Hello, hello, hello, savvy listeners. This is Out Loud in the Library: A Durham Tech Library Podcast. I'm your host, Courtney Bippley, reference library extraordinare. And today's library update is that we have a new Spanish Language Collection! Thank you to the Durham Tech Foundation for a mini-grant that enabled the purchasing of these books. We have both translations and books originally written in Spanish in print and digital form. So you can find them on campus in the library or online in our Dogwood Digital Library collection. Whether you read Spanish, or are learning Spanish, or just like to look at Spanish written on a page, enjoy. Today's interview is with Larry Chapman, the financial coach at Durham Tech. We talked about all kinds of things related to finance and money and what you to make an appointment to talk about, what you need to bring, and some general tips for money management. Which I found useful. And I hope you do too.
Thank you so much for joining me today. Tell me a little bit about yourself.
Well, thank you for having me on. I think the main thing I'd like to lead with is I grew up in Wisconsin, went to college there and moved here about 25 years ago, I have two college aged sons, and my wife and I have a four month old puppy named Rocky.
Oh, what kind of puppy?
He's a Boston Terrier.
Adorable? What are your credentials? Why should people listen to your financial advice over say what they find on Instagram or Twitter?
That's a good question. So I have a master's in Business Administration, an MBA from UNC Chapel Hill, and I'm also a Certified Financial Planner. Which is a kind of a long involved training process and credentialing process to learn about every aspect of financial planning. Before I came to Durham Tech, I worked for six years as a financial counselor helping people who were struggling to pay their mortgages during the financial crisis. And I came to Durham Tech about a year ago.
What is financial planning and financial literacy? And why is it important for people to know?
So I define financial literacy as understanding how money works in your life. So how you can make better financial decisions that will help you enjoy a more stable and secure life now and into the future. Having some level of understanding of this can help protect you against a financial services industry that at the very least is trying to make money off you, and in the worst case is behaving in a predatory way. Try to take advantage of you.
What is it, when people come in for financial coaching, what do you actually help people with? Is it budgets or savings? Opening accounts, retirement calculations, student loan applications? What is it that the financial coaching program does?
Right, ah, so the answer is any, any of those examples are things I can help people with. I always tell folks, I'm happy to help you with any question or issue you may have when it comes to money. And if it's a topic I don't know as much about I can do some additional research and get back to them. As an example, I help someone who had been denied unemployment benefits early on during the pandemic, and they needed help navigating the appeals process. And I did some research on that and helped point them in the right direction on that. But given that I work mostly with students, I answer more questions about opening credit card accounts, building credit, finding ways to start saving money than I do about projecting if someone will have enough money to retire.
That makes sense. I don't think people normally start worrying about that until after they've graduated and have entered the workforce.
And often much later.
What do people ask for help with the most?
I think the most common question that people want help with is how to improve their credit score. As I think there's been a lot of focus in the media and you see ads on TV for apps like Credit Karma, and other other programs like that to help you find out more about your credit score. And it is important, finding ways to pay down debt and improve their credit score. I think the next most common question is budgeting, finding ways to save money strategies to get that set up. But definitely if, especially when when we're meeting in person, I've sometimes sat down with people and we've run their credit report together and taken a look at it. But certainly opening up a bank account is something I can help somebody with too.
So you say that you run their credit report together. A lot of people believe that looking at their credit score will lower it. Is that not the case then?
What is the case is that if you apply for a bunch of credit cards or loans in a short period, that is what's called a hard pull on your credit report. So when a creditor is pulling the report for that purpose, doing that too much can lower your score and that's, so that's true. But, there's a free government site. On annualcreditreport.com, that everybody is free, is allowed to run their their three credit reports from three credit bureaus once a year for free, and that has no impact on your credit score. And I would say that's also true of the services we're seeing now, like Credit Karma, or if you have a credit card, you may notice that they are offering to tell you more about your credit score, those services do not impact do not lower your credit score by looking at them or engaging with them at all.
That's really good to know. I will link that website in the show notes for anybody who might forget the website by the end of the podcast.
That's a great idea. Because there's a lot of imitators out there. It's good to use the official one.
Yes, I'm sure that there are a lot of imitators. From your perspective, when you're helping our students, what is the financial health of our Durham Tech community?
I think the students here are dealing with the same financial challenges that a lot of Americans are. Especially, the student population tends to be on the younger side, they have some debt they're trying to pay down perhaps some student loans from a previous institution to trying to deal with, looking for ways to save money, thinking about saving for their first house. I really think that the Durham Tech community is pretty representative of the financial health of a lot of Americans.
It makes sense that it would be relatively representative of society. Is financial coaching through Durham Tech free for everyone? Could I come to you if I have a question? Because trust me I have questions about money.
Yes, it's free to any member of the Durham Tech community. Most of the people I meet with are students. But there are a lot more students than there are employees to so. But I've met with, with many Durham Tech employees, and it's free for everybody.
And is there a limit on how many times someone can come to you, you know, can I come to you once a month? And we go over my budget? Or is it more of a once a year kind of thing?
No, absolutely. I meet with people as often as they need. And a lot of that is driven by what we talked about and what direction they're going what they're trying to do. So for example, you mentioned this, someone made a budget and wanting to have that looked at periodically in the future could certainly do that. Also, if we were working on resolving some incorrect information on a credit report and need to look a few months later to see how that looks. Now, that's something we could certainly do. So there's no limit or guidelines. As far as how often I meet with people, it really is, each situation is different.
So if I came to you, what would I need to bring? Do I need to bring my tax forms for the last five years? Do I need to bring bank statements? Or my W2? What is it that you need to see, to evaluate someone's situation?
Typically, when I meet with someone for the first time, I just like to get an overview of their financial situation. And if they brought a pay stub, that would be helpful, because that tells me a lot about their income and maybe what benefits are being paid through their job, perhaps the bank statement would be helpful, but none of those are required upfront to meet with me. Certainly look at anything that people bring. But there's no requirement upfront to bring anything and like I said, we can follow up on a future meeting and, and dig in as, as needed.
Really good to know. Do you have a favorite or most useful piece of financial advice, something you find you tell everybody because it's so good?
I think that the most important habit that any of us can have, I would say this is foundational to financial planning, financial success in all areas for people at any income level. And that is simply to live below your means. To spend less money than you have coming in. And the reason that's so important is that if you're living below your means you're at some levels, you know, saving money in some form each month, even if it's just accumulating in your checking account. It means you're not accumulating debt every month to fund your lifestyle, it means that money is building up to pay for a future emergency. And that avoids going into debt. You know, when life happens, and it's a habit that I would say is, that people have at all different income levels. Some people who are, who appear to be quite prosperous, and perhaps wealthy, are spending more than they earn and are deep in debt. And on the other end of the spectrum, I've met people with very modest incomes who are putting money aside each month. And so really, it's a matter of having those habits and extending those habits throughout your life. Certainly, you know, as one gets better jobs and earns more money, some of those choices can be easier. But if you don't have the right habits in place from the beginning, it's much more difficult to be successful long term.
When you talk about habits. Are you talking about setting up automatic payments into an account? Or are you talking about researching cheaper ways to buy something? What kind of habits are you looking for when you talk about that?
So, I think one you mentioned there's one of my favorites, which is setting up an automatic savings each month. Maybe you've heard the expression pay yourself first.
I have, yeah.
Yeah. What that refers to is to set up an automatic payment to a savings account or an investment account either directly from your paycheck or at a certain time each month from your bank account. And the idea is that if you have money coming out of your paycheck automatically, you don't miss it after a while, because your take home pay that goes into your regular checking account is a little bit less, but you get used to living on that. And the money that you're sending to this separate savings account is adding up over time without you even realizing it. The other tip I share quite often related to that is, I think it's a great idea to set up that savings account at a bank where you don't normally do business. I think there's convenience of having all one's bank accounts in front of you, you know, on your phone. But when that money is adding up in your savings account, it's all too easy to move that money to your checking account to pay bills. If on the other hand, you have that savings account set up somewhere inconvenient that you're not looking at all the time, the money can add up and you don't even realize it's happening, you sort of forget about. Or, I guess I'd say if you can manage to sort of forget about it, it makes it all the more easy for it to add up without you disturbing it. But the kind of habits I'm talking about are being aware of how much money you're spending. Now for some people, that means a budget, other people it means using an app on your phone that keeps track of everything that you spend. But having a sense of how much we're spending on different areas of our lives is the first step towards really being able to manage that outflow to make sure it's less than what's coming in. Because I think we all have a pretty precise idea of how much money we have coming in each month. But it's the, I think a lot of people when they go through the exercise of you know, writing down everything they spend for a month, they're often surprised in a negative way about how much they spend in certain areas. And so being in touch with that is a good first step.
I really like that idea of putting your savings account in a different place. It's like the virtual equivalent of burying your emergency cash in the backyard, you're really not going to go through the trouble of digging it up unless you really need it. Not that I have cash buried in my backyard people, I don't. I definitely don't. But it's a cool way to think about it. And I like that a lot. And you're right that a lot of people know exactly how much money they have coming in and are potentially spending more than they think they are. But I feel like we have a lot of students who are not spending, you know, they're not buying frivolous things, necessarily. Most of our students are not in the situation where if they stopped buying avocado, toast and Starbucks, they could afford to buy a house. So do you have different advice for people who are literally not able to set any aside
Right, no, I agree that for a lot of people, it's not because they're spending money on frivolous items. I think that kind of thing gets a lot of attention in the popular press, you know, oh, you're spending your money at Starbucks and avocado toast. And that's why you're in bad financial shape. I don't think that's true at all, when you're in a position where you're truly only able to cover the basics and not able to set aside any money. I think that's a time where being really in touch with where your money is going is all the more important. I think even if one is not spending money on frivolous items, there may be an area where someone thinks, well I spend X amount of money at the grocery store each month or X amount on food from restaurants. And it's really a higher amount. So being in touch with that no matter what kind of thing you're spending your money on and and what your situation is, is important. And as far as you know, advice for when you're in a situation where you're not able to set money aside, I think just being cognizant of that, and realizing being in school and training for a new job is a way to improve one's skills and make more money in the future. And developing these habits will make you ready for that. And so when you have more money coming in, and this extra money can go towards savings or this money can go towards paying down debt really is a set of skills that fits any life situation.
I see what you're saying. So you're you're saying developing the habits now can help you in the future when you do have more income coming in? Because you're in school, presumably, expecting and hoping to make more money later than you are now.
Exactly.
Do you help people negotiate lower payments with institutions or companies?
So if somebody has a credit card with an especially high rate, it's certainly worth having having a conversation with that creditor. One who's having trouble making the payments, especially to talk to them on the front end before things get behind and explain to them that you know, you're having trouble making these payments, this interest rate is high, can they lower it for a period of time. And, I think that a lot of creditors would would be open to that conversation and especially if one is approaching them before they're, perhaps before there's a problem. I think that they, especially during the last year, that this has been pretty widespread that lenders credit card companies have been a lot more flexible because they recognize the situation that folks are in due to the pandemic. But I think it's true during normal times as well, that talking to them, getting ahead of it before there's a problem, is the right way to approach it as far as reducing other payments. Also, if someone had a car loan that is especially high rate and high payment, if they're in a position where they can refinance, perhaps go to the credit union to get a lower rate. That could be a good strategy as well.
That's all really good advice. Do you have a favorite or a recommended book about finance or financial literacy or personal finance?
I do. I recommend it to people of all ages, but it's actually aimed at people in their 20s and 30s. It has kind of a weird title, because it was built on a website this guy ran for a long time before writing the book, but it's called I Will Teach You to be Rich.
Sounds promising.
It's, I guess I consider that somewhat frivolous title, but it's a very serious book. And I agree with the advice in it. It's inexpensive one can get it for under $10. But the author's name is Ramit Sethi, R A M I T S E T H I.
Is it like a classic or relatively new book?
Relatively new, the second edition came out maybe last year, two years ago, and the first edition came up a couple of years before that. So it's pretty recent.
The author name sounded relatively familiar, but I am not sure I could have pulled it out of my own brain. How can people make an appointment with you?
The easiest way is to send me an email. ChapmanL@DurhamTech.edu. Also if one searches, Durham Tech financial coaching, there's a financial coaching information page that has a link to my calendar. A lot of people use that just to directly pick a time and it goes directly into my schedule and set it up that way.
And I assume all your appointments right now are virtual?
They are, yes. I meet with most, most people over the phone. Tends to work well. Done some some video appointments. But talking over the phone I find works quite well.
What was the last book you read?
It's another book in my area. It's called The Psychology of Money by Morgan Housel. Came out perhaps late last year. It's a book that really makes one think about our assumptions about money. His main point is that we all make decisions and have attitudes about money that were developed over our lifetime, you know, starting in our childhood, that influences how we view what we think are rational, mathematical, and logical decisions in ways that are different than other people because they have their own set of experiences. And so I think we, we all tend to make judgments about other people's financial choices, because they're really different than ours. But really, it's the case that we all have our own crazy choices.
Yeah, do you have any messages you'd like to share with the people?
I would just say, I'm happy to meet with anybody about any topic talking with me is a judgment free zone. Any any issue that someone might be dealing with? I've definitely definitely heard some version of that before. And I'm here to help people work, work through these issues. And there's nothing to be embarrassed about or afraid to talk to someone about it. Many problems are easily solvable.
Do you get a lot of people coming to you feeling embarrassed about their situation? When really they don't need to be?
I would say yes, especially if they've been dealing with perhaps a bad debt, that is harming their credit. And they don't know. They don't know where to start as far as talking to the creditor getting that paid and removed from their credit report. I think that a lot of the financial industry does not make it easy to deal with them.
No. And I feel like as a society, we look down on people who get in bad financial spots, but we don't prioritize educating about how finances work, and we don't prioritize that social safety net.
Exactly.
Well, thank you so much for joining me. I think people will find this information really useful. I will link to the website you mentioned about finding your credit score in the show notes along with your email and the website that people can use to make an appointment.
That sounds great. Thank you again for having me.
Thank you again to Larry Chapman for agreeing to come on the podcast and talk about money and how people at Durham Tech can get free financial coaching. I want to reiterate that I do not have any cash buried in my backyard because I dug it up to exchange for gold pressed latinum so I can invest in the self sealing stem bolt industry. That's a Star Trek joke. Those are still cool, right? I hope you have a wonderful day and remember to check out the links below to find everything that we talked about in the interview.