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

Budget.

Yes.

It's in your name-

Mm-hmm.

... Budgetnista.

(laughs)

I hate that word budget. I feel like budget is a punishment, it's a diet.

Oh.

I don't want to be on a budget, Tiffany. What do I need to do?

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.

True.

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.

What is your biggest hot take on saving money?

You can actually over save.

What?

Yes. (laughs)

(laughs)

And money that's not being put to work is losing.

Okay, so you're calling me a loser-

(laughs) No.

... is what you're saying?

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

Mm-hmm.

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.

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, 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 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, 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, 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.