Oprah and Mellody Hobson: Best Money Advice for Gen Z

Hello to you, dear listeners. What a. pleasure it is to be with you here on. the Oprah podcast. The brilliant Melody. Hopson, the brilliant and well-dressed. Melody Hopson. Thank you. Uh co-CEO and. president of Ariel Investments is back. with me in the tea house. And Melody has. written a fantastic children's book. It's a New York Times best seller. It's. called a children's book, but it's. actually for anybody who wants priceless. facts about money. And I think all.

parents should get this book for your. children and also for yourself because I. have to tell you, I learned so much. Earlier this year, we recorded a podcast. about the book. And if you haven't. listened or watched it yet, I strongly. recommend that you do. And you know, since I started this podcast last year, Melody's episode is the of all the. people we've talked to is the most liked. episode. of all so far. And since you liked it so. much, I asked Melody if she would come.

back to talk with me, but this time with. young people who are a little bit older. Gen Z. Maybe you are a member of Gen Z. or you have one in your life like I do. And it's in the news every day that this. generation has been hit harder by rising. prices, by um higher housing costs, by. large student loan balances, and more. overall debt than the millennials before. them and certainly our generation. So, there's a lot to unpack. Thank you for.

coming back. Most light. Thank you for. having me. I was very excited about. that. But I do like to overachieve. I know. But I I think it's so. interesting that a conversation with. kids about money out of all the. conversations we've had would be the. most wellreceived, the most liked. because it's so absent in our society, it creates so much fear. And I think um. I've worked really hard to make it to. break it down and make it approachable. So I think that was part of the reason.

that it it went so well. That's what you. did. and and and when I finished reading. this and finished talking to you on the. last podcast, I said, "Melody, you. really should do another book. You. should be doing a book for these Jenzers. that we talked about. I know you got a. lot going on, but just think about it. I. mean, I think it's I actually think it's. a service, and that's what we want today. to be, a service for you. So, why are is. this generation why is this generation. having so many financial. stresses?" Well, you hit it. The.

struggle is real. The struggle is real. So there are 67 million of them ages 13. to 28 just so we can establish. 67 million of them. So this is a big. group of people. They are going into the. world with a greater financial burden. than the previous generation before them. which would be the millennials. Almost. double the debt of Gen X, which is who I. am. And so this is this is a real. situation. The debt almost double. They. go into the world with about $100,000 in.

debt. and um our generation it was 56. It is. real. It's not just Yeah. It's not in. our head. It's not made up. They weren't. frivolous, but there are things that. account for it. You talked about student. loans. In the last 20 years, college has. costs have doubled in 20 years. So, that's real. Those are big numbers and a. lot of them are taking out loans to pay. for that education. The other thing you. talked about is inflation. Inflation was. virtually dead for decades and it's come. back really strongly in the last few. years. So inflation, just the cost of.

living has gone up much more than it was. before. And then you talked about. housing. We've also seen big changes in. housing prices in this country. And so. that has absolutely affected them as. less homes get built and there's less. inventory. Houses cost more. And that is. something that has actually happened. And you've seen that starting during CO. where everything in terms of new homes. being built slowed down dramatically. Mhm. And so a lot of young people are. actually changing their attitudes about.

home ownership, which traditionally was. the American dream. But what a lot of. people now feel like they can't. So they. still want to own a home. It feels a. little bit further away. And that has. actually proven to be true. Again, the. data. Yeah. I always like to say math. has no opinion. The first time home. buyer average age right now is 38 years. old. Wow. that is 10 years older than. Gen X. Wow. So, they were we were buying. homes in our 20s, they're buying homes.

in their 30s, living with their parents. longer, renting longer, and so there is. actual data to show that American dream, that home purchase has been further has. is further and further away. Here's the. other thing. You're right. It is it is. real. Years old. The average age of a. home buyer today, average is 56 years. old. What? Yes. So, I thought about that. from the perspective of you're 56 and. you have a 30-year mortgage. Wow. Right.

Yes. The average age is 56 years old. right now. So, these are real things. But the firsttime home buyer, which is, you know, what they want to be, the. average first-time home buyer is 38. So, this has gotten away from them. The the. home purchase has been delayed. I do. still think that it doesn't mean that it. it's it's deferred not, you know, not. something that will be denied. Okay. But. not denied. Yes. Exactly. But I think I, you know, just hearing and I know for.

many of you just hearing that it is. real. It's not in your head. It's not. made up. It's not, you know, the lazy. generation. It's statistics don't lie. Math doesn't lie. Yes. Yes. So, what are. the biggest mistakes this Gen Z. generation is making financially, do you. think? Well, I think there are a couple. and these mistakes are the same old. mistakes. Okay. I wish I could say they. were new. They're not. They're repeating. the mistakes of prior generations and. some of those mistakes are everything.

and can less afford to repeat those. mistakes. Don't you think can less. afford it? Correct. That's a really. really excellent point. So, one example. is just the debt, the credit card debt. Now the credit card debt is higher but. even if you adjust for inflation and. even adjust it for inflation it's 25%. higher than the previous generation. So. credit card debt is higher but that. cycle of multiple credit cards of paying. the minimum payment this is a lifetime. of debt and just convincing them that.

that debt that they have to break the. cycle on that debt in terms of the. number of credit cards they have as I. said paying the minimum. I bought props. for you just to see my own props. Okay. This is my life. Mhm. Green, not fancy. Yeah. I use one card. I use one card and. then my Chase debit card and that's it. because I don't want any balances. Now you don't want multiple multiple.

multiple paying interest on multiple. things. Yes. I don't want to pay. So, you know, to the extent that everyone, and I know this is impossible for. everyone, to buy something and pay it. off, it is absolutely the best way. So, you're not carrying that debt, but if. you have to carry debt, do not just pay. the minimum. Even a few dollars can make. a difference. $5 more, $10 more than. that minimum payment can take years off. of uh debt. Literally years. And so that.

minimum payment trap is something I'd. like to see stopped because you see. something and you think to yourself, "Oh, the minimum payment is only $20 on. this thousand purchase or whatever it. is." Paying the rest of 8, nine, 10. years. Wow. I hear a lot of jinzers. saying going to college was a waste of. their money. 51%. are saying that. Yes. 51%. And what do. you want to say about that? Was it it's. the best money they've ever spent. There. is good debt and there is bad debt. I.

consider education good debt and even. though it costs a lot and that student. debt can be with you for a long time. I. want to start with just the fundamental. idea which I know you will agree with. You are learning and that is something. that people can never take away from you. ever. The gift of an education is. something that is a gift that keeps. giving. And so I really want to make. sure we understand the most fundamental. piece of it. And I think the smarter. person goes through life Yeah. with.

better decision making, better. socialization. I could get better. discipline. Better discipline. Exactly. You know, having to achieve something. like a degree. The worst thing you can. do, worst, you go to college, you take on student. debt, and you don't graduate. That's the. kiss of death because you don't have the. degree and you have all the debt. It is. the it'd be better not to go to college. because in that situation you don't have. the debt. But if you go and you fall. short of the degree, it is now you don't.

have the degree. Correct? Now here's the. thing about the degree. There is a. direct correlation between how much. education you get in this society and. how much money you make. So if you. graduate from high school, you make one. amount. You graduate from college, you. do make more. You get a master's, you. make more than that. This is just a. fact. I can show you this across all. sorts of of uh fields. However, the gap. isn't as wide as it was before and some.

some other areas like trades. the trades jobs also because of scarcity. that we've had in this country, they're. making really good living. Yeah, we're. going to talk talk to some people doing. that without going to college. So, I. just want to say but even to get a to be. a a member of a trade, you have to have. some education, certification, right? you have to apprentice. You know, there. are things that that you have to do. So, there's still an investment that you. have to make in time and often times. money. It just may be different than a. 4-year degree. But, I'm just going to.

tell you another example of just why. this education is worth it. If you just. look at unemployment statistics today, now we have virtually full employment in. this country at 4%. Meaning most people. want to work do. If you have a degree, that unemployment number is under 2%. Right now, because we have virtually. full employment, it doesn't seem like a. big deal. But when you start getting. into periods where people are losing a. lot of jobs, the person with the degree.

is more likely to work. It's a fact. That's why it's the best money ever. spent. It truly. I really I really mean that it's a lot. of money. So, and I I've had student. loans, so I know, you know, I'm not. sitting here from a perspective I don't. know what people are talking about, but. I can tell you I aggressively paid them. off aggressively and I feel feel like. that education gave me a lot of. opportunities. Yeah. I think a lot of. people say that because they think going. to college, you're going to college just. to get a job. But what you just.

clarified, I mean, I got it like a aha. You're learning and you're not just. learning about how to get get out and. get a job. It's expanding you the four. years you you you bring so much to. yourself. It's so once I did a. commencement address for um on money and. I said the thing about it I researched. all these commencement addresses and no. one ever talks about money but I said. most of your parents think you're here. to get a good job. That's right. But.

there's no commencement address on the. address on the facts of what you're the. situation you're in and what you're. confronting. And it's super interesting. because this whole concept of money is. such a taboo concept in our society. Even though I joked in the commencement. address, there are plenty songs about. money. Yeah. But we don't talk about it. We can sing about it, but we don't talk. about it. About it. That's right. And so. this this whole idea of um education, I. really do think it's gotten a bad w. And. I understand why because the cost of an.

education have far outstripped. inflation. It's it the cost has grown. faster than inflation. So people feel. these it's moved so fast and so far they. feel that they've been taken advantage. of. Well, that's why I thought that. priceless facts about money that you did. for learning how to talk to your kids. about it and sharing interesting uh. facts about money was so vital. mainly. because as you and I know most people. grow up not having any conversations. about it. It's like there's this I don't.

know stigma shame around it. You know my. father never discussed it and just said. never have any any credit card debt. You. know you never want to never buy. anything. When I was growing up it's. called layaway. Never buy anything on. layaway. Don't have any credit cards but. never really an understanding about. money. So to start that conversation. early and what I really think is God. knows this should be taught in schools. It should be taught in schools. Don't. you agree? Absolutely. The state of.

Maine bought the book for every. elementary school student and I thought. they brought 13,000 books. I thought it. was such a genius idea and I applaud. them for doing that. Um because I do. think it's a powerful tool in the hands. of a young person and it is something. that is really life-changing once you. get rooted in both the comfort of the. conversation and the actual actual. subject because a lot of kids as we're. going to find out today uh people who. never had a conversation about money. We. have Jinzy is zooming in with questions. for Melody. Kayla is joining us from.

California. I hear you've been what. nodding along with this conversation. Tell us tell us what's going on with. you. Well, thank you so much for having me. And I I have been everything that Melody. is saying and everything that you know. just is being said, I'm just like, "Yep, definitely definitely something that I. agree with or I'm experiencing right. now." What's your situation? Tell us. what's happening. Well, I mean, my. situation kind of all started when I. graduated nursing school in the height. of the pandemic in 2020. And that was.

already a struggle in itself, but I. think I kind of dug myself deeper into. that hole with the use of credit cards. because it was difficult to start off um. with no job, with no nursing job, trying. to find a position. And that kind of. just spiraled into maxing out those. credit cards and just and to the point. of maxing out those credit cards, it's a. total of 20K. uh not including the. student loans that I have from nursing. school, but I think I just hit that peak.

of my money situation when it came to. the point that I wasn't able to pay for. even just like a $5 meal, like a fast. food meal. And I was even utilizing. those buy now pay laterers, which is. what layaways are called now. Uh I was. utilizing those for groceries. So I knew. I had to change something. And so I kind. of held myself. You knew this when you. couldn't pay for lunch. You knew this. when you couldn't pay for lunch? Yeah, it was literally just a lunch that I had. that I wanted to get for myself for.

during work. I wasn't able to do it and. I cried that day. It was I I knew when I. cried for that meal, I knew that was my. breaking point. And so, are you doing. the thing? Have you been doing Kayla the. thing that Melody just said don't do? And that is making the minimum payment. on your cards. Just the minimum. payments. Yes. I since 2020 I've accumulated about. five credit cards and since then I've. been just doing the minimums and I just.

recently actually calculated all of the. interest that I was paying over these. five years and yeah the number I can't. remember on the top of my head but. combination of everything was 5,000. plus. Wow. Wow. Yeah. So, and that. really like lit a fire in me. Isn't that. interesting because most people I mean. that's why everything I was nodding too. everything Melody said because you don't.

think about I remember when I first came. out of college and got my first credit. card. I was so excited. And you you. think only 20% minimum, only 15% minimum. payment. And you think, "Oh, well, that's not so much." And then you get. three or four credit cards and before. you know it, you have so much debt, you. you you you you don't see how you're. going to get yourself out of it. Yeah. It just it just ended up being a whole. snowball effect of using all of the.

credit cards. And I think putting it all. on paper in front of me and seeing all. the numbers in front of me, I think. that's when it clicked and put me back. into reality of we need to do something. about this. So what's your question for. Melody? So my question is with me now. paying off these credit cards. I have. paid 5K out of the 20 so far. It is also. very difficult to maintain just the. lifestyle and if there's any emergencies. that happen, I don't know if I'll have.

the money and I have up about 5k that. I've already paid off from one of the. credit cards. I don't want to result. back to that. So my question is how can. I continue to have this progress of. paying my credit cards off but also have. a good cushion with an emergency fund. doing this all at the same time? Okay. Well, I think you're going to have to. prioritize. I like that you have um. really gotten clear about your situation. and I like that you put the bills in. front of you. One of the disadvantages. that to the great advantage you all have.

as being digital natives is that because. you are digital you can avoid a lot of. the reality by not you know just having. the piece of paper in front of you and. checking and you tend to pay digitally. You tend to you you know uh go through. that life that way. So, the first thing. I would say that I would want you to do. is I would want you to pay off the most. expensive debt first. There's a saying. that it's very expensive to be poor. The less money you have, the higher.

debt, the higher interest rates you. might be paying. So, get rid of the ones. that are the highest interest rates. first because trying to save against. those interest rates gets very hard. It's like having a bucket with a hole in. it. Something's leaking out even though. you're filling the bucket with money. So, you want to get rid of those high. interest rate uh credit cards first and. really be deliberate about it. So, you. might you maybe have paid 5,000 so far. You might say, "I'm going to get rid of. this one totally first and still pay. these minimums." Does that make sense?

Look at each by the interest rate. they're charging you and be very clear. about that. And you have to be extremely. disciplined about not restarting. So. once you clear one of those cards, you're going to have to be ruthless. about it that you don't start again. because you see that zero balance that. might be sitting there. The second thing. that I think is really important is I a. little bit of savings can go a long way. and become very very addictive. So I'm. going to ask you to do something that is. going to seem so. small but every dollar does count. Like.

the the show the bear they say every. second counts. This is every dollar. counts. Okay. Start by saving 50 cents a. day for 2 months. Literally 50 cents. You can have a jar of change. Put 50. cents a day in that jar. After two. months, I want it to be a dollar. I know. this seems like so, you know, Melody, what are you asking me to do? After two. months, I want it to be $3. Okay? And after the in the last four. months, I want you to try to save $5 a.

day. Now, $5 a day, we're talking about. $35 a week. We're talking about $140 a. month. That gets hard. But in those. early days, you start to condition. yourself around saving. You you've. trained yourself. It's not. And this. becomes a way of life, not a diet. It's. very, very important. It just starts to. be a way of life. And saving becomes. addictive. So, everyone that I've had do. this, they see a little money, they get. excited. They start to see more money,

they get more excited. So, that that I. love this. This is so much better. Everybody will say save 10% of your. salary. It's too hard. 50 cents, a dollar, $2, $3, $5. At the. end of that year, you have almost. $1,000. And that's a little cushion. And. it's, you. got to save $1,000, which when you're m, you know, living paycheck to paycheck, that seems impossible. But if I start. you at 50 cents, I promise you can get. there. The other thing I'd like to ask.

you to do for one month period 30 days. 30 days is just use cash for one month. Okay? You cannot use anything else. This. is why it's important. If I I ask most. people, how much money do you have you. have in your wallet? People can't even. tell me. But you'd know if you only had. cash. And so you only use cash, which. actually changes how much you spend. Believe it or not, when we don't see and. have to take the bills out, we spend. more money. So, we spend about 18% more.

on plastic, debit or credit, because we. the scarcity isn't there where you're. you literally have no more bills in your. wallet. You've got to go to an ATM and. get more money cash for one month. It is. going to shift how you think about what. you buy. Starting today. One month. Today. Okay. Starting to that is that's. on the to-do list now. that that'll get. you a little bit of an emergency fund, but but I want to prioritize that debt. first cuz $15,000 in debt at your age is. still a lot of debt. Yeah. And that's.

not even including because I have my. student loans and I'm currently in. school right now along with like a car. loan. So, however, I have to tell you. first of all, you need the car to get to. work. So, you know, that's essential. probably unless you're going to take the. bus. The other thing I have to say, and. sometimes there isn't public. transportation in certain communities. The other thing I would say, you nailed. it with nursing because it's so in. demand. That is a really good job and. that is there's a shortage of nurses in. this country and there will be a for a. while and so you're going to be looking.

at great income in terms of nursing. Yes, definitely. I'm very proud of where. I am. So very grateful. So good job. there. Good job. Thank you. Thank you so. much, Kayla. So much. Let's talk about. the buy now pay later services that. Kayla mentioned. Uh, what should young. people know about these services? Okay, this is what makes me nervous. Okay, on. the one hand, I can tell you that they. have these buy now pay letters where. they'll say a year without interest. So, you're going to buy it. Yeah. No payment.

for one year, no interest. Sounds good. Enticing. if you can be very disciplined about. that. So, you're going to buy a. refrigerator and you're not going to pay. interest for one year. basically the. float that you the interest they're. paying for in order to get you. But what. happens is most people aren't that. disciplined. The interest then comes and. then it starts hitting you very very. hard and the numbers are very big. That's why I don't love it. So if you. said to me, I bought the refrigerator, I.

paid it off in 6 months, I never paid a. dime of interest, and I paid the the. refrigerator off full stop, we're good. But if you say, "I bought the. refrigerator, I got to the one year, and. then I started to pay the interest." I. could promise you that interest is going. to be very high, then you're going to be. in that um minimum payment scenario. There's a reason they offer it to you. They're getting paid back some way and. they're going to get paid back. The. reason they're offering it to you is. because they're counting on you going. through through that year and then. waiting and they can correct. So, I'm.

not a big fan. Okay. We have Madia. joining us from Boston and I hear after. you graduated last spring, you applied. for over 300 jobs. Wow. What happened? I. Well, thank you so much. It is a. pleasure speaking with both you today. Um, so taking you back last year after I. had graduated, I was applying to jobs. like nobody's business and I was able to. get interviews however they differed.

from what I had applied to. So, uh, in a. handful of circumstances, I would get on. these interviews and it wasn't just the. the interviewer and I, it was myself, them, and a handful of other applicants. Um, so that wasn't disclosed. And then. when they started describing the job. positions, uh, I realized that it also. differed from what I had applied to. So, I had applied to a marketing position. online and what they were describing. were door-to-door sales. So this.

happened in multiple different. occasions. Um and then there were also. times where I was asked to do work. projects as a part of the interview. process and these work projects were. unpaid. Um and they would take hours or. even days to complete and it may have. been naive on my part. Uh you know I. really wanted to prove that I was a. solid applicant and that I had the. skills uh for the job at hand. Uh so. after turning in these projects I was. ghosted by a lot of companies. Um so.

that was very discouraging and. disheartening. Uh there was one. circumstance where I was a top. applicant. I made it to a final round. I. spent a whole week working on a work. project. Um and they had told me all. great things. So about a week later, I. got a call from the recruiter and he had. simply told me that they went with. another applicant who had more. experience. Um, and so that just kind of. hurt as it was an entry- level position. and I had completed a lot of the work. I.

ended up asking the recruiter for, you. know, more feedback. Uh, and once again, I was ghosted. So with all of that said, I have come out on the other side. I. have a job now. Um, but I know that my. story is not unique. There are so many. other people uh in my generation and in. others who are experiencing this or even. worse right now. Um, and I do believe. that my generation was raised on the. premise that the American dream was.

still within reach. That if we ended up. going to college and obtaining a degree. that we would be able to get a good job. and set ourselves up for success in the. future. And with this job market, I just. feel like that system uh is no longer as. accurate as it once was before. So my. question for you, Melody, is what advice. would you give to my generation when it. comes to building a stable and. successful future while maintaining a.

healthy work life balance um and really. just not living paycheck to paycheck? Okay. Can I ask one question? How did. you get the job that you have? I had a. networking connection. Um, and I really. do believe that if I didn't have that. connection, I very well could still be. job searching. Okay, great. Because that. would be one of the things that I would. suggest just in terms of that job. search. It's not just about putting. applications in online and hoping. someone calls you back. I think that. takes the same amount of work as. anything you would do. And it's about.

who do you know? So many people have. referrals that will get you somewhere. And the mere fact that it was a. networking connection, I think that's. more and more likely these days than. not. You might have a friend who has a. great job and you would say, "Do you. think there are any jobs available at. your company or is there anyone you. could introduce me to at your company?". So, I think that is a really really good. option if you're looking for a job that. maybe everyone doesn't think about. because they often think, well, who's. going to help me and how could I what. network do I have? But it could just be. a simple network of someone that you.

know who has a who talks about their. place of employment in a very positive. way. In terms of I like to just be very. authentic and real about these things. When you're in your 20s, the work life balance question, I think, is going to be challenged because those. are heavy, heavy work years of trying to. put in the time to get points on the. board so that you have the opportunity. to have the kind of freedom and um. success that you want over time. But.

that first decade, it's a duespaying. decade. And so when I hear a 9to-5, which seems to me pretty work life. balance, that's 40 hours a week. When I. think of no work life balance, I think. of 80 hours. I think of 120. I think of. a very different lifestyle. I think you. have to ask yourself. very um and be very intellectually. honest about what do you want. So you. can't have all of the things you want. without making some tradeoffs. And you.

certainly can't have it all at one time. Correct. I think this is such an. invaluable. point you're making about work life. balance. And I hear this a lot because I. have girls in their 20s and you don't. have work life balance when you're just. starting out and you're 25. You you. there is no such thing. There is someone. else controls your time. That's the. fact. When you think of your 20s, how. hard did you work? I was working a I. remember once filling out my time sheet. and I had 107. hours on 107 hours and my boss says,

"Well, you're not a team player." I'm. not a team player. Yes, I think you. should reduce the number of wanting me. to not even take credit for the hours. So, I ended up doing that. I ended up. only putting in like 80 because to work. 107 hours and get paid for 107 hours. They didn't want to pay me for 107. hours. But the expectation was that I. would show up and be there whenever. needed. We We've all done that. 107. hours. Still doing it. And still doing. it. And still doing it. But yeah, but.

that's why I said you have to decide. because I do think this generation has. been fed some dream idea of work life. balance. That just isn't real in your. It's not real. Now that I also I reject. the concept because it implies when. you're working, you're not living. When. you're living, you're not working. You. know, when people talk about that and I. think you can have both both, especially. if you're doing something you really. enjoy. But I do think this idea of. thinking that you'll have your weekends, you'll make a great living, all of these. things all at once, you'll have a job. that you love. Those early years are, as.

I said, those are hard hard years for. most people and they continue to be hard. years for people. I have a joke with my. husband. He's getting me a time clock. because he says, you know, I I work so. many hours, I punch in, you know, and I. don't punch out. But I do think that. that is something to keep in mind. And. the other thing I would say to you is in. terms of feeling you know financially. secure. I think the the question that. you have to ask yourself is about what. are your goals? You know people knowing.

early on what that means to you then you. can you have something to drive for. So. I want to give you a very you know. specific example that was me. I started. doing my job and I just thought I was. putting money in my 401k plan at work. I. was starting off maybe putting away a. couple thousand dollars a year, you. know, a couple hundred dollars a. paycheck kind of thing, maybe a hundred. a paycheck, which seemed like a lot to. me. Just so, you know, I made $38,000 a. year. That was how much I made. So, it. wasn't I wasn't making a lot of money. I.

had this goal of ratcheting up how much. I saved in my 401k plan because I had. one goal. One day, I wanted to see that. I had $100,000 in my 401k plan. Wow. That was my goal because I did the math. on over 25 years if I confounded. $100,000 would I have millions of. dollars? And the actual answer was yes. So I said I'll be a millionaire in. retirement if I could get to $100,000. But I had a goal with compounding. Yes.

Yes. With compounding. So just having a. goal of what is it that you're trying to. accomplish? And it can change. Do you. want to retire at a certain age? Do you. want to have a family at a certain time? If you could establish that goal, then. you can financially start to plan for it. and work towards it. And if you say, "Listen, I want to work 40 hours a week. and I want to surf on the weekends.". Just understand what that financial. trade-off is. And some people are. absolutely willing to make it. And I. have no judgment on that at all. None.

Has this been helpful? Has this helpful? Very helpful. Yes. Um, it's it's the. goals need to be set for sure. I think. it's just a matter, you know, I'm a. recent graduate, so you live and you. learn and you go through it. Um, and I. think it's it's just the fact that a lot. of other people are going through this. and and it feels very real. So, that was. great advice. And it's also just keep in. mind that the mere fact that you're. feeling a little shaky and unsure about.

this, it makes a lot of sense. You're. not, you know, this is you go into the. deep end of the pool. Now when you know. adulthood becomes upon you, it's you are. making your own life decisions and the. safety net starts to go away of the. family that you've probably I can't say. for sure have had there to to to help. take the edge off. Yes. Yeah. Absolutely. I've been, you. know, lucky enough to be able to support. myself for a while. Um so I do have a. taste and a feel for what that's like.

Um but I know a lot of other people are. just entering into that world as well. So, uh, it is still, you know, you just. got to persevere through it and push. through it. Good job. Good job. Thank. you. Thank you so much, Madia. Next up. is 26-year-old Alexandria joining us. from California. And I hear you moved in. with your parents after graduation to. save money. So many people can relate to. that. So, tell us your story. Okay. Well, first off, I'm so blessed to be a. part of this important conversation. It. means a lot to just sit here with.

admirable women. um especially while I'm. trying to get things together. financially for the first time. Um so. I'm 26, I'm living at home. Um I'm a. labor and delivery nurse. I um. previously got my bachelor's in nursing. and then um I have another bachelor's in. psychology. So that comes with a lot of. responsibilities and now this is like my. first big girl job. And so I'm having. student loans, credit card debt, you. know, wanting to save, budgeting,

learning, you know, now things are in my. name like my car note. My parents were. helping me at one point during school, but it's so much. And um I was watching. the previous podcast with Miss Hobson. and it was just she said something like. it's scary, you know, to make financial. decisions and that's how I'm feeling and. it's it really hit home for me. So. school it has never set me up for that. Like it never taught me about credit. It. never taught me about investing or. budgeting and what I can do. Um so I.

feel like I'm just in this space where. I'm overwhelmed because now I have all. these student loans accumulating and. then it's like wait I applied for this. much why is it this much now? And it's. like the interest and you know what is. consolidation and just understanding. subsidized and unsubsidized. like it's. so much and I'm still trying to like. help around my house too. That's why. Melody should write that book, I'm. telling you. But anyway, like oh my. gosh. So, it's um it's hard and it's.

just I feel like even me wanting to own. a home eventually, it seems so far out. of reach. So, I guess my question would. be for someone like me who's trying to. achieve financial security and stability. and even home ownership like eventually. um what steps can I realistically take. to get there when it feels like all the. odds are against me right now because I. have so much on my plate um you know. just even like paying my debt off like.

is what's the right steps? Okay. So, first of all, the first thing I would. say to you is. it's a lot, but it's also generations. have done this before you. This is a. part of life. And the best thing that. you could do right now is to calm your. fears by taking one piece at a time. If. you think of it all at once, you're. going to be overwhelmed. It's like a. storm. But if you take one piece at a. time, I think you can start to dissect.

the the issue and take control of it. So. you've got student debt in one bucket, you've got the um you know, your just. your living expenses in another. You. have the benefit of living with your. parents, so you're not paying rent or. mortgage right now, but that's going to. give you a lot of opportunity to save. for that down payment for that first. house, which could become part of your. goal. So the the first thing that I. would do if I were trying to really. understand the situation and get it. under control, what is your nut? What.

does it take for you to just live? Like. where you haven't done one nice to have, you've only taken care of the need to. have. You got to pay the student debt. You've got to pay the car payment. You. have to um contribute to the house some. amount that you've negotiated with your. parents. What is that number before. you've done bought a lip gloss or you. know gone out for a hamburger? What is. that number? I think you understanding. that if you do that's great. If you.

don't you need to understand that. Then. when you look at that against what you. make, you can start to figure out what. things can you start to now um uh be. very intentional about like the debt. consolidation. You mentioned that one of. the things you might do is say I'm going. to con consolidate all of these loans. around one payment, one amount. The. maximum consolidation for the federal. student loans interest payment is 8.75%. right now. Now, if you have bank loans,

that's a different story, but you might. want to consolidate those student loans. The thing is, you can only do it once, as you probably know. you might. consolidate those student loans just to. also not have all these different things. coming at you from different places. which feels overwhelming and you're down. to one loan that you're paying and then. you decide maybe you might want to. accelerate that payment um so that you. can pay it off faster but if your credit. card debt is 15 or 20% I'm going to tell. you pay off that credit card debt first. So looking at the credit card debt.

that's something you have to pay and. I've just said to you don't pay the. minimum. So if you're not paying the. minimum and you're accelerating that, what does that number look like? Understanding that budget, which is just. really the most important thing you. could do, then lets you know what how. can you achieve the other goals that you. have, but you got to start with what. you're paying today. Then you know, you're going to get raises. You've got. such an awesome job. If I could deliver. a baby every day, that would be so much. fun. Um because I love babies so much.

So you've got this awesome job. you're. going to do better over time with tenure. and seniority. You're going to make more. money. It won't all be static of where. you are today. So, there's instead of. being behind the eightball, you've got. so much ahead of you. So much. opportunities, so much um uh income that. you will earn, you're not stuck. You're. just starting. You're not stuck. You're. just starting. And so, if you can think. of it that way, I think it'll make a. very big difference in your mindset.

You're like every other 20some your age. trying to get control of this situation. because sadly and this is the thing that. I'm most upset about in our society. No. one teaches us. I've said that over and. over again. How would you know? No one. in school has taught any of us any of. these these subjects. And if you don't. live in a house where your parents talk. about it, they may not know either. because no one taught them, you know, you're really behind the eight-ball. So, you're just going to take it upon. yourself to to now take this in hand,

but you're gonna start by understanding. what you're spending. Yeah. And I think. understanding too, Alexandra, that. everybody is in the same position as you. trying to figure it out. So, you're. feeling overwhelmed and you're thinking. everybody else has it figured out. They. don't. They don't. Everybody is trying. to figure it out for exactly the same. reason that that that Melody just said. because nobody gets taught. Yes. She's. also in a good situation. I mean, you've. got the to live with parents. Once you. get this this budget under control, you. could start saving for a home, you know,

because you're not paying the full rent. that you would be paying. I mean, over. time that that's going to work in your. favor. And I know you don't want to live. there forever probably. I was thinking, oh my god, I kind of want to get an. apartment or something because I've been. here like for a while and you know, I'm. 26. Like I want to So maybe you get a. roommate. You know this I say this to. people and they're like a roommate. I'm. like that's the way most people started. their lives. They lived with a friend, right? They split the rent. They split.

all the expenses and and that just that. that makes it easier. You know, yes, there's another person there. Find. someone that you like hopefully. But it. does make it easier. You know, when I. just saying a roommate to someone, people get offended sometimes when I say. that. I'm like, but that's that's a. perfectly fine solution. You know, something that that people don't do much. anymore. You talk about car pooling. These were like, you know, oh, it was a. way of life. They split gas. Yes. Yes.

You know, these things are, you know, they're they're not so bad and they help. you actually save money. And also, did. you hear previously what Melody was. saying about saving 50 cents a day, then. saving a dollar a day, and then I just. actually, yeah, I've been saving my. checks since I started working. I. started in February, so I've been saving. as much as I can and even if there's a. little bit, you know, in my checking, uh, I'll take that at the end of the. month and like put it into my savings. So, I I've really been trying. That's.

really great. That's really great. You. know, the other thing I tell people. about savings is most people eat out at. work every day. They grab a sandwich or. what I was like, just one day a week. take your lunch. You know, it's 10, 12, $15. one day a. week. That's $45. Thank you, Alexandria. Thanks for joining us. Thank you. Thank. you so much. I appreciate it. Thank you. Good luck. Earlier, you're on a good. path. Really? Yeah. So, that means a. lot. Thank you. And I'm definitely going.

to take that. I'm not just saying it. I'm a hard grader. Thank you. I. appreciate it. I love what you said. earlier too, Melody, about the this. period in the 20s is like you're putting. something in the game. I forgot the term. you use, but it's like you're you're. you're building for the future. Yes. Exactly. Yeah. Yeah. And it's it's. something that I think people don't. realize that you have to get started and. you're getting started with debt on you. because of the education or just the. life, you know, being what it is and.

just being as smart as you possibly can. about how you handle that in the. beginning. And we all make those early. mistakes. So, I remember when I got my. first credit card, I was at college at. Princeton and my friends go on this ski. trip to Aspen. Now, I am not Aspen ski. trip money people, okay? Let alone have. I ever been skiing. You need all the. gear, the ski pass, it's got to be. It's. maybe one of the most expensive sports. This is true. I went with my friends.

all in $2,000. I have no money. and I put it on a. credit card and I said I'll just pay the. minimum but then got behind and bill. collectors were calling me at school. So. I'm freaking out. I am in so much. trouble. Embarrassed to tell my mother. because we've been to this movie, you. know, in my family of not being able to. pay our bills. I can't believe I've done. this. It literally seared me. And the. only way that I ended up paying for it, and I I cannot believe I'm telling you.

the ending. My aunt died and it was and. she left me $2,000. Oh my goodness. Is. that the craziest story? Yeah. Yeah. I. mean, which is I didn't obviously want. her to die, but she she was so proud of. me. She left you exactly $2,000. I swear. on my eyes. And I was like from heaven. She was saving me from this horrible. credit card bill that scared me so much. that did you course correct and not do. it again. I swore in my which is why all.

of this became so hardwired in me. I. would never ever ever do that again. because I was so stressed. Wow. I know. the skiing thing I you know I had. multiple family members come for skiing. and by the time everybody's boots and. coats and ski instructors were very bad. It's a lot. It's a lot. should have. opted out of that one. That's right. Yes. You should have gone hiking only. shoes or walk around the park. Walk. around the Yes. skiing is a lot. The.

Wall Street Journal recently did a story. about this growing trend that we were. talking about earlier of young people. choosing the skilled trades over. college, even calling Ginz the tool belt. generation. The article featured Father. Judge High School in Philadelphia, which. is an allmale Catholic school. And we. gave them a call. And joining us now are. the welding program instructor, Mr. Joe. Williams, and 18-year-old senior, Marcos, from their shop class at Father. Judge. Hi there. Hello. Hello. How are. you? Hi. How are you? Great to have you.

both here. So, you've opted not to go to. college, Marcos, I hear, and instead are. pursuing a trade. Why did you make this. choice? Uh, I made this decision for a. couple of reasons. One was when I was in. grade school, I was always in like the. honors classes. Even at judge, I was in. the honors classes. But studying, it. took a while for me to memorize stuff. I. just was never the best memorizer. So, it came hard. And then looking at high. school and even college, I wasn't sure.

how that was going to go. And I thought. about that like for my future. But then. I came to judge at an open house and I. saw the welding program for the first. time and I saw an opportunity to be. successful without having to go to. college. Also, I always thought um. student debt um student loans for. college that that was going to be a lot. I didn't want to go into debt and I saw. welding as a way to get past that.

Another reason is because I'm very. hands-on. I love building. I love. creating and welding was a way I could. make that into a career and be. successful as someone that went to. college and be making the same as them. or even more. So, you enjoy welding? You. actually enjoy welding. Yeah. You like. it? That's that's that's a big bonus. Mr. Williams, tell tell us about this. program and why it was started. This program was started because there. was a a definite need and a deficit of. of of welders. There are so many people.

retiring but there's not enough people. to fill the void in all the bluecollar. jobs. So the arch dasis had a couple of. meetings and they thought about bringing. the trades to the arch dasis. So they. chose welding and then in in a matter of. months they decided to build a welding. program here at father judge and this is. a three-year program. Two hours every. day for three years these young men come. to my class. We learn how to read. blueprints. We articulate blueprint.

symbols. We learn how to draft symbols. We talk math. We talk lang language. We. do things on and out of class. We teach. them soft skills. We teach them. interview skills. So my my class is just. not a program of welding. They I teach. these young men how how to be men and. what the real world has to offer to them. when they graduate. like bills, like uh. uh uh introducing yourself, shaking a. man hand with with a firm grip, looking. him in the eyes, and just different. facets of becoming a man, not just the.

educational side, but the building side. and incorporate that into becoming a man. into the society. I hear some of the. students are being recruited even in. their sophomore year and receiving. offers of up to $70,000 a year before. they even graduate. Has this this. surprised you? Um, it it hasn't really surprised me, but it still surprises them because the. the these guys are still young. So, some. of them grasp the the the income and. salary, but I try to tell them that the. average income of a male is between 40.

to 57,000 a year. These young men at 17. are incorporating salaries between 60 to. 80,000 depending on submarine welding, nuclear fabrication, structural welding, and and they're starting this, you know, with no debt. Nothing of what us as. adults seem to acquire in our age. These. young men are are getting these salaries. without any any means of that get. And I. hear, Marcos, you already have a. full-time job lined up for this summer. Yes. Yeah, I do. Um, it's called.

Wholettech International. It's in. Camden, New Jersey. Um, and they make. nuclear containers. Um, and I'll be. starting in July for on July 14th. Wow. And I hear you have a question for. Melody. What is it? Uh, yes. Um, I'm. blessed to say that because of the. welding program, I'll be if I stick with. this route, I'll be making um a 100,000. by the time I'm 20 years old. Wow. And. because of that, I'm planning at staying.

at my house, staying home, saving my. money, but I'm gonna have so much money, I really don't know what to do with it. So, I was wondering like money tips from. you. Like, what do you think I should do. with it? Okay. Wow. You're going to be. flush as we said. Well, first of all, I. have to say that this is welding. college. This is fantastic. This is. welding college. I mean, from what. you've said, the amount of hours, the. detail, the depth of it, and you get. your certification here. You get. certified here. which is a big deal. Um, and but the one other thing I want to.

say which I think that when people think. about trades they think they are less. than. I've never thought of that. I. actually even reject the idea of the. notion of blue collar, white collar. I. just don't like that. I think work is. work and it all work is admirable. All. work and this is essential. These are. essential jobs for our society and so. it's no wonder that they are you would. be in demand and you'd make this kind of. money. Now what I would tell you being. disciplined at this age around that kind.

of money coming into your hands is going. to require a great effort but if you are. disciplined you are going to be set for. life because time is on your side with. the ability that you have for that money. to compound and then also just the. opportunity that you will have not to. accumulate the debt that so many people. are talking about the fact that they. have to dig out of. Can you explain. compounding to Marcos? Marcos you. understand comp compounding. So. compounding Warren Buffett calls it the. the eighth wonder of the world. So he.

said compound interest is magical. because your money starts to work for. you instead of you working for your. money. So a very simple compounding. example that I give in my book is would. you rather have a penny that doubles. every day for one month 30 days or a. million dollars? Which one would you. rather have? Uh the penny, right? The. penny is over $5 million. And I explain. how if it doubles every day, 1 cents is. two cents, two cents is 4 cents, 4 cents. is 8 cents, eight. And so that kind of.

compounding is magical and it the money. starts to grow really fast. So because. you're so young and let's just say you. work until you're 65, you have decades. of money to compound. Decades. And I. actually looked at some math. I I did. some math on this of just something. simple. If you put away $2,500 a year, just $2,500 a year, you only made 8%. Only 8% and it compounded for um 25. years. It's almost $200,000.

Just $2500 a year. So, there's a. wonderful calculator you can go to. There are all sorts of calculators you. can go to where you can calculate. returns. Now, what I would do if I were. you starting, I would invest. First of all, if you get. a full-time job and there's a 401k plan, a retirement plan, re invest there first. because you get the tax advantage. You. don't pay taxes on that money. And often. times, they have a match, which is free.

money. So, you don't want to walk away. from free money ever. So you'll still. have some discretionary money that you. can invest, but first make sure you're. maxing out on that 401k plan as much as. you can possibly put put in it. You. start that now. I can tell you it's it's. magic. Then when you are starting to. invest on your own, if you want to buy. stocks, I would invest in things you. know. So what do you like and why do you. think it might be a good investment over. time? And how much should he invest or.

not invest in stocks? So first of all, I. would because that's the question. When. do you invest and what to invest in? Okay, so when you invest, you can invest. at any time. I actually like investing. for children. Yeah. And I like them to. if if if Everest likes Barbie, I want. her to have Mattel. If she likes. Sephora, LVMH. Okay. I can give you all. of those examples. So, is there anything. in your life like a lot of young people. love uh video games, they love that. might lead you to Microsoft, you know, all of those thinking about things that.

are in your life. Microsoft has been an. amazing stock as an example. Think of. things in your life that you'd say, I. understand this and therefore want to. invest it. If you don't want to do that, you can buy a mutual fund or an ETF. where a professional does it for you. But your your point is invest in what. you know or like. Correct. Yeah. So that. you understand it. Yes. I love the idea. of just a small amount of money that you. would invest in something that you know. and like and you can just track it over. time. I think that would be we be. something that that you'd really.

actually start to enjoy. Okay. Got it. Yeah. Thank you. Thank. you. Thank you both so much, Mr. Williams. Good luck, Marcos. Thank you. What it sounds like a fantastic program. Yes, it is. We want to thank you guys. for having us here on your show. We. really really appreciate it here. Father. Judge Welding and um Melody, we we. really love what you do and we've I took. some tips from you also. I watch your. videos. So, you know, I I want to thank. you for being you and and Oprah. We want. to thank you also. Thank you so much.

Thanks for all you're doing for uh so. many kids. That's great. Marcos, have a. great summer. Is it your first job? Yeah, this is this is I had a internship. um summer job last year for welding, but. this is like my first full-time job. Can. I say one other thing, Marggo? Just make. a commitment that there's a certain. amount of money you're going to save no. matter what. You are not going to touch. it. It's going to go in an account. It. is literally off limits to you. And and. I think if you again, if you get into.

that discipline now, you won't have to. learn these lessons later. Yeah. Okay. Yeah. Thank you so much. And thank you. for both of your time, too. Thank you. Thank you. That's great. So cute. But. Melanie, before we go, what do we need. to understand about jinzy and money. that's not getting enough attention? I. would say two things. My first one is um. what I already said, every dollar. counts. Every dollar counts. meaning. every dollar that you save uh counts. Every dollar that you put against that. debt counts and it and it don't have to.

think of it in big numbers. You know, it. it's not every $5,000 counts. Not every. counts. It's every dollar counts. It's. very The big takeaway for me today is. what you said about the 50 cents. 50. cents a day is so doable. It's so. doable. You start small and it grows. into big numbers. And then that's the. second thing. Time is on their side. They have one thing that is so valuable. The time that they have, the decades. that they can use to help them compound. money. It It's not how much they put in.

It's when they start. And if they start. now very early saving, that money will. grow by leaps and bounds over decades. So that later they're not catching up. trying to put big amounts of money away. little amounts today grow into giant. amounts over decades. That is just the. math of it. So every dollar counts, every dollar you save and time is on. your side. Time is on your side. And I.

thought what you said at the very. beginning of this conversation that. what's happening with Jinzy is real. Yeah. The struggle is real. It is ab. they absolutely they're not making this. up. They're not being whiners. They are. coming into the world with more debt. than prior generations. That is a fact. Melody Hopson, thank you. It's always a. delight and pleasure to be with Melody. I know you all know cuz she's the most. liked on the podcast. And her book, Priceless Facts About Money, is. available anywhere. Books are sold. It.

is a must-read for children, as I've. said, and their parents. Thanks to my. guests, Kayla, Madia, Alexandria, Marcos, and Mr. Williams. Thank you so. much. And to our partners, too. Thank. you to all of you listening and. watching. So grateful for you sharing. your valuable time with us. See you next. week. You can subscribe to the Over. Podcast on YouTube and follow us on. Spotify, Apple Podcasts, or wherever you. listen. I'll see you next week. Thanks. everybody.