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00:00 Speaker A
As 2025 winds down, it’s time to get your financial foundation intact. So what should be on your year-end checklist to help kick off 2026 on the right foot? Our next guest has the tips that you need to know. Joining us now is Vivian Tu, aka Your Rich BFF. She also serves as Sofi’s Chief of Financial Empowerment. Vivian, you often refer to the strip method. Can you give us an example of how people can start using that right now?
00:32 Vivian Tu
Yeah, I I always jokingly say when my friends ask, if you want to be rich, you need to strip. S stands for savings. I usually recommend three to six months of living expenses, six to 12 if you’re a head of household into a high yield savings account so that you can be earning more interest. Um T then stands for total debt. You’re going to rank your debt from highest to lowest interest rate, make the minimum payment across everything, and then any additional debt paydown funds you would put towards the debt with the highest interest rate. R, retirement, everybody’s favorite word. Taking advantage of tax advantaged accounts like a 401K or 403B through your work, as well as a Roth IRA or traditional IRA individually. These are just great ways to get those little nuggets of candy from the government. We all love a tax benefit. Um and then inside of those accounts, I, we want to invest. Um I really recommend that folks don’t try to cherry pick single stocks because more often than not, it exposes them to way too much company risk, whereas I prefer investing in larger baskets of index funds that really allow you to just participate in any sort of upwards market momentum. Um and then last but not least, P, you got to make a plan. You do not get to have happily ever after if you don’t know what that looks like. So I really encourage people to use this time to also really goal set.
02:22 Speaker A
Let’s break that all down piece by piece. First of all, as we make our way towards this new year, we really want to create this sort of financial routine and those were all wonderful, but how do you jump in and sort of find maybe a high yield savings account that works for you if this is your first time trying to do that?
02:40 Vivian Tu
Yeah, absolutely. Listen, I think it’s so important that you get a high yield savings account, so I don’t want you to get paralysis by analysis. I will say, you mentioned earlier, I am the chief of financial empowerment at Sofi, and I’m a huge fan of their high yield savings account product, mostly because it’s not just a high yield savings account. They also have a high yield checking account. So even money that is sitting aside waiting for your Wi-Fi bill or your groceries can actually continue to be earning you money. Um we just want to make sure that especially now as our wallets are feeling tighter and tighter um around the holidays as we’re spending that it’s earning us just as much money as, you know, we are working hard for it.
03:33 Speaker A
Vivian, some some Americans might be watching this right now and they’re here savings and they wish that they could save but they’re just in so much debt, maybe even credit card debt. Where do you even begin to pair that back ahead of year end?
03:51 Vivian Tu
Yeah, so credit card debt specifically is the fastest growing, scariest debt because the APR every single year is so high. The average credit card is charging you 20 to 30% interest every single year. Um so what I really encourage people who are feeling so overwhelmed that they can’t get out of this debt is to look into some alternative paydown options, things like personal loans. Um so if I offers a great personal loan where you can essentially get that lump sum from them, you pay down your credit cards and then you’re actually able to pay back that loan with them as well.
04:36 Speaker A
Vivian, this year we also saw the return of student loan repayments, maybe even for Gen Z, it was their first time having to repay these student loans. What’s your recommendation and what sort of changes can we expect in just a few weeks?
04:52 Vivian Tu
Yeah, I mean, listen, there are going to be even more federal student loan changes expected next year. I feel like right now we’re seeing a different headline come out every couple days. So while I don’t have a crystal ball exactly, it is a really good time to revisit your student loan payments. Make sure that you are feeling confident about being able to make them on time. If not, looking into what sort of relief programs are available to you, whether that be income driven repayment, um perhaps looking at refinancing your student loan if you feel like your interest rate is just too high. Um and, you know, there’s so many different strategies to use, but the first thing to do is to make sure that you’re not sticking your head in the sand and avoiding it entirely.
05:46 Speaker A
Avoidance is definitely what not to do. but we also did hear from Challenger Gray in Christmas and they had a pretty staggering number. So far this year, year to date until November, there have been 1.1 million layoffs and it’s a really tough pill to swallow, a tough pill to even read that, especially around the holidays. For those who have been impacted by these layoffs this year, what would you recommend that they should be thinking about here?
06:18 Vivian Tu
Yeah, I think it’s really all about using your network right now. Uh you’ve heard the phrase that your network is your net worth. It’s never been more true. I think a lot of a lot of people are actually just going online and trying to apply for jobs, but I think that’s the wrong approach. I would actually reach out to your personal network and you know, struggle in public. Um say that I’ve been laid off, say that you’re looking for work, say that what you’re open to. You would be so shocked how many people will come out of the woodwork and say, oh, well, my company’s hiring for this or I know somebody who could potentially get you a job here. Um when you utilize that network, it essentially puts your resume on a short stack versus the overall general pool and this means that you’re likely just going to have a little bit of an easier time getting your foot in the door that very first opportunity. Um and that’s always the hardest part.
07:23 Speaker A
Vivian too, aka your Rich BFF. such great tips. Thank you so much for joining us and happy holidays.
07:29 Vivian Tu
Thank you so much for having me.