our money and, at the same time, you also are a realist about what's actually going on in the world right now.
- VTVivian Tu
Yeah.
- MRMel Robbins
And so I'm grateful that you're here, and I'd like to start by having you paint the picture. So if the person who is listening right now is living paycheck to paycheck, what is gonna happen? What will change in their life if they take everything to heart that their new Rich BFF is gonna teach them today?
- VTVivian Tu
This episode is going to give them power. Um, we talk a lot about wanting money, wanting richness, and I think everybody pictures the lime green Lamborghini and the new designer bag, but that's not what this is all for, right? We should want money because when you have money, you have the power, you have the freedom. You get to be the captain of your own ship. Something that so many people are feeling these days is this lack of agency, that so many things are changing around them, but they don't actually get a say in their life. And to me, that's the most frustrating thing ever because if you can't fix it, then what's the point? So I hope everybody listening will realize by the end of this you will have actionable things that you can do and that no matter where you are in your financial journey, there are very few mistakes you can't come back from. It's never too early to start, but it's also never too late.
- MRMel Robbins
I love that. When you have money-
- VTVivian Tu
Mm-hmm
- MRMel Robbins
... you have power and freedom.
- VTVivian Tu
Yeah.
- MRMel Robbins
If somebody is listening right now, and they're saying, "I am struggling so profoundly right now-"
- VTVivian Tu
Yeah
- MRMel Robbins
... it feels impossible to get ahead," what, what do you wanna say to that person?
- VTVivian Tu
I do think that there are, are very few mistakes, especially in the financial sphere, that you can't come back from because I'm someone who made a lot of them. I'm the person who would overspend. I'm the person who had to wait at a bar until 12:01 when my direct deposit hit to be able to afford my bar tab. Like, the scariest words to me at 21 were, "Your card declined." And I am not someone who grew up with money. I am the only daughter to two Chinese immigrant parents. We grew up incredibly frugally. They really valued education. I did everything the way I was supposed to. I went to the right type of college. I got the right type of job. I got the Wall Street job. I mean, trust me, my Asian parents were very, very proud.
- MRMel Robbins
[laughs]
- VTVivian Tu
And I made a lot of money mistakes. So for me to be able to sit here now and talk to you about all of these things, I'm so proud. It's an honor. It's being able to show that I have battle scars, and I came out bigger and better and braver, and I feel the same way. I mean, I have millions of followers who DM me and tell me the things that they were able to fix because they put this work into action.
- MRMel Robbins
I would love to have you, um, Vivian, just speak to this moment.
- VTVivian Tu
Yeah.
- MRMel Robbins
And what is the person who really does feel like they're never gonna get their head above water, what is available to them in the things that you're about to teach to us today?
- VTVivian Tu
First and foremost, let's address what you just said. Like, these people aren't crazy. Like, if I can address the audience, you are not crazy. If we actually look at the stats, right, we've seen that over the past century, the housing market, exponential increase. The cost to get higher education, exponential increase. The cost of living, exponential increase. You know what hasn't exponentially increased? Wages. So we are being asked to do more with less. If I can kind of wrap this all in a nice big bow-
- MRMel Robbins
Please
- VTVivian Tu
... there are macroeconomic forces, whether that be politics, you know, geopolitical conflict, um, things like legislation. The way our economy is currently designed really benefits people who have money and penalizes and treats not having money like it's a crime. Those are not things that you can tomorrow wake up and change. These are things that are going to impact your money, but you are not necessarily going to be able to flip a light switch and be better at. Tomorrow, and hopefully depending on when you listen to this, today, if you actually can make changes in your own life, you can always end better than you started.
- MRMel Robbins
Mm.
- 6:44 – 13:12
3 Financial Habits That Keep You Broke
- MRMel Robbins
knew when you were broke?
- VTVivian Tu
One, it's very expensive to be broke. Think about it, right? Who gets charged overdraft fees from their bank? Oh, it's the people who are overdrafting on their accounts. They don't have the money. The second thing is, is that there's a little bit of a frustration that comes when you're playing this comparison game of you're broke, but you're trying to prove to people that you're not broke. And I very much had this because I had the brand name job, I had the fancy title, but I didn't have the money, and I did not come from a family that was going to be able to bail me out like that. And so I would see some of my peers from college, they would be moving into an apartment that they bought, and I'd be like, "Man," like, "what am I doing wrong?" FYI, their parents bought the apartment for them. I wasn't 100% sure about that at the time. I am now. I'm very sure about that. And I think I got myself on this consumption hamster wheel trying so hard to fit in-
- MRMel Robbins
Mm
- VTVivian Tu
... because I wanted to prove so badly that I wasn't broke. Because right now, money for us is very much a moral measuring stick. People feel like if you have money, you are a good person, you are a smart person, you do good things, and if you don't, it's a moral failure. Like, you are not smart, you've made bad choices, you are irresponsible, and that's just not always true. And I think keeping up with the Joneses, in my case, keeping up with all of the hot, flashy, cool things that were happening around me-
- MRMel Robbins
Yeah
- VTVivian Tu
... was a big problem. And last but not least, I would say the third thing I really wish I knew when I was broke was that you don't have to be broke forever. It felt like I was going to be stuck in a bad spot for eternity. So I found this apartment, and it's teeny tiny. My bed touches three walls, but it was going to be this beautiful Soho apartment, and my Sex and the City dreams were about to start finally. That apartment ended up having a severe German cockroach infestation.
- MRMel Robbins
Oh, my God.
- VTVivian Tu
And I was so horrified because we had to pay to break our lease, and that was every dollar that I had saved from the first full calendar year of working. And I was devastated because it felt like I had run on a treadmill in place for 365 days of my life. What a waste. And ultimately, that was the moment, the belt-tightening come to Jesus moment for me where I was like, "I actually need to be better." And I think I felt like I was gonna be stuck there forever, but smart decision after smart decision compounds the same way bad decision after bad decision does. And eventually, things changed. Slowly, not quickly, not overnight, but one day I woke up and I didn't feel like I had this fear every single day of w- was I ever going to make it? Was I ever going to have enough in savings to feel comfortable? It's my promise to people listening that you don't have to be stuck forever.
- MRMel Robbins
There is a different interpretation of that story, and I wanna give it to you.
- VTVivian Tu
Ooh.
- MRMel Robbins
You just proved what you promised you were gonna teach us, which is that money is power and money is the ability to leave a sick job-
- VTVivian Tu
Yeah
- MRMel Robbins
... or a relationship or a German cockroach infested apartment.
- VTVivian Tu
[laughs]
- MRMel Robbins
And so you did have a tiny enough mountain-
- VTVivian Tu
Tiny. Mm-hmm
- MRMel Robbins
... to have the power and control to leave. And-
- VTVivian Tu
And wasn't that an amazing way to end that story instead of saying I had to live there?
- MRMel Robbins
Yes, because the you from a year ago would've had to live there.
- VTVivian Tu
Yeah.
- MRMel Robbins
But what was the thing you changed most?
- VTVivian Tu
I think it was the keeping up with the Joneses. It was such a public thing because I was on the trading desk, which by the way, you're sitting shoulder to shoulder with other people, on the phone with the exterminator, yelling at the property manager, just I'm red in the face. All the while, I'm trying to juggle all of the trades happening, trying not to lose my job, trying to be good so I can possibly get a good raise at the end of the year. I'm on the phone talking about my cockroach infestation. And everybody knew. Everybody knew I was weird cockroach girl. And so I was so embarrassed and I was like, "Okay, we have to lock it up." We aren't getting our nails done every week. We aren't going out to eat as often.
- MRMel Robbins
Maybe you've had an experience where, like me, I was... I remember standing on the sidelines watching our daughter playing town soccer, knowing that the $125 check that we had sent in the week before had just bounced. The fee for her to be on that field
- VTVivian Tu
Mm-hmm
- MRMel Robbins
And not wanting any of the parents-
- VTVivian Tu
To know
- MRMel Robbins
... to know. And then after the game, watching the coach walk over-
- VTVivian Tu
Ugh
- MRMel Robbins
... and knowing that I was about to be asked about this, and hoping they didn't say it too loud.
- VTVivian Tu
Yeah.
- 13:12 – 17:28
Auditing Your Spending When You're Living Paycheck to Paycheck
- MRMel Robbins
a reality check that you also have for the person who's saying, "I'm paycheck to paycheck-"
- VTVivian Tu
Mm-hmm
- MRMel Robbins
... saying that, "I'm struggling," saying it, but there are hidden buffers-
- VTVivian Tu
Yeah
- MRMel Robbins
... so to speak, of shit you don't need.
- VTVivian Tu
Ask yourself honestly, when you say you are paycheck to paycheck, are you spending all of your money after taxes on necessities, or can you think of multiple instances where you have spent money that you have had regret about? Let us do an audit of your spending of the past month. First and foremost, if there's a bunch of stuff that you bought and regret, can you return it? Two, if you are seeing that there is a trend of feeling like you are hand to mouth, oh, but by the way, there was that lash appointment, that nail appointment, maybe you were sports betting, maybe you bought those concert tickets that you didn't necessarily need to get front row seats to, you could've just gotten a GA ticket. I'm not asking you to cut out every little thing in your life that brings you joy forever. I'm asking you to cut it out for the next couple months to see what type of buffer you can build yourself. Because once you can get your head above water-
- MRMel Robbins
Mm
- VTVivian Tu
... once you are able to actually put some of that money into a little nest egg, into investments that can work for you, you'll be able to do all of the things you enjoy, and you won't have to feel guilty about it.
- MRMel Robbins
You write on page 49 of your bestselling book, this is in a chapter called Investing in Yourself, "Would I still buy this if I couldn't tell anyone about it? One of the best pieces of spending-related advice I've ever gotten was to ask myself this question. Sometimes when we invest in luxury items or upgrades, a big part of the appeal is being able to tell others we have them."
- VTVivian Tu
[laughs]
- MRMel Robbins
"This question cuts to the core of that. Would I want the BMW as much if everyone else thought I had a Kia?" So talk to me about this. Would I still buy this if I couldn't tell anyone about it?
- VTVivian Tu
That's such a powerful spending exercise, because I've actually bought a lot of stuff that I don't like.
- MRMel Robbins
[laughs]
- VTVivian Tu
And it's kind of crazy to say that part out loud, but I have bought shoes that were incredibly uncomfortable because they were from a specific designer, and I wanted people to know that I could afford that specific designer. The stuff where I've actually spent money to improve my life in a meaningful way has always paid off and had a bigger ROI in terms of my joy and my satisfaction-
- MRMel Robbins
Mm
- VTVivian Tu
... than stuff that I bought just so that I could tell people that I had the thing.
- MRMel Robbins
I love a little three-month challenge.
- VTVivian Tu
Three-month challenge.
- MRMel Robbins
'Cause I also think we don't have a clue what we're spending money on, 'cause you just swipe, and then you tap, and then you do this, and it feels good in the moment, and then you're like, "Wait, where did all my money go?"
- VTVivian Tu
Can I tell you a secret?
- MRMel Robbins
Please.
- VTVivian Tu
Even as someone who feels very financially literate, I had a med spa subscription for laser hair removal-
- MRMel Robbins
[laughs]
- VTVivian Tu
... that I forgot that I had had, because I had finished my cycle of laser hair removal, and I just kept paying for it. I just forgot to cancel it, and [laughs] I was so embarrassed, but I knew that I wasn't gonna be able to get that money back. Spilt milk. We're not gonna cry about it. So what did I do? I canceled the subscription. I made sure the next month it didn't show up on my statement, and going forward, I made a more concerted effort, essentially, to check my statement every month to make sure that that wasn't something that I was seeing slip through the cracks in other parts of my life.
- MRMel Robbins
And the exercise of just saying no to stupid things or things you don't actually need in order to build a little bit of a mound versus continuing to dig deeper, I think would give you power just right there. So have you ever... I- you- you
- 17:28 – 23:06
The Savings System That Builds Wealth Automatically
- MRMel Robbins
always hear this advice from people who are out of touch that, like, "If you wanna save money, just spend less."
- VTVivian Tu
Like, sick, cool, good advice. I'm cured. [laughs] Like, that is the dumbest thing I've ever heard, because it is not actually a willpower thing, and frankly, you cannot willpower your way to good decisions. So what I actually encourage people to do is build a system.
- MRMel Robbins
Okay.
- VTVivian Tu
So most of us these days, you're not getting a physical check from your boss. Most of us get an electronic deposit of some sort, whether you are a W-2 employee and you get a biweekly paycheck, or if you are a freelancer and you send in an invoice and they direct deposit the cash into your account Here's what you're gonna do. If you work for a company with a workplace portal, you can actually set aside part of that paycheck to not your checking account. So most of us just have 100% of that paycheck go into your checking account. You see it, you spend it. Hell yeah. Wrong. What we're gonna do is we're actually gonna set aside 95 or 90% of your paycheck, and it's gonna go to that checking account. You're gonna pay your rent. You are going to take care of the needs for your family. You are going to pay for the things that you need to pay for, and that 10%, that 5%, if you wanna start small, we're gonna have that immediately go to a savings account. No matter how much money I had in that checking account, by the end of the month, by the end of that pay period, somehow I'd found a way to spend it, and I'm just like, "How did that happen?" And the more I made, I found the more I was spending. But if you are automatically paying yourself first and setting money aside into that savings account, today you is literally taking care of future you.
- MRMel Robbins
Let's say you don't have a portal. Let's say that you're working-
- VTVivian Tu
That's fine
- MRMel Robbins
... a retail job-
- VTVivian Tu
Yep
- MRMel Robbins
... or you're working at a restaurant, or you got a bunch of-
- VTVivian Tu
Yep
- MRMel Robbins
... side hustles or-
- VTVivian Tu
Retail job
- MRMel Robbins
... nannying.
- VTVivian Tu
You're a freelancer.
- MRMel Robbins
Yep.
- VTVivian Tu
All that stuff. Most banks these days can allow you to do an auto-transfer. So maybe it's, oh, uh, I work a retail job, so I know for the most part I can expect this much money to be hitting my bank account every month. If there is a convenient date or maybe two convenient dates, you can say, "Hey, let's transfer $100 once this check clears-
- MRMel Robbins
Yep
- VTVivian Tu
... or by the end of the week."
- MRMel Robbins
Okay.
- VTVivian Tu
If you are someone who is a freelancer who's like, "Okay, I've just sent in my invoice. I know I have net 30," when that money comes in, you can say, "Hey, let's go ahead and transfer 10% of that into savings." Also, by the way, maybe also good to split off 30 to 40% of it for taxes-
- MRMel Robbins
Yep
- VTVivian Tu
... and put that into a high-yield savings account. So before your quarterly taxes are due, you're making money on the tax man's money. You're able to earn more interest, and that's great. That is extra money in your pocket that comes out of thin air. Like, most banks that are traditional brick-and-mortar are offering you, the FDIC national average right now is 0.37%. So you put 100 bucks in, at the end of the year, you got 100 bucks and 37 cents. What are you buying with 37 cents? Nothing. Okay? But high-yield savings accounts are offering somewhere between 3 to 4% right now, and so 100 bucks in at the beginning of the year, at the end of the year you have $103, $104, and that scales. So you put in more money, you get the bigger percentage. And so you will be earning more and more money. And so I think that is a way that you can essentially start to bridge that gap.
- MRMel Robbins
I wanna really highlight something, 'cause I wanna make sure as you're listening or watching you got the power of one small thing that you said.
- VTVivian Tu
Mm-hmm.
- MRMel Robbins
And I wanna be sure you did not miss this. So you said your money's coming in, right? And I love when you were like, "Great, paycheck. Let's spend it." Wrong.
- VTVivian Tu
[laughs]
- MRMel Robbins
No. When the money comes in, the first thing you should do is have a savings account, high-yield if you can get it, to pay yourself.
- VTVivian Tu
Yeah.
- MRMel Robbins
And I had this, like, download in my mind as you were talking, sometimes this happens, like, magically in the studio, where Vivian, I saw broke-ass you-
- VTVivian Tu
[laughs]
- 23:06 – 24:59
Why an Emergency Fund Matters More Than You Think
- VTVivian Tu
It's not sexy to be like, "Ah, yes, I've saved three months of living expenses." But you know what is sexy? Being able to sleep better at night, knowing that if something were to happen, you got it like that. A couple years after the cockroach apartment, I actually, I don't know if you can see it, I cut off the tip of my finger with a bread knife.
- MRMel Robbins
Oh, whoa.
- VTVivian Tu
It was the night of my 25th birthday. It was a very crusty baguette. I end up spending my 25th birthday, shout-out to the Mount Sinai Emergency Department, like, I was in there, tears. And to add insult to injury, the total bill for that trip to the emergency department was $13,000.
- MRMel Robbins
Oh, my God.
- VTVivian Tu
I had really decent insurance, so my portion was $1,600. And man, that birthday party sucked. But you know what sucked less? Being able to pay the bill and move on with my life. And imagine- At the time, this was years and years ago, but, like, I don't wanna have that bill hanging over my head for the worst birthday party ever. I wanna be done. And I was lucky because I had the emergency fund to pay it.
- MRMel Robbins
It comes back to power.
- VTVivian Tu
Power.
- MRMel Robbins
Power.
- VTVivian Tu
You cannot budget your way out of paycheck to paycheck. You need to increase how much money is coming in the door. Like, this is not a spending problem. Well, hopefully it's not, but this is a how do I get more money in the door? If you're truly living paycheck to paycheck, you're not s- doing the $600 Sephora haul every month and that's why you're paycheck to paycheck. If you actually are spending only on necessities, you feel like you're being worked to the bone, I don't think it's fair that you cannot make ends meet with a 40-hour-a-week job. I think it's not fair. This is what we're gonna do. You got two options.
- 24:59 – 28:06
Breaking the Paycheck to Paycheck Cycle
- VTVivian Tu
One, you need to make more money at what you are currently doing. So what does that look like? That looks like negotiating a raise. That looks like getting a promotion. That looks like potentially job hopping somewhere else to get a more competitive salary or bonus. And then the second option is you have to pick up a side hustle. And I know what everybody listening is probably thinking, like, "I'm working 40 hours already. I'm exhausted. I come home. I have to cook for my kids. I have to take care of everybody." I know. I'm not saying it's okay and I'm not saying it's fair. So either through negotiation of a raise, promotion, through getting a better job, or through making money on the side, walking dogs, tutoring, mowing grass, whatever it might need to be, you need to get more money in the door. You're not the problem, but you do get to be the solution. Because once you have more money coming in the door, you finally get a second to breathe. When you're going hand, mouth, hand, mouth, hand, mouth, it's very hard to think about the right decision, 'cause you're thinking about the right now decision.
- MRMel Robbins
Mm.
- VTVivian Tu
How are you gonna put food on the table? That is a bigger concern than putting money into your 401 [k] . That's a bigger concern than, "Huh, what do I really want my career trajectory to be in 10 year?" You're not thinking about that. You are thinking, "I gotta clock in, clock out, get my money, and do the things that I need to do, which is pay my rent, buy my food, and hopefully have everything else in my life maintained, because not one single unexpected expense can come up." When you have more money, you buy the buffer.
- MRMel Robbins
What would you say if you're in your 20s, crazy challenging job market-
- VTVivian Tu
Yeah
- MRMel Robbins
... and you are not getting paid well because you've had to take whatever job you've had to take, what is your advice?
- VTVivian Tu
Some jobs are for learning and some jobs are for earning. If you are able to take a job that will give you some job experience, that'll get your foot in the door, that'll give you that inertia, and you have a familial structure that allows you to move home, that'll help subsidize some of those costs, 'cause they are expensive, you'll be able to get some of that on-the-job experience that'll then hopefully translate to your next option. And so sometimes the thing you need to do to get paid more is to leave, even in a tough job market. But I also think that can happen with department changes. I think that can happen if you want to maybe change different industries. So you're in marketing for one type of company and then you go to a different type of company, but all companies need marketing teams. Um, it is about understanding are you here to make as much money as possible, or are you here to actually learn something? And I think at the beginning of your career it should be about learning something. That's not to say you shouldn't be asking for more, but expecting a monstrous number out the gate may mean you have to give up other parts of your lifestyle that very few people actually are fully aware of what those sacrifices will be.
- 28:06 – 32:48
How to Ask for a Raise
- MRMel Robbins
What do you think the best way is to ask for a raise?
- VTVivian Tu
Come with receipts, Mel. We are coming prepared. You better come in with everything that you've already done. Winter raises, winter promotions are made in the summer. At the beginning of the year, I'm talking January, February, you make sure that you know what your goal is for the year. You sit down with your boss, you set some goals, you're gonna revisit them in a J month, like June, July. Cool. So you got about six months. In the summer you're like, "Hey Mel, I know at the beginning of the year we discussed that we were setting goals for me for this year. I'm happy to report that I've already accomplished X, Y, and Z. I would love to know what other things would you need to see from me for me to be in a good position to be promoted at the end of the year, for me to reach the next level of XYZ?"
- MRMel Robbins
Mm-hmm.
- VTVivian Tu
"For me to be given a new territory?"
- MRMel Robbins
Mm-hmm.
- VTVivian Tu
"Okay, I'm gonna let you as my boss tell me." I'm gonna say, "Great, I love that suggestion. I'm also going to focus on a couple of these other things that I know have just been a thorn in your side, so I can help make your job easier." Great. We leave. I crush it. Okay? June, July through October we'll call it, I am just grinding. I get it all done. And then in November I come back with all of my receipts. I've built something called a brag book in my inbox. So I've titled it, it's a little folder, it says Brag Book 2026, whatever. Anytime someone congratulates me, anytime someone's like, "Wow, Vivian is amazing," right? Then in October I sit down with you and I'm like, "Hey Mel, I'm so happy. Like, we have done such a great job this year as a team. Everything is going, been going super well. I'd love to show you a couple of examples of how I was able to achieve all of these goals." And then after I've shown you all of my bells and whistles, all the things I've already crushed, I go Given the l- the amount of assistance, given the amount of success I've been able to bring to the team, a raise of XYZ would be commensurate with my performance, or a promotion makes sense given that I'm already operating at this level. Then I shut up.
- MRMel Robbins
[laughs]
- VTVivian Tu
In one of my first negotiations, I gave this incredible pitch of how hard I was, I was working. Everything was amazing. I asked for my raise, and then I said, "But if not, that's okay."
- MRMel Robbins
[laughs]
- VTVivian Tu
Vivian, stop talking. What is wrong with you?
- MRMel Robbins
[laughs]
- VTVivian Tu
Stop talking. Let you tell me no. I don't tell myself no.
- MRMel Robbins
Now you're actually showing that you earned it-
- VTVivian Tu
Yep
- MRMel Robbins
... and that you're worth investing in.
- VTVivian Tu
Yep. It's the you show. It's not about what other people are making.
- MRMel Robbins
Yes.
- VTVivian Tu
It's not about what the person sitting next to you is, because you can't just be like, "Well, Johnny told me they made that." Now you've snitched on Johnny. You are going to show why you deserve the number.
- MRMel Robbins
I think the advice is absolutely fantastic, and I love the idea of the brag book-
- VTVivian Tu
Mm-hmm
- MRMel Robbins
... because you forget. You forget all the things that you're doing, and you should assume that the person that you're working for isn't aware-
- VTVivian Tu
Yep
- MRMel Robbins
... of absolutely all the different things that you're doing.
- VTVivian Tu
Yeah.
- MRMel Robbins
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- 32:48 – 34:10
Fighting a Medical Bill and Winning
- MRMel Robbins
just got hit with a bill-
- VTVivian Tu
Mm-hmm
- MRMel Robbins
... 'cause this happens to people, especially medical bills, what is your advice about how to fight it?
- VTVivian Tu
Okay, so before we even fight the medical bill, let's see if it's even right. Bad stat, 80% of medical bills have errors in them.
- MRMel Robbins
80%?
- VTVivian Tu
Eight zero. So first, I would say first thing you do is make sure that you are asking for an itemized bill. You wanna see every single thing they're charging, not just the number at the end. Tell me everything that you did to me. Then I would say check to see if that's fair. There are tools online now, like a Fair Health Consumer, that you can go and check to be like, "What is a normal cost for an X-ray?" So then after that, you're going to call, not email. They will ghost you, by the way. You wanna call the hospital that you went, and you went to the emergency department, and you're like, "Hey, I would like to have a discussion about this. Like, what waivers, relief programs, charity care, what is available to me?" From there, I want you to say, "I'd actually really be interested in paying this bill in full, but I'm not gonna be able to do the whole thing. Would there be any sort of discount available if I can get that paid today?" Then they know they're actually getting some money, and this all works if you don't have insurance. If you have insurance, those rates are typically pre-negotiated.
- MRMel Robbins
Vivian, what do you say to the
- 34:10 – 34:59
What to Do If You Didn't Save for Retirement
- MRMel Robbins
person who is listening who has very little money saved for retirement?
- VTVivian Tu
Mm-hmm.
- MRMel Robbins
Maybe they're more my age, and they're starting to get really worried, or maybe they've come out of a divorce-
- VTVivian Tu
Yeah
- MRMel Robbins
... and they're starting over, and they're starting to get worried about their future.
- VTVivian Tu
You can catch up. I think tactically we have to talk about catch-up. After you turn 50, you have actual access to something that the rest of us don't called catch-up contributions. You can actually put more away because they want you to, and I quote, "catch up." [laughs] That is literally what it's called, catch-up contributions.
- MRMel Robbins
Um, how much money do I need to retire?
- VTVivian Tu
[laughs] People have no idea what they actually need and have no idea what they actually want.
- MRMel Robbins
Hmm.
- VTVivian Tu
So what I like to advise everyone to think about is your
- 34:59 – 37:04
How Much Money You Need in Savings
- VTVivian Tu
FU number.
- MRMel Robbins
FU number, okay.
- VTVivian Tu
Your fuck you number, Mel.
- MRMel Robbins
Yes, of course.
- VTVivian Tu
Come on. Okay?
- MRMel Robbins
Yes.
- VTVivian Tu
The reason we call it the FU number is because it really is going to give you true financial freedom.
- MRMel Robbins
Okay.
- VTVivian Tu
And we want your money from investments to replace your money from labor-
- MRMel Robbins
Okay
- VTVivian Tu
... so you'll never have to work again. So how do we do this?
- MRMel Robbins
I don't know.
- VTVivian Tu
Close your eyes. We are having a zen moment. I want everyone to visualize a perfect year. Where do you live? What does your house look like? Are you supporting anybody? Maybe it's a partner. Maybe it's kids. Maybe it's an adorable furry little pet. Are you traveling? Are there things you are spending on? What does your dining out situation look like? What kind of car do you drive? Envision your perfect little universe. Now open your eyes, and this is a hard question. What do you think one perfect year in that perfect little universe would cost you? That is your perfect year number, okay? We are gonna take this number, and we are going to divide it by 0.04. You're going to get a bigger number, okay? People think you're gonna get a smaller number. You're gonna get a bigger number, okay? That is the amount of dollars you would need to have invested for you to have this life.
- MRMel Robbins
So if you had a million dollars in savings-
- VTVivian Tu
Mm-hmm
- MRMel Robbins
... what is 4% interest? Is that $40,000?
- VTVivian Tu
That is correct.
- MRMel Robbins
Well, that kind of puts it in perspective.
- VTVivian Tu
And I, I don't want people to freak out-
- MRMel Robbins
Yeah
- VTVivian Tu
... but, because we have to remember that in retirement, oftentimes we are getting more assistance, right? There is Social Security, there is Medicare. And so you may not necessarily need as much to be able to live that happily ever after.
- MRMel Robbins
Mm.
- VTVivian Tu
But this is a good jump-off point for us to start calculating where we're trying to get to.
- 37:04 – 38:32
Talking to Your Parents About Their Retirement Savings
- MRMel Robbins
Talk to me about the sandwich generation.
- VTVivian Tu
So a lot of us these days are feeling sandwiched. Um, we are starting to build our own families, our partners, our kids, all the while our parents are actually coming to us and saying, "We are underfunded for retirement." And so not only are you supporting your family unit, you are also then supporting the family unit you grew up with, and you're feeling a lot of that pressure. And I think the number one thing I encourage everybody listening to do is have the conversation with your parents about their retirement funding. If your parents are behind on retirement, it is better to know now so that you can help them set up contributions that are going to then support them, so that you can help them potentially think about downsizing their home, so you can think about all the other options and pull those levers now when you still have that runway.
- MRMel Robbins
So give me the opening line of this conversation.
- VTVivian Tu
I would say something along the lines of, "You know that I'm always here to support and help you. I wanna get ahead of this because so many people are underfunded for retirement, and I have no intention of letting you suffer. But for me to help you get you to where you need to be, we gotta do it together. So let's sit down and talk about it. This is the first step that we need to take to make sure that you get the retirement you deserve."
- 38:32 – 43:57
Getting Started With Investing
- MRMel Robbins
I love that. So if you're intimidated by the word investing-
- VTVivian Tu
Mm-hmm
- MRMel Robbins
... how would you explain it to somebody who doesn't think they're smart enough to understand it? And where do you start if you can only have a few extra dollars-
- VTVivian Tu
Yeah
- MRMel Robbins
... every month to do it?
- VTVivian Tu
You work hard for your money through labor, whether that be mental labor, physical labor, whatever. Your money can also work for you. We as human beings are really bad actually at making money, 'cause you can work maximum 14, 15, 16 hours a day. At a certain point, you still need to get sleep. You need to eat food. You are a human. You are not a good money-making machine, no matter how much money you make. You know what's a better money-making machine? Your money. Your money works 24/7. It doesn't take a lunch break. It doesn't need holidays or vacations off. It is working day in, day out 24/7, and it can.
- MRMel Robbins
Okay, great, 'cause I, I wanna see if I can give this back to you-
- VTVivian Tu
Yeah
- MRMel Robbins
... in a way that somebody who has always been intimidated by this idea of-
- VTVivian Tu
Yeah
- MRMel Robbins
... investing can really grasp. So we've talked about, which I find personally helpful-
- VTVivian Tu
Mm-hmm
- MRMel Robbins
... broke you-
- VTVivian Tu
Yep
- MRMel Robbins
... is gonna start paying from the money that comes in, the future rich you-
- VTVivian Tu
Yep
- MRMel Robbins
... in the savings. This is like your little fund.
- VTVivian Tu
Yes.
- MRMel Robbins
This creates the buffer. This is like-
- VTVivian Tu
Yeah
- MRMel Robbins
... the money you're gonna start to use to climb out of where you are. Investing is where the rich you takes that savings account and takes the money that's in there and puts it to work.
- VTVivian Tu
Yep, exactly.
- MRMel Robbins
Got it.
- VTVivian Tu
Yep.
- MRMel Robbins
Okay, so how do we start?
- VTVivian Tu
So first off, I wanna make a distinction.
- MRMel Robbins
Okay.
- VTVivian Tu
Saving and investing are not the same thing. They are not the same action and should not be treated the same. Today you is paying rich you for savings.
- MRMel Robbins
So that's what you save to have the buffer so you have power and freedom to leave-
- VTVivian Tu
Yep
- 43:57 – 50:31
Renting vs. Buying a Home
- MRMel Robbins
If you're currently renting-
- VTVivian Tu
Mm-hmm
- MRMel Robbins
... and you've always dreamt of owning a home-
- VTVivian Tu
Yep
- MRMel Robbins
... and now you're thinking based on the insane costs and the rise in the housing market, particularly here in the United States-
- VTVivian Tu
Yeah
- MRMel Robbins
... and around the world, I may never be able to buy a home.
- VTVivian Tu
Yeah.
- MRMel Robbins
What do you need to know?
- VTVivian Tu
Buying a home for so many of us is still so core to that American dream. It is still so core to success, and if you want a home, I think you should have every right to get one. But I ask you first, why do you want a home? Do you want a home because you know you're in the right place, and you plan on living there for at least five to seven years, at least, and you don't wanna go to a different city for any other job opportunities? Is it because you want to make that house your home and do a bunch of renovations to personalize it to yourself? These are all good reasons. But if you are someone who's like, "Well, I hate having to fix my own toilet at 2:00 AM, and I also hate the idea of paying a homeowners association fee, and I also hate the idea of paying property taxes, and I also hate the idea of being stuck somewhere, and, oh, by the way, I might be in the market to expand my family in the next year or two," maybe it's not the right time to buy.
- MRMel Robbins
That is the perfect question when you're looking at homeownership as a lifestyle decision. You know, when you ask yourself, "Why do I want a home?" you're basically making yourself go, "Wait. Why do I want a home right now? And does this make sense? Like, am I gonna stay somewhere for a long time? Can I actually afford what it's going to take to keep a home up?" Because if you're gonna be moving around a lot, or it's way too expensive for you to both buy it and then maintain it, maybe now is not the right time. That's a lifestyle decision that then becomes personal to you instead of chasing it because you think you should buy it by now because your parents did or your friends are. But let's not ignore the truth that at least in the United States, buying a home and homeownership is one of the most important ways that people build generational wealth because it forces you to save. And then the other thing that people forget is at some point you wanna be able to not have to pay rent. So if you're never gonna buy a home, in retirement you're gonna have to pay rent, and that's gonna be part of the retirement savings that you need to do now. And so I think the question is important, but I just wanna make sure that you're answering it based on lifestyle, but you're also keeping the facts in front of you, which this is one of the most important assets that you could have in the long term, and it also forces you to save.
- VTVivian Tu
Correct. As for folks who are sure they want to buy, you need to get creative, okay? Because right now it is true. In almost all major metros, it is cheaper to rent than buy. Buying a house is hard right now. Let's not pretend like it's not. People need to start thinking, "Do I need to buy my primary home?" I know someone who actually cannot afford to own their primary residence in Los Angeles, but he grew up in Oklahoma and has family there and ended up buying an investment property in Oklahoma. He can afford the mortgage in a lower cost of living area, and he rents because in LA he's gonna get a lot more with rental dollars than buying dollars. Another option, let's think about those unique mortgages. Everybody thinks you gotta put 20% down. Yeah. I think that is the norm because then it helps to make the monthly payment very, very manageable, but if you're someone who just doesn't have a lot saved, you're trying to get into a neighborhood before you're priced out of the neighborhood, and you have a good job that you can count on, and you think you can make decent monthly payments, what about an FHA loan? What about a conventional 97? These are all different types of mortgages that either help you if you have a low credit score or basically give you a little prize, a little treat for having a high credit score. What about if you're buying in a rural area, a USDA loan? For our veterans listening, there is nothing better than a VA loan. You put nothing down. You don't need to pay, um, PMI to essentially insure that mortgage. That is the best possible option. But I think people don't talk about those things enough.
- MRMel Robbins
I would love to have you speak directly to the person who is listening, and they're in their 20s. They're doing everything that they were told to do-
- VTVivian Tu
Yeah
- MRMel Robbins
... but they still can't get ahead.
- VTVivian Tu
Yeah. Sucks, doesn't it? I think a lot of us were sold a promise and a dream that if we put our heads down, if we worked hard, that we went to the right school and we got the right job, we'd eventually get to have happily ever after. It's kind of looking like that's not necessarily true. The new American dream doesn't look like anything. It's whatever you close your eyes and want it to be. It's not about what has already happened. It's about what can you do today to make tomorrow different.
- MRMel Robbins
That's the same answer you need to hear right now if you're in your 50s or 60s-
- VTVivian Tu
Yeah
- MRMel Robbins
... and you're starting over.
- VTVivian Tu
Mm-hmm.
- MRMel Robbins
Or you are dealing with a setback after divorce or a health diagnosis.
- VTVivian Tu
1000%.
- MRMel Robbins
You have to take it. Like, I- it- it is true that life is not fair, and it sucks, and you can do something next that changes where you end up in the future. What do you want to say to the person who is back home living with their parents? Um, nearly half-
- VTVivian Tu
Mm-hmm
- MRMel Robbins
... of all Americans under 30 live with a parent according to the Federal Reserve Data. Which as a parent, I kind of think is cool, but-
- VTVivian Tu
Yeah
- MRMel Robbins
... I know as a person who had a vision that you would be somewhere else, maybe it doesn't feel that cool.
- VTVivian Tu
Yeah. I would say you're a genius. Like, and one, you should go kiss and hug your guardians or parents or whatever and say thank you, because if you are able to move back home, you already have a level of generational wealth that people don't talk about.
- MRMel Robbins
Mm.
- VTVivian Tu
People think generational wealth is, "Ah, I am bequeathing Mel a million dollars when I pass." No, no, no. Generational wealth is you can move home, is
- 50:31 – 53:14
Getting Ahead Financially While Living at Home
- VTVivian Tu
auntie daycare, I'm gonna take care of your kid, or, "Hmm, don't worry, Nana and Papaw don't use the car as much. Don't worry, Mel, you can drive it." That's generational wealth. And so I think if you are currently living at home, you have a sweet setup. What I ask is for you to do a couple things. One, the money that you would have spent on rent, put it aside for yourself. Pay future rich you. Two, set a move-out number, not a move-out date. Do not put yourself on a timeline that you cannot hit and actually be comfortable. You don't move out until you have the number you need. And three, use this as an opportunity to maximize all of the financial at- advantages you have. So that means if you are paying no rent or less rent to live at home with your parents, you should be putting more money into your 401 [k] , more money into that Roth IRA.
- MRMel Robbins
I absolutely love that you called moving home with your parents the new generational wealth because one of our-
- VTVivian Tu
It is
- MRMel Robbins
... kids just moved home.
- VTVivian Tu
Yeah.
- MRMel Robbins
And I see it as an enormous opportunity and launching pad-
- VTVivian Tu
Huge
- MRMel Robbins
... to set yourself up for the next chapter.
- VTVivian Tu
Huge. 'Cause you don't wanna move out and then build your financial foundation on sand. You wanna build that financial foundation on brick.
- MRMel Robbins
I just absolutely love that this is the new generational wealth-
- VTVivian Tu
Yeah
- MRMel Robbins
... and looking at it as a power move-
- VTVivian Tu
Yeah
- MRMel Robbins
... versus something that means your life isn't working.
- VTVivian Tu
Yeah.
- MRMel Robbins
No, you're being smart.
- VTVivian Tu
Yeah.
- MRMel Robbins
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- 53:14 – 57:44
The Biggest Financial Decision You'll Ever Make
- MRMel Robbins
What is the single biggest financial decision you make in your life?
- VTVivian Tu
Kind of a hot take here, but I think it's who your spouse is. We talk a lot about saving and budgeting and spending and investing, but your spouse is the person that you are going to spend the vast majority of your life, hopefully, with. Why would you not make sure that the two of you are on the same financial page? It is crazy to me because the top two reasons why couples fight, sex and money. What if I told you if you had the conversation early, if you opened up a blank slate, if you opened the doorway, if you didn't argue but instead sat down and laid it all bare and figured out a plan forward together, you could avoid 50% of those really hot button topics. Wouldn't you naturally assume it would make your relationship stronger? You would fight less and just be happier?
- MRMel Robbins
So what are the questions I'm asking if I'm dating somebody?
- VTVivian Tu
Well, Mel, how long have we been dating, okay? Like, uh, are we first date? Are we-
- MRMel Robbins
Oh, I'm not gonna ask you financial stuff on the first date.
- VTVivian Tu
I am.
- MRMel Robbins
You, you are?
- VTVivian Tu
Yeah.
- MRMel Robbins
Okay, what are you gonna say?
- VTVivian Tu
If tomorrow more money than you knew what to do with fell out of the sky, what would you do for work?
- MRMel Robbins
The same thing I'm doing right now.
- VTVivian Tu
At the time, would you have said that?
- MRMel Robbins
Yes. I loved what I did. I just hated how little money I had.
- VTVivian Tu
Then that would tell me something about you. If someone- ... is making a really high earning job right now, and they're like, "Oh, man, if, if enough money fell out of the sky, I'd become a social worker," that tells you something about them.
- MRMel Robbins
Yeah.
- VTVivian Tu
If someone who's super broke right now says, "I would still do the same thing," that also tells you something about them. I would also say, "Okay, Mel, if I gave you a budget of $100,000 to take the best vacation of your lifetime, what would you do?"
- MRMel Robbins
Oh. Um, well, I would... It would be an adventure trip. I would either go, uh, to Africa-
- VTVivian Tu
Mm-hmm
- MRMel Robbins
... or I'd go to India, or I would do the trip that I just did with my family, which was rafting the Grand Canyon.
- VTVivian Tu
Mm-hmm.
- MRMel Robbins
I would 1000% spend it on some sort of experience.
- VTVivian Tu
Yeah. If you were on a date with someone that said, "My dream vacation is to spend a month on the beach, and every single day my step count is zero on my, you know, Apple Watch," that person and you should not be together. Because you're out here being like, "I'm gonna climb this. I'm gonna do this. I'm gonna hike this. I'm gonna trek this." You now know something about that person, about how they value their money and how they value their time.
- MRMel Robbins
So here's what I'm hearing. I'm hearing that one of you wants to spend $100,000 to go to, like, an eight-star resort and lay on the beach and do nothing, which means, in my mind, you like status and luxury. Whereas I [laughs] want to go on a really extraordinary experience, and that tells you that we have very different values, and we wanna spend our money doing very different things.
- VTVivian Tu
You can talk about money on the first date. Don't be like, "Hey, bring your pay stub." Don't be a weirdo. But you can talk about money as soon as the first date.
- MRMel Robbins
So when you're starting to get, like, more committed-
- VTVivian Tu
Yeah
- MRMel Robbins
... and you're in that, "Is this the end of the aisle" person-
- VTVivian Tu
Yeah
- MRMel Robbins
... what is the conversations you need to have that most people don't?
- VTVivian Tu
Well, the first legal document that bonds you and someone usually is not a marriage license. It's a lease. You move in together. And so that is a really good time to actually have this conversation because at some point you will have to provide a pay stub and the credit check and all of that, and you can't lie about it at that point. And so it's, "Hey, you know, we've been dating now for however much time, and I know we're talking about potentially moving in together. Like, just so that we're able to look at apartments that make sense for both of us, roughly what are you willing to spend on rent? And, you know, let's have a conversation about how we're going to split this." That then can lead into, "I make this much money. This is what I'm comfortable spending on rent. What about you?" You share first. Then they give you the number.
- 57:44 – 1:05:04
Rewriting the Money Narrative for Women
- VTVivian Tu
If you are in a relationship where you are already trying to change somebody, it's probably not the right relationship, unfortunately, and I know people don't like to hear that. But you can't make somebody do something. They have to want it themselves. And unfortunately, if you are the one forcing the issue, oftentimes that'll lead to resentment. And so you can't force your spouse to want more. You just need to meet somebody and be with someone who values a dollar the same way you do, who values work-life balance the same way you do, and who has the same goals as you do.
- MRMel Robbins
Or you need to get very clear about what you actually want in a partner-
- VTVivian Tu
Yeah
- MRMel Robbins
... and whether or not the ambition that you want in them is ambition that you need to unleash in yourself.
- VTVivian Tu
True.
- MRMel Robbins
And that you recognize that you want to and see the value of other attributes in somebody. I've been married for 30 years, but I would say that I was in that classic situation where I just assumed my husband would make all the money.
- VTVivian Tu
Yeah.
- MRMel Robbins
And he's not a guy that's driven by money.
- VTVivian Tu
Mm.
- MRMel Robbins
He's driven by something else. I mean, the man is a death doula, and he leads-
- VTVivian Tu
[laughs]
- MRMel Robbins
... men's retreats. And he would live in a one-bedroom apartment.
- VTVivian Tu
Yeah.
- MRMel Robbins
The ambition was mine.
- VTVivian Tu
Yeah.
- MRMel Robbins
And I think when you are a ambitious person, it is a mistake to apply your ambition and aim it at somebody else-
- VTVivian Tu
Mm
- MRMel Robbins
... and make it their responsibility.
- VTVivian Tu
Something that I have seen in both genders but sometimes, you know, often from women, is that they are looking for traits in a partner that they do not personally possess, and that really bothers me.
- MRMel Robbins
What do you mean?
- VTVivian Tu
I need to date a man who makes over half a million dollars. Do you make over half a million dollars? I need a man who's very generous and willing to buy me gifts. Are you a generous person? Do you buy the people in your life gifts? We oftentimes expect the world but aren't willing to give it ourselves. And so I just encourage anybody, especially with a partner, is like they don't necessarily need to match your income, but you need to match each other's effort. And if you don't, it's not gonna work. In terms of effort, it can look very different, though. It could be one person being the breadwinner and the other person taking care of the home. It could be both people going out and working and splitting the household unpaid labor. But you have to be very clear about what the defined roles in your relationship are.
- MRMel Robbins
I love that you come down to roles and values because roles and values come down to conversations, knowing yourself-
- VTVivian Tu
Yeah
- MRMel Robbins
... and skills you can build, not gender assignment.
- VTVivian Tu
No, never.
- MRMel Robbins
And-
- VTVivian Tu
Be your own sugar daddy.
- MRMel Robbins
Yeah.
- VTVivian Tu
[laughs]
- MRMel Robbins
Of course. Be your own rich BFF.
Episode duration: 1:05:09
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Transcript of episode 78BsFkDrAr8
