Podcast Episode - Suze School: Make A Date With Your Money

Suze starts with information about FEMA and what resources are available to you, if you are in a disaster area.  Then we get a lesson on making a date with your money, which is spending a day reviewing every aspect of your money.  Do you have the right insurance, are your beneficiaries in place? Do you have a plan to get out of debt? All that and much more.

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Podcast Transcript:

October 13th 2024. Welcome everybody to the Women and Money podcast as well as everybody smart enough to listen, Suze O, here and yes. Yes. Yes. Each yes is for me, KT and Colo. We are safe and sound.

In fact, last Friday we returned to the island all together. Colo flew in from Colombia. We haven't seen him for a while now, as you know, he returned to Colombia to take care of the affairs of his brother and to be with his family and to mourn and to pray and to do all of those things.

And now he flew back on Friday morning and we all got on the plane together and came back to the island to our surprise. The island is perfect. Really. I mean, we lost some beach but nothing big at all. So there's nothing to worry about. Also, I just wanna say something when a major disaster starts to come in myself more than anybody I know makes all these contingency plans that if we needed to evacuate, I have a way to do so. So if I think things are gonna get bad, oh, we are so out of here. I cannot tell you we have evacuated many, many, many times.

But when I choose to stay somewhere, it's because I pretty much know that we're going to be just fine now. Obviously I can be wrong, but it's a pretty good calculated guess. So. Don't ever worry about me and KT and Colo. We're always ok no matter where we are and what is happening in the world.

Number one, number two, even though we're ok and everything's fine for us. The truth of the matter is after these two major hurricanes, Helene and Milton, there are hundreds of thousands of people that really are not ok.

And it's very possible that they're not gonna be ok for a long time because many of them did not have flood insurance. And why didn't they have flood insurance? Well, I have one friend, Sissy who lives in Savannah. Her mother lives 300 miles inland and her house was almost totally destroyed. Her mommy's house, who in the world would expect that they need flood insurance when you're 300 miles inland.

So it's not like people went. Oh, I know I need flood insurance. I live in a flood areas but I'm just not gonna get it. Most of these people who lost their homes to flood there, had never been a flood where they lived. There was no reason for them at that time to have flood insurance. And what happens is that leaves them with absolutely no way to be insured for their loss. I'll talk to you in a second about what they can do, but that is a travesty. So you need to know what does your insurance policy pay for? And I'm here to tell you it does not pay for floods, not your regular home insurance. It does not.

So nowadays, maybe just, maybe everybody should be looking into flood insurance no matter what it's expensive, but possibly it might be worth it.

Now, as you know, over the past two or three weeks now, I've been saying I wanted to do a podcast called Make a Date with Your Money and I had had five or six things that I really wanted you to do to check this to check that and whatever it may be. But given that we have just experienced two major hurricanes, I wanna talk to you a little bit and to those of you who are listening, who just went through these disasters and maybe you are hearing that there's no money available for you that FEMA isn't gonna be there. That all you're gonna get is $750. All of that is not true.

So before I go into the other things, I just wanna talk about disaster relief and insurance and what? In fact, you need to know first, can I just address the $750 from FEMA?

What's so interesting is that the $750 relief from FEMA is something that you can get immediately. It can be put on a credit card, whatever it is. And that's for those of you who need immediate assistance with maybe stuff for your babies or for whatever it is. So you just get it. That's not all you get, but you don't have to really wait for it. It's there immediately for you just to get you by for the next few days or maybe a week or two.

But that's just a very small part of what FEMA is there for. So listen to me closely. Now FEMA is known as a disaster assistance program. And the maximum amount of assistance that an individual or households can get is usually around $42,500 at least for the year 2024. Now, that can change depending on what they're going to do, but that's an approximate amount of the maximum amount allowed.

But the average grant really is only about $3000. Notice I said grant, that's because this money does not need to have to be repaid. So FEMA assistance covers things like housing assistance or personal property, transportation. And again, each one of those categories has a maximum limit, but it's just there to assist you not to replace everything. Totally not to make you fine. No, to assist you during this time of disaster for the cost that your insurance company if you're insured will not pay for.

So again, you have to remember that by law FEMA cannot pay for costs that your insurance covers. So it's important to contact your insurance company right away to file a claim for larger amounts. There's always the Small Business Administration loans and those are set up as low interest disaster loans to individuals. So if you're a renter, if you're a homeowner or a business person of any size, that's where probably you are going to get the most assistance.

For instance, homeowners can borrow up to $200,000 for home repair or replacements and up to $40,000 for personal property. And if you're a business, by the way, you can borrow up to $2 million to repair or replace property or equipment or inventory and other businesses like that, the difference between the SBA loans and FEMA.

Again, FEMA is a grant that money doesn't have to be repaid, which is why they can't afford no matter what administration is in effect at the time to give you each $200,000 half a million dollars, whatever it is and never be repaid when you need larger amounts of money than FEMA can give. That's when you go to the Small Business Administration and get a loan and the loans must be repaid, as I've just said, and the interest rates range from 1.5 to 3 and three quarters percent right in there. You should double check that because everything keeps changing and it depends on your eligibility, but you need to know that that is available to you.

Now, I want to talk for a second about the National Flood Insurance Program, better known as NFIP. The NFIP provides flood insurance for policyholders, obviously, but with policy limits determined by the specific coverage that you yourself purchased. And the problem is many of you don't know what you have purchased. Does it just cover your building? Does it cover your buildings and belongings inside the building? Many of you have no idea when I ask you.

So residential properties, the building coverage limits can go up to about $250,000 but you can also insure your contents and contents coverage limits can go up to $100,000 because if you think about it, your refrigerators, your stoves, your dishwashers, your all those things can add up to a lot of money.

So if a flood comes in, it's not just your building that's gonna be ruined. Everything inside that building is going to be ruined as well. So it's really important if you're going to get flood insurance, you just don't get $250,000 for the residents and the building coverage, you also get up to $100,000 and I would advise to do all 100 if you can for the contents as well. Now, let's say for those of you who don't have a residence, it's a non residential property.

So you have a building, whatever it may be, then you can get coverage all the way up to half a million dollars and contents coverage can go up to half a million as well. Now, many of you probably have flood insurance and you have now been affected by either Milton or Helene.

All right, it is very, very important that you make a claim within 60 days of the flood event and then payment for uh any approved claims is going to be based obviously on the policy coverage that you do have and the extent of the damages. Now, a lot of you may be thinking this doesn't affect you or whatever I am telling you every single one of you needs to write down what I am saying.

You need to have this in a file somewhere so that if this ever happens to you or somebody, you know, or a family member, you can tell them exactly what I have told you. Just that simple.

Now, what happens when you don't have flood insurance? You can't qualify maybe for an SBA loan, whatever it is, you need to know that there are so many nonprofit organizations and community resources that are out there for you.

Like right now, there are community resources that have temporary housings and there have food pantries and counseling services and all those kinds of things. So you have to check that out and you have to find them also a nonprofit organization like the American Red Cross or let's see, the Salvation Army or even local community foundations. They often will provide disaster relief and assistance to you in the form of cash grants or gift cards or in kind donations such as clothing and things like that.

And the exact amount and type of assistance will vary. Obviously by organization and availability doesn't mean that you just go to one organization, you can go to them all.

So the next question is, how do you contact these companies or these agencies? So for the Federal Emergency Management Agency, which is what is FEMA, their phone number is 1 800-621-3362. Their URL is fema.gov/assistance. The Small Business Administration, phone number is 1 800-659-2955 and you can get them by going to www dot sba.gov/funding-programs/disaster-assistance. I will put all of these on the women and money community app, by the way. And the national Flood Insurance program, the NFIP is floodsmart.gov. Phone number is 877-336-2627. Obviously, these phone numbers are all for people in the United States.

So that's what you need to know. But I'm just gonna reiterate here. There is money. There are people on the ground. So it's really important that you just know if you're out there and you don't know what to do and you think nobody cares about you and you think that there's no money to help you. I'm here to tell you that you are wrong.

Millions of people care about you. There is help out there for you. Is it gonna be easy? No, but I do know with faith and courage you could do this that you have to want to and have faith that you can.

All right. So there was that. Next, make a date with your money.

What I wanted all of you to do and I still want all of you to do is I really want you to take this time before the New Year starts to sit down. Make a date, get out your calendars, everybody and make a date when you or your spouse or your life partner or your children. I don't care who your parents you sit down and you make a date and that date is the entire day, is devoted to dealing with every aspect of your money. Not so much what you're invested in, but is everything in place?

Are you protected in case something happens? So for instance, what I was gonna tell you all was I wanted you to number one, check all your home or rental insurance policies as to what they cover and what they don't cover. And also have you increased the coverage? Really? Everybody, since you bought the home, given that maybe it's worth a whole lot more than it was 10 years ago when you originally got that insurance.

And the fact of the matter is it costs a lot more to replace that home today because of inflation as it did a long time ago. Next, what's really important about what I just said is this when you have as many homes that have been destroyed by the two hurricanes, by the 100 some odd tornadoes that happened in the Florida area, by all the things that are happening in this area and around the United States that makes lumber materials, the cost of building because all the workers, what do they do? They go to those areas because they know they're gonna get jobs which leaves these workers who are in your area possibly charging more. So it's gonna cost more to replace your home than it did 10 years ago than it did five years ago.

And I want you on this date with your money to make sure as you're looking at your insurance policy, what are you covered for?

Are they going to allow you to rebuild your house and pay for all of it? So, is it replacement costs or do you just get the insurance value. Does it pay for trees and does it pay for your garage and the tools in your garage and all of those things you need to check that out?

Are you insured for hurricane, for flood for any of that? Now, your normal insurance policy is not going to cover you for flood and unless you've added hurricane insurance on or earthquake insurance on, it's not gonna be there either, but you have to know.

So you have to look at your insurance policies and answer all of those questions. Am I insured for X Y and Z? Is everything in my house insured? And how much is it insured for? Are my structures on my property insured? My garage is everything in my garage insured? Are my trees insured? You have to ask every possible question and what is the answer to that question? Only you will know.

So that's the first thing you're gonna do when you have a date with your money.

Also, what I want you to do is I really want you to look at every retirement plan and insurance policy, life insurance policy that you have. I also want you to look at the beneficiaries of your health savings accounts because you have got to make sure that all the beneficiaries are the beneficiaries that you want to get the money. You don't want to have had a retirement account where you left an ex-spouse or whoever it may be that money and now you're not even talking to that person and it doesn't even matter if you're not remarried, but you don't want that person to get it. And so you have to look at the beneficiaries and make sure that they are absolutely up to date if you happen to be married.

I want you to double check that a trust is not the primary beneficiary of any of your retirement accounts or your HSA account. I want you to make sure that your spouse's name is the primary beneficiary of those retirement accounts. If it's not your spouse because you're not married. I don't care, then whatever you want to do, but it is not to be anything other than your spouse as the primary beneficiary.

If in fact, you are married next, I want you to check all the interest rates that you are paying on the unpaid balances on your credit cards. Yeah, a lot of you have credit card debt. You just do. It's been very difficult. Possibly because of inflation. Maybe you've been ill. Maybe you lost a job. Who knows what? But you've been putting your everyday living or vacations or gifts on your credit cards, you've been paying the minimum payment due and maybe if you look at the interest rates on there, you'll find that they're at 13% 20% 28% and you're only paying the minimum payment due. You are never going to get ahead.

And how many times have I said debt is bondage. You will never have financial freedom if you're in bondage. So therefore, I want you to sit down on this date.

Make sure you have pencil and paper for all this. Get out all your credit card receipts and I want you to write down in order your credit card the interest rate that you are currently paying the balance due and the minimum payment due. And I want you to do that on every single one of your cards. And then I want you to arrange them from the highest interest rate to the lowest.

Now, if you in fact have a good FICO score, maybe 720 or above, sometimes even 680 or above credit cards will take it. But you might want to consider if you have a really high interest rate on these cards to do a balance transfer to a credit card that will lock in a 0% interest rate for about 21 months on a credit card that won't charge you an annual fee and a credit card that will not charge more than 3% of a balance transfer fee.

If you could do that, then pay as much as you possibly can during those 20 or 21 months at 0% interest. Hopefully your card will be paid off or many of your cards will be paid off by the time that interest rate is up, beware once the 21 months is up, your interest rate's gonna go back up probably to 28%.

So currently, if you look at your credit cards, you total up the minimum payments that you are paying right now and whatever those minimum payments are, I want you to add 20% to that amount. So let's say you have five credit cards and the minimum that you're paying every single month on all five is let's just say $500 100 dollars on each.

If you're paying $500 a month, I want you to pay 20 percent more or another $100. And I want you to pay at least $600 or more on the ones with the 0%. If you're able to do a balance transfer, if you are not, then what you are to do is to make, put those credit cards in the freezer, just get rid of them for now.

You are to continue to pay the minimum payment due that you are paying. Now, you are not going to pay the minimum payment due that they're going to say is due next month or the month after that. If you can afford to pay that this month, you can afford to pay it every month.

And you're going to pay the minimum payment due on every credit card and add that extra $100 that I was just saying to the one with the highest interest rate when that credit card is totally paid off, you're gonna take that amount plus that $100 that you were paying. Roll it down to the next highest. When that's paid off, you're gonna take the 100 the first credit card payment, the second credit card payment and roll it down to the third and you're gonna keep doing that until you are out of credit card debt.

Once you pay off a credit card, please do not close down your credit cards because if you do, you are closing down your credit limit and that will affect your FICO score. So, talking about FICO scores and your date with money, I want you to check all of your credit reports and FICO scores to make sure all is as it should be.

And it's important because now with so many people being able to steal your identity to do all kinds of things, the only way that you're gonna catch it before it becomes a really big problem is to be checking your FICO scores as well as your credit reports. You can get your credit reports for free by going to annual credit report.com, but just check and see what's on there. If anything looks suspicious, contact the credit bureau and by the way, while you're at it, if you really wanna make sure that you stay safe and sound, then freeze your credit reports last but not least because I'm running out of time. Here.

It's really important that you make sure that you have created and signed and notarized and funded. Obviously, what I talk about all the time, the must have documents, a living trust, a will, an advance directive and a durable power of attorney for health care and a financial power and funding. By the way, simply means changing the titles on your accounts and real estate from your individual name to the name of the trust.

When something goes wrong, when you are injured, when all of a sudden you have unexpectedly lost your life, think about all the people who have unexpectedly lost their lives and now what's happening, their beneficiaries, their people, you know, they probably don't even have paperwork, who knows. So it's really important that you have all of these things together, you know about your insurance, you know about your FICO score, you know about your beneficiaries, you know about what your insurance covers doesn't cover, you know, that you have the must have documents in order, you know, all of those things and when you know all of those things and there's so many more.

But I won't overwhelm you today, then really you start to own the power to control your own destiny versus lack of knowledge, lack of wanting to have a date with your money and then something happens and then you lack that power to control your destiny and that's not what I want for you.

So if you can do all that. And remember that there's only one thing that matters when it comes to your money and it is this people first, then money, then things. And if you stay healthy, you stay knowledgeable, you stay involved with every aspect of your money.

Well, then I have to tell you, in my opinion, you will be unstoppable.