- Hi, I'm Melissa Bell publisher of Vox Media.

Welcome to Money Talks, Home Habits,

powered by Bank of America.

This is a virtual explainer event

centered around the new meaning of home

and how its purpose has suddenly shifted.

Today, we'll be focusing on saving when home

and how to manage and prioritize savings

during such an uncertain time.

People spending more time at home

means changing spending and saving habits,

but what's the proper way to save?

And what are we saving for?

For some, the transition to spending more time at home

comes with automatic savings.

The U.S. personal savings rate jumped to 33% in April,

the highest ever recorded.

Still in a June, 2020 survey,

23% of Americans reported that a lack of emergency savings

was their biggest financial regret.

So how can people put any new found savings

to good while still at home?

An emergency fund should be the foundation

of any savings plan.

Emergency funds should cover six to nine months

of regular household expenses.

Saving, however, may not come as easily

for those whose incomes have been impacted.

That's why it's even more important to set aside time

to go through your monthly expenses

and identify any that can be reduced,

whether you've found unexpected savings in recent months,

or have had to cut back,

take the time to prepare for the future

by reevaluating your savings priorities, today.

I'm joined by Tonya Rapley,

a financial educator and founder of My Fab Finance.

Tanya, it's great to have you here today.

- It's wonderful to be here.

- One question that is really top of mind for me,

is centered around the folks who have been impacted

in a disproportionate way because of the coronavirus.

What financial advice do you have for them?

- Yeah, Melissa thank you for asking that question

because as a financial educator and working in this field,

I have seen and I've worked with people

who even before Corona virus

were financially vulnerable and what we are finding

are people, particularly people of color

and people who might be deemed essential workers

who are working in, whether it is required fields,

or essential fields such as in the grocery store,

farming, et cetera, things that really help ensure

that our economy stays voting and our needs are met,

are vulnerable as well and they don't often

have those protections, but they haven't had them.

And that's one of the things that I'm hoping

that this kind of starts a conversation

of what it looks like to bring people up to,

equally before we even have something

like the Coronavirus start.

And so when working with clients

and helping people kind of navigate, okay, what do I do?

I'm already financially vulnerable.

What can I do to kind of alleviate some of this?

If anything, the first thing

is we gotta comb through those expenses.

What was helping you or what worked before coronavirus

might not work now.

So what you could afford then

you might be able to afford now

because maybe your hours have been cut back,

or maybe now you have additional health cost,

or maybe you're responsible for your childcare and so forth.

So you aren't able to go into your office

or you're not able to do things you used to do

to bring in income.

And so we need to cut back on those expenses

and we can do that by looking at our budget,

looking at what's going out

of our household every single month.

And then cutting back on the things that aren't necessary.

Like during this time we really want to be focusing

on those essential items.

The next thing is I would suggest that people take advantage

of help or assistance that's available to them.

I know that sometimes we might not want to or feel like,

I got this, but there's any time in history

where there's more help available.

It is right now.

So there are resources available.

I know here in Los Angeles where I live,

they have a rental assistance program.

They're rolling out when everything first started happening,

they were forgiving student loan payments

for a certain amount of time

and mortgage payments for a certain amount of time.

A lot of utility companies have been understanding

and are working with individuals

or working with their customers to look to see

what help is available on that side.

But then also, if you need any social services

or anything of that nature,

find out what you need to do to make sure

that you're getting groceries and so forth,

look into, grocery co-ops or food pantries nearby

and so forth so that you can kind of make up

some of that difference

in what you were spending in groceries

and maybe you can reallocate the money from your budget

to something else.

And then the last thing I really want people to do

is really think about stabilizing and what it looks like

to stabilize your financial foundation,

because that's important.

And I know that people might be in crisis mode.

It's like, I just can't figure out

how to get to XYZ point.

You're not alone.

There's a lot of people who are trying to figure out

how to get to XYZ point,

especially when the point has been changed as it has.

I don't think any of us expected for 2020

to look this way and to have this experience this year.

So alter your plans.

It's okay to alter your plans and change your expectations

of what was expected for you this year.

And just realize that you're not alone.

I think that, especially for people

who might feel like they are vulnerable

or feel even more vulnerable, you're not alone.

There are services there to help you

and we'll get through this.

- Thanks, Tanya.

I think that's a great point.

One thing that I think you mentioned at the very beginning

is how a lot of these issues predate coronavirus,

and this moment is perhaps exacerbating them,

but also revealing them.

Now I would love to bring on some guests

who are excited to ask you some questions.

- Craig, welcome to the today's discussion.

I'm looking forward to what you

and Tanya have to talk about.

- Hi Tanya, my question is like a lot of other people

I've been saving more money than usual

in the past few months.

I'm not going out shopping as much.

I'm not eating out as much and spending money socializing.

And I'm wondering if for those reasons it's a good time

to spend a little bit more money

than I might usually on large purchases,

despite the fact that I still have debt

that I'm working towards paying off.

And I'm wondering if there's a balance

of how much more money I can spend on myself

and so into paying off my debt.

- Oh, that's well,

that's good news that you are saving more money.

I think that as we've spoken to others

and when I'm talking to other clients I work with,

that's been a positive byproducts of this entire experience,

but what kind of large purchases are we thinking?

Like what do you have in mind?

- I think there's kind of two categories.

One is just splurging a little bit more on clothes.

For example, every other month

usually I'll make an online purchase and maybe

I'm more prone now to spend a hundred dollars

more than I would have before.

And then the other side is just for example,

I'm moving apartments next month.

And I have my eye on a few furniture pieces

that probably I wouldn't have considered before,

but now I'm like, okay,

well I haven't spent so much money the last few months.

Maybe it's okay to buy these now.

- Okay, all right.

So furniture and additional clothes.

Okay, furniture makes sense to me,

but clothes I'm like, where are you going?

Like, take me with you.

Where are you going?

'Cause I know I'm not going to any places,

but so just think about this,

so there's needs and there are wants, right?

So when it comes down to our needs,

that's shelter, that's food, that's clothing and so forth.

But then there's once and these things probably do fall

into the categories of wants.

You have an apartment, you're thinking about

how am I gonna furnish that apartment?

And we have clothes like, well maybe I want

a few different pieces of clothing.

So these are wants and there's nothing wrong with wants.

But when we're thinking about moving into priority,

making wants a priority,

then we have to look at how are we doing financially?

So dialing back to, okay, moving into this apartment,

do you have enough money set aside just in case

to cover that rent, because what we don't want to happen

is that you spend quite a bit of money

on furnishing this apartment.

We haven't put money aside and saving for this apartment.

And so something happens

and now we've got to sell the furniture.

We have to move out because we haven't been prioritizing

putting money aside to save for that.

So there's nothing wrong with spending money on your wants

and there's nothing wrong with making it a priority.

As long as you have already previously prioritize creating

that emergency fund and that savings cushion,

so that things were to happen,

you'd still be able to pay for those basic needs.

How are you doing on that?

Have you been able to save, to create that cushion?

- I would say I have that cushion, but like everyone else,

it doesn't hurt to always save more money.

I always want to see that number go up.

So I guess I'm looking for what

that balance could look like.

- Yeah, definitely.

And are you currently working?

- I am and I'm very lucky to have job security

for the near future at least I see my income

continue to come in throughout the coronavirus.

- Okay, well that is good news.

And so you're in a pretty good position.

The thing with furniture,

it doesn't mean that you're gonna have to buy

the most expensive furniture in the store, right.

It means that we're gonna shop around for a good deal

and make sure we're getting the best deal.

And so maybe there's still a way to save on that

and still put money aside in savings.

It doesn't mean we're gonna blow

everything out the water.

So keep that in mind,

as you're looking at your wants and so forth.

I think it is, there's this theory,

whereas in like certain major life experiences or purchases

lead to more expenses such as moving into apartment

and moving into a specific side of town,

now you feel like you have to have certain things

in that apartment or a certain lifestyle

or reflected lifestyle to participate in living

on that side of town or maybe it's certain clothes