Emergency Fund, Investing, Podcast, Saving
February 26, 2023
Listen to Podcast Episode:
On today’s podcast, Suze and KT unveil a fantastic new program with Alliant Credit Union and then we go to Suze School for an important lesson on how to use CDs as an alternative to our emergency fund.
Suze: February 26, 2023. Whose voice is that?
KT: That's KT!
Suze: What are you doing here?
KT: I was invited to Suze School because today is a great day and we've been waiting and it's finally here and Suze said KT, you're gonna help me make this great announcement.
Suze: Because you know when you do something that's really special,
Suze: I always want KT to be part of. You want to share it. We want to share the joy the joy. But you will leave when I give the Suze School part of this presentation, will you or not?
KT: Do you want me to or not? Do you all want me to stay?
Suze: They all love when you stay.
KT: You want me to stick around everybody. Okay first let's tell them the great news.
Suze: All right, so today, finally on February 26th,
Suze: you will be able to purchase three month and six month certificates of deposit at Alliant credit union by simply doing what? Going to take out your little Suze notebooks. You are to write this down. You are to go to My Alliant A. L. L. I A N. T dot com slash ultimate
Suze: U. L. T. I. M A. T. E. That is where you need to go
Suze: to be able to open up a certificate of deposit of three months or six months and why would you wanna be able to do that at Alliant Credit Union? So write this down for a three month certificate of deposit, it will be an annual percentage yield, an APY of 4.85%
Suze: For a six month certificate of deposit. Are you ready for this one? It will be an APY of what, KT?
Suze: So if you if you want 5% on your money, especially for those of you who are already members of Alliant Credit Union, you have a significant amount of money. Many of you do, in the Ultimate Opportunity savings account currently making 2.95% now you can take some of that money
Suze: and switch it to a three or six month certificate. A deposit for 4.85% for the three month 5% for the six months.
KT: Six months goes by really quick Suze. I'm opening one tomorrow.
Suze: Oh you are. Why are you waiting until Monday?
KT: Because I have to do it Monday.
Suze: Why is that?
KT: Well Monday...
Suze: What are you talking about? Monday you can go online and do it right now. KT, you do not have to wait at all. Oh she's looking at me.
KT: I have to tell everyone a secret. I'm really lazy so I have our office do it for me.
Suze: You're kidding.
KT: No, Barbara does it for me. I just tell her what to do.
KT: She's... Everone, Suze's mad at me. So let me ask you a couple questions about these certificates.
Suze: So you know what to tell Barbara?
KT: Yeah I'm going to tell her to open a six month because it's 5% and six months will fly by... fly by. So I want to start with maybe just putting a couple $1000 in. But
KT: can I put like any amount or is it in increments? Like is it like other certificates? How do I, can I just tell her put a couple $1000 in?
Suze: Why would you only put knowing who you are... Why would you only put a couple $1000 in? But let me answer the question for you, KT. The minimum amount
Suze: everybody that you can put in is $1000. But after that you can put any amount of money you want in. You could put $1535 in $3050. It doesn't have to be in $1000 increments. That's number one. Number two, KT, for somebody seriously like us. Okay. Especially because we live in Florida,
Suze: which is a tax free state, on the state level. So therefore why would you only put in? Seriously, KT tell Barbara to only put in two or $3000. Why wouldn't you put in...
KT: Like 10,000?
Suze: Why wouldn't you put in 100,000? Why wouldn't you do that?
KT: I guess I should.
Suze: Not only should you but since you can I would put up to $250,000 in this. If I were you because it's insured. Yeah by N. C. U. A. So I would absolutely be doing that.
KT: So wait. So if I put in let's say I put in 100,000 that's a lot of money.
KT: What happens after that six months? Do I have to do anything or does it roll over? Like how do I make a set and forget it?
Suze: Here's what you need to understand and let me just recap for you
Suze: Whether you're already a member or you want to become a member of Alliant Credit Union and you want to open up a three month or six month certificate of deposit to take advantage of these rates. You're looking for a certificate of deposit short term
Suze: where you would go would be to My Alliant dot com slash Ultimate. That is where you need to go number one.
Suze: Number two. When you get there. You will see that if you are already a member there will be a place for you to click.
Suze: If you are already a member, like you are KT, then what will happen is that you will have a choice okay that when your certificate of deposit matures it can either automatically renew at maturity for let's say another six months or another three months, if you bought a three month certificate
Suze: a deposit. Or you will also have a choice if you want to to transfer into any account that you're going to designate when you open the CD on the application. You're going to be able to designate if you do not renew what Alliant account you want this money to go back into. However for new members now listen closely.
Suze: If you haven't already opened up an Ultimate Opportunity Savings Account or you're not a member with Alliant Credit Union, you will also go to
Suze: My Alliant dot com slash Ultimate. You will automatically then become a member when you sign up to open up a certificate. But it will be a default for you that when your certificate of deposit matures it will automatically renew. Now you can change that
Suze: anytime you want. In fact, Alliant will send you an email asking you what it is that you want to do. So again, it's very very easy to change an automatic renewal. Did that help you KT?
KT: Yea, I'm going to do it.
Suze: You know everybody as you can tell, KT has been your
Suze: really good friend over all these years because she really is like so many of you
Suze: where she can get confused very easily. It's true, right, KT?
KT: I don't get confused. I just don't have as much knowledge as you.
Suze: Well, of course you don't. There's only one Suze Orman. For those of you who maybe get confused or you don't know what to do and you don't know who do you ask now? Who do you go to at Alliant to ask a question. The other great news that we have for all of you
Suze: is this: we have created an email address that's going to serve as a helpline for all of you. So if you have a question and this is only for Suze Peeps. So if you came to Alliant through me through this podcast and you need help with anything that has to do with your Alliant Credit Union account.
Suze: You're trying to become a member, whatever it may be. Whatever you need help with write this down. Send an email to Suze S. U. Z. E. Suze help at Alliant Credit union dot com.
Suze: So if you want help, don't now go to straight to Alliant Credit Union. Don't go calling them, go to my help line via this email with Suze help at Alliant Credit union dot com. Now in a second. Here we are going to go to Suze School and I am going to tell you
Suze: in this Suze School how I want you to use these three month and six month certificates of deposits
Suze: as an alternative to your emergency savings account. What KT?
KT: Suze, I have more questions for you.
Suze: Of course you do KT what?
KT: Okay, so on March 1st Tommy, our nephew is turning five. But wouldn't this be an incredible gift to open a six month certificate of deposit for a you know for a five year old?
Suze: You can so you can have a custodial account for a minor but you can't do it online, you have to do it on the phone just so you know.
KT: But it's easy, right?
Suze: Of course it's easy.
KT: I'd rather call someone and have them do it.
Suze: It would be it would be a great thing to start to give him.
KT: All of them. These are great gifts while the going's good. I'd love to give these as gifts and I have one more question for me, can I use money from my IRA to actually buy these certificates?
Suze: Actually you cannot. Normally you could buy different certificates one year, whatever five years. But because these are so specialized there are only three and six months.
Suze: If you have a retirement account you cannot purchase the three month and the six month in a retirement account at Alliant Credit Union. You know, KT, I don't know if people get how special this is that Alliant is offering these three and six month certificates of deposits.
KT: Because you asked them to.
Suze: I asked them to and they did it because I want all of you to be invested short term
Suze: and so you're not really gonna find rates like this for three and six months anywhere else. Truthfully, but the point is this is only available to the listeners of the Women and Money podcast. You're not gonna get an email about it, you're not gonna see it advertised anywhere. It's only if you listen to this podcast.
KT: I think we should talk about it all week.
Suze: No, we're not going to talk about it all week.
KT: We should. It's so special.
Suze: I know but they've heard it now.
KT: Thursday, I'll tell you more about it Thursday. I'll tell you which one I bought and how much I put in.
Suze: Because I want her to not just do the six months.
KT: I'm going to do two.
Suze: Yea, I want her to divide whatever money she is going to decide to put in. That's up to her. I don't get involved.
Suze: I want half go into the three month and half to go into the six month. That's what I want all of you to do. Now, if KT wants to listen to me and do that okay but you never know. KT sometimes has a mind of her own. Any more questions. KT?
KT: No, that's it. Suze School is about to begin, class is in session.
Suze: So that is the good news everybody. So again it's My Alliant dot com slash Ultimate.
Suze: And if you have any problems whatsoever, send an email to Suze help... that's S. U. Z. E. Help, one word, at Alliant Credit union dot com. Now remember for additional information about the three and six month certificates, that can be found as well at My Alliant dot com slash Ultimate.
Suze: Alright KT, you might as well just go and tell Barbara what you want her to do for you.
KT: Are you kicking me out?
Suze: I am actually.
KT: Alright everybody. She likes to be alone and focused when she does Suze School. So until Thursday stay tuned, get that certificate. Buy a few of them like I am and enjoy this amazing rate. Thank you Alliant, thank you, Suze.
Suze: There you go. Bye bye KT. Alright everybody. So let's go to Suze School.
Suze: The reason that what we're doing right now with three and six months certificates of deposits are so important is this, as you heard me say earlier, there really is no place to run right now. The markets were horrible last week,
Suze: as I've said, if you follow me on the women and community app, I give market updates every few days or at least once a week or every two weeks. And I think you may see next week the markets maybe be a little stable for a little bit. But then they really will as I've been telling you now for a while they will most likely continue down.
Suze: So it's brutal for everything. It's brutal for the energy stocks. It's been seriously brutal for PXD. The stock that I really like and I still like it. The energy stock, you know, for Devon it has been brutal across the board. Which is why it's always important to dollar cost average and never lump sum into buying something
Suze: if you can't buy it on the way down as well. So that's number one, number two. However, it's times like this where things are starting to happen in the economy where layoffs are starting to happen little by little even in the service industry,
Suze: which is not a good sign. Walmart is laying off people. So that makes the topic of emergency funds even more important.
Suze: And as you know, I have been a tremendous advocate
Suze: for you to have 8 to 12 months of funds for emergencies in case you get sick, in case you get laid off, in case something happens and you cannot work. And what do those eight or 12 months correspond to? They are, what you would have to pay
Suze: and mandatory bills for at least eight months, preferably one year. But let's just stick with eight months for now. So what that means is, now start to write down especially this in your Suze notebook.
Suze: I want you to write down the bills that you have to pay every single month, no matter what. If you happen to pay your car insurance once every three months, I want you to divide whatever amount that is and make it a monthly amount
Suze: so that you at least know that you have to save that money for three months. So that why? You can then pay your insurance. So for an example, every month you have to pay your rent or your mortgage,
Suze: you have to maybe pay a car payment, maybe your cellphone, your utilities, your insurance, your car insurance, possibly your health insurance, whatever it may be. Food that you buy at a grocery store, utilities, gasoline, your student loans.
Suze: If you drive your car to work and you have to pay for parking, what does that cost you? All of those things. So write down every one of the categories that you can think about, that you know, you have to pay every single month.
Suze: Then you might want to go through your records and you might want to actually put the dollar amount in there so that you know when you total them up, how much you actually need to pay out every single month.
Suze: So let's just say
Suze: that for you, your must pay bills comes to $5000 a month. Let's just say that's true. Therefore if you were to have an eight month emergency fund, that eight month emergency fund
Suze: Would have to be $40,000. Let's just assume that you've worked really, really hard to save $40,000 and it is in a savings account.
Suze: Now for this example, I'm going to use Alliant Credit Uunion because I happen to know what the Alliant Credit Union is currently paying you on the Ultimate Opportunity Savings account. So you have $40,000 earning 2.95%. Here is what I want you to do, given that your monthly expenses are $5,000
Suze: I want you to times whatever your monthly expenses in this case, 5000 by three that gives you $15,000. I want you to keep $15,000 in the Ultimate Opportunity Savings account making 2.95%. So that if anything happens I know that you're fine for three months.
Suze: Then that will leave you. If you subtract $15,000,
Suze: the three months of emergency, money from $40,000. The eight month of emergency money. That will leave you with $25,000. Of that $25,000. Now listen closely, I want you to put 15,000 of it into
Suze: the three month certificate of deposit at Alliant Credit Union for 4.85%.
Suze: I then want you to subtract 15,000 from the 25,000. That leaves you $10,000. Are you following me here? And I want you to put that into the six-month certificate of deposit at 5%. Now you still have your $40,000.
Suze: But 15,000 is earning currently 2.95%, 15,000 is earning 4.85%
Suze: And 10,000 is earning 5%.
Suze: Now obviously you might think well Suze why can't I just put all of it in to the six month certificate of deposit. And that's because if something happens tomorrow, I need to know that you are okay. And the way this works is as follows. You have $15,000 that's earning 2.95%. So if anything happens you can carry yourself for three months.
Suze: Let's say something happens. You now have used up the $15,000 over three months. But now you have another
Suze: $15,000 that is maturing that will take you another three months. Do you see that then three months from that time your six month will be maturing and now you have $10,000 that will take you for two more months. Making it your eight-month emergency fund.
Suze: Now let's just say you do this
Suze: and you don't need the money.
Suze: I still want you to always keep $15,000 in the savings making whatever Alliant or wherever it happens to be that you're saving it whatever they're paying you.
Suze: And then what starts to happen is this - in this case let's just say for the first three months you were fine. So you still have your $15,000 in savings. But now your three-month certificate of deposit has just come due.
Suze: Now I want you to take that $15,000 and I now want you to buy a six-month certificate of deposit with it. Because the six months right now are paying more than the three.
Suze: Then when your six month certificate of deposit that you originally purchased comes due three months later. Now you'll decide what you want to do because if still nothing has happened then you'll take that money and do what with it? Buy another six month certificate of deposit, again depending on interest rates, did you follow that?
Suze: What that starts to allow you to do is as interest rates go up which I think they're going to. You will be making more and more money but on different segments of this money.
Suze: B ut that it also keeps you liquid enough in case what an emergency happens and you need these emergency funds. Now obviously you don't need this money. It's not for emergency. You just happen to have money sitting in the Ultimate Opportunity Savings account 300,000 or whatever it may be making 2.95%. Maybe you have an emergency savings account somewhere else.
Suze: But this was just money that you just want to be safe and sound and make a good rate. If that is true, then if I were you let's just say you had 200,000 sitting in an Ultimate Opportunity Savings account. I want you then to put 100,000 in a three month certificate of deposit,
Suze: currently paying 4.85% at Alliant credit union and a six-month certificate of deposit currently paying 5% APY.
Suze: When the three month comes due in three months then we'll have to see what interest rates are doing. But let's just say they keep tracking like they have been. Then you would take that money and roll it to a six month certificate of deposit paying whatever it's paying.
Suze: And then three months later when your original six month comes to you by another six month until our strategies change. And then maybe we go to one year or two year or five year or 10 year. It depends what we're gonna do. An Alliant Credit Union also offers all of those. So that is the strategy of what I want you to do.
Suze: So even if you were going to do Treasury bills I would want you to do a three month treasury bill and a six month treasury bill. Don't go out longer than that. Divide your money between the two.
Suze: So if you can do that
Suze: then I think we'll be in a great position to take advantage of the interest rates going up which I am pretty sure you are going to see happen because the Feds are again are not happy that inflation has not come down as much as they have wanted it to.
Suze: So that is what I want all of you to know for this Sunday's Suze School again a very quick recap which is to open up your three month or six month certificate of deposit at Alliant Credit Union. You need to go to My Alliant dot com slash Ultimate. That's U. L. T. I. M A. T. E. Ultimate.
Suze: And why is it that? Because these rates are the ultimate rates that you're going to get. Again, the three month will be 4.85% and the six month will be 5%. They're available today. So go ahead and do it. All right everybody. So until Thursday when Miss Travis comes back
Suze: and joins me with an Ask KT and Suze Anything. Remember there's only one thing that I want you to say every single day and it is this, come on, say it with me today, wherever I go I will create a more joyful, peaceful and loving world
Suze: And when you do that you will always be unstoppable.
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