291: [Alissa Maizes] Your Emergency Fund Is Not Enough
- aboutthatwallet
- Apr 11
- 6 min read
Table of Contents:
Blog
In a world where financial literacy is more critical than ever, understanding how to build and manage your wealth can seem overwhelming. In this episode, we welcome Alissa Maizes from Amplify My Wealth, who shares invaluable insights tailored for the sandwich generation—those who are balancing their own financial responsibilities while caring for both children and aging parents.
Alissa Maizes is the Founder of Amplify My Wealth, a licensed attorney, fee-only fiduciary financial advisor, and winner of the 14th Annual Plutus Awards for Best Financial Advisor Financial Literacy Content Creator, providing financial advice to the clients of her firm, Amplify My Wealth, and pro bono advice to clients of the nonprofit Savvy Ladies.
Alissa emphasizes the importance of recognizing that your charge card is not an emergency fund. Many individuals mistakenly believe that credit can serve as a safety net, but this mindset can lead to financial stress and deeper debt. Instead, she advocates for the establishment of a solid emergency fund, ideally covering three to six months of expenses, to provide a true safety net.
Throughout the episode, Alissa discusses the unique financial challenges faced by the sandwich generation. Despite earning six-figure incomes, many find themselves living paycheck to paycheck, often prioritizing the needs of others over their own financial health. Alissa reminds listeners that you cannot care for others if you do not first take care of yourself. This foundational principle is crucial for sustainable financial management.
Alissa also delves into the significance of aligning financial values with family goals. For parents, this includes planning for college expenses while also preparing for retirement. She suggests that families should first assess their own financial needs before extending support to others. By doing so, they can ensure that they are equipped to handle emergencies and future expenses without jeopardizing their financial stability.
In discussing generational wealth, Alissa highlights that true wealth is not just about passing down money but teaching future generations how to manage it wisely. By instilling good financial habits and encouraging open conversations about money, parents can empower their children to make informed financial decisions.
Listeners will find Alissa's practical tips on budgeting, saving, and investing particularly beneficial. She encourages everyone to take small steps towards financial improvement—whether that means cutting unnecessary expenses or increasing contributions to retirement accounts. Every action, no matter how small, is a step towards building a more secure financial future.
As the episode wraps up, Alissa's passion for financial literacy shines through. She provides resources for those who may not be able to afford a financial advisor, including free materials available on her Instagram page. This commitment to helping others achieve financial independence is truly inspiring.
Join us for this enlightening conversation that not only addresses the challenges of the sandwich generation but also offers actionable advice for anyone looking to improve their financial situation. Tune in and start your journey towards financial empowerment today!
FAQ
Why is a credit card not considered a suitable emergency fund?
Alissa Maizes emphasizes that using a charge card as an emergency fund is a misconception that creates unnecessary stress. The high interest rates, potentially around 30%, can quickly lead to a new financial emergency on top of the original one. A true emergency fund should be readily accessible cash in a safe, low-risk vehicle like a high-yield savings account or money market account.
What are some common financial challenges faced by the "sandwich generation," particularly those in six-figure households?
Despite higher incomes, many in the sandwich generation still live paycheck to paycheck and fail to prioritize their own future financial needs, often focusing instead on supporting children or other family members. This can make it difficult to save adequately for retirement or address other long-term financial goals. Maizes stresses the importance of taking care of one's own finances first before extending significant financial help to others.
What is the initial step individuals should take to improve their financial well-being, regardless of their income level?
The crucial first step is to prioritize your own finances and take action now, no matter how small. This involves understanding your current expenses and future needs. Even finding a small amount of money to save or put towards debt can create positive momentum and shift your mindset towards building wealth. Maizes also highlights the significance of addressing your money mindset, as unconscious beliefs can create barriers to financial success.
How can individuals balance saving for their own retirement with the desire to help their children with college expenses?
Maizes suggests prioritizing your own retirement savings first, as you cannot take out loans for retirement, unlike college. While she understands the desire to help children with higher education, she recommends exploring alternative, less costly options such as working during school, attending community college first, and seeking scholarships. The overarching principle is to ensure your own financial security before taking on significant financial burdens for others.
What are the most important financial literacy topics for the sandwich generation to focus on?
According to Maizes, the most crucial aspect of financial literacy is to "put yourself first and do something now." This involves identifying even small ways to save money and start building a financial foundation. She also emphasizes the importance of understanding where your cash is held and ensuring it's in an account that offers a competitive yield, such as a high-yield savings account or money market account, rather than sitting in a low-interest traditional bank account.
Besides traditional employment, what are some ways individuals can increase their income or improve their financial situation?
Maizes points out that managing existing money effectively is itself a way of "earning" money, such as by investing in a diversified portfolio of low-expense funds or optimizing savings account interest. She also suggests exploring tutoring based on existing skills or selling unused items. A key overlooked area is ensuring cash is in high-yield accounts. She advises caution regarding the ease of entrepreneurship and encourages considering good jobs with benefits.
What factors should individuals consider when determining the appropriate amount for their emergency fund?
While the general guideline is three to six months of living expenses, Maizes advises considering several factors. These include the number of income earners in the household (fewer earners may warrant a larger fund), the likelihood of quickly replacing lost income in their industry, and the individual's personal comfort level with financial security. It's also important to base the calculation on essential expenses during a financial downturn, not current ideal spending.
What is Alissa Maizes' perspective on financially supporting adult children?
Maizes advocates for setting clear financial boundaries with children at all ages to enable parents to prioritize their own financial well-being. While providing some support, like health insurance and cell phone up to a certain age, can be considered, she believes in empowering adult children to become financially independent. Continuously funding grown children can hinder their ability to manage their own finances and may jeopardize the parents' retirement security. Open communication about financial boundaries is crucial.
Glossary of Key Terms
Emergency Fund: Liquid savings specifically set aside to cover unexpected expenses such as job loss, medical bills, or home repairs.
Sandwich Generation: Individuals who are simultaneously supporting their children and aging parents.
Money Mindset: An individual's beliefs, attitudes, and habits related to money, which can significantly influence their financial behaviors and outcomes.
Financial Literacy: The ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing.
Generational Wealth: The transfer of assets and financial knowledge from one generation to the next.
Fiduciary: A financial advisor who is legally obligated to act in their client's best financial interests.
Fee-Only Financial Advisor: A financial advisor who is compensated solely by fees paid by their clients and does not receive commissions for selling financial products.
Diversified Portfolio: An investment strategy that involves spreading investments across various asset classes (e.g., stocks, bonds, real estate) to reduce risk.
Low Expense Mutual Funds/ETFs: Investment funds that pool money from many investors to purchase a diversified set of investments, with low fees associated with managing the fund.
Tax-Advantaged Accounts: Financial accounts that offer tax benefits, such as retirement accounts (e.g., 401(k), IRA) where contributions or earnings may be tax-deferred or tax-free.
High-Yield Savings Account (HYSA): A savings account that offers a significantly higher interest rate compared to traditional savings accounts.
Money Market Account: A type of savings account that typically offers a higher interest rate than a traditional savings account and may have limited check-writing abilities.
Power of Attorney: A legal document that authorizes one person to act on behalf of another in financial and/or legal matters.
Pro Bono: Professional work undertaken voluntarily and without charge.
Analysis Paralysis: A state of over-analyzing a situation so that a decision or action is never taken, in effect paralyzing the outcome.
![290: [Angelina King] Tax Essentials: 2025](https://static.wixstatic.com/media/d89034_4830fc0f9c5b4e8e9452cae028a6c870~mv2.jpeg/v1/fill/w_980,h_551,al_c,q_85,usm_0.66_1.00_0.01,enc_avif,quality_auto/d89034_4830fc0f9c5b4e8e9452cae028a6c870~mv2.jpeg)
![286: [Sumedha Rai] The Future of AI and Your Wallet](https://static.wixstatic.com/media/d89034_f360f730ff234921a0dd9285943a785f~mv2.jpeg/v1/fill/w_980,h_551,al_c,q_85,usm_0.66_1.00_0.01,enc_avif,quality_auto/d89034_f360f730ff234921a0dd9285943a785f~mv2.jpeg)
Comments