Your Rich BFF Vivian Tu Answers Personal Finance Questions

Hi, besties.

I'm Vivian Tu,

a former Wall Street trader, financial educator,

and the CEO of Your Rich BFF.

Today I'm taking questions from the internet.

This is Personal Finance Support.

[upbeat music]

User ChocolateRain comments,

It's very odd how these companies

are almost begging customers to split payments/buy

in 4 etc.

Something is off.

I hear you.

Buy in 4, after pay, like,

the Klarna conversation of it all.

It all started from a good place.

The background is these companies were utilized often

to provide credit to underbanked communities,

so people who couldn't necessarily get credit

in the traditional way,

they couldn't necessarily get credit cards

or loans from banks.

People could use these programs to purchase major things,

things like refrigerators, appliances,

a new laptop for work, work tools.

It started as a way to potentially help people,

but obviously capitalism [clicks tongue]

sunk her teeth into it,

and now all of a sudden companies are saying,

Hey, you can split your burrito into four payments,

four easy payments of $4.

Yes, burritos do now cost $16.

If you can use them correctly,

you're okay, but you miss one payment

and you best believe your credit score is gonna get dinged.

You are gonna get charged interest.

These are no longer safety nets providing funding

to underfunded communities.

They are predatory.

I do not use any of these programs

and I would encourage you to avoid them as well.

This question comes from kaiotikistaken,

Pros and cons of joint bank accounts?

This is a hot topic of mine,

but I think the healthiest strategy most often for couples

is to have a yours, mine, and ours strategy.

Joint bank accounts are great

because they make it really easy to split joint expenses,

so things like paying for your mortgage

or utilities or even date night and vacations,

but a joint bank account also opens yourself up

to a lot of risk.

I actually know a couple that had a joint bank account

and one of the partners, you know,

developed a pretty bad sports betting addiction

and drained that entire bank account,

but because he was a joint owner on the account,

there was nothing that my friend could really do about it.

So if you're opening up a joint bank account with someone,

you have to make sure that you really, really trust them,

they are financially literate and responsible,

and I still encourage,

even great couples in great relationships,

to still have their own money,

because we all need to have access to rainy day funds.

And I just think that it's so important,

especially for women,

to make sure that they have the money

to leave a bad situation in case things go south.

User patriciahunda is tired.

She says, What the hell is 'loud budgeting' now?

Y'all just be making stuff up.

I'm tired.

It's safe to say that a lot of people

are feeling the burn in their wallets.

Everything feels a little bit tighter,

from necessities, but also to just, like,

going out with friends.

And loud budgeting is very simply

when you are transparent about your own money goals

and what is available to you.

So you have four friends getting married next year.

They all want you to go

to their destination bachelorette parties.

They are all having destination weddings

and destination engagement parties.

It is okay for you to actually talk to them

and say, Hey, I have some money goals

and if I'm being totally transparent,

going to New York for your engagement party,

Cabo for your bachelorette,

and then Italy for your wedding is not in my budget.

I'm currently saving for XYZ.

I have to pay off this much debt,

but I wanna still support you

and be there for you as a friend.

Talk to me about what is most important for you

and what I should really be present at.

That type of transparency is entirely

what loud budgeting is about,

and it's just us being more honest

versus going into debt for other people's major moments

or to look cool or to do stuff just because.

Finerius asks, How do you balance saving for the future

versus enjoying life now?

You have to build the infrastructure

so you take all the decision making out of your day-to-day.

So when you sign up for your first job,

they have you give them a checking account

of where you want your paycheck deposited.

But did you know,

you can actually say,

Hey, I want 75% of my paycheck routed here,

I want 10% here,

and another 15% here?

This helps you really figure out

what goes to taking care of future you

and what you get to enjoy today.

Seekingwealth_ says, People really think skipping out

on their daily $5 coffee

will help them become a millionaire.

I am kinda torn on this one.

I agree, a $5 coffee every day

for a whole entire year works out

to be roughly a little less than $2000.

That's certainly not getting you to millionaire status

in the course of a year.

However, the behavior of dollar dribbling

oftentimes can lead you to become less wealthy

over the course of your lifetime.

So what does that mean?

If every day you buy that $5 coffee with intention

and it brings you so much joy

and it is the only thing powering you to get to work,

go get it.

But are you also buying a croissant with that?

And then are you also spending $15 on a salad for lunch?

And, oh, by the way, I didn't really feel

like taking public transportation home tonight

so I took a ride share.

When you do these little things that add up over time,

it can lead to less money in your pocket

and less money, more importantly,

in your investments over the course of your lifetime.

When you are just spending mindlessly,

it's not really adding to your life,

you will actually end up spending a lot of your money

and then looking back and feeling

like you have nothing to show for it.

So what I say is if you are going to make little purchases,

buy yourself a little treat,

do it with intention,

do it with meaning.

But in situations where you don't need

to be spending certain amounts of money,

you might be better off allocating that dollar

into an investment account for yourself.

That money doesn't go away,

it just gets to take care of future you.

JunoCrypto3 says, $20,000 in student loans,

still paying the price of bad decisions.

I'm sorry that you are still paying off your student loans,

but for maybe younger people

who are considering higher education,

what I really encourage you to do is actually go to bls.gov.

This is the Bureau of Labor Statistics.

They have an A through Z occupational handbook,

so they have everything from accountant to zookeeper.

Through every single one of these jobs,

they'll tell you how much education you need,

any sort of licensing requirements

or graduate degrees or anything like that,

roughly what this job would make.

Also, what different sectors pay for that type of job.

And that way you actually have a good gut check

of will this degree and major give me the actual career

that will fund all of the debt

that I might need to be taking to actually get it.

Toddbarry says, Got this great Chrome extension

that searches for discount codes when you shop online.

It only takes an extra minute

and it never ever finds a discount.

Those Chrome extensions more often than not,

they won't really find you anything.

But what I do think is real

is going through an affiliate website,

so things like a Rakuten,

before you are going to buy something.

They have a relationship with a lot of vendors

where they're like, Hey, if you drive us traffic,

we will give you 10% of each order.

And then they turn around and say,

Hmm, we'll give you 5% cash back

if you route your order through us.

Essentially, you get to split that commission with them.

So before I go shopping anywhere,

I head to a site like Rakuten.

I make sure that I see what sort

of cash back I'm able to get,

and then I use a rewards credit card

so I can get cash back again or maybe even travel miles.

Mymoneyculture asks, What should I do first?

Pay off my debt,

save for an emergency fund,

save for a house, or invest?

Okay, this is the easy peasy way

to go through the waterfall.

First and foremost, you wanna have an emergency fund.

This makes sense because you don't wanna get

into more financial trouble if the wheel rolls off

of your car or your roof caves in.

What I personally like to do is say three to six months

of living expenses in a high-yield savings account

if you're single,

or six to 12 months of living expenses

if you're a head of household.

Then we're gonna pay off our high interest rate debt,

so that's debt anything above 7%,

mostly credit cards.

Once we have that all paid off,

then you can start thinking about investments

and saving for a house so you can continue

to pay your low-interest-rate debt

while you start setting money aside

for more liquid investments.

DryEntrepreneur2342 asks, What systems do you use

to stop yourself from dipping into your savings?

I make it really hard for me to access my own savings.

You can have part of your paycheck go towards

a checking account and then part of your paycheck

go towards a savings account.

So if you can say 90% goes to checking,

10% goes towards savings.

Then make it some random password into the bank

that holds your high-yield savings account.

Make it hard for yourself to get in;

make it so that you have to click forgot password

and go to your email

and get a special code and log in again.

Because when you put enough barriers in between you

and spending from your savings account,

you don't feel like you have the right to dig into it.

Okay, a Quora User asked,

How can learning to negotiate effectively

increase your overall wealth?

Let me tell you one thing:

rich people love to negotiate everything.

I'm talking medical bills.

Fun fact: did you know 80% of those have errors in them?

They go and they actually negotiate and say,

Hey, I didn't get these treatments done.

Can I get a discount here?

And they're getting them.

On top of that,

things that you get subscriptions for,

so your Wi-Fi,

your cell phone bill,

all of that, you can negotiate it,

especially if you have multiple competitors in the area.

They wanna keep your business

and they are willing to offer you a discount

or maybe a locked-in lower rate for a period of time.

You should be negotiating for a raise every single year.

And you should be negotiating things

that are big expenses for you,

like rent, as well as what you would pay for a car,

and especially when you go

to make big purchases like a home.

The easiest way to negotiate is to, one,

do your research,

know exactly what the market rates for everything are

and where you might be able to find those discounts.

Two, it's to really prepare and set yourself up

for success with all of your information,

and then make a very clear ask,

and then stop talking.

Most of us try to walk it back or say,

Oh, but if not, it's okay.

Don't say any of that stuff.

Just wait for them to respond.

But more often than not,

you'll actually find that many providers,

many employers, will actually meet you halfway.

So once you actually get what you want,

make sure that you deliver on your end of the bargain

and continue being a great employee

or being a loyal customer.

This question comes from Irrational_thoughts1,

Are spending tracking apps really worth it?

So it depends.

Spending tracking apps are a great way

to see what you're spending on.

You can track it all you want,

but if you're spending more

than you have coming in the door,

you're still going to be in a net negative.

So what I really encourage you to actually do

is build out a budget that you can live with

and not be so tight on every single expense,

but have categories.

My favorite strategy is the 50/30/20 method.

50% of your after-tax take-home pay goes to needs,

so things like your basic housing

and transportation and groceries.

30% of your after-tax take-home pay goes to wants,

so that's like getting drinks with your friends

or going out to eat or going to a concert.

And 20% goes to taking care of future you.

I'm talking debt pay down and investing.

On Reddit, user Deep-Funny-5242 wrote a post

about the huge impact of quitting social media

on my finances.

I could not agree more.

And this is coming from someone whose entire career

is on social media.

But I feel like social media has convinced

so many of us that we do not have a good life.

And the problem of that is,

in our parents' generation,

our parents would take their binoculars

and look at the Joneses across the street

and be like, Ooh, the Joneses got a new station wagon.

But now, instead of being limited

to other people who are in your general income tax bracket,

we have unfettered access to everybody on Earth.

All of a sudden,

I can see what the inside of a private jet looks like.

I have no business knowing what that looks like

because I don't have private jet money,

and all of a sudden it looks like everybody's on vacation

all the time, all at once.

You're the only loser at home doing your job,

working, living a normal life.

But, in fact, that's quite the opposite of true.

I really encourage everyone to think about the incentives.

If somebody is really hardcore promoting something,

is it because they make an affiliate commission

when you buy one?

Cult-following items.

Maybe you don't need those things to be happy,

someone is just trying to sell 'em to you.

Decent_Age_1707 asks, How many different pots/accounts

do you put money into for saving?

I have a big pot that is my emergency fund.

I have a vacation fund.

I had a home down payment fund.

I bought the house.

We have a family planning fund.

In many cases, when you have your money

at a high-yield savings account,

you're actually able to divvy up

where your actual cash is earmarked

without having to open a bunch of other accounts.

And what I like to do is I actually label the names,

including a dollar amount.

So say, Emergency fund: $10,000,

and that way if I see the dollar value slip below

that amount, I can then top that account up

because I know it needs a little bit more money.

Dependent_Tap_8999 asks, How much do you trust generic AI,

like ChatGPT, for financial advice?

Point blank, not at all.

Not only are these generic AI platforms

not registered investment advisors with the SEC,

but ChatGPT in particular recently just came out

and said that they are no longer answering medical,

financial, or legal questions,

and my guess is it's because they ran out

of arbitration budget.

Listen, I think AI is truly going to be such a big help

in the personal finance space,

and that is why I built my own startup called Ask Dolly.

You can check it out at askdolly.com.

We are a registered investment advisor with the SEC.

You can get on-demand personal finance knowledge 24/7.

And then, if you do ask

an incredibly niche personal question,

we connect you with a live human certified financial planner

to make sure that you can get

the financial advice you deserve,

not just some generic AI slop.

SamRC1987 says, I'm just a guy heavily banking

on his Pokemon cards, Pogs,

and Beanie Babies to provide his only shot at retirement.

What I encourage people to think about when it comes

to things like art or collectibles or even wine,

your item is only worth

what someone is willing to pay for it.

Do they have value as assets?

Yes.

However, you have to remember,

the market for collectibles,

for art, for wine sellers,

they're not as liquid as things like the stock market

or even crypto or even real estate.

There are only so many people

who actually want collectibles.

In some cases,

if it's ultra rare and there's a huge community

and a cult following behind it,

yes, you have assets and they might be worth something,

but they're really only worth

what someone is willing to pay.

And more often than not,

in an economic downturn,

people are much less willing to pay for collectibles,

things like Pokemon cards,

because they have to pay for things like food,

things that are actually necessities.

InspectorNo376 asks, How do you handle unexpected expenses

when your budget is already tight?

This is exactly why we need to have an emergency fund.

I'll give you a story.

When I had just moved to New York,

I had a little bit of an incident with a bread knife

and chopped off the tip of my index finger.

I went to the ER.

The entire bill ended up being $16,000.

Even after insurance,

I still owed roughly, I wanna say, $1,300.

The problem was I didn't have that money.

Oh, but wait, my emergency fund did.

I had been setting aside money into an emergency fund,

and that was able to cover my medical bill.

Even if you don't think of your emergency fund

as money you have access to today,

it can bail you out of a really big, sticky situation.

So when your budget is tight,

what I encourage you to do is simple:

slowly start setting money aside.

This can be $10 a month, $20 a month,

whatever you have access to.

Over time, that emergency fund will grow,

grow, grow, grow, grow,

and when you have an unexpected expense,

you will have the dollars to be able to take care

of those expenses and better take care of yourself.

Ooh, this is a little bit of an old-school question,

but mdg_roberts1 asks,

Is it a good idea to keep a cash stash around the house?

Yes and no.

No, because any sort of cash

that is not earning you interest

in a high-yield savings account

is essentially being eaten away at slowly

by inflation and the cost of living going up over time.

Yes, because in some cases you will need cash.

So when a housekeeper comes

or maybe when you go to the neighborhood bodega

and just want to buy a couple things,

I think cash is efficient and effective

and has a time and a place,

but keeping too much of it at the house

does not benefit you in any way.

I probably keep 100-$200 in cash at the house,

at my house, at any given time.

Having the cash is helpful for my day-to-day life,

but it doesn't leave too much out of a bank

where I can actually earn more money on my money.

A question from the UKPersonalFinance subreddit,

Any tips for handling a partner

who keeps getting into debts?

I think someone who keeps getting into debt,

I think the word keeps is doing a lot

of the heavy lifting in the sentence for me.

I don't think debt makes you morally a bad person.

Many of us have debt; I have debt,

but you have to have a plan to pay it down.

And the fact that you have a partner

who continuously keeps getting themself

into a bad financial position tells me

that they do not value a dollar the same way you do,

that they are not responsible with their money,

and ultimately will not be a responsible partner for you.

And I know that sounds quite harsh,

but I do not want your financial future

to be jeopardized by someone who clearly isn't

as responsible as they need to be to be in a relationship.

Question from ChampionOk533,

At what income level should someone start

to consider a money manager/financial advisor?

At what level does it possibly 'pay for itself?'

You do not need a money manager or financial advisor

unless you have a really complex financial situation.

I'll give you two examples.

So if you are a high-powered attorney in a major city

and you make $650,000 a year,

you do not have a complex financial situation.

You make your money in one place,

you get a W-2 job from your law firm,

you are an incredibly high earner.

That number is huge.

But because your money is coming in from one place,

it's very simple, cut and dry,

it's also very easy for you to perhaps invest

on your own or utilize a robo-advisor,

because this is going to help you save

so much money in fees.

Human financial advisors and money managers

more often than not charge 1 to 1.25% in fees

every single year of the assets they manage for you.

And over the course of your lifetime,

that could be six, maybe seven figures.

I really don't wanna give up that much in fees.

However, if you have an incredibly

complex financial situation.

Let's use Drake as an example.

This man makes money from album sales,

he makes money from streaming,

he makes money from touring, from merch.

He tours in multiple different countries,

so there's a ton of complication there.

He has a very complex financial situation,

and that is when a financial manager

or a money manager or an advisor might make more sense.

The next question comes from Rude-Ad-7287,

I'm in overdraft and can't get out.

I would appreciate any advice.

Simply put, it sounds like there is a discrepancy

between income and outflow.

Unfortunately, that really does mean you need

to increase the amount of dollars coming in the door.

So that means either getting a temporary side hustle,

getting a higher-paying job.

It means perhaps even working with a family member

to help put you in a position where you are able

to have the cash to pay certain things down.

Once you have more income coming in the door,

it's also about tackling perhaps

the existing debt problem you may have

or the spending problem that you may have.

If this is coming from a position of you're overspending,

I think that's one conversation.

You could consider things like credit counseling;

you could consider things like debt consolidation.

But if it's truly a needs-based problem,

so you are in overdraft trying to buy groceries,

you are in overdraft trying to pay for basic necessities,

this is a very tough situation,

because I'm not gonna sit here and try and pretend

like you can budget your way out of poverty,

you can't budget your way out

of a paycheck-to-paycheck lifestyle.

You actually just need to make more money.

Regardless of where you live or where you are struggling,

there are so many local resources

that might be able to help you,

whether that is a food pantry,

whether that is debt relief.

In certain neighborhoods in New York City

we have programs that can help eliminate

certain types of debt.

Maybe there are social programs,

social safety networks that can provide you mutual aid.

But please look into your local geography

and what is available both to you from the community,

but also the local government.

No_Cardiologist_1407 asks, How do people get rich

by faking being rich?

They don't.

You've heard of notable examples,

like Anna Delvey,

those house of cards always come crashing down.

What I always say is that if you focus all of your energy

on looking rich, it'll actually make you broke.

More often than not,

people who purport to have all of this money

and live this crazy lavish lifestyle

are not doing that well.

The richest people on this planet you would never know.

They would walk down the street.

And I think it really comes down

to being able to spend money on things

that actually bring you joy versus spending money

on things just to impress people.

Yjlevg asks, How can I keep my dad

from being taken advantage of financially

by family members, scammers, etc?

I love this question because I am

a first-generation daughter of immigrants.

In many immigrant communities

there is this level of obligation

to support family members,

but if you don't set healthy boundaries,

they are going to take from you

until you have nothing left,

versus you being able to lift them up.

What I encourage you to do with your dad for family

is to not only maybe provide money and support in that way,

but also provide support through the form of education,

resources, and helping them help themselves.

As for scammers, this is a

more older-generation younger-generation conversation.

I actually forced my parents to walk me through

any sort of major financial decisions they're making,

because my parents were a victim of a phishing scam.

We have to make sure that we are protecting a generation

that didn't necessarily grow up as natively

on technology as we did.

I think it's really important to have those conversations,

let them know that they're not in trouble,

but you wanna help,

and setting them up for success

so that your parents are more technologically savvy.

That'll help prevent them from being scammed.

Next question is from ressem,

Is buying a home still worth it in 2026?

What do you mean by worth it?

If I'm being honest, right now,

it is cheaper to rent than buy in the vast majority

of major metropolitan cities.

However, when you ask yourself is it worth it,

I want you to think about a couple things.

One, how long do you plan to stay in that residence?

If you're not planning to stay

for longer than five to seven years at a minimum,

you should not be buying,

because the frictional costs of buying a home,

such as mortgage origination fees,

paying for an inspection,

the costs are very high.

If you, however, are planning on putting down roots,

you wanna be there for a while,

it may be a good idea.

Keep in mind, when you're a renter,

if something bad, terrible happens to you,

your toilet starts leaking at 2:00 AM,

that is your landlord's problem.

When you own the home,

that is now your problem.

When you are a renter,

you don't pay property taxes,

but when you own, you pay property taxes.

However, when you own,

the big pro is that you're building equity.

But what I always say is buying real estate now

doesn't have to look like what it looked like

when our parents did it.

I know multiple people now who rent their primary residence

but actually have investment properties

that they then utilize as part-time vacation homes

and might rent out the other part of the time.

They want to be able to buy a little piece of this Earth

and have it maybe for their future retirement,

but they don't necessarily feel like the geography

where their primary residence is located

is a good investment market.

So I would just say get creative.

Buying a home is not the end-all be-all.

If you buy one, it doesn't make you a winner.

Not having one doesn't make you a loser.

You gotta make sure you do what actually makes sense

for your lifestyle.

D-ckMOSS asks, Turning 40 and realizing that I need

to start saving for retirement.

Will I be okay?

One in four people has $0 saved for retirement,

so I don't want you to feel alone

and I don't want you to feel embarrassed.

Many people do not start saving for retirement

until they're later in their life.

However, I also have to hit you with a brutal truth,

which is you will have to work harder

than someone who starts saving for retirement in their 20s.

You're gonna have to put more dollars away,

and you are going to have to be a lot more deliberate

with the investments you choose.

And it is possible that you may not get to retire at 60.

You might have to wait until you're 65,

70, maybe even 75.

The honest truth is money doesn't

make people rich, time does.

The earlier you start investing,

the longer compound interest has to work.

It's essentially like a teeny tiny snowball

rolling down a mountain.

The longer you have,

essentially the bigger distance you have

from the top of the mountain to the bottom,

the more your money can grow.

While you are not completely up a creek without a paddle,

I would encourage you to not only

really prioritize retirement investing,

but once you hit age 50,

make sure that you are maximizing

those catch-up contributions

so that you can actually play catch-up

for a lot of those dollars that you may not have invested

in your 20s and 30s.

That's everything for today.

I hope you learned something,

and thanks for tuning in to Personal Finance Support.