Summary
Lanea and Crystal discuss various aspects of personal finance, focusing on the importance of savings, insurance, and the benefits of automating financial processes. They explore how automation can alleviate stress and improve financial management, as well as the role of AI in investing. The discussion also touches on trust issues related to automated financial services and the psychological benefits of removing decision-making from financial tasks.
Takeaways
- Savings features can help automate money management.
- Insurance education is crucial for financial literacy.
- Automating finances can reduce stress and improve efficiency.
- Psychological benefits come from removing decision-making in finances.
- AI can assist in financial management but trust is essential.
- Investing automation can help those who struggle with decision-making.
- Setting up auto withdrawals can simplify saving and investing.
- Using round numbers can make financial management easier.
- Trust issues with financial institutions can hinder automation.
- Automating payments can lead to better financial health.
Transcript
Crystal (00:00)
Hi, I’m Crystal, the founder of the Piggy Bank Patrol, a podcast that gets parents talking about money. Myself, along with my co -founder, Lanea are financial analysts and new parents. We want to empower parents to learn healthy money behaviors while breaking cycles and teach children about money.
As always, the piggy bank patrols content is intended for educational, informational, and entertainment purposes only, and is not to be taken as legal, financial investment, or tax advice of any kind.
Crystal Chabot (00:30)
Hey, Lenea, do you automate any of your finances?
Lanea (00:34)
I feel like I automate my budget, but that’s about it.
I do have all of my bills on autopay
Crystal Chabot (00:42)
Yeah, that’s automating it. There you go. I think that when it comes to automating, we need to consider the have on our inflows and outflows. And because you are the budget queen, I feel like you have the perfect setup for automating all your finances. But I’m not sure if you would prefer to manually transfer to savings at the end of the pay period. that?
more your style or
Lanea (01:09)
think it’s evolved over time, really. I think at this point I would be fine automating it. But, you know, obviously there is a time where I automate really anything. So I think it’s kind of a matter of where you are in your journey as well. see, I am looking more to automate, to maximize and to prevent myself.
from hurting myself because if it’s not there, I tend to respect that more than if it’s there and at the end of the month say, okay, whatever is remaining be more proactive rather than reactive.
Crystal Chabot (01:46)
wish that banks had a way to set up a if this then that. if at the end of the month or on like the 29th of the month I have X amount in my account, put X amount that’s above it. Like if I had 1500 in my put 500.
Lanea (02:04)
Mm-hmm.
Crystal Chabot (02:08)
automatically into my savings so my account gets reduced to a thousand. That way it’s automatically transferred so I don’t have to manually go in and think about if I should transfer it or not. none of my banks do that.
Lanea (02:19)
think that there are some, or they’re at least getting close, because I used to bank with Simple Bank. So it was an online only bank, but it was like banking and budgeting in one, and it was based off of your pay schedules. So it would basically do that. either set up enough money aside in envelopes.
Crystal Chabot (02:30)
Okay.
Lanea (02:48)
for your different bills, but it also had a savings feature and it also could take money out of your account automatically every day. I think you could set the pace of it could take it out and automatically put it into savings.
Crystal Chabot (03:05)
that could help a lot.
Lanea (03:07)
I miss that bank so much, like so much. They were bought out by BBVA then BBVA was bought out by…
Crystal Chabot (03:10)
What happened to it?
Lanea (03:18)
some other like really large corporation and then they closed it. And I’m heartbroken. I’ve been looking for years for a replacement and there’s just nothing on the market that’s as good as the bank as they were.
Crystal Chabot (03:22)
Wow.
yeah, it says they were acquired by PNC Financial Services. Yeah.
Lanea (03:37)
PNC, yes, PNC is the one them. It’s honestly heartbreaking. I followed their Reddit thread for years trying to find an alternative and there’s some that are kind of getting there, but they’re not like Simple Bank.
Crystal Chabot (03:42)
RIP
They’re not like what they were. so sad. It happens so often in the business world and finance in general.
Lanea (04:01)
Yes.
And then I wonder if Ally Bank does something similar.
Crystal Chabot (04:11)
It’s possible. I’m not sure. don’t use them, but I know a lot larger online banks are moving towards AI and if anything can do it, an AI chatbot should be able to set something like that up, right?
Lanea (04:25)
One would one would really think so
Crystal Chabot (04:28)
It’s just as simple if this than that. If it can’t do it if this than that,
Lanea (04:32)
You wouldn’t think that it would be that hard, it seems like it is.
Crystal Chabot (04:37)
But there are still some simple ways to automate for now what we have with our basic manual ways of doing things. So for example, we can set up auto deposits on our paychecks. I think that’s important. some people are still manually depositing their checks at the bank.
And that just leaves so much risk open. Cause what if you lose the check?
Lanea (05:04)
Yeah, I don’t personally know of very many. I like the stats on it because I don’t personally know of anybody that manually deposits it. Even I was going to take that a step further that I do know some people that split the percentage of their paycheck so it automatically goes into different accounts. And I think that’s pretty smart.
Crystal Chabot (05:26)
about 10 % of US employees have a paper check.
Lanea (05:32)
Okay, yeah, I didn’t think that it was very many.
Crystal Chabot (05:35)
But there’s also a percentage of people that are unbanked. So where are they direct depositing it? That’s kind of what I want to know. Yeah, like auto depositing income is an easy one. then you can also set up a generic move X amounts.
Lanea (05:38)
Yeah.
Crystal Chabot (05:51)
every few weeks to high yield savings or through investment brokers like Robinhood, you can set up an auto withdrawal from your account.
Lanea (05:59)
Yep. Yeah. Yeah. I’m setting that up for my Roth.
I just figure if, and I’m even really lucky in that we usually have excess every month that we can, put towards savings. But if I don’t automate it, it’s just, I feel like the chance of it happening would be much, much less.
Crystal Chabot (06:24)
when I wasn’t making a lot of money I went back in the day I used to use acorns so they would round up every time you would use your card and like that difference would be put into the account.
Lanea (06:30)
Mm-hmm.
Yeah.
See, I kind of like that principle because one, I like round numbers. I don’t like dealing with the cents I don’t think it makes a material difference on the day to day, but I think it’s one of those small things that you could do that would add up to a significant amount over time.
Crystal Chabot (06:44)
Yeah.
a reason why Canada got rid of pennies.
I still have like a collection of them. Someday they might worth like they might be worth something someday.
Lanea (07:02)
Really? Okay.
Crystal Chabot (07:05)
But the other thing that we can also do is, like you mentioned, set up the bill auto pay. So you can do that through your bank or whoever you’re paying. can have services to set that up through. So basic things like mortgages, cell phones, utilities, car payments, credit card payments, student loan debt.
Federal ones, think if you have set up with the auto deposit you get a bit of interest off
Lanea (07:33)
Yeah, it’s like a 0.25 % interest rate reduction.
Crystal Chabot (07:38)
that’s kind of cool. I mean, it’s not much, but it’s better than nothing.
Lanea (07:42)
Well, I know a lot of cell phone companies give you like an extra $5 or $5 or $10 off of month to if you set up auto pay.
Crystal Chabot (07:52)
I don’t know. I pay mine yearly.
Lanea (07:56)
I know, I know.
Crystal Chabot (07:57)
Otherwise, there’s like medical bills and daycare, but my daycare that I signed us up for, I don’t think that we can, I think we had to pay by check actually.
Lanea (08:06)
That’s how ours is too. That’s the only bill that we have that’s not on auto pay at this point. Like all of our utilities are mortgages.
I, yeah, all of our credit cards are, everything that I can set up on auto pay I’ve set up. It’s just nice not to, yeah, it’s just nice not to worry about it.
Crystal Chabot (08:21)
Yeah.
It just saves so much time.
we do have to be in the position financially to not worry about it because I remember back in the day I was like, my internet bill’s coming out. Do I have enough on this day?
Lanea (08:35)
Yeah, yeah.
yeah, absolutely. that’s why I know that there’s a lot of people that are like a big fan of budgeting by paycheck, I feel like you would always be somewhat stressed just because you are always planning it like down to the wire. Like what bills are going to come out with what paycheck rather than working to get a month ahead.
Crystal Chabot (09:00)
yeah.
Definitely. Yeah, that’s pretty much all I had for the automating finances. I mean, it really depends on your financial makeup, where you’re at in your life and everything, but there’s always at least like one or two bills that you could maybe automate. Like even when I wasn’t making a lot of money, I still automated like paying my rent. So.
Lanea (09:27)
See, I actually, I think that the beauty of automation lies not in the ease of it, although like that’s nice. Like if you’re financially able to do it, obviously I recommend auto pay. Like it’s nice to, it’s nice to do. But I think the real beauty in it lies in the ability to remove.
choice or decision from it. So if you are on a paying yourself first, have it automatically withdrawn from your account. So it just comes out. So it never touches your account. I have a really good friend that less self-discipline when it comes to personal finance. So if it’s in his account, he will spend it.
Crystal Chabot (09:58)
Yeah.
Lanea (10:14)
But if it’s not in his account, he won’t spend it. So just moving the money so it’s never actually in your account or it automatically gets moved over. I think that’s where real gains can come from. And I forgot who it was, I don’t know, like the founder of Fidelity or something like that mentioned if you don’t
have it set up automatically self-discipline will lose out like 99 % of the time.
Crystal Chabot (10:45)
fallback psychologically if you need it.
Lanea (10:48)
Yeah. Well, and I think a lot of people do like I need it. we contribute three hundred dollars a month to Leo’s savings account and It’s automatically transferred. If it wasn’t, it would be harder to do not because of the burden of it, but it’s hard to.
It’s hard to send $300 every month, even though it’s what you agreed on, you have the available funds. It’s just hard to do. there’s just psychological components of it. But because it’s automatic, I’m never going to have to remember it. And I’m never going to have to do something that I do, but don’t want to do. And I think investing is very similar to that for probably the vast majority of people, or at least for me.
Do you have any of your financial life with AI?
Crystal Chabot (11:42)
No, I won’t even use the Bank of America, chatbot. I refuse. I’ll use Google Gemini for dumb things like stuff that I would Google, but I am not going to give personal information over. don’t. And I know that there’s like there’s actual like funds built by AI and I haven’t looked that far into it, but it
Lanea (11:43)
I don’t either.
Okay, all right.
Crystal Chabot (12:07)
there are some companies out there that will invest for you based on AI, like the AI person doing it.
Lanea (12:16)
Well, I think that there’s quite a few companies that do that, isn’t there?
Crystal Chabot (12:20)
how many of them are just don’t know how many are legit.
Lanea (12:20)
Like robo advisor?
I think that there are a lot of legitimate ones. It’s just will you make back the small fee that they charge? because if you Google just even robo advisors, there’s a ton of them, Wealthfront, Fidelity, I think even Charles Schwab has one. there’s quite a few of them that exist.
there was it was several months ago, but I’m pretty sure I sent it to you. it was a Ted Talk about decision making specifically with like AI and investing. And I don’t think it’s really been released yet in ways that would actually work. But they were doing statistically speaking, which, decision would be the better.
Crystal Chabot (12:51)
Okay.
Lanea (13:06)
like outcome and everybody went with one when really statistically it’s better to go with the other one. And that’s what they were talking about. AI could help overcome that.
But it would be interesting if there was an actual good, legitimate model to run all of your investing decisions through to see like how you would do versus on your own.
Crystal Chabot (13:29)
I could theoretically set up a small account and then find one and do that.
for like a year and see what happens.
Lanea (13:36)
Yeah.
But it’s also hard because the market always changes too,
Crystal Chabot (13:40)
they have ones that automatically trade for you too now. I just don’t know if I can trust them with my bank info.
Lanea (13:43)
Okay, yeah.
Yeah, I’ve thought about doing betterment, I think it was I think the fee was nominal. I think it was like point to five percent, but it just didn’t seem worth it.
Crystal Chabot (13:57)
Yeah, I’ve looked into betterment and it just didn’t scratch my itch. For lack of a better saying.
Lanea (14:05)
What would though, like what would convince you to automate your investing or automate?
Crystal Chabot (14:14)
Anything would, I don’t trust other, like if I’m gonna lose money it’s gonna be because I fucked up, you know? don’t trust like any human or non-human for that.
Lanea (14:20)
Okay, alright.
I think one of the biggest hurdles of investing is getting over decision fatigue. Like what to go with. a lot of people struggle with that. So if you remove that decision piece out of it, I think it could help a lot of people.
Lanea (14:41)
We didn’t talk about homework. Did you complete your homework from last week?
Crystal Chabot (14:44)
shit.
I did do our net worth calculation for this last month. besides all odds, the stock market did us a solid and we’re up about
$3,700.
Lanea (14:59)
Yay, that’s awesome.
Crystal Chabot (15:01)
Yeah, closer to that 100,000. That is so elusive. Every time we hit it, we just fall back on her because we’re like, let’s buy a house.
Lanea (15:10)
That’ll do that. That’ll do that. We went and toured a house this week. We were almost going to put an offer on it, but it went into pending already. It was only on the market for two days and we were going to renovate it and live in it. So that’s, that was pretty disappointing. It was a mid-century modern on like 0.68 acres. It was
Crystal Chabot (15:22)
No!
Lanea (15:38)
Perfect, was perfect, perfect, perfect. But yeah, I’m pretty disappointed about that.
Crystal Chabot (15:44)
Yeah, but you gotta put in an offer like before you see the house basically.
Lanea (15:50)
real.
Crystal Chabot (15:50)
your realtor pretty on it at least or? Fuck.
Lanea (15:52)
No, no, absolutely not. We really like him, but we’re not one we’re not looking very very sporadic. So it’s not his fault. But I went on the market Wednesday. I saw it Wednesday. I wanted to go and see it, but I forgot what was going on, but we couldn’t.
And then Friday came, we saw it and then it was pending that night. So.
Crystal Chabot (16:17)
just remember realtors are like banks. You can change them and you don’t have to stay with them just because you like the customer service.
Lanea (16:21)
Yes.
I agree, yeah, we would be like, we are ready like right now, I think it would be a different story, but.
Crystal Chabot (16:33)
Right. I don’t have any big news. Housewise, I have been watching all the hurricanes hitting Florida and I’m I’ve been thinking about it actually a lot because it comes up on my YouTube. And I’m just like, I really wonder if the guy we bought the house from here in New York.
is regretting his choice to move back to Florida, because I’m pretty sure he doesn’t have a house anymore. And he paid cash, so he probably doesn’t even insurance or anything.
Lanea (17:00)
Thanks
You know what we should have added to the 101 is insurance.
I took an entire class on insurance.
Crystal Chabot (17:20)
Really like house insurance or, I don’t know.
Lanea (17:22)
No, like just all sorts of insurance and risk mitigation measures. It was actually pretty interesting.
Crystal Chabot (17:28)
That could be its own little episode, Risk Mitigation.
Lanea (17:30)
Yeah.
Crystal Chabot (17:31)
house update. we finally got a dumpster and cleaned out the smoker carpet from the garage.
Lanea (17:37)
Wait, there was smoker carpet in the garage?
Crystal Chabot (17:40)
Yeah, all of the carpet I ripped out of the second and third floor went to the garage because I didn’t have anywhere else. Yeah, yeah. But removing the carpet from the garage revealed damage that was known by the seller. So basically they have like we’re on a hill and we have a retaining wall with the neighbor and our garage butts up against the retaining wall.
Lanea (17:45)
Okay. Okay.
Crystal Chabot (18:06)
So there’s like two roofs full of non-guttered roof that drains into that little space between the garage and the retaining wall. And there’s no French drain or there’s no drain tile or anything. And so the way that they built that exterior wall of the garage is two by fours.
Lanea (18:18)
Okay.
huh.
Crystal Chabot (18:30)
with siding
they had some insulation and then some drywall, but the drywall stopped like a foot above the ground and they had a wood board pressed up against it. And if you remove the wood board, it’s just like an empty hole to the outside with the rotting two by four supporting the roof. So we have some work to do in the spring to waterproof it. Cause there was a giant puddle and now we’re going to have to pay extra when the
Lanea (18:39)
Okay.
lovely.
no!
Crystal Chabot (18:58)
guy comes to pick up his thing because the carpet is sopping wet. So they’re going to take it and they’re going to weigh sopping wet carpet and charge us for water.
Lanea (19:03)
no.
They weigh? They weigh it?
Crystal Chabot (19:11)
Yeah, you have so you pay the the dumpster fee and then you pay the way station fee at the dump at the dump Yeah, it’s $77 a ton
Lanea (19:20)
didn’t realize that.
Okay.
Crystal Chabot (19:27)
So it’s not too bad, but it adds up.
Lanea (19:30)
yeah, I was gonna say.
Crystal Chabot (19:32)
Especially water.
Lanea (19:34)
Yes.
Crystal Chabot (19:34)
But I’m glad we got the large dumpster because it filled up the large one.
Lanea (19:40)
That’s crazy.
Crystal Chabot (19:42)
It was a lot of gross sludge carpet, yeah. Yep, so that’s gone. I have a garage now, technically. Yeah, just in time for winter. Yeah.
Lanea (19:44)
Well, there you go.
Lanea (20:00)
Thanks for listening to today’s episode. Please remember that finances and parenting is a complex balancing act. But remember, By learning and growing together, we can build a brighter future for ourselves and our families. If you have any questions or want to share your experience, reach out to us at YouTube, Instagram, or Spotify at Piggy Bank Patrol. We would love to hear from you.