- The biggest mistake that homeowners make
is buying a home for just who they are right now,
not who they might grow into.
- My guest today is Tiffany Aliche,
better known as the Budgetnista.
In her late 20s, she was over $300,000 in debt,
but her climb back made her one of the most trusted voices
in personal finance.
Today, she's a New York Times bestselling author.
And she's here to share with us
what most people don't understand
about budgeting for a home.
Welcome back to "Own It."
I'm Angie Hicks, Co-Founder of Angie.
Own It is everything you need to know about owning a home
without it owning you.
In today's episode, we talk about the real math
about owning a home,
the rule that keeps you from buying too much,
and the one mistake homeowners make
that has nothing to do with the house.
Let's get into it with Tiffany Aliche.
Tiffany, it's great to have you on the show.
I love to talk budgets.
In learning about your background,
you grew up talking budgets, budgets, budgets.
You said your dad was a CFO,
so dinner table conversation revolved around finances.
- All the time.
I'm one of five girls, so you can imagine the expense.
(both laughing)
So, we talked about money all the time.
I didn't know that other families didn't.
Specifically, we would have like a game night/family night
on Thursdays where we would play like board games
and things, but also talk about grades and behavior,
me, (laughs) but then also money.
I can remember just as basic as we're saving for vacation,
or I remember in high school,
my father had his financial advisor
come sit at the table with us.
I had made like a bunch of babysitting money
and I invested for the first time
with the financial advisor.
We didn't get to be 16s. - I love that.
- At 16, you got to walk to the bank with my dad
and he would open up your first bank account.
This is back when we had passbooks.
Remember, I'm dating myself.
(both laughing)
- Yes, I do, I remember that.
- And what I really loved about my parents
is they didn't approach money from the scary place,
just very matter of fact.
I worked every summer since I turned 14, every pay period,
my dad would, he would have you come and sit with him
and you would have to explain all the withdrawals
from your passbook.
You can spend your money how you like,
but you have to be able to back it up.
And I was a mess in the beginning.
But it really taught me to be more responsible.
And really, I appreciated it once I hit college.
And my college roommate had debt collectors calling
our dorm room.
At 17, 18, we thought it was hilarious.
- Like, how is that possible at 17 or 18, right?
- The sad news was that her father had passed away.
And so her mother was struggling to raise her and her sister
and had opened up credit cards in her name.
I didn't even know that was a thing.
So that was the first time that I thought, oh, wow.
And so I was casually telling my dad,
"Oh, you know, dad, you know,
debt collectors call the dorm room,
but don't worry, we make funny voices
so they won't know that it's us."
And he's like, "Yeah, that's not..."
(both laughing)
- They're going to keep calling.
- And so he gave me some really solid advice
and I shared it with her and it helped.
Whenever she had other financial questions,
she would ask me and I would ask him.
And then, because I lived, I went to Rutgers,
but I lived on a girls campus, Douglas.
And so all the girls on the floor started saying,
"Can you ask your dad this?
"Can you ask your dad that?"
And I thought, "Well, I want to be the person."
And so that's how it really started for me,
that it was this thirst to also have the knowledge
because I saw how powerful it was and helpful.
- So did you end up studying financing or business
while you were at Rutgers? - Yeah.
- So I took a lot of finance classes
and I got my bachelor's in business.
And then after graduating college,
I decided that I hated corporate America
because I had a bunch of internships.
I said, "Oh no, my soul is shriveling up here."
And (laughs) 'cause I was a fun girl.
And so, but I really loved kids.
And so I said, "Maybe I'll be a teacher."
And so, I went back to school and became a teacher.
I taught preschool for 10 years.
I got my master's.
I thought I was gonna be a principal,
but I realized that you don't actually get to teach
when you're a principal.
So I got my master's in education,
which was still helpful for starting the business,
the Budgetnista.
But yeah, I loved it.
To me, the foundation of the Budgetnista
is that I learned how to teach these little people
to take them from a place of no knowledge to knowledge.
And so that's what I do with money.
People come to me like they're three and four essentially,
and I get to do so in a way that's fun
and engaging and non-judgmental.
So I really learned that in the classroom.
- You know, your idea around the Budgetnista
kind of started with the housing crisis of 2008, right?
So walk us through what happened to you during that time.
- So up until '23, '24-ish, '25,
I did whatever my parents told me to do.
You know, like they told me when it came to my finances.
And then about '25, I said, "You know what?
I'm a full-grown adult, let me blow up my life."
(both laughing)
I didn't say it like that,
I thought I was just being mature.
And so, I had just gotten my master's in education.
And instead of listening to my parents
to apply for scholarships, I got student loans.
So that left me $52,000 in student loan debt.
Which I was like, no biggie,
because they'd helped me with undergraduates,
so I didn't have any undergraduate debt.
After that I decided, you know, I've got my master's
and I was living with my sister,
and I said, "I think I'm gonna buy my first property."
I'd saved like $30,000.
And that was enough for like, yeah,
and I was making $39,000 as a preschool teacher,
but then like an additional-
- So you were a good saver.
- An amazing saver,
because I was making additional like five,
$6,000 a year babysitting and tutoring.
So I was really hustling to save.
And so I had this 30,000 and I said, you know what?
You know, I want to buy my first place.
And so a condo and my sister
who was my roommate at the time, my older sister,
I said, great, she'll help me with the mortgage.
And she said, okay.
And so I bought a condo for $220,000.
My mortgage, I'll never forget, was 1660.
And she paid me like 600.
So I'm like, oh.
So essentially,
I was paying a thousand bucks a month for this property.
And that wasn't necessarily a bad decision.
I just didn't know the market was going to crash.
And then a friend of mine who I thought was wealthy,
because in your 20s you think nice car,
nice apartment, you're rich.
He was not.
I like to call him "Jake the Thief."
I did not know he was a thief and that's why he had money.
So he convinced me.
I said, "Jake, you're rich."
He said, "Sure."
I said, "Could you show me how you got rich?"
And he said, "Well, I invest with other people's money."
And I was like, "Oh, what's that?"
I didn't know he meant mine.
He said, "You could take money off of a credit card."
I didn't know that.
I had a credit card,
but my dad had always instructed me
to pay it off every month in full, so I did.
My credit score then was like a 802,
'cause I paid off my credit card every month.
- Which is fantastic. - And he said,
"Take the money off your credit card.
"As a matter of fact, open up two more
"and take the money off all these credit cards.
"Give it to me, I will invest it,
"and then pay you monthly from this investment."
And I was like, "Oh my gosh, I'm gonna be rich!"
I was not, $35,000 in credit card debt later,
I was crying.
And he ran off with the money.
I'll never forget, I mean, it was such a,
I just ignore red flags apparently,
because I remember at the time,
there was a bank down the street
where I was taking the money out of off my cards.
And I used to, for preschool,
we used to have to get dressed in nurses scrubs
so you could play with the kids without like,
you know, worrying about your clothes.
And I had on like these pink scrub bottoms
and a teddy bear scrub top.
I probably just look like a baby.
I'm at the bank asking,
"Can I please take $35,000 off my card?"
- Oh my God. - They were like,
"Are you okay?" And I was like, "Yeah."
Meanwhile, I'm like, 25. - They're like,
what's going on? People don't do this-
- Yes, and they were like,
"Are you sure it's not a scam?"
I'm like, "No, this is my friend."
You know, but I was an adult, so they said, "Okay."
I mean, you think it would have had
like an alarm ringing in my head, it didn't.
And then right when the housing market started to crash,
my school, which was non-profit based,
lost their funding and my school closed.
So now I had no job, $35,000 in credit card debt,
$220,000 mortgage, and $50,000 in student loan debt
and no way to pay it.
And the debt collector started rolling in
and I just remember feeling panicked.
And I didn't want to tell my parents
because I was like, "Oh my gosh."
I had not consulted them on any of these things really.
My sister was like, "Well, what if they take your house,
what will you do?"
I said, "I guess I could move back home."
She's like, "Well, why wait?
'Cause what if they lock you out, you know,
and then you can't get your things."
So I remember like bringing my lamp home
and then bringing like my blanket and then my mattress.
My dad was like, "What?
Do you live here?"
- You just slowly moving back in.
They're like, what's going on? - Yes, and so
what I told him at the time was, "Oh, I lost my job."
And he was like, "Okay."
I didn't tell him about the other things.
And I was like too ashamed.
'Cause I knew, I mean, they're my parents, they love me,
so, but I was ashamed that I didn't ask for advice
and had made these mistakes.
But I fell into this financial depression
because I just felt so overwhelmed.
And finally, I remember my best friend Linda called me.
She was like, "You're not picking up your phone.
"Is everything okay?"
And I was like, "No."
And I told her everything.
I'm like, "I'm living back home."
By then, I was like 28 going on 29.
I was like, "I'm gonna be spending my 30th birthday
"in my middle school bed."
You know, I was like, "I owe this money.
"They're gonna take my house!"
And she started laughing.
I said, "Mm, I fail to see what's so funny."
And she was like, "I'm back home too.
"I also lost my job."
I kind of looked around,
all my friends were struggling financially,
and I was always the go-to.
And I thought, "Well, Tiffany, you know how to budget
"and save and you know how to navigate your debt
and credit."
And so I started doing that for myself and then them.
And then before I knew it, a friend said,
"You should make this into a business."
And so I started The Budgetnista.
- So tell me a little bit about what that process
of coming back from that low was like?
What did it take to kind of rebuild?
- The one, it started by I had to release the shame.
Because shame shields solutions.
And the only way to release the shame,
I didn't know that at the time,
but I had to give voice to it.
Because shame is like, "Don't tell anybody.
Don't say anything."
And so when I told Linda,
and she wasn't like wagging her finger at me,
I thought, "Oh, it released some of that."
I said, "Oh, this is not so bad."
I'm not like, you know, I didn't kick anyone's puppy.
You know, they mean like Tiffany, you know,
and so, I started to realize wait you made a mistake,
but you're not a mistake
because that's what I realized I was saying like, you know,
I was beating myself up so bad
and she gave me the permission to forgive myself,
and in releasing that shame I said,
like the lessons you learned as a kid are still here,
you know, and so I, first things first,
I was like, okay something with this debt.
You have to get it off your back.
Debt collectors calling you 24/7, there has to be a way.
And so a friend of mine was a bankruptcy and debt lawyer.
And I was like, how do I navigate these debt collectors?
He said, "You know, by law, you can ask
"that they not call you, that they email you
"or send you letters instead."
I'm like, "Really?"
He said, "Yeah, there's something called
"a cease and desist letter."
What, I ran to my Staples and faxed,
you know, we faxed back then, you know?
- Yeah, I'm like, I need this, I need this,
I need the calls to stop, right?
- And so I just said, "Hey,
you can communicate with me via email.
"Here's the email and via letter, but no more calls."
So that gave me a little peace of mind
where I was like, "Okay."
And then I realized at the time,
this was right before the foreclosure was about to hit
'cause it took a while.
So many people were losing their homes,
they actually didn't foreclose on my home
for some months later.
So it didn't hit my credit score.
And I realized, I could do a balance transfer
before this great credit score tanks
because of this foreclosure that's pending.
You know, and so that's what I did.
I transferred as much as I could from my credit cards
with higher interest rates.
I was able to get, because my credit score
was still so high, I think it was almost like 18 months,
it was something crazy, of zero interest.
So I was like, okay, it wasn't all of the credit card debt,
but most of it, maybe like $20,000 or so.
So now every penny I paid to the 20,000
I was able to transfer actually went to the credit card.
- [Angie] Was going to paying off the debt.
- So that helped a lot.
It took me three years to get out of that credit card debt.
And then when it came to the student loans, I was like,
"I can't do anything about it."
So I did, because they weren't private,
they were federal student loans.
So I was able to defer them and forbearance,
which just meant basically freeze.
You know, so I just focused on the credit card debt.
And then I was looking for a job I couldn't find,
like especially when I was let go,
it was the beginning of the school year,
so they already had their teachers, you know?
So instead I was like, I just did everything.
I babysat, I tutored.
Thankfully, I was still on unemployment for a while.
And so I kind of cobbled together this new financial life
where I dropped down to what I call my ramen noodle budget,
which is like, you know, your college budget
where you're like, I learned to do my own hair.
You know, like I didn't go out.
I mean, I walked a lot of places.
I was in the best shape of my life.
I had a car, but who had gas money?
(both laughing)
And so I really pared down.
I lived with my parents for like a year.
Then I moved in with one of my sisters, Tracy,
who's two years younger than me.
I slept on her couch
because she had a one bedroom for another year.
It took about five years for me
to dig my way out of all of that I owed.
I mean, I still owed my student loan debt,
but the credit card, the house was gone,
and I kind of at least was at a baseline of basically zero.
- I feel like I'm starting again.
- Yes, yes.
And so it was not easy.
So when people tell me some of their financial mistakes,
I'm like, "Well, let me tell you
about Tiffany's financial fiascos."
(both laughing)
- I mean, there's something to be said,
and I think you bring a good point up,
is that, like,
sometimes you have to be allowed to make your own mistakes.
- Going through that, I will never forget,
you know, the lesson of, like, ramen noodles again,
my sister's couch.
It built the financial responsibility in me.
I need it for myself, versus just, like,
just doing what my parents said.
- We're a lot tougher than we think we are.
And sometimes we gotta kind of see what we're made of.
So let's talk about houses.
So, like, you came back.
You weren't afraid to go and get another house
at some point in the future.
But you have a new rule.
So it's called, "Is your mortgage rentable?"
So explain that to me.
- So I told myself,
if I was ever gonna buy another place again,
if I was gonna get a mortgage, it had to be rentable,
which meant that I could get between $1300 and $1500,
which meant that if I couldn't afford,
my mortgage could somebody cover it if I had to rent it out,
and at the very least, ideally try to cover my mortgage.
So the second property that I purchased
with my late husband, we got, it was a foreclosure,
and it was worth about 320 at the time,
but the bank owned it and they just wanted the money
that was owed to them, which was about 180.
So we got really fortunate.
But it needed a lot of work.
Like whoever they had, it was a mess in there.
So, and it's funny because I used, Angie, to be like,
we need a contractor, we need an electrician, we need...
You know, and so we were able to fix it up.
And now that investment of 180, we put about 180 into it.
And so you figure that's like 360,
but now, so that house we purchased in 2017,
renovated like a year or so later,
now that house is worth about 550.
Yeah, so you think to yourself,
like that was such a great investment.
For example, I bought my,
I live in a condo around the corner from the house
after sadly my husband passed away in 2021,
he had a brain aneurysm.
So literally, he was here on Monday
and saying he had like a terrible headache
and then on Friday he was gone.
41. - Oh, that's horrible.
I'm so sorry to hear that. - Thank you.
So the condo that I purchased,
and I'm always like free with numbers.
I purchased it for 520, 2023, it's now worth 820.
Isn't that crazy?
New Jersey is something else.
So, I've been fortunate that if purchased properly,
you have to know your market.
And if it makes sense that yes,
home ownership can be a conduit for wealth.
- So, I think you bring up a really good point though
on carrying costs, you know,
so like, let's go back over that again,
just so people understand,
'cause I think sometimes people think
it's just the mortgage.
You know, let's talk about
what the carrying cost of a home is.
- So there's your mortgage, obviously if you have one.
There are your taxes for that house.
There's also insurance for that house.
So for example, that house, I have a landscaper.
They don't have a big lawn, but still the landscaper.
Also too, because my sister has two kids, I was like,
"Ugh, don't mess up my house."
So I have a cleaning lady that comes every two weeks.
(both laughing)
- Right, right. - You know?
I'm trying to think of what else.
I mean, it depends.
Some municipalities, some people pay sewage
and garbage separately,
but yeah, it equals about for that house,
about $1500 a month.
- Tell me about the noodle budget.
When I was learning about you, Tiffany,
I was like, I love the name.
So let's talk about that one too.
- Yeah, so I wrote this book, Angie,
called "Get Good With Money" in 2021.
And actually, the paperback just came out.
And I talk about like the noodle budget,
which really just is if you had to eat ramen noodles,
meaning, if you just had to get down to the bare bones,
I do not believe that you should live
at your noodle budget long-term, forever,
it's just a temporary drop.
So let's just say you're hearing the whispers
that they're going to be letting people go at your job.
Well, then you might say, oh my gosh,
you know, I was actually hired just a couple of years ago.
I'm likely to be let go.
Let me drop down to my noodle budget,
which means I'm gonna let go of my streaming platforms.
I'm gonna make sure I have food.
I'm gonna make sure that I have a place to live
and my medicine and things like that.
The money that, you know, ideally you have saved
that's coming in can stretch longer.
So your regular life save might cost you $5,000 a month.
But maybe your noodle budget life
with everything cut out is 3,500.
And so, like you temporarily live at that 3500
until you're back on your feet again,
and then you can go back to your 5,000.
So it's just a temporary safeguard
to extend the life of your savings.
- Which is also another good point,
'cause you can also, not only are you able to stay longer,
but if that time, if the job doesn't go away,
you're actually saving
a bunch of money too. - Exactly, exactly.
- You're adding to that saving.
So let's go to this point.
Like so, what kind of savings level,
or what should they keep as a cushion
when they're out there
and kind of making that house decision?
- So ideally, I mean, most people,
this is gonna be very difficult for,
but ideally, even if you do put your savings
into your house, how quickly can you get back
to minimum three months of noodle budget savings?
So that's what's so great about it, right?
Because remember, we're gonna drop down to it
if we hit hard times.
So my assumption is if you have to dip into your savings,
you've hit hard times.
So you multiply your noodle budget times three,
and that's the bare minimum,
but ideally upwards of six months.
And I tell people, if you're an entrepreneur,
you might want to do a year, but no more than a year.
So I keep a year
because I could literally have a downturn that hits us hard.
And I'm like, okay, I need to buckle down.
It's going to take a year for me to turn the business around
and I've done that before.
- Right, makes total sense.
So, you know, so if you're thinking about
buying your first house and you're like,
hey, I saved up for my down payment,
don't stop there.
Like don't rush and buy then, wait a little bit longer
till you get a little more cushion
so you're not draining all your savings.
- Because I promise you, the city or the town you live in,
they love to say, "Oh, is that what taxes were
"when the other person lived here?"
Not for you. (chuckles)
I remember I called my dad in a panic
when I bought my condo, my first condo.
I was like, "Daddy, my taxes went up $120 a month."
He said, "Welcome to the real world."
So you wanna have that buffer
because you just don't know what comes up.
You know, people buy a house
and the boiler goes out, then what?
So you want that buffer, mm-hmm.
- As the budgetnista, you've had women tell you,
I went from homeless to homeowner because of you.
What did you teach them that made the difference?
- So, well, I think in the beginning,
it was just, it was possible to do.
I remember the first time it happened,
a woman wrote me and said,
"I'm currently living in a shelter and I am working."
It was kind of like the first time I really,
really felt like, wow, you could be working.
It's still not enough, you know?
And she said, I am working.
And at the time I had these free challenges every January.
It would be like anywhere from a week to like a month
where it's a financial challenge
where I would walk you through either budgeting or savings,
or even we had a home buying edition of that challenge.
And she said, "Do you think I should do the challenge?
'Cause I don't really have much money."
I said, "Well, one, it's free.
And even if you do it just on paper,
like you can't save, you can't do the things just yet."
I said, "Because, you know,
unless you know how to do something different,
you never will do anything different."
So I encouraged her to do that.
And then Linda, my best friend that I was talking about,
she has her master's in social work.
She's a certified social worker.
So I asked Linda, what are some tools and resources
just in the state and city where she lived
that she could look into?
So Linda gave me a list of them and I shared them with her.
And this is a woman, just via literally Facebook message,
which is messaging back and forth.
And then I didn't think about it.
I hadn't heard from her for some years.
And then I got a ping one day
and I could see the old messages.
She said, "Tiffany, I don't know if you remember me,"
so I looked at the old messages.
I was like, "Oh, that's right.
The young woman in the shelter."
And she's like, "I just want to say thank you so much.
I'm closing on my home today."
Oh my gosh. - Oh my gosh.
I love that. - I was like, what?
'Cause I'm a big crybaby.
(both laughing)
So I gave her my number, I was like, "Call me."
And we cried like babies on the phone.
And I was like, "I'm so proud of you."
And I literally said, "What did I say?"
And she said, "No, Tiffany,"
she's like, "One, you gave me that there was hope
"that I could do it.
"Then you gave me the step-by-step tools
"about here is how you budget and start to save
"and manage your debt and pay down your debt
"and manage your credit."
And she was just like, you know, "Slowly but surely,
"I started to make more money,
"but I didn't forget how to budget,
"how you showed me how to save, how to set aside,
"how not to live over my means."
And she signed up for a program
where they help with down payments.
And she said, "Because I'd been really consistent
"and my credit score was good, I qualified."
And she's like, "You changed the trajectory of my life
"and my children's lives."
And so she was just the first.
That's happened at least three or four times after that,
it's just blown my mind.
- That's fantastic.
And you have done a wonderful job,
you know, taking the shame out of not being in control
of your finances and being willing to kind of seek help.
So I think leading by example as you have
and being so open about your experiences,
I think that tells people a ton.
Last question I've got here for,
what's the biggest mistake homeowners make?
Not because they don't know better,
but because life gets in the way.
- I think the biggest mistake that homeowners make
is buying a home for just who they are right now,
not who they might grow into.
- Oh, that's a great point. - So I'll give you an example.
My podcast partner, when I had my podcast, "Brown Ambition,"
Mandy, she bought this cute little house,
her and her husband.
And it's like, I think I want to say
it's two or three bedrooms.
And at the time they had one son, one rambunctious son.
It was really cute.
And then the pandemic happened
and they were able to refinance for like two, 3%.
Amazing!
And then they had a second son, two boys.
Oh my gosh.
- Yeah, and they're working out of their house
and they're, and- - And she's like,
but where are we going to go? We have 3%.
So she's like, if I would have known
I would have gotten, you know,
like they knew they were going to grow their family.
She's like, I wish we would have gotten a house
that made sense for where we're going
and then locked in that 3%.
And so, I think that's one of the biggest mistakes
because, you know, you think like, oh, you know,
this two bedroom is going to be enough.
What, are you planning to get married?
Are you trying to have additional children?
So just keeping that in mind.
- So Tiffany, if people want to learn more
about all of your great advice when it comes to budgeting,
where should they go?
- So I am the Budgetnista on all the platforms
from LinkedIn, YouTube, Instagram, TikTok.
And if you'd like to get a copy of my new paperback,
it's out on paperback now,
my New York Times bestselling book, "Get Good with Money."
It's available at getgoodwithmoney.com.
- It's very fun, Tiffany.
I really enjoyed it. - Thank you, Angie.
- Here's what I'm taking away from my conversation
with Tiffany.
A house isn't just a mortgage.
It's the taxes, the insurance, the landscaper,
even the boiler that goes out the week before you move in.
But the mortgage is only one piece of the puzzle.
What's important is to understand the full budget.
It's not actually about renting,
it's about not letting a house own you.
The mortgage you can carry, the cushion you don't drain,
the decisions you make on purpose,
that's what owning it actually means.
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The biggest thing I took away from Tiffany
was that shame shields solutions.
We have to talk about money.
Talk about it with your partner, your kids, your friends.
That's how you actually own it.
Until next time, I'm Angie Hicks with "Own It."