Dara M Wilson:

Hi, I'm Dara M Wilson.

Yasmine Khan:

And I'm Yasmine Khan.

Dara M Wilson:

This is Monday Ha Ha.

Yasmine Khan:

The podcast where smart funny friends bring money talk out of the shame drawer and on to the table.

Dara M Wilson:

Each week we discuss one of those money topics that pretty much everyone struggles with but nobody feels comfortable talking about.

Yasmine Khan:

And we are so excited to introduce today's guest. She is an expert on financial health and co-author of the Financial Diaries, which is a deep dive into the financial lives of 235 working American families. She's currently exploring how to strategically deliver cash infusions to people at the right time, and the right way in order to make a little money go a longer way. It is Rachel Schneider. Welcome to the show.

Rachel Schneider:

It's so nice to be here. Thanks so much for having me on.

Dara M Wilson:

Yeah, of course. We're so excited to have you.

Yasmine Khan:

How is your day going?

Rachel Schneider:

It's great. I'm sitting here shivering. I'm in the coldest conference room in the history of conference rooms. Other than that, it's a great day.

Dara M Wilson:

That is the legacy of men in the workplace. Making it colder for women because what is it? It's like the calculations are all based off of what men wore in the workplace in the 50s or something.

Yasmine Khan:

Yeah, ties, and suits, and all these warm things.

Dara M Wilson:

Cummerbunds.

Rachel Schneider:

I know. I know it's true.

Dara M Wilson:

You know men with their cummerbunds. They're always wearing them all over the place.

Rachel Schneider:

Exactly, their multiple layers and also I'm in New York City. It's like in September, nobody knows what temperature it is, so do we turn on the air conditioning? Do we turn on the heat? What's happening? What do we do?

Dara M Wilson:

Yeah, meanwhile, we're still sweltering and there's no end in sight.

Yasmine Khan:

Yeah, here at Oakland, yeah.

Dara M Wilson:

Yes.

Yasmine Khan:

You're at The Wing though. I would think it's a woman's space, that they would know how to adjust the temperature.

Dara M Wilson:

[inaudible] it.

Rachel Schneider:

I know. You would think, right? As you're saying that, I was thinking yes. It is the case that often conference rooms are cold because you know, exactly what you said, but I'm sitting in a women's centric space and it's just still that buildings are cold. What they have at The Wing are blankets everywhere though in case you're cold.

Dara M Wilson:

So they do know.

Rachel Schneider:

I could go get a blanket, but I'm going not bother with that.

Dara M Wilson:

You don't want to get too too cozy on a podcast recording.

Rachel Schneider:

No.

Dara M Wilson:

It is easy to feel like you're at a sleepover and just drift off if you don't stay alert.

Rachel Schneider:

No, at a sleepover and you stay up all night gabbing with your friends.

Yasmine Khan:

That's true. That's the vibe we really try to bring to the podcast of like we're going to brain each other's hair and play a few pranks.

Dara M Wilson:

right.

Yasmine Khan:

You know, it's going to be great.

Dara M Wilson:

Play a few pranks.

Rachel Schneider:

Exactly.

Yasmine Khan:

Yeah, you know like where you put the hand in the water so that ...

Dara M Wilson:

Make somebody go to the bathroom.

Yasmine Khan:

Yeah.

Dara M Wilson:

Rachel ...

Yasmine Khan:

It is actually just mean.

Rachel Schneider:

Right.

Dara M Wilson:

Did you, yeah. I was going to say, did you play any pranks? Did you do sleepovers as a kid?

Rachel Schneider:

Oh, yeah, but I did not play any pranks. We did that thing you try and levitate somebody. Did you guys do that thing?

Yasmine Khan:

Yeah.

Dara M Wilson:

Yeah.

Yasmine Khan:

Light as a feather, stiff as a board.

Rachel Schneider:

Yes.

Dara M Wilson:

Yes. I was levitated at a summer camp. A magician came in and I volunteered. I was levitated and it was really creepy because I couldn't figure out how it was done. I didn't do a lot of sleepovers. I think I don't know. Me and a lot of my black friends, that was just not a thing, letting your kids go to some strangers house.

Rachel Schneider:

Yeah.

Yasmine Khan:

I was not allowed to do sleepovers either. I think ...

Dara M Wilson:

It was like a family.

Yasmine Khan:

Yeah.

Dara M Wilson:

I could go to like a cousins.

Yasmine Khan:

I'd go to cousins house.

Dara M Wilson:

And even then, only certain cousins.

Yasmine Khan:

I was allowed to have sleepovers, though. It was always at our house.

Dara M Wilson:

Same, same, same, same.

Yasmine Khan:

Yeah.

Rachel Schneider:

Yep.

Yasmine Khan:

But yeah, light as a feather. Didn't you ever feel like maybe you were kind of levitating, like if you concentrated real hard and just let yourself feel it? Maybe it was just me.

Rachel Schneider:

Well, at some point I want to hear more about actually being levitated. That's crazy to me. Did you figure out how the magician did it?

Dara M Wilson:

I, at the time, thought that there must have been ... I don't know what the construction item is called. It goes [inaudible 00:04:02].

Yasmine Khan:

Like a platform or something?

Dara M Wilson:

Kind of. It has two spikes and it goes into the wood platform.

Yasmine Khan:

Oh, like on a stick.

Dara M Wilson:

A forklift.

Yasmine Khan:

Oh.

Dara M Wilson:

Yeah, yeah, yeah. Two spears, like a fork and then it lifts.

Rachel Schneider:

Right.

Dara M Wilson:

I thought that that's what it was but then I like [inaudible] tried to look behind. It wasn't there. Like maybe, I just actually got levitated.

Yasmine Khan:

Maybe that's why you weren't allowed to go to sleepovers because it was more about just like black magic and trying to keep you safe.

Rachel Schneider:

Right.

Dara M Wilson:

It's like the schools that are banning the reading of Harry Potter because they're like, "They have real spells in there."

Yasmine Khan:

Yeah, yeah.

Dara M Wilson:

My parents were like no leviosa. Wow. I surprise myself with that reference. I don't even know that lived inside of me.

Rachel Schneider:

Oh, that's super funny.

Yasmine Khan:

Well, it is time I think to open up our mailbag. It's something we do each week just to kick off the episode. Let's read what our lovely listeners have had to say today. Jess Barns wrote in to say, "Listening to Money Ha Ha while I worked today. Love listening to funny women give me life lessons that I definitely need to hear."

Dara M Wilson:

I'm so glad that @justtypes said that because we are also giving each other life lessons that we need to hear.

Yasmine Khan:

Yeah.

Dara M Wilson:

We need to take our own advice.

Yasmine Khan:

Sometimes I listen to our episodes and I'm like I need to do that more.

Dara M Wilson:

And sometimes I listen to our episodes I'm like wow, I am a cautionary tale.

Yasmine Khan:

That's mostly what we're here to serve as, cautionary tales. Walking, talking, giggling cautionary tales.

Dara M Wilson:

We also got some feedback from our episode with Berna, @heyberna who is so much fun to have on. @hippyamber said, "So hyped by this episode. Being black and Filipino, I can relate to a lot of the things said on this." And then fire emoji, fire emoji, fire emoji. That's right. That's right.

Yasmine Khan:

Yes.

Dara M Wilson:

Three of them.

Yasmine Khan:

They also said, [inaudible] said, "Beautiful women doing a beautiful thing." With two high five's in a row, which I'll take it. I love it. I'm happy about it. Why not?

Dara M Wilson:

@shygirl04 says, "Thanks for another great funny and relatable episode. Got some horrible money advice growing up from different people. Glad I'm not the only and I was able to make some smarter decisions. Hope to pay it forward to my friends, and family, and others in the community." That's right. Pay it forward.

Yasmine Khan:

Yes.

Dara M Wilson:

All we are trying to do is dispel these myths, get rid of all your bad money advice, all money shame, all your money juju that is making things more difficult for you. Tell all your friends right now, immediately about this podcast.

Yasmine Khan:

Let the sunshine in. Talk about it because yeah, that's how these things get easier.

Dara M Wilson:

That's right.

Yasmine Khan:

And Libby Britten said, "Oh, God. You guys had Hey Berna in the office. I freaking love her." Well, so does everyone.

Dara M Wilson:

So do we.

Yasmine Khan:

And so do we. It's a great episode. You guys should check it out.

Dara M Wilson:

If you are all following us on social media, there has been passed around now a video of Berna, Yasmine, and myself dancing to Taylor Swift music.

Yasmine Khan:

Yes.

Dara M Wilson:

Which was chosen specifically for a member of the Money Ha Ha team, who is a Taylor Swift fan. I'm not going to out that person. We do look very silly and it is a very fun video.

Yasmine Khan:

It is a fun … actually, watching that video made me realize I've definitely hit a point in my life where like I'm just like this is what I look that. That is how I jiggle and we're just going to embrace it.

Dara M Wilson:

There was a moment where I was talking about squatting and actually doing squatting and was like I'm okay with that. It's not great, but it is truthful to where I am. @savorynoondaydrama, wow that's a lot of name. I love that. Says, "Talking about relieving stress, which includes me spending time just feeling the wind and listening to podcasts and I am admittedly obsessed. I'm not a big television person, but I do not have time for it anyway." Brag, "My favorite podcast are Mom Struggling Well, Money Ha Ha Pod because they're women who have good info and it all feels very relatable." Oh, thank you.

Yasmine Khan:

Yeah.

Dara M Wilson:

This is a nice mailbag segment. This is so great.

Yasmine Khan:

It's getting all warmed up and feeling good, which is what we usually like to do, warm you up, make you feel nice and relaxed, and then we come at you with the stressful stuff.

Dara M Wilson:

Yeah, that's one way to put it. We are talking today in this episode about lending options or borrowing for a cash crunch. What do you do when you need some money and you need to borrow from somewhere? There's lots of situations where people are in a crunch for cash, need to borrow. Rachel, we're so excited to have again, is an expert on the problems that lead to needing to borrow, and which solutions are better than others. We're going to talk about both of those things today.

Yasmine Khan:

Before we get started, we are just going to take a little moment to step into the no-judgment zone.

Dara M Wilson:

Zone, zone, zone.

Yasmine Khan:

Yes. This is a segment where we share our own experiences with our weeks topic without judging each other or ourselves, which is really, really important too.

Dara M Wilson:

I have said this before and I will reiterate. I advise everyone listening to also not judge us.

Yasmine Khan:

Dara, what's your no judgment story for this week?

Dara M Wilson:

If we're talking about borrowing in cash crunches, I think the story that's top of mind for me, I feel like all of our topics lately, honestly, have been very [inaudible] and sweaty. I get super nervous every time we start talking but let me just dive on it. A few years ago I had made a decision that one of my credit cards was actually going to be a charge card. I say I made a decision. They sent me the card in the mail and I was like, oh, this is fancy. And so, I signed up for the card because they pre-approved me.

Dara M Wilson:

I've had it forever. It is a charge card and not a credit card, which means at the end of the pay period, I need to give them money. There is like a very little grace period. There's no like just roll over with interest and not give you my money right now. I found myself in a position where I was not able to do that. I was kind of looking around at all of the different options that I had. I actually felt like I didn't have a whole lot of options, or at least I didn't know where to turn. And then my bank ... again, this is letting other people make decisions for you. My bank was like, "Hey, do you want to do like a credit consolidation, a balance transfer?"

Dara M Wilson:

I was like, "Okay, yeah. I'll do it." They have these great introductory rates and they're like, "As long as you pay it off within this time period, you don't pay any interest at all." I was like, "Well, I'll definitely do that." But like why would I think I was going to do that when I'm also the person who got myself into this situation in the first place? Like those are not the same people. It took longer than I had anticipated, but as long as I should've anticipated to pay off the whole balance transfer.

Dara M Wilson:

I also was very grateful because it ended up not really having that negative impact on my credit because the bank also gave me ... the increased my credit limit at the same time, just randomly. My credit score still ended up being good. It didn't have the negative impact of not being able to pay off the thing, but I also was very embarrassed about being in this situation, to begin with. It was just like you spend too many monies. That's all it was.

Yasmine Khan:

No judgment.

Dara M Wilson:

I need to wipe off my upper lip.

Yasmine Khan:

It is happening.

Dara M Wilson:

Yasmine, what about you? What is your cash crunch no judgment story for this week?

Yasmine Khan:

In past episodes, I've talked about at grad school, the last semester of grad school, not getting the financial aid that I needed and finding myself with a lot of credit card debt. Another big consequence of that was I moved to Providence Rhode Island, which is if you're a California girl, just like basically another planet. Four seasons are nice and all but digging your car out of the ...

Dara M Wilson:

Overrated.

Yasmine Khan:

Very overrated.

Dara M Wilson:

Overrated.

Yasmine Khan:

Digging your car out of the snow. It's just not the life I imagined for myself. I was so excited to just come back to California. But because I ended with all of this credit card debt that I hadn't anticipated having, and not a lot of great job prospects. You know I had my masters degrees. I was so excited, but it turned out it was right in the middle of the recession, 2010. There were not a lot of options for just getting a job, but even just fulfill the basics of putting a roof over my head, and putting food on the table, and putting gas in the car.

Yasmine Khan:

My mind was just so occupied with those basic things, I literally could not scrape together the few hundred dollars it would take to fly myself home. I tried many things, including at one point, I took all of my personal belongings and sold them at a yard sale, which is really sad. When I look back, there's just little things you collect over your life that are meaningful to you, that remind you of different periods of your life. I literally had to just release and get rid of all that stuff just so that I could in my mind, make the move cheaper and easier.

Dara M Wilson:

Right.

Yasmine Khan:

Even with that, I think one thing we talk about a lot is just the cognitive load of being so strapped for cash. I was working a bunch of waitressing jobs. I was also a cheesemonger, like selling cheese at the farmer's market every Saturday morning. I'm talking to very fancy people about the wet Rhine this and all the goodness.

Dara M Wilson:

I'm never going to not laugh when you say, monger.

Yasmine Khan:

Yeah, it's the real, it's the thing.

Dara M Wilson:

Any kind of monger.

Yasmine Khan:

It's the name of the job. I would spend every Friday cutting cheese. You may also laugh at that.

Dara M Wilson:

Thank you for the permission.

Yasmine Khan:

Yeah, but my day to day was just so filled with what am I going to do to get by until the next day? I ended up being stranded in Providence for over a year, unable ... I had bad credit so I couldn't put a plane ticket on a credit card. It was incredibly lonely, incredibly isolating. I'm lucky I had a great group of people that I lived with. I had lived in this big house full of just really wonderful people. We also sort of pulled together and supported each other. That was really helpful. I didn't have any way of literally just getting myself home.

Yasmine Khan:

There were no financial institutions that were willing to help me out because, at that point, my credit was just completely maxed out because that last semester of school I didn't get that loan. I had maxed everything out. I could barely pay those bills. Eventually what ended up happening was a good friend of mine gave me the money to come home. That was a really hard thing for me to accept emotionally. I like to be more of a giver. Receiving is really, really hard. It was a person that I love and trust. She's a really important person in my life to this day. Her thing to me was just like it's the weight that it has for you is not the weight that it has for me.

Dara M Wilson:

That's very kind.

Yasmine Khan:

It was. You know, I think having those relationships is important and being thoughtful and mindful about just what you're willing to receive and ask for. I probably should have asked a year early because I was really depressed being so far from home. Yeah, that was when credit is not available to you, that's the option that you have sometimes if you're lucky.

Dara M Wilson:

Yeah. What about you, Rachel? Do you have a no judgment story to share about being in a cash crunch?

Rachel Schneider:

I do, although, I feel like it's the opposite kind of no judgment. Like my life has really genuinely been one of ease. When I hear these stories, I also always just feel grateful and really lucky. When I was in college and I should give more context to that, right? After grad school, easily found a job that paid lots of money and so most of my adult life and I had worked in the private sector for a bunch of years. And then I went into the nonprofit world, but I still was far enough along in my career that my financial life was pretty steady.

Rachel Schneider:

Most of my adult life, I haven't really experienced much financial challenge. When I was in college, my parents paid for school, which was awesome and really lucky. I thought I should pay for my own living expenses or I should at least contribute in some way, so I waited tables. There were some times then when I would get short, right? When I just didn't and a lot of that, to be honest, was poor ... well, it was exactly what I ended up studying later, right? That when you're waiting tables and you don't know exactly how much money you're going to have, then calibrating that to exactly how much you're spending, can be hard.

Rachel Schneider:

And so, I just got it wrong sometimes. There wasn't anything big that happened. It was just I spent more money than I had. I was super lucky because I could go to my parents and they would bail me out. The one time that I remember really strongly when that happened when I had racked up credit card debt, which to me at the time seemed like so much. In hindsight, I think it was $350 or $400, but it was really a big amount for me at the time. I was so ashamed to go to my parents and ask for them to pay that bill. So ashamed and it really took a lot to ask them. I put it and I put it, and I let the balance build up unnecessary because of exactly what you were saying. It didn't feel good to ask, even though obviously, like for where I was at that point in my life, that was pretty clearly the answer.

Dara M Wilson:

Right.

Rachel Schneider:

You know, but it's tough because we have all these emotions built up around what we are doing for ourselves, verses, what we want other people to help us with. It can be hard. We want to think that money is just about the dollars and cents, but it's not. It usually about the emotions.

Dara M Wilson:

Yeah.

Yasmine Khan:

Yeah.

Rachel Schneider:

I mean I may be saying that too strongly. It is often about the dollar and cents. If you don't have enough for the cost of living, then that's a real math problem, but a lot of people's decisions about money are about the feelings.

Yasmine Khan:

Yeah. I mean we talk about that a lot on the show. It's similar to how people talk about food. It's not just about calories in, calories out. It's about how you're feeling and how your emotions affect the way that you have that relationship with that thing. With money, it's the same. We all have different barometers. I remember, yeah, $300 for one person can feel like an overwhelming about. I remember at one point having an amount that I think was like $1,500. I just felt that was going to crush me. I had friends who were just like, "Oh, it's no biggie. You'll, you know."

Yasmine Khan:

And just being like, "What?" Like I can barely get my bank account to stay above $300 in a paycheck cycle. I don't know why this is so dismissible for others. We all have a different barometer.

Dara M Wilson:

Yeah, we have different baselines. I do appreciate you being explicit about how lucky you have been. I think when we have these conversations, it's important to be transparent and genuine when we're talking about these things so that people don't feel like well, if it worked out for this person, it should've worked out for me. People are coming from different sets of circumstances. I have talked on this show about borrowing from my parents. It happened one time when I was moving to California and it was very difficult and then it has not happened since.

Dara M Wilson:

As both of you speaking, I was just realizing when I was talking about my situation, it never crossed my mind that that was a possibility to go to them. I am just, I am the daughter to be successful and not to be a burden. To talk to people about things that are going on, but after I have racked it up and be like, oh, you would've been laughing because one of my eyeballs was on the ground. You know and just like but after I've popped the eyeball back in and turned it into a story, as opposed to here's what's happening right now. I think sharing what the baselines are for different people are very important.

Yasmine Khan:

Yeah.

Rachel Schneider:

Totally. I think that one of the hard things, when we think about money and money advice, is that the natural instinct is to project from your own life and say, "Well, I did it this way so you should do it that way." But, we're all coming from different places, so that doesn't necessarily work. A lot of my professional life has been about like how do I deepen my understanding of other peoples experience because mine isn't really going to be the experience that helps us come up with the right answers for a lot of people.

Dara M Wilson:

Right.

Yasmine Khan:

A lot of that is about uplifting the voices of people who have different experiences, which I think is something you've done a tremendous job at in your career.

Rachel Schneider:

Ah, thanks.

Yasmine Khan:

And in your book.

Rachel Schneider:

I tried. I tried.

Dara M Wilson:

Well, on that note, let's dig in a little deeper, learn a little bit more about this week's topic since when we have experts on, we like to take our facts section and actually ask the experts questions. Our first question for you, Rachel is, can you describe for us what the situations are where people need short term access to extra cash.

Rachel Schneider:

So many. I know you guys usually give some numbers, and you've probably given the number that about 40% of American's can't easily come up with $400 if they need it, which is a number the Federal Reserve has been putting out every year. They do this annual survey, and they ask this question. I think it was initially super shocking for people, that 40% of American's don't have $400 set aside that they could easily handle an unexpected expense. When you dig into a why is that? It's I tend to think about it as a systemic problem, right?

Rachel Schneider:

Wages just have not grown at the same rate as the cost of living. That's been the case for several decades now. So real wages adjusted for inflation, are not growing fast enough to keep up with the rises in the cost of housing, the cost of education, the cost of transportation. That leaves people with really a very thin or nonexistent margin with which to put aside some money. So then when that's your situation then you layer on to that, okay, I'm living at break-even or just barely breaking even already. Layer on to that that people have a lot of volatility. They have a lot of ups and downs in their earnings and ups and downs in their spending need.

Rachel Schneider:

How do you manage against that, right? If your rent is due tomorrow, but you don't get paid until next week, and you live with zero cushion, then just the fact that your bills are due could mean that you don't have the small amount of money, or the big amount of money that you need in this moment.

Dara M Wilson:

Right.

Rachel Schneider:

I talked to somebody a few years ago when I was first doing the diaries research, that stuck with me so much on this point. This person was talking to me about how they wouldn't fill up their gas tank because it wouldn't make sense for them to have the full dollar amount of what it cost to fill up their gas tank sitting in their car, basically, in the form of gas. What if something came up tomorrow and I need that cash? And so this person was going to fill their tank every $5 or $10 worth of gas in order to preserve some liquidity. That's a lot of people's experience.

Yasmine Khan:

Yeah because you can't have that gas for dinner once all that money is in the tank. I've interviewed people who have said, "I don't pay certain bills because they don't put a roof over my head or food in my children's belly." You have to really prioritize those things that are super immediate sometimes.

Rachel Schneider:

Yep, exactly.

Yasmine Khan:

What are some of the common traps people fall into with short term borrowing?

Rachel Schneider:

It's a tough one because you know so the biggest trap is to borrow money that you are not going to be able to repay, right? There are what people in the advocacy community rightly get super worked up about is the existence of payday loans. And so going to borrow, for those of you who don't know, a payday loan is a loan where you essentially sign over your next paycheck and say, "I'll repay this money with my next paycheck." If you're actually able to repay that loan, fine. The interest rates are super expensive. What happens is most people are not able to repay that loan.

Rachel Schneider:

And so the biggest trap is probably the thinking I'm going to be able to repay this and taking out this loan that you can repay. That now is going to roll over and roll over and rollover, and have higher fees and make it harder and harder to get out from under it. And then there's looser versions of that. You could have that same experience with credit card debt where it just grows and spirals out of your control. You could have the same experience with an overdraft on your checking account. There's lots of ways to end up over-indebted. I think they probably mostly stem from a real need and sometimes there's genuinely not being a better choice, therefore, taking out the loan.

Yasmine Khan:

Yeah.

Dara M Wilson:

Yeah.

Yasmine Khan:

It makes me think of because what you're describing because there's a certain amount of optimism that's going into this, which is like I will be able to do this in the future. I can't do it today. I think optimism is such an important part of resiliency and resiliency is really what helps us to make it through hard times. So, keeping in mind that we want to have that optimism and that resiliency, what kind of considerations should you take into account before making a decision on which lending option to choose?

Rachel Schneider:

Well, I take a deep breath in trying to answer that. I really do think that when people ... I totally agree with everything you just said. We need optimism in order to be resilient and when you're having a moment when you don't genuinely don't have the money you need for whatever it is, whether it's your move back home, or just paying your rent, or buying gas for your car. That need needs to be solved, right? It's not that we don't want people to be optimistic. That thought of if I borrow, I'll be able to repay is as you're saying like a really good healthy instinct.

Rachel Schneider:

I guess what you do really want people to do or what hopefully people will do is be more realistic with themselves. Balance that optimism with an awareness of what money they actually have coming in and try and genuinely exhaust all other options before taking on debt that they can't repay. You know, I think that it's hard for me to give that advice because I think that real answer is that people are dealing with things that are pretty much out of their control and doing the best they can. Yes, it's very easy to give the advice of hey, just don't take on that debt if you don't think you can repay it, but in the moment if you need to put gas in your car, you need to put gas in your car.

Yasmine Khan:

Yeah.

Rachel Schneider:

In a way, I want to say like don't beat yourself up about it if you end up over-indebted. Just take a deep breath and figure out the next step to get out of that situation.

Yasmine Khan:

Yeah. No, it's hard. Yeah.

Dara M Wilson:

Yes, it's true. It's just ...

Rachel Schneider:

I don't know if that laugh is like oh, that is [crosstalk] to say or yeah, yeah.

Dara M Wilson:

No, it is like ...

Yasmine Khan:

Empathy because it's just hard.

Dara M Wilson:

Yeah.

Rachel Schneider:

It's really hard, right?

Yasmine Khan:

It's hard and sometimes it's all we can do is just acknowledge that it's fricking hard.

Dara M Wilson:

Yeah. In the Financial Diaries, you talk about hidden inequality that people are usually explaining inequality is people failing in their personal responsibilities. What have you learned about in your research about why people find themselves needed to borrow money? Why certain groups find themselves in those positions more than other groups?

Rachel Schneider:

Well, a lot of it actually goes back to the personal stories we all shared, right? Some groups have more cushion as a group. I could go to my parents instead of borrowing. That changes my financial trajectory in all ways from the beginning. It is the case that the wealth gap in our country, you know people are focused rightly on the income gap. There's big wage disparities in our country. I think an even scarier wealth gap where communities of color just own far less wealth than white communities in our society. That plays out in really big ways across the communities or across individual lives.

Rachel Schneider:

One of the things that we did in the book, is we looked at how ... I mean in the research and proceeded the book. We looked at which the extent to which people borrow and lend to each other, to their friends and family. So, family, right? Lots of people, like the first thing you're going to do before you go take out a high-cost loan, is you're going to borrow money from a friend. In our research study, 95% of the people that we worked with over the course of the study, either borrowed or saved or lent money with somebody in their community over the course of the year.

Rachel Schneider:

I should say what the research was a deep dive into the financial lives of working families who were all middle to lower-income across the country for a full year. We had a year's worth of information. What we saw was that people borrow and save with each other and help each other, right? It makes obvious intuitive sense. What we also thought was that the dollar amount that people could borrow or lend to or from each other varied by community. Some communities have more money in their community to borrow and lend to each other.

Dara M Wilson:

Right.

Rachel Schneider:

We do have these really big systemic structural challenges with money in our society. They then play out in individual people's lives in ways that like I think people take individual responsibility for and they think it's their own fault, their own responsibility to fix. They have lots of and that's not 100% wrong in that you do have to engage and try and fix your own financial life. But a lot of the root causes are these bigger challenges of inequality that we have. We could on and on across our society.

Yasmine Khan:

Yeah, that's really helpful. I think just to sort of piggy-back on that. I was really sort of drawn to the idea of the title of your first chapter is that these hidden inequalities. You describe that for some of the families that you are interviewing, from the outside it appears that everything is sort of middle class and stable, but within there on the inside of the home, there's a lot more instability. Can you just talk a little bit more about that and what you mean by these inequalities being hidden?

Rachel Schneider:

Yeah, for sure. We tend to think about inequality as really about wages or about wealth accumulation, but when we were talking about a hidden inequality, we were talking about a different idea around finances which was really the ability to be stable in your financial life. The ability to feel secure in your financial life. What you see when you look at numbers in the American population is that people feel a level of instability pretty high up the income range. As many as one-third of people who earn $100,000 or more in their household, still report being financially ill healthy, if you will.

Rachel Schneider:

They still say they don't necessarily have an easy time paying all of their bills or they don't necessarily have enough saved for the future, or feel confident that they could cover it if a bid disruption happened in their life. Pretty high up the income range, people still feel a sense of insecurity. The way that showed up in the lives of the people that we were getting to know was in stories like one woman who really did present as middle class. Owned a house with her husband, three kids, two cars, full-time work and she still said, "You know, I don't know if I should pay my mortgage right now. I have the money on hand, but I'm worried." It's that same gas question.

Dara M Wilson:

Wow, yeah.

Rachel Schneider:

She was saying that like, "I don't know if I should pay this bill right now because if I pay my mortgage right now but then next month my husband works less than he usually does, then I won't be able to pay for something else and then I'll have to borrow from my sister. I don't want to borrow from my sister." What's going on for a lot of people, is that even if they have a sort middle class in air quotes, life, they still don't have the feeling of eased and confidence, and stability and security that we associate with having made it in the middle class.

Dara M Wilson:

I think we are, Yasmine and I both heard many times in this episode, just having a lot of moments of like digesting and being like, yeah.

Rachel Schneider:

I know. I know I was thinking I'm like the doomsday. Here is this Money Ha Ha. It's not Money [inaudible 00:33:59]. [inaudible] a sad part. I know but I do feel like the hopeful part ... I don't know, part of why I'm so big on arguing these systemic ideas and arguing about the deeper inequality that we have is that I do think it's so important to help individuals take themselves off the hook like in a way. Let's acknowledge that we have a bigger probably and at least not feel personally shamed and personally bad, right. This woman that I'm describing who didn't know if she should pay her mortgage, that was a shameful feeling. That was I screwed up feeling.

Dara M Wilson:

Absolutely.

Rachel Schneider:

It could just as easily have been a, oh crap, like something bad is going on in my neighborhood feeling, instead of a, I've screwed up feeling.

Yasmine Khan:

We are shame magnets. We tend to take it on all ourselves.

Dara M Wilson:

Yeah.

Rachel Schneider:

Yeah, we do. We take it on ourselves. And to be clear, what was most inspiring about the diaries stories and about these stories of instability is how creative, and resilient, and amazing people are in figure out workarounds so that they still can make their lives work. They might have worry and they might not feel a sense of ease, but they're making it work.

Dara M Wilson:

Yeah, people are still, they're finding a way to make it work. They're finding ways to find joy, despite all of it.

Yasmine Khan:

Yeah.

Dara M Wilson:

Like step one is uncovering the stuff, which people like you are really helping us to do. Step two is enacting all the change that needs to happen to relieve some of the stress for people. In the meantime, while we're figuring that out, people still need to live and they are which is ...

Rachel Schneider:

Yeah, totally.

Yasmine Khan:

Yeah.

Rachel Schneider:

Totally. Exactly. Like this woman I'm talking about who didn't know if she should pay her mortgage, she was amazing in talking about how she set aside ... like she was super creative in her saving strategy and super creative in avoiding loans when she didn't have ... her way of strategizing around the volatility that the family was experiencing was to when there was a sale in her neighborhood, she would just stalk up on toothpaste, or toilet paper, or pork chops, or whatever, right? Her freezer was full. Her pantry was full.

Rachel Schneider:

She had a feeling like that's how she worked around the volatility and worry. She made herself feel like they were going to be okay. Her family was always going to have food on the table and they were always going to have what they needed because she was really resourceful and creative about making their money life work.

Dara M Wilson:

It's also so important to have that feeling of control in your life.

Rachel Schneider:

Totally.

Dara M Wilson:

Part of what could be detrimental when you are realizing like oh, I am somewhat a cog in a machine and a system is working against me. It does make it feel like okay, so then what can I do?

Rachel Schneider:

Yeah.

Dara M Wilson:

Actually, which is a great transition into our next segment, which is our action item. Yasmine, song. Yes. Each week we give you a simple thing you could right away to get better at money. This week I believe we're going to get our action item from our guest. Rachel, do you have an action item for our listeners?

Rachel Schneider:

I do have an action item for our listeners. I do think the thing to do is to put yourself on a savings habit in some way. This could look different for different people. Some people find it really effective to set up an automotive transfer from their checking account to their savings account. Other people pick one of the many amazing new-ish [inaudible] apps that help you to save. Even if you're saving like a $1.00 a week, it does add up. Eventually, you find yourself with the cushion that can help you avoid borrowing. It can be hard to do. It can feel a little scary to do, but if you set up something that allows it to be out of sight and out of mind. And then before you know it, you'll have some money set aside.

Dara M Wilson:

And building the habit for saving is as important as the saving itself, at least in my personal experience. Getting in the groove of doing that is so important. =

Yasmine Khan:

Yeah and I think the invisibility of it to what Rachel was talking about, makes sense. Knowing that it's happening automatically and I don't have to think about it. Also, it opens up your mind to like this is possible.

Dara M Wilson:

Right.

Yasmine Khan:

I felt like this was not possible but there are automatic things that you can do to make it possible so that becomes a new part of your reality.

Dara M Wilson:

Sometimes, because we have talked in the past about how sometimes telling people to save feels like a joke. You're like I don't have any money to do anything. How can I save?

Yasmine Khan:

Yeah.

Dara M Wilson:

There are situations where literally like I said, it's building the muscle even if you're just putting aside like if I paid for something in cash and I get change, the change is not money for me for right now. It always goes aside.

Yasmine Khan:

Yes and have it, yeah, and even just that dollar. I think putting it ... making those small little things count is important. In the interviews I've done, a lot of people have mentioned like Dave Ramsey's baby steps. One of these baby steps is to save $1,000. For a lot of people, they're just like if you're calling $1,000 baby steps, then I just feel like an embryo. I am not even close to being a fetus in your world. It's just different levels. I think making it okay to just have whatever is in your savings be what it is.

Dara M Wilson:

Yeah.

Yasmine Khan:

If you have to dip into it to cover an emergency, then that's fine too. That's not a failure. That's what it's there for.

Dara M Wilson:

Right.

Rachel Schneider:

Oh, I totally agree.

Dara M Wilson:

Yeah, I think it's great advice.

Rachel Schneider:

Yeah well, I just really love what you both said about it because it is about the habit and the behavior and not the outcome. It's just not about how much money is in your account because if you get too fixated on how much money is in your account then you'll forget that oh, the point is when something comes up, I'm supposed to use that. That was the point. What just sometimes see is people not using their savings and instead of borrowing. I think part of that is because it was such hard work to accumulate that savings.

Dara M Wilson:

Right.

Rachel Schneider:

Then you don't want to spend it and that's fair. That's good, but I don't know, not if you're then going to pay interest on a loan at the same time. You're better off using your savings. You just start again. That's why it's about the behavior.

Dara M Wilson:

Right.

Rachel Schneider:

You just keep doing it.

Dara M Wilson:

Right, exactly.

Yasmine Khan:

Well, this has been a great conversation. I am going to transition us into the next part of our podcast which is, it was worth it.

Dara M Wilson:

There you go.

Yasmine Khan:

See, we're bringing the energy back [crosstalk 00:40:53].

Dara M Wilson:

There we go.

Yasmine Khan:

It was worth it is a segment where each of us shares something we spent money on in the past week that we actually feel was worth the money. I just want to emphasize the reason we do this is because there is so much personal shame around the spending that we do. A lot of what we try to talk about is that a lot of the problems are bigger than ourselves and it's okay. It's okay that we spend money sometimes on things that bring us joy. Dara, what is your it was worth it?

Dara M Wilson:

My it was worth it, for this week, is my little dog Milo, full name, Milo Marie Jackson the third nay pants. Thank you very much. He got groomed this week. He got a little puppy cut. The groom didn't happen when it was supposed to so I got a very deep discount. He got a tip to tail, all of it done for like under $30, which is amazing. He's so freaking cute. It's bananas. Every time he walks by I keep being like, "Come here."

Yasmine Khan:

I love you more now.

Dara M Wilson:

"Come here [inaudible 00:42:01]." I would never say that into a microphone.

Yasmine Khan:

But, I can see it on your face. I'm in the room with you and I know it.

Dara M Wilson:

He looks fantastic. I'll make sure we share some pictures with this episode. He looks so good. My little man.

Yasmine Khan:

How about you, Rachel? Do you have an, it was worth it, purchase that you felt good about in the last week or so?

Rachel Schneider:

I did. My parents were visiting this weekend and so I took my kids and my parents and we did this thing in New York City called, The Accomplice, which was like a walk around the village. It's a mystery. It's actors pretending to do things that actors do.

Yasmine Khan:

How fun.

Rachel Schneider:

It was like a cross between Escape the Room and I don't know, a walking tour. It was super fun and I bought the tickets for us. It was really nice. I mean it can be tough to know what to do with grandparents and kids that everybody will like.

Dara M Wilson:

Right.

Rachel Schneider:

Everybody liked it. It was worth the cash.

Yasmine Khan:

Yeah, those are my favorite expenses is like experiences because there's nothing more meaningful than just making memories with your loved ones.

Rachel Schneider:

It's true. My kids said, "Hey, this is a tourist thing. We live here.", but it was still good.

Dara M Wilson:

There's an Oakland version of that.

Yasmine Khan:

Oh, really?

Dara M Wilson:

I have been getting bombarded with advertisements for it. I feel myself ... I know getting weighed down.

Yasmine Khan:

We should do it. Maybe that will be our next it was worth it.

Dara M Wilson:

Oh, but the last time we planned an, it was worth it in advance, it turned out not to be worth it.

Yasmine Khan:

It wasn't. That's true. We went to a comedy festival that turned out to be bonkers unorganized.

Dara M Wilson:

Not worth it.

Yasmine Khan:

Yeah.

Rachel Schneider:

Oh, bummer.

Yasmine Khan:

Yeah.

Dara M Wilson:

What about you, Yasmine? What's your it was worth it for this week?

Yasmine Khan:

My it was worth it, as you know I've been doing less stand-up comedy lately and doing more writing sketch comedy. It's been really fun. It's really fun to go to a show and not have to get on stage, and just sit and watch other people act things out for you. I enrolled in sketch writing two, which is a little bit a chunk of change, but I'm really excited. I love writing comedy. I love writing scenes. I realize it's important for me to have something that I do in my downtime that's not just watching TV. I'm like maybe I'll write TV, or write shows.

Dara M Wilson:

Heck yeah.

Yasmine Khan:

It's been really really fun and it was worth the dollar bills.

Dara M Wilson:

Nice.

Yasmine Khan:

Life enriching.

Dara M Wilson:

Well, that's it for us. This has been so fun and informative. Thank you so much, Rachel for being here with us.

Rachel Schneider:

Thank you so much for inviting me. It was really fun to talk to you both.

Dara M Wilson:

Do you have any plugs, any places you're going to be, things people should know about, where you live on social media maybe?

Rachel Schneider:

Sure, I mean if people want more information about the research study I did or the book, it's called, usfinancialdiaries.org. You can always find me through that website. I am not so much on the social media. I am findable on Twitter, as Rachel Schneiderr. I really, I don't pay as much attention to that as I used to, so probably email is better.

Dara M Wilson:

God bless you.

Rachel Schneider:

Yeah. Yeah, what can you do? You can't be everywhere.

Dara M Wilson:

Better for your life, probably.

Rachel Schneider:

Maybe.

Dara M Wilson:

Yeah.

Yasmine Khan:

Yeah. All right, that's our show. You can catch us back here every single Tuesday. Next week on Money Ha Ha, we'll be talking about saving for a vacation with Erin Rein. If you like the podcast, show the support. Rate us. Leave us a great review wherever you're listening to this right now. Make sure you subscribe so you never miss an episode.

Dara M Wilson:

We would love to hear your lovely voice. Send us your stories, questions, and ideas for future episodes. Record a 30-second voice memo. Kick it off by telling us your first name and where you are, or you can remain anonymous and then email that recording to hi@moneyhahapod.com, that is H-I-@-moneyhahapod.com.

Yasmine Khan:

Follow us, tweet us @moneyhahapod on Twitter and Instagram. Dara is @daramwilson on Twitter and I'm @yasminek, Y-A-S-M-I-N-E-K on Instagram. Hey, Dara, anything you want to plug?

Dara M Wilson:

Yes. My all lady stand up show that I produced with Jackie [inaudible] called, Amazonians.

Yasmine Khan:

Yes.

Dara M Wilson:

We have a new place. We are going to be monthly every second Thursday of the month in Jack London Square in Oakland. If you're interested in that, the show is always packed. It's so much fun. It's a cider brewery, which is a lot of fun. You can get tickets for the next show, which is October 10th at bit.ly/amazonians1019, that's B-I-T.L-Y/amazonians1019.

Yasmine Khan:

Money Ha Ha is a production of the Even App. Learn more at even.com.

Dara M Wilson:

It's hosted by me, Dara M Wilson.

Yasmine Khan:

And me, Yasmine Khan.

Dara M Wilson:

Our executive producer is Jane Leibrock

Yasmine Khan:

And our producer is Phil Surkis.

Dara M Wilson:

Our designer is Allison Chan.

Yasmine Khan:

What what. Our social media manager is Nicole Maltrotti.

Dara M Wilson:

Our production manager is Adejoke Adegoke.

Yasmine Khan:

Our theme music is, Money, by Ann Teeg Naked Soul. Until next week ...

Dara M Wilson:

Have a nice life.

Yasmine Khan:

Life.