Why You’re Broke: 5 Rules to Finally Take Control of Your Money

Mel Robbins 0:00 Budget.

Tiffany Aliche 0:00 Yes.

Mel Robbins 0:01 It's in your name-

Tiffany Aliche 0:02 Mm-hmm.

Mel Robbins 0:02 ... Budgetnista.

Tiffany Aliche 0:03 (laughs)

Mel Robbins 0:03 I hate that word budget. I feel like budget is a punishment, it's a diet.

Tiffany Aliche 0:09 Oh.

Mel Robbins 0:09 I don't want to be on a budget, Tiffany. What do I need to do?

Tiffany Aliche 0:13 Step one is to write everything down, just the words of what do I spend money on? Kids don't care about your bills. I don't care if your kid is 30 or 3.

Mel Robbins 0:21 True.

Tiffany Aliche 0:21 They don't care about your bills. What they do care about is what's important to them, and so if you can link your bills to what's important to them, then they will care about that outcome.

Mel Robbins 0:30 What is your biggest hot take on saving money?

Tiffany Aliche 0:32 You can actually over save.

Mel Robbins 0:34 What?

Tiffany Aliche 0:34 Yes. (laughs)

Mel Robbins 0:36 (laughs)

Tiffany Aliche 0:36 And money that's not being put to work is losing.

Mel Robbins 0:38 Okay, so you're calling me a loser-

Tiffany Aliche 0:40 (laughs) No.

Mel Robbins 0:40 ... is what you're saying?

Tiffany Aliche 0:43 All of this that you're learning today is not for money's sake, it's for meaning's sake, you know?

Mel Robbins 0:49 Mm-hmm.

Tiffany Aliche 0:49 What is the real thing that you're wanting? To what end? Time with family, time with friends, purpose, whatever that is, to center that and to use the money to match to it because you might already have enough.

Mel Robbins 1:04 Hey, it's your friend Mel, and thank you for hanging out with me. I just love spending time with you, and I also wanted to acknowledge you for something. You are listening to this podcast, and that's really cool because you listen knowing that it could help you make your life better, and I just wanna say that's awesome, go you. Welcome to the Mel Robbins podcast family. Thank you, thank you, thank you for making this podcast one of the most popular podcasts in the entire world. I'm Mel Robbins. I'm a New York Times bestselling author and one of the world's leading experts on confidence and motivation, and I have a really simple mission showing up here talking to you twice a week. I just wanna inspire and empower you with tools and experts. Today you're gonna meet an incredible expert who's gonna give you the resources and the strategies that you need to create a better life, and that brings me to today's conversation, the five things that you need to know to take control of your financial life. Hey, it's Mel. I'm in the studio. I told you we have an incredible podcast today. We are gonna be talking about taking control of your money, and we have an extraordinary expert. But first, before we jump into the show, please subscribe. Subscribe, subscribe, subscribe. I'm asking you, my YouTube family, why? Because it really supports your friend Mel Robbins and it supports this show, and that way I can bring you world-class experts at $0. So take a second, subscribe. I'm waiting. You ready? Good. Let's (claps) do the show. Who is in the chair today? I'm so fricking fired up for this. Tiffiny Aleichem is here. She is known as the Budgetnista, and here's what I love about her. She's not only gonna break this entire topic of money and your financial life down, she is so amazingly relatable and entertaining. You're gonna learn so many cool things. You're gonna learn how to increase your savings without depriving yourself, how to get out of debt. You're gonna learn three ways to boost your credit score like (snaps fingers) that, and one of my all-time favorite concepts about money, she calls it paying yourself first, and you have to learn this. I wanna be very clear about something. I am unbelievably talented when it comes to making money, but I am not a financial expert. In fact,

Mel Robbins 3:30 I consider myself to be bad with money, and it may surprise you to hear that I feel that way about myself. And I'll admit to you, I have a lot to learn when it comes to being responsible with money, managing money, and if I dig even deeper, I have a lot of emotion about money. See, I shop when I'm stressed, and even though I can pay my bills at this moment in my life, I don't open my bills when they arrive. They literally sit there in a little stack. I don't know if you have a little stack like in the entryway of your house or on the counter in the kitchen, but I always have like a little stack. I don't know what it is. I kinda wanna get to the bottom of it today. And this has been the way that I've been for as long as I can remember. In fact, I can give you some examples. If I go back to college, so I arrive at college and they have that sort of like opening registration forum thing where e- there's these tables and clubs you can join. When I went to college, I'm 55 years old, no kidding, there were banks there and they were handing out credit cards, like literally handing out credit cards as if it was candy to trick-or-treaters. All you had to do, walk up to a table, fill out a form, "You get a credit card. You get a credit card." I'm like, "I'll take a credit card." It was like free money, until I graduated with $10,000 in debt and I had no idea what I'd spent it on. And that led to the next era in my life of financial irresponsibility in which I would play this game that I called Credit Card Leapfrog, which basically involved Mel Robbins searching for a credit card with a 0% offer and then transferring my balance from my last credit card that I had maxed out to this new one. And I get it, I was an idiot, and the fact is though that what was really going on is I was intimidated by money, and I was also really embarrassed by the reality of my financial situation, and it felt like living in financial quicksand. And when I got into my 20s, my first job after law school was to be a public defender and I could barely make the ends meet. I mean, I'm talking pay rent, pay for groceries, and so I started...... putting my living expenses on a credit card. I mean, it got so bad in terms of me being in debt and just constantly being irresponsible around it, that when Chris and I got married 28 years ago, I came into that marriage with five or six credit cards that were completely maxed out. Now, did I tell him? (laughs) Of cou- No. I- I- I'm being serious. In fact, if I sit here and really think about it, I'm not sure he even knows this today, because I kept it secret and I just kinda kept paying the minimum balance. And I'm telling you this because I think this is more common than most of us realize. And when you get into debt or you are like I was and you are constantly living beyond your means, because you're like, "Okay, I feel terrible, so I don't wanna sit and look at my bills, so I'm just gonna go out and spend money that I don't have, and eventually I'll have money." And so, it just creates this level of stress and shame, and it became, for me, a very toxic cycle that was hard to break out of. And, you know, as my story progresses, a lot of you know that when I was in my 40s, my husband and his best friend followed a dream of going into the restaurant business, and like a lot of you who are small business owners, we put up our house as the collateral for that business because that's all the collateral that we had. And that's great when your business is successful, but the market took a turn, the business started to fail. We found ourselves 800 grand in debt. I'm 41 years old. Three kids under the age of 10. And let me tell you something, if you think a credit card bill is scary, that is nothing compared to what it feels like to have liens start arriving in the mail saying they've hit your house, and bankruptcy notifications. And so many of you that have heard that story, that was my life 15 years ago, wanna know, "Mel, oh my God, $800,000 in debt, almost gonna lose your house. You were

Mel Robbins 8:00 unemployed. How the hell did you get out of debt?" And I've never really given the answer, because I just outworked it. Like, that literally is the answer. That I realized nobody was coming. I realized that my husband was doing the best he can to try to keep the business afloat. He hadn't been paid in, like, six mon- Like, if I was gonna f- through this, I- I had to do something. And what that looked like is working like a freak. I mean, I had two, three, four jobs at a time. I just never stopped. And I started chipping away at the credit card bills and paying off the minimum balances and then making more chunks, and then when I paid them off, I cut them up. And when I finally got myself out of debt, not mortgage, I still have a mortgage, but like, all of that debt that had racked up, the liens on the house, all that stuff, that was like six years ago. I had one rule,

Mel Robbins 8:50 any dollar that came in, 50 cents had to go into savings. Why? Because it was so terrifying to be under that kind of excruciating financial stress and shame. I never wanted to be in that position again. And I know there's a lot that I can learn, which is why I'm so excited to learn from Tiffany, but I'm also here because I look at my three kids, our adult kids,

Mel Robbins 9:15 so 25, 23, and 18, and here's what scares me. I pass this stuff down to our daughters. I see them struggling with their relationship with money. It's not a powerful relationship. They are scared of it. They want more of it. They f- don't feel empowered by it. And you know, one of them is so afraid that she will never have enough money that she's like a squirrel. She works like crazy, she's always working on s- and then she's taking the nut and she's squirreling it away, and she's not enjoying it. And then there's our other daughter who's 23, and she is identical to how I used to be. You know what she does? She does what I do. She shops, and she buys something that she can't afford. In fact, the other time I was talking to her on FaceTime, this was two days ago, she's sitting there eating something that looked weird. I'm like, "What is that?" She's like, "Oh, it's sea moss. It's like the next it thing. Everybody's eating it in LA, Mom, which means of course you have to buy it in some organic bla-bla-bla-bla-bla-bla-bla kind of thing, which means it costs way beyond the budget of a starving artist." And so, I know better, I'm like, "Jt, don't say anything, Mel, 'cause you know, that's not a good thing to do." But I feel like I don't know how to empower my kids to break out of the cycle with money that I was trapped in. And that is why I am so excited when our next guest today said, "Mel, the Mel Robbins podc- Of course I'll get on a plane and fly to Boston and sit down with you and spend time teaching you, Mel, and you listening, The Five Things That You Need To Know to Take Control of Your Financial Life." Tiffany Aliche is here. And you might have already met her before, because she is an expert and star in the Netflix series Get Smart With Money. Her podcast Brown Ambition has won a Webby award. Her book Get Good With Money is a New York Times bestseller. And she has built an eight-figure business and she runs an eight-figure business, and she has been in the depths of debt. And you know what's interesting is I can almost hear right now all the moms and dads pulling up the share button and sharing this episode to their kids, 'cause you know as soon as we're done editing this, this is going straight to my kids. And if you're listening to this because your mom or dad or aunt or uncle or brother or sister sent this to you, I wanna tell you something. You're gonna freaking love Tiffany and you need to hear it. Tiffany has helped two million people just like you save, manage, and pay off hundreds of millions of dollars. And one of the reasons why I like her so much is she's been there. She understands what it's like to be under crushing debt, to be a victim of a scam, to not be able to pay your bills. And she is living proof that you can learn everything you need to learn. You can literally not only climb out of that debt, you can build a mountain of wealth, and she's gonna meet you wherever you are. So, are you ready to get good with money?I sure am. Tiffany, welcome to the Mel Robbins Podcast.

Tiffany Aliche 12:16 I'm so excited to be here, Mel. I would love to just jump in and talk about your story with money. And first of all, I wanna offer up that your story is very common. That, you know, you are not the exception but the rule. So many of us, especially when we're younger, struggle with our financial relationship with money.

Mel Robbins 12:34 Yep.

Tiffany Aliche 12:34 So, like, I'm not surprised by some of the things you went through 'cause I went through them as well.

Mel Robbins 12:38 And when you've helped as many people as you've helped-

Tiffany Aliche 12:41 Yeah.

Mel Robbins 12:41 ... I would imagine that you hear some of the same things-

Tiffany Aliche 12:45 Yes.

Mel Robbins 12:45 ... whether it's fear or shame. What is something that you want someone to know if they're struggling to pay their bills right now or they are like Chris and I were, their house has liens on it, they're in a mountain of debt, or they think they've done all the right things but they're still feeling this level of why can't I get this right? What is your overarching message in terms of what's possible for somebody?

Tiffany Aliche 13:11 Well, one, I want you to know that it is quite possible. If you can hear the sound of my voice, it means that you are still currently here.

Mel Robbins 13:19 Yes.

Tiffany Aliche 13:19 And because you're still currently here, then you can turn around whatever situation or circumstance that you're in. I promise you. You know?

Mel Robbins 13:26 Awesome.

Tiffany Aliche 13:27 So if-

Mel Robbins 13:27 No matter how much debt you have?

Tiffany Aliche 13:28 No, no matter... I mean, when you said 800,000, I said, "I see your 800 and I had 300,000." (laughs)

Mel Robbins 13:35 (laughs) Well, we're gonna get to that.

Tiffany Aliche 13:36 Yeah. (laughs)

Mel Robbins 13:36 So why don't we get into... I know your background, but why don't you tell everybody-

Tiffany Aliche 13:40 Mm-hmm.

Mel Robbins 13:40 ... how you became The Budgetnista, like your background.

Tiffany Aliche 13:45 I feel like I was born into The Budgetnista. I'm one of five girls.

Mel Robbins 13:49 Uh-huh.

Tiffany Aliche 13:49 And my parents are both immigrants from Nigeria. And my dad especially was really focused on teaching his girls about money.

Mel Robbins 13:56 Okay.

Tiffany Aliche 13:56 He was an accountant. He has his, um, bachelor's in economics, his master's in finance. And we had money lessons at home.

Mel Robbins 14:04 Wow.

Tiffany Aliche 14:04 Yeah. So every Thursday we would have like a family meeting.

Mel Robbins 14:07 Uh-huh.

Tiffany Aliche 14:07 Usually about chores and homework, but also the family's financial state.

Mel Robbins 14:12 Wow.

Tiffany Aliche 14:12 You know? And honestly, when you're a kid you think like whatever is... happens in your home is like that's what happens everywhere. It wasn't until probably middle school and I'm like, "You guys don't... You don't have money class?" (laughs) You know, because my dad let us know that this is normal, everyone does this. And I'm like, "So you don't do Thursday night money sessions? Got it. Okay." Uh, but it was great because... I mean, at the time I didn't think it was great, but it really taught us the basics and not to be afraid of money because we talked about it so openly.

Mel Robbins 14:39 Okay.

Tiffany Aliche 14:40 Like, he would leave the light bill on the dining room table, which was central in

Tiffany Aliche 14:45 our house, our dining room, and he would say, "If the light bill goes down, we could put money into our, our traveling fund and we can go to Disney."

Mel Robbins 14:52 You know what? I'm stealing that right now.

Tiffany Aliche 14:54 (laughs)

Mel Robbins 14:54 No, I'm serious.

Tiffany Aliche 14:55 Yeah.

Mel Robbins 14:56 Because I think as a parent having an 18-year-old son-

Tiffany Aliche 14:59 Mm-hmm.

Mel Robbins 15:00 ... like I come downstairs in the morning and if he's the last one up, it's like every light-

Tiffany Aliche 15:04 Yes.

Mel Robbins 15:04 ... in the house is on. And you can say it intellectually-

Tiffany Aliche 15:08 Yes.

Mel Robbins 15:08 ... but even just that strategy of leaving the bill out-

Tiffany Aliche 15:11 Mm-hmm.

Mel Robbins 15:11 ... and saying, "If you turn off the lights, this is lower-

Tiffany Aliche 15:15 Yep.

Mel Robbins 15:15 ... and I can use that money to do be- more things for you."

Tiffany Aliche 15:19 Yes.

Mel Robbins 15:20 That's a great tip.

Tiffany Aliche 15:21 'Cause-

Mel Robbins 15:21 Thank you to your dad.

Tiffany Aliche 15:22 (laughs) 'Cause one of the things that he understood and... is that kids don't care about your bills. I don't care if your kid is 30 or 3.

Mel Robbins 15:30 True.

Tiffany Aliche 15:30 They don't care about your bills. What they do care about is what's important to them. And so if you can link your bills to what's important to them, then they will care about that outcome. Match it to what's important and then all of a sudden, even for yourself, like money for money's sake is usually not motivation enough.

Mel Robbins 15:46 Yeah.

Tiffany Aliche 15:47 You know, matching it to a thing, vacation, less work, more time with family, well if you can match it to something that's important, then it's easier to stick to the money goal.

Mel Robbins 15:57 Interesting.

Tiffany Aliche 15:58 Mm-hmm.

Mel Robbins 15:58 So did you like literally graduate from high school and head off into your life and you were already chipping away saving millions of dollars?

Tiffany Aliche 16:05 Well, I was financially, quote unquote, perfect until about 25, 26 because I just did what my parents told me to do.

Mel Robbins 16:11 Okay. And-

Tiffany Aliche 16:11 That's around that age.

Mel Robbins 16:12 Gotcha.

Tiffany Aliche 16:12 You know, you start, um... Old people call it smelling yourself when you're like-

Mel Robbins 16:15 (laughs)

Tiffany Aliche 16:15 ... I'm grown.

Mel Robbins 16:16 (laughs)

Tiffany Aliche 16:16 I can do what I want. (laughs) And so, but I was really good at savings. I went to, to school for business.

Mel Robbins 16:22 Uh-huh.

Tiffany Aliche 16:23 Um, and I hated all my internships 'cause I'm fun. And it was like, "I'm dying here."

Mel Robbins 16:28 Yes.

Tiffany Aliche 16:29 And so I decided I wanted to teach because I loved kids and I thought, "I think I wanna be a teacher, but I don't wanna be broke. How do I reconcile those two things?"

Mel Robbins 16:36 Yes.

Tiffany Aliche 16:36 Um, so I decided, well, if I'm really good with my money, I can take a job that takes less, that, that pays less.

Mel Robbins 16:42 True.

Tiffany Aliche 16:42 So I did that. I became a preschool teacher. I was-

Mel Robbins 16:45 I bet you were great at that.

Tiffany Aliche 16:46 Oh my God, I was the best. I'm not gonna lie. Everybody loved Miss Tiffany. (laughs) I mean... (laughs)

Mel Robbins 16:51 (laughs)

Tiffany Aliche 16:51 'Cause I was like 21 and I had a ball teaching.

Mel Robbins 16:54 Okay. So you're, you are following the advice of your parents.

Tiffany Aliche 16:59 Mm-hmm.

Mel Robbins 16:59 You are working the systems. You are able to do a job that you love.

Tiffany Aliche 17:03 Yes.

Mel Robbins 17:04 You are checking all the boxes. What happened?

Tiffany Aliche 17:06 And just saving, saving, saving 'cause-

Mel Robbins 17:07 Okay.

Tiffany Aliche 17:08 ... I lived home for the first year.

Mel Robbins 17:10 Smart.

Tiffany Aliche 17:10 And my dad showed me how to do my own taxes. Um, so much so that I was so good at like budgeting and, and managing money that I would show the other teachers.

Mel Robbins 17:19 Yeah.

Tiffany Aliche 17:20 Um, the maintenance men would come in during nap time. The parents. I started to have like parent university, so the kids would nap, parents would come in and I would show them, "This is how you budget. This is how you save." And that's how The Budgetnista was born informally because I realized I don't just like teaching kids, I like teaching this too.

Mel Robbins 17:37 Right. Okay.

Tiffany Aliche 17:38 You know?

Mel Robbins 17:38 That's super cool.

Tiffany Aliche 17:38 You know? And then I wanna say about 25, that's when I said, "I don't actually want your advice anymore because I'm an adult."

Mel Robbins 17:45 You mean your father's-

Tiffany Aliche 17:46 Yeah. (laughs)

Mel Robbins 17:47 ... advice. Okay.

Tiffany Aliche 17:48 Yeah. (laughs) I'm an adult. I have it, I have it.

Mel Robbins 17:50 Uh-huh.

Tiffany Aliche 17:50 Um, and so it was then that I decided to go back for my master's in education.

Mel Robbins 17:55 Yep.

Tiffany Aliche 17:55 I thought maybe I'd be a principal. So all of a sudden I would-

Mel Robbins 17:57 Ooh, you'd be a great principal too.

Tiffany Aliche 17:59 Well, you know, I don't know because I feel like...You put the best people in the classroom, if I'm being honest. Um, and that's what I realized after my master's, $50,000 later. "I don't like this." (laughs)

Mel Robbins 18:08 Yeah. (laughs) Totally.

Tiffany Aliche 18:08 So, so I didn't have

Tiffany Aliche 18:10 undergraduate loans. My parents helped and, and I lived at home part of the time.

Mel Robbins 18:15 Yep.

Tiffany Aliche 18:15 So I didn't have l- student loans.

Mel Robbins 18:16 Okay. So now you're 26, you got $50,000 in student loans.

Tiffany Aliche 18:19 In, in student loans though, yes.

Mel Robbins 18:20 Uh-huh.

Tiffany Aliche 18:21 And then too around that time I said, you know, I had $30,000 saved.

Mel Robbins 18:25 Yep.

Tiffany Aliche 18:25 Because although I was, um, working and making by then about $50,000 a year as a teacher, I was really good at side hustling. I, I babysat, I tutored, and so I saved about $30,000 and I said-

Mel Robbins 18:37 Amazing.

Tiffany Aliche 18:37 ... "I think I wanna buy something." I'd bought a condo, which was not necessarily bad.

Mel Robbins 18:41 Right.

Tiffany Aliche 18:41 Except for it was right before the crash, the recession. I didn't know.

Mel Robbins 18:44 So we're talking 2007, 2008?

Tiffany Aliche 18:46 Yes.

Mel Robbins 18:46 Yes.

Tiffany Aliche 18:46 Yeah. So I bought, I...

Mel Robbins 18:47 That was when this all happened to me too.

Tiffany Aliche 18:49 So I bought it in 2006, right?

Mel Robbins 18:51 Yep.

Tiffany Aliche 18:51 So I paid 220 for the condo, and I was like, "It's no problem, I've got a good job." And then I thought, "I wanna learn how to like, be rich." And I had a friend, air quotes, who I thought was rich. 'Cause in your 20s you think if someone has a nice car-

Mel Robbins 19:03 Yes.

Tiffany Aliche 19:04 ... an apartment, they're rich.

Mel Robbins 19:05 Yes.

Tiffany Aliche 19:05 So I asked him, "Can you teach me to invest?" Not my dad, but you. "Can you teach me to invest?" He says, "Sure, you look stupid. I mean..." Yeah. (laughs)

Mel Robbins 19:12 (laughs)

Tiffany Aliche 19:12 And so he told me to pull money, for one he said, "Do you have credit cards?" I said, "Just this one that my dad told me to pay off every month," which I do. He's like, "No, no. Open up a couple more because you can pull money off a credit card." I didn't know. And I was like, "Sure." So I open up the cards and he's like, "Pull ..." I think I wanna say I pulled off, um, $15,000.

Mel Robbins 19:32 Yeah.

Tiffany Aliche 19:32 And it should've been such a red flag because I was at the bank. I can literally see the banker's face saying, "Are you okay?" They kept me there for an hour, like grilling me and i- and no red flag went off. Like, Tiffany, they were worried because they're like, "Who-"

Mel Robbins 19:45 "Is she getting scammed?"

Tiffany Aliche 19:46 Well obviously, yes. But I didn't know that.

Mel Robbins 19:48 Yeah.

Tiffany Aliche 19:48 And so I, uh, 'cause I was like, "We have a contract." Signed this contract with him. Of course he promptly flew the coop.

Mel Robbins 19:55 (gasps)

Tiffany Aliche 19:55 I did not know, yes.

Mel Robbins 19:56 Wait. So this was a guy who basically told you to take out credit cards-

Tiffany Aliche 20:02 Yes.

Mel Robbins 20:02 ... get a cash advance-

Tiffany Aliche 20:03 Yes.

Mel Robbins 20:03 ... on the credit cards.

Tiffany Aliche 20:04 Give him the money, and he was gonna invest it for me.

Mel Robbins 20:06 Oh man.

Tiffany Aliche 20:07 (laughs) I know. But at the time I just, I was like, "But he's rich. He wouldn't steal from me."

Mel Robbins 20:11 That's true.

Tiffany Aliche 20:12 You know?

Mel Robbins 20:12 Like if somebody is-

Tiffany Aliche 20:13 That's what I thought.

Mel Robbins 20:14 ... like doing all the things and going out, they're wearing the fancy clothes-

Tiffany Aliche 20:17 Yes.

Mel Robbins 20:17 ... you're like, "Oh, they know how to make money."

Tiffany Aliche 20:18 Well, he was, this is a serial, he, I didn't realize he was a serial scammer, th- that's why he had the money, because he...

Mel Robbins 20:23 'Cause he then took your 15,000 or 20,000-

Tiffany Aliche 20:26 Yes.

Mel Robbins 20:26 ... and then like bought more nice clothes-

Tiffany Aliche 20:28 Yes.

Mel Robbins 20:28 ... and then went onto the next person.

Tiffany Aliche 20:30 Yes.

Mel Robbins 20:30 Wow.

Tiffany Aliche 20:31 Yes. So I, but I didn't know at first because, and even thinking about the terms, it was this 15,000 is gonna yield you $2,000 a week for two years. I don't even know, I didn't even really ask what it was gonna be invested in. I was like, "That sounds like a lot of money. I'm in." So because I thought, "I'm about to be rich," I had these credit cards that still, because I had such great credit-

Mel Robbins 20:50 Yeah.

Tiffany Aliche 20:50 ... I had these credit cards that I'd never thought about using credit cards before, but I'm like, "Since I'm gonna be rich, let me start using them." I ran up another 15,000 on the credit cards.

Mel Robbins 21:00 Oh my god. So you've-

Tiffany Aliche 21:01 So over s-

Mel Robbins 21:01 ... got 30,000 in debt?

Tiffany Aliche 21:03 Yes.

Mel Robbins 21:03 And it's probably at like 18, 20% interest?

Tiffany Aliche 21:05 I can only imagine. Yes.

Mel Robbins 21:06 Holy smokes.

Tiffany Aliche 21:06 So now I've got $50,000 in, in, um, student loan debt. 220,000 a mortgage, 30,000 credit card debt. Literally the year before, debt free. And I was as happy as a clam. Tu-tu-doo. 'Cause you know like, you're just a little fool, like, "Hmm-mm-mm, I'm about to be rich." And then a week or two in after s- tricking up all my money on my credit cards, you know, reaching out to him like, "When can I expect my first payment?" He was the worst kinda thief. I like just a clean thief, just steal my money and go.

Mel Robbins 21:34 (laughs)

Tiffany Aliche 21:34 He instead would be like, "You didn't get the deposit? I sent it. Call your bank." So it, he w- took me through...

Mel Robbins 21:41 So now he's gaslighting you.

Tiffany Aliche 21:42 I didn't have the word for it then and I'd be like, "Uh, bank, you know, did you get the money?" And they were like, "No." Um, so he did that for a few months and then maybe he was trying to like get away 'cause he then moved, so maybe he was hoping-

Mel Robbins 21:54 Mm.

Tiffany Aliche 21:54 ... you know, that I wouldn't call the police until, until he could move away. Um, then he just stopped answering. And I remember I was devastated, like, "Wait, what do I do now?" And so I was like, "That's all right. Tiffany, you're a really good saver, a really good budgeter. And so you're just going to, you know, babysit, tutor, and your job, and you're just gonna pay this debt down."

Mel Robbins 22:12 You're gonna chip away at it.

Tiffany Aliche 22:13 Yes.

Mel Robbins 22:13 And you're not gonna tell anybody.

Tiffany Aliche 22:14 Yes. And then the recession hit and people were losing their jobs and I said, "Whoo. Not me, 'cause I'm a teacher." And then they called us and said, "Actually, you too." Three days before the new school year was set to begin.

Mel Robbins 22:26 Oh man.

Tiffany Aliche 22:27 I was like, "I don't understand." Because teachers don't, I mean, you're a n- you're, you need teachers.

Mel Robbins 22:32 Yeah.

Tiffany Aliche 22:32 But it was a nonprofit based school.

Mel Robbins 22:34 Oh.

Tiffany Aliche 22:34 And so was it- And so they lost their funding because the corporations that gave us funding, it was the recession-

Mel Robbins 22:39 Right.

Tiffany Aliche 22:39 ... for them too.

Mel Robbins 22:40 Right, right.

Tiffany Aliche 22:41 So I'm like, "Yeah, but school's supposed to start in three days and in the summer you don't get paid." So I was waiting on that first check to start this new plan.

Mel Robbins 22:48 Oh my God.

Tiffany Aliche 22:48 And I remember being like, "What do I do now? I owe all this money, I have a mortgage." And so I call my oldest sister Karen, 'cause you know, she's Mom junior.

Mel Robbins 22:56 Yep.

Tiffany Aliche 22:57 I was like, "What do I do?" (laughs)

Mel Robbins 22:59 (laughs)

Tiffany Aliche 22:59 And she was like, "Honestly, Tiffany, what's the worst case scenario?" And I was like, "I don't know, I guess I lose my condo?"

Mel Robbins 23:06 Yeah.

Tiffany Aliche 23:06 And she said, "Well, what would happen then?" I'm like, "I guess I would have to tell Mommy and Daddy and move

Tiffany Aliche 23:10 back home?" And she's like, "Well, why wait?"

Mel Robbins 23:12 Oh.

Tiffany Aliche 23:12 "I think you should just do the thing now preemptively, you know?" And I was like, so I didn't even tell my parents. I just brought like a lamp home and then I brought like a blanket and then my mattress. And my dad's like, "Are you back?" I'm like, "Yeah." (laughs) But he didn't know why I was back. A- 'cause he knew it was like a recession and he didn't know, he didn't know that I lost my job. So he just ass- he just assumed I was trying to save money.

Mel Robbins 23:34 Right.

Tiffany Aliche 23:35 But I didn't want him to know all the other shenanigans surrounding... Only...

Mel Robbins 23:38 So did you lose the condo too?

Tiffany Aliche 23:40 Yes. It was honestly, you know how some things you're like, "It can't get worse"? And it was like, "Hold my beer."

Mel Robbins 23:45 Yes.

Tiffany Aliche 23:45 Indeed it can. So I ended up losing my condo to foreclosure. I tried to keep up with the mortgage until my retirement account was, was empty. So now I have no retirement account. I lost my condo. I still owe all this money and now I'm living back home with two Nigerian parents who think like I'm in 12th grade still because by then I was like 28, 29 and I, they were like, "Well, I hope you know you have a curfew." I'm like, "A curfew?"They're like, "If you're home..." Because I had a s-

Mel Robbins 24:11 You're not spending money.

Tiffany Aliche 24:12 Yes. I had a sister who was still in high school, and they were like, "We don't want you coming in and out," like-

Mel Robbins 24:17 Yeah.

Tiffany Aliche 24:17 ... her, her rules are your rules. I was like, "Wait, what?"

Mel Robbins 24:20 Yeah.

Tiffany Aliche 24:21 And so I stayed there till I was 29, and on my 29th going on 30th birthday, I remember laying in my middle school bed, because that was the bed available because the baby sister was in, like, my cool teen, like-

Mel Robbins 24:33 Yeah.

Tiffany Aliche 24:33 ... spot in the basement, and she was like, "I don't care if you're home. Go live upstairs with mommy and daddy." (laughs)

Mel Robbins 24:38 Yep.

Tiffany Aliche 24:39 And I remember laying in my middle school bed, tears streaming down the sides of my face, and I thought, "I had more money the last time I laid in this bed when I was, like, 14-"

Mel Robbins 24:47 Oh, yeah.

Tiffany Aliche 24:47 "... 'cause I babysat, I walked dogs-"

Mel Robbins 24:50 Oh, yeah.

Tiffany Aliche 24:50 And I was like, "I had more money then. I had maybe, like, three or four thousand dollars saved then than I do now at 30." And I was calling myself every loser, like, just talking to myself in a way that I would never let anyone talk to me, and it wa- I was filled with such shame-

Mel Robbins 25:05 Yeah.

Tiffany Aliche 25:05 ... that it sent me into a state of depression, because I was like, "I'm never gonna get out of this, never, ever, ever." So that's why when people come to me, I'm like, I feel it deeply, you know. Um, and so I just, I stayed in that state of depression for a while until my best friend Linda, who used to call me all the time, was like, "You never wanna go out. You always sounds so sad. What's wrong?" And I used to lie to her, and just be like, "Everything's fine! Everything's fine!" And then one day she's like, "Everything's not fine, Tiffany. Like, what's happening?" So I try to lie to her again, and I just broke down into tears, and I was like, "I'm at home. I lost everything." And she was like, "That's it?"

Mel Robbins 25:42 (laughs)

Tiffany Aliche 25:42 If you knew Linda, you'd be like... 'Cause that's Linda.

Tiffany Aliche 25:45 And she was like, "So I'm calling you from my mother's couch." She's like, "Girl, we're all broke. It's the recession." (laughs)

Mel Robbins 25:51 (laughs)

Tiffany Aliche 25:51 And I started laughing, and she started laughing, and it was, like, the first laugh I had in a long time. But she was like, "Have you called any of our other friends? Like, literally, Tiffany, we are all broke. Everyone lost their job. Everyone's losing their homes. Like, you're actually not special. I mean, it's sad, but, you know, join the club, basically."

Mel Robbins 26:08 I wish you had been in my, uh, circle of friends then-

Tiffany Aliche 26:11 (laughs)

Mel Robbins 26:11 ... because I needed somebody to tell me that-

Tiffany Aliche 26:13 Yes.

Mel Robbins 26:14 ... 'cause, you know, we were about to lose the house and-

Tiffany Aliche 26:16 It's hard.

Mel Robbins 26:17 And, like, really hard, 'cause you think you're the only-

Tiffany Aliche 26:21 Only one.

Mel Robbins 26:22 ... one.

Tiffany Aliche 26:22 Yeah.

Mel Robbins 26:23 I mean, the recession isn't your fault.

Tiffany Aliche 26:24 Yeah.

Mel Robbins 26:24 Losing your job isn't your fault.

Tiffany Aliche 26:26 Yeah.

Mel Robbins 26:27 The fact that you were targeted by something, someone who had the intention of scamming-

Tiffany Aliche 26:33 Yeah.

Mel Robbins 26:33 ... you, that's not your fault.

Tiffany Aliche 26:35 Yeah.

Mel Robbins 26:36 And yet, you tend to say to yourself, "I did this."

Tiffany Aliche 26:41 Yes. Yes. So-

Mel Robbins 26:42 So what did you do?

Tiffany Aliche 26:43 So what, one, I realized that, so Linda allowed me to shed s- some of the shame.

Mel Robbins 26:47 Yes.

Tiffany Aliche 26:48 And shame shields solutions. It was like-

Mel Robbins 26:50 Ooh. Say that again. I love this.

Tiffany Aliche 26:53 So shame, I realized, shields solutions, and when I was deep in the shame, I couldn't see all the lessons that I did know. I said, "Tiffany, you've always been a great budgeter. You've always been a great saver. You've always been a little side hustler. Those parts of you are still there. You've, you can't see them because you're so steeped in this shame," and shame, honestly, loves it when you're by yourself. Shame is like, "Don't tell anybody. It's just me and you. Like, stay here with me." The only way to really to banish shame, I realized, was to give voice to it, was to say, "I, I did a thing." And shame was like, "Damn, because once she tells someone, then she's gonna realize she's not the only one."

Mel Robbins 27:30 Yes.

Tiffany Aliche 27:30 "And then we're not the only ones here, and then I have to leave."

Mel Robbins 27:32 Yes.

Tiffany Aliche 27:32 And so once I told Linda, and Linda's reaction was like, "Is that it?" Then I told someone else, and they were like, "Okay." And then I realized, like, oh, I'm really not the only one and that what I'm going through can actually be helpful to other people because I'm not coming to them as, like, Pollyanna perfect.

Mel Robbins 27:50 Right.

Tiffany Aliche 27:50 'Cause they were like, "Me too."

Mel Robbins 27:51 Yeah.

Tiffany Aliche 27:51 So we're just all whispering, "Me too." Before you know it, the whispers are loud, and we're all like, "Me too, now let's get to work."

Mel Robbins 27:57 Yes.

Tiffany Aliche 27:57 And so what I did first and foremost is, like I said, I, I took all my credit cards and put it on a balance transfer card, thankfully before the foreclosure and things hit and my credit score would not allow me to do that.

Mel Robbins 28:07 Okay.

Tiffany Aliche 28:08 So that was one. Two, I was like, "I cannot live here with my parents. I mean, I need, like, to go." So I then traded my parents' house for my sister's, um, couch, you know, which I know everyone is not able to do.

Mel Robbins 28:20 Right.

Tiffany Aliche 28:20 You know, but I was fortunate enough to be able to sleep on her couch, um, for a while, and I started to look for side hustles that were aligned with either my degree or what I had already been employed as, you know?

Mel Robbins 28:31 Yeah.

Tiffany Aliche 28:32 Because at the time, when you get let go as a teacher right before the new school year, it's not like a ton of teaching jobs lined up-

Mel Robbins 28:37 Yeah.

Tiffany Aliche 28:38 ... 'cause they have to have a teacher in the classroom already.

Mel Robbins 28:40 Yes.

Tiffany Aliche 28:40 So it's not like, oh, you know, like, I'm an engineer, and engineering jobs are always open. I wasn't sure if I was gonna go back to the classroom, but in the meantime, I'm like, "I can tutor. I can babysit." And so I did a lot of that to try to get a little money together, and I did something where I had to give my permission to myself that, "Not everyone's going to be paid, Tiffany, 'cause you don't have it." And so I had to make a list, which I call my money list, of all of my expenses

Tiffany Aliche 29:05 and look at them and say, "Of this money list, which one are your health and safety bills? Meaning, the bills that you have to pay to maintain your health and your safety." And I was like, "Verizon, it ain't you, girl." (laughs)

Mel Robbins 29:18 (laughs)

Tiffany Aliche 29:19 "It's not you." But, it's like, like, I have asthma. I was like, "You're gonna need that pump." (laughs)

Mel Robbins 29:23 Yes. Yes.

Tiffany Aliche 29:23 And things that I must have, and so everyone else, I was scared, but when you have, like... I always tell people, "Get yourself a Linda." So Linda used to sit next to me on the couch, and we would open up mail together. And so sometimes I'd be like, especially if you get, like, a y- um, a pink or red envelope, you know, it's like...

Mel Robbins 29:38 Mm-hmm.

Tiffany Aliche 29:39 So then I wouldn't open it. I would slide it to Linda, and she would open it, and she would read it out loud. She'd be like, "Okay, this one says... Oh, this one's not so bad. You owe..." (laughs) So that helped a lot because I was never gonna open, you know, those letters.

Mel Robbins 29:52 Well, can we s- stop right there?

Tiffany Aliche 29:54 Mm-hmm.

Mel Robbins 29:54 We're gonna

Mel Robbins 29:55 get to the five-

Tiffany Aliche 29:57 Yes.

Mel Robbins 29:57 ... categories of taking control of your financial life-

Tiffany Aliche 30:01 Mm-hmm.

Mel Robbins 30:02 ... in just a minute, but can we just hover for a second-

Tiffany Aliche 30:06 Mm-hmm.

Mel Robbins 30:06 ... on this moment of opening bills?

Tiffany Aliche 30:08 Yeah.

Mel Robbins 30:09 You have helped two million people-

Tiffany Aliche 30:11 Mm-hmm.

Mel Robbins 30:12 Talk to me about why it is so hard to open your bills or look at your bank statement.

Tiffany Aliche 30:21 Because you... There is an African saying that says, "Fear makes the wolf bigger than he is."

Mel Robbins 30:27 Oh.

Tiffany Aliche 30:28 And so, your fear is enhancing what's on the other side. It's rarely ever as big as you think. You know, you're like, "I know on the other side of this door, the wolf is huge, he's gnarling, he's foaming at the mouth, he's gonna attack me." You know? And meanwhile, if you actually open the door, it's like a wolf puppy that you could have handled. But the longer you wait, that wolf will eventually grow up and become the thing you're afraid of.

Mel Robbins 30:50 Mm. Thank you for saying that about paying your bills. And, you know, here's where I just wanna make sure as you're listening to this conversation, that you realize that this is just part of the story. Because, Tiffany, you then went from that unbelievably low moment to becoming one of the most popular financial educators and experts out there in today's world. And you've helped more than two million people who were in the position that you were in to then go on to save, manage, and pay off hundreds of millions of dollars. I mean, your story alone is a testimonial to how absolutely anyone, regardless of where you are, can start today to take control of their finances. And in that regard, you have five major categories that you're gonna help us master, and you have so many tips, so many tricks, so many different mindset flips. We all need to know this stuff, we all need to take control of our finances, and that's exactly what we're gonna do when we come back. So don't you dare go anywhere. Welcome back. It's your friend, Mel. I'm so glad you're still here, I'm so glad that you're spending time listening to this, because there's no doubt in my mind this episode is going to help you create a better life, because you're learning from none other than Tiffany Aliche. Now, you've probably seen her on Netflix's Get Smarter With Money series, maybe you've read her two New York Times bestselling books, but just know she has helped two million people who are just like you to save, manage, and pay off hundreds of millions of dollars in debt. And now, you know what you and I are gonna do? We are gonna jump into tips and tricks that you need to know in five specific categories, and I'm so excited. I'm sitting here on this metaphorical walk shoulder to shoulder with you. I've already confessed all of the things I've done wrong. I can't wait to learn about this, and we're gonna start with one of these topics that I hate when it comes to money. This is number one of the five things you're gonna help us master, Tiffany, and it is budget.

Tiffany Aliche 32:57 Yes.

Mel Robbins 32:58 It's in your name.

Tiffany Aliche 32:59 Mm-hmm.

Mel Robbins 32:59 Budgetnista.

Tiffany Aliche 33:00 (laughs)

Mel Robbins 33:00 I hate that word budget.

Tiffany Aliche 33:02 (laughs)

Mel Robbins 33:02 I hate that word budget. I feel like budget is a punishment.

Tiffany Aliche 33:07 Okay.

Mel Robbins 33:07 It's a diet.

Tiffany Aliche 33:08 Mm.

Mel Robbins 33:08 I don't want to be on a budget, Tiffany. What do I need to do?

Tiffany Aliche 33:11 So can we-

Mel Robbins 33:11 Wh- and why do we need a budget? And let's talk budget.

Tiffany Aliche 33:14 I want you to think

Tiffany Aliche 33:15 about a budget the way lo- what I say is, like, how you think about, like, your mom, right? So you've got three kids, right?

Mel Robbins 33:20 Yeah.

Tiffany Aliche 33:20 And so if, like, say your son's like, oh, when he's little, you know, "Mom, can I have dessert?" You'd say, "Yes, after you have dinner."

Mel Robbins 33:28 Mm.

Tiffany Aliche 33:28 Or if your daughter says, "Mom, can I go outside to play?" "Yes, when you do your homework." You know? Or, you know, "Mom, can we go on vacation?" "Yes, if we lower this, this, you know, the light bill." So your budget is like your mom.

Mel Robbins 33:42 Mm.

Tiffany Aliche 33:42 She's there to say yes, when, if, after. So it's really a say yes plan, but one that's safely implemented so you can maintain the thing that you want, right?

Mel Robbins 33:54 'Kay.

Tiffany Aliche 33:54 So you could call it a money list. That's what I usually start with, 'cause people hate that name.

Mel Robbins 33:57 I like the name money list.

Tiffany Aliche 33:58 Yes.

Mel Robbins 33:58 What does a money list mean?

Tiffany Aliche 34:00 A budget. (laughs)

Mel Robbins 34:00 Okay. I love this reframe-

Tiffany Aliche 34:04 (laughs)

Mel Robbins 34:04 ... because I hear the word budget and I hear no and restriction.

Tiffany Aliche 34:07 Mm-hmm.

Mel Robbins 34:08 And you're saying no, that the budget-

Tiffany Aliche 34:12 Mm-hmm.

Mel Robbins 34:12 ... is how you say yes to what's important to you.

Tiffany Aliche 34:15 Yes. It's not there actually to tell me no, it's there to find the yes in the safest way possible.

Mel Robbins 34:20 So for somebody hearing you say that-

Tiffany Aliche 34:23 Mm-hmm.

Mel Robbins 34:23 ... and they're like, "But I've never made a budget." Or, "I've never stuck to one."

Tiffany Aliche 34:30 Mm-hmm.

Mel Robbins 34:30 "I don't know what my budget should be." Like, where do you begin?

Tiffany Aliche 34:35 Step one is to write everything down, just the words of, "What do I spend money on?" Don't think about the month, just in general. So it's like, oh, the kids, oh, credit card, oh, grooming, going out. Like, just, I want you to just write the words. Don't think about the money, just words.

Mel Robbins 34:48 Okay.

Tiffany Aliche 34:49 So that's first part.

Mel Robbins 34:49 Step one.

Tiffany Aliche 34:50 Yes. Then step two is now you say, "These words on my money list, how much am I spending approximately monthly?" Some stuff you'll know, like your mortgage or your rent. Some stuff you might not be sure. Go pull out your bank statement and see on average the last few months how much you're spending on, on groceries or eating out or grooming.

Mel Robbins 35:07 Or electricity.

Tiffany Aliche 35:07 Mm-hmm.

Mel Robbins 35:08 Or water.

Tiffany Aliche 35:08 Yes.

Mel Robbins 35:09 Or any of those things-

Tiffany Aliche 35:10 Yes.

Mel Robbins 35:10 ... that you don't even really think, "Oh my God, I got that bill."

Tiffany Aliche 35:12 Exactly, so then that's within a month frame on average, right?

Mel Robbins 35:15 Yep.

Tiffany Aliche 35:15 So that's step two.

Mel Robbins 35:16 'Kay.

Tiffany Aliche 35:17 Then step three is to write down how much you make on average every month from all of your areas. So maybe you get alimony, maybe you get child support, maybe you have a job, whatever that is. How much are you making monthly? Then you add up, step four, you add up how much you're spending monthly-

Mel Robbins 35:33 Mm-hmm.

Tiffany Aliche 35:33 ... and subtract it from how much you're making monthly. I call that the tears and tissue step, 'cause usually people get there and they're like, "Can I have a tissue?" (laughs)

Mel Robbins 35:41 (laughs) And should you do this with a friend?

Tiffany Aliche 35:44 Yes.

Mel Robbins 35:44 Should we call Linda?

Tiffany Aliche 35:45 Yes. (laughs)

Mel Robbins 35:45 Okay.

Tiffany Aliche 35:45 Get your, get yourself a Linda. Like, so, so literally, so I, when I used to do one-on-ones, we would do all that and people would be like, "Okay." And then I'd, I would literally just grab a box of tissues and just put it here, 'cause I'm like, "It's about the water works."

Mel Robbins 35:57 It's coming.

Tiffany Aliche 35:57 Mm-hmm.

Mel Robbins 35:58 It's coming.

Tiffany Aliche 35:58 'Cause, you know, they add it up. I remember it was a nurse. I'll never forget. Um, I'll call her Bee, and I came to her house and it was a beautiful condo. And so we did that step and she started crying and then I started crying 'cause baby, I'm a baby. Um, and she was just like, "I didn't realize how much over I was spending." And she said, "As a matter of fact, I can't even afford the air conditioning. That's on... Can I turn it off?" And I was like, "Yes." (laughs)

Mel Robbins 36:21 (laughs)

Tiffany Aliche 36:22 ... so we sat with the fan on because she just turned on the air conditioner 'cause I was coming over, so I was like, "Turn off the AC. L- a fan is fine." That tears and tissues step allows you to see, what do you need to do now?

Mel Robbins 36:33 And so, let's say you've done that, right?

Tiffany Aliche 36:37 Mm-hmm.

Mel Robbins 36:37 And you've made the money list.

Tiffany Aliche 36:40 Mm-hmm.

Mel Robbins 36:41 And you see what's coming in and what's coming out-

Tiffany Aliche 36:43 Mm-hmm.

Mel Robbins 36:43 ... you're, like, faced with the reality.

Tiffany Aliche 36:45 Yeah.

Mel Robbins 36:46 Tears and tissues.

Tiffany Aliche 36:46 Yes.

Mel Robbins 36:47 And you see that you are outspending every month-

Tiffany Aliche 36:51 Mm-hmm.

Mel Robbins 36:51 ... what's actually coming in.

Tiffany Aliche 36:52 Mm-hmm.

Mel Robbins 36:53 What is the next step?

Tiffany Aliche 36:54 The next step is I want you to categorize your expenses, before you get to slashing and dashing, you know, 'cause that's what people wanna do. "I won't eat out. I won't..." Uh... (laughs)

Mel Robbins 37:02 Yeah. "I'm never gonna eat again."

Tiffany Aliche 37:03 (laughs)

Mel Robbins 37:04 "Never gonna turn the lights on in this house."

Tiffany Aliche 37:05 That's right. (laughs)

Mel Robbins 37:05 "Get the candles."

Tiffany Aliche 37:07 So I'm like, categorize your expenses into three categories. One, I want you to write a B next to all the bills on your list. So bills are, if you don't pay it, someone's gonna come knocking on your door and say, "Where's my money?"

Mel Robbins 37:20 Okay.

Tiffany Aliche 37:20 Right?

Mel Robbins 37:20 Yep.

Tiffany Aliche 37:20 So put a B next to all those things.

Mel Robbins 37:22 And give me an example. I know that sounds like a, a basic question, but is your mortgage a bill?

Tiffany Aliche 37:26 Yes. Mortgage is a bill. Rent, um, car note, um, your credit card-

Mel Robbins 37:31 Student loans.

Tiffany Aliche 37:33 ... student loans. So if you don't pay, you're likely to be sued. Think about that.

Mel Robbins 37:36 Gotcha.

Tiffany Aliche 37:36 Mm-hmm.

Mel Robbins 37:36 Like when you were like, uh, standing at Walmart or Sephora-

Tiffany Aliche 37:39 (laughs)

Mel Robbins 37:39 ... and you're like, "Yeah, I'd like 10% off this." And then you're like, "Oh, wait, that's a credit card."

Tiffany Aliche 37:42 Yes.

Mel Robbins 37:42 That's a bill.

Tiffany Aliche 37:43 Mm-hmm.

Mel Robbins 37:43 Gotcha. Okay.

Tiffany Aliche 37:44 So, a B next to all your bills.

Mel Robbins 37:45 Okay.

Tiffany Aliche 37:46 And then, uh, and those are really, like, fixed expenses, so that way you understand, right? And then I want you to put a U in front of any B that fluctuates based upon your usage.

Mel Robbins 37:56 Oh, I love that.

Tiffany Aliche 37:57 Mm-hmm. So I call these, like, the U stands for usage or utility.

Mel Robbins 38:00 So, your student loan does not have a U?

Tiffany Aliche 38:03 Mm-mm.

Mel Robbins 38:04 Your mortgage or rent does not have a U?

Tiffany Aliche 38:06 Nope.

Mel Robbins 38:06 But the-

Tiffany Aliche 38:07 Water.

Mel Robbins 38:08 Water?

Tiffany Aliche 38:09 Electricity.

Mel Robbins 38:10 Oh, yeah. Your-

Tiffany Aliche 38:10 So your usage, mm-hmm.

Mel Robbins 38:12 Yes. The data on your phone bill.

Tiffany Aliche 38:13 Yes. And so it's important to separate those two, because I want you to, uh... and you'll see that I want you to understand the level of control you have on these expenses. And whatever's not a B or UB, everything else is a C. C stands for cash or choice, meaning that you have full choice of how you spend here. So grooming might be left over, groceries might be left over.

Mel Robbins 38:34 How much you're eating out with friends?

Tiffany Aliche 38:35 Yes. And so entertainment.

Mel Robbins 38:37 Yeah.

Tiffany Aliche 38:37 And so now, before you get to slashing, I want you to ask yourself, where is most of your money going? For many people, most of their money might be going to the Bs and UBs.

Mel Robbins 38:47 Uh-huh.

Tiffany Aliche 38:47 But for some people it's actually all the Cs.

Mel Robbins 38:49 Yes.

Tiffany Aliche 38:49 So then I... then we have to identify, do you have a don't make enough issue or spend too much issue? And so if most of your money's going to the Bs and UBs, you might not make enough, so it's not about slashing, because these are your bills, you know?

Mel Robbins 39:04 Yeah.

Tiffany Aliche 39:04 But if most of your money's going to your Cs, your choices and your cash expenses, then you probably have a spend too much issue, so now we need to slash.

Mel Robbins 39:12 Yes.

Tiffany Aliche 39:12 You know, because it's entertainment and grocery and, and all those things where your money is going. 'Cause what I find is that frugal people wanna get more frugal when things are tight. I'm like, "That's not the answer."

Mel Robbins 39:21 Right.

Tiffany Aliche 39:22 You know that instead, I want you to put your energy toward learning how to earn more if all of your money's going to your bills, because we're... what are we... we're cutting the mortgage?

Tiffany Aliche 39:30 What are we cutting, you know?

Mel Robbins 39:31 That's true. You know, one of the things that I worry about, and I'd be curious to hear your perspective-

Tiffany Aliche 39:35 Mm-hmm.

Mel Robbins 39:35 ... is that you and I both had the experience of being in college.

Tiffany Aliche 39:39 Mm-hmm.

Mel Robbins 39:40 And it's that opening week, and literally at the opening registration fair-

Tiffany Aliche 39:45 Yeah.

Mel Robbins 39:45 ... there were banks-

Tiffany Aliche 39:46 Mm-hmm.

Mel Robbins 39:46 ... with credit card tables. You get your Snickers bar when you sign up for one-

Tiffany Aliche 39:49 (laughs)

Mel Robbins 39:50 ... and then it's free money. But I worry a lot about the fact-

Tiffany Aliche 39:57 Mm-hmm.

Mel Robbins 39:58 ... that in today's world, particularly for people who are in their 20s and 30s, that social media-

Tiffany Aliche 40:09 Mm-hmm.

Mel Robbins 40:10 ... has become like shopping with a click.

Tiffany Aliche 40:14 Yeah.

Mel Robbins 40:14 And you and I had to leave our house-

Tiffany Aliche 40:16 Mm-hmm.

Mel Robbins 40:17 ... to go spend money back in the day.

Tiffany Aliche 40:19 Yeah, yeah.

Mel Robbins 40:19 And when I think about TikTok or Instagram, every other freaking suggested thing-

Tiffany Aliche 40:25 Yeah.

Mel Robbins 40:25 ... has a shop now button.

Tiffany Aliche 40:26 Mm-hmm.

Mel Robbins 40:27 And stuff gets sent to your house.

Tiffany Aliche 40:30 Mm-hmm.

Mel Robbins 40:30 And have you seen a big increase, because you've been doing this for a while-

Tiffany Aliche 40:36 Mm-hmm.

Mel Robbins 40:36 ... in people in the spending category, that spending has gotten so easy-

Tiffany Aliche 40:41 Yeah.

Mel Robbins 40:41 ... because of social media? It's always in your face. You always see what you're missing out on. There's an influencer that has the product for free who's like, "This changed my life." And oh, click, click, click, it's 11:30 at night.

Tiffany Aliche 40:52 Yeah.

Mel Robbins 40:52 So do you see a spike in this, or is it-

Tiffany Aliche 40:55 Absolutely. Overconsumption is the new way. We all have so much that we don't need. I mean, even I sometimes, I'm like, "Tiffany, you do not need, like, another... like, you don't need a vacuum."

Mel Robbins 41:08 (laughs)

Tiffany Aliche 41:08 I'm like, "But that one is so cool." You know? And I'm like, like there's this influencer who I follow who I love her 'cause she's so aesthetically pleasing.

Mel Robbins 41:14 Yes.

Tiffany Aliche 41:15 But you know the ones that wear... like, everything in the kitchen is aesthetically pleasing?

Mel Robbins 41:18 Yes, it's just these Amazon shops-

Tiffany Aliche 41:20 Yes. Like, yes-

Mel Robbins 41:20 ... so that I can click through to my Amazon thing.

Tiffany Aliche 41:21 Yes. So it's like a, a cont-

Mel Robbins 41:22 I got this all for free-

Tiffany Aliche 41:23 (laughs)

Mel Robbins 41:23 ... but I'm gonna make money on you buying it.

Tiffany Aliche 41:24 A container for the container.

Mel Robbins 41:26 Yes.

Tiffany Aliche 41:26 It's like, well, who wants to eat cereal out of a cereal box? We want to eat it out of a aesthetically pleasing glass container.

Mel Robbins 41:31 Yes.

Tiffany Aliche 41:31 Like, do I need an aesthetically pleasing... You don't.

Mel Robbins 41:34 Yes.

Tiffany Aliche 41:34 You know? So it is really hard. So that's why I don't believe in leaning so heavily on discipline when it comes to financial, like, stick-to-it-ness, you know?

Mel Robbins 41:42 What do you believe in?

Tiffany Aliche 41:43 That I believe automation, automation, automation. That's the new discipline, that if we can put systems and automations in place, it will help to safeguard you, because you're human.

Mel Robbins 41:52 Yeah.

Tiffany Aliche 41:53 So we're not here to fight against your humanness.

Mel Robbins 41:54 Right.

Tiffany Aliche 41:55 You know? I'm like, for budgeting, for example, I do this thing where I call it budget without a budget. You go to HR.

Tiffany Aliche 42:00 You say, "Hey, HR," or payroll, "I want to split my money before I get my money." And so what that looks like is, is that... and, and most places can do this 'ca- I'm at a huge company and we're capable of doing this. There are four accounts, two checking, two savings.

Mel Robbins 42:15 Wait, so everybody needs four accounts?

Tiffany Aliche 42:18 Ideally, give or take. I mean, it depends on where you are, but this is, this is the ideal, two checking, two savings. So checking one is kind of like your spending account. This is attached to your debit card, right?

Mel Robbins 42:28 Okay.

Tiffany Aliche 42:28 So most people have this account, but everything just gets dumped there.

Mel Robbins 42:31 Yes.

Tiffany Aliche 42:31 You know? So that's the account you keep it. The second account is a checking account, which is your bills account.And so I want you to separate your bill money from your spending money.

Mel Robbins 42:40 And does it cost money to have two different checking accounts with your bank?

Tiffany Aliche 42:43 Well, the good thing is, if you have direct deposit into those, most banks will waive that fee.

Mel Robbins 42:48 Awesome.

Tiffany Aliche 42:48 So that's why you're gonna do it from, eh, like, I have payroll direct deposit into those accounts.

Mel Robbins 42:53 Oh, so you, at your-

Tiffany Aliche 42:56 Company.

Mel Robbins 42:56 ... company level-

Tiffany Aliche 42:57 Yes. Yes.

Mel Robbins 42:57 ... you basically say-

Tiffany Aliche 42:59 Mm-hmm.

Mel Robbins 43:00 ... w, x percent-

Tiffany Aliche 43:01 Yes. Mm-hmm.

Mel Robbins 43:01 ... of my paycheck is gonna go into checking account-

Tiffany Aliche 43:04 Yep.

Mel Robbins 43:04 ... number one-

Tiffany Aliche 43:05 Yes, for spending.

Mel Robbins 43:06 ... which is where my bills are.

Tiffany Aliche 43:06 Yeah.

Mel Robbins 43:07 And, or spending.

Tiffany Aliche 43:08 Yeah.

Mel Robbins 43:08 And then the other percentage, and do you have a particular percentage in mind?

Tiffany Aliche 43:12 Well, the good thing is people ask me that all the time. I'm like, "Well, we don't have to guess." Money list is right there saying-

Mel Robbins 43:16 Oh.

Tiffany Aliche 43:16 ... "Hello. We know how much you need to put in here."

Mel Robbins 43:19 Be kind of embarrassing to walk into HR and be like, "Um, could you put $1,500 in checking account one-"

Tiffany Aliche 43:26 And $2. (laughs)

Mel Robbins 43:28 "... and $10..." (laughs)

Tiffany Aliche 43:28 But usually it's a form, so you don't have to tell all your businesses.

Mel Robbins 43:30 Okay.

Tiffany Aliche 43:30 You know? And so you fill-

Mel Robbins 43:31 But still, you can see how that then creates an automation-

Tiffany Aliche 43:36 Mm-hmm.

Mel Robbins 43:37 ... that helps you stay in the lane.

Tiffany Aliche 43:39 Yeah. So the key is with that checking account, the second one, you are gonna call the bank and say, "I do not want a debit card." I did not know that you could just opt out of a debit card. You can.

Mel Robbins 43:49 But what do, what do I do if I need cash?

Tiffany Aliche 43:51 Because you have your spending account. Because why are you swiping away your bill money?

Mel Robbins 43:55 Oh. 'Cause I don't need a debit card-

Tiffany Aliche 43:57 Not for the bills account.

Mel Robbins 43:57 ... for the bills account.

Tiffany Aliche 43:59 Yes.

Mel Robbins 43:59 I've never had two checking accounts.

Tiffany Aliche 44:01 Yes. Yeah, okay. (laughs)

Mel Robbins 44:02 I'm sitting here thinking, my freaking money goes right into that thing.

Tiffany Aliche 44:05 Yes. So if you, that way, it keeps your bills account... This is why I say you don't need as much discipline. It keeps that money-

Mel Robbins 44:10 Oh, I l, I am actually gonna do this.

Tiffany Aliche 44:12 Yeah.

Mel Robbins 44:13 I think this is so empowering-

Tiffany Aliche 44:14 Mm-hmm.

Mel Robbins 44:14 ... because I have had such the philosophy of just put your head down, work, work, work, work, work, work, work, work, work, work, work, work, work, and as long as there's balance in there, we're okay.

Tiffany Aliche 44:22 Yeah. So I like to separate it because I'm like, I know that when I'm at Target, 'cause it's my favorite, I'm swiping (laughs) , that I know one thing, I'm not swiping my bill money because this debit card is not attached to my bills account. I put the money into the bills account and if you have enough, you can automate your bills. And if not, you could certainly manually pay them. You could just say every two weeks I'll sit down and manually pay my bills from my bill.

Mel Robbins 44:45 I love-

Tiffany Aliche 44:46 Mm-hmm.

Mel Robbins 44:46 ... this advice.

Tiffany Aliche 44:47 Mm-hmm.

Mel Robbins 44:47 You're so good at what you do.

Tiffany Aliche 44:49 Thank you. (laughs)

Mel Robbins 44:50 No wonder you've helped millions and millions and millions of people.

Tiffany Aliche 44:53 Well, and remember the other two savings, I want you to put those savings accounts not at your regular brick and mortar bank because they're gonna pay you 0.000000.

Mel Robbins 45:01 Okay, so where do we put our savings and why do we need two savings accounts?

Tiffany Aliche 45:04 Well, I like, again, because I want you to separate so you can see.

Mel Robbins 45:09 Okay.

Tiffany Aliche 45:09 You know? And so this is like that kind of like when I said automate, automate, automate, you don't have to be as disciplined.

Mel Robbins 45:13 Right.

Tiffany Aliche 45:13 So savings one at a high yield savings account. Typically these are online only banks, you know? They pay right now currently

Tiffany Aliche 45:20 maybe four, 4%, a little bit more. Um, and so you're gonna have one-

Mel Robbins 45:23 Now when you said online only bank-

Tiffany Aliche 45:25 Mm-hmm.

Mel Robbins 45:26 ... I had a visceral reaction-

Tiffany Aliche 45:28 Okay.

Mel Robbins 45:29 ... because I immediately thought about the dude that scammed you outta money for some reason.

Tiffany Aliche 45:33 Oh, yes. (laughs)

Mel Robbins 45:34 You know what I mean? Like, how do you know that an online bank-

Tiffany Aliche 45:38 Mm-hmm.

Mel Robbins 45:39 ... is a reputable bank to put your money in? Because that to me-

Tiffany Aliche 45:43 It's FDIC insured.

Mel Robbins 45:44 FDIC insured.

Tiffany Aliche 45:45 Yeah, so this is-

Mel Robbins 45:45 But how would you know that 'cause everybody can copy that little icon?

Tiffany Aliche 45:49 So no, 'cause that would be against, I mean, I mean, if they wanna go to like under the jail-

Mel Robbins 45:53 Yes.

Tiffany Aliche 45:54 ... by the federal government.

Mel Robbins 45:54 Okay.

Tiffany Aliche 45:54 So you could, honestly, a, a Google search, there are like, um-

Mel Robbins 45:57 We're also gonna link, everybody, you know our resources are robust.

Tiffany Aliche 46:03 (laughs) Mm-hmm.

Mel Robbins 46:03 And today there will be a lot of information-

Tiffany Aliche 46:06 Yes.

Mel Robbins 46:06 ... from The Budgetnista.

Tiffany Aliche 46:07 Yes.

Mel Robbins 46:08 And Tiffany will have stuff so that you can go to her resources-

Tiffany Aliche 46:12 Yes.

Mel Robbins 46:12 ... and understand what's reputable, what's not.

Tiffany Aliche 46:14 Mm-hmm.

Mel Robbins 46:14 And so...

Tiffany Aliche 46:15 So I list a bunch. So with, with both of my books, Geek With Money and Made Whole, I list some of the banks that I like, you know?

Mel Robbins 46:20 You know what else I love about this approach? 'Cause you mentioned Target-

Tiffany Aliche 46:23 Mm-hmm.

Mel Robbins 46:23 ... and, you know, we have a huge global audience so just think about your favorite even, uh, place where you go to pick up your prescriptions.

Tiffany Aliche 46:30 Mm-hmm.

Mel Robbins 46:30 Or your local kind of pharmacy type store. When I walk in there, it's as if I have walked onto a game show.

Tiffany Aliche 46:39 (laughs)

Mel Robbins 46:39 This was even when I had no freaking money.

Tiffany Aliche 46:42 Mm-hmm.

Mel Robbins 46:43 And it's like you walk through the doors and I'm like, "Oh, I feel like I need some hair rubber band things." And, "Yeah, I need those little cotton things." And-

Tiffany Aliche 46:52 Yes.

Mel Robbins 46:52 I have that shit in my drawers.

Tiffany Aliche 46:53 Yes.

Mel Robbins 46:54 Like, I don't know why I, there's something about the psychology of that. So in your model-

Tiffany Aliche 46:59 Mm-hmm.

Mel Robbins 47:00 ... when you do your money list and the Bs and the Us-

Tiffany Aliche 47:03 Mm-hmm.

Mel Robbins 47:03 ... and I walk in there and I don't have a debit card-

Tiffany Aliche 47:06 Mm-hmm.

Mel Robbins 47:06 ... I've only got the debit card for what I can spend.

Tiffany Aliche 47:08 Yes. 'Cause all your money is literally squirreled away someplace else. You have a, a savings account for emergencies, you have a savings account for goals.

Mel Robbins 47:17 Gotcha.

Tiffany Aliche 47:18 I wanna buy a house, I wanna buy a car, I wanna invest in the market. We're gonna separate them because you don't wanna spend your emergencies on, on goals. That's, your emergency account is like your, your seatbelt, you know, like your safety belt.

Mel Robbins 47:28 Yep.

Tiffany Aliche 47:29 And so that's why you have the two savings and you let it earn interest. So if you have those four accounts, you use your money list to figure out how much money you wanna place into those four accounts. Then all you have to worry about is, especially if everything's automated, the money lands, it splits before you get it, bills pay themselves, savings will save. And when I go swiping, it's not my savings, it's not my emergency savings, it's not my bill money. So I can rest assure without having to be so disciplined 'cause I just set it up one time. And so it's just one of my favorite ways to budget without budgeting, like the hardcore, you know, my, my journal and a diary and I'm not doing all that.

Mel Robbins 48:04 Yes.

Tiffany Aliche 48:05 You know? (laughs)

Mel Robbins 48:05 Yes. You do it once, set it and forget it-

Tiffany Aliche 48:07 Yes.

Mel Robbins 48:08 ... and now it's aligned with what you want.

Tiffany Aliche 48:09 Yes.

Mel Robbins 48:10 Do you have a guideline in terms of when somebody's making their money list, we got the Bs, we got the Us, we got the Cs.

Tiffany Aliche 48:15 Mm-hmm.

Mel Robbins 48:16 We've now got our four different bank accounts.

Tiffany Aliche 48:18 Mm-hmm.

Mel Robbins 48:18 The two checking, the two savings.

Tiffany Aliche 48:20 Mm-hmm.

Mel Robbins 48:21 So if you followed all this advice and you kinda look at what it costs for you to pay for your life, you know, all of the stuff that's going out in all of these categories you've just taught us about, what do you think the percentage should be? If you look at the income coming in, like what percentage is your day-to-day expenses?

Tiffany Aliche 48:39 I would say ideally-Ideally, ideally, if you can live off of 70% of your income.

Mel Robbins 48:46 Okay.

Tiffany Aliche 48:46 That's ideal. Like, you might be at 99, that's okay. But this is what you're working toward.

Mel Robbins 48:51 Okay.

Tiffany Aliche 48:51 No more than 70%.

Mel Robbins 48:52 Okay.

Tiffany Aliche 48:53 Obviously, you make more, it might be even lower, like I think at this point I might live off of 20 or 30%.

Mel Robbins 48:57 Okay.

Tiffany Aliche 48:57 At one point, I was living off of 200%. (laughs)

Mel Robbins 49:00 Right.

Tiffany Aliche 49:00 You know, but 70%.

Mel Robbins 49:01 Right.

Tiffany Aliche 49:02 You know, 70%-

Mel Robbins 49:02 Meaning you were in debt.

Tiffany Aliche 49:04 Yes. (laughs) Exactly.

Mel Robbins 49:04 Meaning you were spending more.

Tiffany Aliche 49:07 Yes.

Mel Robbins 49:07 Yes.

Tiffany Aliche 49:08 Way more.

Mel Robbins 49:08 Yeah, same.

Tiffany Aliche 49:08 So this is not shame, this is just like, "I'm working toward this."

Mel Robbins 49:10 Yes.

Tiffany Aliche 49:10 This is what your ideal is.

Mel Robbins 49:12 Okay.

Tiffany Aliche 49:12 So 70%, so that would be what's in your spending account and what's in your bills account. That would equate for 70%, because that's living off of money.

Mel Robbins 49:20 You know, I love that you just offered up though this hope.

Tiffany Aliche 49:26 Mm-hmm.

Mel Robbins 49:27 Because what you just said to somebody who is in the place that you and I have both been in-

Tiffany Aliche 49:33 Mm-hmm.

Mel Robbins 49:33 ... which is, your life costs way more than you make-

Tiffany Aliche 49:38 Mm-hmm.

Mel Robbins 49:39 ... and you are also dealing with a mountain of debt-

Tiffany Aliche 49:42 Mm-hmm.

Mel Robbins 49:43 ... that there is hope for you.

Tiffany Aliche 49:44 Yeah.

Mel Robbins 49:44 So if you make this money list, which is step one-

Tiffany Aliche 49:48 Mm-hmm.

Mel Robbins 49:48 ... your Bs, your Us, your Cs-

Tiffany Aliche 49:50 Mm-hmm.

Mel Robbins 49:50 ... and you then look at it and you're like, "Oh, I'm screwed."

Tiffany Aliche 49:52 Mm-hmm.

Mel Robbins 49:55 What Tiffany is saying to you is that the goal is to move from-

Tiffany Aliche 49:58 Yep.

Mel Robbins 49:58 ... a negative position-

Tiffany Aliche 50:00 Yes.

Mel Robbins 50:00 ... to a position where 70% of what's coming in covers your life.

Tiffany Aliche 50:05 Yes.

Mel Robbins 50:05 And the other 30%-

Tiffany Aliche 50:07 Goes to savings and investing and mm-hmm.

Mel Robbins 50:10 Awesome.

Tiffany Aliche 50:10 Yes.

Mel Robbins 50:10 And I cannot wait to go home and make a money list. Now, there are four other topics, Tiffany, that you're gonna help us master, and so I don't want you listening to us to go anywhere. You're about to learn her amazing tips to increase your credit score, you'll learn about something that Tiffany calls dreamscaping, which is a critical part of you creating a plan and finding hope and enthusiasm to take all this advice and apply it. And what I love about Tiffany's approach, and I'm sure you're loving it too, is you're gonna hear her say, "You don't need discipline. You just need to understand these tricks." Stay with us. Welcome back. It's your friend Mel. We are so glad that you're here, and by we, I mean me and Tiffany Aliche. She's also known as The Budgetnista. You're falling in love with her as you listen to her. She's been featured on Netflix, she's a New York Times bestseller, and more importantly, her genius, and you're experiencing it right now, she's helped two million people save, manage, and pay off hundreds of millions of dollars in debt. And here she is, showing up here for you, giving you relatable, world-class strategies in the five key areas that you need to understand when it comes to taking control of money. So you and I have covered budget with Tiffany. There are four more to go, and up

Mel Robbins 51:22 next, debt. What do you do when you go through the money list and what you see is a lot of debt?

Tiffany Aliche 51:31 Mm-hmm.

Mel Robbins 51:32 What are the steps?

Tiffany Aliche 51:33 Well, for debt, you have to, that's another kind of like list, so I just call it, just honestly like the debt list. We have to just get a picture, like what's happening here?

Mel Robbins 51:41 Yes.

Tiffany Aliche 51:41 Who do you owe? This is what's gonna go on your debt list. Who do you owe? How much do you owe? When is it due? What's the interest rate? What's the status?

Mel Robbins 51:52 (gulps)

Tiffany Aliche 51:53 I know. This is why you wanna have your bestie of besties.

Mel Robbins 51:56 I know. Get over there.

Tiffany Aliche 51:56 You're right, like... (laughs)

Mel Robbins 51:57 I'm thinking about my friend Jodie. Jodie, pull up a chair, let's go.

Tiffany Aliche 52:00 (laughs) Right?

Mel Robbins 52:01 Exactly.

Tiffany Aliche 52:02 So yeah, so you, 'cause you have to get a pic- this is actually, sometimes it can be a little harder than the money list.

Mel Robbins 52:07 Oh, I would think so.

Tiffany Aliche 52:08 Yes.

Mel Robbins 52:08 'Cause I was, I, as I'm listening to you, I'm thinking to myself, "I haven't even done this for myself."

Tiffany Aliche 52:15 Yeah. To see like, who do I owe?

Mel Robbins 52:16 Yeah, like what is my mortgage-

Tiffany Aliche 52:19 Yeah.

Mel Robbins 52:19 ... at right now?

Tiffany Aliche 52:19 Mm-hmm.

Mel Robbins 52:19 And how many more years is it going to be?

Tiffany Aliche 52:22 Yeah.

Mel Robbins 52:22 And what are, like I, what is the car loan that I have?

Tiffany Aliche 52:26 Yeah.

Mel Robbins 52:26 And how many more years is it?

Tiffany Aliche 52:27 Mm-hmm.

Mel Robbins 52:27 And what is the interest rate?

Tiffany Aliche 52:29 Yeah. So just knowing, like, what those things are, and like I said, don't do it alone. You could literally have a party.

Mel Robbins 52:34 Oh God.

Tiffany Aliche 52:34 It could be like, you know, like-

Mel Robbins 52:35 But we're not spending money.

Tiffany Aliche 52:36 Yes. (laughs)

Mel Robbins 52:36 There's no ice cream, there's no nothing.

Tiffany Aliche 52:38 It's a potluck, you know?

Mel Robbins 52:39 Yes.

Tiffany Aliche 52:39 It's like, you could just be like, where you and a group of friends just sit down and say, "We're gonna do our debt lists," you know?

Mel Robbins 52:44 Yes.

Tiffany Aliche 52:44 Um, and so just knowing where you are, so now you can start to prioritize who's getting paid and when. So I have a few methods that I really like.

Mel Robbins 52:52 Let's talk about 'em.

Tiffany Aliche 52:53 One, there's a snowball method.

Mel Robbins 52:55 Okay.

Tiffany Aliche 52:55 And so this is when you pay the lowest balance, um, debt first. So you're gonna look at all of your debt and line it up from lowest balance that you owe.

Mel Robbins 53:03 Okay.

Tiffany Aliche 53:04 Right? Like, and then to the highest, like debt that you owe.

Mel Robbins 53:07 Okay.

Tiffany Aliche 53:07 And if you're someone who is like emotionally charged by your debt-

Mel Robbins 53:11 Mm-hmm.

Tiffany Aliche 53:11 ... and need you to have early success-

Mel Robbins 53:13 Yes.

Tiffany Aliche 53:13 ... you're gonna pay the minimum to everybody else, but that lowest bill is going to get the bulk of the money that you have available, and you're gonna know what that is. This is why that money list is so important.

Mel Robbins 53:24 Right.

Tiffany Aliche 53:24 'Cause it's like, where am I gonna get the money? Let's look at the money list.

Mel Robbins 53:26 Right.

Tiffany Aliche 53:27 Are you making a little more right now? Are, are you able to spend a little less? That money that you're about to squeeze from your budget is gonna go to that lowest debt. So let's just say you owe $200 to granny.

Mel Robbins 53:37 Yeah.

Tiffany Aliche 53:38 You know, and you're giving her

Tiffany Aliche 53:40 100 bucks a month.

Mel Robbins 53:41 Right.

Tiffany Aliche 53:41 So now, it's like, okay, that 100 bucks a month now rolls over like a snowball downhill.

Mel Robbins 53:45 Yes, 'cause now that debt's paid to granny.

Tiffany Aliche 53:47 Yes.

Mel Robbins 53:47 And now we go to the next one.

Tiffany Aliche 53:48 Yes. The next debt gets its minimum, which it was already getting, but it gets that lowest debt's minimum, the- the first one, and that extra money from your, from your, your money list. So now all of a sudden, it's getting like three payments in one. So you're cooking with grease now. You know?

Mel Robbins 54:03 Yeah. Yeah.

Tiffany Aliche 54:03 And when that's paid off, you roll over that full amount to the third. And what's so great is, as the snowball rolls down the hill, it collects snow minimums along the way, so by the time you get to the biggest debt, you have the most amount of money, but it didn't actually take any additional money out of your budget, because you've collected minimums that you were already paying.

Mel Robbins 54:20 Oh.

Tiffany Aliche 54:21 Mm-hmm.

Mel Robbins 54:21 So I'm gonna try to translate that.

Tiffany Aliche 54:23 Mm-hmm.

Mel Robbins 54:23 So if your credit card bill has a minimum of $50-

Tiffany Aliche 54:27 Yes.

Mel Robbins 54:28 ... and you've just been paying the 50-

Tiffany Aliche 54:29 Mm-hmm.

Mel Robbins 54:29 ... and paying the 50, that means you're not really chipping away at the, at the balance.

Tiffany Aliche 54:33 Mm-hmm.

Mel Robbins 54:34 So as you use this method and you get the lowest paid off-... you don't have to pay that $50 anymore.

Tiffany Aliche 54:40 No.

Mel Robbins 54:40 And then you go to the next one.

Tiffany Aliche 54:41 Well, you take that $50 from there-

Mel Robbins 54:43 But then it goes to the next one.

Tiffany Aliche 54:44 Yes. Mm-hmm.

Mel Robbins 54:45 Got you. And so you've accumulated all these 50s-

Tiffany Aliche 54:47 Yes. Yes.

Mel Robbins 54:48 ... and by the time you get to the big one, you might have 200 extra dollars in the cash c-

Tiffany Aliche 54:51 Yeah, on top of the mini. Yes. Yeah.

Mel Robbins 54:53 Got you. Okay.

Tiffany Aliche 54:53 So it doesn't actually hurt your, um, you, it, you're not coming out of pocket any more 'cause you've been paying all these minimums.

Mel Robbins 54:58 Yes.

Tiffany Aliche 54:59 You know? And so it's a great way for people who need that early success and don't wanna tackle the big bill right away.

Mel Robbins 55:04 Amazing.

Tiffany Aliche 55:05 So that's the snowball method. The avalanche method

Tiffany Aliche 55:08 is when you're like, "Forget all that. I'm logical. I wanna attack the debt with the highest interest rate, the most expensive debt first."

Mel Robbins 55:16 Mm.

Tiffany Aliche 55:16 Because interest rate is the fee you pay for what you owe.

Mel Robbins 55:19 'Kay.

Tiffany Aliche 55:19 So the more you owe, the more the interest rate is gonna affect what you have to, to pay, so-

Mel Robbins 55:23 Yes.

Tiffany Aliche 55:23 ... you're gonna line your debt up from the highest interest rate-

Mel Robbins 55:26 Yep.

Tiffany Aliche 55:26 ... to the lowest interest rate first.

Mel Robbins 55:27 'Kay.

Tiffany Aliche 55:27 And you're gonna attack highest interest rate debt first.

Mel Robbins 55:30 Okay. Y-

Tiffany Aliche 55:30 So there's snowball, avalanche, and I call this the tsunami method.

Mel Robbins 55:34 (laughs)

Tiffany Aliche 55:35 Is, this is for people who really get emotionally overwhelmed, and you line up your debt by how it affects you emotionally.

Mel Robbins 55:41 Oh.

Tiffany Aliche 55:42 You know? Because like, let's honor the fact that some of us really need to navigate from that place. Like, which debt is causing you the most stress? It's s- it, the tsunami is coming over you, and it's like, "I have to pay my grandmother back, because I feel so bad. And then next, it's really my mortgage. And then next, it's this bike that I bought. And then that..." You see what I mean?

Mel Robbins 55:59 Yes. Yes.

Tiffany Aliche 55:59 So with that method, you're lining up the debt from most stressful to least stressful and paying it off in that order. But either way, you're collecting the minimums amount along the way. You pay off the debt, you roll over that full payment to the next one. Pay off that debt, roll over all those payments to the next one. So that still stays the same, it's just the order that it depends on, like what you need in order to be successful.

Mel Robbins 56:20 We must have similar grandmas, 'cause I wouldn't wanna have to face my grandmother either.

Tiffany Aliche 56:24 (laughs)

Mel Robbins 56:24 'Cause they're knocking on the door, complaining again at the dinner table. So, um, you have

Mel Robbins 56:30 this concept that I absolutely love. That was budget that we've talked about.

Tiffany Aliche 56:34 Mm-hmm.

Mel Robbins 56:34 We've now covered debt.

Tiffany Aliche 56:35 Yeah.

Mel Robbins 56:35 The third concept that you talk about is saving.

Tiffany Aliche 56:38 Yes.

Mel Robbins 56:39 How do you save? Especially if you don't feel like you have money to save, because you are just making the ends meet, or not, even.

Tiffany Aliche 56:50 Mm-hmm. And sometimes you can't. I know people don't wanna say that, but I'm like, I remember when it was like, I had a savings account, 'cause it was free, but that account was like, "Hello? Is it me you're looking for?" (laughs)

Mel Robbins 57:02 (laughs)

Tiffany Aliche 57:02 It didn't have anything in it.

Mel Robbins 57:03 (laughs)

Tiffany Aliche 57:04 I mean, because that's life sometimes.

Mel Robbins 57:05 Yeah.

Tiffany Aliche 57:06 And I just rem- but I opened it, because sometimes you do a thing not for where you are currently, but for-

Mel Robbins 57:11 But where you wanna go.

Tiffany Aliche 57:12 There you go. And so I opened up a savings account, because they're typically free, and I said, "One day, I'll be able to put something into you." And so for the first year or so, when I was paying down all that credit card debt, and, like, making a little money here and there, the Budgetista was starting to do a little better. And I was like, I remember I was able to save $5 a month, and I put it in there, not for the five, but the five was proof. "If I could do five, one day I'll do 10.

Mel Robbins 57:34 Mm.

Tiffany Aliche 57:35 If I could do 10, one, one day I'll do 100."

Mel Robbins 57:37 Mm-hmm.

Tiffany Aliche 57:37 "If I could do 100, one day I'll do 1,000."

Mel Robbins 57:39 Mm-hmm.

Tiffany Aliche 57:39 And so it was a placeholder for that one day. In the beginning, it's okay to acknowledge that you might have these four accounts and those two stay empty for a while.

Mel Robbins 57:47 Yeah. I-

Tiffany Aliche 57:48 Because there's not enough money.

Mel Robbins 57:49 I, I love that you said that, 'cause I can absolutely remember years of my life where there was a savings account attached to my checking account.

Tiffany Aliche 57:58 Mm-hmm.

Mel Robbins 57:58 I could not afford to put anything in there. It would literally be like 27 cents.

Tiffany Aliche 58:01 Mm-hmm. (laughs)

Mel Robbins 58:02 You know, like that. And, and I made friends with the tellers.

Tiffany Aliche 58:04 Mm-hmm.

Mel Robbins 58:04 And so, when you kinda get that, they, they, they penalize you for having-

Tiffany Aliche 58:09 Yeah.

Mel Robbins 58:09 ... and, "Oh, I'll just waive that for you now."

Tiffany Aliche 58:10 Mm-hmm.

Mel Robbins 58:10 "No problem." But just seeing that still someday.

Tiffany Aliche 58:15 Yes.

Mel Robbins 58:16 Someday.

Tiffany Aliche 58:16 Someday.

Mel Robbins 58:17 Someday, I will get it in there. Someday.

Tiffany Aliche 58:19 Dreamscaping.

Mel Robbins 58:20 Okay. Let's talk about dreamscaping.

Tiffany Aliche 58:21 Yes.

Mel Robbins 58:22 What is dreamscaping?

Tiffany Aliche 58:23 So this is a word I totally made up, as preschool teachers are apt to do. Um, and I just thought, like, you know, landscaping, this is when you design the outside of your home to be-

Mel Robbins 58:31 Yes.

Tiffany Aliche 58:31 ... beautiful and aesthetically pleasing. And so I'm like, "Well, why can't we do that with our dreams? Why can't I?" Dreamscaping means that like, I think of the most beautiful, aesthetically pleasing, big, expansive life that I wanna live. And I was a big daydreamer-

Mel Robbins 58:47 Hmm.

Tiffany Aliche 58:47 ... when I was a kid, so I got, like, I was the kid in class talks too much and daydreams. (laughs)

Mel Robbins 58:54 (laughs)

Tiffany Aliche 58:54 And so I, but I love daydreaming, because it allows me to tr- like, really, like, um, go into the future and say, "This is what life is gonna look like for me," live there for a little bit, and then bring back, bring back that feeling here. And it says, "Okay, this is what you need to do for that to be life."

Mel Robbins 59:11 'Kay.

Tiffany Aliche 59:11 And so, with dreamscaping, I identify a time in the future that, what I wanna see. So maybe it's the December 31st version of yourself this year.

Mel Robbins 59:19 Yes.

Tiffany Aliche 59:19 Maybe it's you five years from now, 10 years from now, whatever that is. And then I ask myself, holistically, "How do I want life to go?" Not financially, holistically. Like, "How long do I want my hair to be?" Like, "Where do I wanna live? What do I wanna drive?" You know, "What kind of foods am I into?" Like, I, just imagining my full, complete life. "Where have I traveled to?"

Mel Robbins 59:39 Yep.

Tiffany Aliche 59:39 You know? Um, that kinda thing. And so, that's the second part of dreamscaping, is I, like, really dreaming, like, your full life.

Mel Robbins 59:45 Yep.

Tiffany Aliche 59:46 Um, then the third part is to find a guide asking for help. So, if there's someone who, there's part of your dream that they're living it, you know, maybe they're on social media and you follow their social media. N- you know, do they do podcast interviews? Do they have a book that's come out? Do you know them personally? Like, don't go at this alone. Why? You know, the fastest way f- from where you are to where you wanna be usually is through someone else.

Mel Robbins 1:00:10 Right.

Tiffany Aliche 1:00:11 And so I'm literally studying, like, "Oh, I love the way Mel does that."

Mel Robbins 1:00:13 Yeah.

Tiffany Aliche 1:00:14 "Okay, so I'm just g- I'm gonna read all the things you've written, and watch all your shows, and, and, and listen to all your podcasts, so I can get a guide from you about what does that look like." And then fourth, I create a plan based upon what I've learned about, this is where I wanna be, this is what I'm, learned from Mel of how she got there. Let me create a plan that's focused but flexible. Because I'm not you.

Mel Robbins 1:00:36 Mm-hmm.

Tiffany Aliche 1:00:37 So it's like a, you know, there's like this framework there-

Mel Robbins 1:00:39 Yeah, of course.

Tiffany Aliche 1:00:39 ... but a lot of flexibility in there. Like, "Oh, well, Mel did this, but I'm gonna do it like this, but-"

Mel Robbins 1:00:43 Right.

Tiffany Aliche 1:00:43 You know? And so I create this plan.But as I work the plan, the last and, to me, one of the most important things is then find community. That, like, that's so big for me. I started The Budgetnista because if not for Linda, where would I be? You know, that like-

Mel Robbins 1:00:57 Hmm.

Tiffany Aliche 1:00:57 ... I don't care if community is one person or 1,000

Tiffany Aliche 1:01:00 people or two million people.

Mel Robbins 1:01:01 Yeah.

Tiffany Aliche 1:01:01 Find community and work the plan within that community.

Mel Robbins 1:01:04 Yeah.

Tiffany Aliche 1:01:04 So you can have accountability, you can have, um, people to cheer you on and a place to vent and say you're scared, you know? And to see yourself in other people. So if you do those five things, that's the five steps to dreamscaping.

Mel Robbins 1:01:17 Well, the other piece that's, uh, powerful about that is when I look at all of your advice, it is empowering you-

Tiffany Aliche 1:01:26 Mm-hmm.

Mel Robbins 1:01:26 ... to take your emotions out of it and to align the actions that you're taking with the kind of person that you wanna become. I love that.

Tiffany Aliche 1:01:35 You ever think to yourself... So this is something I remember I, I learned in, um, in therapy when I was, uh, talking to my therapist. She said, like I'd never smoked. I have asthma, so I'm like, "I do not wanna take myself out of here." And so... (laughs)

Mel Robbins 1:01:46 (laughs)

Tiffany Aliche 1:01:47 Um, and so she said, "Tiffany, do you consider yourself, um, like a non-smoker?" And I was like, "No, because it doesn't even resonate because I just don't smoke." I'm not, that's just not part of like who I am.

Mel Robbins 1:02:00 Okay.

Tiffany Aliche 1:02:00 So I don't even associate smoker or non-smoker. I've just, never anybody who smoked, because I align with, "I am who I say I am."

Mel Robbins 1:02:07 Mm-hmm.

Tiffany Aliche 1:02:08 And so like, that should be the aim for all that we do. So it's not like, "Oh, am I a overspender or underspender?" It's like, well, no, you're just... You align with, "This is, I show up, I am who I say I am." That my goal is to be the person who I'm not worried about over or underspending. I spend in a way that's aligned with the way, the life that I wanna live. Do you see what I mean?

Mel Robbins 1:02:28 I do.

Tiffany Aliche 1:02:28 Not attached to that label, yeah.

Mel Robbins 1:02:29 I do. I feel very empowered as I'm listening to you-

Tiffany Aliche 1:02:33 Mm.

Mel Robbins 1:02:34 ... about going and creating a money list-

Tiffany Aliche 1:02:36 Yeah.

Mel Robbins 1:02:36 ... and going and doing the debt list.

Tiffany Aliche 1:02:39 Mm-hmm.

Mel Robbins 1:02:40 And just really getting a very clear picture-

Tiffany Aliche 1:02:43 Mm-hmm.

Mel Robbins 1:02:44 ... for myself.

Tiffany Aliche 1:02:45 Mm-hmm.

Mel Robbins 1:02:45 For myself, so that I can decide in the Dreamscape Model-

Tiffany Aliche 1:02:49 Yes.

Mel Robbins 1:02:49 ... well, what is the story I tell about myself-

Tiffany Aliche 1:02:52 Yes.

Mel Robbins 1:02:53 ... to myself in this category?

Tiffany Aliche 1:02:54 Yes.

Mel Robbins 1:02:55 Because clearly, if I wanted to get good with money-

Tiffany Aliche 1:02:58 Mm-hmm. Uh-huh.

Mel Robbins 1:02:59 ... then I've got the expert right here.

Tiffany Aliche 1:03:02 Mm-hmm.

Mel Robbins 1:03:02 And I follow your steps, and I can easily learn it, and so can you as you're listening to this. You have this concept that I freaking love about paying yourself first.

Tiffany Aliche 1:03:14 Mm-hmm.

Mel Robbins 1:03:15 What does that mean?

Tiffany Aliche 1:03:16 So that means I want you to ask yourself

Tiffany Aliche 1:03:18 four questions before you spend any money, and those questions are, "Do I need it?"

Mel Robbins 1:03:22 No.

Tiffany Aliche 1:03:23 "Do I love it?"

Mel Robbins 1:03:24 Yes.

Tiffany Aliche 1:03:24 "Do I like it?" (laughs)

Mel Robbins 1:03:25 Mm-hmm.

Tiffany Aliche 1:03:26 "Do I want it?"

Mel Robbins 1:03:26 Mm-hmm.

Tiffany Aliche 1:03:27 So need it, love it, like it, want it. And so they show you that like needs are most important-

Mel Robbins 1:03:32 Okay.

Tiffany Aliche 1:03:33 ... then your loves, then your likes, then your wants, and so when I'm spending money, those are the quadrants. I try to stay on the half of needs and loves. So a need is something you must have in order to be okay.

Mel Robbins 1:03:45 Yeah.

Tiffany Aliche 1:03:45 So bills.

Mel Robbins 1:03:46 Yeah.

Tiffany Aliche 1:03:47 Those UBs and Bs, those are your needs.

Mel Robbins 1:03:49 Yes.

Tiffany Aliche 1:03:49 You know, right?

Mel Robbins 1:03:50 Yes.

Tiffany Aliche 1:03:50 Now loves are different. Loves are something that is going to bring you joy over a year from now, you know? And so that's different for everyone. For some people, it is that haircut. For some people, it is, you know, that amazing dinner.

Mel Robbins 1:04:03 Yeah.

Tiffany Aliche 1:04:04 For some people, it's travel. For some people, it is that dress. So there's no judgment there. Just a year from now, will this th- thing still generate joy for me?

Mel Robbins 1:04:12 Hmm.

Tiffany Aliche 1:04:12 So deep joy are the things that are, the things that we love.

Mel Robbins 1:04:15 Yes.

Tiffany Aliche 1:04:15 And then likes, which is next, are temporary joy. So that's something about six months from now, and you're like, "Oh, it's still cute. I remember."

Mel Robbins 1:04:23 Yeah.

Tiffany Aliche 1:04:23 You know, but a year later you might be like, "Wait, where is that shirt that I had?" You know?

Mel Robbins 1:04:26 Yeah.

Tiffany Aliche 1:04:27 And then wants are literally the opposite, just instant gratification.

Mel Robbins 1:04:30 Yes.

Tiffany Aliche 1:04:31 It's like-

Mel Robbins 1:04:31 That's the shop now on Instagram.

Tiffany Aliche 1:04:32 Yes. So when you are spending money, I'm not here to tell myself no. So I, for example, this is a l... Well, I, I always travel, but this year in particular, I really wanted to go. I've never been to Johannesburg, and I wanna go.

Mel Robbins 1:04:44 Oh, yeah.

Tiffany Aliche 1:04:44 And there's this like really cute travel group. There's like 15 women, and it's like Johannesburg, Namibia, Botswana.

Mel Robbins 1:04:51 Sounds incredible.

Tiffany Aliche 1:04:52 Right? And so it's not a little bit of money obviously, as you can imagine.

Mel Robbins 1:04:55 Yeah.

Tiffany Aliche 1:04:55 And so when I was deciding whether or not to do it, I said, "Tiffany, is this a need? No. It's not food, shelter, clothing, water. Is this a love? Will you remember this trip a year from now?" I said, "Abso-freaking-lutely." And then of course, you look at your budget. Can it allow it, you know? So what that means is that if I don't have enough of that like or want, so what?

Mel Robbins 1:05:16 Right.

Tiffany Aliche 1:05:16 Because if I get another stinking T-shirt from Target, like what are we talking about here? (laughs)

Mel Robbins 1:05:19 Yeah. Yeah, exactly.

Tiffany Aliche 1:05:21 You know?

Mel Robbins 1:05:21 Exactly. I think everybody, even when you're struggling-

Tiffany Aliche 1:05:24 Yes.

Mel Robbins 1:05:25 Even when you're struggling, I think most of us can look around whatever room we're sitting in in our apartment and be like, "I have too much stuff."

Tiffany Aliche 1:05:31 Yes.

Mel Robbins 1:05:33 Like, uh, why, why, why am I... And I, I do think that there is this rise in shopping and consumerism-

Tiffany Aliche 1:05:39 Yes.

Mel Robbins 1:05:39 ... because you don't have to leave your house.

Tiffany Aliche 1:05:41 Yes.

Mel Robbins 1:05:42 You do not need to leave your house. They pull up and drop it on your doorstep.

Tiffany Aliche 1:05:45 Yes.

Mel Robbins 1:05:46 And you just constantly... It's like a pulling the, the, the, the, the, the, the, um, if you're watching this on YouTube, you see me doing it, but it's like you're at a slot machine. Pull.

Tiffany Aliche 1:05:55 Yes, pull the lever. Mm-hmm.

Mel Robbins 1:05:56 Pull, pull, chop, chop.

Tiffany Aliche 1:05:57 But if you really wanna pay yourself first, then you try as much as possible to stay in the much, in the need and the love category.

Mel Robbins 1:06:03 I love that.

Tiffany Aliche 1:06:04 Because that means your money is meaningfully spent. You know what I mean?

Mel Robbins 1:06:07 Yes.

Tiffany Aliche 1:06:08 Like meaningfully... So I'm not here to tell myself no. I'm here to say as yes as much as possible to my needs and my loves.

Mel Robbins 1:06:15 And my loves.

Tiffany Aliche 1:06:15 Yes.

Mel Robbins 1:06:15 Yes. Yes, yes, yes. What is your biggest hot take on saving

Mel Robbins 1:06:20 money?

Tiffany Aliche 1:06:21 My biggest hot take on saving money is there is a cap for how much you should save. Like you can actually over save.

Mel Robbins 1:06:29 What?

Tiffany Aliche 1:06:30 Yes. (laughs) I've been an over-saver where I had so much money saved, because there is a point where it's like no more than a year's worth of emergency savings is necessary for savings. I mean, at one point-

Mel Robbins 1:06:42 You're not talking about investing?

Tiffany Aliche 1:06:43 No.

Mel Robbins 1:06:43 You're just talking about savings.

Tiffany Aliche 1:06:43 Yeah, saving. Yeah, yeah.

Mel Robbins 1:06:44 Okay, great.

Tiffany Aliche 1:06:45 So like, you know, like, um, depending... So my mom was a nurse before she, um, retired.

Mel Robbins 1:06:49 Yep.

Tiffany Aliche 1:06:49 Right? So three months was enough for her. You know, my sister's an engineer, six months is fine. Me as an entrepreneur, I'd feel more comfortable with a year. But anything above that, you're actually losing money. Because savings is not really growing-

Mel Robbins 1:07:03 Oh.

Tiffany Aliche 1:07:03 You know? And it should be put to work. The purpose of... I want people... 'Cause people get mad about savings. They're like, "I want all my money to be put to work." But every belt is not meant to be a fashion Gucci belt. Some belts are safety belts. It's not for fashion, so-

Mel Robbins 1:07:17 That's right. Your, your car-

Tiffany Aliche 1:07:18 Yes.

Mel Robbins 1:07:18 ... has a buckle belt-

Tiffany Aliche 1:07:19 Yes.

Mel Robbins 1:07:20 ... in it-

Tiffany Aliche 1:07:20 I'm sorry.

Mel Robbins 1:07:21 ... but it's a safety belt.

Tiffany Aliche 1:07:21 It's not monogra- and it's not monogrammed.

Mel Robbins 1:07:22 Yes.

Tiffany Aliche 1:07:23 Right? The pur- the intention is for safety and that money, although it would be nice if savings grew astronomically, that money is just for safety.

Mel Robbins 1:07:30 I love that.

Tiffany Aliche 1:07:31 Mm-hmm. And then the excess, that no more than a year, should be put to work, absolutely. For some people the excess is anything above three months, some people anything above six months. I say no more than a year. So too much savings is actually detrimental. There's like the law of diminishing returns. One glass of water, so good for you. Four glasses, so great. 40, you're gonna drown.

Mel Robbins 1:07:51 Yes. I, that, that is, that's the first time I've ever heard that.

Tiffany Aliche 1:07:54 Mm-hmm.

Mel Robbins 1:07:55 And I think for those of us that has lost your money or nearly lost your house-

Tiffany Aliche 1:08:00 Mm-hmm.

Mel Robbins 1:08:00 ... or lo- like you don't ever wanna be in that.

Tiffany Aliche 1:08:03 Yeah.

Mel Robbins 1:08:03 And so I probably have too much in terms of savings-

Tiffany Aliche 1:08:06 Yeah.

Mel Robbins 1:08:06 ... but it's just sitting somewhere where the market can't affect it-

Tiffany Aliche 1:08:09 Yes.

Mel Robbins 1:08:09 ... the housing recession can't affect it. You know, but it's not doing anything.

Tiffany Aliche 1:08:13 Yes.

Mel Robbins 1:08:14 Wow.

Tiffany Aliche 1:08:14 And money that's not being put to work is losing.

Mel Robbins 1:08:16 Okay. So you're calling me a loser?

Tiffany Aliche 1:08:18 No. (laughs)

Mel Robbins 1:08:19 Is that what you're saying?

Tiffany Aliche 1:08:20 No.

Mel Robbins 1:08:21 Let's, so we've covered budget, debt, savings.

Tiffany Aliche 1:08:24 Mm-hmm.

Mel Robbins 1:08:25 And now let's talk about number four, which is credit.

Tiffany Aliche 1:08:27 Okay.

Mel Robbins 1:08:28 And this is a hugely popular topic.

Tiffany Aliche 1:08:31 Mm-hmm.

Mel Robbins 1:08:32 With your audience, with everybody. How can you improve your credit score?

Tiffany Aliche 1:08:37 So credit, if your cr- issue is credit, congratulations, it's the easiest thing to fix. So I want you to just, phew, woosah, 'cause credit is a thing that people worry about the most-

Mel Robbins 1:08:46 Yes.

Tiffany Aliche 1:08:46 ... but quite honestly, it's the easiest to fix. Credit is tips and tricks.

Mel Robbins 1:08:50 Oh my God.

Tiffany Aliche 1:08:50 That's it.

Mel Robbins 1:08:50 I love, tips and tricks.

Tiffany Aliche 1:08:51 Just tips and tricks.

Mel Robbins 1:08:51 Here we go, give me some tips and tricks.

Tiffany Aliche 1:08:52 Right? So first thing to understand that there are, there are multiple categories that affect your credit. It's 35% of your score is, um, is what your payment history is.

Mel Robbins 1:09:03 Okay.

Tiffany Aliche 1:09:03 Right? And so like do you pay the people on time? Do you pay at least a minimum? Well then, 35% of your score, you're good.

Mel Robbins 1:09:09 Handled.

Tiffany Aliche 1:09:10 30% of your score is going to be, um, amounts owed. So get your payments down.

Mel Robbins 1:09:17 Everybody, that would be the debt list-

Tiffany Aliche 1:09:19 Yes.

Mel Robbins 1:09:19 ... and the money list.

Tiffany Aliche 1:09:20 Mm-hmm.

Mel Robbins 1:09:20 Okay?

Tiffany Aliche 1:09:20 So if those two things alone is 65% of your score, so if you just like concentrate on getting your debt down and if you automate that bills account, do you see how it all comes together?

Mel Robbins 1:09:30 Yes, I do.

Tiffany Aliche 1:09:30 Yeah, so automate that bills account, 65% of your score is being positively affected. There's other things to consider with your score, is they look at length of credit history.

Mel Robbins 1:09:39 Okay.

Tiffany Aliche 1:09:39 Right? So length of credit history is just how