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Katherine Talks to Attorney Christine Kingston in an Interview on How to Prepare for the Next Recession

Categories: Interview
Katherine: Hello everyone. Thank you so much for joining us today on This Needs To Be Said. Our friend attorney, Christine Kingston, is here with us to talk about recession preparedness.
Katherine: Now, preparedness, make sure I said the word right. You want to get yourself prepared for the next recession, and you want to take out pen and paper for this interview. Especially because you may have heard about a depression, or you may have heard about the fall in 2008. and some people, we missed it if we didn’t really have anything to be taken. But there is a way to set yourself up for success so that you’re not kind of guessing or feeling your way through a recession. That is the bad time. That’s the worst time to do it. You want to prepare, you want to do something in advance so that you don’t feel the bumps and bruises. It’s going to happen. But if you can prepare yourself, it won’t happen as bad to you as those who didn’t prepare.
Katherine: Christine, thank you for coming back to This Needs To Be Said. How are you?
Christine K.: I’m doing fantastic. Katherine. I’m really excited about this topic today. I’m all fired up for your listeners. Let’s see if we can make a difference.
Katherine: I know we can. We always do. So getting prepared for something, of course, simply, you’re planning for this trip, you get everything you need to go there. But when you think about, well, when I think about a recession, I don’t really know what I might lose or what might be in jeopardy, or how I need to prepare. I might decide to be a hoarder and I might be keeping the wrong things. Or I might be hanging on to debt that isn’t really helping me, but I think it is. I may be hanging on to things that could help me get through the recession if I could let it go. So this is just me and my humble thinking.
Katherine: But you being an attorney, and you’re helping us to take the bad feeling an energy around bankruptcy, take that out of our mouths and, and look at a way to reset. And I’m not suggesting that that’s what you’re going to say today. But I know in our experience you’ve shared it with us how attorneys are not the bad person. They’re here to help us to move on in life. So as we’re talking about recession preparedness, what do you mean by that – Because I might prepare for the wrong thing.
Christine K.: Right? Well, you know it’s kind of like; do you have an emergency kit at home, Katherine?
Katherine: I don’t, shame on me.
Christine K.: Okay. So that’s a similar concept. So, you’re not prepared in the event of an emergency, a natural disaster perhaps. And then the same concept would apply to be prepared financially when there’s a financial disaster that hits. Right?
Katherine: Okay.
Christine K.: So we’re talking about things that are outside of our control, generally speaking-
Katherine: Yeah.
Christine K.: that we need to be prepared for. Now you, we can’t prepare 100% for everything. So we’re going to have to come off the perfection wheel.
Christine K.: But there’s a lot of stuff we can do that’s within our control. Okay. So in California we get earthquakes and I know where you’re at, everybody else in the country, they’d be freaked out by that. But we have earthquake preparedness kits. So when the event we’ve got saved up a water, emergency blankets, things like that. So if I have to run in bail, I’ve got three bags I grab and go.
Katherine: Look at you, I’m learning.
Christine K.: And so it’s similar to that-
Katherine: I didn’t know better.
Christine K.: but with financial … Yeah. Right. So some people have cash on hand, they keep it in a safe in the house. So that’s all again goes through the emergency preparedness. So similarly, financial emergencies, what do you have to have.
Christine K.: Now all of the credit card companies have brainwashed us. And I say brainwashing, it’s because it’s little increments in commercials over time, that got you to think that you need a credit card for emergency rather than cash. I’m going to tell you right now, if our internet grid goes down and the banking system cannot run electronically. You don’t get to use the ATM and you’re not getting your cash. Okay. So you want to have a little cash reserves, maybe keep cash in your wallet once in a while or have a little bit of money in your house in an envelope, in a safe that’s fireproof, please cause cash burns.
Katherine: Please.
Christine K.: Right? And then what I normally recommend is people have a minimum emergency fund of at least a thousand dollars cash in a liquid account, checking savings. Somewhere they can get it quick. Okay? So if you hear something in the news and it’s going to happen then you want to be able to grab it quick and use it. Right? You guys got a flat tire, you’re on the side of the road, you need a new tire. If the credit system is not available and you don’t have a line of credit. You need cash to get a new tire, to get home that day.
Christine K.: So that’s the most important thing is to build up that emergency fund while you have some liquid cash, disposable income available. That’s like the number one rule of being prepared is have some money in reserves. Which means you’re not spending all of your income every month.
Katherine: Okay, well I might be.
Christine K.: The other thing … yeah, go ahead.
Katherine: I might be on the right track. As I’m listening to you, some of the things that you’re saying as emergency preparedness. Ironically I make sure that my partner has cash in his wallet every day that he leaves the house, even if he doesn’t use it. And I said, you know, you never know. Yes you have food with you for lunch for work. But what about just in case, like you said, I mean it’s not an emergency but you’re not where your card can be used. Or you’re just some were stranded and they only take cash. There’s a restaurant I love to go to here in my community that only takes cash. They have an ATM in there for you to get cash out of, but they do not take cash.
Christine K.: That’s exactly what I was thinking of.
Katherine: So if you want to eat here … Yeah. So it’s just so I guess along the way I’m daily prepared. I feel good because in the beginning you asked me about an emergency kit and I said, “I don’t have that. I don’t have three bags to run out the door.” But along the way I’m prepared. So when you give me this …
Christine K.: Yes
Katherine: Yeah. So I know that this is moving in the right direction. It’s not foreign. It’s not going take a mindset change and I can say, “Oh, okay Christine. I feel good now. I’m boosting myself. I feel good. I’m prepared. So this can go in the big prepared too. I can do this daily, but for the unknown I can.” So, I’m good. I’m checking my list off while you’re talking.
Katherine: So those of you in the audience that are prepared like that, then you’re moving in the right direction. So good for you. If not start practicing because it, it, it takes the panic out of it, I can imagine. It takes the panic out of not knowing what to do, because you already did it. Keep going, I’m loving it.
Christine K.: That’s right. No, that’s fantastic. Exactly what you’re saying Katherine. And, and we just take you where you are now and then just build on that. So if you’ve got $1,000 in savings, good, build it up to two.
Christine K.: Because they all start coming and I’m seeing corporations start to pull back on their spending, start to lay off the excess labor. And so it’s the same concept. You get a layoff, we hit a recession, we have a natural disaster because everybody is seeing that the weather patterns are changing. Look what’s happening on your east coast over there where you’re at my dear. People are becoming dis-located and they can’t go back home and they’re experiencing the floods. And if you don’t have sufficient insurance to cover those losses, then guess what? You’re going to replace your own wardrobe on your own.
Christine K.: And we could spend thousands of dollars just trying to piece back together things that we can’t get, that we just lost in a natural disaster. So these are things that are really important. Got To have cash on hand in the emergency fund for these events.
Christine K.: The other thing is let’s get out of debt. Well, I’m a bankruptcy attorney. So I’ve got a quicker, cheaper, better, faster way for everybody to get out of debt. And again, I go back to the credit card companies that are trying to tell you not to do it that way. Because they want you to stay in debt longer. The longer you’re in debt, the more interest they get to make off of you. And the banks if you look at the stocks and the stock market, and you look at the banking and the finance sector and how much money they make on those investments. They’re in business to give a profit to their shareholders, not to provide extra customer service for you, the average reasonable person. I’ll just leave that hanging for a minute.
Katherine: What?
Christine K.: Right?
Katherine: You have to repeat that and then explain it cause you … what? I mean I get that they’re in business. I get that they’re in business. Their business is to keep you in debt. That’s part of you keep using the card. You keep owing them, they stay in business.
Christine K.: Where does a bank make money? A bank makes money off of interest on credit cards, fees on your bank account. Right?
Katherine: Yeah.
Christine K.: Where else does a bank make money? They make money off their assessments.
Katherine: But they definitely make money off of when you can’t pay. When you have returns, when you’re, when you have no money and stuff is bouncing and making your financial situation worse.
Christine K.: Bounced checks, absolutely.
Katherine: Are they making money off that loss?
Christine K.: That’s right. Or $20 a month for a service fee for just having a bank account with them. And so those banks make money off of all those fees. And so, that’s how a bank makes money and they’re publicly traded. So when a publicly traded companies on the stock market, they’re charged with making a profit for their shareholders. And so, you the client or customer or me, if I bounced a check, okay fine, maybe I get some of my late fees waived a. But then it hits my credit report or if it’s a credit card and things like that. So the idea of you staying in debt, makes lots of money for the banks. And so that’s why they don’t want you to go through bankruptcy, because it stops all of that.
Christine K.: It benefits you, not the credit card companies and the banks. I’ve got this chart that I’ve just, I can’t get it out in public enough. It’s this chart of a person that has $30,000 in debt and if they went through a chapter seven bankruptcy, they would pay nothing on that. But then their neighbor who pays that $30,000 back at 15% interest pays over $50,000 over a nine year period of time.
Christine K.: So Sally, who goes through a chapter seven bankruptcy nine years ago, takes $500 a month and makes maybe 3% interest over nine years. Sally’s going to have, you know what? Probably $25,000, while this guy who is paying off his debt at $500 a month paying interest is now just out of debt. When Sally has a savings, and she went through bankruptcy. So you tell me who’s better off, right?
Christine K.: The sooner you can dump the debt, the quicker you can move on with your life and A saved money, and B keep your emergency fund for real emergencies, not to make a monthly credit card payment. So, we’ve got to really maybe shift our paradigm and thinking a little bit and say, “Why am I doing all of this? If I can’t get it a debt in the next five years, then then who am I supporting?” All you’re doing is supporting the banks.
Katherine: Right? And I get that they have something that we want, because I’m thinking about it. I know you don’t agree too much with hanging on to credit cards, but I think about, “Okay, well what is it that I’m trying to do?” And you said the paradigm shifts. So you were answering it as I was asking it in my head like how do we prepare? There’s some things you want to do. And yes, the bank provides a service that I like to use. But at some point I’m paying too much for the service. And becoming a smarter consumer over a period of time changed something in your life that doesn’t rely on the credit card all the time. So you have to, I say pick your struggle.
Katherine: Like you may have the credit card debt, but if there’s other that you got a car payment. I don’t know the exact minute that you know we’re going to be in recession, and that things are going to be out of control. So I don’t know the moment you get to start complaining, but we could start preparing now.
Katherine: So as you’re preparing, decide what your goals are. Shift your mind think differently because I, every time we have these discussions, I’m thinking of the guilt that a person has to overcome, because we’ve internalized that getting ourselves out of trouble this way with bankruptcy resetting our lives is bad. Somehow we have to be the martyr. Somehow we have to go through the whole process of that self-beating up, or sabotaging our success. So everybody would pick the person who is a pain, pick the road of the person who had to pay $50,000 back, because it just feels right. I’m going to pay that back because that’s what I owe, and I understand that.
Katherine: But there’s also space for forgiveness and resetting and you just really have to think about, preserving yourself. The bank isn’t thinking about when Katherine needs to prepare, or should have been prepared for whatever happens that was out of her control. But now that I’m in that space and I’ve found myself in this space so often. So, I’m glad that I have you coming on the show to talk to me as well as the, This Needs To Be Said audience. Because I found myself in the too late spot. Like it’s like I tried everything I could do because I’m trying to do the right thing. And I’m trying to be honorable and noble and, and do you know what I said. I promised Christine I’m going to do this. I want to keep my words.
Christine K.: Yeah. But how about if I told you that being honorable is also being financially responsible, and that bankruptcy is financial responsibility. And so if we reverse engineer that, and of course I’m an attorney and I just said something that just flip everybody out. Because bankruptcy is in the Bible. It’s in the constitution of the United States. It’s no coincidence that you can file bankruptcy one time every year, because in the Bible you can have a debt jubilee every seven years. We talked about that before. So let’s be financially responsible, and good stewards with our money. And being a good steward also means not paying too much for things. And if it means that you get out of debt quicker than Amen. Hallelujah. Praise the Lord. Let’s move on.
Katherine: Yeah, yeah.
Christine K.: Right, so that’s just a mind shift.
Katherine: Yeah, that’s going to be huge for people. So put that in your preparedness kit. Start looking at things differently.
Christine K.: A New paradigm shift.
Katherine: Yeah, yeah, yeah. I love it. Oh God.
Christine K.: Yeah. And the third thing I would do is just keep an eye on the news. We’ve got to know when this stuff is happening. Right? If you know what’s going on in your company. Right. I hear people all the time, “Layoffs are coming.” They know it’s coming. So if you know something’s going on your company and you might be subject to a layoff in the next two or three months, sure everything up. The moment you lose your job, you’re probably eligible for a chapter seven. So let’s take advantage of the next unemployment cycle and get through bankruptcy to kill off your debt. So the next time you get back to work, no one’s going to garnish your wages. You’re not behind on all your bills. You’re now able to make rent, which is obviously more important than Macy’s or Kohl’s or whatever credit card you have.
Katherine: Yeah.
Christine K.: Right?
Christine K.: The last thing I was going to say, go ahead.
Katherine: Go ahead. just inhaling and exhaling. I don’t mean to interrupt you.
Christine K.: You’re mind has already exploded, so hang on. Just write a couple of questions down. The last thing I was going to say is, there’s a lot of great ideas out for this, this gig economy. I was reading an article about a lawyer. He’s a full time lawyer and you’ve got to go with us. We’re overachievers man. This guy is a full time lawyer, but he does side gigs. He was doing side gigs to pay off his student loans and then once he paid off his student loans, he just kept going. This guy, I did an air BNB, rented a room. So he gets paid to stay home. Well, while you’re staying at home, he also boards other people’s dogs under this WAG app. And then while he’s wanting to go for some exercise, he’ll use a dog walk APP and go walk other people’s dogs, while he gets exercise.
Christine K.: If he’s riding his bicycle to work on his way to work, he’ll grab a Grub Hub opportunity. And he’ll deliver someone’s food or something to them on his way to work. So now this guy, it’s interesting because this whole article is telling me. He was making over two grand a month just from things that he was going to do anyway, or the places he was going to be anyway.
Katherine: Yeah.
Christine K.: So, it wasn’t any inconvenience to his schedule. And I was sitting there kind of blown away by it and I’m sitting there, they get, “Nah, I like to crochet.”
Christine K.: But you know there are things that you can do in your spare time to pick up a couple extra bucks. If you want to pay the $50,000 in credit card debt, then increase your gig income and pay it down quicker. Maybe you can save all that interest from happening. That $20,000 in interest, you can cut it from nine years to five years and pay it off sooner.
Christine K.: So those are opportunities. Increase your income, create multiple income streams, have an emergency fund, consider all your options for getting out of debt quickly. Because that’ll slow you down. And then just keep an eye on what’s going on in the economy, so that you can be prepared. And then when the economy starts bouncing back, good, have some money in reserves, you want to buy a house. What are your future financial goals? We can always rebuild credit. It bounces back, wash after wash. So, that’s not something that people should be hung on to because if that drops down a little bit, we can always get that back.
Katherine: We get hung up on so many things. Like this whole time I’m hiding my face right now, because everything she said is like when you show up in the line too late and you’re saying, “Hey, help me.”
Katherine: And the bank is saying, oh, whoever the creditor is saying, or even the friend that you weren’t money from, “Katherine, if you would’ve just told me sooner.”
Katherine: And I’m thinking that I did the best thing by exhausting all I knew to do, which may have not been much. So when I come now the house is burnt to the ground and I’m saying, “Well, I should have had insurance.” And it’s just a mindset thing. The way we waste money as opposed to the way we think we could. You waste money going shopping on things that you don’t necessarily need and maybe not love. But we don’t want to have insurance because what if I don’t ever need it and I spent that money. But what if you do? So there’s a big mindset. Everything you’re saying, I’m loving it. I’m smacking my head. I’m going, Oh gosh, I’ve been there. It gives you like a tough feeling in your stomach. Your chest is tight, it’s too late.
Katherine: So being prepared, and I showed up one time in my life that I can be proud of, that I was absolutely prepared. Now it didn’t go the way I wanted it to. However, I didn’t feel bad about not being prepared.
Christine K.: That should be the last recession proofing thing that you should do, get into action. Get into action and don’t procrastinate because I agree with you, Catherine, when people call me and it’s already at the end of the line foreclosures tomorrow. I lost my job six months ago and now I’ve used up all my savings. There are a lot of tools that us bankruptcy attorneys have in our toolboxes to help people, because you know what’s interesting is a lot of people think in bankruptcy you have to have like nothing. Listen, you do not have to walk into my office with no clothes on before you could file bankruptcy. You are allowed to keep certain assets.
Christine K.: Part of my job is to protect your assets, at the same time dump your debt and so that’s why working with a bankruptcy attorney is so valuable that it’s going to protect those assets and it’s going to make that bankruptcy process run a lot smoother, because we know how to get you through that process. We know how to protect your assets and properly plan for that. And so I would say the moment that there’s a job loss, a layoff or a medical issue that comes up, and you know the first moment that you’re not able to pay those bills back. Get a consultation. We’ve got several options available for people, you know, including the old fashioned pay it back. It depends on how much money you have coming in. So I hope that helps.
Katherine: It helps a whole lot. This is going to be one of our … I listened to all of them, but I’m going to repeat this one for myself. Because it has so much in this. You’re talking about a kit, you’re talking about a mindset shift. You’re talking about projections. What it’s going to be down the road because the person who lost their jobs six months ago knew eventually the money would run out. When did you project it would run out? So talk to me before you get to the end of your rope, because I don’t have time on my end to think about how I could help you if it was a personal thing. Right? So you came to me, the house is on fire and it’s not a good time in my life. But had you come to me sooner, Katherine, I could’ve prepared my mind on how-
Christine K.: Yeah, you might have had more options.
Katherine: Yeah, I could shake the bushes and see, “Okay, you need to call Christine. You need to do this. Here’s some things that you can try. But if you only have till tomorrow, yeah, you’re in a bad spot.” I don’t like feeling bad about something that you could have done better. So that’s what you’re giving us here. And so I have a chunk of … good information and a lot of exhaling to do. Because I think of people when you’re with me, think of times when I’ve been in those situations and, “Gosh, I should’ve known Christine then.” And you know, this person needs to be listening to what we’re talking about right now.
Katherine: A lot of things that we were taught growing up, which is the elephant in the room, keep us from growing. It keeps us from doing what we should do for ourselves. Because my mama didn’t tell me that Christine, she said, bankruptcy’s bad. She said, you pay back those, you get stuff from. You don’t get it if you can’t pay it back.
Christine K.: Yes, and you’re still hearing your mother in your head.
Katherine: Right, right. So I’m like, “I hear you Christine, but my Mama said.” Or, “My family didn’t do it that way.” Right, right. But then what were the financial woes that our families had? So it’s just so much. This is a little bit of time we have with you, but so much has popped into my head from this and I’m like, “Wow. I got to get myself prepared. I got to get myself prepared.
Christine K.: Get into action, is really key too. Take action. The people who procrastinate, the people that bury their heads in the sand get less choices. The sooner you get into action, the more choices you will have. And I would argue that that is a better outcome for everyone.
Christine K.: The people that come to be with multiple choices don’t always have to work with me. I will propose plans outside of bankruptcy for them. And it just depends on those financial circumstances. You know, people are trying to save homes, they’re trying to save equity in homes. Maybe they’re about to inherit a big bunch of money, but they still have a bunch of debt. Well there’s a lot we can do before that ship comes in. So all those different things.
Christine K.: So I mean, sure, maybe we’re suffering from layoffs and we’re preparing for a recession. But some people might be preparing for this alleged great wealth transfer coming too. So either way the debt is just one thing that’s holding you back in most everything in life. And it just takes the time value of money. When we put that into effect and get into action sooner, we get better results. So people can get a head start that way.
Katherine: Absolutely. Every time I talk to you, it’s good. I say that every time. Next time I talked to you, that would be good too.
Christine K.: I appreciate that.
Katherine: I know every time is good. So I thank you for sharing your knowledge with the, This Needs To Be Said audience. I want you to wrap our time up with telling people how they can get in touch with you outside of this show. And so share whatever information you want them to have to contact you.
Christine K.: That’s perfect. Thank you so much, Christine Kingston. I’m with Surf City Lawyers on our website is www.surf S-U-R-F. City C-I-T-Y. Lawyers spelled plural www.surfcitylawyers.com You can also call the office directly at (714) 533-9210 again, the number is (714) 533-9210. you can also email us results@surfcitylawyers.com thanks, Katherine.
Katherine: Thank you. And until next time Christine have a wonderful day.
Christine K.: You as well. Glad to help. Bye.