Personal finance expert Nicole Lapin's advice on Talking Points podcast

Personal finance guru and New York Times bestselling author Nicole Lapin wants you to rethink everything you've been told about the topic.

In this episode of "Talking Points" she shares her 12-step plan approach to managing your money, debt and leisure spending. Lapin and host Brian Kelly, The Points Guy, explain how experiences with credit card debt helped shape how they view their own finances and redefine what money means for them. Lapin also offers tips on breaking down debt through various steps, such as "prioritize to pulverize."

"When you see a bill and you have 100 bucks, and you got a magical bill for 100 bucks, you say, 'OK, I'll just get rid of that because it feels really cathartic. I'm done with this bill," she explains. But Lapin says that's not the best way to pay down your debts.

"You should start with your credit card debt first, then if you have a car loan, of course tackle that. You don't want to pay on a depreciating asset. And then if you have a mortgage. And then finally your student debt, which is considered good debt because they can take away your car, they can take away your house, they can't take away your brain."

3 key takeaways from their conversation:

• Think of a budget as a spending plan in the same way you would craft a sustainable eating plan versus a fad diet
• Put money into categories: Essentials, End Game and Extras
• Find credit cards that fit your lifestyle — so if you're prone to breaking your phone, find a card that offers cellphone protection

The interview also covers what she considers when planning a vacation, and a banking technique that Lapin says might alleviate some financial stress.

You can play this episode above, or wherever you choose to listen.

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Nicole Lapin is the NYT Bestselling author of "Rich Bitch" and "Boss Bitch." She is the host of the nationally-syndicated business reality competition show “Hatched,” and has been an anchor on CNN, CNBC and Bloomberg. Her third book, "Becoming Super Woman," is out now.

Transcript:

Brian Kelly: Welcome to this episode of Talking Points. I'm your host, Brian Kelly, and today we have one of my awesome friends and an all-around rock star. She's the author of a number of bestselling books, including “Boss Bitch” and “Rich Bitch.” Nicole Lapin, thank you so much for joining us today.

Nicole Lapin: Thank you, Brian. I feel like you should do the male versions of these books. What do you think?

Brian Kelly: What would they be called? Like, Points Bitch?

Nicole Lapin: Maybe. I think "Points Bitch" would be great, or “Rich Dude,” "Rich Bro." Like, what would be a "bitch" equivalent?

Brian Kelly: But I feel like it's so much cooler to be -- like, “Rich Bitch” is fun, but I feel like it would be ... people would look down on me, right?

Nicole Lapin: Nobody could ever look down on you, first of all. That's impossible.

Brian Kelly: Well, physically...

Nicole Lapin: No. I think you and I don't need another side hustle or another project, but if we did, I think you could do that.

Brian Kelly: Yeah. Let's talk about you. I mean, you have been the youngest anchor on CNN, and so you went from knowing nothing about finance growing up. You are first generation American. Money was not a topic in your household, and now look at you with these bestselling books. How did you go from zero to 100?

Nicole Lapin: Oh my gosh. I would have said, like, bonds had to do with Bond Girl growing up. I knew nothing. I mean, we don't learn this stuff in school. It's bananas. Like, if you and I are in charge of the world, I think we say instead of, or in addition to, the Pythagorean theorem or all this nonsense like dissecting a frog, you need to learn, like, how to do a budget, how to do taxes, how to do a business plan, what the heck a credit score is. All that stuff.

Brian Kelly: And today ... I don't have kids, but I mean, I know my friends' kids are studying Mandarin and traveling to China. I have to think today and today's curriculums are teaching this. Are they not?

Nicole Lapin: They're not, and I think that (with) personal finance, it's such a disservice. Even, like, what am I doing going to speak at business schools? Even my friends who had gone to business schools, they ask me, like, the most basic personal finance questions. One of them said, "I have money because I have checks."

Brian Kelly: Oh my gosh.

Nicole Lapin: I'm like, "Oh my God, I'm so scared for our society right now." And I'm the least likely person to know any of this stuff, but I realize that money is just the language, like anything else, we just don't have a Rosetta Stone for that language growing up. And I got a job when I was 18 because I grew up in a super broken home, I needed to start working really early on. My father died of an overdose when I was 11, and I just started in school when I was 15, on the air at small markets, and I needed just a J-O-B, like, I didn't have the luxury of doing what I love like a lot of entrepreneurial experts. I just had to figure out how to love what I did because I needed to make money. And I was offered a job on the floor of the Chicago Merc. At the time I wanted a job in, like, big-market Milwaukee from the small broadcasting station in Chicago.

Brian Kelly: Did you grow up in Milwaukee?

Nicole Lapin: No, I went to Northwestern, and they asked me if I knew anything about business news, and I just said, "Absolutely. I love business news." And I totally lied, and I totally faked it till I made it. And I knew nothing about it. And I was thrown on the floor of the exchanges in Chicago and I just went to the school of hard knocks.

Brian Kelly: Yeah, and just learned it.

Nicole Lapin: It sounded like Chinese, because it really is a language. Like, once you can speak the language of money... I actually rewrote financial dictionaries in the back of my books in real English, like short is not the opposite of tall, it's the opposite of long, it just means something's going in the pooper. Like, it's not serious. Equity is a fancy word for stock. Like, I know it sounds really intimidating...

Brian Kelly: Yeah. But people don't learn these things.

Nicole Lapin: Right. But once you learn it and once you know it, I'm like, "This is not that complicated."

Brian Kelly: Yeah. So you're known for your 12-step guides. For someone listening right now, whose... their financial house isn't so much in order, bring us through, like, where do you start?

Nicole Lapin: All of my books are 12-step plans because the first step is admitting you have a problem, and we all have problems. When I started working in business news, I felt like a total imposter because I got myself in debt. I got myself in $5,000 of credit card debt, and as an immigrant's daughter, I was still trying to keep cash under my sink because that's what we did, but at the same time, I was accumulating interest, and I didn't know how compounding interest worked, and all of that stuff. So I just got myself out of it the hard way and I broke it down into steps, and that's what really helped me. So $5,000 was $2,500 a year. And then I broke it down by the month, I broke it down by the day. It was $7 a day, and to me, that felt more manageable than, like, an overwhelming $5,000. And so I think generally, when you're talking about finances, when you're talking about business, it feels so overwhelming unless you break it down into 12 steps, and within those steps, break it down into actionable steps that you can take.

Brian Kelly: It's so funny you say that, because in college, I got ... my first credit card was a University of Pittsburgh card. I think they gave me an umbrella or a T-shirt as my sign-up bonus.

Nicole Lapin: Tempting, right?

Brian Kelly: Quickly got it, booked a spring break to Ireland. I was making no money, so clearly a $500 balance was all of a sudden $1,000. And after college, when I moved to New York City, it was quicksand. I mean, I couldn't pay rent, and then I had a bill from college, a Verizon bill that was sent to collections, and they were going to garnish my wages. Like, I was a hot mess. So it is kind of funny now when I'm advising people on credit cards, but I do think that actually going through the hell of debt and knowing the negative sides, I think, makes us better people to say, "Look, you have to be out of credit card debt." And I think that's what I've always tried to make clear with, like, points -- yes, credit cards can provide amazing value, but only if you're not paying the interest and getting totally underwater with interest.

Nicole Lapin: I always say that debt is the only four-letter word I don't like.

Brian Kelly: Yeah, I mean, bad debt, right?

Nicole Lapin: Bad debt. That's right. I know there's like good debt and bad debt, like avocados is good fat.

Brian Kelly: So, other advice that you give to people who are just trying to get it together?

Nicole Lapin: Getting that debt monkey off your back is one of the chapters, or one of the steps, in “Rich Bitch,” and I talk about how you should also "prioritize to pulverize." So I think a lot of folks think that all debt is created equal. And so, when you see a bill and you have 100 bucks and you got a magical bill for 100 bucks, you're like, "OK, I'll just get rid of that because it feels really cathartic. I'm done with this bill." But that's not the best thing to do because you should start with your credit card debt first, then if you have a car loan, of course tackle that. You don't want to pay on a depreciating asset. And then if you have a mortgage. And then finally your student debt, which is considered good debt because they can take away your car, they can take away your house, they can't take away your brain.

Brian Kelly: So I know you just got back from Bali, and of course this is a travel podcast, so we're going to start talking travel, but how do you budget for travel? Like, is it a line item? Is it a non-negotiable? Especially millennials and Gen Z, everything's about experience. How should people be thinking about budgeting for travel and trips?

Nicole Lapin: So I think of a budget as a spending plan in the same way as you would think of a sustainable eating plan as something that you can stick to instead of, like, a crash diet. So, allowing yourself the equivalent of a Hershey's Kiss so you don't end up in the middle of the night noshing on a big old hunk of chocolate cake because you're so hungry and so deprived -- we've all been there. And so when people say, "Cut out your morning latte," like, I just want to bash my head against the wall because it's such bad financial advice.

Brian Kelly: Millennials are being bankrupted by their avocado toast.

Nicole Lapin: Right. Like, "Let me live. I work really hard. I want some avocado toast and a soy latte, or whatever, or milk latte." But I think if you break it down into -- I love alliteration -- the three E's, so essentials, end game and extras. So 70% of your overall spending plan should go to the essentials. So your food, your transportation, your housing, everything you need to live on every single day. Then 15% should go to the end game. So the future Brian, your investments, your retirement, all of that. And then 15% should go to the extras. Like, you have to allow yourself for extras -- whether it's travel, whether it's the latte, whether it's the mani-pedi, whether it's, like, avocado toast for everybody, whatever does it for you. Allow yourself fun, otherwise you're going to binge later on. Because people will say to me in the beginning of the year, like, "Oh, I cut off the morning latte. I'm doing so great." And then four months later, "I bought the Gucci purse because I didn't buy the latte." Like, "Hello, Captain Obvious -- if you just got a latte every day, you would keep yourself motivated." Have that small indulgence so you won't binge later on. So, that's what I do with travel. And then I also, like, name my sub-savings accounts, for travel.

Brian Kelly: So you won "Money Expert of the Year." How do you plan for a trip?

Nicole Lapin: It's like nerd [unintelligible].

Brian Kelly: It's a nerd award? But it's a great award. I think you should be proud of that.

Nicole Lapin: Thanks.

Brian Kelly: Got to ask, though: How are you with your points? When you went to Bali, were you maximizing or ...?

Nicole Lapin: I am, or I'm trying. I mean, you'll forget more than I will ever know, obviously. So I have ... when I worked at CNN, I lived in Atlanta and that's when Delta came into my life.

Brian Kelly: So you are Delta loyal.

Nicole Lapin: I am Delta loyal.

Brian Kelly: I mean, it's arguably the best U.S. airline. They're number one on time. Their planes are nice and fresh. Like, Delta is a good experience.

Nicole Lapin: I agree. I may or may not have a second home in Delta One. So I'm Delta all the time.

Brian Kelly: So you spend on them and you get your medallion. What medallion status are you?

Nicole Lapin: I just got it in the mail the other day. I got my Diamond Medallion tags.

Brian Kelly: Yeah. Congratulations.

Nicole Lapin: And I'm not sure if that's a good thing or embarrassing, because you need a fly a shitload.

Brian Kelly: A lot.

Nicole Lapin: Can I say shitload?

Brian Kelly: Yeah, you can.

Nicole Lapin: You have to fly a shitload. Like, you can't even buy your way into that.

Brian Kelly: But speaking of... So, you're on the plane, a lot of travel, I know a lot of us burn out, and that is one of your topics that you talk about -- how to not burn out. And with traveling so much and being so busy, what are your tips for that balance?

Nicole Lapin: Yeah. So “Becoming Super Woman,” my third book, just came out, and it's a 12-step plan tracking (how) to go from burnout to balance. And for me, it's really getting rid of that busy badge of honor because I think for so long in my career, I would just love to live in that breathless zone. I would take red-eyes or super early morning flights to try and defy (the) space-time continuum. And if I wasn't booked to the 15 minute, like, I would be pissed. If I had a lunch break when I was traveling and not in meetings, I would be pissed. I lived in this constant state of breathlessness and I've had to retrain myself that, like, being busy and being stressed doesn't mean you're important.

Brian Kelly: I think there is this notion, especially when you travel -- people think that it's, like, luxurious, and I need to prove that, like, I am this invincible road warrior, but it takes a toll on your health and...

Nicole Lapin: It totally takes a toll. But I think in your 20s, you know, get on with your bad self. You need to, like, work a certain amount to even get to burnout territory. But I think in general, we've leaned so far into everything that we've fallen over, and I think that rhetoric was fine for a time, but work is not the recipe for getting better across the board. You can't work your way into success. You can't work harder and just expect it to be better. You have to allow yourself some rest. Like, you have to put your oxygen mask on first before helping others.

Brian Kelly: Yeah, so investing in yourself.

Nicole Lapin: They don't say that. We both know that they don't say that on the plane.

Brian Kelly: So you just mentioned naming sub-accounts. What exactly is that?

Nicole Lapin: Do you do that?

Brian Kelly: No, I don't.

Nicole Lapin: So if you look at my banking account, I have ... like, (do) you drop your iPhone?

Brian Kelly: Uh-huh (affirmative).

Nicole Lapin: I drop my iPhone, on average, twice a year. I've calculated this over time.

Brian Kelly: Oh, about the same.

Nicole Lapin: And so I put an automatic deposit. I have, like, a "Nicole's broken iPhone fund."

Brian Kelly: No you don't.

Nicole Lapin: Swear to God. I guess Miss Butterfingers is, like, inevitably going to drop her phone and instead...

Brian Kelly: But there are credit cards that you can get that have cell phone protection, so I think you should look into that.

Nicole Lapin: OK. So maybe I can lower my $25 a month automatic deposit for when ... because I think that's what happens. A lot of people get freaked out when some emergency happens and it, like, derails their whole juju of what they had going on, and then it's almost like a diet where you're like, "Ah, I had the cake so I might as well have the whole cake because I messed it up." So I try to just, like, safeguard against myself.

Brian Kelly:So how many of these sub-accounts do you have?

Nicole Lapin: It's kind of cuckoo bananas, but also, if you visualize it, it doesn't feel like you're just putting money into a dark abyss because you spend so much on taxes, you spend so much on bills, like, the last thing you want is just to be like, "More is coming out of my paycheck." But instead, renaming that makes it something that I feel like I can stick to more because I know what I'm getting. I'm getting my Mexico trip. I'm getting my...

Brian Kelly: So you'll put a sub-trip, like -- you'll save for Mexico, you're going to splurge on a nice hotel and meal. So before you go on a trip, could you estimate exactly what you're going to spend on it? Like how much planning, how nitty-gritty should you go to have a healthy finance habit?

Nicole Lapin: I have a top line idea of what I want to spend but I try to have a plan and then know that I'm going to get rid of that plan and not be, like, super rigid. I'm not a fussy traveler. I'm not, like, an intense, like...

Brian Kelly: You're not a fussy traveler as long as you're in business class.

Nicole Lapin: That's right.

Brian Kelly: Fully horizontal.

Nicole Lapin: I'm not. I mean, except for that.

Brian Kelly: What apps do you recommend, because this can get dizzying to do, right? I feel like you should have your own, like, system where it's all automatic. What do you recommend (to) someone technology-wise to help become more financially healthy?

Nicole Lapin: As long as you're doing it, whatever does it for you, like, get an app that you love. There are 1,000 obviously, and budgeting trackers, but sometimes even kicking it old school is a good way to start. Like, if a pink colored pencil does it for you and you're going to get that done ... The first time I did a spending plan, I did it in the back of my favorite book, Anna Karenina, which is how I named my company, from a line in Anna Karenina, because it just felt, like, less serious, less overwhelming, like an Excel spreadsheet wasn't involved. You can even do a spreadsheet if that does it for you, or you can just set up a system and a process in the beginning of the year, in the beginning of the month, and so you can automate everything. And so you basically safeguard yourself against yourself. It's foolproof.

Brian Kelly: There are a lot of people in the financial health industry. Who do you follow on Twitter that you think is really good when it comes to this type of stuff?

Nicole Lapin: So many people. Brian Kelly, he’s amazing. I also just follow Dave Ramsey, and Suze Orman, and Jean Chatzky, and I think they all have different audiences. And so, when I was getting into this space, I felt like, for me, the advice was buy a latte, maybe rent a house, but, like, in other segments of the population that need financial advice, which is everybody, it might be don't buy a latte and buy a house. And that's OK. The financial gods are not going to come out and get you. It's truly, like, rethink conventional wisdom to think for yourself, but maybe that works for you. It's like when I became vegetarian, I just thought, "OK, well, my family ate meat. They're Jewish." Like, at some point I thought, "Self, do I want to eat meat?" And the answer could have been yes. But I think we all need that moment to stop and think, like, just because it's always been done this way doesn't necessarily mean it's the way it always has to be. So rethink everything for yourself, whatever advice you've been told, even from me.

Brian Kelly: Rethink everything. So one of the biggest trends, I just read a CNN article on a family who had five kids who retired at age 32 due to the FIRE movement, right?

Nicole Lapin: FIRE, yeah.

Brian Kelly: What is that? "Financial Independence, Retire Early?" Are you a believer?

Nicole Lapin: It's a really popular movement, of course. I think there's a lot of misconception around the idea that a 401(k) is going to save the day. Like, if you put money in a 401(k), you're going to eat cat food in retirement. That's not enough, period, end of story. And, like, the more the merrier when it comes to retirement accounts. An IRA is an individual retirement account. I think a lot of folks don't realize that you're going to pay taxes on the traditional vehicles when you take that money out. So if you see the money in your 401(k) or your traditional IRA, that's not the money that you actually get. Like, you get taxed later. And the Roth idea, the reason people are so excited and hot and bothered about the Roth, is you pay taxes now. You might think, like, "Why am I stoked about paying taxes now? Who wants to pay more taxes?" But the thing is, like, you're probably going to be in a higher tax bracket when you grow up and when you're ready to retire. And I'm not a betting woman, but I'm assuming taxes are only going to get higher.

Brian Kelly: Yeah, for sure.

Nicole Lapin: So you want to be able to have different accounts, and also think about like having a little sabbatical time. It doesn't need to be, "I'm going to retire and never going to work again when I'm 65 or whatever." Like, take a year off if you can. Think of it as like a mini-retirement.

Brian Kelly: And finally, Nicole, you have so many good books. Where can people find you on social media?

Nicole Lapin: @NicoleLapin, wherever social media is served, and Nicolelapin.com, and yeah, you can listen to “Hush Money” podcast. There is this really amazing episode about tipping with the super dope Points dude. Did you love being on the show?

Brian Kelly: That was so fun. We had a lot of fun.

Nicole Lapin: It should have been illegal how much fun we had.

Brian Kelly: Nicole's podcast, “Hush Money” -- download it where you find podcasts --was really fun. I went on and we talked all about tipping and tipping culture, and Nicole and I saw eye to eye.

Nicole Lapin: Yeah, we did. Like a boss.

Brian Kelly: Awesome. Nicole Lapin. Thank you so much for joining us.

Nicole Lapin: Thanks, Brian.

Brian Kelly: Safe travels and thank you for sharing. I love, just -- I'm thinking differently about financial habits and advice and everything that we've gotten. I think that’s the keynote to take away today: think differently. The advice that you've been given your whole life may not be the best advice for you. Thank you, Nicole.

Nicole Lapin: Thank you.

Brian Kelly: That's it for this episode of Talking Points. I'm your host, Brian Kelly, and huge thanks to the fabulous Nicole Lapin. Go buy her books today and follow her on social media. And to my team at The Points Guy, Margaret Kelley and Caroline Schagrin, you guys rock. Couldn't do it without you. Safe travels.