Elizabeth Ayoola
Appearances
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
How's your credit, Sean? I know we talk about it all the time, but are you in the 850 club?
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
Well, I actually didn't know, so thanks for that, that you could downgrade a travel credit card. So that's good to know that that's an option. Some people take out several credit cards for the perks, be it travel rewards or points. And I know personally that it's easy to lose track of all the annual fees and also end up spending across multiple cards.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
So how should people approach taking out cards for perks? And when is it time to reevaluate whether it's still a smart financial move?
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
Let's move on to the second part of the question now. So the listener asked whether they should cancel their card. Can you talk us through what the pros and cons of canceling a credit card are?
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
I like what you just did there, Sean, about I'm in the neighborhood. You didn't give us an exact score. Well, I know. I checked my Experian this week, and I'm 10 points away from 800. So you do the math. Okay. Today, we're going to talk about someone else's good faith and credit. Okay.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
I love that nerdy advice. And I actually yesterday was scrolling through my own travel credit card benefits. And I saw that I had discounts and also more points when I use my card for rental cars. So I will be using that during the summer in an upcoming trip.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
Credit card debt is becoming increasingly expensive. There's been a rise in delinquency on credit card debt in recent years. Keith is choosing to opt out of them altogether or only have a few credit cards. Melissa, what implications could not having credit cards have on one's credit score?
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
I know with my credit, I have maybe like two credit cards that are idle, so I don't use them. So is that an option for people if they don't want to cancel their card? Can you just leave it there idle?
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
Melissa, do you have anything else that you think the listener or anyone else who is considering closing their travel credit card should think about or how to basically maximize their points and their benefits?
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
Absolutely. And I'm going to add in there that that it may be a good idea to also budget for the annual fee and set a reminder wherever you set your reminders, be that in your calendar or anywhere else, for when the annual fee is coming up. Budgeting for it can ensure that it doesn't throw your budget out of whack when you're suddenly hit with an annual fee that you weren't expecting.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
Melissa Lamberina, thanks for coming on and answering these questions. Or should I say mahalo nui loa? It's been a pleasure to be here. And that's all we have for this episode. Remember, listener, that we are here to answer your money questions. So turn to the nerds and call or text us your questions at 901-730-6373. That's 901-730-NERD. You can also email us at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
And if you're listening on Spotify, leave us a comment to let us know what you thought of this particular episode. Join us next time to hear Sean ask a nerd questions about managing rental properties. Follow Smart Money on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes. And here's our brief disclaimer.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
We are not your financial or investment advisors. This nerdy information is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances. This episode was produced by Tess Vigeland and Anahel Hosky. Nick Karisamy mixed our audio. And a big thank you to NerdWallet's editors for all their help.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
And with that said, until next time, turn to the nerds.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
Ana, at the top, you mentioned some potential impacts on investing. Tell us about that.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
And I'm Elizabeth Ayola. This episode, we are looking at some reasons why you might want to switch up your credit cards. But first, our weekly money news roundup, where we break down the latest in the world of finance to help you be smarter with your money. And speaking of credit, the United States just had its credit downgraded by the ratings agency Moody's.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
Our news colleague, Anna Helhosky, is here to explain more.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
And thank you, Ana. Of course. Up next, we answer a listener's question about switching up their credit cards. But before we get into that, a reminder to send us your money questions. Do you want to know the smartest way to budget for your summer vacation? Or are you in the market for a new credit card but aren't sure how to find the one that's best for you?
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
Leave us a voicemail or text us on the nerd hotline at 901-730-6373. That's 901-730-NERD. Or email us at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
We're back and we are answering your money questions to help you make smarter financial decisions. This episode's question comes from Keith and he sent us an email. Here it is. I have a question about the dreaded credit cards. We have a United Quest visa I acquired because I was traveling via air for work on a regular basis.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
So the $350 annual fee and a subscription to the United Club made sense, especially since I could bring my wife when we travel together. However, recently, United changed its policy for the United Club membership and increased their fees to $750 per individual and $1,450 for an individual with access for two guests, making it so expensive I'm no longer interested.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
We'd love having the available credit of $16,000, but would pay $100 a year for it. Our 2025 goal is to get off of credit cards other than using one for monthly bills. Should we cancel? I am thinking it's a good thing to have the available credit. We have five now empty cards. We will be 100% no debt this fall minus the mortgage. I have y'all to thank in part for that, by the way. Mahalo nui loa.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
Thanks for your thoughts. To help us answer this listener's money question, we have credit cards nerd, Melissa Lamberina. Welcome back to the show, Melissa. Thank you for having me. Before we get started, just a note that we're going to talk about some credit cards in this episode. So some may be NerdWallet partners, but that does not influence our opinions at all.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
Also, the benefits, terms and fees mentioned were accurate at the time of posting, but things could change in the future. Some offers may have expired by the time you're listening, but for the latest details, follow the links in the episode description.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
All right, so moving along, the listener wants to know whether it makes sense to cancel their travel credit card, especially with the increased annual fee. So Melissa, can you talk us through how to decide whether the annual fee is worth it, first of all?
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
Otherwise, you're better off with a no annual fee card. Melissa, I'm asking for myself, too. So I currently have two travel credit cards with pretty high annual fees. I probably have them both for under two years. And I just got hit with an annual fee. And I am trying to figure out how to go back and make sure that basically the fee is worth it.
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
So what are some practical ways that people can do that?
NerdWallet's Smart Money Podcast
What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off
And that's what you want to avoid. So I'm thinking maybe a practical way people can do that is I'm an Excel sheet girl. So maybe noting down somewhere or kind of tracking what you're using, or maybe even just doing a recap at the end of the year to see how much of the benefits you've actually used. So do you think that's a way to go about it?
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
Going back to Gerson's question, how can people determine how much liability coverage they might need? Elizabeth, I think people can think of this in terms of tiers.
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
Lisa, I just want to say I have never heard such an engaging explanation for car insurance, so thank you. I have another follow-up question, which is, what would the next tier cover?
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
Lisa, I don't want anyone coming after me for $2 million either. So I'm definitely going to consider this umbrella policy. So Sean said these policies can be a good deal. What does that mean in practical terms?
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
So guys, it sounds like you're saying that you have to think about your risk tolerance in some cases, right? To see what level of insurance that you need.
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
All right, Lisa, can you think of any other coverages that people might not think of as important but are worth considering?
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
Are we seeing some economic declines now? The economy has been fairly healthy in the last couple of years, despite the elevated inflation, right?
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
Those are some good tips. I'm definitely shopping around every few months to see if I can get anything cheaper. Do you have any other tips for how folks can save money on their auto insurance? I know in the past when I've called trying to lower my insurance, they've offered discounts in exchange for tracking my driving habits, which I think is also known as telematics. So what do you think, Lisa?
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
And here's our brief disclaimer. We are not your financial or investment advisors. This nerdy information is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances. This episode was produced by Tess Vigeland. Hilary Georgie helped with editing. Megan Maurer mixed our audio. And a big thank you to NerdWallet's editors for all their help.
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
And I'm Elizabeth Ayola.
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
Car Insurance 101.
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
And those must-haves are essential expenses, including your rent or mortgage payment, transportation, food, utilities, insurance, and minimum loan payments. At NerdWallet, we usually recommend the 50-30-20 budget. That limits must-haves to 50% of your after-tax income, 30% to wants, and 20% to debt payments and savings.
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
Addressing your debt now is also critical, whether it's a student loan, an auto loan, or a credit card. Interest can add up quickly, so you might consider moving high-interest debt to a credit card with a 0% APR offer on balance transfers. And of course, making extra payments on any high-interest debt now will put you in a better position if times get tough.
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
Today, our news colleague, Anahil Hoski, is here to talk with us about recessions. So, Anna, are we in a recession right now? Are we in danger of entering one? Should people be preparing?
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
Sure thing. Up next, we're answering all your burning questions about car insurance. But before we get into that, a reminder to send us your money questions. Are you wondering the best way to manage investments ahead of a recession or what this uncertainty might mean for your financial goals? Whatever your question is, leave us a voicemail or text us on the Nerd Hotline at 901-730-6373.
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
That's 901-730-NERD. Or you can email us at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
To help us answer Gerson's question on this episode of the podcast, we are joined by Lisa Green. Welcome back to Smart Money, Lisa. Thanks so much, Elizabeth.
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
Wow. I know nobody asked me, but my biggest fear is dying in a car accident. Let's talk about the different coverages you're paying for with car insurance. Lisa, can you run through maybe the top three most important coverages people should keep in mind as they look for car insurance?
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
All right. Now, hold on. Not so fast. Let's take a step back and get into what we mean by a recession and what is stoking some of those fears right now.
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
Is this the R word, Sean?
NerdWallet's Smart Money Podcast
How to Get Ready for a Recession and Choose Enough Car Insurance
So Lisa, it sounds like liability coverage is the most important for many people. So can you tell us what goes into liability coverage?
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
For sure. Yes. And that's awesome. And on that note, we are going to answer some of your questions, Maddie, to hopefully help you get on the right path and make your own decisions that's best for you and your family. All right. Please tell us what is your first question?
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
And I'm Elizabeth Ayola.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
Yeah, so for listeners who are maybe unaware of what it is, essentially it's just about investing in companies that align with your personal and your ethical beliefs. So for example, maybe you don't want to invest in companies that contribute to the military industrial complex, or you don't want to contribute to companies that have a history of polluting the environment.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
Those are examples of ESG that you might be pulled to. So probably the easiest way to invest when it comes to ESG is to open a robo-advisor account and then invest in an ESG fund. But before we go into that, to your point, Maddie, I think it really depends on your values to say whether it's worthwhile to do ESG investing. Yes, you're right. Some companies do greenwash and nothing is 100%.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
It kind of makes me think you guys can throw tomatoes at me if you think this is a bad analogy. But it's just like people who are like, oh, there's no point of trying to save the planet because what's my little contribution going to do, right? And while it does require a lot of people to contribute to make a huge impact, it doesn't mean that your contribution is zero.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
Now, that's a good analogy.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
Ouch. That hurts almost as bad as these exasperating puns, Sean. And yes, I'm egging you and these puns on because that's what a supportive co-host does.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
So you said that you, which is great on you for calculating around how much you guys need in your emergency savings fund. So did you have any thoughts about what you wanted to do with the other half? If you did, let's say, put aside that $27,000 or six months worth.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
I know all too well, eggs are a staple in my refrigerator, so I've been experiencing the hike in real time. For those wondering the why of it all, there are a few factors at play, but the key driver is the ongoing H5N1 or avian flu crisis. Now, in the last three months of 2024, more than 20 million egg-laying chickens in the U.S. died due to bird flu, including cold birds.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
And I will just give a personal anecdote. And that is, I have a son and I was also in your position, like I'm not sure whether to open a 529 or whether I should open a Roth. So I actually started out with a Roth. And then when the Secure Act 2.0 was passed and it was possible to roll unused funds, as Sean said, into a Roth, I leaped at the opportunity to open a 529 as well.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
So all that to say, it is also possible to have both. It doesn't have to be either or.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
To find out how we got here and what's being done to battle the avian flu and the prices you pay at the store, we have our news colleague, Anna Helhosky, here to talk us through it. Hey, Anna.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
This episode was produced by Sean and Tess Vigeland. Hilary Georgie helped with editing. Megan Maurer mixed our audio. And a big thank you to NerdWallet's editors for all their help. And here's our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
No, that's not the news any of us is hoping to hear.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
It's not just the scramble you order at brunch. It's anything that needs to be made with eggs, like baked goods, pasta, my protein shakes.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
You got it. Sounds so bad for the chickens. But what happens to the farms? That's a lot of loss.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
For those who don't know, the FDA investigates foodborne illness outbreaks as well as other food inspections. That seems concerning for food safety, especially while the bird flu is ongoing. Yeah, it's not an ideal situation. One thing I'm wondering is what happens to the eggs that have already been laid and sent to the market if bird flu is later discovered in a flock?
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
No problem, Sean. Up next, we answer a listener's question about ethical investing. But before we get into that, a reminder, listener, to send us your money questions. Maybe you're wondering how to save money on groceries when egg prices are sky high, or you're trying to figure out the best way to fund a home renovation.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
Now let's get to this episode's money question. That's coming up in a moment. Stay with us.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
We're back and we are answering your money questions to help you make smarter financial decisions. This episode, we're joined by Maddie, a listener with some questions about how to get started ethically investing, how to manage their savings and more.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
Hi, I'm happy to be here.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
I do, Sean. I pay attention to where my money is going and how it's being used. And I try to make sure it aligns with my personal values.
NerdWallet's Smart Money Podcast
Egg Prices, Greenwashing, and Smarter Ways to Invest
Well, first of all, Maddie, I want to say that you're very brave and you're doing a great job. Oh, thanks. And you're on the right track. I think being cognizant of what your blocks are when it comes to money and being aware of where you need to improve are like great steps. So with that said, my question for you right now is what is your relationship with money?
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
And honestly, I'm a little behind on my retirement savings too, because all my discretionary income is going towards paying off this debt. So those are probably two things that I would prioritize.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Oh, thank you so much. That makes me feel so much better about my situation. But I want to know which debt repayment method works best for someone like me who wants some instant gratification from paying off that debt. Because when I'm just making the minimum payments, it feels like I'm not getting anywhere.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
So is there a specific method that I could use that may kind of give me that instant hit and make me feel like, yes, I'm making progress?
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
What?
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
That's crazy. That's crazy, Sean. I don't know about that.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
You're breaking my heart, Sean. But I hear you. I hear you.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
But Sean, I want to address the elephant in the room. Please. I like shopping. I like going on vacation. Is there a way that I can pay down this debt and still do the things I love and not feel like I'm a prisoner to my own debt?
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Well, Sean, I guess I do want to get started on implementing some of the strategies that you have mentioned. So are there any resources that you can recommend? Because it does also feel really overwhelming.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Oh, I'm downloading that right now. Listeners, download that right now. Sean, the information you have given me today, I know it sounds cliche, but it really is life changing. And I feel now like I have a shot of getting out of this debt.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
But I just do want to say to those listening out there, everyone needs to be prepared for this emergency and know how to shut their water off and be sure the valve will turn and shut off when needed. And don't be like me. Don't put off your home maintenance. I knew better. This could have been a big disaster if I was gone to work or out of town when I found out that thing was broken.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
So please, prepare for an emergency, people.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
I know that's right. A little mess up here and there is not a big deal because it makes for a good story, right? I mean, so after I pay all this debt off, I'll have a great inspirational story to share, and I'll feel really good about myself.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Wow. How am I feeling? I'm feeling like I can do anything right now. Thanks to you, Sean.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
I don't know if you've ever thought about an alternative career, but motivational speaking, definitely your thing.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
For anyone who cares to know the next steps I'm going to be taking, I'm going to be blocking Zara from deleting the apps and blocking Zara. I am going to check out this snowball method. I'm sure you guys have an article on nerdwallet.com about it. We do. I'm going to use that.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
So I'm going to replace the instant gratification I've been getting from shopping with the instant gratification that will come when I pay down one of those cards.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Oh, thank you for listening and being my therapist and all the other things. I appreciate it.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
That was fun. I loved it. We need to do that again. That was fun.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
And here's our brief disclaimer. We are not your financial or investment advisors. This nerdy information is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances. This episode was produced by Tess Vigeland, Anna Helhosky, and Hilary Georgie. Hilary also helps with editing. Nick Carissimi mixed our audio.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
And a big thank you to NerdWallet's editors for all their help.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Ana, how do we know what the dollar value is? Tell us how it's measured.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Okay.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
As you mentioned earlier, the dollar is weakening.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
No problem. Up next, we answer a listener's question about how to deal with credit card debt that never seems to go away. But before we get into that, a reminder, listener, to send us your money questions. Are you looking to diversify your accounts but don't know where to start? Are you trying to have a big money conversation with your partner but aren't sure how to navigate that?
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Whatever your money question, leave us a voicemail or text us on the Nerd Hotline. at 901-730-6373. That's 901-730-NERD. Or you can email us at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
I like to think that I don't have any bad habits, Sean. Okay, but actually, I'll be honest. It's eating dinner at 10 p.m., especially when I don't feel like I had enough protein for the day.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
We're back and we're answering your money questions to help you make smarter financial decisions. This episode's question comes from Allison, who sent us an email with some questions about paying off their debt. And at this point, we'd usually read our listeners email, except that's not what we're going to do. Sean, do you want to tell our listeners this idea that you cooked up?
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
And I'm Elizabeth Ayola.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Okay. I think I'm following you, Sean.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Me, me, me.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Where do I start, Sean? I think in terms of where I'm doing well, I think I have a good level of self-awareness. So I understand how much debt I'm in. That is one of my pain points at the moment. I have quite a bit of debt. I think I'm earning quite a bit of money. And I generally have a good understanding of my financial basics.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Sean, so at the moment I have two credit cards with high balances. One of the balances, the highest, has $22,000 on it and the other one has $17,000 on it. For the $22,000 credit card, the interest only on that card is about $300 a month. And then for the $17,000 credit card, I'm paying $150 a month of interest on that credit card.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
So it's quite a lot of money that's coming out of my paycheck each month. And at the moment, what I'm putting towards that is about $1,100 a month on each card. But you know the issue I'm really having, Sean, can I be honest with you?
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
even after shelling out about $1,100 per month on each card, I somehow end up charging again. And I just don't understand why I'm in this cycle of paying off the debt and then mounting back up the debt and just finding the debt is not moving anywhere.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Today, we're talking about something that touches everything from your shopping cart to your online checkout screen and your summer travel plans, the value of the U.S. dollar.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
What's crazy sometimes with credit cards for me is I use them with the idea that I'm going to pay it off at the end of the month. What I realize is I end up not tracking how much I'm actually spending. And then the end of the month comes and I'm ready to pay it off. And I'm like, well, who spent all that money? Couldn't have been me. But I guess it was me. Yeah. Yeah.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
And then in terms of what I spend it on, I mean, different things. I don't know about you, Sean, but the inflation has been kicking my butt. So I'm finding I'm spending a lot more on groceries. I eat out with friends sometimes. I'm paying my bills, of course. And then sometimes unexpected expenses will come up. Sean, oh my goodness.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Recently, I have had to fix something in my home that broke the water boiler. And that's going to cost me about $2,000.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Before we go into that, Sean, I know you said that I'm going to have to charge about $1,000, but no, Sean, I'm going to have to charge about $2,000 on a card I had paid off in January, and it's only April. I'm telling you, it just feels oppressive right now. Like, I need a drink, Sean, but I probably just need to put on my big girl pants and get some discipline over my spending.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
I'm bringing home about $5,000 after taxes.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Sean, if I'm going to be honest with you, you lost me at the budget part because I'm terrified of looking at my income and expenses right now because I feel ashamed. I feel a lot of shame around how I'm spending.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
And I feel like it's going to be really difficult for me to actually sit down and just rework my budget because then I'm going to have to face my indiscipline and the spending habits that I've adopted right now.
NerdWallet's Smart Money Podcast
Less Spending Power, More Debt? Navigate a Declining Dollar and Make Progress on Credit Card Bills
Wow. It feels like such a distant dream. But if I had that extra cash, I probably would throw it into some savings because I know that if I had a solid emergency fund, that could have paid for this emergency that just happened. So I probably would beef up my emergency fund.
NerdWallet's Smart Money Podcast
How to Prepare for Stagflation and Make Your Insurance Work Harder
Life insurance. You've probably been told you need it, but do you? And if so, how do you know what kind to get? Today, we help a listener figure out whether umbrella insurance is enough. Welcome to NerdWallet Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Elizabeth Iola.
NerdWallet's Smart Money Podcast
How to Prepare for Stagflation and Make Your Insurance Work Harder
I like that you are shopping around and doing your due diligence every year. And it sounds like ultimately you are trying to shave some dollars off of your insurance. So I'm curious about where you would like to put those extra dollars and if you have anything in mind in terms of what you want to do with that money.
NerdWallet's Smart Money Podcast
How to Prepare for Stagflation and Make Your Insurance Work Harder
I know you also mentioned earlier that you're not sure exactly how much you should save for their college funds. So how did you come to that estimate? What are your thoughts?
NerdWallet's Smart Money Podcast
How to Prepare for Stagflation and Make Your Insurance Work Harder
They may be more expensive. I recently switched or got a new term policy and I'm older than I was when I had my original one. So I am paying a little bit more, but I will say, depending on how much coverage you have, obviously, it didn't put a dent in my budget paying an extra couple of dollars.
NerdWallet's Smart Money Podcast
How to Prepare for Stagflation and Make Your Insurance Work Harder
And here's our brief disclaimer. We are not your financial or investment advisors. This nerdy information is provided for general, educational, and entertainment purposes, and it may not apply to your specific circumstances. This episode was produced by Tess Vigeland and Anna Helhosky. Nick Karisamy mixed our audio. And a big thank you to NerdWallet's editors for all their help.
NerdWallet's Smart Money Podcast
How to Prepare for Stagflation and Make Your Insurance Work Harder
This episode, we answer a listener's question about life insurance. But first, our weekly money news roundup, where we break down the latest in the world of finance to help you be smarter with your money. And today we're asking what it means if the economy enters into something called stagflation. Our news colleague, Anna Hilhoski, is here to explain more. Hey, Anna.
NerdWallet's Smart Money Podcast
How to Prepare for Stagflation and Make Your Insurance Work Harder
And thank you, Anna. Of course. Up next, we answer a listener's question about life insurance. But before we get into that, a reminder to send us your money questions. Do you want to know the smartest way to budget for your summer vacation? Or are you in the market for a new credit card but aren't sure how to find the one that's best for you?
NerdWallet's Smart Money Podcast
How to Prepare for Stagflation and Make Your Insurance Work Harder
Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD. Or you can also pop us an email at podcast at nerdwallet.com. In a moment, this episode's money question. Stay with us.
NerdWallet's Smart Money Podcast
How to Prepare for Stagflation and Make Your Insurance Work Harder
And Adam, how old are your kids? I'm also a parent.
NerdWallet's Smart Money Podcast
How to Prepare for Stagflation and Make Your Insurance Work Harder
Okay, so some are a few years away from college.
NerdWallet's Smart Money Podcast
How to Prepare for Stagflation and Make Your Insurance Work Harder
Oh, congratulations. Oh, congrats.
NerdWallet's Smart Money Podcast
How to Prepare for Stagflation and Make Your Insurance Work Harder
Got you. So you wrote to us with some insurance questions. So can you tell us how this ties into maybe all of these life transitions you're having if it does at all? And then what your questions are around that?
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Elizabeth, do you enjoy sandwiches? I do enjoy sandwiches, Sean. And actually, I had a fire chicken sandwich two days ago and I had an egg sandwich yesterday. And of course, no cheese because we are lactose intolerant over here.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
And I'm Elizabeth Ayola.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Mmm, the sandwich generation. I am inching my way closer to that cohort.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Today, we're talking about the labor market and how we, the public, are feeling about the economy. NerdWallet actually has a new report looking at our perception of how things are relative to what they really are. Our news colleague, Anna Helhosky, is here with more. Hey, Ana. Hey, Elizabeth.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Hey, thanks, Ana.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Thanks, Sean. Up next, we answer a listener's question about how to help manage aging parents' finances while also dealing with your own financial stresses as a parent. But before we get into that, a reminder, listener, to send us your money questions.
NerdWallet's Smart Money Podcast
Managing the Job Market and Your Parents’ Finances: Tips for the Sandwich Generation
Maybe you want to know whether high yield savings accounts are still the best place to house your savings or how to get your credit in shape to buy a house this year.
NerdWallet's Smart Money Podcast
Marriage and Money Myths — and Why the Economy Feels 'Off'
So to help us answer this listener's question, on this episode of the podcast, we are joined by NerdWallet personal finance writer, Lauren Schwan. Welcome back to Smart Money, Lauren. Hello. Thank you. Let's start by talking about what Bailey mentioned about marriage and taxes, because the alleged tax breaks are a big draw of getting married for some couples.
NerdWallet's Smart Money Podcast
Marriage and Money Myths — and Why the Economy Feels 'Off'
So firstly, Sean, can you break down what people should know about this?
NerdWallet's Smart Money Podcast
Marriage and Money Myths — and Why the Economy Feels 'Off'
Listeners may remember way back last fall when there was a lot of talk about economic vibes and how they didn't seem to match up with what national statistics were telling us about the economy. I am a listener and I will say I was also confused by the mismatch between musing shared in my social networks and the economic data that we were presented with.
NerdWallet's Smart Money Podcast
Marriage and Money Myths — and Why the Economy Feels 'Off'
Thanks for breaking that down, Sean. So Lauren, you're the only one who is married here. Did getting married change your and your husband's tax situation much?
NerdWallet's Smart Money Podcast
Marriage and Money Myths — and Why the Economy Feels 'Off'
Absolutely. So Lauren, it sounds like this listener's partner experienced something really terrible with their finances a few years back, and they're still trying to recover from that. But even if the listener and their partner do get married, the credit issues that the partner is dealing with won't port over to the listener's profile, right?
NerdWallet's Smart Money Podcast
Marriage and Money Myths — and Why the Economy Feels 'Off'
So Lauren, as we mentioned earlier, you are married. So how did getting married change your financial life? Did you have any like, why did nobody tell me this moment or things that you didn't expect?
NerdWallet's Smart Money Podcast
Marriage and Money Myths — and Why the Economy Feels 'Off'
All right, Lauren, can you share some thoughts about how couples can help support each other financially for anyone listening out there?
NerdWallet's Smart Money Podcast
Marriage and Money Myths — and Why the Economy Feels 'Off'
This episode was produced by Sean and Tess Vigeland. We had editing help from Pamela De La Fuente and Hilary Georgie. Megan Maurer mixed our audio. And here's our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances.
NerdWallet's Smart Money Podcast
Marriage and Money Myths — and Why the Economy Feels 'Off'
Dream weddings, tax breaks, sometimes love too.
NerdWallet's Smart Money Podcast
Marriage and Money Myths — and Why the Economy Feels 'Off'
Up next, we're going to answer a listener's question about some of the more nuanced financial implications and benefits of marriage. But before we get into that, a reminder, listener, to send us your money questions. Maybe you're trying to figure out how to better your credit so you can buy a home this year, or you need some help figuring out which financial goal you should prioritize.
NerdWallet's Smart Money Podcast
Marriage and Money Myths — and Why the Economy Feels 'Off'
Either way, leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD. You can also pop us an email at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
Marriage and Money Myths — and Why the Economy Feels 'Off'
Now let's get to this episode's money question. That's coming up in a moment. Stay with us.
NerdWallet's Smart Money Podcast
Marriage and Money Myths — and Why the Economy Feels 'Off'
And I'm Elizabeth Iola.
NerdWallet's Smart Money Podcast
Crush Debt or Grow Investments? How to Make the Best Choice for You
Definitely. So Sean and Elizabeth, our listener is wondering about when it makes sense to focus on investing instead of paying off debt. What do you guys think about that?
NerdWallet's Smart Money Podcast
Crush Debt or Grow Investments? How to Make the Best Choice for You
Sean, what's the RoboAdvisor account? Asking for myself and also for listeners who may be unfamiliar with that.
NerdWallet's Smart Money Podcast
Crush Debt or Grow Investments? How to Make the Best Choice for You
Okay, thank you for clearing that up for us.
NerdWallet's Smart Money Podcast
Crush Debt or Grow Investments? How to Make the Best Choice for You
Truthfully, I'm still very new to investing and I don't have any investments beyond a retirement account. I think that with these economic times where it's getting harder for many people to cover their living costs, I'm of the mindset of keeping as much liquid cash as possible. I'm focused more right now on building up my emergency savings account than investing.
NerdWallet's Smart Money Podcast
Crush Debt or Grow Investments? How to Make the Best Choice for You
But if I hit a point where I feel like I can comfortably part with more money, then I'll be willing to risk investing and maybe that'll change.
NerdWallet's Smart Money Podcast
Crush Debt or Grow Investments? How to Make the Best Choice for You
Thanks, Sean and Elizabeth. I'm happy to be here and I hope I can help.
NerdWallet's Smart Money Podcast
Crush Debt or Grow Investments? How to Make the Best Choice for You
Yes. So it's an approach to debt that focuses on paying off your smallest debt first. And once that's paid off, you take the amount that you are putting on that one and you move it over to the next largest balance. And then you keep that pattern going.
NerdWallet's Smart Money Podcast
Crush Debt or Grow Investments? How to Make the Best Choice for You
So with every debt that you pay off, the amount of money that you're putting towards your debt grows like a snowball rolling downhill and slowly getting bigger. Hence the snowball method.
NerdWallet's Smart Money Podcast
Crush Debt or Grow Investments? How to Make the Best Choice for You
So in Alex's case, for example, the debt snowball method will look like prioritizing putting more money towards whichever debt has the smallest balance first, which could be the loan with a 6.9% interest rate or the loan with a 3.9% interest rate while continuing to make the minimum monthly payment on the other debts.
NerdWallet's Smart Money Podcast
Crush Debt or Grow Investments? How to Make the Best Choice for You
Remember, with debt snowball, you're focused on the account balance and not the interest rate and then rolling that money to the next largest debt.
NerdWallet's Smart Money Podcast
Crush Debt or Grow Investments? How to Make the Best Choice for You
Sure. We do love a good snow analogy. I think that having a visual of your debt payoff, be it snowballs or something else, it can help make it a little easier to understand the method. So the debt avalanche is the opposite of the debt snowball method.
NerdWallet's Smart Money Podcast
Crush Debt or Grow Investments? How to Make the Best Choice for You
Instead of focusing on paying off the smallest debt first, you tackle the debt with the highest interest rate first while making the minimum monthly payment on your other debt. And then you roll that money into the next highest interest debt and then you keep it going.
NerdWallet's Smart Money Podcast
Crush Debt or Grow Investments? How to Make the Best Choice for You
Well, first, I think it helps to figure out whether you'll be more motivated by small and quick wins, which you get with the debt snowball method, or if you're more of a patient and analytical person who can stick out the debt avalanche method, which may take longer. So paying off your smallest debt first may give you the energy to stick out paying off your debt, while the debt avalanche method
NerdWallet's Smart Money Podcast
Crush Debt or Grow Investments? How to Make the Best Choice for You
could lead to you growing weary, especially if your largest debt is also the one with the highest interest rate. At the end of the day, I think the best payoff method for you depends on your goals and how you approach money. So you have to be honest with yourself.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
I understand that. So Irene, I want to ask you, what are your thoughts in terms of how to fund it? So there are three primary ways. Of course, there are more, but three primary that you could fund your home renovations. And one is through a home equity loan. You could also do a home equity line of credit or a cash out refinance.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
So what are your thoughts in terms of how you want to fund this home renovation or what have you been exploring?
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
Kate, do you want to talk through the different ways of financing a home renovation?
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
All right, Kate. So since that is not a very maybe viable option for many people, let's talk about HELOCs and home equity loans.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
Okay. I'm going to pivot the conversation a little. I want to ask you, Irene, whether you've thought about whether you're prepared to add to the financial burden you already have with a mortgage by potentially doing a renovation. And also, are you ready for the emotional labor of home renovations?
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
Kate, what are some ways to approach home renovation plans? What would you say if you had to give an outline for ways people can approach it?
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
All right, Irene, do you feel like you have some steps to take based on our conversation?
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
So this has been a great conversation and a reminder that this is not individualized advice, but we hope that the chat that we've had with Kate is enough to equip you with information you need to make your own decision. So I hope that's the case for you, Irene.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
We look forward to hearing what you decide when you decide to do the renovations. Please feel free to send us pictures of the renovations. Would love to see. And thank you so much for coming on, Irene. Thank you so much for having me. I appreciate it. Kate Wood, thanks for joining us again and sharing all of your nerdy knowledge. Of course. Always love being here.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
And that's all we have for this episode. Remember, listener, that we are here to answer your money questions. So turn to the nerds and call or text us the questions that you have at 901-730-6373. That's 901-730-NERD. You can also email us at podcast at nerdwallet.com. Also, visit nerdwallet.com slash podcast for more information on this episode.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
And remember, you can follow the show on your favorite podcast apps, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes. And here's our brief disclaimer. We are not your financial or investment advisors. This nerdy information is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
This episode was produced by Tess Vigeland. Hilary Georgie helped with editing. Nick Karisamy mixed our audio. And a big thank you to NerdWallet's editors for all their help. And with that said, until next time, turn to the nerds.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
Have I peaked? No, my best days are ahead of me. But have you peaked at your 401k balances? Sean, also no, because their best days are ahead of them too.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
And I'm Elizabeth Ayola.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
Yeah, thanks, Sean. Up next, we have a listener's question about home equity lines of credit. But before we get into that, a reminder, listener, to send us your money questions. Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD. Or email us at podcasts at nerdwallet.com.
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Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
To enter for a chance to win our book giveaway, send an email to podcast at nerdwallet.com with the subject book sweepstakes during the sweepstakes period. Entries must be received by 1159 p.m. Pacific time on May the 7th. include the following information, your first and last name, email address, zip code, and your phone number.
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Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
For more information, please visit our official Sweet Stakes rules page.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
One of the ways to be smarter with your money is to ignore it, or at least parts of it. The recent wild fluctuations in the stock market is one example.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
We're back and answering your money questions to help you make smarter financial decisions. Now, this episode, we're joined by Irene, a listener with some questions about the pros and cons of home equity borrowing and the best way to fund home improvements. Welcome to Smart Money, Irene. Hi, I'm so happy to be here. We're excited. It's going to be a great chat.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
And I'm also joined by NerdWallet Mortgage's writer, Kate Wood, to help me answer Irene's questions. Welcome back to Smart Money, Kate. Thank you so much for having me back. Let's get the conversation started. So we're going to start with a little icebreaker for you, Irene. Now, if you had to describe your current financial situation in one word, what would it be and why? Okay.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
Oh, I love that. And because finances are a journey, I think you're always growing. So it sounds like you're in a good spot.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
Let's dig into your financial situation. So tell us some basics about your financial life generally. What's going well? Where do you think you have more room to grow?
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
I can relate with that challenge, especially in this economy. So speaking of savings, what are your savings like? How much do you all have saved currently?
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
And then I'm curious to know in terms of your savings, does that cover three to six months worth of expenses?
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
Now let's move on to your debt. Do you have any debt at the moment? We do.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
And just for interest, what do you and your husband do? What are your occupations?
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
Okay, great. So now we're actually going to go into the conversation about what you wrote us about, which is home ownership. So talk to us a little bit about your home ownership journey.
NerdWallet's Smart Money Podcast
Strategies for Navigating Market Swings and Leveraging Home Equity Wisely
Our news colleague, Ana Helhosky, is here with more. Ana, you're going to help us out here, right? Bring us some sage advice on how to keep on keeping on in our retirement and college savings account.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Sean, what's the last thing you bought that you know for certain was made in the United States?
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
I love the ideas of sinking funds and that is something honestly I don't do. I do have a savings account and I have a spending account and I usually pull from my spending account if I have something non-emergency to spend on. I also find that having too many accounts makes me dizzy. So Sean, how do you stay organized with all the accounts for all the things?
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Oh, that makes sense. And I like the idea of having most of the accounts at the same bank. That feels a little less chaotic. All right. Our listener also had a question about whether they should keep money in a money market account or a high-yield savings account. Kim, can you talk to us first about what a high-yield savings account is? I find some people mistake them for investment accounts.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
And I can quickly explain what money market accounts are. So they're essentially savings accounts that have features of your traditional checking accounts like debit cards and check writing features as well. Now that can be a con for some people, talking about myself here, because easy access can encourage spending.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Since the listener would be using the money for ongoing home repairs, though, a debit card could be helpful. Now, a downside to MMAs, or money market accounts, sometimes they have higher minimum deposit or balance requirements than high-yield savings accounts, and that could range from hundreds to thousands of bucks.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
One other option that's more on the investment side of things is an Atomic Treasury account, which is available to open right in our free NerdWallet app. So basically, an Atomic Treasury account is an investment backed by the US government and typically offers a higher APY than a high-yield savings account.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
The exact APY varies, but as an example, as of late April, you could earn a 4.39% APY on T-bills with the Atomic Treasury account. Now, they are slightly less flexible than an MMA or a savings account since they don't have debit cards or allow you to write checks, but you can withdraw your money at any time.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Another thing is that you also don't pay any state or local taxes on interest earned, though you will owe federal taxes, like with the interest you earn on a savings account. We'll put a link in the description of the episode if you want to learn more about atomic treasury accounts, and the page includes a calculator you can use to see how much that you could potentially earn as well.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Kim Palmer, thanks for coming on and answering this savings related question. Of course. Thank you so much for having me.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Join us next time to hear about whether to pull back on retirement account contributions in times of market turbulence. Follow Smart Money on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
This episode was produced by Tess Vigeland, Anna Helhosky, and Hilary Georgie. Hilary also helped with editing. Nick Karusemi mixed our audio. And a big thank you to NerdWallet's editors for all their help.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Okay, you're going to have to give me the name of the jeans after the show because I love a good pair of jeans. This episode, we're looking at what it really means for a product to be made in the United States and what we're all willing to pay for that label.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Not really, honestly. I care more about the quality of the product as opposed to where it comes from. But I will say that I do try to support products that are made ethically.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
And I'm Elizabeth Ayola.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Okay, so if you want to buy something made in the U.S., what's the best way to go about it? How can you find Made in America products?
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
No problem. Up next, we answer a listener's question about how to rebuild your savings. But before we get into that, a reminder listener to send us your money questions. Do you want to know the smartest way to budget for your summer vacation? Or are you in the market for a new credit card but aren't quite sure how to find the one that's best for you?
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Today, we're talking about why it isn't always easy or economical for products to be made in the USA.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD. Or you can email us at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
To help us answer this listener's money question, we have Kim Palmer, a personal finance nerd. Welcome back to Smart Money, Kim. Thank you so much for having me. Kim, to start with, our listener, whose name is also Kim, in case you didn't catch that, is worried about spending all their savings on home repairs. How should the listener think about spending money from their savings pot?
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Kim, since it seems like you're going through a similar situation as listener Kim, can you talk about how you're thinking about using savings for home improvement projects and then rebuilding your savings or emergency savings fund?
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Also, I want to mention that Kim can prioritize home repairs in terms of urgency. So what comes to mind is maybe she focuses on repairs that could become more expensive later if they aren't addressed immediately. For example, let's say you have mold somewhere in your house. That's probably going to be more urgent than a more aesthetic improvement like swapping out a light fixture.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
And it can be a good idea to keep an emergency fund intact for unexpected expenses and then start a new savings fund for other things like home repairs.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
And I'm Elizabeth Ayola.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
I think, Amy, the things that you're thinking about are valid. And I also want to validate you by saying my retirement number was around two million something. And I was like, well, how the heck am I supposed to save all that money? So I understand how it feels to be freaked out by the number that you get. But I also want to ask you, How do you and your husband manage your household finances?
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
And also kudos to y'all because it's not easy being a full-time gig worker or entrepreneur or creative and having that uncertainty. So how do you guys navigate managing your household finances with your income?
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
Okay, so if your head is spinning from the tariff news in the last week or so, you're not alone. Our news colleague, Ana Helhosky, is here to help sift through what this means for our finances and how best to manage the impact, including basics like how to save on groceries. Ana, you've been tracking the play-by-play of this drama, but what do people need to know right now about the tariffs?
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What to do When Groceries Cost More and Retirement Feels Out of Reach
So I know that you said that you guys work as a team, but you kind of have separate finances. So during retirement, do you guys plan to pull your finances together or you're going to spend your retirement money and he will spend his?
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
So then I have another follow up question. So I know you asked us about maybe how much do you need to save for retirement, right? So when you ask that question, do you mean separately or as a couple?
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
And I would like to circle back, Amy, because in my past time, well, no, my present time, I love to play with retirement calculators, a very strange hobby. You mentioned that you and your partner have done that. Yes. But I do want to point out that seeing a big number like 2 million can feel very intimidating. I want you to also remember that you're not saving 2.5 million on your own, right?
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
So you're investing a smaller amount with the hope that it's going to grow over time into the amount that you expect to need for retirement. And I fell into that trap recently as well. And I'm like, oh my God, I'm so far from my goal. And then I forgot for a moment that my money's going to compound over time and it will start multiplying itself essentially.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
So for those who are listening who don't understand a compound interest, you earn interest on your interest in investment accounts, effectively allowing your investments to snowball. And the acceleration of growth is often much more rapid in the final years of retirement. So all that is to say your money's going to grow over time.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
So you want to think about your retirement savings in terms of what you might need on an annual basis versus the total number. But if you are behind on your retirement savings, you have a few options. I think the four main options that you have if you feel behind is one, you could work for a few more years than you originally planned.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
Two, you can spend less and invest more in your retirement accounts. The third option would be to change what retirement looks like for you. So maybe it's a hybrid of retirement and picking up side jobs. And then the fourth one may be to employ some combination of all of these options. So when I say that, what stands out to you, Amy, for maybe an option that you could explore?
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
Yes. But I do have some like, I don't know if this is good news or not. There are different types of fire, right? So while you may have to be stringent for like Sean said, the more pure type of fire, there is also barista fire for those who are listening who may be like, oh, I want to retire early.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
And that's essentially when you save enough to work part time, but no longer need to depend on full time work. And based on what you told me about you and your husband loving your jobs, which is awesome, and being happy to do it, you know, for as long as you need to do it, there is also the option of working part time.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
And the goal there is to have enough so that you don't have to work full time, but you'd still work part time. So that's a form of fire as well. What is it called again? Barista fire. Barista fire. I like that. Uh-huh. There are different types.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
It might be. Yeah. And the cheeky plug for the listeners who are like, what other types of fire are there? We have an article on nerdwhite.com about the different types of fires. So we will put that in the show notes.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
And here is our brief disclaimer that you love to hear. We are not financial or investment advisors. This nerdy information is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances. This episode was produced by Sean and Tess Vigelin. Hilary Georgie helped with editing. Megan Marr mixed our audio.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
And a big thank you to NerdWallet's editors for all their help.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
So many tariffs and it feels so hard to keep up with. So are there more tariffs on the way? It's very likely.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
I do. And I also know we're sick of talking about eggs, but I can't live without them. And I'm also sick of the prices going up. Olive oil, too. I use that to make my eggs.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
Thanks, Sean. Up next, we answer a listener's question about catching up on retirement savings. But before we get into that, a reminder, listener, to send us your money questions. So take a second and think, where do you need help with your money? Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD. Or email us at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
Now let's get to this episode's money question. That's coming up in a moment. Stay with us.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
Amy, welcome to Smart Money. Hi, thank you all so much.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
And I'm Elizabeth Ayola.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
Sean, I don't know if you remember the show we did last week.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
Yes, that one. The one where we joked at the top of the show about how there wasn't much news going on out there.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
And here we are a week later and the barrage of news out of the Trump administration continues unabated. Honestly, it's hard to keep track, but that's our job.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
Let's get up to speed here. On January 31st, the head of the CFPB, Rohit Chopra, was fired and Scott Bessant, who is the new Treasury Secretary, was named the acting director. Now, soon after that, Bessant ordered that the Bureau cease all investigations and said no new rules or guidance would be issued. And it only went downhill from there.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
So at this point, it looks like the agency is effectively dead in the water, which leaves a lot of unanswered questions like, what does this mean for consumers moving forward? To get a better idea of what happens now, Ana spoke with Chuck Bell. He's the program director for advocacy at Consumer Reports.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
I sure did move for the thousandth time. And easy is not an adjective I would use to describe the process, Sean. It was also probably the most expensive thing I've done in my adult life. So it was so expensive that Little Miss Nomad, yes, that's me, has no intentions of moving anytime soon, which is crazy coming from me.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
Yes, thank you. Up next, we answer a listener's question about preparing financially for a big move to a new city and a new job. But before we get into that, a reminder, listener, to send us your money questions, especially your questions about tax season 2025. We're working on an episode all about taxes and we're going to take on some of your burning tax questions.
NerdWallet's Smart Money Podcast
Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You
Now let's get to this episode's money question. That's coming up in a moment. Stay with us.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
But it does seem like Chris wants to change their habits and use their money to live their life. How do you, Amanda, think Chris can begin to rethink how they're using their money?
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
Chris has this pent-up desire to just live their life and use their money to do so, but is afraid, maybe because they don't know exactly what they would like to do with their life or their money. So defining their personal goals would be an important step for them to take. Because, as we often say on Smart Money, your money is just a tool to get you what you want in life.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
So Amanda, how do you think Chris can begin to map out their financial goals?
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
I love that suggestion, Sean. At 23, I just finished my postgraduate degree. I had moved back to Nigeria for a second time and was also pursuing a media career like you. So I knew little about money management and was just looking at how to survive on what felt like an impossible income at the time.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
One thing I will say, though, is that I knew what life I wanted to live, but I just wasn't clear about how big of a role finances would play and also how to even create a financial plan. If I'm being completely honest, I just thought one day I would earn enough money and everything would just work itself out. Optimistic, but definitely not a plan.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
But that said, I wouldn't trade the life experience that I gained from moving to a developing country alone. Having financial stability is important, but those life experiences honestly shaped me.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
Speaking of investing, I actually was going to say my biggest mistake was not investing. As I listened to you talk, Amanda, I had a different thought. And it would be because I was thinking I just was so broke. I didn't have enough money to invest because I was earning in Nigeria like the equivalent of $200 a month. And I didn't have any other income but that.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
In my 20s, I spent a lot of time thinking that I didn't deserve to earn a good amount of money. So I never really negotiated my salaries. And I also didn't look for jobs that would pay me a reasonable living.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
I don't know if that's a mistake or learning, but I definitely would have valued myself more, asked for more money, and done a lot more research into how I could pursue my passions and still make some money while I'm doing it. And then, of course, I would have invested more.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
By the way, if you want to play around with the investment calculator that Sean mentioned, you can find a link to it in the description of today's episode. Now, speaking of investments, Chris also asked about finding a balance between their rigorous investing and and saving and having life experiences, do you think they should maybe pull back from saving and investing so much?
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
From my point of view, I think the lifestyle they hope to live during retirement is a big piece to answering that question. $1.5 million may be enough for one person, while someone else's lifestyle may require $3 million, for instance.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
Me too. I'm considering an art class sometime soon. Yes. All right. Any other thoughts you want to leave our listeners with, Amanda? Do you have any more gems for us? Well, check your credit score always and always.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
And here's our brief disclaimer. We are not your financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances. This episode was produced by Tess Vigeland. Hilary Georgie helped with editing. Nick Karasimi mixed our audio. And a big thank you to NerdWallet's editors for all their help.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
And I'm Elizabeth Iola.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
Unless you've been living in the desert for the last few weeks, you know we are in a new era of tariffs. President Trump has called tariff, quote, the most beautiful word in the dictionary. And he's followed through with one of the most significant trade wars in modern history.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
But it's our new reality, Sean. And they have the potential to affect just about everything we buy, including, perhaps most expensively, cars.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
Thanks, Sean. Up next, we answer a listener's question about whether it's okay to loosen the strings a bit when you've amassed significant savings and want to move out of your parents' house. But before we get into that, a reminder, listener, to send us your money questions.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
Maybe you're wondering what the recent stock market crashes might mean for your finances and how you can get ahead of a potential recession. Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD or email us at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
To enter for a chance to win our book giveaway, send an email to podcast at nerdwallet.com with the subject book sweepstakes during the sweepstakes period. Entries must be received by 1159 PM Pacific time on May the 7th. Include the following information, your first and last name, email address, zip code, and your phone number.
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Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
For more information, please visit our official sweepstakes rules page.
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Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
Hey, guess what? Smart Money is a finalist in the 2025 Webby Awards, and you can help us win. Just head to vote.webbyawards.com, register real quick, and vote for us in the best individual podcast episode business category. It's free, it's fast, and unlike borrowing your neighbor's Wi-Fi, totally guilt-free. You've got until April 17th to cast your vote. One more time, that's vote.webbyawards.com.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
To help us answer Chris's question on this episode of the podcast, we are joined by personal finance writer, Amanda Barroso. Amanda, welcome back to Smart Money. Thanks for having me back, you guys. I'm loving this question. We have a really unique situation with our listener here today.
NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
financially, they appear to be doing everything well, and it almost feels like they're doing everything too well. So I know I was a hot mess in my early 20s, but it seems like the listener is hyper-focused on saving and investing at the expense of just living their life, which is pretty much the opposite financial problem that most people have.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Vicki mentioned selling stock before doing the rollover. Now, Kate, why might they have to do that?
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
What are the tax implications of doing this? I know depending on where they live, they might owe state taxes on capital gains.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Most economic data is released on at least a one-month lag. So last week, for instance, we learned about April's unemployment rate and the size of the labor force that month. But we also learned about hiring and layoffs in March. and economic production, or the GDP, for the entire first quarter.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
What are some potholes that people can avoid when doing an HSA rollover? What are some ways to minimize the potential of penalties?
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Well, Kate, is there anything else people need to know or the listeners should know that we haven't already covered?
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
So when we talk about the health of the overall economy, it's a matter of making sense of all of these different snapshots of various parts of the economy at various times. But then you're also putting them together with what we know about how the economy has behaved in history and the impact of things that are happening right now.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
And if you're looking for more nerdy information about investing in an HSA, we'll link an article in the episode description that walks you through why and how you should invest in one of those accounts.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
And here's our brief disclaimer. We are not your financial or investment advisors. This nerdy information is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
So things that we don't even have data for yet, or in some cases, historic precedents, like the current tariffs. So it can make for a very complex recipe.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Well, the economy is holding up, but consumers and businesses are being cautious. So a quick rundown is that the unemployment rate is at a moderate level, wages are growing in a sustainable way, and prices aren't increasing dramatically. However... Hiring continues to slow, and we know people are trying to get ahead of the impact of tariffs.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Over the past few months, for example, imports surged, and so did vehicle sales. So we're beginning to see in the hard data, but also in sentiment data or consumer surveys, that people are preparing for potentially tougher economic times in the form of higher prices, for instance. I want to talk more about economic growth.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
So GDP is the standard way that we measure economic production or growth. It's a formula that tries to capture most everything that an economy produces. So when the change in real GDP is positive, the economy is said to be growing or expanding. And when it's negative, we call that a contraction. Generally, the long-term average of real GDP is about 3%. So in 2024, for instance, it was around 2.5%.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
And in the whole of 2023, it was 3.2%. So there's some bouncing around that average. However, this last week, we learned that real GDP for the first quarter was negative 0.3%, which is just slightly negative, but it does indicate a contraction. And at first blush, this could be alarming, but a look at what goes into the calculation provides some clarity.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
So the primary cause of this negative number is the effect of a rush to import goods ahead of tariffs. Household and government spending, business investments and exports, all of those are added together in GDP, but imports aren't produced here, so they aren't counted in the same way.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
If enough goods are imported but not counted as inventory on store shelves or consumed in the same time period, it can result in a negative number, and that's likely what happened with the first quarter number. So while the GDP reflected a contraction, it wasn't really a broad-based decline in economic activity, rather the big effect of this one big number.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Well, coming into this year, I think it's safe to say the labor market was really coming into balance, if not fully balanced or normalized. And this is relative to where it was a few years ago. Back then, workers really had the upper hand as labor demand or employers seeking workers outpaced supply or workers themselves. And while this was really great for workers, it helped drive high inflation.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
So the Fed raising rates, among other things, has helped bring that labor supply and demand into better balance. You know, that feels less great to workers, but it's far more sustainable. Right now, I think the labor market is at a potential precipice, though. So normalization has looked like lower hiring rates, fewer job openings, and slightly higher but still okay unemployment rate.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Unfortunately, the current pressures on the economy and the labor force could tip these things from where they are now, which is stable, into a trouble zone. So I think the labor market is healthy, but there are increasing risks to that health.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Well, yes, inflation continues to slow as of March, which was the latest data we received. Then headline inflation or overall inflation was 2.3 percent, which is down from 2.7 percent in February and down from over 7 percent in 2022 before the Fed began raising interest rates. And I want to reiterate that this percentage we use to discuss the PCE index is a measure of price growth.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
And I'm Elizabeth Ayola.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
So when we say it's decreasing, it means that prices are growing more slowly, not that price levels are coming down. But overall, inflation is at a much better place now than it was a few years ago. And it's really within spitting distance of the Fed's 2% target. The big question now is whether it will hit that target, and I think not.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Going back to what we were discussing earlier, this data is on a lag. So the 2.3% is the March growth rate, and the biggest tariff announcements were saved for April.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
So if prices were increased in anticipation of tariffs or as the initial tariffs started to take place, we're likely to begin seeing that when we get April data, followed by months of potential increases as various tariffs take effect, if, in fact, they do.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Consumer sentiment data, like the index you just mentioned, can serve as leading indicators for the direction of the actual economy. In other words, how people feel can signal both things they're experiencing that haven't yet made it into the hard data, but also how they might be changing their behaviors, which will ultimately impact the hard data too.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
So sentiment data from several sources, including the Conference Board and the University of Michigan, has been declining. And it's likely a solid warning sign to pay attention to. We do our own sentiment research at NerdWallet, working closely with the Harris Poll. That's a partnership we've had for over a decade now.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Today, we're digging into what's going on with the economy at large right now. The latest GDP numbers are showing that the economy actually shrunk in the first quarter of 2025. And we've been hearing from listeners with questions about whether we're on the cusp of a recession or if we're already in one.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
And recently, we found 87% of Americans say they're planning to change their financial strategy over the next 12 months in response to tariffs. So when these strategies involve changes to spending, investing, and saving, it can have dramatic impacts on the economy overall.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Definitely, yes, in the soft data, which is what we often call sentiment data, as I was just discussing. But we're seeing it in the hard data, too, in imports and purchases ahead of tariffs. This is just the tip of the iceberg, though. We'll first see things that people are doing in anticipation of the potential economic change. Then we'll see reactions to the actual economic change.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
In the case of tariffs, this is higher prices and constrained supply chains. Further, we'll continue to see reverberating effects of this in the labor market as businesses deal with higher costs and lower consumer demand, and potentially even further downstream in things like debt levels and delinquencies.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Well, I can say pretty confidently that we are not in a recession right now. You know, something to keep in mind with all of the recession talk that is bound to increase in volume is that the official dating or declaration of a recession comes from the National Bureau of Economic Research.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
And generally, they announce an official recession after it's already begun and sometimes not until it's over. So this space between where a recession begins and when it's officially called is is when you look to the experts for their educated opinion on whether we'll look back at the current moment as being in a recession.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
And with all of the data and information I have available to me today, I would say no, we are not in a recession, and I am not alone in that statement. But for many of the reasons we've discussed today, there is a definite risk of one on the horizon, and that risk increases the longer this trade war continues.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Well, I really wish I had more eyes for all of the things I'm trying to keep an eye on. But really, I think we've discussed many of the primary indicators that I watch on a regular basis to get a read on the overall health of the economy. One thing that we haven't touched on that I keep my eye on is consumer debt.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
And this is less of a predictive recession indicator and more of a way to look at how a recession might impact households. So we know debt levels are higher now than they were just a few years ago. And higher debt obligations mean less wiggle room in the budget to absorb financial and economic stressors. So that's concerning to think about in the context of a potential recession.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Well, I'm hoping my insurance covers most of it since I give them my hard-earned money every month. But whatever is left, I'm paying for it with my emergency savings, investment accounts, and a hope and a prayer.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
And when you begin to see higher rates of debt delinquencies, you know households are really struggling. One of my many concerns right now is that should we find ourselves in a situation where a growing number of households are in financial dire straits, are there resources to help them?
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
And with federal grants being cut for community services, like food pantries, for instance, I'm not sure the answer is yes.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
It might sound a little bit cliche, but people should really focus on what's within their control, namely their saving and their spending. I think most of us, myself included, have varying levels of anxiety about the future of the economy and our place within it. But there's really only so much we as individuals can do in this moment.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
So the primary thing I would recommend is to revisit your emergency fund. And I know that's something you guys talk about a lot on the podcast. But having easily accessible emergency savings can be useful whether you have an unexpected expense like a medical bill or something as serious as a job loss. You know, ideally, you have several months of living expenses saved up.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
But this can be a tall order, especially if you're starting with nothing. So don't be afraid to start small. Focusing on this safeguard doesn't only result in real insulation from financial shocks, but it can provide a sense of control in this time when everything feels a little chaotic.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Absolutely. Thanks for having me back.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Sure thing. Up next, we answer a listener's question about managing their health savings account. But before we get into that, a reminder, listener, to send us your money questions. Do you want to know the smartest way to budget for your summer vacation? Or are you in the market for a new credit card but aren't sure how to find one that's best for you?
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD. or email us at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
To help us answer this listener's money question, we have Kate Ashford, NerdWallet's Medicare and Health Insurance Authority. Welcome to Smart Money, Kate. Always happy to be here, Elizabeth. First of all, can you explain what a health savings account is for listeners who don't know much about it? I will say that I love HSAs for their triple tax benefit.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
And I'm Elizabeth Aiola.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
I will say a refund and saving money sound like great incentives to me. Let's turn to a couple of questions that we got from listeners about taxes. Here's the first one, which comes from Diana. Hello, I've been trying to max out my Roth IRA, but I'm worried that I will hit the cap on MAGI, so won't continue to be able to put money into it.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
The problem is that although my salary is not close to the limit, my brokerage account dividends are putting me closer to the limit. I don't understand why the dividends get reported on taxes since I haven't ever taken the money out. I also don't understand the difference between ordinary and qualified dividends.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
Lastly, I don't understand how it will work later for taking the money out since some of it was included in my taxes now and some was not. I've been just putting money in for the future, but don't know how to actually take it out later. Thanks, Diana.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
I think backdoor Roth IRAs are like a gift because they sound too good to be true, but they're actually true. So thanks for that, Bella.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
All right, so another question we often get from listeners is about whether they should take the standard deduction or itemize. Can you explain to the people the difference and why someone might choose to do one or the other?
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
All right, Sean. So we'd all be forgiven for sticking our heads in the sand this week and not paying any attention to what was happening with our 401ks and IRAs. I mean, honestly, it was a hot mess.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
Ha ha. I'm not answering that. Ask me again next week.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
Good job, Sean. We're learning from you.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
This episode was produced by Sean and Tess Vigeland. Hilary Georgie helped with editing. Megan Morrow mixed our audio. And a big thank you to NerdWallet's editors for all of their help. And here's our brief disclaimer. We are not financial or investment advisors.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
This nerdy information is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
I'm not sure about y'all, but I definitely like to hear about some ways to cope with the news so we don't become our own worst enemies.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
Sean, I hope you did not look at your retirement funds this week.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
Up next, we answer a listener's question about taxes as we barrel towards April 15th. But before we get into that, a reminder, listener, to send us your money questions. Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD. Or you can email us at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
Now let's get to this episode's money question that's coming up in a moment. Stay with us.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
And to help us answer all the tax questions on this episode of the podcast, we are joined by NerdWallet tax writer, Bella Avila. Welcome back to Smart Money, Bella. Thanks. I'm happy to be back on.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
That's for sure. And I've been doing the same. So let's hear a bit about what's going on over on Wall Street and some tips for making smart investment decisions.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
So what advice do you have for the procrastinators out there who might not make that April 15th deadline?
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
I love that you added that people have to still pay their taxes because I will not lie, I might have forgotten that part. And also good suggestion on the calculator, Bella. I'm a calculator girl. So for everyone listening, we will have a link to NerdWallet's federal income tax calculator in today's show notes.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
Or you can just search in Google or whatever search engine you use, NerdWallet tax calculator.
NerdWallet's Smart Money Podcast
How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes
Alright, so are there any big changes this year that people should be aware of?
NerdWallet's Smart Money Podcast
Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)
And I'm Elizabeth Iola.
NerdWallet's Smart Money Podcast
Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)
So, Sean, as we just mentioned, the news in the last couple of weeks has been a lot.
NerdWallet's Smart Money Podcast
Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)
So let's try to clear up as much as we can. Today, we're breaking down some of the key recent actions by the Trump administration that could affect your finances and the economy. Our news colleague, Ana Helhoski, is here to help with that. Ana, thanks for stopping by. Yeah, you got it.
NerdWallet's Smart Money Podcast
Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)
All right, so let's start with tariffs, a topic we've talked about on the podcast in the past, but more hypothetically. Now it seems this tariff business is starting to become a reality.
NerdWallet's Smart Money Podcast
Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)
I also want to put it out there that tariffs placed on one country often lead to retaliatory tariffs in response. And that's what we saw this week, too.
NerdWallet's Smart Money Podcast
Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)
All right, so another big topic in the headlines lately is the federal spending pause, or should I say the federal spending pause pause?
NerdWallet's Smart Money Podcast
Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)
So since we don't know what could happen, if anything, to that personal information now that Doge has access, we can't give specific advice on what to do next. But what we can say is that we recommend freezing your credit in general because it blocks scammers from accessing your credit reports and also opening fraudulent accounts.
NerdWallet's Smart Money Podcast
Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)
For those who don't know, the CFPB is an independent agency that oversees the consumer finance industry. So that includes banks, lenders and other financial institutions. Its main job is, as the name suggests, to protect consumers, often through enforcement actions. Over the last 13 years, the CFPB has recouped $19.7 billion for consumers.
NerdWallet's Smart Money Podcast
Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)
And the Education Department is in charge of overseeing all federal education policy, along with managing financial aid and student loans. So it has a laundry list of duties.
NerdWallet's Smart Money Podcast
Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)
Another good opportunity to repeat our House view on freezing credit. So, Ana, if Trump doesn't get rid of the education department, he could still dwindle its power, right?
NerdWallet's Smart Money Podcast
Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)
Yeah, sure thing. Up next, Sean and Sarah Rathner answer not one, not two, but three listener questions about travel credit cards, opening investment accounts for grandkids, and more.
NerdWallet's Smart Money Podcast
Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)
Maybe you're wondering if you should itemize or claim the standard deduction, or if there will even be an IRS to send your tax return to. Whatever your tax question, send it our way. One more time, leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD. You can also email us at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)
I would not say that, Sean, not even remotely. In fact, it's dizzying trying to keep up with everything that's happening right now with the new administration. And some of it could affect all of our finances.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
Thank you for joining us today. So before we start, I just want to say a couple of things that often get forgotten when we're talking about investing. First, investing usually comes second to some other goals. If you're having a hard time paying for necessities or you don't have an emergency fund, it's really important to focus on those things before we even start worrying about investing.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
Second, instead of scrimping, try to increase your income. I didn't start investing until I was in my late 20s. And that's because one, I didn't work at NerdWallet yet. So I literally didn't know anything. And two, I was making around $25,000 a year. So I didn't have much expendable income. And when you don't have extra income, it's really hard to prioritize investing.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
And it just might not even be a good idea to do that. When I started making more money, it was suddenly a lot more possible for me to invest for retirement. If it's possible for you and you want to be investing more, look for jobs that will pay you more or look into side hustles. But cutting back on your streaming services probably will not save you enough money for retirement.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
And finally, if you don't have the money to invest now, that's totally fine. Some people have serious money anxieties, and others just don't have the cash. Whatever your reason is, don't stress too much about it. Just keep learning, and when you're able to, you can start investing. So why do we invest? What is the point of all this? The answer is that it's because we like money. And that's OK.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
There's no shame in admitting it. I like money. Most people like money. It's because money isn't just money. It's not like Scrooge McDuck diving into pools of money and buying Maseratis. It's not that. It's about not being stressed about your money all the time.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
And it's about being able to buy everything that you need and some stuff that you want comfortably without having money stress take up all of your energy. Money allows us to thrive instead of just survive. And investing helps you make more money than you could ever possibly make just by working at a job. So OK, what actually is investing? This whole process is very strange.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
Investing is the process of money that you already have making additional money for you. And this works through what's called compound interest. Compound interest means that your gains get a little bit bigger every year. And that's also why starting when you're younger gives you a huge advantage and more money in the long run.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
So let's, for example, you just start at that little number one in the box up there. Say you buy an investment for $100. If it goes up the average stock market return of 10%, it could then be worth $110, meaning that you've made $10. then that $10 that you earned also starts earning compound interest on top of the $100 you initially invested.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
That doesn't sound like much of a profit, but imagine if you were doing it with way larger amounts of money over a way longer period of time. Now, that 10% is an annualized rate, which means that you're not going to get 10% every single year. In all likelihood, some years you're going to finish up, some years you'll finish down.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
But over the course of decades, when you average all that out, you tend to get about 10%. The way you actually start investing is through an investing account. And there's a couple of different types. But the type of investment account you have is actually really, really important because a lot of them have some pretty significant tax benefits that you want to take advantage of.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
So you've got your 401 s, and these are offered through your employer. You add money to it, and sometimes your employer matches it. So it's basically free money. If you have a 401 , you'll likely choose your investments from a pre-selected list or a fund that will automatically adjust itself over time. This means 401 s are typically very hands-off.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
IRAs, on the other hand, are investment accounts that you open up yourself. IRAs can be opened online through brokerages and actually at a lot of large banks, they also do that. So it's likely you can open up an investment account just through your bank. Unlike with a 401k IRAs, you'll have to choose your own investments in those accounts.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
You may have heard about a thing called a Roth IRA or a Roth 401k. And it's good if you know the difference. So with a Roth, you pay taxes on your money now, just like any other money that you earn. And then the money you have invested inside that account grows tax-free and you can take it out tax-free in retirement. With a traditional IRA or 401 , the money you contribute today is pre-tax.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
So that is, you get to deduct it from your income taxes this year. So it's like a nice little treat this year. But then when you cash it out in retirement, you will owe income taxes on it. This is really, really important. I've seen a lot of people make this mistake. Your investment account is not an investment. So a Roth IRA, a 401 , not an investment.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
If you have a Roth IRA, that's great, but that doesn't mean you're actually invested in anything. So you fund your investment account, and then you buy investments from there. But I've heard of people opening a Roth IRA, putting in a bunch of money, and then wondering why it didn't grow over the last 10 years. So you have to purchase investments for your money to actually grow.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
And if you don't do it, you'll miss out on all of those years of growth. So very important. And there's a couple of different types of investments that you can choose from once you open and fund your investment account. So you've got stocks. I'm sure everyone's heard of that. These are shares of ownership in companies.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
And the way you make money from them is if they go up in value, and some pay you a cut of the company's profits on a regular basis. Then you've got bonds. This is when you loan money to companies or the government, and they pay you interest. Funds, now these are very exciting because they're basically just baskets of stocks and bonds that you buy all at once.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
A fund is still a stock or bond based investment, depending on the type of fund that you get. And there's a lot of different kinds, such as like index funds or exchange traded funds and mutual funds, but they're all collections of investments that you buy at one time. And I think funds are pretty awesome because if you own a stock and that company goes out of business, you lose all of your money.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
But if you invest in a fund that covers 100 stocks and that same stock goes out of business, your investment is buoyed up by the other 99 companies. So again, all of these investments, stocks, bonds, and funds, you buy them from your investment account, and then you own them in there. So let's talk about the stock market. It's this weird, nebulous term that's kind of hard to understand.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
But the stock market is just where people buy and sell investments, but now people just trade investments online. The stock market is made up of several what are called market indexes. Now, these are basically just predetermined lists of companies. And the performance of that overall list can tell us a lot about the health of the US economy.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
For example, the S&P 500, something you probably have all heard of, that's just a list of 500 of the largest publicly traded companies in the US. and it includes companies like Apple and Amazon. When we say the stock market is down today, that means that on average, most of those companies aren't doing well.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
And you can't invest in the literal stock market, but you can invest in funds that include all the same investments. These are called index funds because they track a market index. Again, if you have an S&P 500 index fund, it should perform pretty closely to how the S&P 500 itself is actually performing. The S&P 500 goes up 10% a year on average and 6.5% after inflation. This is just an average.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
So some years, the market goes up more. Some years, it goes down less. But when done well, investing can potentially mean doubling your money every few years for doing basically nothing, which is my favorite way of earning money, by doing nothing. It's great. So let's talk strategy. This is all about the way that you invest, when you put your money in and when you take your money out.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
Passive investing is where you buy that S&P 500 index fund and you keep adding money until you retire. It's very boring, but it's effective. It can give you that 10% return on average over the long haul. But a lot of people want to make more than that 10%, and they do so by actively buying and selling stocks, crypto options, and other high-risk investments.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
They try to predict when they'll be low, then they buy them, and then they turn around and try to sell them when they're high. These people are called active traders or day traders. So only 20% of active traders make money over a six-month period. That is not a lot of people.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
There have been a lot of studies over the years that show that active investing is a way less lucrative fashion than boring old passive investing with that index fund. Plus, active investing is a lot more work. You have to do all kinds of research, and you keep an eye on the markets.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
And you can hypothetically earn more by actively trading versus passively earning the same amount as that historical return of 10%. But most people end up making less when they actually try it. That's because people are really bad at predicting things. And in order to make money on the overall stock market over the long term, you have to be really good at predicting things all the time.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
So maybe you make it big on one stock, but the odds of that happening again and again are very low. Let's put all of this information together, the accounts, the actual investments, and the strategy. Here's how financial advisors suggest you prioritize your money when you're starting to invest. The first thing you want to do is you're not actually going to invest at all.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
The first thing is that you're going to have an emergency fund. This is money that you won't actually put in the stock market. And that's because when your money is invested, its value can change day by day. Say you have $1,000 and you want to use it for an emergency fund, but you invest it.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
When you have to fix something on your car suddenly, you go to check your money, and its value could be $600 instead of $1,000. And that's not good. If you put it in a high-yield savings account, you can access that money at any time without risking its value. Plus, right now, the interest rates are really high. So your money could be earning 4% to 5% just by sitting there.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
Next, you want to get that 401 match if it's available to you because it's free money. After that, it's a good idea to look into IRAs. Both IRAs and 401ks have what's called a contribution limit, which is just the maximum amount of money you can put in each of them every year. If you're able to max out an IRA, then it's good call to move back to your 401k.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
And the reason you switch around like that is because of the way the tax benefit works. It's likely more beneficial to invest in an IRA or over a 401k if you've already gotten your match, if you have to choose between the two. Then if you max out your 401k, you can move to a standard brokerage account.
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
Confession time. How much debt are you carrying right now? If you don't want to share the details, can you at least confirm it's not trillions of dollars? Well, the U.S. government cannot say that. It's currently more than $36.2 trillion in the hole. And today, we're going to hear how that happened, how serious it is, and what it means to our personal finances.
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
And when might it make sense to choose one retirement account over another based on the investments available?
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
And here's our brief disclaimer. We are not your financial or investment advisors. This nerdy information is provided for general educational and entertainment purposes, and it might not apply to your specific circumstances. This episode was produced by Tess Vigeland. Hillary Georgie helped with editing. Nick Karasimi mixed our audio. And a big thank you to NerdWallet's editors for all their help.
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
That is not where you want to be. So how did the debt get to $36.2 trillion, Anna?
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
So who owns the debt and what is the debt made of?
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. Sean will join us in the later half of this episode where we're answering a listener's question about investing in their 401k accounts and whether it's cool that an insurance company is in charge of managing it.
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
Can you explain more about the difference between the two?
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
You just mentioned foreign countries. So which ones does the U.S.
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
I think it's safe to assume that the national debt will grow, but what do economists' projections show?
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
Ana, does the government ever pay off its debt?
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
But first, our weekly money news roundup where we break down the latest in the world of finance to help you be smarter with your money. Our news colleague, Anna Helhofsky, is here to talk about the large financial hole the country is in and what it means for all of us. Hey, Anna. Hey, Elizabeth. We're going to be answering two listener questions today.
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
Well, I've seen the debt ceiling back into the news lately. Can you explain how it's different from the national debt?
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
I'm pretty sure we will. Thanks, Anna. You got it, Elizabeth. Up next, Sean is back to help answer a listener's question about whether it's worth contributing to a 401k without an employer match and without a lot of investment options, or if it's better to do a brokerage account on their own. But before we get into that, a reminder, listener, to send us your money questions.
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD. Or email us at podcast at nerdwallet.com. This episode's money question is coming up in a moment. Stay with us.
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
To help us answer Vicky's question on this episode of the podcast, we are joined by investing nerd, June Shem. Welcome back to Smart Money, June. Thanks so much for having me again.
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
And this first one is asking for a bit of an explainer. They wrote, Hi, nerds. Could you attempt to explain how we got into trillions of dollars of national debt? When was the last time we were in a surplus? Who exactly are we in debt to? Thanks. So, Ana, where do we even begin with this subject? It's really hard to wrap my brain around that figure I mentioned earlier, $36.2 trillion.
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
Vicky says that the insurance company can change the fees at any time without notifying the people who are actually in the plan. And to me, that doesn't sound right. What do you think is going on there? Because it's my understanding that retirement plans have specific disclosure requirements.
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
But can you think of any drawbacks of investing in a 401k for retirement versus a brokerage account? Yeah, there definitely can be drawbacks.
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
And on the flip side, what might be some of the benefits of investing in a brokerage account over a 401k account?
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
How does the government rack up that kind of debt?
NerdWallet's Smart Money Podcast
401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained
So 401k accounts are sometimes critiqued because they may not have as many investment options as something like a self-directed Roth IRA, for instance. But as Sean pointed out, we have over 20 different options in our 401k, which seems like a lot. Is that normal or are we just spoiled at NerdWallet?
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
I mentioned is really helpful if you find yourself using your card at online retailers. When those retailers have your card info stored, it's even easier to spend and making yourself wait a while before you actually make the purchase can help. And on that note, if you can opt to not save your credit card info on those sites you frequently visit, that can make a big difference too.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
If you have to go get your card from the other room every time you want to transact, it forces that slowdown period. And remember when a shopping spree meant contending with other shoppers and finding parking? Well, one reason we did it less often was because it wasn't so easy. So make your credit card transactions just a bit more difficult.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
You can also optimize the spending you are doing by choosing the right card. If you're going to use a credit card, make sure the things that you're buying can be paid off with each billing cycle and use a card that offers rewards like cash back.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
If you have a very specific financial goal for the year, I'd recommend checking out the content over at NerdWallet. And this isn't just a shameless plug. I do it all the time. That savings calculator you mentioned earlier, I just used it last week to compare some rates that I was getting paid on various savings accounts.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
So the content at NerdWallet, I can give you a few of my favorite tips on this podcast. But if you're looking for very specific pointers on a very specific financial goal, you can find it there. My ethos personally for money and more really is to consistently strive to do better, to give myself grace. I'd suggest that as a sort of all-encompassing approach to financially healthy 2025.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
So wherever you are on your personal finance journey, make decisions and take steps to do a little better than you did before. Sometimes you'll be able to take big steps and grow, like by opening a CD with your tax refund, for example. But some days, just saving a couple dollars on your grocery bill will be the extent of your progress. And that's okay.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
And when you meet setbacks or unexpected expenses, because you will, be nice to yourself and just keep moving.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
All right, Sarah. Thanks for having me.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
There's always room for improvement, especially when it comes to savings. You can always save more. The top-sided regrets involved saving in 2024, or the lack thereof. 29% of Americans regretted not saving for emergencies, and 27% regretted not saving for financial goals last year.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
Some of those regrets I'm going to keep to myself. Probably a wise decision. I did do a lot in 2024. And financially, that included paying off my master's degree and selling a home to move halfway across the country. So there were some big financial milestones, but also room for improvement.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
I think there's always some room for improvement when it comes to our finances, even if we don't necessarily have regrets.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
Hopefully not a lot. Well, actually, most of us have money regrets for the year. 69% of Americans say they had financial regrets for 2024. And those range from not saving enough to overspending on a variety of categories.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
To your point, we're going to do what we can to help that out, but it was the youngest generation that was the most likely to have such regrets. 89% of Gen Z compared with 80% of millennials, 73% of Gen X, and less than half, or 46% of baby boomers had money regrets for 2024, which... If you think about it, it makes some sense.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
Baby boomers are at the life stage where they're most likely to be financially secure. And I don't know, there's something about getting older where I just feel like maybe you let go of things that other people would normally regret when they're younger.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
And it gets easier. I still have money regrets from 1998 or so. Yeah.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
And then having more money as you get older helps too.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
Well, you Right. There's always room for improvement, especially when it comes to savings. You can always save more. The top cited regrets involved saving in 2024 or the lack thereof. 29% of Americans regretted not saving for emergencies and 27% regretted not saving for financial goals last year.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
It's a labor of love, though, I know.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
Overspending was another category that accounted for a large share of regrets. One-fourth of Americans regret overspending on entertainment last year. 14% regretted overspending on travel. 13% overspending on housing costs. So that's you, Sarah. Yep. And 12% regret overspending on an event, like a wedding or a celebration of some kind.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
When it comes to the spending, particularly, there are a few different approaches you can try. I think the classic advice for overspending on specific categories is setting a budget limit for that category. Maybe I can spend $100 weekly or biweekly on entertainment. And by biweekly, I mean every two weeks. Another way to approach it is limiting the number of outings.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
If your entertainment budget is getting blown because you like to dine out five nights a week, cut it down to three. Or maybe only spend on the problem category on weekends or something like that. The idea with all of these is that you're setting up guidelines and boundaries for yourself.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
Right. Well, moving from the rural Midwest back to a fairly urban place in North Carolina, my spending on dining out kind of went out of control for the first few months because I was just in heaven with all of the takeout. And I've had to rein that in and really set those guardrails for myself and limit myself so I don't just go nuts.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
Right. I wish we could parse this data by credit score because I am sure there's some perfectionists out there who regret not making it to 850 from 825, which, by the way, is still very, very good. We know that 21% of Americans, so about one in five, regret not improving their credit in 2024.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
I think the best advice or the best way to boil down advice about maintaining your credit or improving it is just being consistent. Consistently making your payments on time every month and consistently keeping your credit utilization low. Improving your credit can take time, but if you can apply that consistency, you're taking the right steps.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
When it comes to credit utilization, there's really no hard and fast rule, but using no more than 30% of your available credit is a good level to aim for and less is even better.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
You're absolutely right. We had a very similar discussion last year and the hype around New Year's resolutions is real. And I agree that they are way overrated. You know, I'm sure there are people who have great success with this annual approach to goal setting, but I'm with you, Sarah. I'd rather make lifestyle changes or goals throughout the year without all the fanfare.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
Hey, I'm here for daily goals too.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
Yes, I think that the annual approach is very all or nothing. And it's easier to give up when you screw up a little bit. But I like that weekly approach because you can just pick it back up next week.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
Well, this is kind of related to what you were saying earlier about automating credit card payments. You know, one thing that's really worked for me personally is automating transfers into my savings account. So twice a month, immediately after payday, a transfer goes from my checking account into a savings account. Automating that even a little bit makes it so much easier.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
You just don't even have to think about it. You don't have to remember. But if you're like, well, okay, but how do I find the money to save? You might try swapping out one thing that you're spending money on monthly and directing that money into your savings instead.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
Maybe that's a streaming account that you signed up for and forgot about or are no longer watching your favorite show on or a subscription box that has lost its novelty. You know, cancel that and direct the $20 or $60 or whatever it is into your savings every month instead.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
Spending wisely is spending with some thought, right, and attention. Slowing down and being mindful of your actions is really where you can make a difference.
NerdWallet's Smart Money Podcast
Regret Less, Save More: How to Make Smarter Money Moves in 2025
Whether you filled your cart at an online retailer and enforce a holding period before you hit that checkout button, or if you're just more strategic and thoughtful about your shopping trips ahead of time, the more you can think about your spending, the more you can make those small changes that add up over time.
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
Sean, I know you're headed to the UK soon, and as a London girl, it would be wrong for me not to give you recommendations. So here are some must-see spots. You must go to Kew Gardens because you're a gardener's shortage for a bohemian hipster vibe. You gotta go to Camden for top-tier markets, cafes, and coffee shops. South Back Center for an artsy, eclectic experience.
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
So now that we've discussed down payments and closing costs, Abby, how can we actually fund buying this home? What are the options?
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
In that case, do you think it's worth people waiting, maybe if they have a lower credit score, waiting and improving their credit score before trying to apply for financing?
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
All right, so the listener also wanted to know about borrowing from your 401k to buy a house. So what are your thoughts on that?
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
Down payment assistance. That is something I am not a homeowner like you two, but there was a time during the pandemic when I was looking into buying a home and I did look at the down payment assistance programs. So can you break those down for us, Abby? What is it and how does it work?
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
That's a lot. So we know that there's more debt, and when prices rise for goods, homes, services, et cetera, then debt continues to rise. The higher the debt, the more difficult it is to repay. What are you seeing with payments?
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
Abby, when I was researching all of these options, one thing that I felt was overwhelmed because there were so many options and so much information. Do you have any tips for how people can maybe start the process without feeling overwhelmed of researching?
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
I'm with you on that. You guys know I love a Facebook group. The Facebook groups that I've poked around in as well, lots of people express regret over not realizing how expensive it was going to be to own a home. So I second that in terms of doing the class. And I think this is a good segue into the rent versus buy question that the listener had. So what are your thoughts on that, Sean?
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
What are your thoughts on renting versus buying?
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
I prefer the idea of renting during this phase of my life. And I am focused on maximizing my retirement savings. So all the things you guys said, it just reaffirms my decision right now to not want to own a home. I love calling up my landlord. The other day, actually, my water heater broke and I was without hot water for, I don't know, maybe a week or two.
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
But the point is, I didn't have to replace that. And I know that was expensive. So my landlord was in charge of that.
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
Oh, my God. How did you know? That was one of the things, too, because I was like, I might not like Texas and I might need to move and I don't want to be stuck with a house. So that was part of my reasoning, too.
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
And here's our brief disclaimer. We are not your financial or investment advisors. This nerdy information is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances. This episode was produced by Hilary Georgie and Anna Helhosky. Hilary also helps with editing. Nick Karistamy mixed our audio.
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
And a big thank you to NerdWallet's editors for all their help.
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
And then you have to see the London Eye because you're a tourist and why not? And of course you have to take a pic in front of Buckingham Palace or the trip never happened.
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
Did the report detail any of the reasons why late payments are increasing?
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
And now you're indebted to me and have to bring me back a key chain and Kit Kats because I gave you those excellent tips.
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
What is going on there?
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
Now for some advice. Sean, have you got that CFP hat at the ready?
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
So we know that delinquencies are rising. What are some of the potential consequences of delinquencies?
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
When someone starts falling behind on payments, what should they do first?
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
Is it ever a good idea to use savings or retirement accounts to catch up on debt payments?
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
Whenever people are in a tricky spot with their finances, they may get desperate, and that's when predatory lending and scammers seem to appear. Any advice for spotting the warning signs for those?
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
And I'm Elizabeth Iola.
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
Thanks for that, Sean.
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
Up next, we answer a listener's question about home buying considerations. But before we get into that, a reminder, listener, to send us your money questions. Do you want to know how to diversify your stock portfolio? Have you been wondering about how to budget effectively to reach a new financial goal? Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD.
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
Or email us at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
To help us answer Nikki's question on this episode of the podcast, we are joined by mortgage nerd, Abby Badak-Doyle.
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
We're always keeping an eye on economic indicators, and there's been a pattern lately that's not looking too good. Recent data shows that debt delinquencies are trending upwards.
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
Abby, so I have a question for you. I am in a mom's group and I see a lot of people asking questions about how they can get into buying a home, even though they're on an extremely tight budget. So some people say they're barely making ends meet, but they're still looking for a way to buy a house. So what would your kind of thoughts be on that?
NerdWallet's Smart Money Podcast
How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home
And what about people who are worried about PMI? Because I hear that all the time as well, that, well, if you don't put 20%, you're going to have to pay that PMI. Is that a myth to you?
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
Of the business owners who are making it, shout out to y'all, the average makes under $100,000 a year. Owning a business also doesn't automatically mean that your business is going to be worth millions either.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
Now, while it may be true that you're unlikely to become wealthy just by earning income from a 9 to 5, the part that people miss is that if you consistently invest that income in, let's say, stocks, bonds, mutual funds, and low-cost index funds, you can become wealthy in a couple of decades.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
I want to say congratulations for having that extra money in your budget because I am also a mother and my son is seven. And when he stopped going to daycare, I could have thrown a party for that. So I'm glad you guys have that extra income. So based on all of your priorities now, which one of the ones that you mentioned would you save
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
best aligns with one, your long-term financial goals and also what feels the most pressing?
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
And if you don't mind me asking, how much do you guys have in your emergency savings at the moment?
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
Pressure. Most people who become millionaires in the U.S. do so by contributing to a retirement account consistently over time. I also am going to say an analysis by 401k provider Fidelity Investments found that in Q3 of 2024, 544,000 of the 24 million participant accounts in the 401k plans had balances over a million dollars. Case in point, you can become a millionaire working a nine to five.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
I like that you said you feel like you're on track for your retirement savings. So what makes you feel like you're on track? What are your goals? And how are you kind of measuring your progress?
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
I guess to answer your question about what you should prioritize, obviously only you guys know that, but I will say that some general options in terms of financial priorities that we usually share at NerdWallet is first of all, like Sean said, ensuring that you have a sufficient emergency fund. Then it would be paying down high interest debt, which it doesn't sound like you guys have much of.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
The next thing would be saving for retirement and you're already doing that and you seem to be on track. And then you could consider putting money into college funds first. for your kids, which you guys said was one of your priorities too. You can try to achieve multiple financial goals at the same time.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
I think sometimes people get hung up on having to do one thing at a time, which is fine if that's what you want to do. But it is possible to allocate some of that extra income that you now have to saving for retirement and also allocate some to a college fund for your kids and also save some towards your house renovation. So it doesn't have to be one or the other.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
Well, I'm going to jump in here because I love talking about FIRE, but I know that's not the exact topic, but it makes me think of Coast FIRE. For anyone who's not familiar with FIRE, it's, you know, financial independence, retire early. But essentially with Coast FIRE, you save aggressively and then you do get to a point where your investments can grow enough to cover your retirement needs.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
And it allows you to, like the word says, coast to retirement without having to save so aggressively. So to answer your question, it doesn't mean that you necessarily stop saving, but maybe you don't have to front load as much as you are. And for a little personal anecdote, I can relate with you guys because I started saving for retirement late and I was obsessing over not having enough as well.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
As someone who is a small business owner and a 9 to 5-er, I want to say that there are benefits of doing both simultaneously. If you want to increase your cash flow, you can save and invest more money by doing both. And I was able to hit some of my savings goals quicker as a late bloomer to investing because I had extra cash to max out my 401ks and contribute to a SEP IRA.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
So I was working, taking on all these side hustles in order to put as much as I could into retirement savings. But at a point, I started forgetting that because my number, I don't know, was around like, oh, I need $2 million or something to retire how I would like to. And I started to think, oh, my God, I need to save $2 million. But I forgot that compound interest is working for me.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
So after some time, that's going to kick in and it's going to help my money to grow. So all that to say, I think, as Sean said, maybe sitting down with a CFP and having maybe a more clear number of where you're trying to go within the different scenarios can help. And just also letting the stock market do what it does and hopefully let your money grow over time can be really helpful.
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How to Build Wealth Right Now and How Couples Can Align on Financial Goals
So and then also maybe exploring some of the anxiety that you're having around the uncertainty, because I realized that was a big issue for me as well. Four, in some ways, was maybe not so much about the amount of money I had, but more about the fears I had about not having enough money that was driving me to over-worry about it.
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How to Build Wealth Right Now and How Couples Can Align on Financial Goals
But so important, so important. I used to be so afraid of retirement. And even I took me so long to start saving because I was scared to do that daydreaming because I thought it was going to make me realize how far behind I was. But it actually was such a motivator because I got to think about what I want my life post-retirement to look like.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
So I would totally say even you guys doing that together on one of your dates where you have like your goal sharing or talking about money to just sit down and allow yourself to daydream.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
And even doing that maybe before a meeting could help you bring more to the meeting with the financial planner about what exactly you want that retirement to look like so they can help you with the numbers element of things as well.
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How to Build Wealth Right Now and How Couples Can Align on Financial Goals
I do. Thank you so much for being so gracious, Sean. Okay, okay, okay. But before I bow out, I am going to add that owning a business is not for everyone. So sometimes it's better to take that time and those resources and pour them into lobbying for a raise or developing high demand skills and making yourself more valuable in the job market.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
And here's our brief disclaimer. We are not financial or investment advisors. This nerdy information is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances. This episode was produced by Tess Vigeland. Hilary Georgie helped with editing. Nick Karasimi mixed our audio. And a big thank you to NerdWallet's editors for all the help.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
That extra money you make can be put into smart investments that help you grow your wealth without having to become a boss.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
Oh, thank you for letting me, even though it felt like I was talking on fast forward. Thank you.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
All right, Sean, it's your turn. I hope you take a deep breath because you have 100 seconds. All right?
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
And three, two, one, go.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
50 seconds.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
And I'm Elizabeth Ayola. This episode, we talk with a married couple about how they manage their finances together. even when they don't agree on what they want to do with their money.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
But because I'm going to give you, I want you to finish, so go ahead. Tell us.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
Okay.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
Yes, but it was all good. So I love this argument, Sean.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
As a balanced human and one who has both a Roth 401k and a Roth IRA, I have to agree, kind of. So I do agree that the Roth IRA limit isn't alluring enough for the rich auntie lifestyle that I hope to live during retirement and that the higher Roth 401k limit is more incentivizing.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
But that said, I feel like you're overlooking a huge part of the argument, which is that Roth 401ks can be limited when it comes to your investment options. So with a Roth 401k, you're at the mercy of plan administrators when it comes to your investment options. And that might comprise mutual funds, typically a target date fund, and they usually have set expense ratios.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
However, with a Roth IRA, you can shop around and that can save you money long term and take your retirement savings further.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
I will take that rebuttal. But let's not forget that everyone doesn't have access to a 401k. So for those who don't, a Roth IRA may be as close to tax-free withdrawals that they'll get, even if it is overrated, Sean.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
It might be. And because I just have to get the last word in, I'm also going to say, as an aspiring FIRE participant, Roth IRAs can be superior for people who retire early and want to take penalty-free money out of their account to live their best lives.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
Fine, you win.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
We're about to get into this episode's money question segment, where we hear from a married couple about how they manage their money together and work through tough money conversations.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
Maybe you're having a hard time keeping track of your money and are wondering which budgeting method might be right for you. Or you just got hit with a big car repair bill and are wondering if putting it on the credit card is such a bad idea. Whatever your money question, we nerds are here to help. Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
I think that's my default, Sean. As a recovering oversharer, I am well-versed in realness.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
Alrighty, let's get to this episode's money question segment. That's coming up next, but you got to stay with us. We're back and we are answering your money questions to help you make smarter financial decisions, hopefully. In this episode, we're joined by Naomi and her husband, Andrew, who have some questions for us about how to prioritize the new breathing room they have in their budget.
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How to Build Wealth Right Now and How Couples Can Align on Financial Goals
I love that you guys are on the same page because as Sean said, that can be difficult for some couples. So are there any areas where you maybe disagree or you don't necessarily align when it comes to how to spend money? I know you mentioned short-term goals. So maybe can you expand on that a bit more?
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
I stay ready, Sean.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
So owning a business isn't the only way to build wealth. It grates my nerves when I see social media influencers or business owners tout this idea. I mean, that isn't the only way to become a millionaire. All right. So first of all, about one in four businesses fail within the first year. And I'm not saying this to be a negative, Nicole, or discourage people from starting a business.
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How to Build Wealth Right Now and How Couples Can Align on Financial Goals
I love that. I want to circle back to this idea of you guys maybe disagreeing a bit around your short-term goals, and especially because you mentioned debt being maybe the main driver for that. And you also mentioned a very good point, which is sometimes there is what is called in the financial world, good debt and bad debt. So what are you guys' ideas of what good and bad debt are?
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
So if we can see if we can get you to reframe and maybe align in that regard.
NerdWallet's Smart Money Podcast
How to Build Wealth Right Now and How Couples Can Align on Financial Goals
So Sean, do you want to maybe first go into what good debt and bad debt is, especially within their context?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
I have a bunch of seedlings growing in my greenhouse right now. Tomatoes, hot peppers, herbs, some annual flowers. I always feel so invigorated by spring and I just love to spend all of my free time in the garden this time of year.
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Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
You know, my budget has been holding pretty steady so far this year, but it is about to go through some big changes. I recently paid off my car, which I'm very excited about. That frees up a few hundred bucks each month, and I'm about to start renting out my house in Washington and splitting the cost of my partner's mortgage in Portland, so we're both about to be spending less on housing.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Is that for domestic only?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
But it's important to know, too, if you're planning on doing international travel, neither would port abroad. Correct, Barbara?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Kay, that makes me wonder about your retirement in general. When you talk with your partner about your retirement, what comes to mind? What do you discuss for potential plans?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Mm-hmm.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Between those shifts, I'm planning to evaluate how I can make the most of this money each month Day to day, though, my spending hasn't changed a lot. I'm mostly still trying to reduce my discretionary spending amid the economic uncertainty we've been seeing. What about you, Elizabeth?
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Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
I mentioned that because at this stage where you are, it can be really helpful to dream a little bit and talk deeply about what you think is realistic so that you can begin to map out what extra expenses you might have in your retirement. Because you will probably have some expenses that will go down.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Like you mentioned, you're getting close to paying off your mortgage, but you may have to pay for additional health care. You may have to pay for travel. And all those things are important to talk through and make a plan for.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Yeah. Barbara, how do you approach that with clients? What do you think Kay should be considering here?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Thank you.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Right. Barbara, I want to circle back to one of Kay's first questions, which was when it's okay to pull back and if it is. What are your thoughts, based on what you've heard so far from Kay, around whether Kay might be in a place to do this or just in general, whether it's best just to keep save, save, saving away?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
So what exactly was hiding in those cobwebs? And did you learn anything insightful by cleaning them up?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
So really digging into the numbers then.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Got it. Okay, I know we've run through a lot of information over the past 20, 30 minutes or so. How are you feeling at the moment? And what do you think your next steps might be?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
And Barbara, do you have any final thoughts for Kay or anyone else listening that is planning their own retirement savings?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Well, Barbara, Kay, thank you both so much for joining me on this segment of Smart Planning.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
And remember, listener, that we are here to answer your money questions. So turn to the nerds and call or text us your questions at 901-730-6373. That's 901-730-NERD. You can also email us at podcast at nerdwallet.com. You can follow Smart Money on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes. Here's our brief disclaimer.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
We are not your financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. This episode was produced by Hillary Georgie, who also helped with editing, Nick Karisamy mixed our audio, and a big thank you to NerdWallet's editors for all their help.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
And with that said, until next time, turn to the nerds.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
You know, I'm always curious about how people manage their money and their budget on a really tactical level. So what tools do you use to manage your budget?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
I'm pretty similar. I use a piece of budgeting software that gives me a granular view of my spending and saving and investing, but I don't check it every day because I also do the pay myself first method. I have my savings and bill payments largely automated so I know that I have my finances covered without much day-to-day maintenance.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
For people out there who are looking for budgeting tools, we have an article full of options, and you could also test our NerdWallet app. We'll put links in the episode description for both. Moving along, a spring cleaning item that comes to mind is refreshing financial goals.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Some people may be totally amped to set new financial goals around the beginning of the year, but others may need a few months to get into the swing of things, and that's totally okay. Spring can be a good time to set goals, as symbolically it's a time of newness and growth, The seasons start shifting, nature awakens, plants begin blooming. Can you tell I'm a gardener? I can tell, Sean.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Well, anyway, spring is a great time to set or revisit your financial goals. Check in with the progress that you've made on your goals so far this year. We are somehow over a quarter of the way through 2025. So if you had a goal of regularly contributing to a Roth IRA and maxing it out, are you approximately $1,750 of the way to that goal?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
If you haven't been able to make as much progress as you would like towards your goals, ask yourself whether they are still attainable or if you might need to pivot, and if they still align with your values and long-term vision. Some people may be rethinking their goals or pivoting due to all of the economic uncertainty happening right now,
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Maybe you were planning to take a big vacation later this year, but now you're pulling back to focus on saving, for instance. Or maybe you're moving up your timeline to buy a car. So, Elizabeth, where do you stand with your financial goals for the year?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
See, this is why we get along. I'm also focused on the long-term strategy when it comes to my investing. Things might be scary now, but this is the price of investing. And I still have many years until I need the money in my brokerage account or 401k. So I'm keeping my regular monthly contributions going. My big goal this year is funding my wedding and honeymoon.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
So I'm going to be allocating an even greater percentage of my direct deposits into my wedding fund now that I'm about six months from the big day.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Sometimes fear of death is a good motivator, Elizabeth. It is. And I know estate planning has many moving parts, but you can start by ensuring that your documents are up to date, assuming you have them. That includes your will, powers of attorney, advanced directives, or trust documents.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
As a quick refresher for those who haven't done any estate planning yet, it doesn't have to cost a lot of money. Our nerds have put together an estate planning checklist that we'll link to in the episode description. And there are online platforms like Rocket Lawyer that offer templates that you can fill out, print, and get notarized if needed.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
If you have a complicated estate, you can hire a professional, and that could cost anywhere from hundreds to thousands of dollars.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
I do have an estate plan, but I'm due to revisit it. I haven't looked over my will in a few years. And since then, my financial situation has evolved. And as I mentioned before, I'm getting married later this year. So now is a good time to make sure that the plans I have set in place are still what I want.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
And setting up your beneficiaries is shockingly easy. You can do it just by logging into your accounts in a matter of minutes. No need to get an attorney involved at all. Estate planning aside, reviewing your insurance policies is another smart spring move and something that can help protect your finances. Do you have adequate life insurance coverage, especially if you've got kids?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Maybe you recently started a family and haven't gotten around to getting life or disability insurance. Auto insurance and homeowner insurance are other types of insurance you might want to review, too. Costs have been going up, so shopping around is your best bet to save money.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Same, but in the meantime, I might sneak off to the garden to see how my seedlings are doing.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
But before we get to that, listener, I've got a question for you. What's your money question? That financial thing that keeps you up at night or that goal you just can't seem to make progress on?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
To start off the episode, though, we're going to chat a bit about spring cleaning your finances. But first, we want to acknowledge the news has been pretty wild lately, especially around trade policies and the economy. We designed this segment to be helpful no matter what's happening.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
And a reminder that one of our goals on Smart Money this year is to talk with more of you live on the podcast to help you with your money questions. So if you want to hang with Elizabeth and me and get a bit of nerdy wisdom, let us know. One more time, leave us a voicemail or text us on the nerd hotline at 901-730-6373. That's 901-730-NERD.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
All right, let's get to our new segment, Smart Planning, coming up next. Stay with us. Many of our listeners are looking for professional advice on elevating their wealth. So we invited another financial expert onto the show to take a deeper dive into listeners' financial questions and provide smart strategies for building and leveraging their money. Welcome to Smart Planning. Let's begin.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
This episode, we're talking with Kay, a listener with some questions about how to gift savings bonds and how to prepare for retirement. Kay, welcome to this segment of Smart Planning.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
To answer Kay's questions, I'm joined by Barbara Ginty, a certified financial planner professional and host of the Future Rich podcast. Welcome to Smart Money, Barbara.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
So Kay, to start, I would love to hear about how you feel about your finances. If you could describe your financial situation in one word, what would it be and why?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
That is great to hear. Why do you feel that way?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
That does sound very stable to me. Can you go a little bit more in depth into your financial life generally? Where do you think you might still have some room for improvement, even though things feel stable and pretty good overall?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
But if something big breaks between the time we record this and when you're listening, remember you can check out our Thursday episodes or the NerdWallet News Hub for the latest updates and to see how it affects your finances. Copy that, Sean. It's time to get your financial house in order. Deep clean that budget and get the dust off of those goals.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
So you wrote into us with a question about gifting savings bonds. Tell us about that.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
I am wondering about something that no one really wants to talk about, which is taxes. Barbara, would Kay or the nephew be on the hook for any taxes when this gift is given?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
And where might the taxes arise?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Well, Kay, any other questions around these savings bonds? I know you had just a pretty tactical question there. So I think that we've covered most of it. But yeah, what are you thinking right now?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Personally, I love a good spring check-in with my finances. My summers tend to be so busy that I like to use this time to make sure that I'm on track with my financial goals. and find a place or two to make some adjustments. So, Elizabeth, where do you think folks should start?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: When is it OK to Stop Saving? (Plus: Spring Cleaning Your Finances)
Well, I want to shift gears a little bit and talk about some of your retirement questions, Kay. You mentioned a little bit about this earlier, but give us a picture of how you've been saving for retirement and where you think you might need some guidance.
NerdWallet's Smart Money Podcast
Should You Keep Your Old Home? The Financial Case for Selling vs. Renting
And Elizabeth.
NerdWallet's Smart Money Podcast
Should You Keep Your Old Home? The Financial Case for Selling vs. Renting
And if you want to send us your question, you can send it to us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD. If email is your preference, you can also pop us an email at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
Should You Keep Your Old Home? The Financial Case for Selling vs. Renting
We're back in a moment with more questions and answers. Stay with us.
NerdWallet's Smart Money Podcast
Should You Keep Your Old Home? The Financial Case for Selling vs. Renting
We do. So while you guys are eating barbecue, if that's your thing and having fun with family, enjoy this episode.
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
Sean, you're a homeowner. When you bought your house, how did you make sure you got the best deal on your mortgage?
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
Kate, where does the idea of a 20% down payment even come from? And I imagine that sounds intimidating to me, especially with home prices these days. That might be tough to do in this economy for some people. It is tough to do because 20% of a home price is
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
That's a fair point, Kate, considering how costly home maintenance can be. That leads me back to the listener's question around budgeting for a home. How can people determine how much house they can afford? Well, an affordability calculator is a great step.
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
Now, listeners, I have used that calculator and I must say it was pretty handy. So once people have used the calculator and have the numbers in front of them, how can they decide whether to make a larger or smaller payment if they're on the fence?
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
So Kate, aside from a down payment, aren't there other costs first-time homebuyers need to budget for? Oh my goodness, there certainly are.
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
So that definitely sounds like a lot more than just a down payment for sure. And I'm so glad that you mapped that out so that listeners can budget for all those other costs. I also wonder about other expenses that are easy to overlook, like moving, for example. I personally moved last summer, but it definitely was a major cost.
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
Very, very smart. So Kate, what if the listener checks their budget and they realize they do not have much to put towards saving for a down payment? Now with rising inflation and higher mortgage rates, some people might feel home ownership is just out of reach.
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
And let me tell you, I love free money. So that is a good plug. Right. All right. So the listener also wants to know what the upper limit on their monthly post-tax income that they're paying should be. What answers do you have for them?
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
So some potential homebuyers, Kate, may have entered 2025 excited about the prospect of buying a house since inflation was, I'm going to highlight was, trending downwards. And we seem to be reaching the light at the end of the tunnel. With things changing a little, should homebuyers be discouraged with current trends we're seeing?
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
Should they be trying to buy now in case the market potentially gets worse?
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
Kate said it best, guys. No need to panic buy. So what else should people know about home buying in 2025? This is a crystal ball for everybody.
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
I hope this is some sort of silver-ish lining for prospective homebuyers. Before we wrap up, we have a surprise listener question.
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
Hey, Sean, we've been focusing on how to buy in 2025, but what tips do you have for us on selling, Kate, so we can answer Sean's question?
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
That sounds like an ideal situation and a great example of good customer service equating to repeat business. Now, what about commissions if you choose to use an agent?
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
Well, that's definitely on brand for you, Sean. And I'm glad that you did your due diligence.
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
So I once did work with a broker when I was looking at homes, and I found that I spent quite a lot of time communicating with them and spending time with them. So with that said, what are some things that people should look out for when they are choosing a broker?
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
And I'm Elizabeth Ayola. On this episode, I talk with mortgage nerd, Kate Wood, to answer a listener's question about how much house they can afford as a first-time buyer.
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
I also wanted to know about the actual broker. So what qualities and characteristics should I be looking for when I'm choosing a broker to work with?
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
That's helpful.
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
And when someone is presented with the loan options from a broker, how can they ensure that the loans they're seeing are the best ones out there? Because a broker may not show you loan options from every lender available, right?
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
So I think a lot of folks might not fully understand the role of a mortgage broker. Can you explain what a broker does and also how they fit into the home buying process as a whole?
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
I certainly feel more empowered as someone who is not a homeowner yet. And I'm sure a lot of the listeners do as well. With that said, for listeners who want to learn more about finding a mortgage broker, we're going to link to an article all about that in the show notes.
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
All righty. We're about to do a timely pivot to a listener's question on how to budget for home and mortgages. Writer Kate Wood is going to help us answer that.
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
Maybe you're feeling a little lost, like you don't even know what your financial goals should be, or you're trying to break yourself out of a bad financial habit, but just can't seem to do it. Whatever your money question, we nerds are here to help. Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD.
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
Let's get to this episode's money question segment where we take on one of your questions about how to budget for a down payment on a house and a mortgage payment. That's up next. Stay with us. We're back and we are answering your money questions to help you make smarter financial decisions. This episode's question comes from a listener's email and is about home buying. Here it is.
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
Hi, NerdWallet team. First time home buyer here. How do we best budget for a down payment and mortgage? And what should be the upper limit on our monthly post-tax income that we are paying? Now, to help us answer this listener's question on this episode of the podcast, we are joined by NerdWallet Mortgage's writer, Kate Wood. Welcome back to Smart Money, Kate. Thank you so much for having me.
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
All right. So the listener has a two-part question. Let's tackle the first half to begin with. They want to know how best to budget for a down payment. Now, I'd be curious to hear what your thoughts are, Kate, especially with how much the housing market has changed over the past few years. Sure.
NerdWallet's Smart Money Podcast
From Broker to Budget: How to Buy or Sell a Home in 2025
When you mention a larger down payment, it takes me back to the pandemic times when I was considering purchasing a property and it was a seller's market. I remember larger down payments being a theme and a tip shared by realtors that I work with at the time. Would you recommend people aim to save 20% down payments?
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
And I'm Elizabeth Iola. On this episode, we answer a listener's question about what kind of returns they can expect from their investments.
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
But before we get into that, we're at that special part of the show, the moment where we ask you to take a minute and think about where you need some nerdy guidance with your money.
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
And a reminder that one of our goals on Smart Money this year is to talk with more of you live on the podcast to help you with your money questions. Yes, we want to hear your voice. So if you want to hang with Sean and me for a bit and get some nerdy wisdom, let us know. One more time, leave us a voicemail or text us on the nerd hotline at 901-730-6373. That's 901-730-NERD.
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
We are back and we're answering your money questions to help you make smarter financial decisions. This episode's question comes from Mary, who wrote us an email. They wrote, Hi, I have a question about investing. About six years ago, I made my first attempt at the stock market without fully understanding what I was doing and definitely without the benefit of your podcast.
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
At the time, I opened two accounts with Wells Fargo, a Welsh trade account and a Welsh trade IRA. Currently, I have about $6,000 in the IRA, which is separate from my work 401k, and around $3,000 in the Welsh trade account. I honestly have no idea what's going on with my Welsh trade account since I initially invested.
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
It's in a mutual fund, and the $1,000 I contributed back in 2018 has only grown to about $2,000. Is that a decent return? And if not, is there a way to move these funds into a better account or investment strategy? Thanks again, Mary.
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
So let's first talk about what kind of growth is realistic to expect from an investment. Now, in general, what kinds of expectations can or should people have about their investments, Sam?
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
I'm so excited to be in the co-hosting seat and listeners. My hope is that you aren't throwing virtual tomatoes at me. I plan to give it my best. I love talking about money and it's an honor to help people navigate their financial decisions.
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
So Mary also said that they're invested in a mutual fund. We don't know what kind of mutual fund they're invested in though. For folks who might be even wondering like, what is a mutual fund? Can you give us a super quick explanation and then tell us maybe what kinds of returns people can expect from a mutual fund?
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
I love what you said, Sam, about not liking individual stock picking because I definitely fall into that bucket.
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
It is. It is. And it can create like a lot of anxiousness if you feel like you don't know what you're doing. All right. So our listener also seems interested in generating even greater returns from their investments. So how would they go about doing that? Mary said more specifically that they might need to move the funds to a new account, but that probably wouldn't be necessary, right? Yeah.
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
I had a quick question as well, Sam, if you can answer this. I know you mentioned selling a mutual fund and then putting the money into a more aggressive one. Would there be tax implications for that?
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
For anyone out there who's wondering what the heck we're on about, our new logo is neon green in case you're looking for us inside of your podcast app. And while you're there, don't forget to leave a review.
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
That makes sense. So Sam, tell us, do you have any other thoughts about how investors should consider what makes up a good or quote unquote good return on their investments and also how they can set realistic expectations for themselves?
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
And here's our brief disclaimer. We are not financial or investment advisors. This nerdy information is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances.
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
Thank you, Johannes. I appreciate that.
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
So this kind of behavioral bias can be seen across the range of interactions that people have with money. But some of the ones that cost us the most pop up in investing, since we're on the topic of investing. So what kinds of behaviors of these sorts do you see investors fall into, Johans?
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
I guess I have a question around how people can do that. So what does it look like in practical terms? I guess, like we say, explain it to a five-year-old to look at the big picture, especially for new investors who are maybe not well-versed in that.
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
So how much do you think a knowledge of how the stock market works plays into these biases? So I know for me, because I factually know, like you said, the rate of return or average rate of return on the stock market is 10%. I don't worry too much about that.
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
So do you think it's a lack of understanding of how the stock market works that kind of drives that fear and maybe elucidates the biases as well?
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
Whether it's keeping your impulse spending in check or sticking to your investment strategy, it's all too easy to get in your own way and do things that aren't in your best interest.
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
I'm also curious about what role money fears play in this type of behavioral bias also. So for example, is someone with money fears or even financial trauma, let's say around losing all of their money, more prone to impulses that come with the bias?
NerdWallet's Smart Money Podcast
Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like
So I know that you're a finance pro, but I have to ask you, Johans, have you ever found yourself engaging in either recency bias or some other element of behavioral finance where you said to yourself, wait, this is my brain reacting in a way that may not benefit me in the long run. And if you did, how did you react to that realization?
NerdWallet's Smart Money Podcast
Welcome to NerdWallet's Smart Money Podcast
And I'm Elizabeth Ayola. We're the hosts of NerdWallet's Smart Money Podcast, where you bring the money questions and we bring trustworthy information back by NerdWallet's expert analysis, without the jargon or the sales pitch.
NerdWallet's Smart Money Podcast
Welcome to NerdWallet's Smart Money Podcast
Plus, we keep it real. No lectures, no judgment. Just tips and tools you can use to build wealth and take control of your finances. Think of us as your financial GPS, helping you navigate your money decisions and avoid expensive wrong turns.
NerdWallet's Smart Money Podcast
Welcome to NerdWallet's Smart Money Podcast
So if you want practical, straightforward, and actually useful financial knowledge, plus a little bit of fun along the way, follow NerdWallet's Smart Money Podcast on your favorite podcast app.
NerdWallet's Smart Money Podcast
Welcome to NerdWallet's Smart Money Podcast
That could work. No shame in pillow fort game. Or you could just tune in for clear, research-backed financial insights.
NerdWallet's Smart Money Podcast
Michele Norris Shares Kitchen Must-Haves and the Nerds Break Down Switching Banks for Better Rates
Sean, what's the most expensive kitchen item you own?
NerdWallet's Smart Money Podcast
Michele Norris Shares Kitchen Must-Haves and the Nerds Break Down Switching Banks for Better Rates
It's probably the ice cream maker I received as part of a team building activity, but never use. Thank you, NerdWallet.
NerdWallet's Smart Money Podcast
Michele Norris Shares Kitchen Must-Haves and the Nerds Break Down Switching Banks for Better Rates
And I love this conversation about stoves because as, I guess, a newbie to appliances, and even though I'm renting, I have an electric stove in my house. I am Nigerian, so I cook a lot of stews and sometimes fried foods. And what I'm finding is that the stove top is staining with oil. on the electric stove. And I grew up with gas stoves.
NerdWallet's Smart Money Podcast
Michele Norris Shares Kitchen Must-Haves and the Nerds Break Down Switching Banks for Better Rates
And I'm Elizabeth Ayola. This episode, we talk with a listener and a fellow nerd about switching banks amidst falling yields on savings accounts.
NerdWallet's Smart Money Podcast
Michele Norris Shares Kitchen Must-Haves and the Nerds Break Down Switching Banks for Better Rates
Aesthetically, I love the look of an electric stove, but I'm realizing that once I get to a point of buying a stove of my own, a gas stove might be better in terms of maintenance and longevity and things like that. So what do you have to say, Michelle, for people who are maybe drawn to kitchen appliances or any kind of kitchen items?
NerdWallet's Smart Money Podcast
Michele Norris Shares Kitchen Must-Haves and the Nerds Break Down Switching Banks for Better Rates
because of the aesthetics, but are not thinking about what works best for them, especially with social media pressure and just wanting your kitchen to look aesthetically nice. Ignore the social media pressure.
NerdWallet's Smart Money Podcast
Michele Norris Shares Kitchen Must-Haves and the Nerds Break Down Switching Banks for Better Rates
All right, Michelle. I want to ask a quick question around protection plans on expensive kitchen items. Do you think that that's worthwhile? I know that some tend to already come with a warranty anyway, but do you think it's worth people, after maybe splurging on the items, as we said, that are important, getting a protection plan on that?
NerdWallet's Smart Money Podcast
Michele Norris Shares Kitchen Must-Haves and the Nerds Break Down Switching Banks for Better Rates
I love that. Michelle Norris, thank you for joining us on Smart Money. Thank you for all the tips and also the stories. Thank you. It was really, really good to be with you. All right. We're about to get to this episode's money question segment, where we help a listener think through switching banks.
NerdWallet's Smart Money Podcast
Michele Norris Shares Kitchen Must-Haves and the Nerds Break Down Switching Banks for Better Rates
It was a small cutting knife that I bought from Target for like 12 bucks. But whether you need to buy a knife set or restock your spices, all that stuff can add up. Now we're going to chop it up with Michelle Norris about where it's worth spending a lot of money in your home kitchen.
NerdWallet's Smart Money Podcast
Michele Norris Shares Kitchen Must-Haves and the Nerds Break Down Switching Banks for Better Rates
Maybe you're not sure how to tackle your credit card debt, or you're wondering whether this is a good time to do a cash-out refinance on your home. On the other hand, you may wonder whether you should pay off your car note or invest that money instead. Whatever your money question, we nerds are here to help. Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD.
NerdWallet's Smart Money Podcast
Michele Norris Shares Kitchen Must-Haves and the Nerds Break Down Switching Banks for Better Rates
All right, let's get to this episode's money question segment. That's up next. Stay with us.
NerdWallet's Smart Money Podcast
Michele Norris Shares Kitchen Must-Haves and the Nerds Break Down Switching Banks for Better Rates
Michelle is a host of podcast Your Mama's Kitchen, author of Our Hidden Conversations, and a contributing editor on MSNBC. I will also add that Michelle has an impressive resume. She has won Peabody, Emmy, DuPont, and Goldsmith awards over the years. Welcome to Smart Money, Michelle.
NerdWallet's Smart Money Podcast
The Best Financial Products of 2025 and Investing in Collectibles
Thanks for having me. Now we've talked on the podcast about investing in stocks and mutual or index funds. We've also talked about real estate investing and even crypto. But what about investing in other things like collectible items? What's the appeal of this?
NerdWallet's Smart Money Podcast
The Best Financial Products of 2025 and Investing in Collectibles
One thing to think about before buying a collectible as an investment is the cost of holding onto it. And it's very different from the potential costs you might have within a brokerage account, like expense ratios. For one thing, you need insurance to protect things like art, jewelry, or designer purses. Now, let me tell y'all, I once heard about a dog eating someone's Chanel bag.
NerdWallet's Smart Money Podcast
The Best Financial Products of 2025 and Investing in Collectibles
Yes, it was uninsured.
NerdWallet's Smart Money Podcast
The Best Financial Products of 2025 and Investing in Collectibles
I agree. And I think for the few people who I have spoken to who collect designer purses, something that they say, don't quote me, is that they like to buy the classics because apparently those tend to be in season even when the more trendy ones aren't. So that's just a thought that came to mind. But now the really fun part, taxes.
NerdWallet's Smart Money Podcast
The Best Financial Products of 2025 and Investing in Collectibles
When you sell a traditional investment at a profit, you usually owe capital gains taxes. Now, what happens if you sell a collectible item, Alana?
NerdWallet's Smart Money Podcast
The Best Financial Products of 2025 and Investing in Collectibles
I couldn't agree more. And maybe this is a good time to just say that maybe avoid taking investment advice of any kind from, you know, TikTok, other socials. I can say it louder for the people at the back if you want. It's so important to do your own research or chat with a financial professional before investing in any of the things we mentioned.
NerdWallet's Smart Money Podcast
The Best Financial Products of 2025 and Investing in Collectibles
Amen.
NerdWallet's Smart Money Podcast
The Best Financial Products of 2025 and Investing in Collectibles
Thanks for having me. All right, folks, that's all we have for this episode. Remember, listener, that we are here to answer your money questions. So turn to the nerds and call or text us your questions at 901-730-6373. That's 901-730-NERD. You can also pop us an email at podcast at nerdwallet.com and visit nerdwallet.com slash podcast for more information on this episode.
NerdWallet's Smart Money Podcast
The Best Financial Products of 2025 and Investing in Collectibles
Remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeart Radio to automatically download new episodes.
NerdWallet's Smart Money Podcast
The Best Financial Products of 2025 and Investing in Collectibles
And with that said, until next time, turn to the nerds.
NerdWallet's Smart Money Podcast
The Best Financial Products of 2025 and Investing in Collectibles
We're back and we are answering your real world questions to help you make smarter decisions about your money. This episode's question comes from a listener's text message. And here it goes. This is a question or topic I'd like to see on the podcast.
NerdWallet's Smart Money Podcast
The Best Financial Products of 2025 and Investing in Collectibles
Recently, I've been seeing things on social media about an Hermes, Kelly, or Birkin, or Chanel flat bag appreciating as well or better than the market. Can someone at NerdWallet do research on this topic and report the findings? Thanks. Yes, we can, listener.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Then, Ellen, I want to ask you, since you are maybe considering pulling back on your retirement savings, are there other financial goals that you maybe wanted to prioritize instead of saving for retirement?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
a long-term goal so i want to say for listeners who may not know what the fire movement is is financial independence retire early and i think elena that you brought up something very interesting which is that some people don't usually focus on you know living for the now maybe and not leaving an inheritance and i think it has a lot to do with what your money values are or your financial values in terms of which one you choose and i feel like the fire movement which i love
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
heavily kind of focuses on your values and how you want to live during retirement. So Ross, can you maybe answer Elena's question and kind of talk through how to think through FIRE, if that's something someone is considering, and also how she could potentially achieve that?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
And something else I'd like to quickly touch on before I ask you a question, Elena, is that there are different types of FIRE, right? So you have very quickly lean FIRE, which is for people who want to live a maybe minimalist lifestyle. During retirement, you have fat fire, which is maybe people who want to live more on the more lavish end.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
And then you have barista fire, which is my favorite, which is where you maybe you don't completely retire, right? And maybe you follow passion projects or just take on work part time instead. But you saved enough, whereas you can still live off a lower income. So with that said, have you thought about, Eleanor, what you want retirement to look like for you?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Do you want to live on the more luxurious side or are you more on the lean side?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
I love that. So, Ross, what would you say, you know, considering that Elena wants to do more barista style, does that change any of the information that you just provided about how maybe she can navigate fire? Yeah.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Elena, you also wrote to us since we're talking about living abroad about potentially not retiring in the U.S. So what question did you have for us or questions did you have for us around potentially retiring outside of the U.S. ?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Absolutely. But is it weird, Sean, that I get some peace even in the middle of the chaos in terms of knowing that at some point the market's going to correct itself and everything's going to be fine?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Since we don't give investment advice and our goal here is to empower people to make their own decisions, Ross, I want to ask you at a high level for other listeners who may be thinking about pulling back on their savings or pausing their retirement savings. What are a handful of things they should think through before making their decision?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
And then to tee up as well, anyone who's considering retiring out of the U.S. at a high level, how should they change their retirement saving strategy based on maybe a plan to live abroad?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Exactly. OK, but let's get back to the point. So I agree and I get that every time is different. And I also think it's helpful to have that context around market performance. But is there anything about the recent turbulence in the stock market and bond market that makes you personally think that investors might want to consider shifting how they're investing?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Thank you for that, Ross. All right, Elena. So based on everything we've discussed, do you have any other questions that you would like to ask? And if not, what are your thoughts about what you'll do next?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
I agree with that. Thank you. All right, Elena. So do you have any thoughts on what you're going to do based on this conversation in terms of potentially pausing your savings or are you going to think about it?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Thank you so much, Elena, for coming on and sharing your life with us. We appreciate it and we hope the information we shared was helpful to you. And Ross, thank you for sharing all of your wisdom.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Ross Anderson, thanks for coming on and answering these investing questions. And Elena, thanks for coming on as well. And that's all we have for this episode. Want to appear in next month's smart planning segment? Let us know. Inspired to navigate your finances with an advisor yourself? Use NerdWallet Advisors Match to find vetted professionals today at nerdwalletadvisors.com slash match.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
If this episode inspired you to reach out to a financial planner, our SEC registered affiliate, NerdWallet Advisors can help through their Advisors Match service. Just visit nerdwalletadvisors.com slash match or click the link in the episode description. And remember, listener, that we're here to answer your money questions. So turn to the nerds and call or text us your questions at 901-730-6373.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
That's 901-730-NERD. You can also email us at podcast at nerdwallet.com. to automatically download new episodes. And here's our brief disclaimer. We are not your financial or investment advisors. This nerdy information is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
This episode was produced by Hilary Georgie, who also helped with editing along with Tess Vigeland. Nick Karisamy mixed our audio and a big thank you to NerdWallet's editors for all their help. And with that said, until next time, turn to the nerds.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Okay, I think I'm following you. And what about the dollar, Sean? You said it was going down, right?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
I did. I was born and partly raised in Southeast London. Shout out to my friends over there. Also, I did my higher education there. Shout out to King's College London. And finally, you should know that I've been craving fish chips and pie real bad.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
No. Now you're taking it too far. Taking it too far, John.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Okay, that makes sense. Maybe the global financial system isn't going to come crashing down tomorrow and investing is still a smart way to grow your money. But I'm still feeling this uneasiness. You said earlier that people like predictability and patterns. How can we find any predictability right now and how can people navigate this stressful time?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
And I'm Elizabeth Ayola. This episode, we have the next installment in our Smart Planning series. And we're going to be joined by a listener and a guest financial expert to discuss whether to pull back on 401k contributions due to the current economic uncertainty.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Same here, Sean. I haven't switched up my investing strategy and I continue contributing to my accounts as well. And let me tell you, I love a good sale and retirement isn't on my horizon yet. So it's investing, business as usual over here.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Yeah, and I get that investing can be an emotional affair, but there's usually something deeper going on when fear is driving our investment decisions. Now, beyond having a lower risk tolerance, if you're constantly freaked out during market swings, you may be more prone to emotional investing, which is when your emotions impact your investment decisions.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
So understanding what's driving these emotions by exploring your money values and fears through things like journaling. I love a good journaling session. Or even talking to a therapist can be helpful. And also looking at the facts versus your emotions can help shift your perspective.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
So Sean, in terms of specific investments, are there any areas people might want to turn to for a little more stability?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
I love a good index fund. So it can be helpful too for people to take the long view of their investments, something that I personally always like to emphasize. We've been seeing these big market swings over the past several weeks, but how long do you really have until you need this money?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Unless you're retiring in the next few years or you need to pull money from your brokerage account to, let's say, put a down payment on a house in the next year or two, you can find that nerdy balance of staying informed about what's happening, but not letting yourself get caught up in the day-to-day anxiety of it all.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
I think off is a gentle way of putting it, Sean. Chaotic feels a little more befitting. 2020 felt chaotic and so does 2025.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
I also remind myself that life ebbs and flows and no bad situation lasts forever. That applies to the market too.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
So, Sean, since you're Mr. Certified Financial Planner, what's your take on that?
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Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
I've personally been ignoring my 401k, to be honest with you.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Yeah, but I will say that I had to sell some restricted stock units to pay for expenses last month while the market was down, and that was not fun because I was at a loss. But thankfully, I do not need to pull funds from my retirement account, and hopefully when I do in the next few decades, my account will be in the green territory.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
You sound like my financial advisor. We talked about that last week.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
I love margaritas. But to answer your question, I am thankful for the stock market sale. And I feel like the future of my portfolio is bright. I'm running with that blind optimism.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Next up, we have our smart planning segment with a listener who has questions about adjusting their investment strategy in times of economic uncertainty.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Maybe you're feeling a little lost, like you don't even know what your financial goals should be. Or you're trying to break yourself out of a bad financial habit, but just can't seem to do it. Whatever your money question, we nerds are here to help you. Leave us a voicemail or text us on the nerd hotline at 901-730-6373. That's 901-730-NERD. Or email us at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
All right, let's get to this episode's smart planning segment. That's up next. Stay with us. Many of our listeners are looking for professional advice on elevating their wealth. So we invited another financial expert onto the show to take a deeper dive into listeners' financial questions and also to provide smart strategies for building and leveraging their money. Welcome to Smart Planning.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Let's begin. This episode, we're joined by one of our listeners, Elena, who had some questions about whether they should reduce their 401k monthly contributions. Welcome to Smart Money, Elena.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Now, to help us answer your questions, we have Ross Anderson, the founder and principal at Kraftwerk Capital and the co-host of the Check Your Balances podcast. Welcome to Smart Money.
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Let's dive into the conversation for today. Elena, you wrote us about whether you should reduce your pension slash 401k monthly contribution, considering everything that's happening in the economy right now. So can you talk to us a little bit about why you sent us this question and what your thoughts and feelings are around this?
NerdWallet's Smart Money Podcast
Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad
Listen, I can't afford not to invest either. But a lot of people out there are seeing the swings in the stock market and even changes in the bond market, which are supposed to be safer investments. And the value of the dollar is dropping. And they might be wondering if investing will continue to be a reliable way to grow your money.
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Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
Jeremy, welcome to Smart Money.
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Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
So how do you manage your money on a regular basis? Do you have a budget? Do you contribute to savings accounts?
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
Well, this feels like a good segue into retirement savings since you're talking about 401k and the like. So let's talk about your retirement savings. How much do you have saved and also how much are you saving at the moment?
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
That's really interesting. And it leads me to a next question, because I know when I first started saving for retirement, I didn't actually have a goal in mind. I just was thinking, you know, let me max out everything I can and save as much as I can. But it really helped me to put things into perspective when I realized I should probably have a number that I'm saving towards.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
So with that said, have you used a retirement calculator to get an estimate of how much you may need to save for retirement?
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
All right, so something that piqued my interest in terms of a question you asked us was that at what point do you take advantage of your time over the pursuit of more income? So can you tell us a bit about that?
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
This was the story of my life last year and the year prior. I was also juggling multiple gigs because I wanted to get ahead financially. I am someone who, you know, believes a bit in the fire movement. So I was looking at early retirement, still am. Saying I was burnt out was an understatement.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
I will say using a calculator, as Sean mentioned, to see how far I was from my retirement goal, both if I continued working and saving at the same pace I was. And also looking at it, if I had dropped a few gigs, helped me tremendously. For one, it helped me to remember that compound interest will begin to fast track my growth in a few years.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
I started late, so I am a late starter when it comes to retirement saving. And also the calculator helped me to see that I'm doing pretty good, just as we've given you a pat on the back for doing earlier. And then the last thing I'll say is that reassessing my money values helped me too.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
So in the end, I did choose to drop a few gigs because while money is important, enjoying my time is equally important. And I was putting too much pressure on myself. Money was starting to cause me more stress than it was creating ease in my life.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
And then I don't know how much this will resonate, but something else that comes to mind is I know we can get hung up on, it is important, retirement savings as a long-term goal, but there are also short and medium financial goals that you can work towards. And they don't all have to be retirement focused. So I know you mentioned buying a second house.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
For some people, it may be as simple as going on a vacation or buying a new car. So it's important to remember that money is here to create security, but also to bring joy in your life as well.
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Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
Thank you for sharing that.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
The first thing I will say, I know this can be a frustrating response, but it really, really does depend on your goals. There are several accounts that you can use in place of a 401k. An IRA is a good account that you could consider. A taxable brokerage account is also one that you can consider and probably the easiest one to go with.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
You would just shop around a bit, find the right one for you, and then make regular contributions to that account. There's also a solo 401k if you happen to be self-employed that you could contribute to as well. So yeah, there are different options aside from 401ks. I think the main thing to consider are fees.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
So you just obviously want to contribute to the account that has the lowest fees and that's going to get you closest to your long-term goals.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
And here's our brief disclaimer. We are not financial or investment advisors. This nerdy information is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
And it means you'll only owe tax on the profits your investments earned in the traditional IRA before you converted it. If you convert a traditional IRA that contains tax deductible contributions into a Roth, you'll also owe tax on the contributions. So that's why the non-deductible contributions part is important.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
A backdoor Roth can require a lot of legwork. To characterize contributions as non-deductible, you have to file Form 8606 non-deductible IRAs with the IRS for the year you make the contributions. Then you have to have your IRA custodian convert the traditional IRA to a Roth IRA, and then you have to pay taxes on any investment profits your contributions earn before the conversion.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
This is another case where you could do all this by yourself, but it's a lot of different steps and a lot of room for error. It's a good idea to consult a financial advisor or tax professional if you're considering doing a backdoor Roth.
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End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
Yeah, definitely.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
When it comes to 401 accounts, a lot of custodians allow you to change the percentage of your paycheck that you're contributing anytime through their app or their website. If you have a workplace retirement plan that matches your contributions, the common advice is to contribute the maximum matched amount if you're able. because it's free money and it's not counted toward your contribution limit.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
There are also now some IRAs that offer a 401k style match on contributions like those from Robinhood, Webull and SoFi, for example. It's worth reading the fine print on these because some of them are offering the match indefinitely, but others are doing it for a limited time.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
There are some IRA custodians, such as Webull, that'll even match a percentage of your account balance when you roll an existing IRA over to them.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
They have until the tax filing deadline next year. That's right. That said, sooner is usually better when it comes to retirement account contributions, because the longer you wait, the more investment returns you're potentially missing out on.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
Of course. This is important stuff.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
Thanks. Good to be back.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
Sure, although it's a surprisingly complicated question. The maximum amount you can contribute to IRAs in 2024 is $7,000 or $8,000 if you're over age 50. Now, that's the maximum contribution to any number of IRAs of any type, Roth or traditional. But there are additional factors in the maximum contribution for Roth accounts.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
In particular, above a certain income level, the maximum amount you can contribute to a Roth IRA gets reduced by a factor that's based on your modified adjusted gross income. And then there's a second income level above that where you can't contribute to a Roth IRA at all.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
For single filers, that phase out starts at a modified adjusted gross income of $146,000 and Roth IRA contributions are disallowed entirely at $161,000 or more.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
There's definitely a case for just going to an accountant. You could do the calculation yourself, but it's pretty complicated and there's a few different steps. Even kind of trying to walk through it on a podcast might be hard to follow. The IRS has a handy page that walks you through how to do it. And as we discussed, you can also get professional help for this kind of thing.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
That's right. You'll owe a 6% tax on the amount of excess contributions left in a Roth IRA every year. I don't know about you, but I'm not trying to give Uncle Sam any more of my cash.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
There are a few different ways to fix that. The sooner you start working on it, the better in general. If you realize that you over-contributed before you file taxes, most IRA custodians like Vanguard and Fidelity have a return of excess contributions form that you can file with them to just get the excess money back. This is probably the simplest way to fix an over-contribution.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
The only downside is that you may need to sell some shares in the Roth IRA to come up with the amount of cash you need to withdraw. Another option is to recharacterize your contributions from Roth to traditional IRA when you file taxes. That might be slightly more work if you don't have a traditional IRA because you'll need to open one to do this.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
But that might also reduce your taxable income for the year because of the new traditional IRA contribution you'd be doing. You'll also need to fill out a form with your IRA custodian to transfer the contribution amount from your Roth IRA to your traditional IRA.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
There are still ways to fix it, but it's even more legwork if you wait until after you file. If you realize you over-contributed after you file, you can still re-characterize contributions like we were just talking about if you file an amended tax return before October 15th of the following year. So for tax year 2024, that would be October 15th, 2025.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
There's kind of a paperwork penalty if you wait until after you file to fix it. If you discover an overcontribution after October 15th, you're going to have to pay that 6% penalty on the overcontribution amount for the year. But you can still fix the issue going forward and avoid further penalties by reducing the amount you contribute the following year by the overcontribution amount.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
For example, if you over-contributed $1,000 in 2024 and you discover this after October 15th, 2025, you're gonna have to eat the $60 penalty for 2024, but you can avoid future penalties by limiting your contributions to $6,000 rather than $7,000 in 2025.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
Absolutely.
NerdWallet's Smart Money Podcast
End-of-Year IRA Fixes Before Tax Time: Roth Contribution and Correction Strategies
The backdoor Roth IRA strategy involves opening a new traditional IRA, making non-deductible contributions to it, and then rolling over that traditional IRA into a Roth IRA. It's not necessarily a fix for over-contributing, but it is a way to get around the income limits for Roth contributions.
NerdWallet's Smart Money Podcast
How To Have a Better Relationship With Money and Maximize Every Dollar
For the longest time, I was too ashamed to explore why I was spending money like it was printable, but I'm glad I finally did.
NerdWallet's Smart Money Podcast
How To Have a Better Relationship With Money and Maximize Every Dollar
Katie, I understand and empathize with that feeling of starting late because I also started late. So you're not alone in that. I started saving for retirement, I think around 33 or 34. Oh, that makes me feel better.
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How To Have a Better Relationship With Money and Maximize Every Dollar
Katie, you wrote to us and you mentioned that you have a big life change coming up. So can you talk to us about that change and then maybe how that might also change your expenses and how much you need saved for your emergency fund?
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How To Have a Better Relationship With Money and Maximize Every Dollar
All really good questions, Katie. And I will say before we go into that, it is worth it because compound interest is working in your favor. And that's essentially when your money makes money, assuming that you're investing it. So investing $25 over investing $0, I think is definitely worthwhile. I do want to rewind and ask you, how much do you have saved for retirement already?
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How To Have a Better Relationship With Money and Maximize Every Dollar
And how much are you saving on a regular basis?
NerdWallet's Smart Money Podcast
How To Have a Better Relationship With Money and Maximize Every Dollar
And then why are you thinking about rolling your money from a 403B into an IRA?
NerdWallet's Smart Money Podcast
How To Have a Better Relationship With Money and Maximize Every Dollar
If you do decide to open a Roth IRA, there can be an advantage with you having lower income than you likely will have in the future because finance professionals sometimes recommend contributing to a Roth during your lower income years since you'll pay less in taxes. So there can be some benefit there too.
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How To Have a Better Relationship With Money and Maximize Every Dollar
And I also want to add, I know it can feel sometimes discouraging or pointless when you're saving small amounts. I personally am someone who likes to save in big chunks. But it's just, one, building the discipline of saving towards those multiple goals. And then also, two, every little bit counts. And your financial situation is, of course, going to change as you progress in your career.
NerdWallet's Smart Money Podcast
How To Have a Better Relationship With Money and Maximize Every Dollar
So you can increase your contributions then. So don't be discouraged maybe because you don't have so much to contribute at the moment.
NerdWallet's Smart Money Podcast
How To Have a Better Relationship With Money and Maximize Every Dollar
I will. And that's all we have for this episode. Remember, listener, that we're here to answer your money questions. So turn to the nerds and call or text us your questions at 901-730-6373. That's 901-730-NERD. You can also email us at podcast at nerdwallet.com.
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How To Have a Better Relationship With Money and Maximize Every Dollar
You can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.
NerdWallet's Smart Money Podcast
How To Have a Better Relationship With Money and Maximize Every Dollar
And with that said, until next time, turn to the nerds.
NerdWallet's Smart Money Podcast
How To Have a Better Relationship With Money and Maximize Every Dollar
And I'm Elizabeth Ayola. This episode, we talk with a listener about how to make progress on savings and investing goals, even when money is tight.
NerdWallet's Smart Money Podcast
How To Have a Better Relationship With Money and Maximize Every Dollar
I love that you mentioned money beliefs and money stories. It's actually one of my favorite introductions, I think, to my personal finance journey. I remember having sat down and journaled what my money stories were and what my money beliefs were. And I found one of the core things for me was that I didn't think I deserved to have a lot of money.
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How To Have a Better Relationship With Money and Maximize Every Dollar
So it limited the way that I negotiated my salary, would negotiate with clients. Making subconscious behavior into something you're aware of can be really hard, right? So how can people get more familiar with their money beliefs and stories that they're embodying?
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How To Have a Better Relationship With Money and Maximize Every Dollar
But I find some people get stuck with sometimes knowing, okay, I'm aware of what is inhibiting me, but they don't know what to do with that. So, okay, I know that I don't think I deserve money. How do you work past that so it translates into changes in your finances?
NerdWallet's Smart Money Podcast
How To Have a Better Relationship With Money and Maximize Every Dollar
I would say it varies depending on the month and what I have going on. So in December, it would have been toxic. But today it is partnership. We are working as a team to get me closer to my dream life. And you know what? That is progress, Elizabeth.
NerdWallet's Smart Money Podcast
How To Have a Better Relationship With Money and Maximize Every Dollar
So you talk in your book about how one of the antidotes of being scared of your money is knowing what you want in life. That resonates with something we talk about a lot on Smart Money, how money is just a tool to get you what you want out of life. But knowing what you want and actually getting there, I think, can be two different things. And you call this in-between space the goal gap.
NerdWallet's Smart Money Podcast
How To Have a Better Relationship With Money and Maximize Every Dollar
So how can people bridge this gap and actually get what they want from their money and their lives?
NerdWallet's Smart Money Podcast
How To Have a Better Relationship With Money and Maximize Every Dollar
So you wrap up your book by talking about how we can keep our money relationships unraveled. If you could give our listeners one piece of advice to keep their dialogue with their money open long term, what would it be?
NerdWallet's Smart Money Podcast
How To Have a Better Relationship With Money and Maximize Every Dollar
Thanks for having me. We're about to get to this episode's money question segment, where we help a listener on a tight income balance saving and investing.
NerdWallet's Smart Money Podcast
How To Have a Better Relationship With Money and Maximize Every Dollar
Maybe you need to buy a new car but aren't sure the best way to pay for it. Or you're finally going to get yourself a high-yield savings account and need help vetting different companies. Or you're trying to break yourself out of a bad financial habit but just can't seem to do it. Whatever your money question, we nerds are here to help.
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How To Have a Better Relationship With Money and Maximize Every Dollar
Hey, thanks so much for having me. So Shauna, your book is called Unraveling Your Relationship with Money. Tell me, why do you think people need to dissect their money relationship and what is the goal?
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How To Have a Better Relationship With Money and Maximize Every Dollar
Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD.
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What to Know About Managing Money Before Traveling or Living Abroad
Speaking of which, I did do transfers between my US and UK account. And what I used was a website called the Currency Fair. It sends money essentially between the UK and the US or between the US and the UK. And it does for other countries as well. Those are not the only two countries. What shocked me about using this is that the fees were relatively low, just a few dollars.
NerdWallet's Smart Money Podcast
What to Know About Managing Money Before Traveling or Living Abroad
So at first I was like, is this too good to be true? So more specifically, back then they had a standard fee of $4 and that was back in 2019. That worked out cheaper for me than it would doing a wire transfer or even using Western Union to transfer money.
NerdWallet's Smart Money Podcast
What to Know About Managing Money Before Traveling or Living Abroad
particularly filing them while you live abroad, double uh. Craig and Tess, what was the experience like for you? And any words of wisdom for our listeners who will have to do the same thing?
NerdWallet's Smart Money Podcast
What to Know About Managing Money Before Traveling or Living Abroad
I second that. I am jealous. Spain is beautiful. Thank you to Tess and Craig for joining us today. Happy to be here. Happy travels.
NerdWallet's Smart Money Podcast
What to Know About Managing Money Before Traveling or Living Abroad
All right. And that's all we have for this episode. Remember, listener, that we are here to answer your money questions. So turn to the nerds and call or text us your questions at 901-730-6373. That's 901-730-NERD. You can also pop us an email at podcast at nerdwallet.com. And visit nerdwallet.com slash podcast for more information on this episode.
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What to Know About Managing Money Before Traveling or Living Abroad
Remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.
NerdWallet's Smart Money Podcast
What to Know About Managing Money Before Traveling or Living Abroad
To help us answer the listener's question on this episode of the podcast, Sarah and I are having a roundtable discussion with some folks who have experience living abroad. We're joined by NerdWallet writer Craig Joseph and our producer Tess Vicklund.
NerdWallet's Smart Money Podcast
What to Know About Managing Money Before Traveling or Living Abroad
Craig typically writes about credit cards and travel, but he's here to share his experience managing his financing abroad while living in New Zealand. Tess spent three years living in Southeast Asia, very fancy. And I'm going to talk about my experience living in London and working in the U.S. Welcome back to Smart Money, Craig, and welcome to this side of the mic, Tess.
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What to Know About Managing Money Before Traveling or Living Abroad
Wow. Wow. What a story. And I learned something new. Don't carry rocks. My story is a little unique or confusing. Stay with me. I was born in London, but I moved to South Florida when I was seven. Then when I was 16, I moved back to London. But in my early 30s, I decided I wanted to move back to the U.S., but I needed to get myself back into the system as an adult.
NerdWallet's Smart Money Podcast
What to Know About Managing Money Before Traveling or Living Abroad
I came over and I opened a bank account as well as took out a secured credit card to help build my credit. And then shortly after I got a freelance writing gig in the U.S. and I had it paid into my U.S. bank account. About a year or two later, I moved back to Florida.
NerdWallet's Smart Money Podcast
What to Know About Managing Money Before Traveling or Living Abroad
Two really good points. I personally maintained my account with Bank of America while I was in London. And as mentioned, I had my freelance pay deposited into that account. So this was helpful to avoid any minimum balance and overdraft fees and also help with credit card payments. I also worked in the UK freelancing.
NerdWallet's Smart Money Podcast
What to Know About Managing Money Before Traveling or Living Abroad
So luckily, I used that money for daily expenses and stacked up the money I was making in the US. But with that in mind, I would say it's important to think about the type of fees that you may be charged for not keeping a minimum balance. You want to think about overdraft fees in case your accounting goes wonky and also like mentioned foreign transaction fees as well.
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Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
I also wanted to ask you kind of related to what you're saying. I know that when I have gone through gaps in my resume, whether it be leaving a job or losing my job, I have always leaned on contract work. So how much of an option is that for you? Are you open to that? Are there freelance opportunities that you can explore?
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
I'm happy for you. Going through something like this and having a strong support network can really make it easier. And also it shows how financially savvy you are because it takes a lot of courage to tell people this is what my budget is and I don't want to go over it. So good job to you.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
And that makes me want to pivot a little bit back to something you were talking about earlier, which is important when you're experiencing unemployment, which is COBRA versus marketplace insurance. So it sounds like you have a really good hold on your budget. So what were your questions around that? Are there any concerns that you have there?
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
Thank you. All right, Bree. So do you have any other questions for us? Do you have any thoughts based on our conversation about what you might do next moving forward?
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
Well, my thoughts are swinging back into action. You will get a new job soon, fingers crossed. I don't know what kind of budgeting framework you do, but the 50-30-20 budgeting framework can be very helpful. That's what we recommend at NerdWallet. So, you know, 50% goes to needs, 30% goes to wants, and 20% goes to debt and savings.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
So you can just do a direct deposit, you know, straight from your paycheck into your high-yield savings account or wherever it is that you save your money and gradually build that up. So, yeah, that's a way to approach it if you have... You know, any toxic debt, again, 20% can go towards that.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
As someone who had to tap a lot into her emergency savings last year, when I moved, I felt awful because I felt like I was failing or moving backwards because my emergency savings wasn't where I wanted it to be. It just can be a reminder to be kind to yourself and remember that's what the emergency savings is there for, to use it in the case of an emergency.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
So yeah, just gradually with time, build it back up. And before you know it, you'll be back in the spot that you want to be.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
And also I want to add, Brie, I don't know if you've thought about what you want to do with that old retirement account from your former employer, but I don't know if you're aware of the options you have, which are typically rolling over the account into a new one, leaving it where it is with your current employer, or reviewing the investment fees on both accounts and seeing basically which one is cheaper and which one is the better option.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
And then it sounds like you're in a good spot in terms of your cadence for saving for retirement, but I will quickly say that Some employers, if you have a balance, maybe a $5,000 or less will involuntarily cash out your account. That happened to me. So you're the only one who made a little, you know, retirement oopsie.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
So that happened to me once when I left the job and I thought it was free money and I spent it. So that is something you definitely don't want to do if you are going to cash out or if you do get a check in the mail. You want to make sure that you roll that over into an IRA ideally.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
Come back on Thursday to hear the latest financial news and what it means for your bottom line. Follow Smart Money on your favorite podcast app, including Spotify, Apple Podcasts, and iHeart Radio to automatically download new episodes. And if you're listening to us on Spotify, leave us a comment right on the platform to let us know what you thought of this episode.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
It does, but I'm spending within my budget and that feels great.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
And I'm Elizabeth Ayola. This episode, we talk with a listener who was just laid off about the smart money moves they should make at this pivotal moment in their life.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
I think what feels really good for me right now is for the first time in a while, I am sticking to my budget and I also don't feel deprived. So I feel, if I might say, in control of my finances.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
We're back and we are answering your money questions to help you make smarter financial decisions. This episode, we're joined by Bree, a listener in Chicago who's working through the financial aftermath of losing their job.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
So how have you been navigating the emotional side of things? Because I have lost my job before and it's not a great feeling. And sometimes it can take some time to process that. And then also, hopefully you still get to move to Chile, but I can imagine it was very disappointing too, because you had that plan in motion and maybe you have to pause now.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
So I do have a question for you because you did write to us about potentially having to navigate different kind of careers that is outside of what you typically do. Since you primarily have been a remote worker, how is that search going? And are you open to non-remote jobs?
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
So let's get into the tax part. How are the taxes that people owe on a Roth conversion calculated? And more specifically speaking to our listeners question, are there any good resources we can point them to so they can figure out what they might owe if they do do a conversion?
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
Now let's get onto our second listener question and it gets more even into the weeds around Roth conversion. So here it is. Hello, my name is Ryan. I have a question about backdoor Roth IRAs. I understand the general concept.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
However, my coworker brought up the pro rata rule, which I think states that any other traditional IRA money is eligible for taxation, even if the account you use to roll over is separate. His accountant advised him against it. My accountant didn't seem to think this was the case. Backdoor Roth.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
Now the name sounds a little sketchy, but they are legal and they can be a really useful tool for tax-advantaged retirement savings. So Sam, can you describe how this unsketchy Backdoor Roth works?
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
And I'm Elizabeth Ayola. This episode, we answer a listener's question about Roth conversions, which is timely considering tax season is upon us.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
Well, that definitely falls under the complicated category. So, Sean, do you have any thoughts about how people can avoid this pro-rata mess and also avoid a run-in with Uncle Sam?
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
Yes, I love a Roth 401k. As sexy as they come. All right, Sam, any other thoughts about Roth conversions and how people can make use of them?
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
So for context that nobody asked for, I recently wrote an article on the topic of AI for nerdwallet.com. And what I learned along the way was pretty interesting. So I came across an Experian report that found that 67% of the Gen Z population and also 62% of millennials surveyed are using artificial intelligence to help with their personal finances.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
And here's our brief disclaimer. We are not financial or investment advisors. This nerdy information is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances. This episode was produced by Tess Vigeland. Hilary Georgie helped with editing. Megan Mao mixed our audio. And a big thank you to NerdWallet's editors for all of their help.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
You're absolutely right, Sean. And that was my first conundrum when I started researching. So I would say that when I personally hear AI, my mind immediately jumps to chat GPT, right? But the Experian report that I just mentioned focused on generative AI. So for those who are like, what the heck is that?
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
It's defined as an algorithm or learning model that can be used to generate new content based on the data it's trained with. So the most common example is a tool like chat GPT. In the experience survey that I mentioned, the target was people using generative AI tools for things like budgeting and saving, investment planning, or improving their credit scores.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
Anywho, other than generative AI-powered tools, there are so many other AI tools available that can help people to manage their finances. Some ways that people could use AI, generative or otherwise, to help manage their money include via an AI-powered budgeting app, robo-advisors, and yes, chat GPT or other chatbots.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
There are also AI power tools that can be used for bookkeeping and researching and analyzing stocks, which can be a headache for some people. Some of these tools just use elements of AI while others brand themselves as actual AI tools. And it kind of reminds me of greenwashing a little bit. Not everything that has a green label on it is 100% sustainable.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
Exactly, Sean. So I think it's pretty cool and it could remove barriers for some people who struggle to manage their finances because it all seems so complex. And it can also be a way for people to elevate their finances too if they're stuck at the basics.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
I think at a high level, AI tools can be used to assist with budgeting, one, understanding complex financial topics, two, and three, researching companies for investing.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
Well, Sean, first of all, don't let me find out that you are an undercover AI expert. Are you? Are you?
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
Okay, good. But yes, you are correct. So you could also tell an AI bot what your goals are and ask how you can get there based on your income and expenses. So if you're not into the AI bot life, there are also AI budgeting apps like Clio, for example, that can provide a budget plan, send payment reminders, and also track your spending.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
For sure. I will say though, it's important to remember that AI isn't always great for personalization. So it doesn't take things like your money values, your fears, your triggers, and things like that into account. And these things are just as important as the quantitative aspects of budgeting. So for example, maybe I have a money fear around unexpected emergencies.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
So I would want a bigger emergency fund than the AI tool suggests. So Sean, this is a good place for you to plug your CFP knowledge around behavior and finance.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
I'm hoping it's not going to put us out of a job, Sean. But I don't know about you, but when I first started my financial education journey, I found many topics around finance confusing. For example, like how bonds work or how to analyze a stock, as I mentioned earlier. And it kept me from starting my investing journey for a while.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
So there are some AI tools out there that can help you better understand complicated financial topics and also overcome some of these roadblocks. The thing I personally like about chatbots, like ChatGBT in particular, is you can use them like a thought partner and have a conversation with them.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
So you could ask it to break a complex topic down for you based on your learning style, and you can keep on asking follow-up questions until you understand. And if you think about it, if someone is explaining to you a topic and you don't understand, sometimes you get a bit apprehensive about keep asking, right? But with the chatbot, there's no judgment.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
So I think that's the difference between using a tool like AI for financial education and just reading an article. AI is more interactive.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
I see the sneaky plug that you just put in there, Sean. And I like it.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
I love it. And I agree with you on that.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
I think this is a huge one for investors, whether they're at the beginner, intermediate, or advanced stages of investing. So as I mentioned earlier, Sean, a barrier to getting started or even leveling up your finances can be a lack of understanding of how to pick stocks, analyze markets, or just research companies. Some AI tools out there can do a lot of this work for you and that saves you time.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
For instance, AI can help you sort through stock market data to identify worthwhile investment opportunities. And similarly, it could help you sort through historical data to help you identify potential risks so you can then make an informed decision based on that knowledge. For the most part, it can be a good resource for research around an investing strategy.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
I second that. And I will also throw out there, because there may be some people who are like, well, aren't robo-advisors AI? So there is an exception, I suppose, which is using a robo-advisor. They use AI to help automate the investment process and also provide general advice.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
But the personalized advice you need to increase your chances of achieving your financial goals may be lacking with robo-advisors. So with that in mind, if you want to learn more about robo-advisors, another plug, we've got an article about that we can link in the show notes.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
Well, I can't give you investment advice, Sean, but that is exactly what I'm saying. So listeners do not ditch professionals like Sean who can give your finances some personal razzle dazzle. I remember when I first hopped on the scene, I think people were spooked about it taking over. But now we're seeing more and more that we can be thought partners with artificial intelligence.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
Just add it to whatever else you already have going on if you think it's going to be helpful. We also have an ongoing global issue to tackle that AI might help with trying to figure out what's for dinner and making sure these expensive eggs are not on the ingredient list.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
All right, enough about AI. Time to transition into our money question for today. And that is about, dum-dum, Roth conversions.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
Maybe you're feeling a little lost, like you don't even know what your financial goals should be. Or maybe you're trying to break yourself out of a bad financial habit, but just can't seem to do it. Whatever your money question, we nerds are here to help. Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
Well, I use ChatGPT to find Valentine's Day staycation ideas. And I am proud to say that I now have new date night ideas that I will be taking full credit for. Just kidding, kinda. But honestly, I also use it to explain how bonds work like I was a five-year-old. And then I asked it to further explain to me as a visual learner.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
Let's get to this episode's money question segment where we answer a listener's question about Roth conversions. That's up next. Stay with us.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
Good to have you back. So let's get to the first listener's question, which comes from David, who sent us an email. Here it is. I have a question about IRA to Roth IRA conversions. I have four times in my IRA what I have in my Roth IRA, mostly because my IRA is old 401k rollovers.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
I can't find anywhere a calculator to estimate taxes that I will have to pay or anyone talking about how much to do a year.
NerdWallet's Smart Money Podcast
Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions
As Sean said, Roth conversions are the main character right now. Can you talk about why they're so appealing and whether they're right for everyone?
NerdWallet's Smart Money Podcast
Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners
And I'm Elizabeth Ayola.
NerdWallet's Smart Money Podcast
Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners
But first of all, we're talking about a new NerdWallet survey that tells us how much debt might make you seem like a walking red flag to a potential romantic partner. And we are joined by Sarah Rathner for this conversation. Hey, Sarah.
NerdWallet's Smart Money Podcast
Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners
Yeah, I like that Sarah Beige flag. I think for me, I would be trying to gauge their money value. So are they in the trenches of their financial trauma? Also, do they have a basic understanding of their financial snapshot, like where their debt fits into that? And also, like you said, Sarah, a goal for getting out of debt. So for me, it would also be about what their expectations are for me.
NerdWallet's Smart Money Podcast
Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners
Are they expecting me to pay their debt off or contribute to it? I think those are some factors that would matter.
NerdWallet's Smart Money Podcast
Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners
Absolutely. And because I'm a little empathetic, I think that would be a soft spot for me for sure. But beyond debt, what did this study have to say about how people weigh the financial management of a potential spouse?
NerdWallet's Smart Money Podcast
Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners
I am seconding that and I had an ex who had this exact problem and it's one of the reasons he is an ex. So how can people maybe make themselves a little more financially appealing to a partner, Sarah?
NerdWallet's Smart Money Podcast
Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners
Yeah, I don't blame them. That's a tough one to work through. Sarah, do you have any other advice for people so that their finances don't get in the way of their love lives?
NerdWallet's Smart Money Podcast
Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners
Exactly. I feel like it's always so romantic to me when I hear about couples who maybe started off with, I don't know, $200,000 debt and then they worked as a team and paid it down together. So I think that's a huge part of love too, like working towards goals together.
NerdWallet's Smart Money Podcast
Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners
With that said, we are about to turn to this episode's money question where Sean and Sarah talk with a listener about how they can plan for their dream retirement.
NerdWallet's Smart Money Podcast
Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners
And I'm betting a lot of you have received your W-2s or 1099s and other tax documents in the mail. And you're starting to wonder about filing your taxes this year. Hmm, talking to myself. We're working on an episode all about your tax questions, so let us know where you need help. Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD.
NerdWallet's Smart Money Podcast
Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners
Or you can pop us an email at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners
All right, let's get to this episode's money question segment where we talk to a listener about their retirement goals. That's up next. Stay with us.
NerdWallet's Smart Money Podcast
Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners
Oh, you must want me to be talking all day, Sean. But I'm proud to say that I'm now well versed in red flags, and they're no longer a carnival for me. So with that said, the last red flag for me was a guy I was dating calling my son a third wheel.
NerdWallet's Smart Money Podcast
Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners
And for good measure, I'm going to throw in another one. So I also met a guy who wanted to have more kids. He had six already, but he did not have a plan for more income.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
Sean, one of my intrusive 3 a.m. thoughts is whether I've told my beneficiaries where my estate planning documents are. And when I last saw my birth certificates as well. Am I alone in this?
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
I expected to see withholdings for the other states as well, given that my employer was aware of my work locations. This makes me question whether I actually need to file in those four other states, especially since I don't have detailed records of income earned in each state due to extensive overtime.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
Additionally, North Carolina doesn't appear to have any reciprocal agreements, which would have made my life far easier. Most sources recommend consulting a tax professional, but that isn't financially feasible for me right now, and navigating the task code on my own has been quite challenging. Could you provide any guidance on how to determine my filing obligations?
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
And what can people who tend to work in different states throughout the year do to stay on top of their potential tax liabilities? How can they stay organized and get ahead so they're not overwhelmed come tax season?
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
So this makes the timely segue into the right way to store your documents.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
It sounds to me like the listener's anxiousness is feeding the procrastination around filing their taxes. First of all, what are the repercussions of not filing your taxes for two years?
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
You are correct. I'm referring to those and essentially any document that could impact your financial life. You want to think carefully about how you store legal identification documents, tax documents, financial records, and also estate planning documents. Things like tax returns, investment statements, bank statements, pay stubs,
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
Another important point that comes to mind from this listener's question is how important it is to have a tax system that works for you. And that might include having a tax professional on deck, a software you use, or a general accounting system to keep track of your tax situation. It sounds like the listener has played with different options and not found the right system for them.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
How can someone determine the best system for them, Bella?
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
card titles, property deeds, insurance policies, and social security cards could fall under those categories. But I know I mentioned a lot.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
And here's our brief disclaimer. We are not financial or investment advisors. This nerdy information is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances. This episode was produced by Tess Vigeland. Hilary Georgie helped with editing. Nick Karusemi edited our audio. And a big thank you to NerdWallet's editors for all their help.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
Exactly.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
Well, you have a few options here. If you don't want to turn looking for important documents into a scavenger hunt, you can put hard copies of your documents into labeled folders and then house them in a file box, cabinet, drawer, or a wardrobe.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
Ideally, you'll keep them in a safe and dry place. I once left my documents in a humid closet, and I bet you can guess what happened to them. Another free tip, if you have young kids, keep the location out of their reach. Some of my important documents have turned into coloring books for my son over the years.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
What a downer, but I'm going to pick it back up. I think it's a good time for us to discuss document management so I can make room for other intrusive 3 a.m. thoughts.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
For people who want an added layer of security, consider a fire-resistant file cabinet or a safe. And another option is a safe deposit box at a local bank. You probably don't want to put documents you'll need frequently in there because, of course, banks are usually closed evenings, holidays, and weekends.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
Also, an original copy of a document, like a will, probably shouldn't go in there because if you die, an executor will need the legal right to access the box. But that said, you could leave a copy with a trusted friend or a relative or with an attorney.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
Both, because why not? It can be helpful to have a hard and soft copy of financial documents just to cover your back and your front. Now, in terms of storing digital copies, you can take pictures of your documents and store them in a hard drive or an online cloud. You could also pop them in a file on your computer, but there is the risk of that computer getting lost and technology fails sometimes.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
So it's good to also have a hard copy somewhere and inform your loved ones about where that location is. And I'll also add for people who are worried about cyber criminals, there is some identity protection resources that you can use or tools rather in case you're worried about that. So we will link out to that in the show notes.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
Correct.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
I know document hoarders, and it creates so much drama sometimes when you're searching for important documents. You first have to get past the pile of irrelevant documents before you can find what you actually need. So having too many financial documents laying around can also put you at risk of identity theft.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
There are. For tax documents like returns, W-2s, 1099s, charitable donation documents, and tuition payment receipts, ideally you keep them for three to seven years. That's because the IRS usually doesn't audit further than six years. Yeah, that means you should probably ditch the tax return from 2018 and earlier.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
But seriously, if the IRS decides they want to be in your business and do an audit, you'll need those returns. Finance professionals say you can keep bank statements and pay stubs for up to a year. Many banks will provide bank statements as far back as seven years in case you dispose of them earlier and you happen to need one.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
In terms of utility bills, you can probably keep them for, let's say, one to three months. When I'm asked to provide a utility bill for something, they usually want a bill no older than three months. And also, you can likely request an e-bill if you need something further back.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
And I'm Elizabeth Ayola. This episode, we're answering more of your questions about taxes ahead of the April 15th filing deadline. But before we sway that way, let's talk about managing important financial documents, which is also relevant when it comes to taxes.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
And lastly, as for medical bills, the Federal Trade Commission suggests keeping your paid and undisputed medical bills for at least a year.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
I have some by my bedside as we speak. Unless you're using them to document business expenses or for something you might get a tax credit on, you can usually shred baby shred. Warranty receipts are the exception. You want to tuck those away safely until the warranty is up. Sean, you're a homeowner. I'm going to let you share your nerdy two cents about property records.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
How long should people be keeping those?
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
Good hygiene around this is to shred, and then you could also recycle. You don't want your personal information hijacked by a scammer, so ensure you dispose of these documents safely. Based on this episode, what's next for you and your document, Sean? I know organization is important to you.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
We're about to answer a few of your questions about tax season 2025.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
Maybe you've fallen off track with your financial goals for the year and need help getting back on track. Or you're faced with a major financial decision and need help weighing out your options. Whatever your money question, we nerds are here to help. Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
Sean, if I recall correctly, didn't you talk with your dad in that scam series about a scam he experienced?
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
Let's get to this episode's money question segment. Stay with us. Hey, guess what? Smart Money is a finalist in the 2025 Webby Awards, and you can help us win. Just head to vote.webbyawards.com, register real quick, and vote for us in the best individual podcast episode business category. It's free, it's fast, and unlike borrowing your neighbor's Wi-Fi, totally guilt-free.
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Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
You've got until April 17th to cash your vote. One more time, that's vote.webbyawards.com. We're back and we're answering your money questions to help you make smarter financial decisions. And we're taking on a few of your questions about taxes. We did an episode about a month or so back about what you need to know around tax season 2025.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
And we got so many good questions from y'all since then that we decided to do another round. And I'm sorry to be a bearer of bad news, but the filing deadline is around the corner.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
Ha. So, Sean, how do you store your documents? What are you going to do with your tax documents, Sean? Yes, I'm all in your business.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
Thanks. I'm glad to be back on. Bella, before we answer the listeners questions, I think we should address an elephant in the room. Some people may be wondering whether they should even bother filing taxes with the new administration's talk of abolishing income taxes in the IRS, rewriting the tax code and relying on a tariff based revenue system.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
All right, Bella, what's the best way to pay for a surprise tax bill? And I definitely have never heard of a no interest payment plan for taxes.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
And this also brings up a broader question about withholding. How can people ensure they're withholding enough taxes as the year goes along? Do you have any tools or resources you can share with listeners?
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
That's right, Bella. That's something I definitely had to do. I know when my pay increased, I had a chat with a financial advisor and she helped me to calculate how much I should withhold. I also played around with a withholding calculator.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
Well, this is a no-shame zone, and that means this episode is for you, Sean. But I will say at least they're not being stored on the kitchen counter and being decorated with food stains. That may or may not be a personal story. So I keep most of my documents inside of a folder tucked away somewhere in my garage and somewhere in my bedroom wardrobe in another folder and somewhere in my email.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
All right, here's another one of your questions about taxes. This one comes from Simon, who sent us a text message. Simon wrote, "...during the 2024 tax year, I worked for a company that required me to travel and work on-site in multiple states.
NerdWallet's Smart Money Podcast
Last-Minute Tax Questions Answered and Tips for Keeping Your Financial Documents Safe
I understand that I may need to file tax returns in each of these states depending on their respective filing thresholds, some based on income and others on time spent working there." However, my W-2 only shows withholdings for North Carolina, end quote, where the company headquarters is located and where I worked when not traveling.
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
Sean, can I be a little soppy?
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
It sounds like we had the same childhood, Sean.
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
All right. So let's take a trip down memory lane. What would you say is the earliest money-related lesson that you learned from your mom?
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Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
That is such a good lesson. I think the one that stands out for me is that sometimes creating financial security requires sacrifice. So I grew up with an immigrant mother who left Nigeria in her teenage years to start a new life in the UK. She left around the age of 16. So she would go back and forth between the UK and Nigeria over the years. But eventually she settled in London.
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
And by this time, she had six kids and she was the breadwinner. My dad was more focused on pastoring. Yes, I'm a pastor's kid. Well, she had to separate my siblings and I for a while and put us with nanny so that she could work and create financial stability for our family.
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
And then I'm so proud of her because within a few years and with lots of hard work, she was able to buy a home for us to live in and we all were able to live together again. But she did have to sacrifice most of her time and also her family being under one roof in order to get there.
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Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
Another financial lesson that I learned from my mom is that you should save, but you should also use your money to do things that bring you joy. Now, I don't know how she did it, but my mom paid for me and my two sisters to go all the way from London to America on vacation to Disney World every year. And that was before we finally moved to Florida when I was around seven.
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Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
So we would stay at the Disney Resort for a week or so. Aside from that, she also invested in good quality clothing items, bedsheets, and food for herself because it made her happy. So that was another way that I connected that, you know, money is not just for paying bills, but it's also for things that bring you joy as well. Mm-hmm.
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Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
But that said, my mom was also a broken record when it came to savings. So she would always talk about how important it was to save some of your money and not spend it all. Sean, can you relate with this at all? Did you pick up any similar money values from your mom?
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I love how dynamic your mom is, Sean. So for me, there is one money lesson that came to me later in life that I indirectly learned from my mom, and that's actually planning for retirement. My mom never gave me any education about retirement savings, but I do remember her retiring early when I was in my early 30s.
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
She was able to live off of her savings until her pensions kicked in, which obviously took discipline, consistent saving, and also careful planning to achieve that. But it's not until now that I learned more about personal finances and started to think about my own retirement that it registered to me what she had to do in order to retire early.
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
And as I'm talking about this, I realized that I'm subconsciously inspired by my mom as early retirement is a goal of mine too. Did you learn much about budgeting by watching your mom with money, Sean?
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Elizabeth Ayola.
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
And you have also just taught me a new parenting hack because I'm tired of my son losing his jackets too.
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
The final lesson that I'm going to share that has really shaped the way that I approach making money is that having money is good, but it isn't everything. I remember during my late teens and early 20s, I watched my mom work sometimes seven days a week because she was saving so aggressively to fund building her house in Nigeria and also to fund early retirement.
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Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
That's such a beautiful value to learn, Sean, because you can't get those years back. All right, Sean. So if you had to tee up the money lessons you learned from your mom in one sentence, what would it be?
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Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
I would say my sentence would be decide the type of life that you want, figure out how money will help you get there, and then execute your plan without self-sacrificing.
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
Well, I am a lot more transparent about finances with my son. He has a piggy bank. I tell him how much things cost. I give him opportunities to earn money. I talk to him about saving and try to foster an abundance mindset in him. Honestly, I just hope it all sticks at the end of the day. But ultimately, I just want to pass on the lesson to him. I would say the core lesson would be
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
to work hard in moderation, and also to understand what his values are around money, because I think that will drive everything ultimately. But at the end of the day, I hope he's as proud of me as I am of my mom for the financial stability she created for us and herself.
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
Thank you.
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
We're about to get to this episode's money question about budgeting for a wedding.
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
But before that, let's talk about lessons we learned from our moms when it comes to money. Sean, was your mom open with you about her finances growing up?
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
Maybe you're not sure whether you're on track for retirement or you're wondering how to adjust your budget to potential tariff increases. Or you want to know whether now is a good time to buy a new car. Whatever your money question, we nerds are here to help. Leave us a voicemail or text us on the nerd hotline at 901-730-6373. That's 901-730-NERD.
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
Either way, we're both crying, so let's do it. Thank you, because I was going to be soppy regardless. So, Mother's Day is around the corner and I get so emotional thinking about all the values that my mom instilled in me and all the values that I get to instill in my son. Mother's Day also had me mulling on the money lessons that I learned over the years watching my mom.
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Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
If you prefer email, pop us an email at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
Let's get to this episode's money question segment. That's up next. Stay with us.
NerdWallet's Smart Money Podcast
Spend Smarter This Wedding Season: Travel, Tipping, and More, (featuring The Knot)
My mom didn't tell me much about her personal finances, but she did tell me about the cost of her bills often, with an emphasis on how expensive things were, of course. And she'd add somewhere, that's why you have to work hard.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
And I'm Elizabeth Iola. On this episode, we talk with a listener who's wondering how to balance paying off their debt while building up their savings.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
So you're also just at the beginning of your financial life, Mikayla, which I think is exciting personally. So where do you think you have the most room for growth with your finances?
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
So Michaela, now can you tell us a little bit about your savings? So what do you have saved at the moment?
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
I see what you did there, Sean. You get a gold star for the wordplay.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
And I will say as well, Michaela, I empathize with wanting to pay down your debt fast. I absolutely hate having debt. And sometimes it feels like something hanging over your head. But in general, it can be best to build your savings while you're paying down your debt at the same time. And one of the reasons for that is that so you can easily cover an emergency without going deeper into debt.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
And I don't know about you, but sometimes when people say that, I'm like, well, how? Because I get maybe sometimes lost in the numbers. And I think there are different ways that you can approach that. So at NerdWallet, we love the 50-30-20 budget. So that's where 50% of your income goes to needs, 30% goes to wants, and 20% goes to debt and savings. For example, out of that 20%, you could...
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
allocate some towards paying down the debt. Since you said you're doing the snowball method, you know, you would focus on the smallest debt first and pay the minimum balance on the rest. And out of that 20%, you could also put some money towards emergency savings as well. So it doesn't have to be either or.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
And Michaela, I also wanted to ask, are you getting an employer match at your job? I am, yes. And are you contributing enough to get the match?
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Okay, awesome.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
All right, Sean. So tell us, where do you think people should start?
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Wow. OK.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Exactly. And I think this is also a good time to unpin your comment earlier about whether it's worth saving for retirement while you have so much debt. So I think a lot of people face that conundrum and they're like, well, it's not worthwhile to do. But I know the average rate of return on the stock market, obviously, ebbs and flows is around 10%.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
So depending on, again, the rate of your debt and how much debt you have, it definitely can be worthwhile to simultaneously pay down your debt and save for retirement so that compound interest and time can both work in your favor for your retirement savings. Okay, yeah, that makes a lot of sense.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Okay. All right, Michaela. So let's double back to the budgeting topic. You did say that you are doing a zero base budget. Are you happy with that budget or do you have any doubts or think maybe you should be trying a different one?
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Well, first of all, I want to commend you because at 24, I did not have that discipline to do that kind of budget. I think when people think of the word budget, it sounds very limiting and restrictive, but there are so many different types of budgets out there. And luckily, you can choose one based on your personality type and your expenses.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
So while the zero-based budget, I think, works for people who do like to track every single dollar and maybe have a better idea of where all their money is going, there are other methods to try. I personally am a pay yourself first type of budgeter.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
And essentially what that means is quite self-explanatory is you pay yourself first, you do your savings, you cover your main expenses and the rest goes on whatever it goes on. But that is, I think, ideal for people who are maybe not impulse spenders or have a good handle on their spending. But I will say budgets also don't have to be set in stone. They can change according to where your life is.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
So last year, I had a lot of changes in my finances. So I shifted to more of a 50-30-20 budget. So there are different type of budgeting systems. Aside from that, there's also the envelope or cash stuffing method. And that can be good for people who need to rein in their spending as well.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
I like these three tips and I think they're good pillars for people to use, myself included. Now let's break it down and start with personal preparedness, which can come in a lot of different forms. Financially, one area to focus on is cash on hand. So if you are unable to use your credit or your debit card, say because networks are down or the power is out, how would you pay for things?
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
And also be proud of yourself because you seem to have the foundation and you have clear goals in terms of what you're trying to do. So just give yourself time as well, you know? Yes, thank you.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Thank you. You have. I did not start saving for retirement until I was 32, I think. So you're doing awesome.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
This episode was produced by Sean and Tess Vigland. Hilary Georgie helped with editing. Megan Marle mixed our audio. And a big thank you to NerdWallet's editors for all their help. And here's our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes, and it may not apply to your specific circumstances.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Now, this tip in particular reminds me of my first week in Houston when Hurricane Beryl hit and we experienced a power outage. It was horrible. So I drove around for hours looking for cooked food and didn't have any cash on me. Honestly, it was a nightmare. And the few restaurants that were open only took cash.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
So it reminded me to keep cash beyond what my son has in his piggy bank and dollars in the house.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
I love that for you, Sean. So now tell us, is there a guideline for how much cash people should have just in case?
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Exactly. And like you said, that number probably looks different for everyone. My son eats a lot of snacks and just eats a lot generally. So I might need more than 500. Another thought, instead of pulling out all of this money at once, you can take a more gradual approach to building up your cash reserve. So maybe each week you pull out $20 and put it in a safe place.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
And I also will put my mom has experienced taking out cash and then forgetting where she put it. So maybe also have a clue of where you're putting the cash.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
People can think of this as basically like a physical emergency fund that you're keeping in a secure location in your house, possibly even in a go bag like you have, Sean, that you have filled with stuff that you might need in time of a crisis. But beyond cash, there are other things that folks should have to prepare for some unforeseen emergency too, right?
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
It sounds really fancy too, Sean.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
All right. So having lived in Nigeria where we didn't have constant electricity, power banks are something I tend to keep in the house to charge items. So that's something people can consider as well. Sean, you also mentioned building community, which is very relevant to my life right now and I think as a whole. So I think this is something we hear about a lot.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
But what does it actually mean to do this? And how can community help people get through a difficult time?
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Well, if you want an indication of how I've been doing, the past Thanksgiving, I got three invites. And on Christmas, I also got three invites. And I mean to people's home. And I've only been in Houston for six months.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Well, what can I say? I'm trying, I'm trying. No, but honestly, it's a testament to how much better I've gotten at building community. And that's by doing two things. So the first thing is being intentional. And the second thing is not making excuses. So for me, the intentional piece is me using Facebook groups and also Bumble friends to find people.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
And then the second thing is to not make excuses by actually making an effort to hang out with them. So I'm proud to say that I've slowly started to build a solid tribe. I will also add that during Hurricane Beryl, the Facebook groups were a beautiful resource because all the moms in there, in particular, I'm in mom groups, were sharing resources for places offering free food.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Some people were even offering their homes. And they also just shared a lot of information on aid. But with that said, I want to go back to that idea of the broader community that you mentioned, though. What does that look like, Sean?
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
I love that you have all these resources and little community, Sean. It can be so helpful. Honestly, I used to be a very isolated person, and I can say that my life is richer because of the communities that I'm now engaged in.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Absolutely.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
And there's a lot more people can do beyond voting, which, of course, is always important.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
So I do like the idea of five calls, but Sean, what if I hate talking to people on the phone and it makes me feel anxious?
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
you get another gold star for that.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Hey, Sean. Have things felt a little, shall we say, shaky as of late?
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Beyond making calls, you can also donate to causes you care about or local organizations that need help. The goal here is really just to focus on the actions you can take that make a real difference and prevent you from feeling powerless because honestly, you're not.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Wait, what's doom spending, Sean? Never heard that before.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
I will say the three tips that you shared may definitely be less expensive ways of coping than doom spending for sure.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
We're about to turn to this episode's money question segment, where we talk with a listener about how they can pay off their debt while building up their emergency savings. But before we get into that, we're at one of my favorite parts of the show, the part where we ask you to take a second and think about where you need some guidance with your money.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
And a reminder that one of our goals on Smart Money this year is to talk with more of you live on the podcast to help you with your money questions. If you want to hang out with Sean and me for a bit and get some nerdy wisdom, let us know. One more time, leave us a voicemail or text us on the nerd hotline at 901-730-6373. That's 901-730-NERD.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
All right, let's get to this episode's money question segment. That's up next. Stay with us.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Well, this episode, we're going to help our listeners feel more prepared for what may feel like an unprecedented amount of shakiness.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
Michaela, welcome to Smart Money. Hi, thank you.
NerdWallet's Smart Money Podcast
How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter
So when you think about where you're going to be in five years, tell us about what you picture.
NerdWallet's Smart Money Podcast
The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free
But first, we are going to talk about what you can get from doing a low or no buy year. So here to talk with us about this is NerdWallet personal finance writer, Amanda Barroso. Amanda, welcome back to Smart Money. Hi there, Shawn and Elizabeth. Thanks so much for having me back. All right, Amanda. So to start, can you lay out exactly how a no or low buy year works and what's your goal?
NerdWallet's Smart Money Podcast
The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free
Speaking of attacking, Amanda, I feel like you're screaming at me with the no new clothes thing, okay? Okay. So I definitely felt that. But Amanda, have you heard of the Libby app?
NerdWallet's Smart Money Podcast
The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free
I hear it allows you to borrow e-books and audio books from your local library. But if the book you want isn't available on Libby, then you can just check thriftbooks.com for inexpensive used books.
NerdWallet's Smart Money Podcast
The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free
All right. So honestly, I haven't bought my son a new toy in a while for similar reasons. And every time he asked me for a new toy, I tell him to play with the ones that he has first, especially the ones that I stepped on. And it works like magic. And since this is a space where we listen, but we don't judge, I am currently stewing about buying him a Nintendo Switch for his birthday.
NerdWallet's Smart Money Podcast
The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free
He begged for it for a year straight only to watch it collect dust on my office desk.
NerdWallet's Smart Money Podcast
The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free
Amanda, I love that you have a plan for how you're going to achieve this because I'm not even going to lie to you. I thought about doing a no spend January and I probably failed within the first week. So with that in mind, I do want to know why did you choose a year and how are you going to be tracking your progress and making sure you're on track?
NerdWallet's Smart Money Podcast
The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free
And also, like, do you have any accountability measures in place?
NerdWallet's Smart Money Podcast
The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free
Amazing.
NerdWallet's Smart Money Podcast
The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free
Do you ever find yourself doing something you know is bad for you, but you just can't seem to stop?
NerdWallet's Smart Money Podcast
The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free
Yeah. I saw this funny meme on maybe Instagram that was like, treat yourself. And I never stopped treating myself after. So that's how I feel sometimes.
NerdWallet's Smart Money Podcast
The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free
Amanda, I am inspired, okay? And I hope that listeners are too. So Amanda Borosso, thank you so much for joining us.
NerdWallet's Smart Money Podcast
The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free
Maybe you're feeling inspired by the last conversation and want to overhaul your spending habits, but want a little more guidance. Or maybe you're preparing to buy a home later this year and want to make sure your credit is in good shape. Whatever your money question, we nerds can help you.
NerdWallet's Smart Money Podcast
The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free
And I'm Elizabeth Iola.
NerdWallet's Smart Money Podcast
The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free
And we're planning to talk with even more of you live on the podcast this year. So if you want to join us to talk about your money question, just let us know. One more time, leave us a voicemail or text us on the Nerd Hotline at 901-730-6373. That's 901-730-NERD. Or you can email us at podcast at nerdwallet.com.