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Tiffany Hanssen: This is All Of It. I'm Tiffany Hanssen, in for Alison Stewart. Did tax season stress you out this year? Were you shocked about how much you owed? Maybe a return you got and you're unsure what to do with it? Student loan payments are coming due again. I'm sending all sorts of bad vibes out into the universe by talking about all of this, but we're going to talk about it all with Jannese Torres. We're going to sort out finances, it's hard to do.

Jannese, as a first-generation Latina, knew little about financial planning growing up, but through some life lessons, she learned how to take control of her finances. Now, Jannese has a successful coaching business helping others become more financially literate. She also has a podcast. She coaches folks on how to take control of their money, and plus, she has a new book, Financially Lit! It's out now. Joining us to talk about how to be smarter with your money is Jannese Torres. Jannese, welcome to All Of It.

Jannese Torres: Thank you so much for having me.

Tiffany Hanssen: Listeners, we definitely want to hear from you. Do you have questions for Jannese about financial literacy? Do you have some advice you want to share? Maybe a hard lesson you had to learn about money and want to talk to us about it? Call us, text us, 212-433-9692. Unsure how to save? Unsure how to create a really great spending plan for yourself? Jannese is here to help. 212-433-9692. You can call us and you can text us at that number. Jannese, we're not great at setting people up with financial literacy.

Jannese Torres: Yes.

Tiffany Hanssen: I went through public school. I see these memes on social media that say, "Good thing I learned trigonometry, but I can't figure out how to do my taxes." That's a truth. There's truth in that.

Jannese Torres: Yes, absolutely.

Tiffany Hanssen: I'm wondering what your experience was like.

Jannese Torres: Yes, it was the exact same experience. I learned by the school of hard knocks, of just starting to earn money when I graduated from college and really not understanding what I'm supposed to do with it. Getting laid off was a wake-up call for me, that the financial stability that we get from a corporate job was not necessarily the stable thing that we've been sold.

For me, I started listening to podcasts, reading blogs, and just really doing that self-education to start to understand all these concepts in the money world that I wasn't privy to as a kid.

Tiffany Hanssen: Sometimes, we're not privy to it because our parents don't know either. No judgment. It's a no-fault zone. It's stuff out there.

Jannese Torres: It's true.

Tiffany Hanssen: We're not blaming our parents, we're just saying, you know what, sometimes that's the case, so we do have to forge our own path. Do you think the way to do that now is-- What?

Jannese Torres: Well, I think it's nice to see legislation being passed in different states that are now starting to require a personal finance course in high school. That's happening more and more, and in the state of Florida, where I live, that's actually been a recent development. I'm really happy to see that, but I think it does require some self-education because your parents can't teach you what they don't learn.

I think with the power of the internet now, and social media influencers in the personal finance space, there's a lot more accessibility to the information than there was in the past. It feels like there's a lot less gatekeeping. There's a lot of forms of accessing this data in a way that hasn't been available in the past.

Tiffany Hanssen: Also, though, to your point about social media and podcasts, there's a lot of it. There's a lot of people giving advice. I look at those sometimes and think, "Is that really what you should be doing?" If you're really coming from ground zero, how are you even supposed to be smart about who to listen to, who not to listen to, what podcast to download?

Jannese Torres: Yes. I think it's going to require you to sample what is out there versus just choosing one source of information. I think it's really important for me, my journey has had a lot more impact once I found people who I could relate to. That's one of the reasons why I wrote the book. The message is as important as the messenger when it comes to learning about a topic that you don't understand, like money.

I think it's important for folks to take a sampling of what's out there, see who you resonate with, and also trust, but verify. You want to make sure that the people that you're speaking to have some sort of authority, whether that's-- They've been featured on prominent media outlets, they have credentials that would justify listening to their advice.

Tiffany Hanssen: Tell us about the message of the book. It's really geared toward--?

Jannese Torres: Latinas. Absolutely.

Tiffany Hanssen: Not just because you are a Latina, but because there is data that tell us that Latinas, actually women in general, are a lot of times behind the 8th ball when it comes to financial literacy, financial planning.

Jannese Torres: That's true.

Tiffany Hanssen: How does the book address that, specifically?

Jannese Torres: We definitely weave the entire existence of what it is to be Latina throughout the book, just acknowledging those systemic issues that are at play, like the Latina pay gap, the fact that we make about $0.55 to a white man's dollar. When you ask folks to pursue the American dream on half the budget, no wonder it feels harder. I think it's important that we address those systemic issues that are at play, but also, there's a lot of cultural baggage that comes into play.

Many of us, especially as first-generation kids, are expected to help our families with financial support. In the mainstream personal finance conversations, it's more individualistic based, the advice. It doesn't take into account this community-based nuance that is a hallmark of what it is to be Latino. We talk about how the experience of being Latino impacts your money, whether we're talking about financial trauma, the language barriers, the systemic issues at play.

I give people strategies. We talk about saving, budgeting, investing, and all those things, but we also talk about the cultural lens which through money affects you.

Tiffany Hanssen: Sure. We're going to get to some of those strategies in a second, but I want to remind our listeners that they can call in, ask a question. You don't have to be Latina to ask a question. We have great financial literacy advice for anybody who is struggling with how to make a budget, how to come up with a spending plan that works for you. Are your student loans coming due and you need to readjust things? How can I do that? It's a judgment-free zone. Now's the time. Jannese is here. She's happy to answer your question.

212-433-9692. You can call, you can text that number. You can also share some advice that worked for you. Spending versus saving. Another thing I saw on the internet is that-- I'm sure you've seen it, you put a dollar in on day one, you put $2 in on day two, you put $3-- Right? [crosstalk]

Jannese Torres: Those savings challenges. Yes.

Tiffany Hanssen: Yes. I think by day 50, I'd be having a little bit of an issue with that. Does it work?

Jannese Torres: I don't think there's a one-size-fits-all approach for budgeting and personal finance, which I think is the thing that confuses people, because there are so many different ways to do it. I recommend to folks to experiment with what works for you. If you love tracking day-to-day savings goals, and that's the thing that motivates you, great. If you're the type of person that you need to automate your savings and just have a portion of your paycheck go into a different account so you don't even notice that it's happening, then go that route.

You have to find that intrinsic motivation that keeps you going, because, again, it's not a one-size-fits-all approach.

Tiffany Hanssen: You mentioned in the book that sometimes, it's time for folks to have a financial reality check. What is that?

Jannese Torres: Well, for me, it was calculating my net worth, which is essentially the number of assets that you have, minus the number of debts that you have, that cumulative amount, whether it's a negative or a positive number. Your net worth will tell you where you are, bird's eye view, from your finances. If your net worth is positive, that means you have more assets than you have debt. If it's negative, that means you have more debt than assets.

For me, when I did the calculation and realized I was in over $400,000 worth of debt between student loans, a mortgage, car payments, credit cards, I was like, "Oh, my God."

I didn't even realize--

Tiffany Hanssen: What's happening? [crosstalk]

Jannese Torres: Exactly. You don't really realize what the whole picture looks like until you do that. It can be a startling realization for a lot of people, but I think if you want to make changes with your financial situation, you have to know that baseline of where you're starting from. I like using digital tools to do that calculation. My favorite is the Empower app, you can just link up all of your different bank accounts and just see what's going on, and start from there.

Tiffany Hanssen: Love that. Empower. Empower app. [crosstalk]

Jannese Torres: Empower app. Yes.

Tiffany Hanssen: I'm wondering how you made it through that really hard look at yourself because I can see myself going, "Well, Tiffany, you're terrible," and then just getting stuck in a rut.

Jannese Torres: It's definitely easy for you to want to burrow your head in the sand when you see that information, and I think that's when it's important to declare your goals, maybe just to yourself, but also maybe getting some accountability buddies. If you've been talking to your friends about money and you all want to make some change, making it a group activity might be a really fun opportunity for you guys to bond over it.

For me, what that looked like was, I started really being much more open about what I wanted to accomplish with my finances. I started sharing my journey on social media, to become debt-free. Just by doing that, I started inspiring friends and family to take a deeper dive into their finances. It eventually now turned into a whole podcast and platform where a lot of people want to learn, and just feel more open to being able to talk about this stuff.

Tiffany Hanssen: We're talking about financial literacy. We're looking for your questions. Jannese is ready to take them. We're also ready to take your advice if you have some advice, something that's worked for you to help you get out of debt, to help create a spending plan, 212-433-9692, 212-433-WNYC. We're talking with Jannese Torres. She has a new book out called Financially Lit! We're going to get to more comments, questions, and lots more financial literacy coming up on the other side of just a really short break.

I'm Tiffany Hanssen, in for Alison Stewart. Stay with us.

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Tiffany Hanssen: This is All Of It. I'm Tiffany Hanssen, in for Alison Stewart. We are talking financial literacy with Jannese Torres. Jannese has a new book out called Financially Lit! Jannese, we're going to go right to our listeners. Maria, you have a question?

Maria: Hi, yes. Thank you so much for taking this. I just want to know, how do I have a conversation with my husband about having finally a joint account? How do I take the emotion out of that conversation? We come from different backgrounds. I'm Latina, he's white. I feel like we've had such different relationships with money and I just want to know, how do I have that conversation without it becoming quite personal?

Tiffany Hanssen: I see you nodding your head, Jannese.

Jannese Torres: This is why I wrote an entire chapter of the book on relationships and money. It is one of those sticky points, when you're trying to figure out what's the system that works for you, especially if you've come from, like you said, two different mindsets. For me, I saw my parents' joint everything. There was no separation of funds. Whereas, when I was married, everything was separated. For me, that just made sense. We just had different philosophies on how to handle money.

I think-- Be okay with the fact that it's going to probably take multiple conversations. I think you want to paint it from a very objective lens about what you want to accomplish by having these joint accounts. If you guys have been operating with completely separate finances up until this point, do you know why? Is there some mistrust? Maybe it's like, "I don't know what you're going to spend the money on, so I'm not sure if I want you to have access to it." I think that it could be one of those things. [crosstalk]

Tiffany Hanssen: That sounds like a conversation I don't want to have, but yes.

Jannese Torres: That might be a conversation that you want to loop in a financial therapist, because potentially, there could be underlying reasons-

Tiffany Hanssen: Sure.

Jannese Torres: -for why your partner doesn't want to do that. I'd recommend just making it a conversation that you are not having under stressful terms, picking a nice, neutral environment to have it, and just be okay with maybe not having the exact result that you want, but leaving the conversation open to maybe evolving.

Tiffany Hanssen: Money is thorny.

Jannese Torres: Yes, absolutely.

Tiffany Hanssen: It is right up there. There's a reason people say money death. These are the topics that really get people-

Jannese Torres: It's true.

Tiffany Hanssen: -hot. All right. We got a text in. "I really appreciate the conversation. I'll be 40 this year. Thought I was the only one. Why is there such shame with debt?" We pull a lot of shame onto ourselves about our financial situations.

Jannese Torres: I think the narrative in mainstream personal finance content, especially when you think about the big talking heads, there is a lot of that stuff projected on people. You make debt a character flaw, when the reality of it is that we're all going to encounter some situation in life where debt is going to have to be the only option. Whether we're talking about student loans-- Most of us cannot pay for college outright. Same thing with a home or a car.

You're just going to have to take on debt for certain life milestones that you want to accomplish, and it's not a bad thing. I think the bad thing is when you take out debt without a plan for how you're going to actually handle it. Some of us do tend to overextend ourselves. There might be that pressure of keeping up with the Joneses, so you buy the new car that you don't need, or you upgrade to the new cell phone that is not necessary.

Debt has its place, but I think it's important to just use it strategically. If you find yourself in a position where it is hampering your financial progress, you're going to have to get really real with the situation and start creating a plan of action.

Tiffany Hanssen: The headline there, I love, which is-- Debt is not a Character Flaw.

Jannese Torres: No, absolutely not.

Tiffany Hanssen: Here's a real brass tacks question. Do you recommend an HSA account for a young-ish family of four who moderately access healthcare? Oh, in other words, they don't have a lot of healthcare needs.

Jannese Torres: I'm a big fan of the HSA accounts for most people who do not need a bunch of medical care. That's the method that I use to save for medical care as well. It's got triple tax benefits. When you have an HSA account, you can invest the money in there. You can withdraw the funds, tax-free, for qualified medical expenses. The growth itself is also tax-free, as long as you're using it for qualified expenses.

I think it's a great tool, and it's very much an underutilized tool, that a lot of folks don't even know they have access to through their corporate benefits, typically.

Tiffany Hanssen: The tax-free part of that is key.

Jannese Torres: Absolutely.

Tiffany Hanssen: We're going to bring Barbara into the conversation, Jannese. Barbara, in Brooklyn. Good afternoon.

Barbara: Good afternoon to you too. My story is, I worked for myself for 35 years. My parents never told me about social security and how important it is, so for all the years I worked, I never claimed my true income. I always claimed less. Now I'm a senior, and it really has an impact on me. To those people who are working for themselves, claim your income, because you'll get it in the end.

Tiffany Hanssen: Barbara, thank you for that. Working for yourself has a lot of pitfalls, in terms of-- You have to be aware of a lot. Barbara's scenario is just one of many.

Jannese Torres: Absolutely.

Tiffany Hanssen: How can you make sure you don't just tumble down that hill if you're self-employed?

Jannese Torres: I think there's this perception that you should write off as much as possible for tax purposes, but what you're doing, inadvertently, is lowering that income that you're reporting, and the income that you're reporting is directly tied to your social security benefits. The less you earn, the less you're going to get in benefits. I would say it requires a delicate balance of paying yourself a sufficient enough salary that you're creating enough income on paper to then be able to have a substantial social security check.

This is why it's so important to work with an accounting professional, and someone who's potentially a tax strategist when you're self-employed, just so that you're not inadvertently shooting yourself in the foot, because you don't know the impact of those financial decisions that you're making.

Tiffany Hanssen: You went from working for a corporation to being self-employed, so this is something you've experienced. What was the first thing you did? What was the first thing you made sure of?

Jannese Torres: Even before walking away, I wanted to make sure I had a plan for how I was going to replace the golden handcuffs, if you will, the benefits package. What was I going to do for retirement, insurance, and things like that? I actually met with a CFP and we created an exit plan for me to be able to walk away from my corporate job without the stress of, "How am I going to get health insurance? What am I going to do for my 401(k)?" We made a really robust action plan.

One of those things that I didn't even think about, but it came up during the conversation, was the importance of having a postnuptial agreement. At the time, I was married, and I was going to be going into this "risky" endeavor as a business owner. My CFP advised, "Hey, you should probably get a post-nup in place, just to protect you and your spouse in the event of a divorce." Ironically enough, it came into play a couple years into entrepreneurship, and I would've lost a substantial part of my business if I hadn't put that into place.

Tiffany Hanssen: Wow. Good advice there. We have a text question. "Wondering if you can talk about how renting is always framed as being a bad financial choice. There's just no way I can afford to buy anything my family can fit in and live, here in New York City. I don't feel like I'm being irresponsible renting, but all financial literacy leads me to believe that's the case." Again, I'll say-- People made to feel bad about their financial choices when life is what it is.

Jannese Torres: Absolutely. That is a hot take that I have in the book, that maybe all the things you've been told about home ownership are a lie, and it's just a group of people who are trying to make money off you. At the end of the day, you're going to have expenses regardless of if you're renting or owning. I feel like home ownership, for many people, is a luxury investment. It's the same as buying a Lamborghini versus something that's actually going to pay off in the long run.

I would rather that someone rents and uses the money they were going to spend on a down payment to invest in their retirement, to bulk up their savings, because home ownership is not for everyone too. You could have lifestyle preferences where you want to move every two, three, five years. Maybe you want to be able to take remote jobs, or be able to move across the country on very short notice.

If you're in a situation where now you have to worry about, "What am I going to do with this home? Do I have to sell it? Am I going to put it on the rental market?" It's just a lot. I think people need to get back to values-based spending, where you're spending your money on the things and the lifestyle. [crosstalk]

Tiffany Hanssen: That's on my list to ask you. Basically, a lot of times, we hear specifically about cities, corporations, you can tell what people care about by what they spend their money on.

Jannese Torres: True.

Tiffany Hanssen: Is that essentially what this is saying? What you're saying with this? [crosstalk]

Jannese Torres: Absolutely. Yes. It's really about just getting clear on what your own financial goals are. If you are feeling the pressure to achieve something like home ownership, where is that pressure coming from? Is it an external source? Are your parents telling you you're wasting money? If it's not aligned with how you want to live your life, then stop worrying so much about what everybody else is saying. If it feels right for you, do that.

Tiffany Hanssen: Let's talk about building credit, because this country has become-- We have become tethered to our credit reports for pretty much everything.

Jannese Torres: For sure.

Tiffany Hanssen: If your credit report is suffering for a whole host of reasons that you don't need to feel bad about, you might need to address, though.

Jannese Torres: Absolutely.

Tiffany Hanssen: How do you start tackling that? I've heard horror stories where people are calling credit agencies, trying to get things corrected. It can be a nightmare.

Jannese Torres: There's a couple of different options that I like. One of the things that I've done personally, to help my niece build her credit-- She's only 15 years old, but I put her as an authorized user on my credit cards, because I have a good credit score, and so she's building credit inadvertently just by being tied to me. If you have someone in your life who is trustworthy, who has good credit, and is willing to help you piggyback off of that, that's a good strategy, and they don't need to be related to you. It can be a friend, anybody.

Then I think it's also good to talk to nonprofit credit relief agencies. Nfcc.org is a good one. You don't want to be paying somebody to, "fix your credit" because there's a lot of scams out there. Just proceed with caution, and that's a topic that we talk about in detail in the book.

Tiffany Hanssen: There are a lot of scams out there. The best way is to just cross-check people on the Internet, and don't give any-- What else? Don't give any financial information, right?

Jannese Torres: Absolutely. For most of these credit repair agencies that are legitimate, you're not going to be having to pay an arm and a leg to get their support. There's going to be a small maintenance fee that you have to pay for them to set up your account and do the work that they do, but it's not going to be, "Hey, give me $10,000 to fix your credit." That's a red flag. [laughs]

Tiffany Hanssen: Right. If there's a little pit in your stomach that says, "I think something might be off here," you really need to listen to that.

Jannese Torres: For sure. Trust your gut.

Tiffany Hanssen: Got it. We've been talking with Jannese Torres. Jannese's new book is Financially Lit! Jannese, I feel like we scraped the surface on so many issues. I think we're going to have to have you back about 10,000 times to get to all of it, but really a great conversation. I appreciate your time today.

Jannese Torres: Thanks for having me.

 

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