my two cents

How to Recover From Losing Everything

Photo: Courtesy of Tiffany Aliche

It’s hard to imagine someone more prepared for this year’s economic implosion than Tiffany Aliche. She’s spent the past decade recovering from the last recession, which left her jobless and $85,000 in debt. Now she’s a full-time financial educator and founder of The Budgetnista, a multimillion-dollar business that offers financial planning courses. “Some people want the quick fix,” she says. “And I tell them, ‘I don’t have a magic wand. There is a solution, but it’s going to take longer than you think.’” We spoke to her about the trauma of losing everything in 2008, the moment she felt secure again, and what everyone can do to make the economy more equitable for Black women in the future.

It’s one thing to know what to do, and another thing to do it. How are you handling this moment, personally?

I’m fortunate in that, during the last recession, I learned the lesson. I lost everything — my job, my income, my home. And it was so traumatic for me that I said, “I’m never, ever, ever going back there.” Now I own my job, so I don’t worry about that. And no one can take my house because my husband and I bought it in cash. My husband and I even saved up and paid off my parents’ house for them a few years ago because I was worried about them during the last recession. I have spent the past ten years preparing for the worst-case scenario, which is where we are now.

What were you taught about money growing up?

My father was a CFO and an accountant. But I think the biggest reason we learned about money was that he only had daughters. My parents are both Nigerian immigrants, and in many African cultures, it’s the men’s responsibility to take care of the women. But they had five girls. So my father had to teach us how to look after ourselves. When I was 15 or 16 and got a summer job, every pay period I’d have to sit with him and show him what I did with my money. And my mom bought our clothes and food and got our hair done, so she taught us in real time how to shop for value.

And it worked, it sounds like.

Up until my late 20s, I was what I’d call financially perfect. I paid all my bills in full, on time. I had some student loan debt after I graduated undergrad, but I paid it off in a year or so. I got into a lot more student loan debt from my master’s degree, which was $50,000. I taught preschool while I was getting my certification to teach older grades, but then I fell in love with preschool and ended up doing it for ten years. I didn’t make much, but by the time I bought my condo, my credit score was 803.

Then I asked a friend of mine to teach me how to invest. He had a nice car and a nice house, so I figured he would know. And it turned out to be an investment scam that left me $35,000 in credit card debt, because he told me to pull money off my credit card and give it to him for an investment that didn’t exist. I never found him again. That happened when I was 27. I spent about a year trying to hunt him down, to get my money back. Finally, I realized I just had to buckle down and pay it off myself. And then the recession hit and I lost my job because the school where I worked closed down. I lost my condo to foreclosure. And at 29 I moved back home with my parents, with $35,000 in credit card debt and $50,000 in student debt. I spent my 30th birthday in my middle-school bed.

How did your business grow out of that?

I didn’t want to go back to teaching, because I didn’t like the idea that someone could just come in and shut down my school. Then a friend of mine noticed that everywhere I went, I was giving someone financial advice. And she was like, “Why don’t you make that into a business?” I started out doing one-on-ones that never paid, because I would find out the person couldn’t afford it, so I wouldn’t take any money. Obviously, that did not work as a business model. But I also did some volunteering for the United Way, and they asked me to teach a series of classes for them, and that was my first contract. I realized that it worked better if an entity would hire me, because that way, the people who didn’t have the money to pay me would get the information for free, but a bank or whomever would pay me. That was the start of making enough money to barely survive. I was still living at my parents’ house, and then I moved in with my sister, and then I rented a room. And slowly but surely, my business grew.

Now I have a staff of almost 30. I was just telling the team this morning, “Yo, when I first started ten years ago, I could barely get somebody to pay me fifty bucks to sit down with them, and now we’re an eight-figure-a-year business.” It blows my mind. I can’t believe it.

Right now I think a lot of people can relate to how infuriating it feels to get stuck in a bad financial situation that’s out of your control. Sort of like when you were scammed, a lot of people are currently having their livelihoods ruined by something out of their hands. Do you have any advice for how to manage that frustration?

One thing I’ve gotten good at is learning to take responsibility without taking blame. Regardless of the fact that this person did this, or the government did that, it’s still your responsibility to take care of yourself. We can acknowledge certain truths about other people’s actions, but then, what can we do about it? I call it being a “paper towel person”. When I was a kid, I’d be running around and spill juice all over the carpet. My dad would be like, “Oh my goodness! The carpet! This is why I tell you guys to be so careful! We don’t have money to waste on spilled juice!” But my mom would get up and get a paper towel. And after my dad’s fussing, he would eventually go get a paper towel too. At the end of the day, everyone still has to get a paper towel. Regardless of if it was that guy’s fault, or the government’s fault, you still have to clean up the mess.

So I’ve learned to skip through the blame and the shame and the criticism and get right to the solution. And that’s what I want for other people. Like, I understand your mother ran up your credit and used your name. I understand your brother has never paid you back. I will listen and empathize. And then I’m going to say, “So, now what? That happened, and you’re right, but what are you going to do?”

When did you finally feel secure?

I was about seven years into the business before I felt like it would take a lot for me to go broke. The first three years there was no money. Year four was like, okay, I guess I won’t starve without going to my parents’ house for food. Year five, I was like, “I think we’re okay.” But believe me, I still feel like it could all fall down. I don’t feel rich. Even though, I guess, technically, you could say that I am.

Did you ever have a moment of feeling like you could at least enjoy your money?

Yeah. It was about two years ago at Whole Foods, a.k.a. Whole Paycheck, when I put food in the cart and went to pay for it and I realized that for the first time, I hadn’t added it up in my head first. There was literally never a time that I had gone food shopping and didn’t get to the register knowing what the total would be. And when the lady was checking me out, I wasn’t afraid, because I knew that whatever the total was, I could pay it.

Do you ever feel like being afraid versus feeling wealthy hurts you at a certain point? 

The moment that I realized that I was going to be okay financially was also the moment that I realized I needed help making “okay” a true reality for me. I needed hand-holding. That’s why I brought in a financial planner, because I felt like I’d gone as far as I could take myself. I was still freaked out all the time. I had at least three or four years’ worth of cash in my bank account, just in case, but I know that having that much cash is unwise. You need enough to cover yourself for six months, maybe a year max. If you have four years’ worth of cash, you’re losing money by not investing it. And I preach that, but here I was with all this cash, running a seven-figure business still afraid of being homeless. Maybe I would have made more money, faster, if I had more of a wealth mindset, and less fear. I feel like having the right mindset adds grease to the fire. But it’s not the fire itself.

It’s pretty clear that so many people are going to come out of this moment with a ton of debt. What kind of advice do you have for people that are staring this down?

You want to take care of your expensive debt first. That’s the rule regardless of what’s happening. I put my student loans — my less-expensive debt — in forbearance so that I could put more money towards my most expensive debt, my credit card. If you’re not able to put your less expensive debt into forbearance, you should be paying just the minimums. Less expensive debt is any debt that’s 9 percent interest or under. You’ll get to that debt eventually, but first, you really need to take care of the debt with double-digit interest rates — 10, 11, 20, 28 percent. There’s no magic about it.

But I get what it’s like to be in a ditch that’s getting deeper. Sometimes you have to be there because you need to take care of your health and your safety — food, shelter, clothing, water — and getting into more debt is the only way. But as soon as you can, put the shovel down. When you finally get a job that’s paying you enough to cover your bills, put down your credit card. It took me two and a half years to get out of credit-card debt, but it was my only priority. There were times when I had to choose one payment over another. Sometimes I had $1,000 and my bills were $2,500. And I had to decide which bills were critical. And the critical bills are the ones that maintain your health and safety. So I took care of those, and for others I was just late. And guess what? Late doesn’t kill you. I had to reconcile with myself: Tiffany, you’re going to be late. Get a grip. But Verizon is not going to come here and beat me up. And when you can pay more, then you will.

That takes a lot of willpower. How did you stick to it? 

I had to learn to cut out those extra things. At one point, the room that I was renting was only $500 a month, and I could barely afford it but I still wanted to go out to eat. And I was like, wait. No. I can’t do that. I’m going to eat whatever can of beans that I have in the refrigerator and then go to my parents’ house and take some food out of their deep freezer. I would literally go to events just for the food. I’d be like, “Oh, that’s nice, the library’s opening a children’s wing, is there going to be food?” And that was okay, because it wasn’t forever. But it took me a while to understand that if I didn’t take swift action and drop down to my ramen-noodle budget then I was going to prolong my stay in this mess. So, if you’re like, “Well, I’m still going to eat out once a week,” then okay. But eating out once a week might add another year to the distress that you’re in.

People will say, “I deserve to have nice things.” And I say, “You absolutely do. But guess what is even better, that you also deserve? To afford those nice things, and have them without the stress.” That’s what I want for people. I’m not telling you not to enjoy life. I’m telling you to truly enjoy life. You don’t want to get these nice things and then lie awake at night because you know you can’t afford them.

It’s incredibly stark how disproportionately the pandemic has hurt Black-owned businesses and Black workers. I’m curious about what kinds of changes you want to see as we come out of this moment, in terms of making the economy more equitable.

I wish there was more transparency about pay, period. When I was a teacher, there was literally a salary chart, and it was based on how long you’ve been teaching and what level of education you have. Five years’ teaching experience plus master’s degree equals $100,000. That’s just it. You might be able to negotiate for little things here and there. Like if you coach a sports team, you can make an extra $10,000 a year. But for the most part, the chart is the chart. So I took that with me into my own business. We have a chart where everyone is color coded. You don’t know other people’s color or salary, because I want to protect people’s privacy, but everyone has access to the knowledge of what their pay could be at every level. No matter who you are, you follow the chart, and it’s very transparent. I wish other companies did that too.

A lot of corporations aren’t willing to take that step, so you have to ask around, person to person. There’s this big financial conference I used to speak at every year, FinCon, and in January they offered me $2,500 to do a keynote speech. But then I found out that a few years ago, they paid this white guy $50,000 to do a keynote. I was like, what makes me worth $2,500 and him worth $50,000? And then the guy before him, he got paid $30,000, and another guy $20,000, and another guy got $15,000. And me, $2,500! That’s like saying, “Hey, Tiffany when you’re done, can you also sweep?”

Oh my God. How did you find out?

I asked. I reached out to a friend of mine who used to work for the conference, and she gave me a full payment list of the last five or six years of all the keynote speakers. Nobody was even under $10,000. Or none of the men, at least. So, I wrote back and said, “It’s my understanding that other people have made more. And on my rate sheet, it’s $30,000 for a keynote.” So I countered, and then I waited for a full month. Finally I was like, “Hello?” And he was like, “Oh, yeah. I’m sorry. No.”

At first I just left it. Then, more recently, some other things came out about the founder of FinCon, about his unfair treatment toward women, Black women and otherwise. So I tweeted about my experience. I didn’t think it was going to be a big deal, but oh my God, it blew up, so much that the founder stepped down as CEO. So that’s another thing — using your voice can lead to change.

How to Recover From Losing Everything