Sean Pyles

Today's episode is sponsored by Amazfit. I've been wearing the Amazfit Active 2, and it's basically like having a personal assistant for my health. Except it doesn't judge me for hitting snooze three times. It's also a game changer for fitness. It combines AI-driven coaching, smart tracking, and premium features without the premium price.

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Is It Time to Leave Your Job? Tips for Smart Moves and Strategic Growth

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When the road changes, the Range Rover Sport changes with it. Dynamic air suspension adjusts to keep things smooth and balanced, so every turn feels effortless. And if the pavement disappears, no problem. Adaptive off-road cruise control kicks in, reading the terrain and making real-time adjustments, so you don't have to spend your drive making more calculations than your tax software.

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Visceral, dramatic, uncompromising. The Range Rover Sport leads by example, just like you do. Build yours today at LandRoverUSA.com. Again, explore the Range Rover Sport at LandRoverUSA.com. Don Graham, we've been talking mostly about how to think about a job change, something that's already in your wheelhouse, possibly already in your workplace.

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Now let's move on to what happens if you start having a desire to completely switch career tracks. Maybe you're working for the Office of Management and Budget at the White House, and then suddenly you want to own a specialty food store in the Hamptons, like my hero Ina Garten did.

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Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles. For better or worse, we tend to think of a new year as a good time to make changes. Maybe we want to get in better shape or eat healthier foods. Maybe we want to move to a new home, city, or state. Maybe we want to stop procrastinating or keep our homes better cleaned or both. Or maybe we're thinking about a change in our careers.

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What are some questions to ask yourself if it's the new year and you're feeling like you just don't want to do that thing that you've been doing for 10 or 15 or 20 more years?

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What are common things that people do have to sacrifice when they're switching careers? I'm thinking about possibly a salary or time just spent getting up to speed on what you need to do for a new career.

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So clearly, getting a new career is a bit more difficult than just getting a new job, right? You're going to need to highlight or gain new skills, you may not have a natural group of people to go to for advice, and you might not really have that network going into a new career. What are some ways to start gaining those things in a new field?

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And obviously, in some instances, you are going to need to go back to school.

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All of this assumes that you know what you want to go into, right? Like, what if you don't know? You know you want to change jobs. Maybe you're very tired of what you've been doing. You want something new career-wise, but you're just not sure what that thing is.

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A new survey out from the Gallup organization finds that employees across the U.S. are looking for new opportunities at the highest rate since 2015. That's even beyond what we saw after the pandemic with the great resignation. Gallup calls it the great detachment.

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What would you say are some ways to get yourself in front of decision makers in the career that you're hoping to move to? Maybe someone who could say yes to you having a job at their company.

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Talk to people I know in my network and ask if they are interested or they know anyone, right? Yeah.

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With this episode, we continue our January series, Your Money in 2025, by taking a look at how you know when it's time to move on from your current job situation, whether it's looking for a change within the company that you currently work for, or looking outside to something entirely different.

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I want to go back to something that you mentioned earlier around almost the emotional side of changing careers. I imagine, you know, if you are starting a completely new career, you'd have to start pretty far down the ladder. And that could be a mental and emotional challenge. It's that hit to the ego you mentioned earlier.

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How do you think people can process that and feel good about this uncomfortable mental place they may be in?

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What about the question of whether you should stay in your current job while looking for this new career or if you should leave the job, maybe take some time off if you can swing it and then use that time to explore what you're hoping to get into?

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There's a lot to consider from what you're getting paid to who you're working with to basically what you want to do with the eight plus hours a day that you're putting in. Today, we're going to talk with a careers expert about some of the questions you should be asking yourself if you're looking for a change in your work life.

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Dawn, do you have any final words of advice for anyone who's thinking about a big career move as we head into 2025?

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Dawn Graham, thank you so much for your help today.

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That wraps up our series on your money in 2025. Over the past month, we've covered budgeting, housing, investing and financial goals. If you missed any of these episodes, take some time to listen to them and see how they can help you get what you want from your money in 2025. Do you have a money question of your own? Turn to the nerds and call or text us your questions at 901-730-6373.

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That's 901-730-NERD or email us at podcast at nerdwallet.com. And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeart Radio to automatically download new episodes. This episode was produced by Tess Vigland. I helped with editing. Amanda Derangowski helped with fact-checking. Megan Maurer mixed our audio.

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And a big thank you to NerdWallet's editors for all their help. Here's our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. And with that said, until next time, turn to the nerds.

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And we'll get to some advice for how to start that process in a way that doesn't jeopardize your current work situation. Meantime, we want to hear what you think. What are you working on in your financial life as we start the new year? Are you thinking it might be time to take a second look at your job and your career? How are you handling that?

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Leave us a voicemail or text the Nerd Hotline at 901-730-6373. That's 901-730-NERD. Or email a voice memo to podcast at nerdwallet.com. Our guest today is Dawn Graham. She is a corporate psychologist, career switch coach, LinkedIn learning instructor, and former host of the popular call-in show, Dr. Dawn on Careers on Sirius XM Radio.

NerdWallet's Smart Money Podcast

Is It Time to Leave Your Job? Tips for Smart Moves and Strategic Growth

Unlike other wearables, Amazfit goes beyond basic fitness tracking. It has specialized modes like High Rocks Race Mode, Smart Strength Training, and even Free Diving, built for both everyday users and elite athletes. And with AI-driven coaching, it adapts to your workouts, tracks recovery, and helps you train smarter.

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Her book is Switchers, How Smart Professionals Change Careers and Seize Success. Dawn Graham, welcome to Smart Money.

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Let's start with a very basic question, which is, how do you know when it's time to start looking for a new job? What are some signs to pay attention to?

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What would you say is the difference between looking for a new job and looking for a new career?

NerdWallet's Smart Money Podcast

Is It Time to Leave Your Job? Tips for Smart Moves and Strategic Growth

There's also a free ZEPP app you can pair it with to get in-depth analytics and downloadable maps you can use with turn-by-turn directions. And it has Zepflow AI voice control, so you can check stats hands-free. And don't worry about battery life. The Amazfit Active 2 runs up to 10 days on a single charge.

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Let's focus on this idea of a new job. So basically you're staying in the same line of work, maybe even at the same company, but you want a different job or different responsibilities. How do you start to think about what it is that you want to do?

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It also seems like part of the task of finding a new job in the same career field that you're currently in may just be understanding all of the facets of similar jobs to yours and then pursuing one that might align better with your current desires professionally.

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If you want a smartwatch that delivers more for less, then visit amazfit.com slash smartmoney to get 10% off. That's Amazfit, A-M-A-Z, fit, dot com slash smartmoney. How's the job going? Nobody has 100% great days at work, but are you generally satisfied with your career and the daily grind? Or are you thinking it might be time for a change? It is, after all, a new year and change is in the air.

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Let's talk about changing jobs within your current company. What do you see as some of the immediate challenges to switching things up within your current workplace?

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Yeah. And if you find that you are at a company that isn't encouraging you to look for different roles or opportunities within this same employer, that might be a signal that you want to hop to a different employer. Let's talk a little more about the conversation that you need to have with your supervisors once you do decide that you need a change.

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Maybe you've had those coffees with colleagues in other departments. What's the best way to approach that without totally playing your hand and telling your supervisor that you're unhappy? Or should you tell your supervisor that you're unhappy?

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Let's move on to some advice for if you're wanting to look outside of the organization that you're already in, but you don't necessarily want to switch careers. I think we're all aware that networking is key and really knowing what you want to go after instead of just spray and pray with your resume. What are some other really key steps that you need to take to get ready for the job hunt?

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How do you know if it's time to go?

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Dawn, what if you just feel uninspired or maybe bored, like not enough to leave your current job, but also you're just kind of going through the motions? If you're not looking for a major change, how can you get back to being passionate about the job that you do have?

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All right. In a moment, we'll be back with tips and advice for if you want to make a really big change and try for a whole new career track. Stay with us. Today's episode is sponsored by Range Rover Sport. Some decisions in life require careful research, like picking the right investment strategy or figuring out which streaming service actually has the movies you want.

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But when it comes to driving, there's one decision that's easy, the Range Rover Sport. It's a bold take on sporting luxury, blending sophistication with power. On the road, adaptive dynamics keep your ride smooth and composed by reducing unwanted body movements. Because, let's be honest, the only thing that should be unpredictable is the stock market, not your suspension.

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And Ana, can you remind us, why did the credit rating agencies lower the U.S. 's rating in 2011 and 2023?

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A default sounds bad. Am I correct in that assumption?

NerdWallet's Smart Money Podcast

What to Do When the U.S. Gets Downgraded and Your Travel Credit Card Stops Paying Off

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Good old Uncle Sam. He's been downgraded. We'll hear what that means. 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.

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850 is not important, as we also say. But yeah, I'm in the neighborhood. What about you?

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In a moment, this episode's money question. Stay with us.

NerdWallet's Smart Money Podcast

From Eggflation to Ghost Jobs: Roasting 2024’s Biggest Financial Turkeys

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We are all about informed decisions, and it's our job to give you that information. For all of those great and wonderful episodes, today we are handing out our 2024 Financial Turkey Awards. And by turkeys, we mean things that really missed the mark in the financial world. And let me tell you, there were a number of turkeys this year.

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A broken wishbone and unsalted gravy.

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Yeah. Well, in a moment, we bestow honors on the financial turkeys of 2024. But if you have a money question for the nerds, we invite you to call us or text us anytime, including holidays, on the nerd hotline at 901-730-6373. That's 901-730-NERD. Or email us at podcast at nerdwallet.com.

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Oh, and happy Thanksgiving to you too, Sarah. On this day of thanks, I would like to thank all of our listeners for participating in the grand smart money experiment. We love getting and answering your questions, and we appreciate all of you and your loyal listenership.

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Okay, we're back and ready with our nominees and winners of the Smart Money 2024 Financial Turkeys of the Year. Sarah, what's your first candidate?

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Good job, Sarah. Love that pun. And a solid and on theme nominee for the food holiday. By the way, I'm going to say I'm still upset about how much my cream cheese costs nowadays, although I will not give up my bagels. Okay, Sarah, what's your next candidate?

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Hmm.

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Wow, Sarah, I got to admit, I had not heard of the ghost job phenomenon, but it is really messed up. What a cruel way to play with people who are desperate for employment in some cases. Yikes. So, Sarah, you've given us your nominees. Which one wins your 2024 Financial Turkey Award?

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A solid winner. Unsalted gravy for all the ghost job posters.

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Ah, yes. I would love that.

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First up, I would like to nominate one of the most grotesque turkeys in the financial world, scams and scammers. We did a special series about scams earlier this year and heard from people, including my own dad, who have been put through all kinds of hell trying to reclaim their money and their lives after they were financially assaulted by scammers.

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And it seems like every week there is yet another report about a big data breach, which means that we are all exposed yet again to scammers who are trying to make a buck off of our personal information.

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Yeah, so as we always say, folks, freeze your credit reports and regularly monitor your accounts for any funny business. You can sign up for your free credit score and get credit building insights personalized to you when you register at nerdwallet.com. So we will put a link to that in today's show notes.

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Yes, I'm just trying to give folks useful resources as always. On to my second turkey. It's slightly conceptual, so stay with me. It is the gap between how we are all told the economy is doing and how we feel about the economy. We saw loads of economic reports throughout 2024 showing that the job market continued to be resilient, even if it cooled a bit. And inflation certainly slowed.

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But things still don't feel great, right? Like you were saying earlier, Sarah, grocery shopping is not an enjoyable experience. It's painful. And there's some data to back this up, too. You know, credit card delinquency rates are as high as they've been since 2011, according to the Federal Reserve Bank of St. Louis. The economy just continues to feel really weird.

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Weird, kind of like how a turkey looks weird. It's both majestic and lumpy at the same time.

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It's got to be scams and scammers, the people who perpetrate these scams. And this is something that we are all vulnerable to all the time. It's super scary and not enough is being done to protect us from these criminals. So everyone stay vigilant.

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and how we can help people. It really is an honor. I've been answering the questions of smart money listeners for a few years now, and sometimes people ask if I get bored of answering similar questions over and over. And I always say no, because in truth, each listener's question is different.

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And do what you can to protect your personal information. Do not go giving out your social security number willy-nilly, even if it might be already out there.

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Yeah.

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I know. It is sad and scary. Well, Sarah, now that we have handed out some turkeys, how about we go eat some of our own? Or I guess in my quasi-vegetarian household, I'll go eat some nut loaf.

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It's a big mush of nuts and mushrooms, and it's really good. Lots of cheese in it, too.

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I swear these things taste better than they sound. Yeah.

NerdWallet's Smart Money Podcast

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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.

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Yeah, the branding around Nut Loaf could be improved. I'll give them that. But I swear, it's really, really good. Anyway, that's all we have for this episode. We here at Smart Money wish you and yours a very happy Thanksgiving and a wonderful holiday season to come. And remember, of course, that we are here for you and your money questions. So send them our way.

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Call or text us on the Nerd Hotline at 901-730-6373. You can also email us at podcast at nerdwallet.com. Visit nerdwallet.com slash podcast for more info on this episode. And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

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And with that said, until next time, turn to the nerds.

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It's not bland. It's full of umami flavor. It's mushrooms and cashews, walnuts. I think there's some almonds in there. Lots of cheese. It's like 50% cheese.

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Oh, yeah.

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Although I'm pretty sure it's a contemporary recipe, and people will look back at, like, mid-aughts and 2020 recipes and be like, what the hell were they doing making that? It's disgusting.

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Whatever someone wants help with is informed by their own financial background and experiences and their current financial goals. And I just find that stuff endlessly interesting.

NerdWallet's Smart Money Podcast

How to Get Ready for a Recession and Choose Enough Car Insurance

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Well, Elizabeth, there's a word out there that we haven't heard bandied about for a while now. It's not a word we like, but it's a word we need to address.

NerdWallet's Smart Money Podcast

How to Get Ready for a Recession and Choose Enough Car Insurance

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It is. Recession. It's cropping up in discussions of the economy, so today we're going to talk about the likelihood of one and how to prepare for it. 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

How to Get Ready for a Recession and Choose Enough Car Insurance

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And how long do recessions usually last?

NerdWallet's Smart Money Podcast

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Lisa, I'm glad that you mentioned umbrella insurance policies. A lot of people may not be aware of them or really how good a deal they can be. Can you give us a brief explanation of what umbrella insurance is and why it might be a good idea?

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I think that's a really helpful way to think about it. And in general, when it comes to insurance, people want to think about what risks they are realistically likely to face and what exposure that could mean for them financially and personally. And then on top of that, what helps you sleep at night? And for me, umbrella insurance helps me sleep very well at night.

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Absolutely.

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So, Lisa, shifting gears here, pun intended, we know that insurance costs have gone up dramatically over the past few years. According to NerdWallet data, the median auto insurance rate for full coverage increased 14% from 2023 to 2024. What are maybe the top two or three things that folks can do to save money on their car insurance?

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Well, Lisa Green, thank you so much for coming on and sharing everything we need to know about shopping around for auto insurance.

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to automatically download new episodes.

NerdWallet's Smart Money Podcast

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And with that said, until next time, turn to the nerds.

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How to Get Ready for a Recession and Choose Enough Car Insurance

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So there's a lot up in the air right now. What about the data? What's happening there that's worrying experts as well as consumers?

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This episode, we're answering a listener's question about car insurance.

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Okay, Ana, so we aren't in a recession right now, but the possibility of it happening this year isn't entirely out of the question. What happens to things like interest rates and prices during a recession?

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What's the difference between collision and comprehensive? We'll ask our nerdy expert for some definitions and best practices. But first, some definitions of another kind in our weekly Money News Roundup, where we break down the latest in the world of finance to help you be smarter with your money.

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Credit is another big thing to pay attention to. It's often harder to get new credit during a recession, but financial flexibility seems to be key in difficult economic times.

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You can also have a few credit cards that you keep open and mostly unused. To stay in good standing with those cards, you'll often need to make a charge or two each month that you can easily repay the balance on, something like a Netflix subscription.

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Well, Ana, thanks for walking us through that.

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Now let's get to this episode's money question that's coming up in a moment. Stay with us. We're back and answering your money questions to help you make smarter financial decisions. This episode's question comes from Gerson, who sent us an email. Here it is. How much coverage should I have on my car insurance? Regards, Gerson.

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So we have a short and sweet question from our listener here, but I have a feeling that the answer is not so simple. Lisa, where should people start when they're evaluating how much car insurance they should have?

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Those are the people you're sharing the road with. Well, Lisa, that is thoroughly terrifying. I can't believe your neighbor admitted that to you. That's really scary. So what you're saying is that we need to soberly evaluate the risks that we're all facing on the road when we consider how much auto insurance coverage we might need.

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And that's the end of today's episode. Thanks for stopping by, Anna.

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But people should know that liability insurance doesn't cover damage that happens to your own vehicle as a result of an accident or some other automotive misfortune that you might be responsible for, right?

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Lisa, you just mentioned the two big areas of liability, injuries to people and damage to property. And those are two different types of liability coverage. Can you explain what each covers?

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Today's episode is sponsored by Amazfit. I've been wearing the Amazfit Active 2, and it's basically like having a personal assistant for my health. Except it doesn't judge me for hitting snooze three times. It's also a game changer for fitness. It combines AI-driven coaching, smart tracking, and premium features without the premium price.

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I'm interpreting your desire to take action and improve your finances as a way to work through that guilt and anxiety that you have.

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This episode, we're talking about ethical investing and what to do with excess savings. 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. Try not to be shell-shocked, Elizabeth, but egg prices have cracked past records and now stand at the all-time highest average ever, $4.95 for a dozen large grade A eggs.

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Ooh, those are some heavy questions. Elizabeth, I know you wrote about investing for many years. Do you want to take on ESG generally, which stands for environmental, social, and government investing, sometimes also called socially responsible investing? They're basically synonymous.

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Or that any kind of investing is a negative thing to do to the planet or the world. You just have to do your due diligence. And there is a certain amount of greenwashing that can happen in ESG funds. For example, some companies in ESG funds have been found to invest in bonds from fossil fuel companies. But you can just look at different funds to invest in.

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You would probably invest in an exchange traded fund, most likely, if you're doing ESG investing. And you can look at what companies make up that fund. If you see, oh, here's a company that I don't agree with ethically, I don't want to invest in this fund, you can search elsewhere and find a different fund that aligns more closely with your values.

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I would say no, not necessarily. Elizabeth mentioned a robo-advisor fund, which automates investing for you. So you can set up one of these accounts. It's very easy to do so. You can automate monthly deposits into this account, and you can have the fund that you selected before, having done your due diligence that one time and made sure, okay, I agree with companies that are in this fund.

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And then your investments are just going in the background. So it might take a bit of homework on the front end, like you would do if you're shopping around for a new credit card or buying a new car. You want to make sure you're doing it right at the beginning so that things can be fine as you're using them on a day-to-day basis.

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There you go. Yeah. Maddie, you also talked about your savings and having all of your money in a high yield savings account. How are you managing the amount that you have just in that high yield savings account? Is that something that you're drawing on? Or is it strictly savings that you're not touching? Are you feeling okay about having all of that money in the high yield savings account?

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Are you able to withdraw cash from that emergency fund in your high yield savings account if needed?

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Yeah, they're a popular online bank, essentially. So I'm glad to hear that you have access to cash in the high yield savings account because some accounts will not just send you a debit card. And what I worry about with some people is if they have all of their money or the vast majority of it in a high yield savings account. And they are in some cash crunch where they need hard cash.

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They might have a hard time getting it or they might need to wait for a transfer to go through before they can withdraw cash. And that is just not a fun situation to be in. But it seems like you aren't dealing with that. So good to hear.

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Something else I want to talk with you about is how you think about the purpose of that amount that you have in savings. It seems like it's somewhere between an emergency fund and a daily spending fund.

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Thank you so much. Here's another wild stat. The cost of a dozen increased 15% from December to January. It's up for the year, too. In January 2024, eggs were $2.52 on average, which means the price of a dozen has nearly doubled since then.

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There are various rules of thumb around emergency funds for households where you're both working, you're a two income household. A lot of financial advisors will say that you can get away with having a three month emergency fund. So that would be around $27,000 going on the high end. I think that's a conservative way to approach it.

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But if you were to maybe step away from the workforce to have a second kid, I think it might be a good idea to beef that up to closer to six months. Obviously, that would take time to do. But that's the more conservative, safest way to do it. But for where you are right now, you are doing great. And that means that you have

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plenty of extra cash in that fund that may not need to be earmarked for emergency savings. And the reason I bring this up is because I find it personally really helpful to have different savings buckets where I have a number of different savings accounts at my bank where I have my high yield savings account.

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and my emergency fund for different purposes so i do have that emergency fund i have one that is for home improvements i have a fund that is for fun money that way you know exactly how much you have for each purpose and you're not being too worried about oh am i draining too much from the emergency fund you know that amount of cash is sitting there with its purpose you're not touching it just to pay your bills but you do have another account that's maybe for groceries or regular monthly expenses that you can pull from when you're paying off your credit card

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Well, returns are never guaranteed. There's always risk when it comes to investing. But over time, history has shown that investing your money is a great way to stay ahead of inflation. And you may be able to get a greater return than what your current interest rate is. But there are a lot of factors that go into that.

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I want to talk about something that might have a little bit more certainty to it, which would be how you save for your kids' futures. So do you have a 529 or how are you weighing what to do in terms of that type of savings?

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At least you'll be able to help in some way.

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Yeah, that is really individual. It can depend on where you think your kid or kids might be going to school. So I would poke around with some calculators. There are five to nine calculators online that you can experiment with and get a feel for, okay, if I want to have X amount of money in X number of years, here's what I have to start saving today and on a regular basis.

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you mentioned maybe using a roth or a 529 in general a 529 is the best most tax advantage way to save for college depending on which state you're in or the rules of ohio where you live you might be able to make a tax deductible contribution to that account

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The earnings in 529s grow tax-free when used for qualified expenses, and they also provide a lot of flexibility because you can use them not just for a traditional four-year college. You could use them for even a K-12 schools in some cases, and you can also use them for trade schools. And unused funds can be rolled into Roth IRAs. There are certain requirements for that.

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In that case, you could partially jumpstart your kids' retirement savings with this 529 account. So they just allow people a great way to save. And I think that because they're a little bit more efficient tax-wise than Roths, I encourage a lot of folks to look into them.

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Well, Maddie, thank you so much for coming on the show and talking with us today.

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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 at 901-730-6373. That's 901-730-NERD. You can also email us at podcast at nerdwallet.com. You can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeart Radio to automatically download new episodes.

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And with that said, until next time, turn to the nerds.

NerdWallet's Smart Money Podcast

Egg Prices, Greenwashing, and Smarter Ways to Invest

Unlike other wearables, Amazfit goes beyond basic fitness tracking. It has specialized modes like High Rocks Race Mode, Smart Strength Training, and even Free Diving, built for both everyday users and elite athletes. And with AI-driven coaching, it adapts to your workouts, tracks recovery, and helps you train smarter.

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Yeah, I heard that Waffle House added a 50 cents per egg surcharge to customers' bills.

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That's one way to meet customers where they are. But the avian flu has been going on for a while, right? So why are eggs getting more expensive now?

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So it's your basic supply and demand issue, and we are short in supply of eggs.

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And anything that's not a conventional egg is considered... A specialty egg.

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This is a weird thing that I've seen recently. Some cage-free eggs on the shelves are actually cheaper than conventional eggs.

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There's also a free ZEPP app you can pair it with to get in-depth analytics and downloadable maps you can use with turn-by-turn directions. And it has Zepflow AI voice control, so you can check stats hands-free. And don't worry about battery life. The Amazfit Active 2 runs up to 10 days on a single charge.

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Without getting too graphic here, what happens when bird flu is discovered amongst a flock?

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Thank you.

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But culling hasn't fully worked to slow the spread, right? I saw the Trump administration is planning another approach.

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I'm curious if the Trump administration's federal workforce changes are impacting these efforts.

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and higher prices, which is why we always recommend comparison shopping types of eggs as well as where you're buying them from. Well, Ana, thank you for that excellent rundown.

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If you want a smartwatch that delivers more for less, then visit amazfit.com slash smartmoney to get 10% off. That's Amazfit, A-M-A-Z, fit, dot com slash smartmoney. Elizabeth, do you know where your money is invested?

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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 email us at podcast at nerdwallet.com.

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Today's episode is sponsored by Range Rover Sport. Some decisions in life require careful research, like picking the right investment strategy or figuring out which streaming service actually has the movies you want. But when it comes to driving, there's one decision that's easy — the Range Rover Sport. It's a bold take on sporting luxury, blending sophistication with power.

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On the road, adaptive dynamics keep your ride smooth and composed by reducing unwanted body movements. Because, let's be honest, the only thing that should be unpredictable is the stock market, not your suspension. When the road changes, the Range Rover Sport changes with it. Dynamic air suspension adjusts to keep things smooth and balanced, so every turn feels effortless.

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And if the pavement disappears? No problem. Adaptive off-road cruise control kicks in, reading the terrain and making real-time adjustments, so you don't have to spend your drive making more calculations than your tax software. Visceral, dramatic, uncompromising. The Range Rover Sport leads by example, just like you do. Build yours today at LandRoverUSA.com.

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Again, explore the Range Rover Sport at LandRoverUSA.com.

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Maddie, welcome to Smart Money.

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So before we get into the substance of our conversation, I want to remind you that everything we're going to talk about is just for educational and entertainment purposes. And while I may be a certified financial planner professional, I am not your CFP. Got it? Understood. Perfect. Let's start by hearing a little bit about your finances. Can you describe how you manage your household finances?

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Like what's been good? What has been challenging?

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So you said that you feel like you can be doing better. In what areas specifically do you feel like you have room for improvement?

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Well, as you know, that's called ethical investing. And today we're going to explain to a listener how it works and how to know that your money isn't going toward companies and activities that you don't want to support. 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.

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I have some kind of nitty gritty questions for you. So first off, how much do you and your husband earn? What's your annual household salary if you could ballpark it?

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Okay, between both of you.

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And you said you have a decent amount in savings. How much do you have?

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Wow.

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It sounds a little chaotic, too.

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Well, sometimes having a lump of money in savings is a great thing to have just sitting there, not being put to use, just being there as savings. So that's good that you have that. And congratulations on what you've been able to do with the money you got from your housing situations. But I want to focus a little more on your debt. So you mentioned that you only have student loan debt.

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Is that correct?

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And do you know what the current balance is of all of your loans?

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So you mentioned that you are in public service loan forgiveness, and that's a program we can get into that in a little bit, but you generally have to be in it for 10 years before your student loans are forgiven. How many years do you have under your belt?

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Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles. It has been, in a word, a year. We had an election, you might have heard about that, but we also had quite a year in the economy. Fair to say it was dominated by concerns over inflation, which affected everything from grocery bills to the housing market and beyond.

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You're speaking in plain language.

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Well, I want to talk about your book. Early in your book, you discuss how laziness can be a virtue when it comes to building wealth. Please explain what you mean by this. And can I and all of my listeners become millionaires by sitting on our sofas?

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It's great. I'm so happy to have you on. Before we get into the conversation, I want to just say on behalf of our legal team that we are not financial advisors. We're not going to give you direct financial advice. This is just to talk about your financial circumstances for general educational and entertainment purposes.

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And this is why we talk so much on smart money and the personal finance space about automating your finances. Even if you're automating savings into a high yield savings account or contributions to an investing account, it's exactly what you're talking about.

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You are putting the mental load of making sure your finances are doing what you need them to do so you can achieve your life goals on autopilot.

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With that out of the way, Charlene, can you tell us about your financial life right now? Like what you do for work, how much you're able to save, current money goals, all that fun stuff.

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Okay. OK, well, I want to turn out your chapter about increasing your income. And I first want to start with discussing the why behind earning more money, because it seems really obvious that having a greater income, making more money makes your life easier for any number of reasons and beyond the basic goal of just wanting more cash. How should people really get clear about that?

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Why their motivation before they put in all this time, emotional effort and labor, which can be really anxiety inducing and time consuming because they do want to increase their cash flow, but they're not sure how to do it. They feel like maybe they aren't deserving of a greater salary. How do you think people can get clear about their motivation?

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And I think at its base, what you're describing through all these examples is flexibility and security. Vivian, I've heard you mentioned on another podcast, actually, that if you are at a job for two years and you're not getting a raise or a salary increase, that is really what you want or a promotion that you really want. It's time to move on.

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Can you tell me about why you think that two year mark is important?

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And I think some people would think, eh, this job's comfortable. I can have the lifestyle that I want around it. I don't need to fight for that increased salary. Do you think it's worth them to reevaluate their perspective? Or do you think, eh, for some people, there's not money motivated. They're fine in that position if they aren't making the most that they could.

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Well, now I want to turn to the part of increasing your income where people are actually asking for the raise, because for many people, as I'm sure you know, the thought of asking for a raise, no less having that conversation is terrifying. So you think people should just get over that basically is what you say in your book.

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How do you think people can reframe their mindset and really understand the worth that they bring to the table?

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So when you say you're saving about half of your income, first of all, congratulations. That's really impressive.

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I want to turn now to side hustles. Historically, side hustles have been something where I've rolled my eyes a bit at them because I spend so much time with my job, which I do love, but I think about it a lot when I'm not in my nine to five. And I think, why would I want to spend time when I'm not at NerdWallet grinding, making more money?

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Do you mean that you're putting that into a savings account? Are you investing that? In what way are you saving it?

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But you advocate for a more sensible way of having a side hustle. Talk us through that.

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I like the idea of putting a time box on it and a specific goal because it's not like you have to have this side hustle forever. One thing that I always like to talk with people about when it comes to side hustles is not turning a creative passion into a job because that can suck all of the fun out of it.

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I have a friend who's a photographer and she has sold some of her pieces and she's kind of found that it sometimes it feels like work for her, whereas it used to feel like a really fun hobby and a passion. So that's one word of caution for anyone pursuing a side hustle. Like my partner loves to crochet as well. And he's thought, oh, I could sell this stuff.

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But then it doesn't become the relaxing way to wind down at the end of the day. It becomes another task that you have to get done because you feel like you owe it to yourself and your side hustle to make this money. Well, Vivian, do you have any other thoughts around increasing your income that you want to leave listeners with?

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Great. Well, Vivian, thank you so much for taking the time to chat with me.

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This episode was produced by Tess Figland. It was mixed by Megan Maurer. And a big thank you to NerdWallet's editors for all their help. Here's our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. And with that said, until next time, turn to the nerds.

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That seems like a pretty solid balance.

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It felt a bit like we were on a constant Fed watch as the Federal Reserve decided what to do about interest rates in its fight against inflation. Today, we bring you the final episode in our month-long special series featuring the best of Smart Money 2024, our conversations with you, as well as our coverage of the economy and your personal finances.

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Charlene, I know that you're curious about kind of average net worth by age. So what specifically are you curious about in that regard?

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Well, for a lot of people, their net worth is made of that balance in the 401k. And you mentioned the word should, how much someone should have. And there are a lot of benchmarks around that, which we can get into in a little bit. But I tend to bristle at the word should because everyone's circumstances are so different. And if you look at...

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What a financial advisor might tell you you should be doing, it might not be realistic for your current goals or finances. So that can be discouraging if you're not in that place where you should be able to meet these things that you should be doing. We'll get to that in a bit.

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But I do want to talk about net worth at kind of a high level because some folks may not be fully aware of what it really is and how you can use it. Net worth in general is great for just giving you a financial snapshot of where you stand right now because your net worth tells you how your assets compare to your liabilities.

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It accounts for things like your student loan balance, the equity that you have in your house. a car loan that you might have, a retirement account balance, and so much more. Because really simply, it's just a measure of how what you owe compares to what you own. If your net worth is positive, you have more assets than liabilities. If it's negative, then it's just the opposite.

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It's really not uncommon for people who are in their 20s and early 30s to have negative net worths. And that doesn't mean that someone who's in the situation is a financial failure. It just is where they are at that current moment. It's a useful gauge for progress on goals like paying down debt or building up a retirement nest egg.

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But early on in life, it's, again, really not uncommon to have a low or negative net worth.

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Mm-hmm.

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Today, we're looking at how we define wealth and net worth this year, and how you can take all of that into the start of the new year with new goals. Speaking of which, early Happy New Year to all of you. Now, on with the show. 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.

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I want to go in on comparing net worth, averages, and we'll talk about some medians as well, because you mentioned that you maybe saw a chart that had benchmarks of how much someone had saved or what their net worth might have been. We actually have a great page on NerdWallet that allows you to compare net worth by age, average net worth by age.

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And one thing that's talked about in this article is that average can be really misleading because the average net worth for folks under 35 is $183,500. But the median, which is just the middle point between the top and the bottom, is $39,000. So really stark difference. And that's because we have extremes at either end.

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So median can be a little bit more representative of what's more common for folks than an average in this situation.

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they would not understand the community that the bay area people are working in because those salaries they could not even fathom yeah i mean i lived in san francisco for a period of time as well and people talk about their net worths all the time in part because they have so much money coming in and that can really lead you to this comparison of how much you have or don't have

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which can leave you feeling kind of bad if you don't have as much as someone who is like a tech multimillionaire. For a lot of people, as long as you are doing the best that you can and working toward your financial goals, that's more important than a number on a balance sheet, which is going to change over time. That's something that I had to work through in my 20s as well.

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And I was talking with a lot of friends who went to prestigious schools in the Bay Area, and they would be worried that, oh, I don't have this career that my colleague had or my classmate had. They would get hung up on that. And then what I would always try to tell them is like, look, this is where you are right now.

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You will probably have a very different trajectory in even a few years, and you don't know where that classmate might end up. So just focus on what you can do for your situation and your circumstances to get you where you want to go. And don't get too hung up on what someone else is doing because it doesn't really affect you all that much.

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So I want to circle back to net worth and how to use it for you as a gauge for your goals and what you want out of retirement, whether it's early or on a more typical timeframe. How do you think you'll be using this metric as you talk with your partner and begin to make more solid plans for your future?

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I would also recommend looking into some of the FIRE communities online. There are a handful on Reddit. There's like fat fire where people are in the fire movement, but they're still enjoying their day to day life, not living off of canned beans, that kind of thing.

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And these communities can be tremendous resources as you figure out what sort of retirement you might want to work toward and how you might be able to gauge your net worth. in comparison to that, because the hard part about saving for retirement is that we've never done this before and we really only have one shot to do it.

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So to the extent that you can learn from other people who are going through this or maybe further down this journey than you are, the easier I think it'll be for you as well.

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I like canned beans, okay? But they need to be within another kind of recipe.

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When I say canned beans, I imagine myself like over a fire in the middle of the desert, like trying to open up this old can of beans. And that's all I've got to my name. With like a pocket knife. Yeah, exactly. Is there anything else on your end, Charlene, that you wanted to ask us about?

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That's the gist of it. Again, it's like for someone in your late 20s, really not uncommon to have a net worth that could be zero or negative. But over time, as you pay down debts, you know, you have a house, so you'll be paying down that mortgage. Your net worth will begin to go up. And ideally, when you are in retirement, your net worth will be fairly high.

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So you don't have a lot of debt obligations that you're paying off when you're in retirement.

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Well, Charlene, thank you so much for coming on and talking with us.

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Yep. Please keep us posted on any changes that you and your husband decide to make around net worth and saving for retirement.

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We are back in a moment with more smart money. Stay with us. I'm joined by Vivian too. You may know Vivian from her videos on social media where she's known as You Are Rich BFF. She also hosts the Net Worth and Chill podcast and is the author of the new book, Rich AF, The Winning Money Mindset That Will Change Your Life. Vivian, welcome to Smart Money.

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Follow us wherever you get your podcasts to get new episodes in your feed every Monday. And if you like what you hear, please leave us a review and tell a friend. This episode, we're talking with a listener, Charlene, who's 29 and lives in Texas.

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So Vivian, you cover a lot of ground in your book, like budgeting, investing, good money habits. And in this conversation, I want to focus mostly on your chapter about increasing wealth and income. But before we get into that, I want to hear a little bit about your background.

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You worked on Wall Street for a period of time before making the jump to BuzzFeed and eventually starting your podcast and social media channels. Can you talk with me about how this background informed your financial education and personal finance philosophy?

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Yeah. You see that people who have a lot of money are playing by a different set of rules in a lot of ways.

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We're going to talk with Charlene about net worth, what it's good for, what it's not good for, and how much you should compare yours to those of your peers. Charlene, welcome to Smart Money.

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And so you were able to bring that to people that you knew who had personal finance questions. And you could distill all of this sort of technical jargon, personal finance know-how and say, hey, here's how you should actually be paying your taxes or budgeting or thinking about paying rent, that sort of thing.

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Elizabeth, what's something you know you shouldn't do but just can't manage to stop doing?

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Those are great priorities. I want to touch on your savings in a little bit, but I just want to underline as well that having credit card debt isn't a personal failing. It doesn't make you a bad person. As we talked about earlier, the world is very expensive and you also want to enjoy the life that you have. It can be easy to overindulge sometimes.

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We have a lot of pressure to spend a lot of money. So try to rid yourself of some of that guilt and understand that a lot of people are in a similar situation and it's not because they're bad people too. Things just cost a lot of money.

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Sounds familiar.

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Yeah. In that case, the debt snowball method is probably going to be your best friend here because with this route, You pay off your debt with the smallest balance first. You're making your minimum payments on your other credit card, but you are funneling as much extra cash as you can into that lower balance debt. That way you're seeing that you're making progress.

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You're paying off $1,000 at a time. You're really accelerating the payoff there, and that just feels good. But what I would really encourage you to do as well is reach out to a nonprofit credit counseling agency. They actually are nonprofits that partner with credit card companies, and they can set you on what's called a debt management plan.

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This is where you can roll your credit card payments into one payment. It's almost like a form of consolidation. And these debt management plans allow you to slash your interest rate so that you can make much greater progress on paying off your debt. You likely won't be able to use your credit cards while on this plan.

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Yeah, that can be a rude awakening for people.

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But it seems like you are getting to the point where you realize you might need to make some tough decisions and change the way you're managing your money.

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I'm trying to break your heart so you can rebuild it stronger, more financially resilient in the future to get what you want out of life. Because that's what I'm getting at here.

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Paying off your debt like this gradually, slowly over time can be okay, but it's going to, at the end of the day, impede you from making progress on your other goals, like saving for retirement, like building your emergency fund, like going on fun vacations with your friends or buying a house.

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Credit card debt that is this expensive and this big can stop you from doing anything else with your money.

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Moderation is key. Go back to knowing your why. You're going to have to make some sacrifices when you're paying off your debt and when you are going out with your friends or you get a call to get that happy hour and you think it's really not in your budget.

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Go back to that and realize, look, this short term pain of not going out or not shopping is worth a long term gain of being able to be free of this debt and focus on other financial goals. So, yeah, at the end of the day, you're going to have to make sacrifices. But that is the cost, quite literally, of getting out of this debt that you have.

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I would recommend using a budgeting tool to help you get a really clear understanding of where all of your money is going, because you don't have to go through line by line and map out your expenses on your own in an Excel spreadsheet. I mean, some people like to do that, but it's not the most fun way to do it. One tool that we have at NerdWallet is our app.

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We are one of the few personal finance apps that let you track your credit score, your cash flow, net worth, and insurance all for free. You can download the NerdWallet app in the iOS and Android stores, and we'll include a link to download it in today's show notes. You guys have an app? We do, and we have a website that has a bunch of great features on it as well.

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You know, I think you could think about your debt as like your broken water heater. It has made a bit of a mess of your financial life right now, and you can be proactive to solve the issue. You're not out of town when it comes to your finances. You're actively engaged. You're in the house with your money right now, Elizabeth. Do what you need to to fix it.

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One last thing I want to add on to this is the importance of saving even a little bit of money in your emergency fund while you're paying down your debt. You might think that you need to channel all of your cash toward debt payoff, and it's important to put a good amount of cash toward it. But if you don't have savings, something like that water heater is going to pop up again.

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And this can help you from going deeper into debt when the inevitable happens. So I really encourage people to save what they can when they can. So Elizabeth, Allison, Elizabeth, how are you feeling right now? Tell me what your plan is for your debt.

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That makes my heart so warm.

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Well, let me tell you, as a certified financial planner professional, a lot of my job is having emotional conversations with my friends and clients about how they can meet their financial goals. It's not just the nuts and bolts stuff. It's how you can kind of overcome what some people call their head garbage that's getting in their way of making progress on their goals.

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And I think you feeling overwhelmed, you feeling ashamed is that head garbage. And I hope that we work to clean up some of it and take out the trash today.

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I love to hear it. Well, thank you so much for sharing your story with us.

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And cut. Wow. Amazing role playing, Elizabeth. How did that feel?

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Well, 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. Follow Smart Money on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

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And with that said, until next time, turn to the nerds.

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I feel like that would give you some weird dreams. You ever hear about that? If you eat too close to bedtime, you have strange dreams?

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And how much is the U.S. dollar worth now, other than looking at an exchange rate? How do we know?

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Well, there you go. For me, it's browsing the vintage clothing sellers on eBay and buying stuff that I simply do not need. But we're not here to talk about that today. Instead, we'll dive into how to break some bad spending habits that might be contributing to your debt.

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So foreign investors are reacting to the health of the U.S. economy?

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And what about when you travel outside the U.S.? I'm asking as someone who is a couple weeks out from a vacation in the U.K.

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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.

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Well, Ana, thank you for walking us through that.

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Now let's get to this episode's money question segment. That's coming up in a moment. Stay with us.

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Gladly. This episode, we're going to do something a little bit different to answer Allison's question. Truth be told, I really wanted Allison to join us on the podcast, but they were unable to do so. And I'm nothing if not persistent, and I do love a creative solution. So Elizabeth and I are going to do a little role play to answer Allison's question.

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This episode, we're talking about some smart strategies to tackle credit card debt. 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.

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Elizabeth will play Allison and I will play myself. To keep things from getting too confusing, I'm not going to call Elizabeth by Allison's name, but we'll just use the details from Allison's email throughout the conversation.

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Go for the Oscar. Here we are. Okay. Well, Elizabeth Allison. Elizabeth, tell me about your financial life right now. Where do you think you're doing well? What's been challenging? Wow.

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So let's talk about that debt. Exactly how much do you have and how did you get into it?

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Please.

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Yeah, a lot of people find themselves in similar situations with their credit card debt. It can become so normal in a way. It's like a piece of furniture in your house that you don't really care about, but just is there forever. And you want to get rid of it, but you're having a hard time shaking it. But it's good that you know how much you have. Nearly $40,000 in credit card debt is sizable.

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I'm glad to hear that you at least know the amount of interest that you're paying on these debts. But let's talk a little bit about what even got you into this debt. What are you spending your money on that led to this high balance?

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Yeah, geez, I'm sorry to hear that. So it's a mixture of lifestyle inflation. It seems you're going out more, you're buying more clothes and then regular old inflation that we're all feeling. Everything else is more expensive. And then life just happens like you have to replace your water heater and suddenly you're out another grand.

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We've talked about tariffs many times before on the podcast, but today we want to zero in on what those policies mean for the value of the dollar and your spending. To help us unpack all that, we are joined by our news colleague, Anna Helhosky. Hey, Anna.

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All of this is building up and making it so that you're having a hard time paying off your debt. But it seems like you know deep down that this might partially be a behavioral thing. You aren't entirely tracking how much you're spending and you aren't really paying off your credit card debt as much as you might be able to. So, Elizabeth, let's talk about your income a little bit.

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How much are you taking home? Because that might help me figure out how we might be able to pay off your debt.

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Elizabeth, you are for sure going to need to have your big girl pants firmly on. And we may both want a drink when this is all done. But we can take care of your debt together. I'm confident in that. I want to go back to your income, though, because that might be the key to how we're paying off your debt. What are you bringing home monthly?

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One thing I want you to do is look at your budget in detail, look at your credit card statements, see how much you're spending and how that compares to your income. Because what we call your debt to income ratio, how much debt you have compared to your income, can be a great way to determine the best path forward for your debt payoff. So let me give you some quick parameters here.

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If your debt to income ratio is less than 36%, your debt is probably affordable within your budget and you can just keep shoveling money toward your debt and paying it off. If your debt to income ratio is somewhere between 36% and 42%, Your debt is eating more and more of your budget. Paying it off DIY style might work.

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You're probably going to want to use a debt payoff strategy like the debt avalanche method or the debt snowball method, but it's important to really make a proactive plan to pay it off. Depending on where your credit stands, if it's around 670 or above, consider looking into a balance transfer credit card or a debt consolidation loan.

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We have a bunch of roundups on the NerdWallet website that can help you sift through these options. Then if your debt to income ratio is north of 42%, your debt's gonna be increasingly unaffordable and you may want to seek debt relief, such as a debt management plan at a nonprofit credit counseling agency or bankruptcy. So I've just run through a lot of different ways to pay off your debt.

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As usual, let's start with the big picture here. Why are we talking about dollar value?

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What may be standing out to you in terms of where you think you might fit on that scale of debt to income ratios?

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Yeah. And I, understand where you're coming from. I had a brief stint with credit card debt a number of years ago, and it was pretty embarrassing. And I felt ashamed of the debt that I racked up. I felt like I didn't have enough self-control and it can be hard to get out of that rut. What helped me was thinking about why I wanted to pay off this debt.

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I imagined what my life was going to look like when I was on the other side of credit card debt. On your end, Elizabeth, what would your life look like if you weren't paying $1,100 or so in credit card debt each month? That's a lot of money that it would free up in your budget. So just thinking out loud here, what would you do first if you had that amount of money free in your budget?

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So you want to buy a house this year or maybe sell the one you're in and trade up or downsize? We've got the episode for you. Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles.

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2025 Real Estate Trends: What Homebuyers and Sellers Need to Know

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Sarah, I know it's been a rough few years for homebuyers, but as someone looking to sell their home this year, I'm selfishly a little relieved that it continues to be a seller's market. And I'll be curious to see how the whole new commission structure plays out, too.

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Right. Just remember that no matter what the noise is in the economy, the best thing you can do for your housing or any other financial plans is focus on what's best for you and design your budget and your spending and your savings plans around that.

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If you spend all of your time and energy, say, waiting for interest rates to come down, you might never reach the goal of homeownership, if that is a goal.

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Next time, we're going to talk about what you can do if you've decided that maybe this is the year you want to make a career change.

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This episode was produced by Tess Vigeland. I helped with editing. Amanda Derengowski helped with fact-checking. Megan Maurer mixed her audio. And a big thank you to NerdWallet's editors for all their help.

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2025 Real Estate Trends: What Homebuyers and Sellers Need to Know

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And with that said, until next time, turn to the nerds.

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2025 Real Estate Trends: What Homebuyers and Sellers Need to Know

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With this episode, we continue our January series, Your Money in 2025. And today, Sarah, we are checking in on the housing market, specifically the house market. It's been a rocky couple of years for folks looking to buy their first house or move out of one and into another.

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For a little while last year, it looked like things were maybe going to loosen up as interest rates started to come down. But then that trend reversed itself for a bit. Who knows what's coming this year?

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We're going to try to look into the crystal ball and at the very least, give you some helpful tips for navigating the process and getting ready for when you do decide you want to jump into the market.

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Well, we want to hear what you think. What are you working on in your financial life as we start the new year? Leave us a voicemail or text the Nerd Hotline at 901-730-6373. That's 901-730-NERD. Or email a voice memo to podcast at nerdwallet.com. Sarah, let's get into your conversation with our fellow nerd, Holden Lewis, and get a sense of what the housing market might look like in 2025.

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Well, I'm glad to hear that you are saving through 529s because those are among the most flexible ways to save for college education. You can use the money from that for a trade school if your kids want to go that route, or if they don't use all of the money in it, you can eventually roll it over to an IRA account so that you can jumpstart your kids' retirement savings, which is fantastic.

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But getting clear on how much you need to save might be a good idea. And if you want to talk with that financial planner again, they have tools that can model out how much you would need to save. They would factor things in

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like the growth rate that you would expect based on the investment in your portfolio, as well as the average rate of tuition increases, because you need to factor in inflation, too, to get a real understanding of what your growth might be and how much you might need to invest. So I know, Adam, you also had some questions around life insurance.

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So talk with us about that, because since you are a dad, that's pretty important to have. So what are your thoughts? What kind of coverage do you have? And where do you think you might need some help?

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And just to be clear, you're talking about term policies. Term policy, correct. Okay. And for folks listening who may not totally understand life insurance, there's... Term life insurance and then permanent, sometimes called whole life insurance. Term expires at a certain time, as you might expect. So Adam, it sounds like yours go to 55 and then 65, correct?

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Whereas a whole policy would extend throughout your whole life. And whole is often much more expensive. while term can get more expensive as you get older. And when you're thinking about how much you need from a life insurance policy, whether term or whole, at minimum, you would want enough to cover any outstanding debts or funeral expenses.

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You also want to think about how much income your family would need to maintain their quality of life without your income. So think about the general liquidity needs for your family, expenses they might face, the mortgage you have to pay off, college funding needs that they might have, And a common rule of thumb is to have around 10 times your annual income in coverage.

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You mentioned that your net worth has grown to a place where you think some of your liquidity might cover these needs. Can I ask, what is your net worth?

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And remind me again exactly how much coverage you have across these policies. So 2 million total. 1 million policy, yeah. While it might seem great to have this liquidity that is that amount, having life insurance that is at your net worth or greater can actually preserve a lot of your liquidity for your family too.

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So if something does happen, your family would have that amount of your net worth plus what they would get from these policies. You can bring a lot of flexibility to your family if something does happen. And you mentioned as well that you're considering moving over to your employer's group term life policy. And you mentioned that you were concerned about losing it if you do leave this job.

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I would encourage you to look into the details of this policy because a lot of group term life insurance policies are convertible, which means that you can convert it to being your own policy if you leave within a certain amount of time you have to make this decision. And typically when this happens, you actually don't need medical underwriting for this term policy, which is a really nice benefit.

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But again, this often has to be done within 30 or 60 days of leaving the job. So look into the details of your policy, because if it's less expensive than you're paying now and between that policy and the other one, you would exceed your current net worth and coverage. That might just be an extra cushion to have for less money.

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And how did you land on the policies that you currently have? What was that process like?

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Right. I mean, no one teaches you how to do these things. That's why we're here, to help you do that. So as you're considering this new policy... It's a good time to look into the current policies that you have and the group term life insurance policy from your employer and look at a few different things from each company.

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You'll want to look at the financial strength of each company, as in, like, are they able to pay out if needed? And then you also want to look at what complaints there might be against the company. You can review this with the National Association of Insurance Commissioners and also review what the complaints might be about.

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So that can give you a feel for whether they're difficult to file claims with or if they take a long time to pay out, things that you wouldn't want your family to have to deal with after you're gone. Also, you want to confirm that they have the types of policies that you want.

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And I do want to mention that NerdWallet has a pretty handy life insurance comparison tool that you can use to help shop around and make sure that you do the policies that fit your needs. That's one way to make this all a little bit easier for you.

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And again, the benefit of group term is that it's so much more affordable. So you can look into what you would be paying with a standalone policy from a different company versus the group term life insurance. I did some digging before this conversation, and I found that for a $500,000 insurance,

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life insurance policy, I would pay around $11 each month for a group term life with what we have at NerdWallet. And then an estimate that I got from Policy Genius was around $40 a month for the same coverage. You do have to weigh the question of whether you're going to leave your job, and then you don't know what the increase might go to.

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Do you think you're going to stay at your current employer for a while or do you think you might hop around? How are you feeling about that?

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So in that case, it might just be a better bet, but there's always the gamble involved. You never know. And that's the risk of any financial decision. It really comes down to numbers and what helps you sleep at night too, because insurance is all about helping you feel better about the unknowns and the risks of the world and doing it in a way that is affordable for you.

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And I want to go back to your relationship with your wife. Have you talked about life insurance with her? Does she have her own policies?

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I understand that. Are you sharing your mortgage cost? Yes. Okay. That might be an area where having life insurance could really help you.

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You never want to think about these things actually happening, but if the worst happens and your wife passes away, having a life insurance policy would make your day-to-day life likely a lot easier because you would be better able to cover something like your mortgage. And for somewhere between $20 and $40 a month, that can go really far and just make

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everything much easier because think about how easily you spend $40 a month. But putting that money toward financial peace of mind is a really smart investment.

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Yeah. Well, Adam, how are you feeling about your insurance needs now? Do you have any other questions for us?

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Great. Well, I would say your main piece of homework, not that I'm telling you what to do with your money since we don't do that here, would be to compare the group term life insurance policy you have from your employer and seeing whether it's convertible. Just in case you do end up deciding to leave this current job, you might want to take that policy with you.

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Well, keep us updated on what you decide to do. We always like hearing from our listeners after we chat. Will do.

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Great. Well, Adam, thank you for coming on and talking with us. Thanks for having me. 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. We'll be back next week to answer more of your money questions.

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Follow Smart Money on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

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And with that said, until next time, turn to the nerds.

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We are back and answering your money questions to help you make smarter financial decisions. This episode we're joined by Adam, a listener from Pennsylvania who has some questions about how much insurance they really need. Adam, welcome to Smart Money.

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To start, I'd love to hear a little bit about your financial situation in general. So can you describe what feels good about your money, where you think you might have some room for improvement?

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And are you married? Do you have a partner?

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What happened? Some of the biggest changes that you made as a result of one being a parent, which you have been for a number of years now, but also getting remarried. Those are some big changes.

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So the answer is you may not be able to because to have umbrella insurance, your insurer requires you to have certain minimums coverage for your home and for your auto. And if, for example, you didn't have that minimum amount of coverage and you had an umbrella policy on top of that and you had a gap between the two, you personally would have to pay out of pocket to cover that gap in coverage.

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So you need to have that minimum amount and your insurer may well not even allow you to have less than that. So in general, it's just better to have higher collision coverage anyway, most likely depending on your car and your needs. And since umbrella insurance is so affordable anyway, you're likely fine keeping it as it is.

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And since your net worth has increased, having that higher amount is a smart idea too. But if you're concerned that the collision coverage that you have is maybe more expensive than you want, that's when you'd want to shop around at least once a year to compare rates on auto insurance specifically. So have you done that in the past or recently?

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I would be really surprised if they didn't have that anyway. because it's in their interest to provide an adequate policy for your needs. Did you shop around elsewhere when you were going over to USAA? At NerdWallet, we often recommend people get quotes from two or three places before making a decision. And we have a pretty handy comparison tool that can do some of this work for you.

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But that's a nice way to get a good feel for what you might be able to get from one company to the next, because prices can vary pretty wildly for coverage.

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I would say it's worth comparing all of them side by side just to make sure that you have the best coverage for the best price. With insurance, especially car insurance, it typically doesn't pay to remain loyal to one company or another. And in fact, we've seen over time, some companies may well charge people more because they're not likely to shop around.

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And because your stepfather was sick, did he also need your support at that time?

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Yeah, from however many hundred miles away when you're in New York and she's in Virginia.

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Well, we'll come back to your story, but I want to dive into Kay's questions as well. Let's start by talking about talking, I guess. I can imagine that having conversations about potentially managing your parents or another loved one's money could be kind of uncomfortable. There's this sort of role reversal going on.

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So how do you recommend people approach what could be a tough conversation or series of conversations?

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Did you have conversations with your mom before she needed your care?

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That really makes me think about how much a gift estate planning is to your loved ones, because you basically had the playbook of what your mom wanted and you could just execute it.

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So any other thoughts around how people can begin this conversation with their family?

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Yeah. And I would say the sooner you can do that, the better. In a lot of cases, you want to have this conversation when people are pretty clear headed and not responding to a big, stressful medical event.

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And it can also be a time consuming process and it can be a little expensive too, depending on how complicated your estate is. So the more you can dole that out over time, the easier it will be to manage.

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So our listener asked about managing finances for older loved ones as a power of attorney, which in technical terms is called being an agent. I realize that a lot of people might not be familiar with what it means to be given power of attorney and act as an agent. Can you talk with us about what that entails?

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But what if your loved one is incapacitated and can't actually be on the phone, but you're getting pushback from a company?

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Yeah. Who has a fax machine nowadays?

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Okay. Well, let's talk about healthcare power of attorney. What's the deal with that?

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One of the more granular questions that Kay asks is about funding and which sources to prioritize. If an older loved one has a variety of accounts, like a pension, a 401 , maybe an annuity, are there rules of thumb about which might be better to prioritize drawing from first?

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Let's go a little more into managing and paying for medical care, which can be one of the toughest areas to talk about with a loved one. How can you ensure that they're getting the care that they want and not getting the care they don't want while managing expenses? And how does Medicare fit in, too?

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You know, for me, I'm all about a classic PB&J, preferably with chunky peanut butter. But today we're going to talk about a different kind of sandwich, the financial one that you can find yourself in when you're of a certain age. 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.

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So far, we've been talking about how to talk with your parents, care for your parents. We haven't talked as much about your kids. Kate, when you were going through your experience with your mom, how did you make sure that your kids were also getting to school on time and hanging out with friends and going to their extracurriculars and had their lunch made?

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All of those things that you have to do when you're a parent.

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Yeah, of course. I imagine this might also be a good opportunity to start this dialogue with your kids, depending on how old they are. You don't want to scare them if they're really young, but having a conversation about what you're experiencing with your mom, with your kids might help them begin to understand that, hey, you might have to care for me one day, too.

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And how old were your kids at this time?

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So they had a lot going on in their own lives, too.

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Well, I'm glad that you could begin to have that dialogue with them and also care for your mom in this really difficult time.

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Do you have any final thoughts for our listeners or others who might find themselves sandwiched between caring for older loved ones while raising kids?

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Yeah, that's just one of those things that you would never consider as you're planning the bigger things like health care. It's like, oh, yeah, my mom also has a Netflix account I have to manage at some point.

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What a relief. Well, Kate, thank you so much for coming on and sharing your story and your insights.

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to automatically download new episodes. Here's our brief disclaimer. I may be a certified financial planner professional, but I am not your financial or investment advisor. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

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This episode was produced by Tess Vigeland, Holly Carey, and Hilary Georgie helped with editing, Megan Maurer mixed her 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.

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This episode, we're looking at how to help manage the finances of aging parents while also caring for children.

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Exactly. 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.

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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 email us at podcast at nerdwallet.com. Now let's get to this episode's money question segment that's coming up in a moment. Stay with us. Today's episode is sponsored by Range Rover Sport.

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On the road, adaptive dynamics keep your ride smooth and composed by reducing unwanted body movements. Because, let's be honest, the only thing that should be unpredictable is the stock market, not your suspension. When the road changes, the Range Rover Sport changes with it. Dynamic air suspension adjusts to keep things smooth and balanced, so every turn feels effortless.

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Ana, this was a big topic of conversation last fall, right? During election season in particular, economists were saying, hey, the U.S. economy is doing pretty darn well, while voters were saying, no, no, it's not, at least not where we live.

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And if the pavement disappears, no problem. Adaptive off-road cruise control kicks in, reading the terrain and making real-time adjustments so you don't have to spend your drive making more calculations than your tax software. Visceral, dramatic, uncompromising. The Range Rover Sport leads by example, just like you do. Build yours today at LandRoverUSA.com.

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Again, explore the Range Rover Sport at LandRoverUSA.com. We're back and answering your money questions to help you make smarter financial decisions. This episode's question comes from Kay, who sent us an email. Here it is. Could you please do a podcast with a deeper dive into financial decision-making as a power of attorney for older loved ones while raising kids?

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I have several questions about talking to older loved ones and managing their finances in order to support their goals and navigating the systems and care that they need. When it comes to being a power of attorney and navigating the financial decisions, where can I go for information and how do I prioritize which funds to pull from?

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I'm thinking about pensions, 401ks, social security, estate slash trust, etc. Is there a recommended amount to pull out in order to make sure there's funds for when they are older and need more care? When navigating the medical care and service needs, how much of that is covered by Medicare versus how much is from their funds slash social security?

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To help us answer Kay's question, on this episode of the podcast, we are joined by NerdWallet Medicare Authority and certified senior advisor, Kate Ashford. Kate, welcome back to Smart Money.

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So our listener has a lot of pretty specific questions about managing care for their older loved ones while taking care of little ones, too, something that's known as being in the sandwich generation because you're sandwiched between caring for typically your parents and your own children. This is a pretty common experience. About a quarter of U.S.

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adults fit this description, according to the Pew Research Center. Before we get into the nitty gritty of Kay's questions, I want to hear from you, Kate, about what it's like to be in the situation because it's something that you have personal experience with, right? Can you tell us about that?

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Yeah, I can imagine. I'm sorry that you had to go through that. And I'm sorry to hear about your mom, too.

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You described putting complicated systems in place. What did that actually entail?

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It also sounds really expensive.

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Marriage and Money Myths — and Why the Economy Feels 'Off'

Today's episode is sponsored by Amazfit. I've been wearing the Amazfit Active 2, and it's basically like having a personal assistant for my health. Except it doesn't judge me for hitting snooze three times. It's also a game changer for fitness. It combines AI-driven coaching, smart tracking, and premium features without the premium price.

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We both work and earn in the 22% federal income tax bracket and take the standard deduction, so I don't see tax benefits. My employer allows my domestic partner to enroll in my health insurance, so that's not a perk. My main apprehension has to do with debt and credit. I have excellent credit and minimal debt.

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My partner was a victim of an awful scam many years ago that led to credit card default and charge-offs that haunt their credit report despite being over seven years old. They were recently even denied for a secured credit card.

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Furthermore, they have nearly $200,000 in student debt that may never get paid off, considering that I view marriage as a liability for my own credit, debt, and ability to borrow money in the future, which is necessary for both of us. Am I misguided? Are there other financial consequences I'm not recognizing? Thanks, Bailey.

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Yeah, you're right. A lot of people think that getting married is this great way to save on taxes. And for some folks, that's really not the case. The big things to think about are combined income and tax brackets. When you file your taxes as a married couple, the income threshold for the marginal brackets is much higher.

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So your combined income may be taxed at a lower rate than what you would have been taxed at as a single filer. And I realize this can get kind of confusing. So let's use our listener situation as an example. Bailey said that they and their partner are both in the 22% tax bracket. For single filers, that bracket is between roughly $48,000 and $103,000 for the 2025 tax year.

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For married couples filing jointly, the 22% bracket range is between roughly $97,000 to around $207,000, so it's basically double. Since our listener and their partner are both in the same tax bracket, the larger range for that 22% tax bracket for married couples doesn't amount to much in terms of savings on a tax bill for them.

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Getting married would be more advantageous tax-wise if one partner earned much more than the other, so they could take advantage of those larger tax brackets. And another thing to note that Bailey pointed out is the standard deduction. For couples who file jointly, the standard deduction is double that of single filers.

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And while that might sound really exciting, it ends up being kind of a wash when you break it down on an individual basis. So like Bailey said, getting married may not be a huge advantage tax-wise.

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Yeah, growing pains as a young married couple.

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Marriage and Money Myths — and Why the Economy Feels 'Off'

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So getting married can have big implications for a range of aspects of your finances, including things like social security benefits and how you save for retirement. But I want to touch on two that come to mind for me. Health care decisions and your estate.

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When it comes to health care, when you're married, you become the default decision maker for each other's health care decisions in the event that one of you is incapacitated. And this happens without having to get a medical power of attorney, which can be a kind of drawn out and sometimes expensive legal process where you might probably have to get an attorney involved. It's just not super easy.

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So this can be a huge advantage in a health emergency. Instead of having to pull out some paperwork to prove that you should be in the room with your partner and that you can make the healthcare decisions for an incapacitated partner, you are just accepted as being in that role. Again, think about what that might mean in some kind of crisis.

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You want to be there to support your partner without having to dig through documents. And then when it comes to your estate, being married can make it much easier to transfer each other's assets upon death, something that folks might not want to think about, but you'll be happy to have that sorted out in the event that that happens.

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Yeah, lots of economic indicators were indicating that things were going pretty swimmingly. But polls kept showing that the public did not agree. Our news colleague Anna Hilhoski is here with more. And Anna, there really has been this huge disconnect between perception and reality when it comes to the economy.

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Thank you for that. That's super important. And a lot of people aren't aware that they can dispute information on their credit reports, or they may not know how to do that. We have articles on NerdWallet that walk you through this process because it's a little bit different with each of the three credit bureaus.

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So we will link in our show notes two articles that can help people understand how to dispute errors on their credit reports. So Lauren, is there any way that getting married could limit our listeners' ability to qualify for credit in the future if their spouse does have a pretty rough credit record?

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Alright, so I want to zoom out a little bit and talk about just managing money as a married couple. Even though our listener and their partner earn about the same amount, it seems like they have very different financial circumstances. Lauren, how do you think they should go about building the financial future that they want to have together considering what each person is bringing to the table?

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You have to play to each person's strength in a relationship. That makes it a lot easier to manage household stuff and finances. So something else I'll add, because from Bailey's original email to us, I've gathered that they're in a queer relationship. And, you know, we're living in, shall I say, very uncertain times right now.

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And there are some signals that gay marriage may be challenged at the Supreme Court. So for peace of mind alone, for people like Bailey and myself, frankly, getting married to the person that you plan to spend the rest of your life with may be worth it for that sense of security and stability that marriage can bring. My partner and I are planning on getting married this year.

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And for a long time, we approached marriage much like Bailey and their partner. It wasn't really a priority because we weren't on that traditional path that is expected of more heterosexual couples traditionally. But we want to build a secure life together. And marriage just makes that so much easier across a range of areas of your financial and personal life, as we've laid out earlier.

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Well, Lauren Chuan, thank you so much for joining us.

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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 on the nerd hotline at 901-730-6373. That's 901-730-NERD. You can also email us at podcast at nerdwallet.com. Visit nerdwallet.com slash podcast for more info on this episode.

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And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

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And with that said, until next time, turn to the nerds.

NerdWallet's Smart Money Podcast

Marriage and Money Myths — and Why the Economy Feels 'Off'

Unlike other wearables, Amazfit goes beyond basic fitness tracking. It has specialized modes like High Rocks Race Mode, Smart Strength Training, and even Free Diving, built for both everyday users and elite athletes. And with AI-driven coaching, it adapts to your workouts, tracks recovery, and helps you train smarter.

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Marriage and Money Myths — and Why the Economy Feels 'Off'

There's also a free ZEPP app you can pair it with to get in-depth analytics and downloadable maps you can use with turn-by-turn directions. And it has Zepflow AI voice control, so you can check stats hands-free. And don't worry about battery life. The Amazfit Active 2 runs up to 10 days on a single charge.

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If you want a smartwatch that delivers more for less, then visit amazfit.com slash smartmoney to get 10% off. That's Amazfit, A-M-A-Z, fit, dot com slash smartmoney. When you think of all the reasons to get married, what comes to mind?

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Well, this episode, we help a listener figure out if marriage is worth the effort and cost. Wallet'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.

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And we want to talk with more of you live on Smart Money this year. So if you want to hang out with Elizabeth and me 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. Or email us at podcast at nerdwallet.com.

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Today's episode is sponsored by Range Rover Sport. Some decisions in life require careful research, like picking the right investment strategy or figuring out which streaming service actually has the movies you want. But when it comes to driving, there's one decision that's easy, the Range Rover Sport. It's a bold take on sporting luxury, blending sophistication with power.

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On the road, adaptive dynamics keep your ride smooth and composed by reducing unwanted body movements. Because, let's be honest, the only thing that should be unpredictable is the stock market, not your suspension. When the road changes, the Range Rover Sport changes with it. Dynamic air suspension adjusts to keep things smooth and balanced, so every turn feels effortless.

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And if the pavement disappears, no problem. Adaptive off-road cruise control kicks in, reading the terrain and making real-time adjustments, so you don't have to spend your drive making more calculations than your tax software. Visceral, dramatic, uncompromising. The Range Rover Sport leads by example, just like you do. Build yours today at LandRoverUSA.com.

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Again, explore the Range Rover Sport at LandRoverUSA.com. We're back and answering your money questions to help you make smarter financial decisions. This episode's question comes from a listener's email. Here it is. Hi nerds, I have a spectacularly unromantic millennial dilemma. What are some of the more nuanced financial implications and benefits of marriage?

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Marriage and Money Myths — and Why the Economy Feels 'Off'

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This episode, we're talking about some of the more nuanced financial implications and benefits of marriage. 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.

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My partner and I have already established we want to spend the rest of our lives together, but haven't gotten serious about planning a marriage. We do want a ceremony someday, but with no intention to have kids and no traditional pressure from family slash friends slash selves to have marital titles, we look at it as mostly a financial decision and struggle to understand the ins and outs.

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Crush Debt or Grow Investments? How to Make the Best Choice for You

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Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles. If there's one question we get more often than any other on the show, it's probably what's the best way to pay off debt. That goes for debt of all kinds. Mortgage debt, student loan debt, credit card debt, car debt, you name it. If it's a debt, we get questions about it.

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While we are not financial or investment advisors and don't give personalized financial advice, I do like to multitask if possible. And that can mean both investing and paying off debt at the same time. And our listener asked about at what rate it makes sense to focus on investing instead of paying off debt. I would say our listener may have pretty affordable debt.

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Their car loan is a little pricey at around 7%, but their mortgage is at 2.8%. I'm guessing they got that in the early days of the pandemic. And their other loan, which they didn't specify the nature of, is at 3.8%. All in all, that is pretty reasonable, especially compared with credit card debt, which can have an APR well over 20% right now.

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Right. So a question that our listener can ask themselves is, where can I get the better return on my money? Paying off a credit card with an interest rate north of 20% is likely going to give you a better return than investing in the stock market. But returns aren't the only thing to consider.

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You do have to think about your own individual circumstances, financial goals, and if having debt is a horrible itch in your foot that you just want to get rid of. That's something to think about, too. But I will say this is a really common question among listeners, and it's something that many nerds deal with, too.

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So Tiffany and Elizabeth, I'd love to hear how you personally approach the balance of debt payoff and investing in your own life, if at all.

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I'm going to throw roses to you. Congratulations.

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So personally, I have a mortgage, a car loan, and student loans. I was lucky to get my mortgage and my car loan back in 2020 when rates were super low. So the loans are basically free money, and I'm not in a huge rush to pay those off. And with my student loans, at this point, I resent that I have to pay them at all. So I don't want to give them any more money than I have to.

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And as I pay off all of my debts, I am contributing as much as I can to my 401k. And I make monthly deposits into my robo advisor account so I can get that sweet dollar cost averaging. So right now, in general, I'm more focused on investing than debt payoff, because it will give me that better return long term for my money, in all likelihood, hopefully, if the stock market does what I want it to.

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Thank you for the jargon check, Tiffany. I'm so steeped in this world. Sometimes I forget that not everyone knows everything I'm talking about. A RoboAdvisor is just a type of investment account where algorithms manage the investments for you. It makes investing really easy and inexpensive.

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Happy to help.

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That makes sense. And I think a lot of people are in a similar situation to you right now. So totally understandable. All right. Well, Tiffany, thank you so much for joining us today.

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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 may not apply to your specific circumstances.

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Well, it seems like you've checked a lot of the American dream boxes there with kids and a house and a retirement fund. So that's great to hear. Congratulations on achieving that because by 35, that's a lot to accomplish, especially for folks in our generation. And before we get too far into this conversation, I did want to remind folks that we are not financial or investment advisors.

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And Adam, we're not going to tell you what to do with your money in this conversation. It's really just some nerdy food for thought for you as you consider what to do with all of your financial goals. So I know that you are debating what to do with a windfall that you might be getting. So

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As it relates to your credit card debt, your investment goals, other life goals that you have, how would you consider using a windfall currently?

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And there's always lots of news around debt, news that we've covered throughout the year. So today for our special series featuring the best of smart money 2024, we are reaching back into the archives for our favorite segments about debt and how to pay it off. It's a best of for best practices. Now onto the show.

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Those are all great goals. So one thing that I like to suggest people do when they get a windfall is take 10% of it and just enjoy it. Because not every dollar that comes into your life has to be put toward the most utilitarian and efficient function. It's great to do that. And it seems like you are honed in on some very efficient ways to use a windfall. However, you got to enjoy life too.

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So what do you think you might want to do if you did have, let's say, a $3,000 windfall? What would you do with maybe $300 of that?

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That's great. I mean, because those memories that you would build with your kids now, and that is well worth $300, I would argue it could be priceless. So I want to hone in on the credit card debt a little bit more. How much do you have in total right now?

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And you mentioned that all but $1,000 is on a zero APR credit card. Is that right?

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All right. And how long do you have that zero APR term?

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It makes that a very expensive kind of debt. And a lot of financial planners would say that should be your priority right now is knocking that out. So even if it is just a few hundred dollars extra over the course of a few months to try to wipe that out, that will free up your cash so you can do something like beef up your emergency fund.

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Yeah. And building on that, there is a debate in the personal finance space around whether if you have high interest credit card debt, if you should focus on that primarily at the expense of all other goals. I'm a big proponent of doing multiple things simultaneously. So right now, it seems like you can focus on paying off that high interest credit card debt

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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.

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while continuing your $25 a week deposits into this high yield savings account for your emergency fund. That is a great way. So you can basically shore up your defenses for when the next emergency does happen, like Sarah said, and not go into credit card debt.

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Yeah, I had a nice $1,500 surprise car expense, actually two expenses. And yeah, it wasn't fun, but I did have the money set aside to cover this. So I was really grateful for that. And now I realize it's going to take me some time to build up those reserves again. And that makes me just a tad bit anxious. But I know that I have these automated deposits set up. I'll be there eventually.

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And this money was there for me when I needed it. Okay. So now I want to talk about investing for retirement. It seems like you have a few different types of retirement accounts going on right now, and you're considering maybe putting some windfall cash into one of them. So talk us through that in more detail.

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That's great to hear. And I think your approach to investing makes sense for where you are in life and the income that's at your disposal and the debt that you're trying to pay off. For a lot of people, the best, easiest, most effective way to invest is going to be in different tax advantage retirement accounts.

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Unless you have hundreds of thousands of dollars at your disposal and you're going to be doing some very complicated investing, investing slow and steady for the long term is likely going to be just the simplest and most effective route so you can have that comfortable life later on.

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Follow us wherever you get your podcasts. And if you like what you hear, please leave us a review and tell a friend. In this episode, we are talking with a listener, Adam, who's 35 and lives in Colorado. Adam has some questions about what to do with a windfall, whether it's wisest to use it to pay off credit card debt or invest it. Adam, welcome to Smart Money. Thank you, Sean. Thank you, Sarah.

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And that's a really smart approach going into retirement because the reality for a lot of people is that retirement doesn't mean not working ever again. It's really great to have some other kind of stream of income to offset what you might be able to get from your pension and these other retirement accounts. So you have more flexibility to go on trips with your kids or with your wife.

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So you can actually enjoy those years and travel or do whatever you want to do.

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And so much of retirement is about pursuing your life purpose. And it seems like teaching is what gives you a lot of satisfaction.

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Okay, Adam, so we've talked about a bunch of different things that you can do with a windfall that might be coming your way. What are you currently thinking that you might want to prioritize first?

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Well, Adam, thank you for taking the time to talk with us. Thank you, Sean. Thank you, Sarah. We are back in a moment with more smart money. Stay with us. We're back and answering your money questions to help you make smarter financial decisions. This episode's question comes from Alex who sent us a text message. Here it is. I have a question regarding loan payoff strategies.

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I am currently on a snowball payoff strategy starting with my higher interest car loan at 6.9%, but I also have loans at 3.9% and a mortgage at 2.8%. At what rate does it stop making sense to prepay loans to become debt-free and prioritize investing more? Thank you, Alex.

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Oh, I know you will.

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Okay, so what would this look like in Alex's case?

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Happy to be here. Great to have you on. So let's start by getting to know you a little bit, in part because I know Sarah and I, and I'm sure our listeners are nosy people. So tell us a bit about your financial life right now. What's your income like, your debts, your financial goals, the whole spectrum of things?

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Right. And the debt snowball method is often compared with the debt avalanche method because we love our snow analogies in the debt payoff space, I suppose. So can you talk about how this one works?

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So with our listener Alex's debts, they would focus on paying off that 6.9% car loan, then the loan at 3.9%, and then the mortgage at 2.8%. And thinking about their question, I'm kind of wondering if they're actually doing the avalanche method instead of the snowball, because they can be kind of easy to mix up.

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I think that's a really good point, Tiffany, because people love to argue about the debt snowball and the debt avalanche method and say one is always the best way to go. A lot of people who are more mathematically minded perhaps may say avalanche is always the best because it can save you money depending on how your debts are structured.

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I tend to prefer the snowball personally because I think that psychologically people paying off debt and getting the benefit of closing out an account can keep people going over the long run because debt payoff can be quite a slog. But like you said, Tiffany, it really all depends on your own personal circumstances, how you are mentally and your financial goals.

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Strategies for Navigating Market Swings and Leveraging Home Equity Wisely

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Elizabeth, have you peaked yet?

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Strategies for Navigating Market Swings and Leveraging Home Equity Wisely

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Okay, you know, that's a good way to think about it. But today we're going to hear some coping strategies for when stock market madness starts to keep you up at night. 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

Strategies for Navigating Market Swings and Leveraging Home Equity Wisely

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This episode, we're answering a listener's question about the pros and cons of home equity loans. 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.

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Strategies for Navigating Market Swings and Leveraging Home Equity Wisely

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And we have an exciting announcement before we move on. We're running another book giveaway sweepstakes ahead of our next Nerdy Book Club episode. In a few weeks, we're talking with Asia Evans, author of Feel Good Finance. Untangle your relationship with money for better mental, emotional, and financial well-being.

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All right, let's get to this episode's money question segment. That's up next. Stay with us.

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Yeah, it's been a wild ride, and that ride is most likely not over yet. We've been here before, we'll be here again. And yes, some of the most basic advice is to not look at your 401k balances, or 529s for that matter. But that doesn't mean that you shouldn't be paying attention.

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Simple Steps to Budget Better and Manage Credit With Confidence

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All right, everybody, raise your hand if one of your promises to yourself in 2025 is that you're going to follow a budget. Hey, look at that, I see lots of hands in the air. Just kidding, I can't see you. But there are probably quite a few of you who've made that promise to yourself. Today, we're going to help you keep it, and we're going to make sure that your credit life doesn't get in the way.

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If you're in there reviewing your credit reports and you see something funky, what's your advice?

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What about the credit score? First off, this is in fact different from the three credit reports. Remind us what the difference is and how you can make sure your credit score is up to snuff.

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I think that test comparison is really helpful. And I also wanna touch on what score folks should have. There isn't one specific passing score, but some people can carry guilt or shame if they don't have a perfect 850 credit score, which in this case would be an A+, or maybe their credit score is nowhere near 850. The truth is the average FICO 8 credit score is 717. That's a good credit score.

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For context, the best rates on loans like mortgages will generally go to those with credit scores north of 740. But also, I think it's helpful for folks to zoom out and think about what they want a good credit score for. If they don't currently have a great credit score, but they maybe aren't planning on applying for a new line of credit soon, I think that's fine.

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They can spend some time improving their credit now so it's in better shape when they actually do need to use that credit score.

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Right. I personally am getting very close to paying off my auto loan, which I'm excited for, but I'm expecting my credit score to take a dip after that. I'm going to be very interested in seeing how well I practice what I preach in terms of separating my self-worth from the number of my credit score.

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Thank you. Thank you. And I'm sure I'll update all of our listeners when that does happen in just a couple months. Finally, Kim, if you absolutely need to carry a balance on your credit card, either now or at some point this year, what are some helpful tips to manage that as the year goes along?

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Is there anything folks should be on the lookout for this year that might impact their credit? This time last year, we were talking a lot about the high interest rate environment. Rates have started to come down. What else are we watching for?

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Kim, I always enjoy hearing how my fellow nerds put their advice into practice for themselves. I want to ask whether there's anything you do at the start of the year to help yourself along these lines. Any reviews you do of the previous year or mental exercises to figure out how you're going to budget and manage your own credit life for the coming year?

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Kim, any final thoughts on credit or budgeting for our listeners?

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Well, Kim, thank you so much for coming on and talking with us.

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We hope this has been really helpful for folks and join us next week when we're going to talk about the coming year in housing.

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This episode was produced by Tess Bigland. I helped with editing. Courtney Neidell helped with fact-checking. Megan Maurer mixed her audio. And a big thank you to NerdWallet's editors for all their help.

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And with that said, until next time, turn to the nerds.

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Anything you'd like to share with the audience?

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Wow, so far in advance.

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Well, I do something similar, but I'm maybe a little bit lazy and I try to automate this as much as I can. I use an app that gathers all parts of my finances in one place, things like my investments, my spending categories, my savings accounts, so that at the end of the year, I dig into that app and I review what I do with my money.

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I did that at the end of 2024 and I looked at different spending categories and I asked myself what spending I felt good about, what spending I did not feel so good about. And then I also asked myself what changes I wanted to make based on how I felt I spent my money and managed my investments and savings and all of that the year before.

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Yeah. And one key difference is that I don't have kids I'm putting into summer camp. So that makes my life a little bit simpler.

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Well, we want to hear what you think too, listener. What are you working on in your financial life as we start the new year? Leave us a voicemail or text the Nerd Hotline at 901-730-6373. That's 901-730-NERD. Or email a voice memo to podcast at nerdballot.com. Kim, these are a couple of the most common topics we get from listener questions here on Smart Money, all about credit and budgeting.

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Let's start actually with budgeting because you really need to do that before you even want to think about using credit. Now, if we have some folks out there who have never done a budget before but decided that 2025 is the year they will finally do it, what is step one? Maybe creating a complex, complicated, fancy spreadsheet that they will never use?

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Yeah, I am kidding, of course. This is one thing that you want to make sure is the opposite of complicated. It should be easy to read, easy to navigate, easy to follow. Kim, if you were designing a personal budget, what would your very first step be? Maybe deciding analog versus digital?

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I'm really glad you mentioned the flexibility of the 50-30-20 budget because this budgeting framework has gotten some flack over the past couple of years for being, shall we say, unrealistic to some people or maybe out of touch with the current way that people manage their money, given how expensive everything from housing to groceries is.

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The real benefit of the 50-30-20 budget, or maybe the 60-20-20 budget, or however you want to structure it, is that it allows you to see where your money is going under these three broad categories. And you can't really make smart changes to how you manage your money without first knowing how you're allocating your money.

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Simple Steps to Budget Better and Manage Credit With Confidence

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Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles.

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I think your point around personal preference is a really good one. And I want to emphasize that because you have to know yourself to know how you might budget best. For example, I've heard from listeners who have suggested that I personally might like the zero-based budgeting approach in part because of how I have my savings account set up.

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Kim, in case you didn't know, I have about 10 different savings and checking accounts, each with its own purpose. Even though I like to have my paycheck distributed to these different accounts, I don't really like to track each penny. At a high level, I know that I have enough money going into each account to cover my monthly expenses.

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And I've tried really granular budgeting in the past, but it just does not work for my brain. Budgeting in the macro is much better for me. And I'll also own that I'm fortunate enough to not have to pinch pennies, which of course makes this a little bit more feasible.

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Throughout this month, we're featuring several episodes to help you get the year started off on the right financial foot, if you will. It's your money in 2025. Kim, you've joined us today to talk about budgeting and credit. And when I say credit here, I mean the credit you use, like from a credit card, as well as your credit scores and credit reports.

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Let's talk about some of the budgeting apps out there. Mint was the popular kid on the block, but that's not an option anymore. Can you walk us through some of the other apps that are proving useful to folks wanting to work on budgeting?

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Our fellow nerds spent time researching a bunch of different budgeting apps, including the ones that Kim just mentioned, and broke down what works best for different needs, plus what to watch out for. You can find a link to read NerdWallet's picks for the best budgeting app in today's show notes, or just search online for NerdWallet best budget apps.

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Kim, how do you go about deciding what exactly to put in your budget and how detailed to get with it? Some people probably really do it down to the penny, but as I mentioned earlier, that won't work for everyone. What are some things to think about when deciding how much to include and what to exclude from your budget?

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What about the timeline? Is it better to budget for a month, a year, a day?

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Let's pretend we're putting together a budget for this new year. And I'd like us to walk through the big major categories and some best practices for tracking these things. So first, the fun stuff, income.

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And then we start tracking our expenses, right? And we're comparing it to what we've budgeted.

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What are some of the challenges that folks tend to face when they first start working with a budget? And what are some ways to get over those challenges?

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And finally, Kim, talk to us about how important it is to review your budget on the regular.

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In a moment, we are back to talk about how to take this budget and layer on credit. Stay with us. So Kim Palmer, now that we've got ourselves all budgeted up, let's talk about how to responsibly layer on credit, as in using credit and maintaining your credit scores. Most of our listeners probably already have at least one credit card.

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And let's stick to credit cards here, not other kinds of debt like mortgages or car loans. We've got this aspect of our lives where we technically get into debt on the regular with these cards that make it very easy to buy things. What are some primary cautions when it comes to credit cards?

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I do love those cashback and points. That is my primary goal with using a credit card. Kim, I feel like a phrase that gets tossed around a lot is responsible credit. What does that mean?

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Then what are some best practices for making sure that you're using credit responsibly? Let's assume someone has qualified for a credit card. What are the best ways to utilize it?

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And that's a really good way to think of it. Know your budget first, then you can figure out how to use credit, aka debt. Of course, we are aware that probably most of the audience already has some credit cards. So we're really going to get into how to use credit responsibly and make sure you're making it work for you, not against you.

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What are some ways that people get into trouble with credit? What are the warning signs?

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This is something that we review quite often on the show, but let's do it again since we're at the beginning of a new year. If you find yourself in trouble with credit card debt, what are the first steps to take to get out of that situation?

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And now let's talk about the importance of good credit. This is often a helpful time of year to go through and review how your credit life is going. You know how they say to check the smoke detectors around this time of year? Well, how about a checkup on your credit reports too, right?

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And when it comes to saving for your home's maintenance, a rule of thumb is to save between 1% and 4% of your home's value each year. So if your home is worth $500,000, try to save at least $5,000 a year. And yes, I know that is a lot of money, but again, homes are expensive money pits, so try to do what you can.

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Well, you have to tailor the number of accounts that you have to what you can reasonably manage personally. I find it really simple, and I have around 10 accounts, I think, at this point. I know it's a little bit nutty, but each one has its own purpose, and it works for me. And it's not as wild or complicated as it might sound.

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I have most of my accounts at the same bank, so I just log in and check my balances. but having my different accounts with their specified purposes and the various amounts that i have automatically dropping into them via direct deposit each pay period just keeps it super simple although of course it did take a little bit of time and thought to set up initially

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The minimum balance requirements can also be tricky if you need to use your money to pay for something like an emergency. Because if you don't maintain that minimum balance, you could incur fees. We have an article on money market accounts that you can find in the episode description if you want even more details.

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Kim, how can someone decide whether to place their savings in a money market account, a high-yield savings account, or something like an atomic treasury account? And in this listener's case, which might be better?

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And if the minimum balance isn't your primary concern, you may just shoot for whichever has the best yields so you can maximize the interest that you're earning. Also, ease of access can be an important factor. So whether you choose to go for a high-end savings account or a money market account, consider choosing one with access to a debit card so you can easily pay for ongoing repairs.

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Another big part of our listeners' question is around how to rebuild your savings after using them for home repairs. So Kim, what suggestions do you have for listener Kim on this?

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That's a really good tip. And then once listener Kim has freed up the money in their budget, they could look into setting up automated deposits from their paycheck or their checking account into whatever savings vehicle they decide to go with. That way they can ensure that they're making steady progress on building up their savings again.

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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. Or if you are listening on Spotify, you can leave us a comment right on the platform.

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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 may not apply to your specific circumstances.

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Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings

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And with that said, until next time, turn to the nerds. Today's episode is sponsored by Amazfit. I've been wearing the Amazfit Active 2, and it's basically like having a personal assistant for my health, except it doesn't judge me for hitting snooze three times. It's also a game changer for fitness. It combines AI-driven coaching, smart tracking, and premium features without the premium price.

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Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings

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Unlike other wearables, Amazfit goes beyond basic fitness tracking. It has specialized modes like High Rocks Race Mode, Smart Strength Training, and even Free Diving, built for both everyday users and elite athletes. And with AI-driven coaching, it adapts to your workouts, tracks recovery, and helps you train smarter.

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OK. And what does virtually all mean in this context?

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There's also a free ZEPP app you can pair it with to get in-depth analytics and downloadable maps you can use with turn-by-turn directions. And it has Zepflow AI voice control, so you can check stats hands-free. And don't worry about battery life. The Amazfit Active 2 runs up to 10 days on a single charge.

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Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings

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If you want a smartwatch that delivers more for less, then visit amazfit.com slash smartmoney to get 10% off. That's Amazfit, A-M-A-Z, fit, dot com slash smartmoney.

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Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings

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President Trump has said he thinks terrorists will bring manufacturing back to the US. Does that seem likely and is it happening already?

NerdWallet's Smart Money Podcast

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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.

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Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings

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Yeah, I'm similar to you, Elizabeth. I'm more concerned with what a product is made of rather than where it was made. What about you, Anna?

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Yeah, and the price can be a deal breaker for a lot of people.

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Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings

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This episode, we answer a listener's questions about how to rebuild their savings after a big expense. 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.

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Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings

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That would have to be this pair of jeans that was a little pricey, I assume because it was made in the U.S., but they are completely worth it because they fit me perfectly.

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Well, thanks for walking us through it, Anna.

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Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings

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Now let's get to this episode's money question. That's coming up in a moment. Stay with us. We are back and answering your money questions to help you make smarter financial decisions. This episode's question comes from Kim who sent us an email. Here it is. Hello, nerds. My husband and I purchased our first home in June of 2024.

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We love our new home, even though it's an 87-year-old log cabin with some needed repairs. We have a little bit of savings for some of the repair costs, but I'm fearful that it will take us a long time to replenish the savings pot for home repairs. At the moment, it's all in a money market account.

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Would it be better to have our home repair stash in a high-yield savings account versus a money market account? Thank you, Kim.

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Our news colleague, Anna Helhosky, is here with more details. Hey, Anna.

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That's a great point because I was a little worried hearing this listener's question about whether they're going to put all of their savings into home improvements. That can make them pretty financially vulnerable. So, Kim, how do you suggest that listener Kim and other folks listening manage their financial priorities and not end up putting themselves in such a vulnerable spot?

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I really feel that. My partner's house is from the 1950s, which means that it's about 70 years old. And we have had loads of home repairs and renovations over the years. I mean, the house didn't even have insulation when we first moved into it. And there are times where we occasionally wonder whether renting might be the easier and less expensive option.

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So Kim, your advice to put home renovations in the context of other financial and life goals and maybe temper some of the eagerness to go all in on renovations is a really smart call.

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I'll also add that it's even more important to build up and maintain an emergency fund when you're a homeowner because maybe you're trying to put a new backsplash in the kitchen and then all of a sudden your water heater goes out and you have to pay for that too.

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A sufficient emergency fund can keep you from going into debt to make that repair because again, homes can be complete and endless money pits. So listener Kim, please look into your emergency savings and see whether you do have three to six months of expenses saved up.

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That's a great point. Sometimes home improvements can be an area where it's not a bad idea to take out some kind of debt. And I don't often suggest that people take out debt. But using something like a credit card with a period of no interest or even tapping your home's equity can make it a lot easier to do your home repairs and remodels without completely depleting your savings.

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But as ever with debt, if you're going to take it out, make a plan to pay it off. Kim, have you ever thought about using something like a zero APR credit card for your home repairs and renovations and all that?

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This is a strategy that I've used for years that's allowed me to make a lot of continuous progress on competing savings goals. And Kim, you use the term mental accounting, which some folks might not be familiar with, but it's really handy. Mental accounting is when you essentially place different values on your various pots of money.

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even though it's all essentially your money and has the same inherent value as your money. Think about when you get money back from returning something at the store and it feels like free money. It's like a windfall that you get all of a sudden. In reality, it's just your same money back to you.

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But in the world of girl math that we heard so much about over the past couple of years, it feels like this really exciting bonus. Savings buckets, like you described, Kim, and which other people call sinking funds, are the more productive version of mental accounting.

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Today's episode is sponsored by Amazfit. I've been wearing the Amazfit Active 2, and it's basically like having a personal assistant for my health. Except it doesn't judge me for hitting snooze three times. It's also a game changer for fitness. It combines AI-driven coaching, smart tracking, and premium features without the premium price.

NerdWallet's Smart Money Podcast

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Well, we'll get into all of those details around your retirement in just a moment. Amy, can you talk with us a little bit more about your job and your husband's job? How much are you typically earning? And why are you maybe concerned about some uncertainty around your jobs?

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So just to clarify, you said that you have one of only 15 full time church jobs in your area. Is that musicians or just all church jobs?

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So there might not be a lot of other options if you do need to find a new job at a different church or something.

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This episode, we're talking with a listener who's wondering how to catch up on retirement savings and whether early retirement is still an option. 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.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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Community property?

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Sure. So you guys have kept your finances separate. But now as you're thinking about retirement planning, I get the impression that you guys are maybe doing a little bit more collaboration on that. Is that correct?

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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Oh, that's great.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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You know, my partner and I right now are planning our wedding, which we're having later this year, and we're setting up our registry. And we're in a similar situation where we have all the household things we need. And our default was to say, oh, just fund our honeymoon. But part of me is wondering, should I have a fund my 401k option on my registry?

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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Well, thank you. I'll send you the link. So you've been saving for retirement with your partner, but separately on your own for the past 10 or so years. How much do you have saved?

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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I think you're sort of going back and forth and thinking through this and confusion speaks to one of the hardest questions around saving for retirement, which really is like, how much do you need? How much do you need to have the life that you want? And it depends on so many factors, like the lifestyle you plan to have, the age you plan to retire, your life expectancy, how much you have saved.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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A lot of people can live on 70% of their pre-retirement income during retirement. Others might want to live on closer to 80% if they want to have a cushier retirement and want to travel a lot. When you think about your retirement, when you're talking with your husband about this, what do you envision your retirement to be like? Where do you see yourself if you can make a mental image?

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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I'm glad to hear that you mentioned you're planning to talk with a financial advisor because retirement planning specifically is so individual. It depends on where you are, where your husband are, where you are together overlapping.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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And you would really benefit from having someone dig into all of your numbers and really have that longer conversation with you about what would it be like if you went to Costa Rica? What would it be like if you stayed here? Could you sell your house? Could you get rental income from your property if you're living elsewhere?

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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There are so many factors to consider, but going with a fee-only fiduciary certified financial planner is often the best way to go to have a comprehensive plan for your retirement. Okay.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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Sure. Well, I think the fact that you and your husband both like to and make a point to think outside of the box will really help you get creative with your retirement savings, because the truth of the matter is that you have a ways to go and you're planning to retire in 10, 12 years. What's your timeline for that?

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So 17-ish years, that's a decent amount of time, but the clock is for sure ticking. So you'll want to, when you meet with that financial advisor, think about those creative ways and also maybe consider bumping up how much you are contributing to these retirement accounts. Do you know what percentage of your income you're putting away into your 401k right now?

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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Well, that's great because a lot of financial advisors recommend saving between 10 and 15% of your pre-tax income for retirement. So you're pretty much right there at the higher end. But that said, if someone is behind in saving, that percentage could be closer to 25% or 30% or even more of your pre-tax income.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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So when you meet with the advisor, they'll have some software where they can run different percentages of your income being put into a 401k or a Roth IRA and see how that might play out over the years that you have left before retirement to see how close you can get to that goal of two, 2.5 million. All right, cool. Something else you wrote to us about in your email was the FIRE movement.

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What are your thoughts around that? And how did someone plant the seed in your brain?

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That's so romantic of him. And also, you should take him up on that offer if you can.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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Yeah, because doing the FIRE movement in the purest sense often requires folks to save between 50 and 75% of their income for retirement. And a common guideline is to have 25 times your annual income saved before you can retire early. Yeah. Oh, wow. Pretty difficult to do for anyone, no matter where they are in their financial life.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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But FIRE comes with some risks, such as having to foot your own medical bills until Medicare kicks in at 65%. So you mentioned your hips. Healthcare is something that I always am concerned about when it comes to retirement, because as we know, when we get older, our medical expenses tend to get greater. You have to account for that when it comes to your savings and investments, too.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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Yours might be musician fire where you're playing in a band and you're getting some money from that, but you're not doing it 40 hours a week.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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There you go. Yeah. You don't have to be working at a coffee shop. Barista really just refers to having some kind of part-time job.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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Well, maybe thinking outside of the box, you can combine some aspects of making coffee with playing music. There might be something there.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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So, Amy, we've run through some different aspects of how to save for retirement where you might be able to catch up on some aspects of investing and saving. How are you feeling at the moment? Are there any other questions around saving for retirement that we haven't gotten to yet?

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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Well, Amy, thank you for coming on. And please keep us updated on how everything goes for you and your husband. Will do. 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.

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You can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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And with that said, until next time, turn to the nerds.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

Unlike other wearables, Amazfit goes beyond basic fitness tracking. It has specialized modes like High Rocks Race Mode, Smart Strength Training, and even Free Diving, built for both everyday users and elite athletes. And with AI-driven coaching, it adapts to your workouts, tracks recovery, and helps you train smarter.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

203.467

OK, so a lot of back and forth here. What's Trump's reasoning for the tariffs?

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What to do When Groceries Cost More and Retirement Feels Out of Reach

222.9

Canada, China and Mexico are our three biggest trading partners. So what has their response been?

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What to do When Groceries Cost More and Retirement Feels Out of Reach

There's also a free ZEPP app you can pair it with to get in-depth analytics and downloadable maps you can use with turn-by-turn directions. And it has Zepflow AI voice control, so you can check stats hands-free. And don't worry about battery life. The Amazfit Active 2 runs up to 10 days on a single charge.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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If you want a smartwatch that delivers more for less, then visit amazfit.com slash smartmoney to get 10% off. That's Amazfit, A-M-A-Z, fit, dot com slash smartmoney. You know all those grocery price hikes that made us mad over the last couple of years?

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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And thank you, Ana.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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Maybe you want to up your credit card points game, but aren't sure which card is right for you. Or you're in the middle of planning your wedding and you aren't sure what's a reasonable amount to spend on flowers. And I may be speaking for myself there. Again, 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.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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Today's episode is sponsored by Range Rover Sport. Some decisions in life require careful research, like picking the right investment strategy or figuring out which streaming service actually has the movies you want. But when it comes to driving, there's one decision that's easy, the Range Rover Sport. It's a bold take on sporting luxury, blending sophistication with power.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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On the road, adaptive dynamics keep your ride smooth and composed by reducing unwanted body movements. Because, let's be honest, the only thing that should be unpredictable is the stock market, not your suspension. When the road changes, the Range Rover Sport changes with it. Dynamic air suspension adjusts to keep things smooth and balanced so every turn feels effortless.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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Well, quite a few products from the grocery store shelves are about to get even more expensive, along with even bigger ticket items as new tariffs kick in. We've got some advice on how to deal with them. 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.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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And if the pavement disappears, no problem. Adaptive off-road cruise control kicks in, reading the terrain and making real-time adjustments so you don't have to spend your drive making more calculations than your tax software. Visceral, dramatic, uncompromising. The Range Rover Sport leads by example, just like you do. Build yours today at LandRoverUSA.com.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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Again, explore the Range Rover Sport at LandRoverUSA.com. We're back and answering your money questions to help you make smarter financial decisions. This episode, we're joined by Amy, a listener who's 49, lives in Wisconsin, and has some questions about how much they need to save to have the retirement of their dreams.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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We're happy to have you. Amy, can you start by telling us what your financial life is like right now? Where do you feel good? Where do you feel like you might have some room for improvement?

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Okay. Living within your means.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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That's what we like to hear.

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What to do When Groceries Cost More and Retirement Feels Out of Reach

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And when you say you don't know what's coming down the pike, what do you mean by that?

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Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You

Today's episode is sponsored by Amazfit. I've been wearing the Amazfit Active 2, and it's basically like having a personal assistant for my health. Except it doesn't judge me for hitting snooze three times. It's also a game changer for fitness. It combines AI-driven coaching, smart tracking, and premium features without the premium price.

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Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You

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And if the pavement disappears, no problem. Adaptive off-road cruise control kicks in, reading the terrain and making real-time adjustments so you don't have to spend your drive making more calculations than your tax software. Visceral, dramatic, uncompromising. The Range Rover Sport leads by example, just like you do. Build yours today at LandRoverUSA.com.

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Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You

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Again, explore the Range Rover Sport at LandRoverUSA.com. We're back and answering your money questions to help you make smarter financial decisions.

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Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You

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This episode, we're joined by a listener, David, who's planning a big cross-country move with his family and has many questions about the financial and logistical challenges of moving, including whether they should sell or rent out their current home after they move. David, welcome to Smart Money. Hi, Sean.

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So to help me tackle your questions, David, I am joined by NerdWallet writer Lisa Green, who has experience managing rental properties and moving and all sorts of things that you are wondering about. So Lisa, hey, welcome to Smart Money too.

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So David, before we get into the conversation, I want to remind you that everything we're about to discuss is just for educational and entertainment purposes. We are not here to give you specific financial or investing advice, but instead provide you with information so that you can make your own smarter financial decisions. Sound good? Sounds great. Perfect.

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Let's start by digging into your financial life generally. How do you and your wife manage your household finances? How are you feeling about things financially?

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Do you end up Venmoing each other or finding some way to send cash back and forth when you're covering expenses?

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And what about your income levels? Because I know with some couples, if one person is earning more than another, they might cover certain things and the person who's earning less might cover less. How does that break down for you guys?

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Right. Yeah. And we'll get into that in just a second here. But I'm wondering also, how do you feel like you're doing financially? Do you think things are going well? Do you think there are areas where things could be better?

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Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You

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This episode, we're talking about all of the financial decisions that you have to make when you're deciding whether to move, especially when that move can take you 2000 miles away. But first, our Money News Roundup, where we break down the latest in the world of finance to help you be smarter with your money.

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Well, it seems like you also worked hard to get to where you are too. So you should be proud of that.

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Let's get into your move. You and your wife are thinking of moving with your kids. Where do you want to move and what's motivating this?

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Yeah, and I assume you have some family out there too? Correct. That can make things easier. So how do you expect moving to change your finances? Do you think it'll make things easier? Might it actually make things more difficult?

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But you haven't done it, so it's new to you and your wife. Correct. I want to talk a little bit about your jobs because that's a big thing to line up when you're moving to a new place. Make sure you have an income coming in. Have you looked into jobs in your potential new home? How has that gone so far?

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David, can you think of any financial reasons to not move just to stay where you are? Or are you really set on this lifestyle change?

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So it's more the personal reasons that might be hard, saying bye to your colleagues and to your current community.

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You mean the one that feels like six weeks ago?

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Right. And that kind of move would only get harder as they get older.

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Well, I think I have grilled you enough, David. Let's get to some of your questions for Lisa and me around the move. What concerns do you have? Where do you want a little bit more information?

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Yeah, that definitely was not true.

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So that all sounds pretty cushy and nice, but I imagine it's not all easy. Money coming in as you are managing a rental, especially when you're living in a different state.

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What do you think David should keep in mind to ensure that if they do go this route, that everything is properly maintained and they're getting their rent on time and they're not on the hook for a mortgage several states away, perhaps while having a new mortgage?

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It is. And so today we're going to take a closer look at one of those pieces of news, which is the apparent shuttering, at least temporarily, of the Consumer Financial Protection Bureau. Our news colleague, Anna Hilhoski, is here with more. Hey, Anna.

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And Lisa, one thing I'm thinking about is savings. It strikes me that you or anyone, you know, David, anyone who's looking to have a rental property in another state or even in the state that they are in would probably want to have more in savings to cover a month where maybe they don't have a tenant, or there is some sort of maintenance that needs to be done to the property.

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How have you thought about this with your own rental properties?

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So David, how is this sounding to you? Feasible? Difficult? Stressful?

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We touched on this in last week's episode, but there have been some new developments since then. So this is the Financial Industry Watchdog, the Consumer Financial Protection Bureau, or CFPB for short. and it is apparently on the chopping block right now, along with other government agencies that are finding themselves scalped out of existence.

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And David- You're planning on buying a new home when you move. Is that correct?

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I can touch on the tax part quickly. One thing to note around Roth IRAs is that you can take your contributions out, but you'll likely have a pretty sizable tax bill on earnings. And in general, withdrawing funds from a retirement account is likely to leave you with a tax bill and potentially penalties too.

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If you need to sell investments, look into your taxable brokerage account because that is probably going to be the most tax advantaged way to do it. If you've held the investments for longer than a year, you'll be taxed at a favorable long-term capital gains rate, which is lower than your income tax rate, most likely.

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So that might be the best way to go, potentially, if you need to sell investments. I'm wondering how you personally have thought out which option might be best for you. Have you maybe put together some sort of nerdy spreadsheet where you're listing each option and what it might cost you in terms of taxes or interest rate, any of those things?

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And I think running those numbers will provide you a lot of clarity. So I would say add some meat to that spreadsheet, see what the bottom line is for each option. And David, how are you thinking about timing here too? Are you planning to move in the next few months? Are you planning to put your house maybe up for rent soon? How are you considering that?

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Think about what you do and don't need at your current home and also whether it would just be more expensive to haul it to a new place versus getting rid of it and maybe buying something in your new location. Lisa, how have you handled that with your various moves?

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You got to match the furniture to the vibe of where your house is. Otherwise, the feng shui is off.

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David, how have you thought about that with your wife? Have you had discussions of like, okay, like, we really don't want to have to move this sectional 2000 miles? Have you even gotten that far yet?

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Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You

Unlike other wearables, Amazfit goes beyond basic fitness tracking. It has specialized modes like High Rocks Race Mode, Smart Strength Training, and even Free Diving, built for both everyday users and elite athletes. And with AI-driven coaching, it adapts to your workouts, tracks recovery, and helps you train smarter.

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Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You

2011.03

That's something that I want to emphasize, too, is how can you make this move easier for you? Because you and your wife will be moving 2,000 miles, you said, with two young kids.

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There are going to be all sorts of logistics to figure out around snack time and bathroom breaks and where all of your stuff is in the car and how do you load up the car that I think to the extent that you can take steps to make that process easier for you, you will appreciate it afterward and especially while you're doing it.

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Have you also looked into the cost of like movers or using pods or U-Hauls? Have you mapped out what those expenses might be too?

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And the depreciation on the furniture in the home could potentially be a tax write-off too. So David, I know we've run through a lot of different aspects of moving and selling and renting and managing a rental property. How are you thinking about all of this right now?

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And over the weekend, Vote posted on X that he had withdrawn any requests for further funding from the Federal Reserve. Side note, the CFPB is financed through requests to the Fed rather than Congress. On Sunday, the CFPB's 1,600 workers were informed that the agency's headquarters were closed and were ordered to stand down from doing any work.

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Soon after, the National Treasury Employees Union, which represents CFPB workers, filed a lawsuit against Vote and the OMB.

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Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You

There's also a free ZEPP app you can pair it with to get in-depth analytics and downloadable maps you can use with turn-by-turn directions. And it has Zepflow AI voice control, so you can check stats hands-free. And don't worry about battery life. The Amazfit Active 2 runs up to 10 days on a single charge.

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If you want a smartwatch that delivers more for less, then visit amazfit.com slash smartmoney to get 10% off. That's Amazfit, A-M-A-Z, fit, dot com slash smartmoney. Elizabeth, I remember you moved from Florida to Texas last year. Was that easy?

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Maybe you're wondering if you should take the standard deduction or itemize or whether you can get by with using one of the online filing services or if you might need to hire a CPA. 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.

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Yeah, that's for sure. So today we're going to walk a listener through some of the financial tips and advice for doing a big across the country move. 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.

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Today's episode is sponsored by Range Rover Sport. Some decisions in life require careful research, like picking the right investment strategy or figuring out which streaming service actually has the movies you want. But when it comes to driving, there's one decision that's easy, the Range Rover Sport. It's a bold take on sporting luxury, blending sophistication with power.

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Cross-Country Moving Tips and What a CFPB Shutdown Could Mean for You

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On the road, adaptive dynamics keep your ride smooth and composed by reducing unwanted body movements. Because, let's be honest, the only thing that should be unpredictable is the stock market, not your suspension. When the road changes, the Range Rover Sport changes with it. Dynamic air suspension adjusts to keep things smooth and balanced, so every turn feels effortless.

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Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles. Today we are reaching into the special Smart Money archival box. It's acid-free and lined in gold. Just kidding. Our archives exist in digital only. And we wouldn't waste our hard-earned and well-saved money on gold lining anyway, right? If you are a loyal listener, you would know that we would never do that.

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It's a really good point about carrying a lot of debt. Amy and their partner could potentially have three mortgages if they go this route. And even one mortgage can feel like a lot to stay on top of. But beyond that, they would also be a landlord, which is its own set of responsibilities.

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Yeah. And like you said, Kate, this is not an easy route to go. And this could be a moment where Amy would want to consult with a certified financial planner, especially one who is experienced in real estate investing. This would help them get another person's perspective on what opportunities and risks are part of going this way.

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And we'll show them whether it's really feasible where they are right now, or if they might be better off going a different route. Well, Kate, thank you so much for coming on and talking with us.

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We are back in a moment with more smart money. Stay with us.

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To help us answer Lena's question, we are joined by mortgage nerd Kate Wood. Thanks for having me back. So we'll get to Lena's anxiety-inducing question about using all of their savings to buy a house outright in a moment. But first, I want to talk about interest rates. That's been the big story in the housing market over the past few years.

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I get where our listener is coming from, though. And another big factor that makes the current interest rates intimidating is that homes have just gotten so much more expensive over the past few years. So I don't want to minimize the impact of interest rates on affordability. But Kate, you are right that compared to historical rates, what we're seeing now is not unheard of.

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Yeah, I also think it's worth thinking about how an interest rate is really just the cost of having a loan.

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And in the case of having a mortgage, that would mean that this listener would be able to hold on to some of their savings and I don't know, maybe enjoy their life, go on vacation, fund the inevitable repairs that come with owning a home instead of having all of their cash tied up in a house. Okay, well, let's address the big question head on.

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And since we do not give specific, personalized financial advice on this show, I'm going to turn the question over to you two, Sarah and Kate. Would you spend all of your savings to buy a house outright instead of maybe getting a 15-year mortgage? And why is the answer a resounding no?

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Buying a house is a complicated process, in part because there are so many people and companies involved. Can you please quickly explain the role of the title agency in the home buying process?

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I also don't want to give the impression that it's never a good idea to buy a house with cash. If you have enough cash to buy a house and plenty of other cash sitting in a savings account that is liquid and accessible. First of all, congratulations. I'm a little bit jealous of you. In that case, you might be fine.

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But with this listener situation, they're discussing draining all of their savings to buy a house, which is extremely risky. If you don't have any cash in your savings, you're basically asking the housing gods to flood your basement or drop a tree limb on your house or something.

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It's just always a smart idea to keep a decent amount of savings liquid for the inevitable repairs that do pop up when you own a home.

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Well, let's talk about that traditional 30-year mortgage. How does that fit into the other options?

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And that's all we have for this episode. Remember listener that we are here for you and your money questions. So send them our way. You can call or text us on the nerd hotline at 901-730-6373. That's 901-730-NERD. You can also email us your questions at podcast at nerdwallet.com. Visit nerdwallet.com slash podcast for more info on this episode.

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And remember to subscribe, rate and review us wherever you're getting this podcast.

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And with that said, until next time, turn to the nerds.

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Would not have been fun. No.

NerdWallet's Smart Money Podcast

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But this month, we are bringing you some of the highlights from 2024, some of our favorite listener conversations and favorite coverage for a special series that is the best of Smart Money. Today, we're looking back at the issue of housing.

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We talk a lot at NerdWallet about the importance of shopping around when making a financial decision. But the home buying process is so lengthy and can be so exhausting that many might not want to shop around for yet another person to do this relatively small part of the process. Do you think it's worth shopping around for a different title agency? What do people really stand against?

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High prices and high interest rates have kept a lot of folks on the sidelines this year, but we followed all the trends and provided a ton of advice on how to navigate the market. So here's a review of what we all learned and need to know about housing as we head into 2025.

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That's fair. But otherwise, for most people, this is going above and beyond the regular shopping around for a mortgage, real estate agent, that type of thing. Absolutely. Okay. Well, I think we should all be honest here. You guys are homeowners. I'm a homeowner. Did you shop around for your title agents when you bought your houses?

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But hey, you got your house.

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I shopped around a lot for my mortgage. I got five quotes. It was also the pandemic, so plenty of free time on my hands. But the title agent wasn't even on my radar of things to shop around for, in part because I hadn't been through this process before. I didn't know that I would need to consider a title agent.

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And honestly, when I buy my next house, whenever that happens, if it ever happens, I don't know if I'll shop around for it because decision fatigue is very real. You got to prioritize the important things, not something that isn't as significant potentially. All right, well, let's move on to our next question in this lightning round, which comes from Amy, who emailed us a voice memo. Here it is.

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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.

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Yeah, that said, it's not totally unheard of. And Amy situation reminds me of something that I heard Barbara Cochran from Shark Tank say one time, and it's that one of her only regrets in her career is selling properties that she could have held on to, because you have this asset, you might as well make it work for you. But that said, it is quite risky, as you pointed out, Kate.

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And if I was in this listener situation, I would want to make sure that I had a really, really beefy emergency fund before I did this enough to cover all of my expenses, including this additional debt for at least six months. Well, now let's turn to the main part of Amy's question, how to tap the equity in their home. What options does Amy have?

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Follow us wherever you get your podcasts. And if you like what you hear, please leave us a review and tell a friend. This episode, we are taking on a few of your housing-related questions in a lightning round. And we have housing nerd, Kate Wood, joining us for this nerdy journey. Kate, welcome back to Smart Money.

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Right. And buying another house could be a move that puts Amy and their partner in a stronger financial position.

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Elizabeth, I don't know about you, but if I never hear the word tariff again, it will be too soon.

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And I get the feeling that Chris isn't someone who can just throw caution to the wind and spend their money freely. In that case, Amanda, your suggestion to try out budgeting could help them spend their money intentionally and allocate some of their money to the life experiences that they might be missing out on while still saving for retirement and other investment goals.

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What do you think about that?

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But as the certified financial planner professional in your ear, I want to emphasize the importance of not making rash decisions and remembering that while this time might feel different, so does every time something tumultuous happens to the economy.

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That's a really good point because oftentimes people think that when they make a decision, it is irreversible and they're stuck with it. But in reality, it's often not the exact decision that you make, but what you do with that decision and how you grow from it and maybe pivot from it. That can help you long term.

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But in general, I kind of get the sense that Chris is maybe a pretty numbers focused person and likes to map out their finances in detail and. In that case, they could put together maybe a few mock budgets for different scenarios and different lifestyles. One could be having a studio apartment. Another could be having roommates.

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Another could be both of those options, but where they have a vacation a few times a year. That might make the idea of enjoying life and spending money a little more concrete. Amanda, I'm wondering if there are any other financial fundamentals that you think Chris should acquaint themselves with before making a big change like moving out of their parents' place.

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The best thing to do is focus on the long term, maybe back away from checking your 401k balance if that's going to make you anxious, and continue to stay informed, which is what we're doing day in, day out on Smart Money, keeping you up to date on the latest financial news so that you can make smart decisions about your money and your life.

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I like that idea, Amanda. And knowing what you're going to do in a really specific way can help you when you are someone who likes to control your money a lot, which is how I think Chris tends to operate. But at an even higher level, Chris could benefit from some thought exercises and some introspection about what kind of life they want to live and what they really care about.

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And at 23, I think it's okay to not have all of the answers there. When I was Chris's age, I had just moved to the Bay Area. I knew pretty much no one besides my twin sister and a childhood friend, and I was just figuring out how to get into the media work that I wanted to do. My life felt like kind of a mess, maybe because I only had like $5 to my name, but I knew some of my passions.

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I wanted to travel. I wanted to make the most of living in a vibrant city. I wanted a career in media and everything that I did was with those goals in mind. So I would ask Chris, what do you really care about? What do you enjoy doing and how are you going to craft a life yourself where you can pursue your passions and have meaningful experiences?

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With all that said, Ana, what should folks be paying attention to right now?

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Tariffs are driving up the costs of all kinds of goods, including ones we drive. So we're going to talk about how to manage that cost. 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.

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Something else I'm picking up on from Chris's question is that they're following a common money script known as money vigilance. With money vigilance, as you might imagine, people are really focused on saving and investing and avoiding spending and avoiding making financial mistakes, which can be great.

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But money vigilance can also slip into money hoarding at its most extreme, where you hold on to every dollar and you don't actually enjoy what you've worked hard to earn. Money isn't just there to be accumulated like we've talked about before. It's really meant to be enjoyed, too. Sometimes that means you make mistakes with your money and you have less of it.

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But the lessons that you learn from those mistakes have their own value. And I often like to say that one of the best ways to learn lessons is by hearing what others have gone through so you can avoid making those mistakes yourself and. then hearing how they came out on the other end.

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With that in mind, Amanda, Elizabeth, I'd love to hear about a financial mistake that each of you has made and how that maybe informs the way you manage your money today.

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Always. All right.

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And start investing today.

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Yeah. Yeah.

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thinking back on my early 20s i remember a very long period of time where i would just avoid looking at my bank account and it wasn't because i had so much i could just get by it was because i had so little i was afraid to see what was in there and there were plenty of times where i would go to the grocery store and my debit card would be declined i didn't even really have a credit card i was using at that point either so i was just scraping by and hoping that ignorance would indeed be bliss until it became a lot of stress at a certain point

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It really took until I started working at NerdWallet and learned about the importance of being proactive and responsible with your money that I began to have a more healthy relationship and regimen with checking my finances. And now it's a weekly, if not daily thing of just checking where my balances are.

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But I learned in a way that I have this impulse in me to avoid problems when I know they're there in the background. And sometimes I still feel that impulse to not check my accounts. And sometimes Whenever I get that feeling, it's probably because I know that I've spent maybe a little more than I should have. And so now at this ripe age of 33 years old, I know better and I get that feeling.

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I try to push back against it and just check my balance, rip off the bandaid because it often just makes me feel better afterward.

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I'm putting on my certified financial planner hat and monocle to answer this question.

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The monocle and the hat both have feathers. It's extremely fancy. Well, with the disclaimer that while I may be a certified financial planner professional, I'm not Chris's CFP. Let's go back to some key facts that Chris gave us. They're 23 years old. They have a net worth of around $190,000 and no debt. At this really early age, they're doing better than many Americans of pretty much any age.

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In 2022, the median net worth of all U.S. households was just under $193,000. Now, there's a lot that we don't know about Chris's situation, how much they earn. They said they earn a lot, but what is a lot? How much they're contributing regularly to their retirement accounts and brokerage accounts. But they did say they have around $120,000 in investments.

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I use NerdWallet's investment calculator to see what this could grow to if they didn't contribute a single additional dollar and their investments grew at an average rate of 6%, which is a relatively conservative estimate. So by the time they're 67 in 44 years, their money would grow to a little over $1.5 million.

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And if they contributed just $100 more each month, that number would grow to just over $1.8 million. So I would say Chris is doing just fine and there is room to allocate money to other things potentially.

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That's really fair. It's hard to say exactly whether they're on track, quote unquote, for retirement because we don't know what Chris's goals are, how much they might need to be spending in retirement. And, you know, as we often say on Smart Money, it's not our job to tell Chris what to do with their money.

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We're just here to provide context and information so people can make their own informed decisions. But I will say that it seems like Chris has enough in their retirement and investments. and savings to pursue other financial goals without jeopardizing their long-term investments. Again, the conversation really does go back to the idea of goals. What does Chris want, right?

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We just have this one life and I certainly like spending my money to enrich my life in meaningful ways while I'm alive.

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Well, Amanda, I love that. Thank you so much for coming on and sharing your thoughts.

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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. Follow Smart Money on your favorite podcast app, including Spotify, Apple Podcasts and iHeart Radio to automatically download new episodes.

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And with that said, until next time, turn to the nerds. Guess what, listener? Smart Money is a finalist in the 2025 Webby Awards, and we need your vote to win. Go to vote.webbyawards.com, register real quick, and vote for us in the best individual podcast episode business category. It takes a minute, makes our day, and lets you say, yeah, I helped pick that winner. Voting ends April 17th.

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One more time, that's vote.webbyawards.com.

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Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out

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This episode, we're talking about letting loose a little with your money when you're ahead of the savings game. It doesn't always have to be about frugality. 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.

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Our news colleague, Anna Helhosky, is here with more. Give us the scoop, Anna.

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And thank you, Ana.

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And we have an exciting announcement before we move on. We're running another book giveaway sweepstakes ahead of our next Nerdy Book Club episode. In a few weeks, we're talking with Asia Evans, author of Feel Good Finance, Untangle Your Relationship with Money for Better Mental, Emotional, and Financial Wellbeing.

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All right, let's get to this episode's money question segment. That's up next. Stay with us.

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We're back and answering your money questions to help you make smarter financial decisions. This episode's question comes from Chris who sent us a text message. Here it is. Chris here. I'm 23 years old with a roughly $190,000 net worth and zero debt due to living at home the past couple of years post-college with a high income. I would like to move out eventually to become more independent.

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However, it is hard to justify spending nearly $2,000 a month on rent when I could continue to invest more and build even more of a nest egg. How do you balance and justify life experiences such as moving out versus simply optimizing finances and saving as much as possible? At what point can someone cool the brakes on saving slash investing aggressively if they have a head start?

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For example, about $120,000 in diversified investments slash retirements and a fully funded emergency fund. How can someone balance the desire for financial freedom with the potential trade-offs of missing out on life experiences or personal growth opportunities due to being overly focused on saving and investing?

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And we know that many folks listening might be feeling nervous seeing how the stock market has behaved over the last week. Many might be wondering what this means for their retirement or if they should change their investment strategy. I know this can all feel really confusing or scary, and I want to take a moment to acknowledge that those feelings are valid.

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Well, here we are. It's a new year. Time to take stock of how things are going with our investments. Are you thinking maybe it's time to take a bit more risk? Or are you looking at your portfolio and wondering if it's time to pull back? We've got some ways for you to consider all the options for investing in your financial future.

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Very sound advice. Sam Taub, thank you so much for helping us out today. Always great to be here. And be sure to join us next week as we continue to look at your money in 2025. We're going to hear all about budgeting and how to manage your credit life.

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This episode was produced by Tess Vigeland. I helped with editing. Arielle O'Shea helped with fact-checking. Megan Maurer mixed our audio. And a big thank you to NerdWallet's editors for all their help.

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And with that said, until next time, turn to the nerds.

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Sam, how about you tell us exactly what's going to happen in the stock market this year so we can all make a lot of money?

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We want to hear what you think too, listeners. What are you working on in your financial life as we start the new year? Leave us a voicemail or text the Nerd Hotline at 901-730-6373. That's 901-730-NERD. Or email a voice memo to podcast at nerdwallet.com. Sam, last week we talked with fellow nerd and chief economist Elizabeth Renter about financial regrets.

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Let me ask you to gaze back on last year and talk about what the investing year was like and maybe some regrets or at least lessons we might be able to take away from it.

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Let's talk about some of the standout sectors that did especially well or especially poorly. I know you were all over the NVIDIA story and came on the show a couple of times to talk about it. What were some other winners?

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That's right. My Dogecoin shot up quite a bit after the election. As of this recording, it's at a whopping 38 cents. And it was often much, much lower, maybe closer to one cent at different points in the year. I'm really proud of the performance of my joke cryptocurrency. Congrats. So Sam, how about some loser industries in 2024?

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Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles. And I'm Sam Taub. It's 2025. Do you know how your stocks are doing? Are you doing that classic New Year exercise of checking the batteries in your fire detector and rebalancing your portfolio? Will you be investing some time in your investing strategy? It's a great time of year to do that.

NerdWallet's Smart Money Podcast

From Meme Stocks to Index Funds: A 2025 Investing Guide

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What, if anything, do these poor performers tell us about what might be coming for the markets in 2025?

NerdWallet's Smart Money Podcast

From Meme Stocks to Index Funds: A 2025 Investing Guide

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Going back to the clean energy industry, do you think the dip there is also election related?

NerdWallet's Smart Money Podcast

From Meme Stocks to Index Funds: A 2025 Investing Guide

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The main stock indices, S&P 500, Dow, hit new records last year over and over again. What does that mean historically? The saying is that what goes up must come down. But what do we know about how markets and investors behave in an environment of rising stock prices?

NerdWallet's Smart Money Podcast

From Meme Stocks to Index Funds: A 2025 Investing Guide

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And Sam, today we've got a whole slew of tips for getting started. Yes, we do.

NerdWallet's Smart Money Podcast

From Meme Stocks to Index Funds: A 2025 Investing Guide

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At a high level, Sam, should we even pay attention when we hear news items about stocks hitting records?

NerdWallet's Smart Money Podcast

From Meme Stocks to Index Funds: A 2025 Investing Guide

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Okay, we're going to take a short break. We are back in a moment with more investing information for 2025. Stay with us. Sam, it's time to get personal. How are you approaching investing in 2025? Doing anything different, new, exciting, boring? What are you keeping your eye on?

NerdWallet's Smart Money Podcast

From Meme Stocks to Index Funds: A 2025 Investing Guide

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I think that's good advice. You cover your fundamentals first, make sure that you are saving and investing for retirement. And then if you have some leftover cash, maybe dabble a bit in other areas. But I think if people are putting all of their money into crypto for retirement, that's a very risky, potentially dangerous idea. Exactly. Very well said.

NerdWallet's Smart Money Podcast

From Meme Stocks to Index Funds: A 2025 Investing Guide

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Let's talk about how to get into investing if it's something that you're not already immersed in, but maybe want to experiment with, especially outside of retirement and other savings funds. With the caveat, once again, that we are not investment advisors, what's a good way to dip a toe into the stock market waters or maybe the bond waters, if that's your thing?

NerdWallet's Smart Money Podcast

From Meme Stocks to Index Funds: A 2025 Investing Guide

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And what are some red flags to keep an eye out for if you are new to the investing world?

NerdWallet's Smart Money Podcast

From Meme Stocks to Index Funds: A 2025 Investing Guide

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The latest Federal Reserve Survey of Consumer Finances showed that some 58% of U.S. households had some sort of stock ownership as part of their finances. That was the highest number on record. The survey measured the years 2019 to 2022, so included the COVID era and the meme stock era for whatever that's worth.

NerdWallet's Smart Money Podcast

From Meme Stocks to Index Funds: A 2025 Investing Guide

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Sam, what are some ways to figure out which investing platform is best for you? There are so many apps and websites out there. What advice do you have for picking one over another? What factors should people be considering?

NerdWallet's Smart Money Podcast

From Meme Stocks to Index Funds: A 2025 Investing Guide

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Sam, I wonder if you could talk a bit about the relative importance of stock markets in our financial lives. There's a common saying that the stock market is not the economy, right? Yes, it's a large part of the financial world, but would you agree that it's not the end-all, be-all?

NerdWallet's Smart Money Podcast

From Meme Stocks to Index Funds: A 2025 Investing Guide

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When we hear news headlines about the stock market, we need to understand that there are other aspects of the economy that are just as important.

NerdWallet's Smart Money Podcast

Are We in a Recession? What the Data Says—and How to Protect Your Finances

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Say you get into a car accident, get pretty banged up, and are left with some steep hospital bills. How are you paying for them?

NerdWallet's Smart Money Podcast

Are We in a Recession? What the Data Says—and How to Protect Your Finances

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And can you talk us through how the rollover process works? What are the options there?

NerdWallet's Smart Money Podcast

Are We in a Recession? What the Data Says—and How to Protect Your Finances

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What opportunities, if any, would Vicki have to reduce tax liabilities on this?

NerdWallet's Smart Money Podcast

Are We in a Recession? What the Data Says—and How to Protect Your Finances

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So the last part of Vicky's question relates to the time it will take to do a rollover and potential penalties if Vicky doesn't rollover the funds to a new provider fast enough. Can you talk us through the rules around HSA rollovers and the timelines involved? How long people have to deposit funds with a new provider?

NerdWallet's Smart Money Podcast

Are We in a Recession? What the Data Says—and How to Protect Your Finances

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And it is really important if Vicky is doing this rollover on their own to not miss that 60-day deadline because that can leave them on the hook for expensive penalties. Kate, can you give us a quick rundown of what Vicky might face if they do miss that deadline?

NerdWallet's Smart Money Podcast

Are We in a Recession? What the Data Says—and How to Protect Your Finances

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Well, Kate Ashford, thank you for coming on and answering our listener's question.

NerdWallet's Smart Money Podcast

Are We in a Recession? What the Data Says—and How to Protect Your Finances

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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. Or if you're listening on Spotify, you can leave us a comment with your question or even just your thoughts on the episode.

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Are We in a Recession? What the Data Says—and How to Protect Your Finances

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Come back next week when we'll talk with a listener trying to manage the financial fallout of losing a job. Follow Smart Money on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

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Are We in a Recession? What the Data Says—and How to Protect Your Finances

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This episode was produced by Hilary Georgie and Anna Helhosky. Holly Carey helped with fact-checking. Nick Karisamy mixed our audio. And a big thank you to NerdWild's editors for all their help. And with that said, until next time, turn to the nerds.

NerdWallet's Smart Money Podcast

Are We in a Recession? What the Data Says—and How to Protect Your Finances

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Well, this episode, we're going deep into a unique kind of account that can help you cover medical costs and how to fund it. 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

Are We in a Recession? What the Data Says—and How to Protect Your Finances

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This episode, we answer a listener's questions about how to manage their health savings account. 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.

NerdWallet's Smart Money Podcast

Are We in a Recession? What the Data Says—and How to Protect Your Finances

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Our news colleague, Anna Helhosky, is here with more details. Hey, Anna.

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And thank you, Anna.

NerdWallet's Smart Money Podcast

Are We in a Recession? What the Data Says—and How to Protect Your Finances

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Now let's get to this episode's money question that's coming up in a moment. Stay with us. We are back and answering your money questions to help you make smarter financial decisions. This episode's question comes from Vicky, who left us a voicemail. Here it is.

NerdWallet's Smart Money Podcast

Are We in a Recession? What the Data Says—and How to Protect Your Finances

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I have an HSA, and I'm effectively using it like a retirement account for medical expenses. That's how I'm planning to use it long-term. I try not to use it day to day if I can avoid it. Well, Vicky said that their employer stopped their matching contributions to their HSA, so they're moving over from the insurance company holding the HSA account to Fidelity.

NerdWallet's Smart Money Podcast

Are We in a Recession? What the Data Says—and How to Protect Your Finances

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Sounds like Vicky wants to do an HSA rollover. Can you explain when that might be a good idea or necessary to do?

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How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

Today's episode is sponsored by Amazfit. I've been wearing the Amazfit Active 2, and it's basically like having a personal assistant for my health. Except it doesn't judge me for hitting snooze three times. It's also a game changer for fitness. It combines AI-driven coaching, smart tracking, and premium features without the premium price.

NerdWallet's Smart Money Podcast

How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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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

How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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So last year, we talked about the IRS's free tax filing program. Bella, what's the current status of that? Is it still intact after the slicing and dicing of the federal government that we've seen over the past several weeks?

NerdWallet's Smart Money Podcast

How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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Bella, we often talk about the importance of filing your taxes early. Can you give our listeners, especially the procrastinators out there, a couple of big reasons to file before April 15th?

NerdWallet's Smart Money Podcast

How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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This episode, we're talking about, dun, dun, dun, taxes. We've got a lightning round of your tax questions as we approach the sure signs of spring, tulips, cherry blossoms, and the IRS deadline. 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.

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How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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So Bella, can you explain what might be happening with Diana's situation and how reinvested dividends might make someone's income above the limit to contribute to a Roth IRA?

NerdWallet's Smart Money Podcast

How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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Yeah, that's a little thing called phantom income. The IRS considers you to have received this income, even though you never saw the cash hit your bank account. So the income is there, but it's also kind of not there like a phantom. So Bella, how can folks like Diana contribute to a Roth IRA if that's their goal, even if their income might push them past the limits?

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How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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Bella, any other words of wisdom for folks as they embark on tax season 2025?

NerdWallet's Smart Money Podcast

How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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Thank you. And Bella, Elizabeth, I have one last question for you. Have you guys filed your taxes yet?

NerdWallet's Smart Money Podcast

How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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I'll take that as a no. Okay. Well, I'm happy to brag and say that I have filed my taxes.

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How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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Thank you. I try to set a good example for everyone. Well, Bella, thank you so much for coming on and sharing your insights with us.

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How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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to automatically download new episodes.

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How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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It was. And it was by and large a reaction to the implementation of tariffs on Canada and Mexico and their retaliatory tariffs. Our news colleague, Anna Hilhoski, is here with more. Hey, Anna.

NerdWallet's Smart Money Podcast

How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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And with that said, until next time, turn to the nerds.

NerdWallet's Smart Money Podcast

How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

Unlike other wearables, Amazfit goes beyond basic fitness tracking. It has specialized modes like High Rocks Race Mode, Smart Strength Training, and even Free Diving, built for both everyday users and elite athletes. And with AI-driven coaching, it adapts to your workouts, tracks recovery, and helps you train smarter.

NerdWallet's Smart Money Podcast

How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

There's also a free ZEPP app you can pair it with to get in-depth analytics and downloadable maps you can use with turn-by-turn directions. And it has Zepflow AI voice control, so you can check stats hands-free. And don't worry about battery life. The Amazfit Active 2 runs up to 10 days on a single charge.

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How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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If you want a smartwatch that delivers more for less, then visit amazfit.com slash smartmoney to get 10% off. That's amazfit, A-M-A-Z, fit, dot com slash smartmoney.

NerdWallet's Smart Money Podcast

How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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And thank you, Anna.

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How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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You know, Elizabeth, I actually just checked my 401 balance and it is certainly lower than it was a couple of days ago. But I'm trying to do a little bit of exposure therapy and practice what I preach, realize that the markets go up and down and don't make rash decisions based on what's happening from one day to the next.

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How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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Maybe you need some help planning the best way to use your credit card points as you book your spring and summer travel. Or you're trying to figure out whether you should revisit your investment risk tolerance. Whatever your question, 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.

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How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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Today's episode is sponsored by Range Rover Sport. Some decisions in life require careful research, like picking the right investment strategy or figuring out which streaming service actually has the movies you want. But when it comes to driving, there's one decision that's easy. The Range Rover Sport. It's a bold take on sporting luxury, blending sophistication with power.

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How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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On the road, adaptive dynamics keep your ride smooth and composed by reducing unwanted body movements. Because, let's be honest, the only thing that should be unpredictable is the stock market, not your suspension. When the road changes, the Range Rover Sport changes with it. Dynamic air suspension adjusts to keep things smooth and balanced so every turn feels effortless.

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How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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And if the pavement disappears? No problem. Adaptive off-road cruise control kicks in, reading the terrain and making real-time adjustments so you don't have to spend your drive making more calculations than your tax software. Visceral, dramatic, uncompromising. The Range Rover Sport leads by example, just like you do. Build yours today at LandRoverUSA.com.

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How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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Again, explore the Range Rover Sport at LandRoverUSA.com. We're back and answering your money questions to help you make smarter financial decisions. This episode, we're taking on a number of questions about tax season 2025 in a lightning round.

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How Tariffs Could Impact Your Retirement and What to Know for 2025 Taxes

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So Bella, let's start with the basics, the who, what, where, and when of tax season 2025, as in when do people need to make sure they get their taxes in?

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

Today's episode is sponsored by Amazfit. I've been wearing the Amazfit Active 2, and it's basically like having a personal assistant for my health. Except it doesn't judge me for hitting snooze three times. It's also a game changer for fitness. It combines AI-driven coaching, smart tracking, and premium features without the premium price.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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I think I have an easier choice here because my favorite travel credit card would have to be the only travel credit card that I currently use, which is the American Express Gold card.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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Yeah, I have the yellow gold and I feel very fancy whenever I use it, even if I'm just at the Taco Bell drive-thru whipping out my fancy metal card. I'm not huge into travel credit cards because I just don't want to have to play that game transferring points. And I'm just kind of lazy with it. I tend to use my cash back card more than anything else.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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But when it comes to my travel credit card, I like it, I guess, for all the reasons that folks typically like any travel credit card. I got a really sweet sign up bonus. The rewards rate is nice on purchases that I make frequently, like going out to restaurants. And when it comes to travel related perks, I do really like that it has baggage insurance.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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This episode, we're featuring a speed round of your questions, including favorite travel credit cards and how exactly to open a Roth IRA, a question for which we turn to fairy tales. 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.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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So just because Sarah and I like these cards, listener, that doesn't mean that they would be right for you. Sarah, you've been writing about credit cards for a while now. Can you enlighten us about what someone should consider if they are hoping to find a new favorite travel credit card?

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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Okay, all good things to consider. And I'll also add this. If you currently have credit card debt, know that the amount that you pay in interest can wipe out the value of your travel rewards pretty quickly. So before you apply for a high-end card, focus on paying down that debt first.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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Well, first, I'm going to tell Cheryl that this is not personalized investment advice. This is just for general educational and entertainment purposes, as we always say. But then I would also tell Cheryl that your grandchildren are super lucky to have you because investing for them is a really generous gift.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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But first, I want to back up and ask Cheryl, hypothetically, or anyone else who wants to invest for a loved one, what are they investing for? Like, what do they hope their grandchildren will use this money for? Is it for college? Is it so they can have a gap year gallivanting around Europe after high school or college?

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What this money is going to be used for can determine what kind of account might be best for them.

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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Let's break this down by different goals. So if Cheryl wants to invest for their grandchildren's future education, a 529 college savings plan can be a great investment vehicle. The funds don't have to be used for college. They could be used for a trade school or other types of education like private school.

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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When the investment money is used for qualified educational expenses, it's tax-free, which is a big plus. And it's really common for folks to fund or open a 529 for relatives. In fact, I just opened one for my nephew as a Christmas gift, and like Cheryl, I'm planning to contribute to that on birthdays and for Christmas.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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Yeah, Elizabeth, I'd describe it as unprecedented, to say the least, but also chaotic and confusing.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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Well, if Cheryl wants to give their grandchildren money just to do whatever they want with and find themselves, there are a few options to consider, but I'm just going to focus on two. An UTMA account and a standard taxable brokerage account. Starting with UTMA, UTMA is a pretty ugly sounding acronym that just means Uniform Transfers to Minors Act, and it's what's known as a custodial account.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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There are also things called UGMA accounts, which is a similar, even uglier sounding acronym, but many people prefer UTMAs, so I'm just going to focus on those. So UTMAs are essentially ways for minors to own investment assets when they generally would be unable to do so.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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When the grandchild is a minor, Cheryl would manage the assets in the account, and the grandchild would eventually take active ownership of the account when they're an adult. There are a couple of catches with UTMAs though. Now remember that the child is considered to own the assets in these accounts.

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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That means they would be considered the child's for student aid purposes, which could mean that they could qualify for less assistance. The second is that the child could be responsible for taxes on growth within the account.

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And I don't want to go too far down the tax rabbit hole here, but depending on how much the account earns in a year, the child's earnings could be taxed at their parents' marginal tax rate, which a lot of folks want to avoid.

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Yes and no. So remember that minors aren't generally allowed to own investments or taxable brokerage accounts unless it's in something like an UTMA.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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If Cheryl wants to pursue the taxable brokerage account route for their investments with their grandchildren, but avoid the sticky student aid and tax stuff that I mentioned earlier, they could just open one of these accounts for each of their grandchildren, make contributions, and then gift the grandchild the money from that account when they want to.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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You are correct, Sarah, because there is no escaping taxes. In this case, Cheryl would likely have to pay long-term capital gains on the earnings in their brokerage account if they hold the investments for more than a year. But the grandchildren wouldn't owe any taxes on the money they get, which is nice.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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And people often worry about having to pay gift tax, but for many folks, that's not really a concern. In 2025, people can gift $19,000 per person without having to file a gift tax return.

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Cheryl should certainly be able to start with smaller amounts, depending on what type of account they want. Cheryl should have no problem finding an investment account with a zero dollar minimum.

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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And moving on, let's get to our final question of the episode, which comes from a listener's text message. Here it is. Step by step, like I'm a five-year-old, exactly how do you open a Roth IRA? And then what do you do once you open it? I'm college educated, but I need finances for dummies. All right, Sarah, you are a parent.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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I get that your kid is not yet five, but how would you explain to them how to open a Roth IRA?

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So cute.

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Give them to us. And Sarah, you got to make this fun because I was that five-year-old who preferred to doodle with my crayons in class rather than pay attention.

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Okay. I'm confident you can get there. Okay, Sarah, I'm picturing a house. How do I get into it? Because I want a retirement full of money and candy.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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Okay, so your income is the key to entering this candy house. And the size of your key, aka how much income you have, determines kind of how big the house is when you get inside, as in how much you can contribute.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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So I'm in the house, now what?

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How do I know which one to pick?

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Okay, I will have the robo porridge, please, because I like to be a passive investor. I've got my bowl selected. What's next, Sarah?

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So I'm in the house. I've got my bowl. I'm gradually adding some porridge to it. Does it somehow transform into a handsome prince that will provide me with money and candy in retirement?

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Well, that's one way to live happily ever after. And hopefully this story helped the listener understand how to open a Roth IRA.

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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And here is our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

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So what's the rationale behind the tariffs? Why is this a priority for Trump?

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

Unlike other wearables, Amazfit goes beyond basic fitness tracking. It has specialized modes like High Rocks Race Mode, Smart Strength Training, and even Free Diving, built for both everyday users and elite athletes. And with AI-driven coaching, it adapts to your workouts, tracks recovery, and helps you train smarter.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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With more tariffs likely to come, what's the takeaway for consumers?

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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Yeah, what did that pause include?

NerdWallet's Smart Money Podcast

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Okay, well, let's turn to a few actions by Trump's so-called Department of Government Efficiency, or DOJ. It's led by Elon Musk, the literal richest man on the planet, and an unelected official. I'd like to note that DOJ is not an actual government department, it is a department in name only, and we all expected it to serve in an advisory capacity, but that doesn't seem to be the case.

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

There's also a free ZEPP app you can pair it with to get in-depth analytics and downloadable maps you can use with turn-by-turn directions. And it has Zepflow AI voice control, so you can check stats hands-free. And don't worry about battery life. The Amazfit Active 2 runs up to 10 days on a single charge.

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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So what does that actually mean for people?

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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Yeah, we have more information on how to freeze your credit at the NerdWallet website. Just search NerdWallet, how to freeze your credit. Beyond the Treasury, it seems like the Trump administration has been pretty busy with other departments, too.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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This wasn't entirely unexpected, of course. Trump as well as Musk are no fans of the CFPB. They also don't seem to be fans of the Education Department.

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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If you want a smartwatch that delivers more for less, then visit amazfit.com slash smartmoney to get 10% off. That's Amazfit, A-M-A-Z, fit, dot com slash smartmoney. Well, Elizabeth, would you say it's been a slow news week?

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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Can he do that, Ana?

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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All right. That was a lot of information to digest, and there's likely to be a lot of new actions coming out of the White House in the coming days. So, listener, let us know what you have questions about. In the meantime, Ana, thanks for walking us through all of that.

NerdWallet's Smart Money Podcast

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But before we move on, a quick note, listener. I'm betting you have a pile of tax documents burning a hole in your desk right now, and maybe you're wondering how to approach your taxes this year. Well, we are putting together an episode all about your tax questions, so send them our way. 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

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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Or 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)

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All right, now let's move on to this episode's money question segment. That's coming up in a moment. Stay with us. Today's episode is sponsored by Range Rover Sport. Some decisions in life require careful research, like picking the right investment strategy or figuring out which streaming service actually has the movies you want. But when it comes to driving, there's one decision that's easy.

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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The Range Rover Sport. It's a bold take on sporting luxury, blending sophistication with power. On the road, adaptive dynamics keep your ride smooth and composed by reducing unwanted body movements. Because, let's be honest, the only thing that should be unpredictable is the stock market, not your suspension. When the road changes, the Range Rover Sport changes with it.

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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Dynamic air suspension adjusts to keep things smooth and balanced, so every turn feels effortless. And if the pavement disappears? No problem. Adaptive off-road cruise control kicks in, reading the terrain and making real-time adjustments, so you don't have to spend your drive making more calculations than your tax software. Visceral, dramatic, uncompromising.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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The Range Rover Sport leads by example, just like you do. Build yours today at LandRoverUSA.com. Again, explore the Range Rover Sport at LandRoverUSA.com. We're back and answering your money questions to help you make smarter financial decisions. This episode, we're taking on a number of your questions in a lightning round. Here's the first question, which comes from a listener's text message.

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They asked, what's your favorite travel credit card? So, okay, a simple enough question. But before we dive in, I just want to give listeners a heads up that we will be talking about some companies that are NerdWallet partners, but that does not influence how we talk about them as ever.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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And as we talk about specific benefits of each card, know that terms and conditions apply and the benefits that we'll discuss are active as of this recording and may change at a later date. Okay, with all that said, Sarah, lay it on us. What is your favorite travel credit card?

NerdWallet's Smart Money Podcast

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I would imagine so, having not any kids of my own.

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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So let's try to summarize and then get to the fun part, a lightning round of listener questions. 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

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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Okay, and go on about that asterisk slash footnote.

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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That is pretty sweet. And I might add my own asterisk or maybe that little dagger thing you sometimes see in publications. And that's that you have to pay a pretty hefty annual fee to be able to earn the points at this rate with the reserve card, right?

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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Yeah, but that said, if you can make it work, you can get a lot of value out of these cards. And I feel like the Chase Sapphire cards, whether the reserve or the preferred, are the gateway credit cards for a lot of people that get them into the points game. Because once you learn about transferring points, I mean, all bets are off for some folks.

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Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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They get totally hooked on maximizing their points to get free or highly discounted travel. So I get why you like that card.

NerdWallet's Smart Money Podcast

Will New Tariffs and Tax Rules Cost You? (Plus: Travel Rewards & Roth IRA Tips)

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Fun.

NerdWallet's Smart Money Podcast

How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles. You know what? We've made a lot of episodes of Smart Money this year. Three episodes a week times, oh, 48 weeks up to this month, give or take a few breaks. We're talking around 140 episodes. That's a lot of advice and financial coverage and pretty good advice and coverage if we do say so ourselves.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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You do.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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Absolutely. And I want to talk about why Kat's portfolio might be so undiversified. I suspect it has to do with something called familiarity bias. With familiarity bias in investing, people tend to invest in companies that they are familiar with, as you might imagine. In Kat's case, it's the one that their dad worked at.

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Sometimes this happens when people work for a company for many years and they want to keep investing in it because they believe in the company's performance. It helps them over their life and they probably still feel some kind of loyalty to that company. But this can be a very risky way to invest.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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So Sarah, Elizabeth, I would love to hear what you think about this kind of investing strategy and what it could mean long term for someone.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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Yeah, you put all your eggs in one basket, and that's the risk of not diversifying, right?

NerdWallet's Smart Money Podcast

How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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Yeah.

NerdWallet's Smart Money Podcast

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Or the time.

NerdWallet's Smart Money Podcast

How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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Yes.

NerdWallet's Smart Money Podcast

How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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Right. If someone really wants to invest in a company because they just love that company, that could be their financial goal. However, Kat's goal is to grow their money. And as we know, the best way to do that typically is by having a well diversified portfolio that is just more efficient on the whole. Let's talk a bit about how Kat could diversify that portfolio of theirs.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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do this they would probably first have to sell a certain amount of shares in the stock that they are currently invested in the one from their father's company that would give them cash to then invest in a more diversified way and i should note here that there are tax implications to selling stock but i will leave that rabbit hole unsplunked for now because it is a deep one and i don't want to get lost in there but team let's talk about this with the perpetual caveat that we are not directing cat or anyone else how to invest

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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What are your thoughts, ideas around how to invest cash that is more diversified than going into a single company that your dad worked at?

NerdWallet's Smart Money Podcast

How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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And let's quickly just state what index funds and ETFs are for people who may not know.

NerdWallet's Smart Money Podcast

How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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And they can mirror the performance of the market on the whole, depending on what type of index fund or ETF you're investing in.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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Just sprinkling it throughout the conversation.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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Truly it is. Yes. Anyway, go ahead, Elizabeth.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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And another pretty easy option that might be really cost effective, too, for Kat, and this is something that I do, is regularly investing in a robo advisor account where you can tell the platform what your financial goals are, what your timeline is. And then I make regular deposits into this account. I basically am saying, hey, I want to retire this year.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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So right now, when I have a long time horizon, let's maybe have some riskier investments and then taper them off to be less risky as I get closer to when I want to actually have this money to spend and fund my life. So robo advisors do a lot of that heavy lifting for you. They're really inexpensive.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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So I think that there are all sorts of great options for someone like Kat to look into in terms of ways to invest their money that make it so they don't have to do a lot of the work themselves.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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Yeah, well, that actually is so key to this whole puzzle that I'm so interested in. A lot of financial advisors and investment advisors will recommend that you don't invest money that you need within five years. And that is to account for the volatility of the stock market.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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You want to give yourself the best shot that you possibly can to have your money grow while, of course, understanding there are no guarantees with investing, really. With that in mind, CAT is pretty close to that five year benchmark.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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And if I were them, I would probably choose something like a lower risk ETF or index fund so that I have less of a chance of losing the money that I'm putting into the stocks that I'm going to be hoping grow for me. If they want to be even more conservative, CAT could just funnel as much money as possible into a high yield savings account.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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Yeah, I'm really wondering what Kat's doing with this money. Hmm.

NerdWallet's Smart Money Podcast

How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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Yeah.

NerdWallet's Smart Money Podcast

How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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Please tell us. Yeah, we're nosy. So curious.

NerdWallet's Smart Money Podcast

How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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That's all we have for this episode. Do you have a money question of your own? 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. And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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This episode was produced by Tess Figland. It was mixed by Megan Maurer. And a big thank you to NerdWallet's editors for all their help. Here's our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. And with that said, until next time, turn to the nerds.

NerdWallet's Smart Money Podcast

How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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And in all likelihood, you didn't hear all of it, right? If you did, thank you. If we were public radio, we would send you a tote bag. Anyway, we decided to go back through the archives this month to bring you the best of Smart Money 2024. Some of our favorite conversations with you and some of our most meaningful advice. Today, we're bringing you the highlights of our investing coverage.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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I hope you'll agree that this is indeed the best of. Now, on to the show. Hey listener, we've got a special episode in store for you today. Our investing and tax nerds recently hosted a webinar going deep into how you can level up your investing and tax strategy. So we packaged that up into a podcast episode for you.

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The nerds talk about what you need to know about different investing accounts, how to get help with your taxes and more. So here's the webinar.

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We are back in a moment with more smart money. Stay with us.

NerdWallet's Smart Money Podcast

How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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To help us answer Kat's question on this episode of the podcast, Sarah and I are joined by our other co-host, Elizabeth Aola. Hey, Elizabeth.

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Thank you for that reminder, Sarah. Okay, so our listener has a really interesting investing puzzle. They have an undiversified portfolio and a very specific investing target. They want to grow their money by $28,000 in a matter of seven years. Without any additional investments, this is likely impossible.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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But fortunately, our listener has a lot of options available to them to mix up their investing strategy that might get them closer to their goal.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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So I ran some numbers and NerdWallet's investing calculator using the average annual after inflation return of the stock market on the whole, which admittedly is a little bit different from what our listener is currently dealing with because they have a pretty undiversified portfolio. It's really just in one stock.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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SEAN FIELDS- OK, so I ran a few different scenarios, one where they don't invest any additional money and get a 7% return. In that case, their balance is estimated to be about $26,000 in seven years. And that's an increase of about $10,000, but it's not where they want it to be.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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Another scenario I ran is one where they invest $150 per month in a diversified portfolio that reflects the stock market, and they get that same 7% return. That would get them to a little over $42,000 in seven years, and that's fairly close to their goal, but still not quite there.

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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Then I ran a third scenario where they invest $200 per month in a diversified portfolio, but only get 5% growth on their investments. In this case, their balance would be a little under $43,000 after seven years. So that's getting them to their goal effectively. So what's the point of running all these numbers?

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How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try

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It's to show that there is a huge range of possible outcomes when you invest, and your returns are going to depend on a lot of factors, including how much you can continue to invest, the return of the market, and importantly, the types of investments that you hold.

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401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained

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Well, June, thanks for going deep into the weeds with us this episode. Do you have any parting thoughts for Vicky or others who are trying to sort out different accounts and investment options for their retirement?

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401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained

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All right. Well, Jun Xiao, thank you so much for joining us on Smart Money.

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401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained

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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

401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained

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You can follow Smart Money on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

NerdWallet's Smart Money Podcast

401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained

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And with that said, until next time, turn to the nerds.

NerdWallet's Smart Money Podcast

401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained

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We are back and answering your money questions to help you make smarter financial decisions. This episode's question comes from Vicky, who left us a voicemail.

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401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained

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Hey, June. So I want to start by laying the groundwork for the conversation. Our listener, Vicky, has a 401k. It happens to be maintained by an insurance company. And Vicky isn't too happy with the plan and is wondering whether it's worth investing in at all. To start, I'm betting that some folks might not realize that a 401k can actually be managed by an insurance company.

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401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained

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And it's not as sketchy as it might sound. So June, can you describe the role an insurance company might play in managing a 401k and whether it's any different from another kind of financial institution like an investment company overseeing such an account?

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401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained

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Our listener is considering not investing in their 401k at all, given that they don't get a match and they aren't wild about the investment options in the account. But there are still some serious advantages of investing for retirement in a 401k versus a regular taxable brokerage account. Can you lay those out for us?

NerdWallet's Smart Money Podcast

401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained

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I want to talk more about specific investment options that are available in retirement accounts because different accounts can have very different options and costs. In preparing for this conversation, I logged into my 401k account and saw that I have access to over 20 different funds to invest in.

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401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained

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And I'm currently invested in a target date fund that will change my investments over time to become less aggressive the closer I get to retirement. And the expense ratio, which is basically the administrative fee for the account, is is .08%, which is pretty low.

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401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained

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Then I logged into my robo-advisor Roth IRA, which automatically determines my investments, and saw that the expense ratio is .25%, which is a lot higher than .08 and can add up to a difference of thousands of dollars over the years.

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401(k) vs. Brokerage Account: Which Is Better for Retirement Savings? Plus, the National Debt Explained

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June, would you say that investment options and fees are the two main things that people should weigh as they compare retirement investment options, or what else do you think people should consider?

NerdWallet's Smart Money Podcast

Regret Less, Save More: How to Make Smarter Money Moves in 2025

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It's a new year. We've left 2024 behind. All there is now is to look forward, right? Well, yes, but it's also a good time to reflect on what could have gone better in our financial lives last year and what we can learn from our regrets.

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Regret Less, Save More: How to Make Smarter Money Moves in 2025

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Those trips sound really fun. On my end, after a few years of pretty tame financial goals, I have a lot on my plate this year. I'm going to sell my house this spring. I'm hopefully going to have my financial planning firm up and running by mid-year. This fall, my partner and I are finally getting married and we have a trip to London somewhere in the mix too. So I have a lot going on in 2025.

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Regret Less, Save More: How to Make Smarter Money Moves in 2025

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Sarah, I love how you and Elizabeth just keep it real. We have been anti-resolutions for a little while now on Smart Money, because as you two discussed, resolutions can lead to unnecessary disappointment and unrealistic expectations. We're not saying don't aim for the stars, because I am certainly fueling up my rocket ship for all I want to achieve this year.

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Regret Less, Save More: How to Make Smarter Money Moves in 2025

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But if your plans don't go exactly as mapped out, that's fine. Just do your best.

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Regret Less, Save More: How to Make Smarter Money Moves in 2025

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I'll say again that it's always helpful to go back and review what went well and what didn't for any given time frame. It doesn't have to be year-to-year. It can be whatever works for you. Having that perspective can be really useful as you move forward in your financial life.

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Regret Less, Save More: How to Make Smarter Money Moves in 2025

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Nice to you, Sarah, because we'll be getting to all of those topics as the month goes on. Next week, we'll have some advice for those of you who are looking to get more informed about investing.

NerdWallet's Smart Money Podcast

Regret Less, Save More: How to Make Smarter Money Moves in 2025

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This episode was produced by Tess Vigeland. I helped with editing. Amanda Derangowski helped with fact-checking. Megan Maurer makes our audio. And a big thank you to NerdWallet's editors for all their help.

NerdWallet's Smart Money Podcast

Regret Less, Save More: How to Make Smarter Money Moves in 2025

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And with that said, until next time, turn to the nerds.

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Regret Less, Save More: How to Make Smarter Money Moves in 2025

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Yes.

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Regret Less, Save More: How to Make Smarter Money Moves in 2025

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and about how to turn those frowns upside down. I'm always up for learning from past mistakes. Otherwise, what's the point of making them?

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Regret Less, Save More: How to Make Smarter Money Moves in 2025

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As we start a series of episodes looking at your money in 2025, we want to hear what you think, listeners. What are you working on in your financial life as you start the new year? Leave us a voicemail or text the Nerd Hotline at 901-730-6373. That's 901-730-NERD. Or email a voice memo to podcast at nerdwallet.com.

NerdWallet's Smart Money Podcast

Regret Less, Save More: How to Make Smarter Money Moves in 2025

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Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles. And I'm Sarah Raffner. And Sarah, before we get to anything else, happy new year.

NerdWallet's Smart Money Podcast

Regret Less, Save More: How to Make Smarter Money Moves in 2025

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I'm not even sure what that means, Sarah.

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Regret Less, Save More: How to Make Smarter Money Moves in 2025

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I'll buy that too, even though I have not seen that movie. I'm such a young millennial over here.

NerdWallet's Smart Money Podcast

Regret Less, Save More: How to Make Smarter Money Moves in 2025

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I'll add it to my list, which is already very long. All right. Anyway, Sarah, do you have any big money goals for the year?

NerdWallet's Smart Money Podcast

How to Keep Your Credit Strong During Economic Shifts and Know If You’re Ready to Buy a Home

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If you are paying PMI, know that you can eventually get rid of it. And it, again, is worth it just to get you in the door. Well, let's turn to closing costs because those are also a bit pricey. Abby, can you give us the rundown of 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

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Oh, you know I will. It is big and shaped like a dollar sign for some reason. But first, let's talk about what's happening with debt right now. Can you give us some context, Donna?

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One thing Nikki didn't ask about in their question was credit. Are there any general guidelines that you think Nikki should keep in mind around what credit score they might want to have before they go shopping around for mortgages?

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Okay. And I've heard that the best rates go to those with a credit score 740 or above. Is that still true? Yep, that's correct. Okay.

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I do have thoughts on this topic. I am generally not a fan of using retirement funds to pay for a down payment on a house. 401k loans, which Nikki asked about, can be particularly risky. If you quit your job or are fired, you will have to repay that loan in short order.

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Plus, borrowing from your 401k can result in a hit to your retirement savings, which can make it just that much more difficult to save enough for your golden years. Now beyond 401ks, Traditional and Roth IRAs allow you to pull up to $10,000 of funds from your account penalty-free for a first-time home purchase if your account has been open for at least five years.

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But you may owe income tax on the earnings portion of what you take out, depending on the type of account that you have. Now, you can take your contributions from an IRA at any time, but here's my gripe with that. This is a retirement account. I don't like to view it as a savings account.

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I think it's important to have some psychological separation between what's a savings account in your bank and what's a retirement account so that people aren't using a retirement account like a piggy bank. And you know, it's also technically possible to take a withdrawal from your 401k and use that money for a down payment.

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But that's also not a great idea because generally comes with taxes and penalties. So again, I'm not a big fan of this route to homeownership.

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Wow.

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Another resource people may not be aware of are first-time homebuyer classes, which can help make homebuying more affordable too. Can you talk us through that?

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And even if someone thinks that they know everything about buying a house, if you haven't done it before, there are going to be things that you don't know. And this is likely the biggest purchase you will ever make in your life. So it's worth doing a bit of homework.

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And if folks want to learn more about first-time homebuyer classes, we have an article on the NerdWallet website, and we will link to that in the episode description.

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Yeah, when Nikki said in their question that they feel like renting is throwing money away, I thought to myself, I don't think so, Nikki. I disagree with you. Because there's nothing wrong with renting. It's not really throwing your money away. You are buying a roof over your head every month, and you have so much more freedom when you're renting.

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Also, let's just be honest, renting can be so much more affordable for many people. When you are renting, your monthly rent payment is the most that you are going to pay for your housing each month.

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And Abby, as I'm sure you know well, when you are a homeowner, your mortgage could be just the minimum you pay for housing that month because you might have to repair something in your house or have some other home-related expense.

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Okay, please go on. Tell me.

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Exactly. That is not sexy. I personally...

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No. Absolutely not. It really is a matter of priorities, Elizabeth. You're prioritizing saving for retirement right now. And you also recently moved to where you're living. So I feel like you're still settling in, in a way. And you don't really want to buy a place unless you're going to be there for at least five years so you can come out ahead.

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So, Abby, do you have any final thoughts on how Nikki or anyone else who's looking to buy their first home might be able to do so when everything is so expensive right now?

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Well, Abby, thank you so much for coming on and sharing your insights.

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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. Or if you're listening on Spotify, drop us a comment to let us know what questions you have or even just what you think of the episode.

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Don't forget to follow Smart Money on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes. And tune in next week to hear about how to manage the financial side of wedding planning, something I am in the middle of for my own wedding.

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And with that said, until next time, turn to the nerds.

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One of the most common types of debt is home loans. What's the story there?

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Speaking of government loans and default, let's talk about what's happening with student loans right now. There have been some recent developments that may concern borrowers.

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Wow. Okay. Thank you, Elizabeth. I will definitely check every single one of those things out.

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That is rough. It sounds like anyone who thinks this could affect them should contact their loan servicer right away to find out their options for pausing or maybe lowering payments. Now, cars have been expensive in recent years and prices are only going up due to auto tariffs. But how are borrowers doing with their auto loans?

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Putting it on. Okay. My imaginary dollar sign hat is firmly on my head.

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Okay. Well, that's a debt I'm happy to be in. Unlike some of the debt that we're going to be talking about in this episode. 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.

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The two big threats of delinquencies are damage to your credit and eventually debt collectors knocking at your door. A delinquent payment, which just means a missed payment, won't immediately harm your credit. Damage typically begins to set in after a payment is more than 30 days late. And then the longer you're delinquent, the worse the consequences.

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So when a payment is more than 30 days late, that's typically when a creditor will mark the payment as officially late, and that mark could stay on your credit report for seven years. That can make it harder to get approved for new lines of credit or rent an apartment, the kinds of things that you need good credit to do easily.

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Then that can drag down your credit score too, and how much depends on where your credit is now. The higher your score, the further it may fall. On the debt collection side, you may find yourself bombarded with calls from debt collectors seeking payments, and this can eventually lead to legal action or your wages being garnished.

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Picking up the phone is one of the best things that you can do. Call your creditors and let them know that you're having trouble paying your bills. They may offer hardship programs that can help you stay current with your bills.

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Savings, yes. Retirement, almost never. When it comes to savings, be cautious there. It's not a great idea to completely deplete your savings to pay off your debt because you could end up going deeper into debt if and when the next financial emergency pops up and you don't have savings to pull on to pay it off.

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Now, when it comes to using your retirement savings to pay off debt, I don't want to say it's never, ever a good idea because there's always some exception to the rules out there. But I am typically strongly opposed to using your retirement funds to pay off debt. There are a number of reasons why, but I'll give you two big ones.

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First, you'll often be hit with taxes and penalties for taking money out of your retirement account, particularly if you're tapping your 401k. And the bigger reason is that you are robbing your future self of a comfortable retirement to solve an immediate problem.

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Taking out $10,000 now to pay off debt could mean that you have a retirement savings gap of much more than $10,000 later due to lost compounding interest over time.

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I recommend people go back to their hierarchy of needs. If cash is really tight, pay the bills that keep the lights on and the water running and a roof over your head. Then start making those calls to other creditors to see which might offer hardship programs so you can try to stay on top of payments.

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Be wary of anyone that's offering a quick fix to your debt. You likely didn't get into the situation overnight, and resolving it can take some time, too. I know this situation can feel really stressful and you just want it to be over with, but take a little time to find the best solution.

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This episode, we're answering a listener's question about some home buying basics. 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.

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Again, take a moment to pause. Realize that high-interest loans can just make a bad situation worse. If you're feeling really overwhelmed by your debt, reach out to a nonprofit credit counseling agency. These organizations are squarely focused on helping consumers navigate their debt, particularly credit card debt, in a way that's affordable.

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They may even be able to help you slash your credit card interest rates. Work to find a solution that keeps your head above water and moving toward resolving your debt.

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And thank you, Anna.

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Now let's get to this episode's money question. That's coming up next. Stay with us. We're back and answering your money questions to help you make smarter financial decisions. This episode's question comes from Nikki, who sent us an email. Here it is. Good morning. I am tired of renting and want to buy a house. I feel like renting is throwing money away. I've never bought a house before.

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Where do I begin? How much did I put down for a deposit? What are closing costs and how expensive can that get? I've heard that there is a loan for first-time homebuyers, but I'm not sure how that works. And is it smart to use my 401k toward the cost? Thank you for your time, Nikki.

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Abby, our listener Nikki would like to buy a house, but they don't know where to begin. So let's start with that. Where should Nikki start?

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And that's all kinds of debt. We're talking mortgages, credit cards, auto loans, and student loans. Our news colleague, Anna Hilhoski, is here with more details. Hey, Anna.

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Okay, that's helpful. So Abby, let's talk about down payment a little bit. Can you outline how much Nikki or anyone else looking to buy a house might need to put down? I think some people are still believing that you have to put down 20%. But that's not exactly the case anymore, right?

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That's a really good point, too, because when I was buying my house years ago, I put down 3%, and that was really the only way I could afford to buy a house. And so, sure, my monthly payment is greater than it would be if I had put down 20%, but it got me in the door, and my monthly payment is still manageable.

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So that's just an individual calculation that everyone will have to make for themselves.

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My PMI was a bit of a PIA, if I can say so. And so once I hit 20% equity, I requested that my PMI drop off because it happened less than two years after I closed on my house due to the surging home prices in the immediate aftermath of the pandemic. And I was able to shave off about $150 of my monthly payment just by getting rid of that.

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Elizabeth, are you ready to keep it real? Like, really real? So real that people might be shocked by what you're saying?

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Although I tend to veer toward thinking that debt is neither good nor bad in moderation. It is a tool to be deployed carefully. And I'd like to hear how you guys have negotiated your feelings around debt, because Andrew, it seems like you've kind of come around to thinking that debt is less bad in general than you thought in the past. Is that right?

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Yeah, it's essentially a financial buffer. But you wrote to us about how you will soon have some new wiggle room in your budget. Tell us more about that.

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That is more than my mortgage payment, I'll say, that you have in your budget to work with. So you're considering maybe the expansion on your house. What are the other priorities that you're weighing?

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You know, I think that's why we get along so well. Well, this episode, we're doing another round of Money Hot Takes, where we lay out the nerdy truths about money that people might not be ready to hear, but it's our job to do it anyway. So buckle up. 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.

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How many months of savings is that for your expenses?

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Well, a lot of financial planners will recommend that for households where you have two incomes like you guys, three months can be okay. But it does seem like you're pretty risk averse and you like having a lot of financial security. So in that case, you might feel safer with closer to six. Tell us a little more about your retirement savings too.

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That's a great question and one that we get often. And think about what you would do in a crisis. Say, God forbid, one of you lost your job. You would make some drastic changes to your budget. You probably wouldn't be eating out as much. You might pull back on retirement savings. You would go into like shelter mode, basically.

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So you want to think about for your emergency fund, three to six months of your bare bones budget.

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50 seconds left.

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I think that's how everyone feels, unless you're a multi-multi-millionaire. And even then, I bet lots of people who have lots of money feel like they still won't have enough. So that's totally normal. You've played around with NerdWallet's retirement calculator?

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Love to hear that. And for folks curious about it, we'll have a link to it in the show notes here. But as you play around with that calculator, you can see, okay, I'm planning on living on maybe 70% or 80% of my pre-retirement income in retirement. and it can give you an idea of how much you might need to save. But that is an estimate.

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We don't really know what the future holds, how the stock market might perform, but this is why it's really helpful, like you were talking about earlier, with doing some financial planning.

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I would recommend, just for retirement planning specifically, partnering with a certified financial planner professional who can run what's called a Monte Carlo simulation, and they can basically run all these different variations of your current financial plan

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and factor in, okay, the stock market crashes, or it does really well, or one of you stops working, any number of changes, and it can give you a percentage of how likely you are to hit that financial goal and have enough in retirement. It seems like you want a clear percentage of how on track you are and what your chances are of having the retirement that you're envisioning. Is that right?

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And I think once you have that shared vision in mind of what you want your retirement to be like, you can almost walk backwards into that and think, how can we allocate the $1,400 that we're going to have each month now to get what we want? Having an addition on your house can be great in the short and medium term just for quality of life, especially as your son grows up.

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But then longer term, it could make your house more valuable. Also, putting more into your kids' 529 could make it so that they have less debt later on or you don't have to take out as much debt for them when they hit college age.

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So like Elizabeth mentioned earlier, there are a lot of ways that you can deploy this money simultaneously to achieve the vision that you want one month, one day at a time.

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Okay, that's 100 seconds. Do you have any more you want to say?

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Well, 529s are great because they are very flexible for higher education. You can also use them for things like trade school or even high school if needed, if you're putting them toward the right expenses.

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But if you want to fund something like a gap year, an account like a taxable brokerage account might be the more flexible way to go because you don't have all these restrictions around what you can use the funds in it for. So that would probably be something to look into as well. Have you considered opening one of those for your son?

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Well, we have tons of roundups on the NerdWallet website. So check those out. You can, again, even think about putting some of that money that you have each month into one of those. I do want to remind you that I'm not telling you exactly what to do with your money. You know, I'm a CFP, but I'm not your CFP. But these are just things to think about.

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You have a lot of money at your disposal right now. And a 529 is one way you can build savings for him. But again, that taxable brokerage can give you a lot of flexibility too. Naomi, Andrew, we've run through a lot of different ways to meet different goals, different ways to think about your values and your priorities.

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How are you two thinking about the money that you'll have at hand on a monthly basis pretty soon and how you might deploy that?

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Yeah. And you guys are thinking about this and talking about this at a great time. You have a few weeks before you're going to see any of this money. So take the time to have these conversations to dream a little bit. Maybe even map out how your budget might look if you put a certain amount toward this goal and a certain amount toward another goal.

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And then try mixing up those numbers a bit and see where you might be five, ten years down the road if you allocate a certain amount toward different goals over time. That might help you see how you can get to where you want to be in really concrete terms too.

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Well, Naomi, Andrew, thank you so much for coming on and sharing your story and talking with us.

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Yeah, thanks, Sean. Thanks, Elizabeth. And that is 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 nerdballot.com.

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Remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeart Radio to automatically download new episodes.

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And with that said, until next time, turn to the nerds.

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There you go. A little over 100 seconds, but I think well worth the extra time because that is a really important point. So many people, especially on social media, are consumed with this hustle culture mentality and think that you have to be working constantly to become a millionaire. And first of all, becoming a millionaire can provide great financial security, but it's not everything in life.

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You know what's also great to do in your life? Enjoy hobbies, spend time with friends, not be working constantly. And I worry sometimes about this mentality that you have to have a business. You have to be constantly working. Otherwise, you're doing something wrong. So thank you for laying all that out.

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I love it.

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All right.

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My money hot take is that Roth IRAs are way overrated. But Sean, you're thinking, you guys always talk about the benefits of Roth IRAs. What do you mean they're overrated? Well, let me explain.

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Sure, Roth IRAs can give you a tax-free pot of money in retirement because you fund them with after-tax dollars, and you may be able to use the funds for certain reasons before retirement without taxes or penalties. But guess what? Roth IRAs have some serious limitations, and there is likely a better alternative right in front of you.

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Starting with the funding limitations, the maximum that folks under 50 can contribute to an IRA, traditional or Roth, is just $7,000 in 2025. And if you're over 50, you can contribute a measly $1,000 more. For many people, that is just not going to be enough to save annually to fully fund their retirement. Then there are the income limits.

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Oh, God. Okay. You can't contribute the full amount to a Roth IRA if you earn over $150,000 as a single filer or $236,000 for married filing jointly. And people will counter that if you earn over the income limit, you can just do a backdoor Roth. Sure, that's an option. But guess what?

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There is a way you can contribute Roth dollars to a retirement account without an income limit, a much higher contribution limit, and without the hassle of doing a backdoor conversion. I'm, of course, talking about a Roth 401k. which I'm here to say is the superior way to contribute post-tax dollars to a retirement account and have a tax-free pot of money in retirement.

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I'm Sean Piles.

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Many employers offer these now, and they allow you to contribute much more to a Roth account. It shares the limit with your regular 401k, so you could contribute at least $23,500 this year, depending on your age. And again, earning too much won't limit whether you can contribute. Ding, ding, ding! Oh no, I'm not even close to done yet. Elizabeth, please give me a few more seconds.

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So you might also be eligible for matching contributions from your employer, which makes it even easier to save for retirement with a Roth 401k. So do Roth 401ks allow you to take out your contributions before retirement penalty-free like a Roth IRA? No. Do they let you pull out up to $10,000 for a first-time home purchase like a Roth IRA? Also no. But guess what?

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Pulling from retirement accounts can jeopardize your retirement savings anyway. And also, you only have to be 55 to begin withdrawing from your employer's 401k upon retirement without penalties compared to the standard withdrawal age of 59 and a half from an IRA. There you have it. Roth IRAs are clearly way overrated. That was a marathon.

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That was a marathon, but it was a sprint and a marathon at one time.

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Thank you.

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I'm glad you mentioned the potential limits of 401ks because you're right. You are kind of up to your employer's retirement savings. Thank you so much for having me. But I do realize that not everyone is as spoiled as we are here at NerdWallet. So you definitely want to compare your options and shop around. This is not a one size fits all situation.

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But first, you heard us up top. It's time for another round of Money Hot Takes. If you are new here, this is how it works. Elizabeth and I have 100 seconds on the clock to rail against something in the personal finance space that we are annoyed by or simply don't like.

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You're completely right, Elizabeth. Relying on access to a 401k or a similar account like a 403b Through an employer to have a reasonable chance at saving for retirement is, shall we say, a massive problem in our society. And that might actually just be a topic for another round of Hot Takes.

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Now here's me getting the last word on your last word. You're only able to withdraw your contributions. The earnings can be taxed and face penalties if you withdraw those before 59 and a half. So downsides, trade-offs in every direction.

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Thank you.

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But before we get into that, we are at the part of the show where we ask you to take a second and think about where you need some guidance with your money.

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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 out with Elizabeth 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.

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because there's a lot of misinformation or just misguided stuff that happens around money, and it's our solemn, nerdy duty to impose our perspective on listeners every so often. Elizabeth, this is your very first Money Hot Take segment, so you have the honor of going first. Are you ready?

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Naomi, Andrew, welcome to Smart Money.

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So to start, I'd love to hear a little bit about what your financial life is like right now. Where do you two feel confident? Where do you think there's maybe some room for improvement?

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Tell us more about that. How do you align on your values and priorities? Because that can be a challenging thing for couples.

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Okay, okay. I'm setting my timer to 100 seconds. Three, two, one, go.

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I love hearing how aligned you are. It's really refreshing. And the idea of you guys having a weekend to talk about your values sounds weirdly romantic in a very nerdy way. So you mentioned that you had these five values. Generosity is one of them. What are the other ones?

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I love that. You guys are manifesting this so much. Where did these words come from?

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Yeah, well, good debt is debt that often helps you build wealth long-term. A lot of people think of student loans as a good debt. Bad debt can prevent you from... achieving your financial goals. Often that's high interest credit card debt. So based on these pretty simple parameters, it does seem like you guys have good debt.

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Happy holidays, nerdy listener. We are taking the week off to relax, spend some time with our families, and balance our checkbooks. Just kidding about that last one. I mean, who has checkbooks in 2024? please enjoy this episode from our archives.

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I have another question for you, Brinker. So going to the why did I buy that question, what is your answer to that usually?

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So tell us a bit about NerdWallet Advisors and your role there.

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Yeah, you can rationalize this, but then you still have that impulse to make that purchase, right?

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Have you found any techniques to try to curb your spending?

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But then what happened?

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I'm also someone who loves to shop online and can find myself buying things that I don't need. Two things that have worked for me are one, just remembering that I truly have enough and that word enough has been really beneficial. And when I forget that I have enough, sometimes I will go to where my enough is, which is my closet.

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And just looking at my stuff, I'll be like, oh yeah, I actually do not have space for anything more because my house is tiny and so is my closet. Have you ever tried anything like that just to curb yourself physically from pressing the buy button?

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Let's turn to your debt. So talk us through what you have, how you got there. You have a few different forms. It's a little complicated.

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And these are personal loans that are covering consumer purchases?

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Great. So how long have you been an advisor?

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And as you sit listening to this episode, sipping some hot chocolate and hopefully enjoying some time off, think about where you need some nerdy help with your finances. Then send your money question our way. Leave us a voicemail or text us at 901-730-6373. That's 901-730-NERD. Or email us at podcast at nerdwallet.com. All right, here's this week's episode. We'll talk with you all in the new year.

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Okay. Yeah. I mean, one of the challenges that you've been experiencing Brinker is like knowing what you should be doing and then doing what you shouldn't be doing. And with debt payoff, it seems like that is still a hard thing to get over. So do you have any advice for Brinker Magda around how she could maybe readjust habits to actually make the progress, return the item, pay off the debt? Yeah.

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Love to hear it. So have you ever recorded one of your sessions for a podcast?

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So how do you track habits that you have in your life, whether it's around shopping, going out? I wing it.

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All right. Well, I think it's time to get to some financial advising. In a moment, our conversation with a listener here in Chicago. Stay with us. Okay, let's get to our guest star for this episode. Brinker is a Smart Money listener here in Chicago. She's 30 and lives in an area of the city called South Loop. She's here with us now in studio. Brinker, we are delighted to have you on Smart Money.

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So I want to get into some specific recommendations that you have. Magda, if you could list maybe the top three things that you would recommend Brinker do, as specific as you can get. Let's hear them.

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Do you have a high yield savings account currently?

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Well, it is my obligation as a nerd to direct you to nerdwallet.com where we have plenty of pages where you can shop around for the best ones. We update these pages monthly. They're super easy to open and they'll earn you a lot more interest on your cash that's just growing as you make these auto deposits over time versus a standard savings account. So I do highly recommend checking.

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Well, Brinker, as we wrap up, do you feel like you have maybe more of a handle on what you want to do with your finances?

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Great. Well, one thing I want to emphasize too is that this is just your first conversation with Magda. You'll be working together as you have this year-long membership in NerdWild Advisors. So reach out to her. She's a great resource for you and you don't have to go through this alone. So that's one great thing too.

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And that's all we have for this episode. Remember, listener, that we are here for you and your money questions. So turn to the nerds and call 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. Also, visit nerdwallet.com slash podcast for more info on this episode.

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And remember that you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes. To learn more about NerdWallet Advisors, go to nerdwalletadvisors.com slash smart-money. Here's our brief disclaimer. I am not a financial or investment advisor.

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This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. This episode was produced by Tess Viglin, Cody Goff, and myself. A special thanks to Magda Domini, Georgia McIntyre, and Emily Canedo. And a big thank you to NerdWallet's editors for all their help. And with that said, until next time, turn to the nerds.

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NerdWallet Advisory LLC, DBA, NerdWallet Advisors, is an SEC-registered investment advisor and wholly owned subsidiary of NerdWallet Inc. The advice provided in this episode of Smart Money was for illustrative purposes only and not intended as financial or investment advice specific to your personal facts or circumstances.

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Oh, we appreciate your time too. So tell us a bit about yourself. I mean, what do you do for work? What's your living situation like? Like, what do you do for fun? All of those things.

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What do you do for fun around the city? I mean, especially in the summertime, like we're talking right now, there are a lot of things to do in Chicago.

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Coming from living in Chicago for years. Yes, I totally understand that.

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Okay, so let's turn to money. I'd like to hear about what kind of money lessons you learned growing up. Like how are your family finances managed?

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How do you think that upbringing, being around so much money in school and coming home and not having as much, affected the way that you view money now?

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Aspirational.

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But you wanted to have nicer things because you saw this growing up.

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Well, so how would you describe your finances now just broadly? Ooh, irresponsible.

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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. You've heard us say many times on this podcast, episode after episode, that we are not here to give you individualized personal finance advice. Except this episode, we're going to be doing exactly that.

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So it seems like you are in conflict with yourself sometimes. You know what you ought to be doing, the responsible quote unquote thing to be doing, but then your actions are taking you in another direction.

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Well, you wrote to us about some challenging debt that you are working through right now. Talk with us about that.

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A security deposit?

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And how long has that been going on for that you've been dwindling your savings and now you find yourself in a tough spot financially?

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So it's been a few years.

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Well, let's talk about your financial goals. Do you have any specific financial goals right now besides resolving your debt? How would you say you are making progress on them or not?

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It weighs on you financially, personally, emotionally.

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Okay. Well, have you ever used a financial advisor before?

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A few weeks ago, you may remember that we put out a call inviting you, dear listener, to contact us if you want a financial planning session and allow us to record that session. Lots of you contacted us, and today we're going to hear from one of you. We're coming to you from a studio in Chicago where our listener lives. But before we get into that, I'd like to introduce you to Magda Domini.

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Okay, great. Well, Brinker, I know that you two have been sitting across from each other for a little while now, but let me officially introduce you. Brinker, Magda, Magda, Brinker. So Magda, I'm curious if you have any initial thoughts about Brinker's finances based on what we've just been discussing.

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Yeah. So Brinker, how thoughtful or intentional or not are you around the lifestyle creep that you've been experiencing?

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Well, I'm really interested in that dynamic, this push and pull that you have internally where you know, like, okay, I probably shouldn't be swiping this day, but then you do it anyway. So what is that internal monologue like? How do you justify it when you're having a day where you're like, I just want to buy this thing?

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Well, let's talk about that check. How much do you have coming in on a biweekly or monthly basis?

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Each paycheck?

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And then at the end of the month, are you finding yourself left over with much or is a lot of it going toward your current debt payments?

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She's a certified financial planner from the NerdWallet Advisors platform. One thing I want to be clear about is that Magda and NerdWallet Advisors are a distinct platform from NerdWallet. Magda will give our listeners some specific advice to improve their finances, and that advice will be given on behalf of NerdWallet Advisors, not NerdWallet.

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So there's a lot to pick apart here. Have you ever used anything like a budgeting app or budgeting template, something to break down where your money is going on a monthly basis so you get that sort of high level and also detailed view?

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I just want to say, year to date, that's pretty good.

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A single month, yes.

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So, Magda, hearing these numbers, let's think about these two on these numbers a bit and get to your analysis and advice. What is the first thing that comes to mind as you're hearing Brinker talk through these expenses and all that?

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Also, we want to mention that in exchange for participating in this series, our listener is receiving a one-year membership to the NerdWallet Advisors platform. Magda, welcome to Smart Money.

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Sean, it's spring and I can finally throw my jackets in the back of the closet and get back to being the tropical princess I was born to be. What are you growing in your garden during this season?

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I think we should talk about budgeting first, since that is the foundation of personal finances. Sean, have you had any major changes to your budget so far this year? Where does your budget need some spring cleaning?

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Well, I want to say those are exciting changes and congrats on paying off your car note.

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All right. So my budget had a few cobwebs and I had been putting off whipping out my duster. But a couple of weeks ago, I decided enough is enough. It felt so good to get back on top of my budget and also get a clear picture of where I was with my money.

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I'll tell y'all my business since you're begging. Please. So my budget was stale, to be honest. Because I was overspending over the last couple of months, I knew that I needed to review my budget to nip it in the bud. So what happened was my income increased over the past six months, some expenses dropped off, and I took on some new expenses too.

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So after doing that budgeting exercise, I'm now clear about exactly what's going out and coming in so I can spend more consciously. Refreshing my budget has also helped me to address some drivers around emotional buying that I was engaging in.

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a little boring. So I use an Excel sheet to budget. I know it's a little old school, but it works for me. And also I'm not a meticulous budgeter either as I use the pay yourself first budgeting system. So how that works is I save what I need to save. I pay who I need to pay. And then the rest is my business.

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Well, while we're on the topic of growing things, spring is a good time to clean up your finances and grow your money. So today we're going to chat about some ways that you can spring clean your finances.

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So what I do is I just check in every so often to make sure I'm on track and staying within my budget.

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Well, I definitely did some spring cleaning on my financial goals for the year. For one, I've increased my emergency fund goal now that my post-moving financial stress is over. I also decided to continue with my goals of maxing out my 401k and IRA, but added maxing out my SEP IRA to my goals this year.

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And although the stock market has been a bit of a yo-yo as of late, now is a good time for dollar cost averaging as it relates to investing. Yes, y'all, stocks are on sale.

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Exciting. I think another spring cleaning financial task that isn't as tantalizing that people can do right now is ensuring their assets are protected through estate planning. I love this topic, by the way. It's probably not going to give you an adrenaline boost, but I think it's necessary.

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But I personally think it's worth it. If you're medically incapacitated or you pass away, your loved ones have one less thing to worry about. They can grieve without having to jigsaw puzzle their way through your finances, which I think can be helpful. When I created my estate plan last year, I used online templates and I paid around $100 to get it notarized. Do you have an estate plan, Sean?

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And I'm Elizabeth Ayola. This episode, we have a new segment, Smart Planning, where we pair a listener with a financial expert, Barbara Ginty, to help walk through some questions around gifting and saving.

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Is it up to date?

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It really is. As part of my spring cleaning, I do need to update the beneficiaries in my trust documents. Now for anyone out there who doesn't have a will yet or estate planning documents, remember to update your beneficiaries on your financial accounts in case you've had major life changes.

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That includes, like Sean is about to do, getting married, a beneficiary dying, getting a divorce, or kids turning old enough to manage assets. And when I say financial accounts, I mean anything from your checking account to an investment account.

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I definitely need to review my auto insurance and shop around for cheaper rates. Of course, I'll be using nerd wallet comparison tools for that. And on that note, I have more than enough spring cleaning tasks to occupy myself with over the next couple of weeks.

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We're about to get to this episode's smart planning segment about gifting and saving.

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Maybe you're feeling overwhelmed with your credit card debt, or you're wondering whether you should keep putting money into retirement savings during times of market volatility, or you're wondering whether now is a good time to buy a home. 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.

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And I'm Sarah Rathner. This episode, we'll answer a listener's question about whether money market accounts are better than high-yield savings accounts and how to know which one to use to meet your savings goals.

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Let's talk about this question of returns or interest that you would earn on money that you deposit in both of these types of accounts. Money market deposit accounts, which is really just a type of savings account, and high yield savings accounts, which of course are another type of savings account. Again, the listener was conflating money market deposit accounts with money market mutual funds.

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That's a type of investment account. It's very different. So where do returns come from in a money market deposit account?

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Erin also talks about what they think is behind the differences in the rates being offered. They think it's about profitability. Could you talk us through why a bank would be marketing or offering one versus the other?

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If you're a homeowner, you're probably already seeing this in your monthly bills. And if you're a renter, this affects you too because your landlord has to pay insurance for your building.

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Do you have any other final advice for our listeners as they chase higher returns in an environment where interest rates are coming down, but sometimes they're faced with products that sound like they're the same thing, but they're actually completely different things?

NerdWallet's Smart Money Podcast

Rising Insurance Costs and Choosing the Best Savings Account for Your Money

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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 may not apply to your specific circumstances.

NerdWallet's Smart Money Podcast

Rising Insurance Costs and Choosing the Best Savings Account for Your Money

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Yeah, what's happened and is happening in and around Los Angeles is a disaster of staggering proportions. You have tens of thousands of folks who are displaced, many who no longer have a home. And it's not like there are homes to spare in that part of the country. So what these fire victims are facing is not only finding shelter, but figuring out where they're going to eventually live.

NerdWallet's Smart Money Podcast

Rising Insurance Costs and Choosing the Best Savings Account for Your Money

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And that's getting more and more complex because insurance companies are pulling out of a lot of these climate change crisis zones, right?

NerdWallet's Smart Money Podcast

Rising Insurance Costs and Choosing the Best Savings Account for Your Money

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But this isn't a new story, is it? We've seen this happening all over the country. You already mentioned Florida, California, Louisiana. We also saw storms in western North Carolina this summer. In all these places that have gone through enormous tragedy, these extreme weather events end up jacking up insurance prices.

NerdWallet's Smart Money Podcast

Rising Insurance Costs and Choosing the Best Savings Account for Your Money

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I think it's sometimes easy for people to think, well, I don't live in an area that's threatened by these kinds of events. So this insurance discussion isn't relevant to me. But it actually is. Can you tell us about how the insurance losses from disasters that might even be far from where you live end up being paid for by all of us?

NerdWallet's Smart Money Podcast

Rising Insurance Costs and Choosing the Best Savings Account for Your Money

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Can you give us a sense of how much more everyone is paying because of these rolling crises?

NerdWallet's Smart Money Podcast

Rising Insurance Costs and Choosing the Best Savings Account for Your Money

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In a moment, we'll turn to this episode's money question segment, where we help you dig into whether high-yield savings accounts live up to the hype, or if other types of savings accounts might be better for you.

NerdWallet's Smart Money Podcast

Rising Insurance Costs and Choosing the Best Savings Account for Your Money

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Maybe you're wondering about how to compare different insurance 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. 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

Rising Insurance Costs and Choosing the Best Savings Account for Your Money

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All right, let's get to this episode's money question segment. That's up next. Stay with us.

NerdWallet's Smart Money Podcast

Rising Insurance Costs and Choosing the Best Savings Account for Your Money

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But what happens when those potentially catastrophic events become more and more likely to happen?

NerdWallet's Smart Money Podcast

Rising Insurance Costs and Choosing the Best Savings Account for Your Money

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Erin continues, thinking a bit deeper, it seems that financial institutions heavily market high-yield savings accounts, yet these often come in half a percent to one percent lower than similar money market funds. From what I see, this setup is quite profitable for banks.

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They enjoy liquidity from deposits while offering a quote unquote high yield that still nets them a solid margin with minimal risk. High yield savings accounts essentially allow institutions to secure a consistent return without needing to invest actively, a profit margin they might not achieve with conventional investment accounts.

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Given your expertise in high-yield savings, I'd love to hear your perspective. Do you agree with this assessment? And if so, why are high-yield accounts marketed as a beneficial product for the average saver? To help us answer Erin's question on this episode of the podcast, we are joined by Margaret Burnett.

NerdWallet's Smart Money Podcast

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Margaret is a savings expert who has been writing about bank accounts for more than a decade. Her work has been featured in the Associated Press, USA Today, and other major media. Margaret, welcome to Smart Money.

NerdWallet's Smart Money Podcast

Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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Hey, listeners, Sean here.

NerdWallet's Smart Money Podcast

Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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You got to match the furniture to the vibe of where your house is. Otherwise, the feng shui is off.

NerdWallet's Smart Money Podcast

Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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David, how have you thought about that with your wife? Have you had discussions of like, okay, we really don't want to have to move this sectional 2,000 miles. Have you even gotten that far yet?

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That's something that I want to emphasize, too, is how can you make this move easier for you? Because you and your wife will be moving 2,000 miles, you said, with two young kids. There are going to be all sorts of logistics to figure out around snack time and bathroom breaks and where all of your stuff is in the car and how do you load up the car.

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I think to the extent that you can take steps to make that process easier for you, you will appreciate it afterward and especially while you're doing it. Have you also looked into the cost of like movers or using pods or U-Hauls? Have you mapped out what those expenses might be too?

NerdWallet's Smart Money Podcast

Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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Let's start by digging into your financial life generally. How do you and your wife manage your household finances? How are you feeling about things financially?

NerdWallet's Smart Money Podcast

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And the depreciation on the furniture in the home could potentially be a tax write-off, too. So, David, I know we've run through a lot of different aspects of moving and selling and renting and managing a rental property. How are you thinking about all of this right now?

NerdWallet's Smart Money Podcast

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Well, we're happy to talk about it with you. And I hope it's a little bit of solace that, you know, there are steps that you can take now to plan for your move and try to make it as easy as possible. But at a certain point, every move has a certain level of chaos and there's not a lot you can do about that. I'm prepared for the chaos.

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Well, thank you so much for coming on and chatting with us about your situation. I hope it was helpful. Very helpful. I'm a huge fan. Thank you so much for having me. And Lisa, thank you for also coming on and sharing your insights.

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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

Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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You can 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. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

NerdWallet's Smart Money Podcast

Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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And with that said, until next time, turn to the nerds.

NerdWallet's Smart Money Podcast

Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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Do you end up Venmoing each other or finding some way to send cash back and forth when you're covering expenses?

NerdWallet's Smart Money Podcast

Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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We'll be back in a few days with another brand new episode of Smart Money. And in the meantime, make sure to send us your money questions. Maybe you're sitting back enjoying a beer, eating a burger and thinking, what am I doing with my life and my money? We want to help you.

NerdWallet's Smart Money Podcast

Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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And what about your income levels? Because I know with some couples, if one person is earning more than another, they might cover certain things and the person who's earning less might cover less. How does that break down for you guys?

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Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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Right. Yeah. And we'll get into that in just a second here. But I'm wondering also, how do you feel like you're doing financially? Do you think things are going well? Do you think there are areas where things could be better?

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Well, it seems like you also worked hard to get to where you are too, so you should be proud of that.

NerdWallet's Smart Money Podcast

Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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Let's get into your move. You and your wife are thinking of moving with your kids. Where do you want to move and what's motivating this?

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Yeah, and I assume you have some family out there too. Correct. That can make things easier. So how do you expect moving to change your finances? Do you think it'll make things easier? Might it actually make things more difficult?

NerdWallet's Smart Money Podcast

Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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We are off for the Memorial Day weekend, but we have a special episode for you in store.

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Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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But you haven't done it, so it's new to you and your wife. Correct. I want to talk a little bit about your jobs because that's a big thing to line up when you're moving to a new place. Make sure you have an income coming in. Have you looked into jobs in your potential new home? How has that gone so far?

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David, can you think of any financial reasons to not move just to stay where you are? Or are you really set on this lifestyle change?

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So it's more the personal reasons that might be hard saying bye to your colleagues and to your current community.

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Right. And that kind of move would only get harder as they get older.

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Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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Well, I think I have grilled you enough, David. Let's get to some of your questions for Lisa and me around the move. What concerns do you have? Where do you want a little bit more information?

NerdWallet's Smart Money Podcast

Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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All right. Talk soon. 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. We're back and answering your money questions to help you make smarter financial decisions.

NerdWallet's Smart Money Podcast

Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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So that all sounds pretty cushy and nice, but I imagine it's not all easy. Money coming in as you are managing a rental, especially when you're living in a different state.

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What do you think David should keep in mind to ensure that if they do go this route, that everything is properly maintained and they're getting their rent on time and they're not on the hook for a mortgage several states away, perhaps while having a new mortgage?

NerdWallet's Smart Money Podcast

Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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This episode, we're joined by a listener, David, who's planning a big cross-country move with his family and has many questions about the financial and logistical challenges of moving, including whether they should sell or rent out their current home after they move. David, welcome to Smart Money. Hi, Sean.

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Lisa, one thing I'm thinking about is savings. It strikes me that you or anyone, you know, David, anyone who's looking to have a rental property in another state or even in the state that they are in would probably want to have more in savings to cover a month where maybe they don't have a tenant or there is some sort of maintenance that needs to be done to the property.

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How have you thought about this with your own rental properties?

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So David, how is this sounding to you? Feasible? Difficult? Stressful?

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And David, you're planning on buying a new home when you move. Is that correct?

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So to help me tackle your questions, David, I am joined by NerdWallet writer, Lisa Green, who has experience managing rental properties and moving and all sorts of things that you are wondering about. So Lisa, hey, welcome to Smart Money too.

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I can touch on the tax part quickly. One thing to note around Roth IRAs is that you can take your contributions out, but you'll likely have a pretty sizable tax bill on earnings. And in general, withdrawing funds from a retirement account is likely to leave you with a tax bill and potentially penalties too.

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If you need to sell investments, look into your taxable brokerage account because that is probably going to be the most tax-advantaged way to do it. If you've held the investments for longer than a year, you'll be taxed at a favorable long-term capital gains rate, which is lower than your income tax rate, most likely.

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So that might be the best way to go, potentially, if you need to sell investments. I'm wondering how you personally have thought out which option might be best for you. Have you maybe put together some sort of nerdy spreadsheet where you're listing each option and what it might cost you in terms of taxes or interest rate, any of those things?

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And I think running those numbers will provide you a lot of clarity. So I would say add some meat to that spreadsheet. See what the bottom line is for each option. And David, how are you thinking about timing here, too? Are you planning to move in the next few months? Are you planning to put your house maybe up for rent soon? How are you considering that?

NerdWallet's Smart Money Podcast

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So David, before we get into the conversation, I want to remind you that everything we're about to discuss is just for educational and entertainment purposes. We are not here to give you specific financial or investing advice, but instead provide you with information so that you can make your own smarter financial decisions. Sound good? Sounds great. Perfect.

NerdWallet's Smart Money Podcast

Should You Keep Your Old Home? The Financial Case for Selling vs. Renting

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Think about what you do and don't need at your current home and also whether it would just be more expensive to haul it to a new place versus getting rid of it and maybe buying something in your new location. Lisa, how have you handled that with your various moves?

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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Hey folks, Sean here. We are taking the week off for the Thanksgiving holiday, so please enjoy this episode from our archives. In the meantime, we hope you all have a wonderful, relaxing, food-filled week. We'll be back soon with brand new episodes for you. Enjoy. You've heard it one million times. Just cut out the daily Starbucks run and you'll be rich.

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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That said, there is another way to affect that bottom line.

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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Yes. Okay. So Alana, you pitched this series to us. What prompted you to start thinking about this?

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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Wow. The gall you must have had.

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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To ask for that much more money. Yeah.

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Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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Alana, I so love how you and Tessa talked about what I sometimes think of as the theater of the workplace or narrative building around your job. And I don't mean to be flip or diminish the real work that goes into building any career.

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Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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But if you aren't good at presenting the story of your work, building a compelling cast of characters through your colleagues and advocates who support your work, and getting people excited about what you are doing, it's going to be a lot harder to get those big opportunities in your career. Tessa described it as planting seeds.

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Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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And I kind of think about it as foreshadowing, set building and fleshing out your narrative arc.

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Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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So try thinking from your future resume's perspective. Try to think from your future resume's perspective. What experience do you need to have to check a box on a job openings list? And how can you get it now?

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And this is a great time to look at other roles again and see what particular skills they're looking for. If you're looking for jobs in IT support, for example, you can take a Google certification course for that. Some companies even offer financial compensation for furthering your education. So be sure to ask your manager if there are any funds available to help you pay for that education costs.

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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So Alana, tell us what's coming up in episode two of the series.

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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For now, that's all we have for this episode. Do you have a money question of your own? 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. And 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

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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Here's our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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Right. Well, we wish everyone could work for NerdWallet, but for those who are looking for other ways to have that kind of income jump, let's talk about what they need to be considering.

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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But more often than not, your financial situation is going to be better aided by fixing what's coming into your budget versus what's going out.

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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Right, and increasing your income can also be far more effective than reducing expenses, particularly for those who don't have many expenses left to cut.

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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Yeah, and the average millennial owes about $6,500 in credit card debt, and those in Gen Z owe more than $3,000. Cutting your daily coffee habit and getting rid of streaming services simply cannot make up the differences here. And these numbers aren't new, but they're sometimes presented with little information about what we can do about them.

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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Increasing your income is one of the biggest ways you can make a dent in those numbers.

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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All right. Well, we want to hear what you think too, listeners. To share your thoughts around ways to boost your income, leave us a voicemail or text the Nerd Hotline at 901-730-6373. That's 901-730-NERD. Or email a voice memo to podcast at nerdwallet.com. So Alana, who are we hearing from today?

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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Oh no, what's the copay gonna be?

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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That's coming up in a moment. Stay with us.

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles.

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

51.486

This episode kicks off our nerdy deep dive into what we're calling investing in your income. Another way to say that is investing in yourself by seeking out more ways to make more money.

NerdWallet's Smart Money Podcast

Boost Your Income and Career: Negotiating Salary, Navigating Promotions and More

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Absolutely. And I mean, we've had a foot in this camp on the show, advising people to take a hard look at their expenses and see what they can pare back in an effort to get themselves to a better financial situation. We haven't told people to forego a morning latte, but there certainly is a time and place for examining your spending habits.

NerdWallet's Smart Money Podcast

From Broker to Budget: How to Buy or Sell a Home in 2025

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Got it. So essentially, a broker makes shopping around for a mortgage much easier than doing it on your own, which I know from personal experience can take a long time to do. So beyond saving time, brokers can also save people money. How much money are we talking? So there was a study done.

NerdWallet's Smart Money Podcast

From Broker to Budget: How to Buy or Sell a Home in 2025

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Hey, Elizabeth and Kate, it is me, Sean. I'm sorry I can't join you for this conversation, but I have some questions about home selling this year. I'm planning to sell my house in just a couple months, and I'm wondering about the best way to do it. I'm probably going to hire a realtor, but I'm wondering what I should be considering as I shop around for an agent.

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From Broker to Budget: How to Buy or Sell a Home in 2025

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Also, how could the recent change in realtor commissions impact how much I might pay to work with a realtor? And is there anything else unique about selling a house in 2025 that I should be aware of? I'm trying to sell my house quickly, but not pay too much in fees. And I've also never done this before. So that's why I'm turning to you, my dear nerds. Thank you so much.

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From Broker to Budget: How to Buy or Sell a Home in 2025

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I can't wait to listen to your answer.

NerdWallet's Smart Money Podcast

From Broker to Budget: How to Buy or Sell a Home in 2025

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And so is it basically that borrowers might be able to get a lower interest rate or where exactly is that $10,000 coming from?

NerdWallet's Smart Money Podcast

From Broker to Budget: How to Buy or Sell a Home in 2025

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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

From Broker to Budget: How to Buy or Sell a Home in 2025

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I'm wondering also if there are certain types of shoppers who might especially benefit from working with a broker or certain times when a broker might be really advantageous. And also on the flip side, when people might not need a broker.

NerdWallet's Smart Money Podcast

From Broker to Budget: How to Buy or Sell a Home in 2025

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And sadly, I'm not there for that conversation, but spoiler alert, I may make a special cameo, and you'll just have to listen to find out what that means exactly. But first, we're going deep into the nuts and bolts of shopping around for a mortgage, including how to get the best rates and what to look for in a broker or lender.

NerdWallet's Smart Money Podcast

From Broker to Budget: How to Buy or Sell a Home in 2025

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Well, I bought my house in 2021 and was still spending a lot of time holed up in my house due to the pandemic. So I had plenty of time to shop around and compare lenders and naturally build out a very elaborate spreadsheet with all of my options.

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From Broker to Budget: How to Buy or Sell a Home in 2025

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And then on the consumer side of things, how can folks put themselves in the best position to get the lowest rates before working with a broker or even shopping for a loan on their own?

NerdWallet's Smart Money Podcast

From Broker to Budget: How to Buy or Sell a Home in 2025

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And joining us in this conversation is Jonathan Haddad, president of Nextdoor Lending, a mortgage broker and wholly owned subsidiary of NerdWallet. Jonathan, welcome to Smart Money. Thank you for having me today, Sean.

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It's great to hear that folks do have options because to me, it seems like getting a credit score of 760 or higher is is maybe more attainable than a 40% down payment. I know I certainly didn't have enough money for that when I bought my house, but I did work hard over time to get that higher credit score, and a lot of folks can do that without spending much money at all.

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From Broker to Budget: How to Buy or Sell a Home in 2025

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Well, Jonathan Haddad of Nextdoor Lending, thank you so much for joining us and sharing your insights.

NerdWallet's Smart Money Podcast

From Broker to Budget: How to Buy or Sell a Home in 2025

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But before we get into that, we are at one of my favorite parts of the show, the part where we ask you, listener, to take a second and think about where you need some guidance with your money.

NerdWallet's Smart Money Podcast

From Broker to Budget: How to Buy or Sell a Home in 2025

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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 out with Elizabeth 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

Today's episode is sponsored by Amazfit. I've been wearing the Amazfit Active 2, and it's basically like having a personal assistant for my health. Except it doesn't judge me for hitting snooze three times. It's also a game changer for fitness. It combines AI-driven coaching, smart tracking, and premium features without the premium price.

NerdWallet's Smart Money Podcast

Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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That's so interesting.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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That makes me think about how people often forget that one of the goals of investing is to buy low and then sell when it gets high. That second part, people just think they want to hold on to it forever. But no, at a certain point, you want to cash it in.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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Johans Harrison, thank you so much for joining us. Thank you, Sean. Elizabeth, it was wonderful to be here. All right, we're about to get into this episode's money question segment where we answer a listener's question about what kinds of returns they can expect from their investments.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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Maybe you're wondering how to shake other behavioral biases that are leading you to make bad financial decisions. Or you're in the middle of planning a vacation and want some help maximizing your points game. 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.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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But first, I want to share an exciting update. Longtime listeners have heard Elizabeth join me on the podcast many times over the past few years, but I'm thrilled to announce that she is officially moving into a new role as my full-time co-host on Smart Money. For folks wondering, we will still have Sarah Rathner join us on the pod occasionally too. But hey, Elizabeth, welcome to the hosting seat.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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All right, let's get to this episode's money question segment. That is up next. Stay with us. Today's episode is sponsored by Range Rover Sport. Some decisions in life require careful research, like picking the right investment strategy or figuring out which streaming service actually has the movies you want. But when it comes to driving, there's one decision that's easy, the Range Rover Sport.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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It's a bold take on sporting luxury, blending sophistication with power. On the road, adaptive dynamics keep your ride smooth and composed by reducing unwanted body movements. Because, let's be honest, the only thing that should be unpredictable is the stock market, not your suspension. When the road changes, the Range Rover Sport changes with it.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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Dynamic air suspension adjusts to keep things smooth and balanced, so every turn feels effortless. And if the pavement disappears, no problem. Adaptive off-road cruise control kicks in, reading the terrain and making real-time adjustments, so you don't have to spend your drive making more calculations than your tax software. Visceral, dramatic, uncompromising.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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The Range Rover Sport leads by example, just like you do. Build yours today at LandRoverUSA.com. Again, explore the Range Rover Sport at LandRoverUSA.com.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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To help us answer Mary's question on this episode of the podcast, we are joined by investing nerd Sam Taub. Sam, welcome back to Smart Money. Good to be back.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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So in Mary's case, after about seven years, their $1,000 grew to $2,000. And I'm assuming that's with no additional investments. And that growth amounts to a return of about 10%, which isn't too shabby. Can you put this in context for us, Sam?

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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And folks might have noticed that we also have a pretty snazzy new logo for Smart Money. We're always learning and growing here at Smart Money. And sometimes that means getting a fresh co-host, getting a fresh logo and mixing things up.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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Although we should say that even though you are potentially investing in a riskier fund, that doesn't mean that you're guaranteed better returns, right?

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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So Sam, underlying any conversation about risk and return and investments is the question of goals. I'm wondering, what is Mary investing for? When do they need this money? How do you see questions like this playing into Mary's question about what kinds of returns they should expect and what they're invested in?

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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All right. And we'll have a link to that in the show notes. Well, Sam, thank you again for coming on and talking with us. Of course. Thanks for having me. 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.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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Yes, hopefully a positive one. All right, well, let's get on with the show. To start things off, we are talking about some of the behavioral biases that can get in the way of a good investing strategy. And these are biases that anyone can exhibit regardless of their experience.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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You can also email us at podcast at nerdwallet.com. You can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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And with that said, until next time, turn to the nerds.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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Joining us to talk about this is Johannes Harrison, a behavioral financial advisor and founder of MoneyScript Wealth Management. Johannes, welcome to Smart Money. Thank you. Good to be here, Sean. Elizabeth, congratulations.

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So let's start with a little behavioral finance 101. In essence, behavioral finance is an economic theory that describes how people make decisions about their money based on emotions or psychology rather than acting in a purely rational way. So can you give us a couple of examples of what that looks like?

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

Unlike other wearables, Amazfit goes beyond basic fitness tracking. It has specialized modes like High Rocks Race Mode, Smart Strength Training, and even Free Diving, built for both everyday users and elite athletes. And with AI-driven coaching, it adapts to your workouts, tracks recovery, and helps you train smarter.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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Because you expected it to be more expensive, so all of a sudden, because of basically a trick of marketing, you think you're getting a fantastic deal on this new home.

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So I want to turn and chat a bit about recency bias. You mentioned that before. Can you define that for us?

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

There's also a free ZEPP app you can pair it with to get in-depth analytics and downloadable maps you can use with turn-by-turn directions. And it has Zepflow AI voice control, so you can check stats hands-free. And don't worry about battery life. The Amazfit Active 2 runs up to 10 days on a single charge.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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And what you've just described is why a lot of financial advisors will often recommend that you don't invest money that you will need within five years so that it has enough time to grow and weather ups and downs. Because over the long term, the market has gone up historically, but you want to have enough of a time cushion so you can get that long term growth.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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But Johans, a lot of people now treat investing like a game on their iPhone because for a lot of folks, that's what it has really become for them through certain apps that they're using.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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If you want a smartwatch that delivers more for less, then visit amazfit.com slash smartmoney to get 10% off. That's Amazfit, A-M-A-Z, fit, dot com slash smartmoney. Sometimes your brain can be your own worst enemy when it comes to making progress on your financial goals.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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These kinds of biases seem to be a part of who we are as people. They're really kind of ingrained into our humanity. So I'm wondering how you think people can become more aware of their behavioral biases and maybe actually tried to counter them to minimize any sort of financial losses.

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I'm wondering if you could talk about the role that robo-advisors can play in keeping us from making these kinds of decisions and sometimes mistakes, because algorithms don't have recency bias, right? Although they may have other biases.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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This episode will help you overcome at least one self-imposed roadblock so you can make smarter money moves. 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.

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Behavioral Finance Mistakes That Hurt Your Portfolio and What “Good” Returns Look Like

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But to your point earlier, you have followed and established a plan. You know what your client's risk tolerance is, what their time horizon is, and you can tune out the rest of the noise in the meantime, as long as you're making regular progress based on your own parameters.

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Welcome to NerdWallet's Smart Money Podcast

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Money can be confusing. Should you invest in ETFs, get a travel rewards credit card, buy a house, or just build a really fancy pillow fort?

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Welcome to NerdWallet's Smart Money Podcast

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I'm Sean Piles, a certified financial planner professional.

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Welcome to NerdWallet's Smart Money Podcast

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Our nerds do the research so you don't have to. We'll help you understand your options so you can make the best decision for your situation, from optimizing your investments and maximizing credit card rewards to making big money moves with confidence.

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Welcome to NerdWallet's Smart Money Podcast

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Whether you're planning for retirement, weighing a big purchase, or just want to make your money work harder for you, we've got insights that you can use in real life.

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Welcome to NerdWallet's Smart Money Podcast

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Trust us, future you will thank you.

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Deck the Bills: Smart Spending and Credit Tips for the Holidays

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Managing your credit score can feel a bit like playing a game where you weren't told the rules, and one small misstep can mean game over.

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What about Abigail's chances of building up their credit again? What steps would you recommend?

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I'd also suggest that listeners use Abigail's story as a cautionary tale to trust but verify when it comes to auto payments for things, whether it's a mortgage or a credit card. Watch your account, and if an expected payment like this doesn't go through, be proactive to resolve the situation so you don't end up with negative marks for missed payments on your credit reports.

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So there you go.

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You do you. On my end, I have taken up this unhealthy habit of watching QVC when I'm bored, like partially as like a cultural and anthropological exercise. And I got to tell you, Sarah, it is not good for my mental health. You're kidding.

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I think a lot of renters find themselves in Samuel's situation. They are making on-time rent payments, but that good financial behavior isn't working to build up their credit, which is pretty unfair since mortgage payments are obviously counted on your credit reports. But having to pay to have these rent payments counted doesn't sound like a great solution.

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Amanda, what free options do Samuel and other renters have?

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That is good to know. Okay, so keeping this lightning round moving, let's get to the next question. This one comes from a listener's voicemail.

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It's a slippery slope from laughing at one piece of junk after another being marketed as some life-saving gadget to quickly falling into a pit of existential dread about what the creation and consumption of this junk is doing to the planet. All that said, I don't like to spiral too much or succumb to doomerism. You know, actionable, forward-looking advice is where I feel most comfortable.

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Okay, and what about freezing your children's credit? How does that work and why is it important even if your kid isn't likely to be actively using their credit profile?

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So for context, for listeners who maybe missed that episode, Sarah and I talked about the persistent myth that you have to carry a balance on your credit card to build your credit score.

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And this listener seems to think that if you don't carry a balance at the end of your statement, any activity on your account won't be counted and thus you won't be bettering your credit scores in that good activity. But this kind of misunderstands how credit scores are calculated.

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It's not that you need to have X number of charges or a certain amount of activity on your credit card each statement. The credit bureaus are more concerned with utilization, which Amanda talked about earlier and is different from this.

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Yeah, sorry about that. But, you know, I was recently reading this article in the New York Times with the headline, I haul, therefore I am, about shopping hauls and what they say about us as consumers, and I did spiral a little bit.

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The article talks about this new shop from Amazon called Amazon Haul, which seems designed to get you to buy cheap stuff that you do not need to build up a haul that I guess you are then supposed to make a social media post about. Like, Sarah, you know all those haul videos where people post about the mounds of junk that they buy?

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Thanks, Amanda. And that's all we have for this episode. Remember, listener, that we are here for you and 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. Also, visit nerdwallet.com slash podcast for more info on this episode.

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And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeart Radio to automatically download new episodes.

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Deck the Bills: Smart Spending and Credit Tips for the Holidays

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And with that said, until next time, turn to the nerds.

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The article goes on to discuss how fast fashion and shopping haul culture drive this self-perpetuating dopamine-fueled cycle of consumerism, which of course costs people a lot of money.

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And in fact, NerdWallet recently released a report about the impact of impulse shopping on people's budgets and found that more than one in five Americans have made impulse purchases that significantly impacted their finances in the past 12 months.

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Yeah, I'm pretty clearly at the point of the holidays where I can get a little bit grossed out by the mass consumption event that we're all taking part in.

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And don't get me wrong, I really love the holidays and I love giving thoughtful gifts that my loved ones will cherish, but it's a fine line between buying a little holiday treat and actively participating in a capitalism-driven ecological disaster. I'm only being a little hyperbolic there. Anyway, back to the actionable part of this segment.

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No cheat codes here, sadly. But this episode, we will help our listeners master the rules of the credit score game to get, shall we say, a new high score? Oh, Sean, your supply of credit related puns remains as robust as ever. Thank you. Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles.

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Let's talk about how to consume more intentionally and less wastefully this holiday season. Sarah, do you have any tips here?

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And what you're getting has so much more character, too.

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Well, I have a couple. One is called the three-year test. Before I buy anything, either for myself or for a loved one, I try to ask myself, where will this be in three years? And this can apply to anything, which is why it's so good. Take a bottle of wine, for example. In three years, that will likely be long since consumed and the bottle will likely be repurposed or recycled.

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But what about an article of clothing for yourself or some plastic toy for your nephew? How likely is it that those things will end up in the garbage or shoved deep in a closet? the more I think the answer to the three-year question will be it's going to be rotting in a dump somewhere, the less inclined I am to buy it.

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On the flip side, if whatever I want to buy will still be in use or will have completely fulfilled its useful life in three years, that's probably a better, more sustainable purchase. The goal for me is to get away from the purchase, use for maybe one month, and forget about it life cycle.

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Yeah, you're building memories. Yeah. That brings me to my next tip, which is to give folks things that they can quickly consume, just enjoy and then be done with. And that typically means giving folks things like food or a bottle of wine, like I mentioned before. For example, my partner's sister loves hot sauce. She is a maniac about the hottest hot sauce she can get her hands on.

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For the past couple of years, I have made her hot sauce from the hot peppers that I grew in my garden the summer before Christmas. And I'll be honest that I do not really know what I'm doing when I'm making these hot sauces, but they turn out super spicy and she loves them. So there you go.

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If you want to mail me some, Sarah, you have my address.

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Let's also talk about a few ways to curb the impulse to shop and spend with abandon. And one classic tip is the put the item in your cart and then wait a day strategy. For me, I find I typically have to wait a couple of days before I'm no longer fixated on whatever I want to buy.

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I find it to be really, really helpful, especially when I pair it with doing some Reddit sleuthing after adding that item to my cart. I recently got enamored with this pair of shearling line sandals that looked so warm and comfortable. I actually almost bought them on the spot because I got so excited about how cozy they would be to wear.

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But then upon digging into the shoes a little bit, I found numerous Reddit threads about how the shearling comes off and gets clumpy and generally looks gross and gets smelly after a couple months. So I will not be buying them. But if I had let the impulsive ADHD powered part of my brain stay on autopilot, I would have learned that lesson the hard way. Definitely look up reviews for stuff.

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Yeah.

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These tips are basically about building guardrails for yourself so you can have more self-control. That's what I try to think about when I'm shopping is how can I make it harder for myself to get momentarily fixated on whatever shiny new thing is coming into my life or landing in my inbox and then buying it.

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But before we get into any of that, let's do a little holiday consumerism check-in. Sarah, how are you feeling about holiday shopping right now? Are you still getting that dopamine boost from clicking the buy button? Or does each new package on your doorstep leave you with a sense of dread?

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One last thing I also want to have folks keep in mind is that when it comes to spending and saving, there's a simple adage that I return to a lot, which is, wealth is not what you have, it's what you keep, as in what you keep in your bank account. So if you want to build wealth, hold on to your money and invest it.

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Don't spend it on what folks in the financial world call depreciating assets, like some expensive sweater that will be out of style in a year.

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Okay. You have Sarah's permission to buy one sweater.

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There you go. I mean, those sweaters have certainly passed the three-year test.

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Whatever's going on in your money life, we nerdy money people can help. Leave us a voicemail or text the nerd hotline at 901-730-6373. That's 901-730-NERD. Or email us at podcast at nerdwallet.com. Maybe you're trying to figure out how you can politely decline an invitation to an expensive weekend getaway that your friends are all going to.

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Or you're wondering what the best way to buy a new car is next year. There is a whole rainbow of money questions out there, and we nerds are here to help you, no matter the color of your question.

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We're back and answering your money questions to help you make smarter financial decisions. This episode, we are taking on a number of your credit questions in a lightning round. And we're joined in this conversation by NerdWallet credit writer Amanda Barroso.

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Amanda is a personal finance nerd who spent more than a decade covering issues facing many Americans, including her work as a writer at the Pew Research Center and as a policy analyst at the National Women's Law Center. Amanda, welcome back to Smart Money.

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Or the latter.

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Wow, this is a wild situation. You would think that a bank that has your mortgage would know your actual address. That's kind of bonkers. But anyway, our listeners in this really frustrating situation, it seems like through no fault of their own, their mortgage payments weren't taken out and now they have late payments on their credit reports.

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So Amanda, to start, can you talk with us about how serious a negative mark like this can be on your credit reports and for your credit scores?

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Yes. Welcome to the future, Sarah. AirPods are the best.

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Although you know what? The Gen Z folks are saying that corded headphones are back. So you might want to keep those around.

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Michele Norris Shares Kitchen Must-Haves and the Nerds Break Down Switching Banks for Better Rates

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Because you might be surprised by how quickly you can accelerate your debt payoff if you pay just a little more each month, because often paying the minimums will keep you in debt for quite a long time. Well, I could spend all day talking about debt because it's one of my favorite topics.

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But you wrote to us with some questions about banking and whether it makes sense to switch to having only an online bank for checking in savings. Talk with us a little bit about why you're thinking about switching and what's drawing you to an online bank.

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With SoFi, you mean?

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Yes, signup bonuses often come with catches like that, where in order to get the signup bonus, you might have to have a certain minimum amount in the account for a certain amount of time. And some high yield savings accounts, it may be that you have to have a certain amount of money in the savings account to get that higher yield on the savings.

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So that's something to consider as well, looking into the fine print there.

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Hello. Well, Michelle, shopping for items in your kitchen can be a little intimidating sometimes because there are so many options and different price points. How do you think people can strike a balance between buying quality items while also working within their budget?

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Ruth, I'd love to hear from you a little bit about when you think it's a good idea to switch maybe exclusively to using online banks or whether, in your opinion, as a banking editor, it might be a good idea to keep a brick and mortar bank in the mix.

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Rachel, it seems like you've been using your savings accounts with a little bit of that savings bucket, savings goal, sinking fund, whatever you want to call it, functionality, where you've been saving for your kids, right?

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Just so I'm keeping track, you have Wells Fargo accounts, you have Ally accounts and SoFi accounts.

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How do you keep all of this straight? Does it get confusing ever?

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That makes me think we should probably outline some of the pros and cons of online-only banks. So do you have any other concerns besides maybe not having access to ATMs easily?

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Ruth, are there any other cons or maybe huge pros that we haven't addressed around online banks that you think Rachel should keep in mind?

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And Rachel, have you looked into any fees that you might have to pay from either your Wells Fargo account and how that might compare to Ally or SoFi?

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That might be a good thing to consider as you're looking at these three different banks that you could go with. Which one maybe gives you the best interest rate? Which one has the lowest fees? Which one is as accessible as you want it to be? Those seem like the three big categories that would be important to you.

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And, you know, it's important to note too, that like you have set up right now, Rachel, you can have both a traditional and an online bank and they may well serve different purposes for your banking needs. Ruth, I'd like to hear maybe some of the pros and cons of traditional banks, too.

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Well, I want to talk about credit unions for a minute, actually, because that hasn't been discussed so far. I am a huge proponent of credit unions. They're a way where you can keep your money in your community. They tend to offer really favorable rates for their members on things like auto loans, and they may allow you to align your money with your values a little more.

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And Rachel, it seems like that's something that's important to you, too, having your money in an institution that reflects some of your values. Have you considered a credit union?

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no i have not i bet you have a bunch in your area that might be worthwhile to look into you would have the likely convenience of being able to go in and get a check if you want a check or cash if you need cash there will be atms around so it's a nice mix of having the infrastructure of a traditional bank

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with some of the alignment with your values potentially that you may not have with a traditional bank. The downside is that they might not have all of the bells and whistles that a fancy online bank might have. But in my experience using both a credit union and an online bank, I find that I have my needs more than met with both of them.

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I want to talk a little more about yields on savings accounts. We've been seeing yields fall due to the rate cuts over the past year, the federal rate cuts over the past year. So Ruth, do you think it's still worthwhile to pursue opening an online bank account? Or is the falling yield that we're seeing on them maybe making other accounts like at a credit union something that's more appealing?

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All right. And Rachel, you mentioned that you're curious to know about the process of switching from maybe a traditional bank or your current online bank to a new bank and that there might be some administrative burden to that. What are your thoughts there?

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I don't know, bureaucratic and boring, I would say. I went through this a few years ago and it took me about an hour to make sure that I had all of my payments switched over to my new bank. And it wasn't a fun hour, but I was relieved to have it done and to know that I was as thorough as I needed to be.

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So you can go through your recent bank statement and just see what are all of these auto payments that you have set up and just transfer them over to your new bank. And I will say there's also an opportunity in this to review auto payments that you have set up that might not be serving you anymore. It's those streaming subscriptions that maybe you're not using as much.

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What are the things that you have auto set up that maybe you don't even want anymore? So you could maybe save some money there too.

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Okay. And Ruth, is there anything else around transferring over to a new account or maybe even closing an account that Rachel should keep in mind?

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Rachel, you also asked us about the functionality of a debit card from an online bank. What are your questions there? What do you think you might need a card from a bank for?

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Rachel, I'm wondering how you're feeling now about the process of switching over to a new bank, whether you think you'll go more into SoFi, you'll stick with Ally, maybe consider a credit union. What are your thoughts?

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There's also nothing wrong with having a period of transition where you're maybe gradually moving over from Wells Fargo and going further into Ally or maybe considering SoFi or a credit union. I did that when I was rearranging my banking setup a few years ago. And I actually still have a checking account with a big national bank that I've had open since middle school.

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And I pretty much only keep it open to pay my mom my part of the cell phone bill and a couple other payments here or there.

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Well, Rachel, thank you so much for joining us.

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And Ruth Sariel, thank you for coming on and answering the banking questions with us.

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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.

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Come back on Thursday, where we'll cover the latest financial news and answer a listener's question about how to pay off tens of thousands of dollars in credit card debt. Follow Smart Money on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes. Here's our brief disclaimer. We are not your financial or investment advisors.

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This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. This episode was produced by Tess Bigland, 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!

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I like your tip about being selective around what kind of knives you get because I bought my partner a very nice knife block for Christmas. And I think it came with eight knives. We use two of them on the regular. So that's a good point around just knowing which ones you're actually going to be using day in, day out.

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Well, this episode, we're talking about where it's worth splurging when it comes to home kitchens. If you're thinking of upgrading your appliances or maybe just buying a really fancy knife set, this one is for you. 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.

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One thing I wonder, too, is how much people can really tell the difference between the smoothie coming from a Vitamix versus a less expensive blender. Are you refined enough in your cooking and your smoothie consumption to tell the difference? I'm not, personally.

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I'm wondering whether there are some kitchen items that people should never be cheap about, even if they are beginner cooks.

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Well, when my house was being built, I splurged on an oven with a gas range instead of the standard electric range. And let me tell you, Elizabeth, it has more than paid for itself with delicious meals. What about you, Elizabeth?

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You're making me want to make a nice sauce for some pasta now. But I completely agree that a good stove can really make the difference between whether you want to cook at all or not. I had plenty of crappy apartments in my early 20s where I was fighting my stove every egg I cooked.

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And I ended up eating out a lot more than I probably should have because it was such an uphill battle to cook anything.

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But first, we are going to chat about where it's worth spending your money in the kitchen and when you might be able to get by on that knockoff version of whatever countertop appliance is trending at the moment. My partner, Garrett, is the cook of the house, and I like to encourage him along by buying nice things for the kitchen every once in a while.

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Yeah, we use the air fryer on the daily in my house. It is just so convenient. I love the way it crisps food. It's been really worth the cost.

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Michelle, before you go, we have two final questions for you. What is your favorite kitchen item and how much did it cost?

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And let me tell you, some of this stuff can get so expensive. Elizabeth, what was the last kitchen gadget or appliance that you bought, and how much did it cost you?

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That's so beautiful.

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But before we get into that, listener, I've got a question for you. What is your money question? That financial thing that keeps you up at night or that goal you just can't seem to make progress on?

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Thank you so much for having me. So you know when it's time to adapt to changing circumstances and when it's okay to stay the course. So for timely guidance about what the news means for your money, listen to our weekly money news segments, which go live on Thursdays and send us your questions and thoughts about what's happening in the economy.

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We're back and answering your money questions to help you make smarter financial decisions. This episode, we're joined by Rachel, a listener with some questions about when switching banks to get the best rates is worth the potential hassle involved. Rachel, welcome to Smart Money.

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To help me answer your banking questions, Rachel, we have NerdWallet Banking Editor, Ruth Sarial. Ruth, welcome to Smart Money.

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So, Rachel, I want to start by hearing a little bit about your financial life right now. Like, where do you feel good? Where do you think you might have some room for improvement?

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Tell me a little bit more about your credit card debt. How much do you have?

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How do you approach paying that off?

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Well, I'm glad to hear you're making some progress on that debt. One thing I would encourage you to do is play with a debt payoff calculator and see how quickly it would take you to be fully out of debt, paying a little above the minimum or maybe even paying $100 more on that a month.

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Hey, Sean, when's the last time a financial product changed your financial life?

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On this episode of the podcast, we are joined by investing nerd Alana Benson to talk with us about investing strategies and how to think about non-traditional investment strategies like buying and selling handbags. Alana, welcome to the show.

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To use a little journalism phrasing, let's not bury the lead here. Let's just answer this question. Social media makes us look like fun. And you do get to put your money into things that matter to you, that are fun to you, that are enjoyable to you. You get to go shopping and call it investing, which is awesome. But is this kind of non-traditional investing a good idea for most people?

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So it's kind of like that episode of Sex and the City where Carrie can't afford her apartment because she owns $40,000 worth of designer shoes. Exactly. Obviously, designer clothing and purses are one thing, but you can also collect everything from baseball cards to coins to works of art and jewelry.

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These items can be very expensive, and it can be hard to collect them in a way that you're not losing your shirt here.

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And you can see the full list of winners at NerdWallet.com.

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Let's talk about the next step of investing in collectibles, eventually selling them so you can recoup some money on that investment. Selling off stock is relatively easy. Just log into your account, click a few buttons. But what about selling a physical object? That has to be way more complicated.

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Alana, let's get your overall take on this then. All of this stuff being said, if someone wanted to invest in some kind of collectible, art, jewelry, comic books, whatever, How does that fit into an overall investment strategy? How would these kinds of investments mix in with things like stocks and funds?

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Well, here we are on the podcast telling you to be very, very, very thoughtful in your decision making when it comes to this stuff. Ilana Benson, thank you so much for your help today. And may we all go out and find the perfect $150,000 designer purse to complement our entire wardrobe.

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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 may not apply to your specific circumstances.

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Sam, let's start with you. Let's not waste any time here. What is the best app for investing in 2025?

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Well, I'm always a fan of doing that. In this episode, we'll talk about how using the right financial tool can help you meet your money and life goals.

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A really big concern among investors is the cost of investing, things like expense ratios and commissions. And generally, folks want to minimize those so they can maximize their return on their investments. So what can people expect cost-wise from using Fidelity?

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And I'm Sarah Rathner. This episode, I'm joined by our co-host, Elizabeth Iola, to answer one of your money questions about, shall we say, misguided investing strategy? And then we help you understand what kinds of investments might be better suited for the average investor. Before we get into all of that, I have to know, Sean, where did you travel to with all those points?

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Now let's turn to you, Holden. For folks who are looking to buy a house this year, what's the best mortgage lender of 2025, and what makes it better for borrowers in the competition?

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Mortgages are one area where it really pays to shop around because you're borrowing a lot of money, folks, like six figures worth of money in many cases, sometimes more. Are there any ways that U.S. Bank can make having a mortgage more affordable, especially as interest rates remain high?

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Well, that's awesome. And Chicago is one of my favorite cities.

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We have a few winners in the travel credit cards category, so check them out if you're looking for premium cards, airline or hotel cards, or travel cards with no annual fee. Yes, they do exist. But our pick for the best all-purpose travel card is the Chase Sapphire Preferred.

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For the benefits you get with the card, it actually has a pretty modest $95 annual fee. And it's funny to say $95 is modest. That's a lot of money. Let's be real. But in the travel card space, a fee of $100 kind of counts that way because some of the higher end cards charge $300 a year and up, sometimes way up, more than double that.

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For $95, you get this generous signup bonus, $50 annual statement credit for hotel stays booked through Chase. And every year you have the card, you also get a point bonus of 10% of your total purchases for the year. So you can offset that fee just by taking advantage of the many benefits that the card offers.

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Yes, that is the time to go. Huge fan.

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That's not a naive question, Coe. some level of travel protections are built into many different travel cards as a benefit. So that's absolutely something to consider when you shop around for a travel credit card. And in the case of the Chase Sapphire Preferred, when you rent a car, it does automatically provide primary coverage for theft and collision damage.

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And that means that the coverage from your card will pay out first before you need to tap into your own auto insurance policy. And so you don't have to worry about your insurance rates going up if you experience a little bit of trouble with your rental car, let's just say.

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And if all this talk about different financial products makes you think of a money question that's been living rent-free in your head, we're here to help you start charging that question some rent.

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One more time, send your money questions to us by leaving a voicemail or texting us on the Nerd Hotline. That's 901-730-6373 or 901-730-NERD. Or you can email us too at podcast at nerdwallet.com.

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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 January 24th. Include the following information, your first and last name, email address, zip code, and phone number. For more information, please visit our official sweepstakes rules page.

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Next up, Elizabeth Iola and I are tackling a listener's question about investing in collectible items and how to tell if doing that is a good idea for you. Stay with us.

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And NerdWallet's Best of Awards for 2025 just dropped. So now is a great time to shop around for that right financial product for your needs. Every year, NerdWallet announces the Best of Awards, which is kind of like a shortcut for you to find the top financial tools across a huge range of products like travel credit cards, insurance providers, robo-advisors, and more.

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Okay, so for anyone who has absolutely no idea what the listener is asking about, they listed a few kinds of very expensive designer purses. Some Hermes bags sell for $6,000. big years, yeah, as in probably more than you make in a year, to help us answer this listener's question.

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Smart Planning Sessions: Investing Through Uncertainty and Planning for Early Retirement Abroad

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Elizabeth, have you been getting 2020 vibes recently? Like the whole world feels a little off?

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Yeah, I feel that. And one thing to keep in mind is that there is never a guarantee that the money you put into an investment will grow. That's just the risk of investing. But over the long run, investing has been a reliable way to build wealth. The average return over the past 100 years has been 10% back during inflation and is closer to 7% or 8%.

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And last year, the S&P 500 was up over 20% and the Nasdaq was up almost 30%. Because of the banner year that we had in 2024, some analysts were saying that some stocks were overvalued and were due for a correction. It looks like that's part of what's happening right now. And I'm also seeing a lot of chatter about how, quote, this time feels different.

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Yeah, I'm with you there. Well, if anyone listening is worried about what the recent economic shakiness means for their investment plans, this episode, we've got some answers for you. 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.

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Maybe this is the period of market volatility that sends the whole system crashing down. And the folks saying that are right in a way. This time does feel different. We haven't seen this specific convergence of circumstances before. But here's the thing. Every time is different. No two market crashes or economic calamities are the same.

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And that can be really hard to reckon with because as humans, we like predictable patterns. When we see something unfamiliar or scary, it can lead us to act irrationally or make decisions from an emotionally heightened state.

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That's why the long view is important.

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Back in early April, we saw an interesting convergence of events. There was one week where the stock market was dropping while bond yields were going up and the dollar was going down. To avoid making a confusing situation even more difficult to follow, I'm going to spare everyone an in-depth recap of what all of that means. But here's the gist.

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It's common for investors to flee to bonds when stocks aren't doing so hot. That generally results in Treasury bond yields going down, in part because they're more in demand. The more folks want bonds, the less Treasury has to pay out in interest, which is essentially what the yield is.

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But if the yields are going up, that can indicate that people are moving away from Treasury bonds, which is kind of unusual given what I described before.

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Yes. Over the course of April, we saw the dollar weaken relative to other currencies, something I am not too thrilled about as I prepare for a vacation in England in a couple of weeks. And Elizabeth, by the way, I still need your London recommendations. Fun fact for listeners, Elizabeth lived in London for many years.

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But what about mushy peas? Do you like those, Elizabeth?

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I'm a fan of the baby food that is mushy peas, so I will get that on my own terms. Well, anyway, back to money things. As of this recording, the dollar is down nearly 10% for the year, and that's roughly a three-year low. As with many things when it comes to macro financial movements, there are a lot of factors at play.

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But some investors may be looking at the volatility in the United States right now and thinking that they can just get better returns elsewhere for less risk. But at the end of the day, the dollar remains what's called the world's reserve currency.

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All sorts of transactions around the world rely on a stable dollar, so even if investors are moving away from the dollar, as it appears, they won't fully extricate themselves from it overnight.

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I'm going to go back to some advice that we talk about regularly on Smart Money. Focus on what you can control. You can find and build predictability through how you manage your money and your investments. So I'll just give you an example from my own life. I'm going to continue to make investments on a regular basis. This is sometimes called dollar cost averaging.

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We have an article about this that I'll link to in the episode description. But basically, you make steady contributions to an investment account so that the cost of your investments averages out over time. In periods where stocks are going down, you can think of them as being on sale compared to when they cost... compared to what they cost when their prices were higher.

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But by making regular contributions to my brokerage account, I'm continuing to make steady progress on my long-term investing goals. And that to me feels safe and predictable.

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In times like this can also be a good opportunity to reevaluate your investing strategy. If you feel really rattled by the recent economic news, this might be a sign that you have a lower risk tolerance than you thought. Risk tolerance is essentially how much risk you can handle from an emotional standpoint.

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There are a bunch of risk tolerance questionnaires online, so I recommend taking one and seeing where you land. But also keep in mind something called risk capacity, which can be thought of as a quantifiable counterpart to risk tolerance. Risk capacity is how much risk you can take on while still being financially solvent or able to meet your financial goals.

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So if there is a mismatch between your risk tolerance and your risk capacity, like if you are emotionally risk-averse but need to take on more risk to meet your financial goals, consider either adjusting your goals or finding ways to make dealing with the swings of the market a little bit easier to handle.

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But first, we're going to talk about whether it's safe to invest right now and if you should trust the market at all, given the way it's behaved over the last several weeks.

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Well, I'm generally of the belief that most people are probably fine with a strategy of dollar cost averaging and putting their money into an exchange rated fund or an index fund which tracks the market or an industry. Trying to beat the market is often a fool's errand. But if people are really wary of investing in the U.S.

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right now, they might want to look at international funds, which primarily invest in companies outside the U.S., For example, in late April, FSPSX, an international fund from Fidelity, was up over 11% for the year. That's compared with the S&P 500, which was down more than 6% as of this recording.

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And some people like to ignore their 401ks in times like this. Maybe I'm a little masochistic, but I can find it actually really helpful to check my retirement account balances when the market is going wild. After I have that brief pang of anxiety upon seeing my balance, which is not as high as I wish it was, I go and I look at how it's grown over time.

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Then I think about how much more time I have until my retirement. So I take the balance for what it is, a snapshot in time. Doing this helps build my financial and emotional resilience, which helps with my risk tolerance. because I'm trying to have a very cushy retirement, and that means that my risk capacity is pretty high.

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That's fair.

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Well, I'll remind you, Elizabeth, and everyone listening, that while I am a financial planner, I'm not your financial planner. So don't take this as personalized advice and don't get litigious if your investments don't perform like you want them to. But here is what I'm thinking. Investing remains most folks' best bet for staying ahead of inflation.

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And hey, we can also talk about tax loss harvesting later on. So don't worry about selling for a loss, Elizabeth.

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But hey, I'm not your advisor. Just getting that out there. Okay. Well, Elizabeth, are you feeling better about continuing to invest in the long term, even as the market and the world are acting like they have had one too many margaritas?

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I love it.

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But before we get into that, we are 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.

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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 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. Or email us at podcast at nerdwallet.com.

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as in the return you get on your investments is greater than the rate of inflation, typically. And because of that, I can't afford not to invest, regardless of what sort of wackiness is going on with the stock market or tariffs or the news of the day.

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Today's episode is sponsored by Amazfit. I've been wearing the Amazfit Active 2, and it's basically like having a personal assistant for my health. Except it doesn't judge me for hitting snooze three times. It's also a game changer for fitness. It combines AI-driven coaching, smart tracking, and premium features without the premium price.

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Visceral, dramatic, uncompromising. The Range Rover Sport leads by example, just like you do. Build yours today at LandRoverUSA.com. Again, explore the Range Rover Sport at LandRoverUSA.com. Answering your money questions to help you make smarter financial decisions. This episode, we're joined by Jeremy, a talent agent living in New York City who's wondering about his financial blind spots.

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Kim, need I remind you that I am a certified financial planner professional and I do not have any financial blind spots. Just kidding. I certainly have financial blind spots. I think everyone does, really.

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Thank you so much for having me. I'm so excited to be here. So Jeremy, before we get into the conversation, I want to remind you that everything we are about to discuss is just for educational purposes and is not individual financial advice. Make sense? Absolutely. Perfect. So to start, can you give us a high level overview of your finances ranging from like savings to debt to investing?

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How are you doing?

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Oh, of course, of course.

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I like that analog approach. So on paper, quite literally, it seems like you're doing all of the right things financially, but you seem to have this nagging feeling that something is missing. Tell us about that.

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But first, we are tackling a question that each of us faces every day. How can we be better at spending our money? Kim, in her role as the host of our regular book club series, is here to guide the conversation. So Kim, who are you talking with?

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And it's almost like you don't know what you might be missing. That's kind of the question mark. Exactly.

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Yeah, I would encourage you to play with that. We have a great retirement calculator on NerdWallet's website, so that's a pretty handy thing to pull up. Just Google like NerdWallet retirement calculator.

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Okay. And can I ask what your salary is?

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I guess annual income, yeah.

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So one common benchmark that's put out and Fidelity recommends this, which is to save at least one times your salary by age 30 and then three times by age 40. And it just grows exponentially as you get closer to retirement. And that's in part because of your compound interest and your continued contributions to retirement accounts.

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So based on that, you're doing well in terms of saving for retirement. You're not quite at that 100% mark, but having $100,000 between two retirement accounts, a little north of that actually, is really solid for anyone in general, but especially for someone who's just 31 years old. So pat yourself on the back for that.

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And that's especially impressive considering that you don't have access to a 401k right now. I will take that compliment. Thank you. Yeah, of course. But yet you still have this nagging feeling of, okay, what's going on? Where am I missing? Where can I improve things? And I think with that in mind, it might be helpful to zoom out and talk about what your life goals are.

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Like, do you know what you want to do with the rest of your life? Do you want to travel? Do you want to retire early? Maybe increase your charitable giving? Yeah.

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Do you have an age in mind where you think, okay, maybe when I'm 55, I'll want to step away from nine to five work?

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Sounds great. We also want to remind listeners that you can enter for a chance to win our book giveaway at nerdwallet.com slash book club for our next book club pick. And with that, take it away, Kim.

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Well, that's helpful to know too. So 58 might sound like an arbitrary number, and it may well be, and that's fine. But I would encourage you when you play with a retirement calculator to put in that number of years that you have until 58, and then how many years you might need to be living off of your savings afterward.

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Because obviously, if you're retiring earlier, you'll have to have a larger nest egg to fund those post-retirement years, even if you are still working somewhat. Yeah, absolutely.

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Another thing that I think you might want to consider as you decide or mull over what your goals are and what you might want to do with your finances and how you can shore up your financial life is the question of like, what do I want to do? Which we kind of talked about. And then also to your point earlier, where am I vulnerable?

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So that can provide an opportunity for introspection and evaluation of how you can shore up your finances. And on the subject of being vulnerable or preventing vulnerability, insurance comes to mind for me. Have you looked into life insurance or disability insurance?

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I mentioned disability insurance because it's something a lot of people overlook. And the chances of becoming disabled before normal retirement age is 25%, at least according to the latest information from the Social Security Administration. And that's for those who were born in the year 2000. But that 25% number has been pretty steady for a number of years.

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So a lot of people may not realize that they actually have disability insurance through their workplace. Evaluate your benefits. You may currently have this coverage. But if not, it's worth doing some research and looking into a policy because I don't know about you, I'm pretty risk averse.

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And hearing that I have a 25% chance of not being able to work or potentially earn an income through my job makes me a little bit nervous. And I try to do what I can to prevent that risk from happening.

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Another area I wanted to touch on kind of quickly, because it does go back to the idea of security that you seem pretty focused on too, is estate planning. Have you talked with your partner and your family around estate planning and set up anything like a will?

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Well, it's something that I suggest everyone look into regardless of their age is making a will or at the very least having your beneficiary designations set up on your financial accounts and double checking that they currently reflect who you would want the assets in those accounts to go to upon your death.

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Because doing that helps ensure that your finances and other property are managed according to your wishes. And it also makes the lives of your loved ones a little easier during a really difficult time if you were to pass away, knock on wood. And, you know, it seems like you've done a really great job of building a strong financial foundation.

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So setting up a will can help ensure that your assets go where you want them to and that your loved ones are supported. Yeah, that's a really great point. And I'm going to stop harping on estate documents in a second, but there's one last one that I want to talk about because you are living with your partner. You're not married. Correct.

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The last thing I want to mention is a living will, which is a legal document that directs the kind of medical treatment that you would or would not want to get in the event that you're incapacitated. And you can also direct a medical power of attorney that could be your partner who could help execute this stuff.

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that way you can ensure that if something does happen where you or your partner has something happen medically that you will be there for each other and you can help get the care that you want and not get the care that you don't want it's pretty important you probably want to talk to an attorney to get this sorted out but i think given where you are with your assets and the savings that you have it'd be well worth the money you would spend doing this yeah absolutely

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You said that you feel inhibited by money. What do you mean by that?

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Unlike other wearables, Amazfit goes beyond basic fitness tracking. It has specialized modes like High Rocks Race Mode, Smart Strength Training, and even Free Diving, built for both everyday users and elite athletes. And with AI-driven coaching, it adapts to your workouts, tracks recovery, and helps you train smarter.

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Well, Jeremy, we've covered a lot of ground over the past however many minutes we've been chatting here. I'm wondering if you have any other questions or thoughts for us based on what we've discussed.

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Elizabeth, do you want to dive in? You were an investing writer for many years.

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This is all very helpful. Thank you. And Jeremy, you mentioned a robo-advisor account. That's essentially a type of taxable brokerage account where your investment allocations are automatically sorted based on your specific goals and perhaps the type of account or investments that are within the account. So it's not that different from a taxable brokerage account.

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Upon selling the assets in that account to get your money out, it would be taxed at either short-term or long-term capital gains basis, depending on how long you held the investments for. Well, Jeremy, I hope this has been helpful and given you some things to think about and maybe consider on an existential and financial level what you might want to do with your money in your life.

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We're happy to do it. 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.

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Remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

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And with that said, until next time, turn to the nerds.

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There's also a free ZEPP app you can pair it with to get in-depth analytics and downloadable maps you can use with turn-by-turn directions. And it has Zepflow AI voice control, so you can check stats hands-free. And don't worry about battery life. The Amazfit Active 2 runs up to 10 days on a single charge.

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If you want a smartwatch that delivers more for less, then visit amazfit.com slash smartmoney to get 10% off. That's Amazfit, A-M-A-Z, fit, dot com slash smartmoney. The buy button is one of the greatest inventions of our time. Also, one of the worst.

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So let's get some advice for managing that spending and feeling good about making a budget. Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles.

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Great conversation, Kim. Thanks so much for doing that. We've got more on the way, but here's the part where we ask you to take a second and think about where you need some guidance with your money.

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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 out with us 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.

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All right, let's get to this episode's money question segment. That's up next. Stay with us. We're back and today's episode is sponsored by Range Rover Sport. Some decisions in life require careful research, like picking the right investment strategy or figuring out which streaming service actually has the movies you want.

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But when it comes to driving, there's one decision that's easy, the Range Rover Sport. It's a bold take on sporting luxury, blending sophistication with power. On the road, adaptive dynamics keep your ride smooth and composed by reducing unwanted body movements. Because, let's be honest, the only thing that should be unpredictable is the stock market, not your suspension.

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When the road changes, the Range Rover Sport changes with it. Dynamic air suspension adjusts to keep things smooth and balanced so every turn feels effortless. And if the pavement disappears? No problem. Adaptive off-road cruise control kicks in, reading the terrain and making real-time adjustments so you don't have to spend your drive making more calculations than your tax software.

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I'm also a big fan of dollar cost averaging, which is one of those terms that make you sound very fancy when you say it, but it's just a complicated way of saying lazy investing. Passive or lazy investing like this doesn't stop at how you contribute to your accounts. What you invest in also plays a role. Sarah, you mentioned target date funds, which I'm also a big fan of.

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For those who may not know, a target date fund is a type of investment that evolves over time. There are different variations, but often a target date fund will start by investing more aggressively, maybe in stocks that might be riskier and thus have greater growth potential. And then as you get closer to your target date, the types of securities that the fund invests in will change.

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So for my taxable brokerage account where I make my monthly deposits, that dollar cost averaging that we discussed earlier, I'm invested in a target date fund that about aligns with my retirement date. Seeing as I have nearly 30 years until I plan to retire, my target date fund currently has a more aggressive allocation. Over time, that will change all on its own without me having to do anything.

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And that's another great way to be lazy and gradually build up my retirement nest egg.

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And also, we didn't quite mention this part, but I have automated deposits from my checking account into my taxable brokerage account. That's one way you can ensure that you are making these deposits, you are investing gradually without really having to think much about it.

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My big tip for lazy money management is my savings bucket strategy. Longtime listeners of the podcast have probably heard me talk about this many times before, but I'll give a quick rundown for those who might be newer to the show. In short, I have about 10 checking and savings accounts, which might sound a little extreme or difficult to manage, but it's really not.

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Most of my savings accounts are with one institution. And then I have my primary checking account at a local credit union. And I also have an old checking account at a big national bank that I only really keep open because it's still connected to my mom's account back from when I opened this account in middle school.

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And she can easily get my portion of the cell phone bill from that account each month. Hashtag millennial money management.

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I'm paying my part of the bill, okay?

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And I think that's totally fine. I mean, what you described speaks to how you don't have to force yourself into a prescribed way of managing your money. You just have to find a system that works for you, and in this case, you and your husband, in managing the expenses of childcare, which is a lot to do. Anyway, I have all these accounts, but each one has its own goal.

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Beyond the account where I pay my mom my cell phone money each month, I have a savings account for my wedding, which is finally happening next year. Woohoo! Another account for my emergency fund, one that I've just called fund money that I put money in for vacations or other discretionary expenses.

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When I was going through my CFP coursework and making regular payments for my classes, I also had a savings account for that too.

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So bear with me, I will admit that there is a little bit of admin work around setting up these accounts and the direct deposits into them, but it's not super cumbersome. I just allocate specific percentages of my paycheck into each account, and this is really where the magic happens. Each pay period, my money just goes into these accounts automatically.

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I don't have to worry about whether I'm adding money to my emergency fund each time I get paid, or whether I'll have enough in my checking account to cover my mortgage. I've set up my deposit so I know I'll have enough going into each account for my monthly expenses and long-term savings goals. Then I just sit back and watch it happen.

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Or I guess, as I mentioned, I'm not exactly sitting back, but I can check on these accounts while scurrying from one task to another and know that my money is also scurrying to where it's supposed to be as well.

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You know, that's a great idea. Then you can enjoy your pizza on the couch and bask in your sense of accomplishment and laziness simultaneously. All right, well, we are about to turn to this week's money question segment, where Sarah and our co-host Elizabeth talk about Roth contributions and how you should think about your retirement accounts at the end of the year.

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But first, it's that time, that very special moment of the podcast, where we turn to you, our listener, and ask, what's up? Where do you need help? This show is all about your money questions, so send them our way. Leave 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.

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I would say that I'm unlazy to a fault. Like I'm always doing something, cleaning the house or reorganizing a cabinet or going for a run. My partner calls it my scurrying. And at any given moment, you can probably find me flittering about doing one thing or another. So no, I am not lazy. What about you, Sarah?

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Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles.

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This episode's money question is coming up in a moment. Stay with us.

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But first, Sarah and I are going to talk about the virtue of laziness, even if it's something that does not come naturally to me. With the holiday season ramping up, now is actually a great time to be a little lazy with your money. I'm not saying you should neglect your finances, but think about areas where you can put your money on autopilot.

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And Sarah and I are going to share two areas where we personally like to be a little lazy with our finances. So Sarah, what have you got for us?

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Knowing why you do what you do with money isn't always easy. Looking back on some of my early financial decisions, I'm sometimes left wondering what I was thinking or if I was thinking at all.

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Yeah.

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And so you said you're making an average amount. What does that mean?

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So you said that in your 20s, you weren't super mindful about your finances. How old are you now?

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So now you're thinking clock is ticking, better get serious.

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Your experience is not uncommon, Katie. You mentioned that you have been saving, doing direct deposits, which we call paying yourself first. It's a really smart way to save money. How much do you have in savings?

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So for that $9,000 to $10,000, do you know how many months of expenses that would cover? I'm thinking about your emergency fund here.

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Well, think about what expenses you might need to cover if you were unable to work. So in an ideal world, you would have between three to six months of what we call a bare bones budget covered in your emergency fund. So that would be things like housing, any medicine that you need, need regularly. utilities, groceries.

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You're not going to be going out to eat a lot if you don't have money coming in. So what is the bare minimum you would need to get by for a few months? That's really how you can help determine what your emergency fund amount might need to be.

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This is a pretty exciting opportunity for you, Katie, because you have a near blank slate with your budget. You have a different income. You have different expenses. And so right now, you have a chance to actively track this in a way that maybe you didn't before.

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So as a way to get a gauge for where your income and expenses are falling, we recommend using the 50-30-20 budget template as a place to start. And this is where 50% of your income would go to covering your needs. That would be like your housing and groceries. 30% goes to wants, and then 20 goes to additional debt payments and savings and investing.

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So you might not fit perfectly into that 50-30-20 framework. A lot of people don't, given how expensive things are. Some people like 60-20-20, where 60 is going towards needs. But this is a way where you can kind of get your arms around your budget a little more, which I think is important considering your savings goals.

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Folks who may not know, a 403b is essentially like a 401k that is offered by typically places like public schools and some nonprofits like the museum that you worked at. And since it's like a 401k or another workplace retirement plan, if you're not currently employed by that organization, you can't contribute to that account, to your point.

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But in that case, you could contribute to an individual retirement account, an IRA, either a Roth or a traditional. And that's the one that you have about $1,000 in, is that correct?

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You can handle them kind of however you feel. You could leave the two 403Bs with the institutions that have them. Or you could roll them both into a new IRA account. And you can shop around for an IRA. A lot of financial institutions offer them. We have roundups at NerdWallet that I recommend you read through to see which one might be a good fit for you. for you.

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But what you might want to consider is going into your 403Bs, seeing the investments that are in them, the fees that you might be paying, and then comparing that to what options you have in an IRA, because you might be able to take more control over your retirement savings if you do have these two 403B account funds in a new IRA.

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That way, you actually might be able to be more proactive with your savings.

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And to your question around which to prioritize or what to do, Katie, the good news is that you don't have to choose one or the other. You have lots of options ahead of you. You could roll the amount in your 403Bs into an IRA and you can contribute regularly to this IRA as well. So you are gradually making progress on your retirement goals because you're Here's the thing.

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I imagine that a lot of people might be scared of what they would maybe find under the layers they built around their relationships with money. And I'm wondering how you think people can work through that fear that might even turn them off from probing their relationship with money in the first place.

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Time is your friend and your enemy when it comes to saving for retirement. You want to make the most of the time that you have ahead of you, but the clock is ticking. So Elizabeth mentioned compound interest earlier. The more you're able to contribute, even if it is just $25 a month, the more you'll have later on. And I know you're kind of considering which is the priority.

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Should you save more for your emergency fund or should you contribute to your IRA? And I think you might want to consider multitasking here. A lot of financial planners will recommend first building a small emergency fund, maybe even just $1,000 or so, and then shifting more toward your retirement savings.

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Since money is pretty tight, just look through the numbers and figure out a way you can divide up your income and your savings so that you are able to make progress in these multiple goals simultaneously. But longer term, increasing your income is going to be really what makes the difference so you can accelerate your retirement savings.

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If you haven't already, I would recommend playing with NerdWallet's Retirement Calculator. We'll have a link to the show notes and we can send you a link after this conversation so that you can get a feel for the numbers again. Think about how much you might need in your retirement and how you can save enough today to get there.

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You mentioned maybe going into the medical field. What are your aspirations and goals over the next five, 10 years?

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Well, this episode will help you get better acquainted with your financial self. 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.

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And that's tough because there's no right answer to that question. Katie, it seems like you have some homework cut out for you. Oh, I have so much homework. Dig into your budget, understand the essentials that you have to pay for, what that emergency fund might look like, the three to six months that you should probably have in there.

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Think about what career path you want to pursue and how you can accelerate your retirement savings. How are you thinking about all that's on your plate? We don't want to overwhelm you, but it can be nice to kind of list everything out.

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But you still can dream a bit and talk with your partner too, and maybe map out what the future might look like. We haven't really talked about how you and your partner manage your finances. You're moving in together. That's a big change for both of you. It seems like you're able to rely on him for some financial support. Is that right?

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Well, like we talked about earlier with you having this great opportunity ahead of you to reevaluate your budget, your goals, your saving plan, you moving in with your partner is a big moment where you can begin to have this dialogue in more depth and set shared goals and align on your values around how you want to manage your money together. I'm really excited for you.

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I think that you have a great few months ahead of you. You have a lot to sort out like we talked about, but there's a lot of fun in that too, because you can dream and play around a bit.

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Overwhelming.

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Yeah.

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Well, Katie, thank you so much for coming on and sharing your story with us. I hope that we've been able to provide some insights to help you map out what you want to do with your savings and investing and finances in general as you're at this pivot point in your life right now.

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Well, keep us updated. We really want to hear from you.

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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 may not apply to your specific circumstances. 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.

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Yeah. In your book, you describe how getting to know your money involves inner work and outer work. Can you explain what you mean by this and how we can productively do both of these types of work?

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But first, we're going deep into your relationship with money. Elizabeth, if you could use one word to describe your relationship with money, what would that be?

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For many people, I'm guessing that word might be tense or maybe even unhealthy, but exploring your relationship with money is an important investment, one that can pay all sorts of dividends in big and small ways.

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I like the idea of having that weekly money date with yourself where you are just setting aside a quick 15 minute allotment of time. Doing it bit by bit will help you make tremendous progress over a month or a year.

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That is so key because we know from behavioral psychology that the more you like to do something, the more fun it is for you, the more likely you are to keep doing it. And a lot of what we've been talking about can seem so heavy and fraught and maybe even painful to dig into or frankly even boring just looking at your numbers. People don't like to do that all the time.

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So how can you make it something that is actually something you want to engage with, something fun? So building in those rewards, making a little moment to celebrate every time you do make some progress will really help you see these things through over the long term.

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And to help us explore our relationships with money, we are joined by Shauna Game, host of the podcast, Everyone's Talking Money, and author of the new book, Unraveling Your Relationship With Money, Ditch Your Money Trauma So You Can Live an Abundant Life. Shauna, welcome back to Smart Money.

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I love that. Okay, well, one last thing before we let you go, Shauna. Throughout your book, you have these money, truth or dare prompts for readers, which I found really fun as I was reading your book. I thought about asking you a truth or dare question, but I thought that a dare might be a little hard to do on a podcast. So I want to ask you a money truth.

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Shauna, what was the first dollar you ever spent? And what did it teach you?

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Putting you on the spot here.

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Do you remember how you spent that dollar?

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So that maybe taught you to enjoy the money that you earn.

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Yeah. Great. Well, Shauna Game, thank you so much for coming on and sharing your thoughts with us.

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But before we get into that, listener, I've got a question for you. What is your money question? The financial thing that keeps you up at night or that goal you just can't seem to make progress on?

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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 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. Let's get to this episode's money question segment.

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That's up next. Stay with us. We're back and answering your money questions to help you make smarter financial decisions. This episode, we're joined by Katie, a listener with some questions about how to save and invest when money is tight. Katie, welcome to Smart Money.

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Katie, I'd love to start by hearing about your financial life generally right now. Where are you feeling good? Where do you think you might have some room to grow?

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Yeah, always, you know, worth a phone call to their customer service just to explain your situation and see if they have something that would match. Worst case, they tell you no and you seek out some other option. So definitely use this time before you move to Spain to do that research. Another thing to look into that our listener asked about, credit cards.

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Which ones might be best for living abroad? And if you don't have a credit card at the moment, I would tell this listener or anybody who's listening to this in the same situation, apply for a card while you still have a US address if you're not going to be maintaining one after you move.

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Because that's often a requirement to be able to apply and be potentially eligible for a U.S.-based credit card. And also, once you get approved, opt into paperless statements so you don't have to maintain a U.S. address to get mail from the credit card issuer. Craig, you're a bit of a credit cards nerd, which is an understatement. What advice do you have?

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According to the Federal Reserve, the average credit card interest rate is just over 23% as of August 2024. And yes, that is a couple months ago, but that is the most recent data available.

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So for somebody carrying the average amount of credit card debt, which is about $10,500, making just the minimum payments means that that debt actually costs close to $29,000, which is nearly triple the amount owed.

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If you need help comparing different credit cards, NerdWallet has a free credit card comparison tool that we'll link to in today's show notes. Or you can also search online for NerdWallet Compare Credit Cards.

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Yeah.

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Well, with that all being said, listener, muchas gracias for your question and I wish you the best of luck as you move to Spain. I hope you have a wonderful time there. It is a beautiful place and we are all very jealous. So enjoy.

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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 may not apply to your specific circumstances. And with that said, until next time, turn to the nerds.

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Let's start with debt repayment strategies. And we've talked about them on the podcast before, but a little repetition is a good thing. So basically, you make a list prioritizing your debts. And then you make the minimum payment on every debt on your list. But then you put any extra money you have in your budget toward the debt at the top.

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And once you pay that debt off, you move on to the second item on the list. And so with Debt Avalanche, you prioritize debts from highest to lowest interest rate. And with Debt Snowball, you list your debts from smallest to largest amounts owed. But this was really interesting. The survey revealed another way that people prioritize debt repayment.

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by how much stress each kind of debt creates for you. So here's an example. Let's say you have a debt on two different credit cards and each charge around 25% interest. And you also borrowed a sum of money from a family member interest-free.

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So mathematically speaking, you probably want to be more aggressive with the credit card debt, but your relative was making some pretty passive aggressive comments over the holidays about the money you owe them. So you pay that debt down first to avoid any future awkward encounters.

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Well, that's where things like balance transfer credit cards can come in handy. If you qualify for them, they give you a long time, 12 months or more, depending on the card, to pay down debt at 0% interest. And NerdWallet has a free article you could read that lists the best no balance transfer fee credit cards.

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Our credit card nerds put in the research and broke down exactly what each card offers and the fine print along with each one. That's a good place to start if you're looking to compare your options. So we'll include a link in today's show notes. Another potential option besides balance transfer cards are personal loans.

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And if you qualify for an interest rate that's lower than what your credit cards are charging you, that could help save you money on interest. And of course, if you feel like you're in over your head, it could be a good time to work with a financial professional or nonprofit credit counseling agency. They can really be a huge help.

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I haven't, but maybe I'll retire to whatever the hot American expat destination will be in the 2050s. Well, okay, maybe hot's the wrong word, given, you know, climate change.

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Sometimes you need that third party to come in and help you see the full view of your debt and help you make a plan going forward.

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I'm Sean Piles. And I'm Sarah Rathner. In this episode, I'm joined by our co-host, Elizabeth Iola, to answer one of your money questions about managing your money while moving and living abroad.

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I think it could be hard to imagine paying off a lot of credit card debt when there are other things competing for your money every day. And this can happen to you at any income level. You have bills to pay. You have things to save up for. So your money is spoken for. And it's easier to think that once you make more money, you'll have something available to put towards your debt.

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But that day might not arrive for a while. Or when you do finally get a raise or a new job with a higher salary, you won't actually use that extra money for debt payments because it'll just be used for something else.

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Well said, Sean. And the thing with credit cards is they can be a very useful tool, but they can also get you in a lot of debt. And that debt can get in the way of you achieving all the other things you want to do in your life. A lot of people are holding off on things they really want to do because of that debt.

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And so if this is you this year, if you are facing this debt and there are other things you want to do and you just feel like you can't, today is a great day to To sit down and list out your debts and really begin to plot out how you want to make a change this year. And we're rooting for you.

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Exactly. Switching gears, if you've been dreaming about living in another country, we're about to give you the tools to bring your dreams to life. Assuming you've maybe paid off your credit card debt first. So you can do this.

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And we also want to remind you, like so many things, you need to make a plan for how you're going to manage your money when you're there, because it's a little bit more complicated than you might think. And I certainly learned a lot listening to the stories that we're about to hear.

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Maybe you're feeling a little lost. Everybody else around you is making these New Year's resolutions and you have no idea where to begin. Yeah. And you don't know what your financial goals should be. And that's okay. You're not alone. If you're trying to break yourself out of a bad financial habit, you just can't seem to do it. And you've got money questions. We nerds are here to help.

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So leave us a voicemail or text us on the nerd hotline at 901-730-6373. That's 901-730-NERD.

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All right, let's get to this episode's money question segment where I'm joined by our co-host, Elizabeth Iola. That's up next. Stay with us. We're back and 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. Here it is. Good morning, money nerds. First, I really enjoy your podcast.

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My wife and I are thinking of moving to Spain for a couple of years. I will be working remote. So living there, but getting paid from a US company in dollars. What's the best way to transfer money over to a Spain bank account and not get hit with big fees? Maybe some banks both countries have in common? Apps? And any credit cards you recommend while living there?

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You sound great.

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All right. Our listener and their partner are planning to move to Spain for a few years. Can you all share a bit about your time living abroad and how you prepared for your move? Did you have a formal process in place or did it just kind of happen? Craig, let's start with you.

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Debt totals are up compared to last year, but not by a lot. All told, debt in general is up just under 4%. Mortgages and auto loans are both up by more than 3%, while credit card debt is up just 1.5%.

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All right, Tess, how about you? What's your story?

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Okay, well, I can't say I've ever left the country and then forgotten to come home. I mean, there are times that I wish I did. So to speak. That's awesome. I think that's something everybody should do in their life, I suppose. I agree. One thing our listeners are concerned about is banking. How did you all manage your bank accounts abroad?

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Did you keep using the same bank that you had in the States, or did you do something different to sort all that out?

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Yeah, I took this question over to Spencer Tierney. He's a banking nerd who's been a guest on this podcast many times, and he emphasized looking for banks that don't charge ATM fees in other countries. NerdWallet's got a great article about that that we'll link to in the show notes. He also mentioned the existence of something I had not heard of, which is a multi-currency account.

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They are, and that's in part because over the past five years, incomes just haven't kept up with the costs of those necessities like food, housing, and transportation. And we found that nearly half of Americans who currently have revolving credit card debt say that paying for those necessities are what contributed to those balances.

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And these let you spend, receive, and hold multiple currencies at the same time. Those aren't the right thing for everyone. It kind of depends on your personal situation, where you're living, and how you're earning money. But we also have an article about that, too, that we'll share as well. And so there are resources out there.

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But yeah, I imagine Reddit as well could be a potentially good resource for anybody. Yeah, for sure. Switching gears, let's talk about transferring money from a U.S. bank account to one in another country, since that's another thing our listener asked about. Is that something that you all had to manage? Do you have any tips on that?

NerdWallet's Smart Money Podcast

Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff

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Hey Elizabeth, when you think about your life and your money, what feels good about your finances?

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Thank you. Asia, welcome to the show.

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I tend to be pretty risk averse and going into debt, especially tapping your retirement to cover expenses. Those two are really risky options. Your retirement, if you pull from that, that could mean that you are less able to fund your retirement later on. And debt can be really expensive and difficult to get out of, especially if you find yourself in a bind with your employment.

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So I would encourage anyone, Brie, yourself included right now, if you are not employed to try to find some kind of work, even if it's just part time. We know from NerdWallet's 2025 labor market report that the typical time that people are remaining unemployed is around 10 weeks right now. And that has been increasing over time.

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So it seems like the job market is in a bit of a shaky place right now. The company you are working for had a round of layoffs. So even if you're not working your ideal job, maybe it's not in your field or exactly what you want to be doing. getting some kind of income stream should be the priority. And yes, you have four to six months worth of savings, and that's fantastic.

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It can take almost that long to get hired depending on the company that you're interviewing with. So starting that process now should be the priority.

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I am not entirely certain how saying whether you turn down a role could impact your unemployment benefits. That's something that you would want to ask that office about because the rules can vary by state. But in general, if you are working a job, even if it's just a part-time job, that can impact the amount of unemployment benefits that you receive.

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You could still receive partial benefits if you're working while on unemployment insurance, but you have to report the income that you're getting.

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It's easier to get a job when you already have a job. So if you have a chance to get in the door, that may well be your best chance to find something better.

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I understand wanting to do your due diligence at this new job and really put in the effort, but you have to follow what's right for you and your career. So even if a month in, you get a job offer from somewhere else that is a much better fit, That's what's right for you. And I wouldn't feel guilty about leaving that new job.

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Maybe a bit of analysis paralysis.

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Yeah. I'm glad you have a support network of friends to help you.

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Have you been able to get quotes for how much marketplace insurance might cost you and what kind of coverage you would get?

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Well, considering that you had a high paying job before, I would be a little surprised if you qualified for Medicaid. You might just have to be that squeaky wheel and start calling people because bureaucracy moves slowly. We know that state governments are having a pretty hard time right now.

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You might be able to get through if you just call, but you need that answer because that's really what's going to help you decide whether Cobra or the marketplace is best for you in terms of the coverage that you personally need for anything that you might have on an ongoing basis and then what you can afford to.

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because 900 something dollars is a huge hit to your budget, especially when you're already going through your savings. But based on your income for the past few years, you might not end up saving a whole lot more if you go with a marketplace plan, or you could probably find one that's more affordable, but it would have lesser degree of coverage for you.

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So again, it comes down to what kind of coverage you can get away with. You don't want to be sacrificing your health just to save a You can end up paying much more than that down the road if you neglect your health. I also want to go back to how you've been able to adjust your finances in general since this job loss.

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It seems like you are really good at communicating your boundaries with your friends around your budget. I love a $20 limit. The good thing about living in Chicago in these warmer months is that there's so much to do for free. I'm from Chicago originally, and I love how the city just comes alive in the summer with all these different street festivals that are free to get into.

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What other changes have you made to your finances since losing your job?

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I love that you seem to be really good at building structure for yourself because that's so important to after a job loss, because there can be a loss of a sense of purpose and your day to day is so open ended. So you are building infrastructure for yourself to have a full life by diverting your interest in travel into exploring your area around you.

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and rewarding yourself for the progress that you are making. So I hope that you can take some time to appreciate that effort too, because it goes really far. And it's one of the best things to help you through a period like this.

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And it can help, too, to have a baseline understanding of where you have to get back to. So look at how much of your emergency savings you have spent from the time that you lost your job to when you get your next job. That's the number that you want to restore to and think, okay, how much, given my budget, given your new salary, can you put away monthly comfortably?

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And then from that point, how long is it going to take you to get to that baseline? One last thing I wanted to touch on is your retirement. We haven't talked about what's happening with your retirement savings. So what is your plan there?

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Because I assume you have at least a little bit of a plan around your retirement savings, maybe from your previous employer's fund and what you might do next with it.

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Okay. Well, that's helpful. So I think you're on the right track with having that be a hard no. It can be really tempting to pull from retirement. And maybe in four months, if your savings are getting depleted, that can be something to revisit. But in general, pulling this money out now can make it that much more difficult to get to where you need to be later on, like I mentioned before.

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So just something to keep in mind too. And Then later on, once you have a new job, that will open you up to exploring different ways to save for retirement, whether it's through their 401k, 403b, your own Roth IRA. But getting that income stream started back up again will enable so much more when it comes to retirement savings. So that should be the number one priority.

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I love to hear that. I thought you were going to say spending money feels good. I know that's always true.

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Keeping it there is easy. And if you're lazy, that's a nice thing to have. But it doesn't make a lot of difference one way or another in terms of compounding because the money is growing over time. I understand wanting to have it all in one place. That can be the much simpler way to do things.

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And as you get closer to retirement, it's just going to be the easiest way to manage what you have saved up is to have it in one, two, maybe three places, but you don't want it to spread across five different employers over time.

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But like Elizabeth mentioned before, you want to review all of the investment options at different accounts, which is why a lot of people are fans of Roth IRAs and IRAs in general is because they tend to have more retirement investment options versus a 401k. But that also depends on your employer too. I would say, think about the fees, the investment options, how you like to manage your own money.

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You might be fine leaving the funds that you have in your former employer's retirement account there. Although sometimes the employers may charge you higher fees because you are a former employer. So get that information too. But I think for now, you're probably fine just doing what you like to do with your retirement funds.

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Well, Brie, we've run through so many different aspects of your finances, your life goals, the way you strategize and organize your own life. How are you feeling now and what do you think your next steps will be?

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Well, it seems like you're doing all the right things. Please keep us updated on how everything goes for you. We can't wait to hear from you.

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Thank you. 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.

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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 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.

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Today's episode is sponsored by Amazfit. I've been wearing the Amazfit Active 2, and it's basically like having a personal assistant for my health. Except it doesn't judge me for hitting snooze three times. It's also a game changer for fitness. It combines AI-driven coaching, smart tracking, and premium features without the premium price.

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Unlike other wearables, Amazfit goes beyond basic fitness tracking. It has specialized modes like High Rocks Race Mode, Smart Strength Training, and even Free Diving, built for both everyday users and elite athletes. And with AI-driven coaching, it adapts to your workouts, tracks recovery, and helps you train smarter.

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There's also a free ZEP app you can pair it with to get in-depth analytics and downloadable maps you can use with turn-by-turn directions. And it has ZEPflow AI voice control, so you can check stats hands-free. And don't worry about battery life. The Amazfit Active 2 runs up to 10 days on a single charge.

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If you want a smartwatch that delivers more for less, then visit amazfit.com slash smartmoney to get 10% off. That's Amazfit, A-M-A-Z, fit, dot com slash smartmoney.

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So responsible. We love to hear it. Well, we know it's not always easy to feel good about your finances. So this episode, we got some advice so you can feel better about your money mood. 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.

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But first, we have the next installment of our nerdy book club series, which is led by regular Smart Money guest and friend of the pod, NerdWallet writer Kim Palmer. Kim, who are you talking with this episode?

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Coming up next is our money question segment with a listener who has some questions about how to manage their finances after losing their job. That's coming up in a moment. Stay with us.

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We're happy to have you here. To start, I would love to hear about your finances generally right now. What feels good? What feels maybe a little bit challenging?

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Well, that's the benefit of having an emergency fund like you had four to six months worth of savings is great. You should be really proud of yourself for building that up. And now you're able to use it to help you right now.

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Sounds great. Well, we also want to remind listeners that you can enter for a chance to win our book giveaway at nerdwallet.com slash book club for our next book club pick. And with that, Kim, take it away.

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Yeah, I imagine that it'd be hard to not have a sense of closure about that. Is there something else? You know, that question could be a little nagging.

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It seems like you're doing the right thing taking the time and space to grieve because job loss can be one of the most difficult things to go through. So I think even though it's hard, it's important to sit with that and process all of your emotions and realize that you're going through the various stages of grief. which don't happen in the order you might expect.

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They can kind of come and go in different orders and that can be confusing too. But I like that you're thinking about what good could come of this because that's a question that a manager asked me to think about in my own context when I was going through a hard time with my job. Even though things might have seemed challenging then, there was a lot of good that came from it.

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And it seems like you might be at a place where you can pivot your dreams and your career a little bit

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Today's episode is sponsored by Amazfit. I've been wearing the Amazfit Active 2, and it's basically like having a personal assistant for my health. Except it doesn't judge me for hitting snooze three times. It's also a game changer for fitness. It combines AI-driven coaching, smart tracking, and premium features without the premium price.

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And as we'll discuss, there can be some serious and complicated tax implications.

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That's a good suggestion because the amount that you convert is considered part of your gross income for the year that you do the conversion. And the tax implications of a Roth conversion are a good reason to pause before making this decision. You want to make sure that you have enough cash to cover that tax bill.

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And you generally can't use the money from your IRA to pay what you owe in taxes without facing a penalty unless you're over 59 and a half.

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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.

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Well, if you didn't gather from the name ProRata, it's a little complicated, but I will try to describe this as simply as I can. So here's how it works. Say you want to convert money from a traditional IRA to a Roth IRA. It's usually pretty straightforward, Sam, as you laid out earlier. You generally pay income tax on the amount that you convert.

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But things can get complicated when you have multiple traditional IRAs or one account where you have a mix of pre- and post-tax contributions. So let me give you an example to bring this to life a little bit. Say you have $75,000 in one traditional IRA where you took the tax deduction, which effectively makes the money in the account pre-tax.

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and $25,000 in another traditional IRA where you haven't taken the deduction, for a total of $100,000 across two traditional IRAs. With a simple backdoor strategy, you could move the $25,000, which you already pay taxes on, into that Roth IRA without taxes. But because you have multiple traditional IRAs, some with pre-tax and some with post-tax funds, the IRS says, not so fast.

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When you go to convert the money from that second IRA, the IRS looks at the total amount you have in all of your IRAs and will assess a proportional tax on the amount that is pre-tax. Because here's the thing, pro rata is Latin for proportional. So with the example we've been going with, the IRS sees that 75% of the money in your IRA is pre-tax and 25% is post-tax.

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This means that if you went to convert that $25,000 that was in the account that had entirely post-tax contributions, you'd still likely be on the hook for taxes on up to 75% of it because the IRS is looking at your total IRA amounts, 75% of which was pre-tax.

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But first, let's explore the rapidly evolving and sometimes intimidating world of AI and whether it's a good idea to use it to help you manage your finances.

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Well, one is to keep your accounts or contributions simple. You could make sure that you only have pre-tax or only have after-tax contributions in your IRA account or accounts. Another option is to avoid Roth IRAs entirely and instead contribute to a Roth 401k if your employer offers it. I'm personally a big fan of the Roth 401k route.

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They allow you to contribute directly to a Roth account without having to deal with any of the IRA accounts or their income limits. I find that much easier.

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Great. Sam, thank you so much for coming on and chatting about this with us.

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Thanks for having me. 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.

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You can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeart Radio to automatically download new episodes.

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And with that said, until next time, turn to the nerds.

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I guess I'm in that minority of 38% of millennials not using AI, but maybe by the end of this conversation, I'll be converted. Elizabeth, before you go too deep into AI stuff, I want to be really clear. What do you mean by using AI to manage finances? Because AI is really broad and so many financial tools can fall under the category of AI.

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Unlike other wearables, Amazfit goes beyond basic fitness tracking. It has specialized modes like High Rocks Race Mode, Smart Strength Training, and even Free Diving, built for both everyday users and elite athletes. And with AI-driven coaching, it adapts to your workouts, tracks recovery, and helps you train smarter.

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Yeah, and a lot of companies are just saying they have AI elements to be with the trend right now, even if it's not a super advanced product. So it sounds like various forms of AI can be deployed to manage different aspects of your personal finances.

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Okay, Elizabeth, can you share three or four ways that people can use AI to manage their finances today?

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Let's start with budgeting there, since that's a pillar of personal finance. Off the top of my head, I think chat GPT or generative AI in general could be used to help you create a budget plan. What do you think about that?

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I'm certainly not, but I try to stay up on what's happening in the world.

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And I imagine that AI tools might also be helpful for analyzing spending habits, maybe looking for areas of improvement in your budget and providing recommendations for how to spend less money.

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There's also a free ZEPP app you can pair it with to get in-depth analytics and downloadable maps you can use with turn-by-turn directions. And it has Zepflow AI voice control, so you can check stats hands-free. And don't worry about battery life. The Amazfit Active 2 runs up to 10 days on a single charge.

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Thank you for giving me this opportunity, Elizabeth. In general, one of the roadblocks for people when it comes to accomplishing financial goals is just inertia. It can be really hard to get going for any number of reasons. So if you want to incorporate AI into your budgeting practice, think about what application of AI might make you more likely to accomplish what you want to do with your money.

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That might mean using AI-powered budgeting apps to organize your spending or having a conversation with ChatGPT to help you find ways to stay motivated as you make progress on your financial goals. Let's move on to using AI for financial education. Elizabeth, how can folks do that and is it going to put us out of a job?

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Yeah, I get that in theory, but here's where my curmudgeonly Luddite tendencies are going to come out. One of my biggest qualms with AI models is that they have a track record of just making stuff up and giving people inaccurate information. So I think if folks want to learn more about a subject, AI can be a good jumping off point.

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But then I would recommend going to a more trusted source like NerdWallet to ensure that you're getting accurate information.

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I'm just looking out for our listeners, okay?

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So we have covered budgeting and financial education. Let's touch on the last use, investing research.

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If you want a smartwatch that delivers more for less, then visit amazfit.com slash smartmoney to get 10% off. That's Amazfit, A-M-A-Z, fit, dot com slash smartmoney. Hey Elizabeth, what's the last thing that you used AI to do?

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And I just want to throw it out there that I think people should be cautious when it comes to using AI to tell them what stocks to pick or for personalized investment advice, and also that people should be aware of algorithmic bias when using AI-powered investment tools.

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Algorithmic bias is when machine learning algorithms make decisions that systematically disadvantage certain groups due to flaws in the data it was fed or trained on. Remember, these tools are using data that they've been trained with, as you mentioned earlier, Elizabeth.

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It's possible that data may favor certain companies or sectors, so folks should just keep that in mind when they use these tools.

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And I think the sum of it is that AI can provide perspective, but it shouldn't be the only source that you use to make investment decisions. On that note, Elizabeth, are you telling me that I shouldn't ditch my financial advisor for an AI tool quite yet?

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Well, until an AI model can make my dinner for me, I think I'm going to stick to my barefoot Contessa cookbooks to figure out what I'm having for dinner.

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But quickly, before we get into that, we are at one of my favorite parts of the show, the moment where we ask you, listener, to take a second and think about where you need some guidance with your money.

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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 out with Elizabeth 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.

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Today's episode is sponsored by Range Rover Sport. Some decisions in life require careful research, like picking the right investment strategy or figuring out which streaming service actually has the movies you want. But when it comes to driving, there's one decision that's easy — the Range Rover Sport. It's a bold take on sporting luxury, blending sophistication with power.

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On the road, adaptive dynamics keep your ride smooth and composed by reducing unwanted body movements. Because, let's be honest, the only thing that should be unpredictable is the stock market, not your suspension. When the road changes, the Range Rover Sport changes with it. Dynamic air suspension adjusts to keep things smooth and balanced, so every turn feels effortless.

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Can AI Really Manage Your Money? Plus: The Truth About Roth Conversions

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And if the pavement disappears? No problem. Adaptive off-road cruise control kicks in, reading the terrain and making real-time adjustments, so you don't have to spend your drive making more calculations than your tax software. Visceral, dramatic, uncompromising. The Range Rover Sport leads by example, just like you do. Build yours today at LandRoverUSA.com.

NerdWallet's Smart Money Podcast

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Again, explore the Range Rover Sport at LandRoverUSA.com. We're back and answering your money questions to help you make smarter financial decisions. This episode, we're taking on a couple listener questions about Roths, specifically backdoor Roths and Roth conversions. And here to help us answer them is investing nerd and friend of the pod, Sam Taub. Hey, Sam. Hey, Sean and Elizabeth.

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Good to be back.

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So, Roth conversions are a pretty hot topic nowadays, and for good reason. They can save folks taxes later, but the kicker is that they'll generally have to pay some taxes now. Sam, to start, can you describe quickly how a Roth conversion works?

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Wow, those all sound like really useful applications. I'll admit that I'm not an AI power user, largely because I worry about its environmental impact, but maybe one day I'll use it to plan my life. This episode will give folks a few tips for how they can use AI to help them manage their money.

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I also want to add that while having the tax diversification that Roths can provide can be really appealing and beneficial in retirement, conversions aren't a great idea for everyone. Among other factors, they generally do make sense if your current tax rate is lower than the tax rate that you think you'll have in the future, which requires a bit of guessing there.

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Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners

Today's episode is sponsored by Amazfit. I've been wearing the Amazfit Active 2, and it's basically like having a personal assistant for my health. Except it doesn't judge me for hitting snooze three times. It's also a game changer for fitness. It combines AI-driven coaching, smart tracking, and premium features without the premium price.

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Wow. Well, I got to say, those make me glad that I'm not in the dating pool. Well, for some people, the amount of debt that you carry might just turn them away from dating you. Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles.

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From what you mentioned earlier, Tenzin, it sounds like it's really just been in the past decade or so that you and your wife have begun to seriously save for retirement. Is that correct?

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When would you like to retire? Do you have a year or an age or some other sort of milestone in mind where you think, okay, this is when we're going to flip the switch and retire?

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Tractor here. I've not heard that term before.

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That could be a retirement project for you.

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so maybe retiring in air quotes looks more like continuing to farm but sort of changing how much income we're expecting the farm to generate and how much passion project it can support right well i think that would make sense considering that it seems like you and your wife may not have a huge nest egg saved up for retirement but you do have this great asset that's making money this farm

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and you have workers who are passionate and care about what you're doing and its impact in the community. So what you might want to look into is a shared ownership model that might be a way for you to slowly transition ownership over time. You also might want to consider some kind of business arrangement where you are really just minimally involved in the company but can drive in

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This episode, we talk with a listener to help them figure out what their retirement might look like, including whether they should leave the farm that they built their life around.

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come from it, like an LLC that's managed like a partnership could be a good option here. But one thing I'm going to recommend is that you connect with a certified financial planner who has specific experience in managing businesses and transitioning owners from active management to maybe a less active role or even selling a business.

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Perfect. This is really important to do right now because if you have a good certified financial planner who understands your position, they can serve as sort of the quarterback or the coach of your financial team where they are directing your tax pro and maybe they can connect you with an estate planning attorney.

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They can really help you connect the dots and get a comprehensive plan so you can get what you want from your money and have the retirement that you and your wife want so you can focus on those passions that you mentioned earlier.

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Yes, there's a lot out there. But one thing I want to go back to is what you imagine your retirement to be. So when you and your wife are having these conversations, what does that look like? What are those passions that you want to spend time on? When are you going to make this amazingly successful tractor hero comic book series? What is it that drives you to have a retirement?

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Well, one thing that might be helpful is for you and your wife to think about what are maybe the top two, maybe three scenarios for your retirement. Are there a couple ideas that you keep coming back to besides travel?

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All right, well, Sarah, tell us, how much debt makes someone undateable?

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Part of why I really encourage you and your wife to get clear about what your goals are for retirement, what you imagine your retirement to be, is because retirement planning really has this qualitative element that I just laid out, knowing what you want your retirement to look like, whether you're going to travel a lot, stay in a specific area, move around, completely retire, semi-retire, all of these different factors.

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And then you want to turn more to the quantitative side, really knowing how much money you would need to save to live that life that you want in retirement. And this is where that CFP with succession planning and retirement planning can help you make a very specific plan for your needs and your goals.

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So then once you have an idea of how much you need to have saved, you will also want to factor in a potential stream of income from your business. And a lot of people count out Social Security, which I don't. think is maybe a little bit misguided, people will just buy into the fact that they won't have it. That can be a good conservative estimation.

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That really stood out to me in the survey. Nearly 40% of respondents said that they don't care how much debt their partner has of any kind. I found that kind of shocking because if I was dating someone and I found out they had a huge amount of debt due to discretionary spending, that would certainly make me question things.

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But I also don't want people to just assume that it won't be there for them. And then they just give up on the idea of it existing in general so that when it comes to the chopping block in Congress, people already think it's already dead.

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So I like to say consider Social Security, but try to have a plan for what your retirement savings might look like without that too, just so you can play with a few different scenarios. Well, Tenzin, thank you so much for taking the time to talk with us. I really appreciate it.

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Well, please keep us posted. And we want some photos of cats on the farm, please.

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Thank you. 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. Also, visit nerdwallet.com slash podcast for more info on this episode.

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And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

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And with that said, until next time, turn to the nerds.

NerdWallet's Smart Money Podcast

Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners

Unlike other wearables, Amazfit goes beyond basic fitness tracking. It has specialized modes like High Rocks Race Mode, Smart Strength Training, and even Free Diving, built for both everyday users and elite athletes. And with AI-driven coaching, it adapts to your workouts, tracks recovery, and helps you train smarter.

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And context is really important here too. If someone has a bunch of medical debt or student loans, I think that's easier to sympathize with because our educational and medical systems can sometimes force people into debt just to get by or to get ahead.

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Yes, I sign on to that.

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Go figure.

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I also want to throw out there that sometimes debt can be a green flag. Like I, for one, have hundreds of thousands of dollars in debt with my mortgage. That's a good kind of debt that you would want to see someone have, especially if it's affordable in their budget. But the study mentioned some entertaining red flags and some green flags that people should consider in a potential partner.

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Can you talk us through those, Sarah?

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Not so fun.

NerdWallet's Smart Money Podcast

Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners

There's also a free ZEPP app you can pair it with to get in-depth analytics and downloadable maps you can use with turn-by-turn directions. And it has Zepflow AI voice control, so you can check stats hands-free. And don't worry about battery life. The Amazfit Active 2 runs up to 10 days on a single charge.

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And this goes for all parts of a relationship beyond just money management, too. Remember that you and your partner are on the same team and do what you can to support each other.

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But before we get into that, we are 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.

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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 out with Elizabeth 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 or email us at podcast at nerdwallet.com.

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Today's episode is sponsored by Range Rover Sport. Some decisions in life require careful research, like picking the right investment strategy or figuring out which streaming service actually has the movies you want. But when it comes to driving, there's one decision that's easy — the Range Rover Sport. It's a bold take on sporting luxury, blending sophistication with power.

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If you want a smartwatch that delivers more for less, then visit amazfit.com slash smartmoney to get 10% off. That's Amazfit, A-M-A-Z, fit, dot com slash smartmoney. Hey, Elizabeth, what's the last red flag that you saw on a guy that made you say, No, sir, this is not it. I gotta go.

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On the road, adaptive dynamics keep your ride smooth and composed by reducing unwanted body movements. Because, let's be honest, the only thing that should be unpredictable is the stock market, not your suspension. When the road changes, the Range Rover Sport changes with it. Dynamic air suspension adjusts to keep things smooth and balanced, so every turn feels effortless.

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Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners

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And if the pavement disappears? No problem. Adaptive off-road cruise control kicks in, reading the terrain and making real-time adjustments, so you don't have to spend your drive making more calculations than your tax software. Visceral, dramatic, uncompromising. The Range Rover Sport leads by example, just like you do. Build yours today at LandRoverUSA.com.

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Debt in the Dating World and Retirement Planning for Entrepreneurs and Business Owners

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Again, explore the Range Rover Sport at LandRoverUSA.com. We're back and answering your money questions to help you make smarter financial decisions. On this episode, we're joined by Smart Money listener Tenzin, an organic produce farmer, with some questions about how to plan their retirement and manage their business. Tenzin, welcome to Smart Money. TENZIN ZHANG Thank you. Glad to be here.

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Definitely.

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So to start, Tenzin, tell us a little bit about your life personally and financially. A lot of it revolves around the farm with your wife, right?

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Tenzin, I also saw on your website that you have some animals that roam around the farm. I'm imagining some idyllic scene with cats roaming around and carrots being harvested. Is that what it's like, or am I overly romanticizing it a bit?

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And do you sell in your local community or are you distributing nationally?

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I want to turn to how you and your wife have managed your money over the years. You mentioned earlier that there is some seasonality to your focus on money, much like how you have to focus seasonally on different parts of your farm. Describe that for us.

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I imagine that there's a lot of overlap between how you and your wife manage your household finances and how you're managing the finances of the farm. How have you been able to make it so that you are getting income stream in a somewhat stable way from the farm, but also not intermingling too much the business finances and your personal home finances?

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Wow.

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Tenzin, you and your wife are at points in your lives where you're beginning to really seriously consider what your retirement will look like. What kind of retirement planning and saving have you done so far?

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I like to hear that you're working with a tax professional because that is often essential when you're managing a business. And even if you just have somewhat complex finances as a non-business owner, it can be really beneficial to have a CPA that you're working with.

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Falling interest rates, stubborn inflation, looming financial goals, all three are intertwined in ways that can get a little messy or confusing. This episode, we're going to help you figure out how to take advantage of this moment to get what you want from your money. Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles.

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And I have learned so much that I will be able to apply even right now in this episode.

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And we'll talk about how to make refinancing more affordable in a little bit. Now, Kate, is there anything else folks should do to be in a good position to refinance?

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Yeah, and then cough up about $500, I think, and then that'll be that.

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If I'm lucky, yes.

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Let's get to the listener's question about making a plan to refinance. Say they know what kind of refi they want, they've scrounged up some cash, and they've made sure their credit is in a good position. What's the first thing they should do?

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Nothing but respect for the board that now controls my professional life. Wonderful. Well, like I mentioned, this episode, Sarah and I are going to use my CFP knowledge and also all of Sarah's knowledge to answer some questions that you sent us about refinancing mortgages when interest rates might hopefully be on the decline.

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Oh yeah. I mean, shopping around for the best rates really pays off with a mortgage when you can be paying hundreds of thousands of dollars in interest over the life of that loan.

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Now I want to turn to something that is not a refinance, but is perhaps a neighbor, if you will, pun intended. I'm talking about home equity lines of credit, or HELOCs. We received a question from a listener about HELOCs, so let's talk about them a bit.

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Since I imagine many folks have home equity they might be hoping to tap, especially if they bought in, say, 2020 or 2021, and their home has gone up in value. Here is the listener's question. They wrote, what does it mean to lock in a rate of a HELOC? And when is it a good time to do so? What are the benefits? And what does it mean to request a payoff versus a pay down on a HELOC?

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But before we get into that, I want to explore other ways that folks can leverage this transitional moment for their benefit. Right now, some people are expecting that inflation may rebound next year if the incoming Trump administration makes good on its promise to implement tariffs.

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Our listener asked about locking in a rate on a HELOC. Do HELOCs typically have a fixed rate, meaning the interest rate doesn't change? Or do they tend to be variable, meaning the interest rates will move up and down over time?

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Meanwhile, the Federal Reserve cut interest rates at its two most recent meetings, and a third rate cut may be on the way later this month. We have these ups and downs swirling around in the economy. And all the while, we regular people are just trying to live our lives and support our families and get our money to where we want it to be. And all of that can be kind of difficult.

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So Kate, when or why would you want to lock a rate on HELOC?

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Finally, our listener also asked about the difference between requesting a payoff versus a pay down of a HELOC. Can you explain what those terms mean?

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And that's all we have for this episode. Remember, listener, that we are here for you and 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. Visit nerdwallet.com slash podcast for more info on this episode.

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And 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

Smart Mortgage Strategies: From Refinancing to HELOC

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And with that said, until next time, turn to the nerds.

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thrive if we dare to do so. But we have to stay responsive, and not in a knee-jerk way, though. I'd say let's try to be thoughtful and rational, or at least as rational as the human brain allows us to be. Maybe reasonable is a better word for it. There are three areas that I think folks should consider as they look to best navigate our current moment.

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One is their debt and how they're paying it off. The second is where they are keeping their savings. And finally, we will look at investment opportunities.

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Ready to buy some garbage. I know I am.

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And I know we might sound like a broken record here, but we harp on paying off your credit card debt because as anyone who is in or has been in credit card debt knows, it can be horrifically expensive. And I'm speaking from personal experience here. The average interest rate on a credit card was over 20% in August, according to the Federal Reserve.

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And the money spent on credit card interest is money not spent on things like investing for retirement, vacations with your family, or whatever shiny thing you want to buy at HomeGoods. And I'm looking at myself with that last one.

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Nor will my rhinestone studded French bulldog soap dispenser, which I bought last week.

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It's happily sitting on my bathroom counter right now.

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After five weeks away on my sabbatical, I've returned for Sarah, for you, and for all of our listeners.

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Long term, we suggest you explore your solutions for resolving this debt for good, whether that's through one of the common payoff methods like debt snowball or avalanche, or using something like a debt management plan from a nonprofit credit counseling agency or a balance transfer credit card.

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Now let's touch on savings, and listener, I am curious, do you know how your bank responded to the recent rate cuts? I'm assuming here that you have a high-yield savings account. If you don't, check out the link in our show notes to see the best high-yield savings accounts this month.

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Our banking nerds have reviewed more than 266 banking products, so you could say this list is pretty well researched. Some banks may move faster than others to lower the yield that you get on your high-yield savings account after a rate cut. And some banks offer lower rates in general than others.

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My point here is if your bank is no longer offering a competitive rate on your savings, now might be a good time to shop around. And Sarah, I got to ask you, have you shopped around for a high yield savings account recently or compared how your current account stacks up to the competition?

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There you go.

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Speaking of investments, that is the third topic I want to discuss. What does this moment mean for you and your investments? Now, before I answer that question, I will remind you that I am not your financial or investment advisor. I'm not directing your investment decisions, just providing some food for thought here.

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I would venture that for most people, this moment may not amount to much over the grand scheme of their investment timeline, particularly when it comes to investing for retirement.

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I actually do. I spent the first half of my sabbatical studying very hard for the certified financial planner exam, which runs just a few times a year. So I planned my sabbatical around taking it for the most part. And then I sat for the exam, all six hours of it. And I passed. Did I have you on the edge of your seat there?

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We hear about people making that mistake every so often, and it's just heartbreaking because it's so easily avoidable. And as we know, with investing, time is often your most precious resource. So again, make sure that you are actually invested in your investments.

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I will say, if you like to take a more hands-on approach to your investments, now might be a good time to evaluate the bonds or bond portfolios that you're invested in. specifically your long-term bonds. In periods of falling interest rates, like right now, for example, many financial advisors will recommend that you invest in longer-term bonds.

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Doing this can allow you to secure a higher coupon rate on your bond before interest rates fall, and subsequent bonds offer lower coupons. Additionally, when interest rates fall, bond prices tend to go up. a bond purchase now could offer a lower price on that higher coupon than you would pay for that same bond after a rate cut.

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I'll note that you should also consider your time horizon for investments and current bond yields, so changing the allocation of long-term bonds in your portfolio isn't exactly a straightforward or easy decision for many investors to make,

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But if you like taking a more active approach to investing, now is a good time to evaluate that mix of bonds and other securities that you have your money in and see if they're well positioned for our current economic and market conditions. Also, as Sarah said, for many people, this sort of hands-on investing may not be necessary.

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One thing we heard from our listeners in the survey that we shared earlier this year is that a lot of you are proactive investors. So I just wanted to provide you with a little more information about how you can think about your investments right now.

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100% there, Sarah. I am also mostly a passive investor, and that's totally fine. The important thing is that folks are investing in a way that suits their goals and risk tolerance.

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In a moment, we will turn to this episode's money question segment, where we go into what changes in interest rates may mean for refinancing your mortgage, including whether it's a good idea to jump into a new mortgage as soon as possible.

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So send us your money questions. Leave 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. We have a lot of exciting episodes planned for 2025, and they all revolve around you and your money questions. You know, I decided to pursue my certified financial planner designation so I could help you make smarter financial decisions.

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Yeah, you got the inside scoop.

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And next year, we want to talk with even more of you live on the podcast.

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We can't wait to talk with you. This episode's money question segment is coming up in a moment. Stay with us. We are back and answering your money questions to help you make smarter financial decisions. This episode, we are taking on a couple listener questions about refinancing, something that's on a lot of folks' minds as the Fed begins easing its interest rate policy.

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And joining us in this conversation is mortgage nerd, Kate Wood. Kate, welcome back to Smart Money.

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So we're going to start with doing a little refinancing 101. We're going to get really, really basic and ask, what even is refinancing? It's when you swap your current loan, whether for a house or a car, student loans, etc., for a new loan that better suits your current financial goals. That usually means a lower interest rate, monthly payment, and generally better terms.

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I am very relieved that it's over and I'm excited to use all of my newfound knowledge to help listeners answer their money questions. I should note that I am not yet a CFP professional. I am a candidate for certification. There's some administrative stuff that has to happen before I'm actually certified. But for now, the hardest part is over with.

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But when is a good time to refinance? Well, if current interest rates are lower than the interest rate on your loan, you might want to look into refinancing. But refinancing isn't as simple as just swapping out your loan. You will have to jump through some hoops, and how you refinance depends on what kind of loan you have.

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Like, refinancing an auto loan is not the same as refinancing your home loan. Our listener asked about mortgages specifically, so we're going to focus on those this episode. But if you do want to learn more about refinancing a car loan, NerdWallet has a step-by-step guide that we will link to in today's show notes, or just search online for NerdWallet refinance a car loan.

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Kate, with all of that said, can you please give us a rundown of what might make someone a good candidate for refinancing a mortgage?

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Okay, so not exactly cheap. You're spending money to save money over the long run, but to actually come out ahead, folks generally need to stay in their house long enough to hit their break-even point.

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All right, Bella, Simon finds themselves in a bit of a complicated tax situation. And I should probably remind our listeners that we don't give specific tax advice, but we'll give you some nerdy wisdom to consider. So can we start by discussing high level tax rules when it comes to living and working in different states?

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From my understanding, the state you live in may tax all your income, but the state you work in generally only taxes the income earned within that state. And each state has its own rules on this stuff.

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Definitely not. I sometimes have panicked thoughts about what's going to happen if I die some horrible sudden death and no one knows where any of my stuff is.

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And states don't automatically withhold taxes, right?

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The listener also mentioned not having enough to pay a tax professional. Can you lay out some options for people who can't afford to pay a tax professional? I'm wondering if going the DIY route might be a good idea here, given Simon's somewhat complicated tax situation. I do know there are free and lower cost options that taxpayers can explore.

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Okay, Elizabeth, I think it's good for us to outline what types of documents we're talking about to start with. My assumption is you're referring to all financial documents, right? Like tax returns, bank statements, birth and marriage certificates.

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Well, here is our last listener question, which comes from Rob, who sent us an email. Here it is. I recently discovered the NerdWallet podcast and normally keep to myself about finances, but have been emotionally overwhelmed by my tax situation and feel there may be others in my same situation.

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In short, I'm 45 years old, have three amazing teenage kids, and a wonderful wife who has been a stay-at-home mom and cancer survivor up until two years ago when she started writing for three local magazines as a 1099 employee. I work in IT sales, making around $150,000 a year.

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I've floated through a few different online tax solutions in the past, then moved to tax firms for a few years, and since my wife started as a 1099 employee, I'm frozen as to who to turn to or how we should file our taxes.

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I'm ashamed to admit that I haven't filed for two years, and I'm not sure how to best pull my family and me out of this hole we're in and could use some guidance on the best financial and possibly emotional way forward to tackle our situation. Thanks, Rob.

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So that could be a potential relief for Rob. Their situation might not be as dire as they're imagining if they don't actually owe taxes. But for people who do owe taxes, they could end up paying penalties and interest. Bella, we talked about this a bit earlier, but can you run through what this might look like?

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Let's turn to the emotional side of Rob's question, because that might be the bigger hurdle to get over than filing their taxes. Sometimes people build up these financial boogeymen, whether it's saving as much as you might need for retirement or paying off a lot of debt or filing your taxes that you haven't touched in two years.

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And they get so paralyzed by that fear that they carry it with them and they become unable to do anything at all besides dwell on this. I think Rob has made some important progress by writing to us and acknowledging their issue. And really, once you get to that point, the next step is just setting aside an hour to at least start sorting this out.

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I think time blocking a single hour where you don't do anything besides working on the problem at hand can be really beneficial. And Rob might be surprised by how much progress they could accomplish in that short amount of time and also how good it will feel to take action on the stressor that's just been hanging over their head.

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Bella, what are your thoughts about how someone can work through the anxiousness that's keeping them from filing their taxes?

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And we'll include a link to that in this episode's show notes. Well, Bella Avila, thank you for coming on and answering these tax questions.

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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.

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Remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

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And with that said, until next time, turn to the nerds. Guess what, listener? Smart Money is a finalist in the 2025 Webby Awards, and we need your vote to win. Go to vote.webbyawards.com, register real quick, and vote for us in the best individual podcast episode business category. It takes a minute, makes our day, and lets you say, yeah, I helped pick that winner. Voting ends April 17th.

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Pretty much everything you could imagine.

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One more time, that's vote.webbyawards.com.

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So Elizabeth, what suggestions do you have for a better way to organize my files in their current situation, which is a mixed up mess?

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Learning how to store documents also seems to be a process of learning where you shouldn't be storing them. And a big part of this is finding secure places to keep documents. What are the safest options that folks have?

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It's also important for folks to have some type of filing system so you can easily get to your financial documents. Instead of just dumping all of your documents into a single folder, maybe categorize them. So you could have one folder for health, another for bank statements, another for loans, and so on.

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If you want to be super organized, you can also arrange the document in chronological order within each folder. And that just inspired the ultimate this or that question for you, Elizabeth. Paper or digital storage?

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It's also good to have both because in some cases, like with a will, a digital copy won't suffice. So having a hard copy can save your family from a lot of confusion and anguish.

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So we know how to store documents, but how long should we keep them? I feel like it's really easy to become a document hoarder. I say speaking as someone who has a decade's worth of tax returns in my nightstand.

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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.

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So are there some rules of thumb that people can follow around when to keep and when to securely get rid of documents?

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And now what about receipts? I personally hate accumulating receipts and I tend to toss them out as quickly as I get them.

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For things like titles, deeds, insurance policies, and mortgage statements, you may want to keep those documents for as long as you have the house. And be sure to keep a copy in the cloud somewhere in case you can't get it from the city. Well, Elizabeth, let's turn to how folks should get rid of documents they don't need. What's your advice there?

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Well, now that I publicly shamed myself on this podcast, I'm going to take a trip to the container store and get myself some drawers and a fireproof box to finally organize my documents.

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But before we get into that, listener, take a second and think about where you need some guidance with your money.

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And I have a special request for you. I've covered scams at NerdWallet for a while now. And last year, we even did a whole series about scams that we encounter every day. So I want to hear from you about what you're seeing out there right now. Those annoying text messages from EasyPass saying that you owe a toll you never actually drove through.

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Social media influencers guaranteeing returns on big investments, that random WhatsApp message from someone trying to strike up a relationship with you. Scams are everywhere, and I want to hear about what you're seeing and how you handle it.

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I did. Yeah, my own dad was scammed out of tens of thousands of dollars a couple years back. And that just underlines how everyone is susceptible to scams, which is why it's so important to keep talking about them. So, listener, again, let me know your scam stories. 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.

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I never thought I'd see the day where we'd be ready to nerd out about documents, but it is an important topic, so here we are.

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People have a week at this point, so hop to it. So to help us answer your questions on this episode of the podcast, we have NerdWallet tax writer, Bella Avila. Bella, welcome back to Smart Money.

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And as we mentioned earlier, the deadline is coming up fast, April 15th. You need to file your taxes by then or request an extension. But note that an extension does not give you more time to pay your taxes. With that in mind, let's answer the first question from our listeners so folks can get busy filing if they haven't already. This comes from Laurel B., who sent us an email. Here it is.

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Okay, well, this is where I confess that my document management is one of my biggest financial and adult blind spots. I'm embarrassed to admit that I have been keeping my documents in my nightstand for many years now, all mixed up with books I've been meaning to read and old headphones and whatever else accumulates in there. And let me tell you, it is not a good look for a CFP.

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I just found out that I owe $2,300 in taxes that I wasn't prepared for. I made $10,000 more last year and I did withhold extra for my paycheck, but not enough. When I got a raise, I didn't immediately think to change my tax withholding. My question is, do I pay out of my emergency fund and set myself back in savings? Or is there some kind of no interest payment plan for taxes?

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I will definitely work with my tax person to figure out how much I need to withhold going into next year.

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I'm wondering how much Laurel has in their emergency fund, because a surprise... $2,300 bill could well qualify as an emergency, but that said, they could opt for a payment plan and hold on to their cash, which isn't necessarily a bad idea. But it sounds like the listener needs to decide whether it's worth paying any interest and penalties.

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For listeners who may not know, the first-time penalty abatement allows some taxpayers to remove a penalty from their record or get a refund for one they already paid. With penalty relief for reasonable cause, if you can prove you tried to pay your tax bill but couldn't because of a major life event like a house fire or a death in your immediate family, for instance, you might get relief.

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Sarah, we've talked before about how we're not big on New Year's resolutions.

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Kim, can you think of any that might be particularly well-situated to help our listener manage this very odd, unique situation?

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What's the alternative? The kid is wearing small clothes or out of season clothes?

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I would love to find a budgeting app that makes budgeting fun. I'll be honest, I have yet to find that for myself.

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I mean, I like to feel responsible and on top of my finances, and that's why I use a budgeting app, but yet to feel joy while using one. So kudos to you, Kim.

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I would love that.

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Another thing I want to emphasize is how important saving is, especially if your income might be intermittent or even unreliable. It is really crucial that people have some cushion to get them through times when money might be tight.

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Kim, do you have any suggestions for how our listener or maybe anyone in a similar situation might be able to maximize saving when they're kind of unsure if they'll have enough money to last them until their next pay period?

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And this could be a place where our listener might be able to have a separate sub account where perhaps 50 or 75 dollars each month goes from their big chunk that they got paid into this emergency savings account. So they're automating the savings. They know they have something built up just in case they find themselves stretched a little thin and they have to rely on that cash at some point.

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I like the idea of going into the new year by saying what you will do less of. Resolutions or annual goals, whatever you want to call them, are usually additive. Like if we just start doing something new or different on top of what we're already doing, then our lives will be fixed and our finances will be suddenly improved. But sometimes simpler is better.

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Well, Kim, thank you so much for coming on and sharing your insights.

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And that is 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 at 901-730-6373. That's 901-730-NERD. You can also email us at podcast at nerdwallet.com.

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And here is our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

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It's strip back the stuff that you don't need and focus on what's really important or helpful. Sarah, question, what do you want to do less of this year?

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Yeah, Sarah, I can completely relate. The bad habit of mindless scrolling before bed has me firmly in its clutches. When I was studying for my CFP exam last year, I actually started using this app called Roots, which can put pretty extreme blocks on your app usage and helps you break your phone addiction. And I found it really, really helpful.

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But naturally, I deleted that after I passed my exam, and I'm back to gleefully and mindlessly scrolling for hours on end each day, especially before bed. So maybe I need to redownload that app. Sarah, what's driving this goal of leaving behind mindless evening phone scrolling?

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I have not watched Severance. I'm still deep in the X-Files. So when I finish that in about two years, maybe I'll start on Severance.

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For me, yes.

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Yeah. And also, as far as resolutions go, that one's pretty painless and mostly good for your body. Just don't drink too much.

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Okay, noted. Well, Sarah, this is a money podcast. How is giving up the phone time a good financial move?

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That's fair. And it's not just the influencers too. I mean, there are ads seemingly every other post and that can wear on you too over time, especially if you're scrolling when you are tired at the end of the day. I'm not immune to clicking on these ads.

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And every time I do it, I feel a little bit like a rat grabbing for the cheese in a mousetrap, like knowing that no good is going to come of this. But dang, that cheese looks so good. It's really hard to resist.

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Yes.

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Also, you know, resolutions don't have to be about taking something on in the new year. It can be just as powerful to stop doing something.

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I'm with you in this. We'll do it together.

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Yeah, I'm planning on leaving behind extreme financial rules. Mostly ones that I impose on myself, I'll say. Longtime listeners of the podcast may recall that last year I told myself that I wasn't going to buy any new clothes at all for the first half of 2024.

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I have a weakness for unique vintage pieces and have acquired a number of them over the years, usually from eBay, and my small house and even smaller closet cannot accommodate anything else. I told myself that enough is enough, no more buying, and I did really well for that first half of 2024 not buying anything.

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But after June finished, I suddenly felt like I had permission again to buy clothes, and boy did I buy clothes. I don't really regret the purchases themselves because they were done fairly thoughtfully and, dare I say, tastefully. But I do think that I bought more than I would have if I hadn't put that overly harsh limit on myself for the first half of the year.

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Yes, absolutely.

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Yes, the flip side of leaving behind extreme financial rules is focusing on more sustainable spending habits. I know that I'm going to get that itch to browse the vintage section of eBay and look for clothes again, so I'm going to put a limit on myself of just purchasing one item of clothing a month maximum.

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This way I have a rule to follow, but it feels pretty reasonable and I shouldn't end up rebelling against myself.

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Well, Sarah, they're about to be back in fashion, given that time frame.

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But that's back in fashion, Sarah. I think you must. You'll be the cool mom.

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I'm going to plan on tracking my clothing spending, or I guess not spending, in a running notes document on my phone. This is where I track a lot of my financial habits in kind of a weird way. It's just what works for me.

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When I find myself scrolling eBay and wanting to buy something but abstaining from buying that thing, I'm going to list the item, its price, along with what I was feeling and thinking as I contemplated that purchase. I think this will help me be a more thoughtful consumer and more thoughtful spender in general. And I'll also just have a nice little spending journal to look back on.

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Very smart suggestion. I may just do that. Or if I'm still feeling like indulging in some shopping, maybe after a few months, I'll have some savings to treat myself to something better, maybe a little pricier that will hopefully last me longer. We'll see.

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I also have the added bonus of being the host of a financial podcast and saying all of this so that everyone listening will be my accountability partners.

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Stop Scrolling, Start Saving: Better Habits and Budgets for 2025

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And I'm Sean Piles. This episode, I'm joined by personal finance nerd Kim Palmer to answer a listener's question about how to budget when you earn an irregular income.

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In general, I'm planning to try out this approach for the first three months of the year and then do a sort of high level checking with myself about what I like about this and what I might tweak as I work toward continuing to refine sustainable spending habits.

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Oh, well, we can talk about those, too. We're about to turn to this week's money question segment where personal finance nerd Kim Palmer and I help a PhD student budget for regular expenses when they have an irregular income. If you are earning a stipend as a grad student or you freelance or work seasonal jobs, this one is for you.

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Before we get to that, a reminder, listener, that we want to hear from you. What are your money goals for the new year? And where are you stuck? We'd like to help you get unstuck, so send your money questions and concerns our way. You can leave 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.

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This episode's money question is coming up in a moment. Stay with us. We are back and answering your money questions to help you make smarter financial decisions. This episode's question comes from a listener's voicemail. Here it is.

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Hey Kim, so we know that a lot of people have a hard time budgeting on a regular income. But budgeting when your income is just received in huge chunks that are expected to last for several months seems like it would be much more difficult. And I imagine the first thing that someone should do is simply know exactly what their expenses are.

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Sarah, you presented this idea to me. What made you think of it?

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So Kim, how do you think people can track their expenses, not just on a monthly basis, but in the case of our listener, on a four to five month basis?

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That's a really smart approach because you are essentially creating a more regular schedule for payment instead of having this huge chunk of money that you're hoping will last you. Once you know your expenses, you can have a certain amount that you will then get into your checking account based on those expenses. And you know that you'll have enough each pay period that you allocate for yourself.

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Uh-huh. Lots of laundry goes with kids.

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That's a really good point around taxes. Depending on our listener situation, they may have to make quarterly estimated tax payments. And if you don't do that, you could be hit with a penalty. So just be careful, set aside money for the taxes and avoid any nasty surprises later on.

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One thing I'm still thinking about is that even if you set up some system where you're getting paid monthly or bi-monthly through direct deposits from a high-yield savings account into your checking account, and you're trying to make it like you're getting paid on a regular basis, the mental load of managing your finances this way still seems pretty stressful, and I'm thinking this might be where a budgeting app could come in handy.

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It tastes good. It's affordable.

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Yeah.

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Yeah, those are some great budgeting ideas. And I do want to throw in that my marketing team at NerdWallet would not forgive me if I didn't mention that NerdWallet has a budgeting app that can also help you with all of these things. And it's completely free. We'll include a link to download the NerdWallet app in today's show notes.

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But I want to hear a little more about something that's been tripping you up in your budgeting, Colleen, which is tipping. So tell us about that. And then Lauren, I'd love to hear your thoughts on Colleen's situation.

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I feel like we're in therapy here, Elizabeth. Well, my mom was one to let me learn my own lessons with some gentle guidance. And one that comes to mind is around my allowance. My sisters and I had to split up household chores to earn our allowances and how we chose to spend them was up to us. I remember one week when I was really young, I spent all of my allowance on gumballs.

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Okay, Lauren, what do you think?

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One thing I'm thinking about in the context of my wedding, my partner and I are getting married at the mayor's balcony in San Francisco City Hall. We met in San Francisco, so we want to go back there and bring all of our friends there for this 10-year anniversary that we're having.

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And so because we are renting out this balcony, I'm not going to be tipping City Hall, but we're hiring a musician who will play at the ceremony. And even though she has her own business, I'll be tipping her balcony. And I'm also planning to tip the wait staff at the restaurant where we're having our reception, but I probably won't tip the owners of the restaurant.

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So it kind of goes back to, in general, I like to tip anyone who operates as a contractor or in a service capacity. And would you say 20% is standard here or 25? I'll usually tip 25% if it's someone that I'm working with closely, like my hairstylist, I tip them 25%. But is 20 more standard if you don't maybe have an intimate relationship with the person?

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I know it might sound kind of weird, but there was this specific type of gumball that I was really into. My mom asked me if I was certain that's how I wanted to spend all of the money I had earned doing my chores. And I said, 100%, I want these gumballs. Well, the next day when I was at the store and I saw whatever Pokemon toy caught my eye and I couldn't afford it, that was on me.

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All right. Well, Colleen, I'd like to turn to some of the other questions that you wrote into us about around planning your wedding and the financial and logistical stuff involved in it. So can you talk with us about what's been on your mind?

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Your honeymoon, hopefully.

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Well, I love to hear that you're thinking about optimizing getting a good yield on your savings. That's the nerd wallet way for sure. But one thing to think about here are two things really would be accessibility and the yield that you can get.

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So you are right that you'd be able to get a better yield putting this amount of money that you have into a high yield savings account versus just keeping it in your checking. I don't think it's going to be really difficult to transfer the money over. All you'll have to do is just set up that deposit and then it might take a couple of days for the money to go from your checking to your savings.

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And then it's just in your savings account. And so that's not going to be all too cumbersome to do. So, yeah, I think it could well be worth it.

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Lauren, what do you think?

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And my mom said, hey, if you hadn't spent all your money on that candy, maybe you could have saved up and purchased this next week with next week's allowance as well. And that is how I learned to save up for things I wanted. What about you, Elizabeth?

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And Colleen, I think you are a more thoughtful wedding planner than my partner and I because we have not even considered whether we would put money up for people to get to City Hall where we're having our wedding ceremony or then the restaurant that's a little ways away where we're having our reception.

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I think being in a dense city like San Francisco, and fortunately, a lot of my friends and family are like city dwellers. I'm just thinking you guys can figure it out. I have my own stuff to do. And part of it is budget related. I am really trying to spend less than $13,000 on my wedding all in.

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I was originally hoping to spend less than $10,000, but quickly that was shown to be unrealistic for me because wedding planning is so expensive. So kudos to you for being a kind, thoughtful wedding planner, but I am making some sacrifices and so will my guests so I can keep this wedding affordable.

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Well, one thing that I saw on The Knot actually that blew my mind was that the average cost of a wedding in San Francisco is over $51,000. That's bananas to me. A lot of money. Yeah. Yeah. I mean, I'm trying not to go into debt to pay for my wedding. So I've just been saving actually pretty much since I proposed to my partner. So that's one of the benefits of waiting five years to get married.

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But otherwise, I just don't know how you do it. But $51,000 for one day, that's just not where my partner and I like to prioritize our money. We're planning to go to Japan for our honeymoon, and that's going to be a good chunk of change. So that's really our financial focus.

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So Lauren and Colleen, this has been a really helpful conversation, at least for me, I know. As a way to kind of wrap things up, Lauren, I'd love to hear if you maybe have one tip for people listening who are planning their weddings. What would be your tip for how they can save money amid everything that is so expensive?

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Okay, great. Well, Colleen, I'd like to hear a little bit about how you're feeling with your wedding and the finances involved.

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Well, Lauren Kay at The Knot, thank you so much for joining us. And Colleen, I'm so excited for you and your partner and congratulations on everything to come.

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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. Or if you're listening on Spotify, drop us a comment right in the app.

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Follow Smart Money on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes. 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 may not apply to your specific circumstances.

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This episode was produced by Hilary Georgie, who also 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.

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Wow, that is an incredible story. I'm really impressed by all that your mom had to do to manage you kids. I mean, I can barely manage a household with a cat and a dog and a gecko. I can't imagine having six kids.

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I feel that. My mom and I are really close, and I feel so grateful for all the lessons that she's taught me over the years, financially and otherwise.

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Yeah, 100%. I mean, I, learning from examples, saw that it's worth investing money in hobbies and interests that enrich your life. My mom's two big interests growing up were going to Grateful Dead shows and doing triathlons. And they might seem like really disparate interests, but you know, life is all about balance.

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Elizabeth, you say soppy, I say sappy.

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So even as my mom was raising us kids, she would make sure to find time to pursue her own interests. And sure, there were certainly times that I did not want to go to yet another triathlon. I remember one time growing up, the sixth Harry Potter book was coming out and I had a copy reserved at our local bookstore.

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But I had to go all the way on a road trip up to Minnesota from Illinois, where I grew up, and I couldn't get my copy. And let me tell you, I was not a happy camper that day. But looking back now, I'm really glad I got to see my mom do all these amazing athletic feats.

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And show us that if you set your mind to something, you can accomplish whatever you want, even if that is seeing your 1,000th Grateful Dead concert.

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You know, I don't know if I was really aware of the household budget growing up, but there were certainly times where money was tight and we had to find ways to cut costs. My mom was really big into couponing when I was young, and we were regulars at JCPenney to pick up clothes for the school year. I also remember there was one school year where I kept losing my jackets.

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I have no idea where they went. I was probably leaving them on the playground, I guess. But after my third or so jacket that I lost, my mom said that if I lost another one, I would not be getting a replacement jacket. And that certainly taught me to be a little more careful my belongings.

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The threat of repercussions.

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Yeah, money isn't everything was a common refrain in my house too. You know, we had each other and that was a lot more valuable than anything else. And there were certainly times where my mom picked up extra work so that we could all get by. And yeah, that meant less time together, but it enabled so much more in our lives too.

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I would say keep your money under control and don't let it control you. So what's yours, Elizabeth?

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That is a robust sentence. I like that. Thank you. So, Elizabeth, you are a mom. We would be remiss if we didn't talk a little bit about any lessons that you're planning to share with your son.

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And I'm Sean Piles. This episode, we're chatting with a listener about budgeting for a wedding, including who you should tip and how much.

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I'm sure he will be. That's so sweet, Elizabeth.

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Well, listeners, we would love for you to join us in this soppy, sappy conversation. As in, we want to hear what lessons you learned from your moms. Leave us a voicemail or text us on the Nerd Hotline at 901-730-6373 or email us at podcast at nerdwallet.com. And we might just share your note on a future episode.

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But before we get into that, listener, I've got a question for you. What is your money question? What's that financial thing that keeps you up at night or that goal you just can't seem to make progress on?

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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 for a little 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. Or email us at podcast at nerdwallet.com.

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We're back and answering your money questions to help you make smarter financial decisions. This episode, we're joined by Colleen, a listener from California with some questions about wedding planning, particularly how to manage tipping all of the people you have to pay when you're getting married. Colleen, welcome to Smart Money.

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So I've talked before on Smart Money about how I am in the middle of planning my own wedding. And I have some questions of my own around the financial side of wedding planning. And while I may be a certified financial planner professional, I am not a certified wedding planner professional.

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Yes and no. She taught me the importance of being frugal and how to be creative when money was tight. But I didn't have a deep understanding of our household finances, which is probably a good thing.

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So to help us answer your questions, Colleen, and some of my own, we are joined by Lauren Kay, executive editor at The Knot. Hey, Lauren, welcome to Smart Money.

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Well, I am thrilled because I have a lot of them. But Colleen, first, I want to start by hearing a little bit about you. Can you just tell us about yourself, like what you do for work and maybe how you and your fiance met and eventually got engaged?

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Oh, that's so sweet. Gotta love romance in 2025. I also met my partner on an app many years ago. So tell us about the plan for your wedding. What's the day going to be like?

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Yeah. What's your headcount?

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Let's talk a little bit about your wedding planning experience so far. What's been easy? What's been kind of challenging for you?

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When's your wedding date?

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So is that a little less than a year from your engagement?

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Lauren, I'd like to hear your thoughts on Colleen's story so far. Does this seem typical, just this sort of rush to make a wedding come together however you can?

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I proposed to my partner in March, 2020. I had these plans before the pandemic came together. And of course, the pandemic threw a wrench into any plans that we had even thought to consider. And before we know it, we've been engaged for five years at this point. So a few years into our engagement, we realized, look, we're going to be together for the rest of our lives.

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We already are committed to each other emotionally. So let's just wait until our 10-year anniversary. And that's coming up in this fall, in October, November. Now we're finally at the point where We are planning the wedding, but we're running into all sorts of budgeting constraints because we don't want to spend a ton of money on our wedding. And budgeting for that has been a challenge.

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I'll say that this is not a paid advertisement, but the knots tools have been really helpful for that, for mapping out all of my different wedding expenses. But Colleen, I'd like to hear how you have approached budgeting for your wedding. What have you been willing to splurge on? Where are you trying to cut costs?

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Yeah, absolutely. I was often told that if I didn't finish my food, I was just throwing money away. And that's something that I still hear in my brain every time I don't finish my plate.

NerdWallet's Smart Money Podcast

How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter

Today's episode is sponsored by Amazfit. I've been wearing the Amazfit Active 2, and it's basically like having a personal assistant for my health. Except it doesn't judge me for hitting snooze three times. It's also a game changer for fitness. It combines AI-driven coaching, smart tracking, and premium features without the premium price.

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How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter

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And do you think you'll still have roommates? Do you think you'll still be in Jersey? What do you imagine your life to be?

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How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter

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But that's not everything, you know. Sometimes it's worth moving to a new place, even if it's a little more expensive, so you can get different life experiences and see what opportunities there are.

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How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter

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Well, you wrote to us about your debt and how you're trying to balance your payoff of your debt with your emergency savings and maybe investing. So talk with us about the debts that you have currently.

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That's exciting.

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Cars are so expensive.

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What's your interest rate on that?

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But first, we're going to talk about a few ways that you can prepare for uncertain, unprecedented, possibly unstable times. Whatever un-word you want to use, it can feel like we're facing it right now. And we've been hearing from listeners with concerns about how they can prepare for any unforeseen unpleasantness.

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So you took out a personal loan separately in anticipation of buying this car, and then the dealer said, no, no, no, you have to take our financing.

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In the future, I might walk out of that car dealership because they should be able to take a different loan than the one that they offer. This is a lesson you learn when you're early in your financial life.

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And what's the APR on that personal loan?

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And the balance on it?

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All right, so how are you currently approaching your debt payoff? Do you have a strategy that you're employing?

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With the debt snowball method, you begin by paying off your smallest debt first, focusing as much money as you can into that while making minimum payments on your other debts. And then once that first debt is paid off, you put the amount you're putting into that into your next biggest debt and so on.

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And that's been working for you?

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That's good. A lot of people debate between whether they want to use the debt snowball or another option, the debt avalanche method. Some people like the debt avalanche method because with that, you're focusing on paying off your debts with the highest interest rate first, and it can save you money in the long run.

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But for many people, snowball can be better because you are getting the wins of paying off smaller debts first, which gives you some positive reinforcement. You feel good about what you're doing with your finances, and you're more inclined to aggressively pay off your debt over the long run when you have multiple different debts that you're paying off.

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For 24 years old, that's not bad. At 24, I don't think I had an emergency fund for any months.

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Be proud of that.

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Do you know how much you have in each of those retirement accounts?

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So you have close to $10,000 in a retirement account at an early age. So that's great to hear. I want to talk a little bit more about your emergency savings. You mentioned that you're using the zero-based budgeting method. How are you allocating savings as you budget?

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I mean, that can be hard when you just have one savings account. Something I talk about all the time is having different savings accounts for different goals. The emergency account, you really don't want to touch it unless it's a true emergency.

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So you could have maybe 8% going into your emergency fund and then 2% going into a rainy day, semi-emergency, oops, I went out with my friends and spent too much money type fund. That's a little bit more flexible.

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Thank you. In addition to being a money nerd, I'm also a word nerd. But this is a really important topic to address. Right now, there are myriad events happening simultaneously that might lead some folks to feeling like they're vulnerable, either personally or financially or both.

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Just one last note on your emergency fund. In general, it's best practice for folks who are on a single family income, kind of like you are, is what people would consider that, is best practice to have six months of emergency savings. That obviously can take a long, long time to build up. So it can be an aspirational goal, but one that you can gradually work toward.

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But that will give you the cushion to cover things. If your car breaks down, you need a repair that's a couple thousand dollars, you can dip into that fund and it won't end up going onto a credit card, which is what we want to avoid because credit card interest rates can be quite high. As I'm sure you know, what is your APR on your credit card, by the way?

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That is not uncommon, which is why we really do advocate for folks paying off their debt as quickly as possible, their high interest debt, before going on to steps like investing more seriously. It's great to multitask, but we talked a little bit earlier about your investing or maybe lack thereof. How are you thinking about investing right now?

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Is it just through your retirement accounts or what's your general philosophy at the moment?

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Well, you are investing in your retirement accounts, so that's good. One thing I would add to your to-do list is to just triple check in those retirement accounts that you are actually invested because sometimes people set up these accounts, whether it's their 401k or a Roth and they put money into it and then they don't select the investments.

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And so then it's basically just a savings account that's earning you no interest. So I would recommend doing that sooner than later, just for your own peace of mind. And that also can give you exposure into different types of investments that are available to you in a retirement account.

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Many people like to opt for what's called a target date fund, which is a way where you can say, okay, I'm going to retire in October. in your case, might be 40 something years. So for now, while you have all of these years of growth ahead of you, it's common that people will invest in more aggressive stocks.

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And then as you get closer to retirement, they automatically are reallocated into less aggressive stocks. So you can have some sense of security as you get ready to retire. And you often won't have to do that work yourself. So that's helpful.

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So we're going to talk about a range of ways that you can shore up your own resilience and take action when you might feel powerless.

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So Michaela, you are investing or you have multiple different retirement accounts. How are you balancing maybe your 401k with your IRA and figuring out how much to put into each account? Or is that something that you're considering?

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8% is great for your age because you are so young. Your money will go a lot further. And I want to spell out how much further your money goes at an earlier age with an example. So you're 24 years old. You have, let's say, $10,000 in a retirement account. And just for the sake of this example, let's say that you contribute $500 a month into a retirement account.

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With a 6% annual rate of return, which is pretty conservative, you would have a little over 1.6 million saved by the age of 67. Now, if you're 34 years old, a decade older, and in the same situation, by the time you hit retirement at 67, you would have about half, you would have $806,000 save for retirement.

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There are three main areas that I think people can look into. I mean, there are more than three certainly, but we're going to talk about three in this segment. One is their own personal preparedness. This includes improving your financial resilience and taking other steps to weather a literal or metaphorical storm. Next is building out your community.

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So by starting as early as you are, you could have twice as much as someone who starts a decade later.

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Pat yourself on the back. You're doing great.

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And I want to talk a little more about your Roth IRA account. How are you using that to save, or is it just sort of in the background?

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A lot of people like to contribute to Roth accounts. You could possibly contribute to a Roth 401k if that's an option from your employer. But people like to have Roths in their mixed retirement accounts because it gives them tax diversification. Basically, you would have a pot of money that is tax free in retirement.

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We have an article about how to invest in a Roth IRA on NerdWallet that I recommend you look into. We'll have a link to that in the show notes. But Roths can be especially useful when you're early in your career, like you are right now, because you are likely to be at a lower tax bracket than you would be when you're further along in your career.

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The way Roths work is that you are putting after tax contributions into these accounts. So right now you're making 50 something thousand dollars. The tax rate's lower than you would have after you finished law school and you are a high powered wealthy attorney. So right now is a great time to think about Roth contributions.

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And finally, focus on what you can control and the actions that you can take today.

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Although Michaela, I'll say it seems like you don't need to rein in your spending. If anything, I kind of get the impression that you want to loosen up your budget a bit.

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You have the reality of your finances. So in a way, zero-based budgeting can be really beneficial for you maybe in the short term while you're focused on paying off your debt. The good news is that, like you said, you should have your really high-interest credit card paid off pretty soon.

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And then having the amount that you're putting on that credit card monthly back in your budget might give you some more wiggle room. How much are you paying monthly on that?

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That's a lot of your budget going to this credit card.

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Have you thought about what you might do with that money once it's not going to this credit card?

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Well, we're not here to tell you what to do with your money. We're here to give you information so you can make informed decisions. But it depends on your priorities. It seems like you want to save and invest. And the good news is that you could do both with nearly $1,000. You could even split it three ways. You can maybe put $300 a month toward a fun account or a vacation account.

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You could put 300 a month into your savings to build that out too. And then you could put $300 a month into a different type of investment. You could look into opening a brokerage account, for example. You have a lot of options.

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And that is so important with managing your money too, is getting yourself out of this scarcity mindset. Yes, money is not infinite for most of us. And you can only do so much with what you have coming in based on what's going out each month. But you have a lot more control and a lot more opportunity with your money than you might imagine.

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Okay, Michaela, we've run through so many different aspects of your finances. How are you feeling right now? And what decisions do you think you might make based on what we've talked about?

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There's always room for growth, but you have done a great job for how early on you are in your financial life.

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Well, Michaela, thank you so much for taking the time to share your story with us.

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Unlike other wearables, Amazfit goes beyond basic fitness tracking. It has specialized modes like High Rocks Race Mode, Smart Strength Training, and even Free Diving, built for both everyday users and elite athletes. And with AI-driven coaching, it adapts to your workouts, tracks recovery, and helps you train smarter.

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I heart radio to automatically download new episodes.

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And with that said, until next time, turn to the nerds.

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That is smart. And I'm sorry you went through that. That sounds pretty scary. I've been thinking about this a lot recently, too. And I've heard advice that it's a good idea to keep maybe a few hundred dollars in cash in the house in case of an emergency. But this was always one of those tasks where I thought, oh, I'll just do it some other time.

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And I never got around to it, in part because I rarely use cash or have it on me. But recently I decided to get over my inertia and I went to the ATM and took out some cash. I felt pretty proud of myself.

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You know, it really varies in part based on how much cash you can comfortably pull out and not need to use for the foreseeable future. Personally, think about how much cash or how much money you might need to get through a few days of an emergency until payment systems are hopefully back online. You might need a hotel room or to fill up your gas tank or get a few meals out. I took out $500.

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That felt like a safe number for me and my partner and our pets. Other people might want more than that, especially if they have kids. And for some, pulling out that much cash might not be possible financially, but having some amount of cash is better than having none at all, as you experienced, Elizabeth.

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Yeah, of course. And we've talked before about the importance of keeping some extra cans of food and maybe some water bottles around. I like to have enough food and water for at least a week, even if I'm just left eating cans of beans and rice for every meal. But something that folks might want to pick up is a battery powered radio.

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This can help you stay up to date on news or honestly just listen to some music to keep yourself entertained if the power goes out. I have a pretty small radio that has a solar panel and a flashlight on it. And let me tell you, it is super handy.

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It is honestly not. It was like 20 bucks on the internet, but it has all sorts of features and gizmos on it. So just look around and get one online.

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How to Get Your Finances Ready for a Crisis and Tackle Debt Smarter

There's also a free ZEPP app you can pair it with to get in-depth analytics and downloadable maps you can use with turn-by-turn directions. And it has Zepflow AI voice control, so you can check stats hands-free. And don't worry about battery life. The Amazfit Active 2 runs up to 10 days on a single charge.

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The idea of building community can sound kind of corny or like a cliche at this point, but it is really important. Even beyond preparing for an emergency, we have an epidemic of loneliness in this country and community is part of the cure there. But when I think about what community means for me, I'm focused on two things.

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One is my immediate community, like my friends and my neighbors, and also a broader support network that I can be a part of. I'm lucky to have some really wonderful friends and lovely neighbors that I know I can rely on. Like if the power goes out at one of our houses, we can just huddle together to stay warm. On the other hand, joining a bigger network can take time and research.

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Elizabeth, I know that you recently moved to a new state. I'm wondering how have you been able to build community so far?

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Wow. Okay. So you're a social butterfly.

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Well, it can take a lot of different forms, but common ones are mutual aid groups. And it sounds like you, in a way, are part of one with that mom group that you mentioned. But a lot of mutual aid groups have popped up in cities in recent years.

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Some of these organizations are built at a local level and work to provide aid and resources to those in need, whether they're unhoused or recovering from a crisis or just a mom who needs a meal for their kids. You can volunteer to help at a lot of these mutual aid groups, or you can just reach out to one if you need assistance.

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At a more casual level, building community can look like joining an affinity group of some sort, which Elizabeth, it sounds like you're doing on Facebook. Me, I'm not on Facebook, but I recently started meeting up with an LGBTQ plus run group in the Portland area because I wanted to expand my queer community.

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If you want a smartwatch that delivers more for less, then visit amazfit.com slash smartmoney to get 10% off. That's amazfit, A-M-A-Z, fit, dot com slash smartmoney.

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And I'm not going to lie, joining an established community can feel a little awkward at first, kind of like you're the new kid at school and you don't know where to sit during lunch. But the more you see people, the easier it is to talk and to build relationships. And hopefully you'll meet some people that you click with.

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And over time, they can become part of that more immediate network that you can turn to in a crisis. Or maybe if you just want to go out dancing with some friends on a Saturday night, they'll be there for you.

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And community is a form of wealth that goes well beyond dollars.

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All right. Well, the third area that I want to talk about are the actions that you can take when you feel powerless.

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We've been hearing from listeners about concerns they have around changes to the Department of Education and what it might mean for their student loans or about whether changes to the Consumer Financial Protection Bureau might leave them more at risk of being taken advantage of by a company.

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No matter where you fall on the political spectrum, it's just good to know how you can make your voice heard.

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Definitely. And one of the most effective tools that you have is probably within arm's reach right now, might even be in your hand. And I'm, of course, talking about your phone. I recently learned about an app called Five Calls, which makes it very easy to find the phone numbers of your elected officials.

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This app also has a number of prompts that you can talk with them about, most of which are fairly left-leaning. But if that's not your jam, you can still use the tool to easily find phone numbers to call to advocate for what you want your representatives to do about the issues you care about most.

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Well, here's a shortcut. Pro tip, Elizabeth. Call during off hours and leave a voicemail. Easy peasy.

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Smart. Thank you.

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And I find that when I do take action, like contacting my representative or donating, I am much less likely to doom scroll or even worse, doom spend to cope.

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Oh, you know, it's just when you buy stuff online to make yourself feel better about the state of the world. And it's certainly a form of self-soothing, but I'm going to say not a healthy one. And it is one that I'm occasionally guilty of.

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Well, folks, I hope this has helped you think about a few ways that you can build up your personal resilience and feel more capable during unprecedented or uncertain times. And if you're looking for more resources, check out the link in the show notes about preparing for emergencies.

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Yes, and I live in an earthquake zone, so I'm making sure my go bag is ready in case I got to get out of town.

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Maybe you're feeling a little lost, like you don't even know what your financial goal 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.

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Today's episode is sponsored by Range Rover Sport. Some decisions in life require careful research, like picking the right investment strategy or figuring out which streaming service actually has the movies you want. But when it comes to driving, there's one decision that's easy, the Range Rover Sport. It's a bold take on sporting luxury, blending sophistication with power.

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On the road, adaptive dynamics keep your ride smooth and composed by reducing unwanted body movements. Because, let's be honest, the only thing that should be unpredictable is the stock market, not your suspension. When the road changes, the Range Rover Sport changes with it. Dynamic air suspension adjusts to keep things smooth and balanced, so every turn feels effortless.

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And if the pavement disappears, no problem. Adaptive off-road cruise control kicks in, reading the terrain and making real-time adjustments so you don't have to spend your drive making more calculations than your tax software. Visceral, dramatic, uncompromising. The Range Rover Sport leads by example, just like you do. Build yours today at LandRoverUSA.com.

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Again, explore the Range Rover Sport at LandRoverUSA.com. We're back and answering your money questions to help you make smarter financial decisions. This episode, we're joined by Michaela, a listener who is 24, lives in New Jersey, and has some questions about how to balance debt payoff with saving and investing for retirement.

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Michaela, can you start by talking with us about your financial life? How do you feel you're doing? How do you manage your money? All of that.

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What do you do for work?

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So that definitely will help with income, I imagine.

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And how much are you making, if I can ask?

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For $24,000? That's pretty solid. And what's your living situation like and your expenses?

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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.

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And how do you feel like you are managing your finances at the end of the month? Do you find that you still have cash left over or are you kind of scraping the bottom of your paycheck there?

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And you hold pretty strict to that budget that you make.

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The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

Today's episode is sponsored by Amazfit. I've been wearing the Amazfit Active 2, and it's basically like having a personal assistant for my health. Except it doesn't judge me for hitting snooze three times. It's also a game changer for fitness. It combines AI-driven coaching, smart tracking, and premium features without the premium price.

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The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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And if the pavement disappears? No problem. Adaptive off-road cruise control kicks in, reading the terrain and making real-time adjustments, so you don't have to spend your drive making more calculations than your tax software. Visceral, dramatic, uncompromising. The Range Rover Sport leads by example, just like you do. Build yours today at LandRoverUSA.com.

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The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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Again, explore the Range Rover Sport at LandRoverUSA.com. We're back and answering your real-world money questions to help you make smarter financial decisions. This episode's question comes from a listener's text message. Here it is. I have had basically nonstop credit card debt since I was 18 years old and got my first credit card. I'm 40 now.

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I go through the cycle of racking up thousands of dollars on my credit card and maintaining it for years. About three or four times over the last 20 years, I've basically paid off all my debt. But then I go, oh, perfect time for this expensive vacation or other such irresponsible things and continue to live outside of my means just to rack up debt again.

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I've once again paid off all my credit card debt, and I desperately don't want to fall back into the cycle, and my husband has warned me that I cannot do it again. I need tips on how to live within my means and remain debt-free.

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Melissa, I hope that you are in a comfortable seat because I think we will all be armchair financial therapists this episode, and I'm only really half getting there. But I'm wondering, what are your initial thoughts about our listeners' long-term debt problem?

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Yeah, I so wish that we could talk with this listener because I would love to hear more about the why behind their debt. From their message, it does seem clear they're not going to this debt to cover necessities. They are knowingly living outside of their means, and it seems like they're making decisions that they know are not in their best interest, like going on expensive vacations.

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I'm very curious about their thought process when they have gone back into debt. What is it that they expect this spending to achieve for them in the long run, even if they know it's actually not good for them to be doing this?

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The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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Yeah. Takes a village to heal your inner child.

NerdWallet's Smart Money Podcast

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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One thing that I'm thinking about, especially in the context of financial therapy, is this idea of money scripts, which are basically common patterns and relationships that people have with money. One is called money worship, where people view and use money to get a higher level of happiness or stability.

NerdWallet's Smart Money Podcast

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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the more money that people have the better they think their life will be essentially and in reality we know that more money isn't an exact corollary to a better life but as i said here sinking deeper into my financial therapist armchair it seems like our listener could be experiencing this money script potentially then the next question is why might they be following this script and how can they find more productive channels for creating their own stability and happiness

NerdWallet's Smart Money Podcast

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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It also seems like this listener may have a dysfunctional relationship with credit cards specifically. I know at NerdWallet, we're big fans of using credit cards in smart, tactical ways. I'm wondering whether this listener might want to actually avoid using credit cards for at least a period of time, if not maybe forever. What are your thoughts about that?

NerdWallet's Smart Money Podcast

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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Yeah.

NerdWallet's Smart Money Podcast

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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Right. A lot of personal finance and budget management can be about putting the right guardrails in place for you to almost curb your worst impulses. It seems like our listener would benefit from that. Let's talk about how to live within your means generally, since our listener is asking about that. Melissa, Sarah, what suggestions do you have?

NerdWallet's Smart Money Podcast

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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So it seems like the overarching goal of a low or a no buy, however you want to do it, is to really reset kind of from the ground up how you are thinking about your spending habits.

NerdWallet's Smart Money Podcast

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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I think a question our listener could ask themselves is why, whenever they're going to make a purchase, why am I spending money on this? Am I doing this if it's not going to help me meet my financial goals? Or why am I so set on this being my financial priority right now?

NerdWallet's Smart Money Podcast

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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That I think will help them have some self-reflection, which it seems like they're already beginning to take on and really gets the root of their spending habits and make sure their money is focused toward where they really want it to go long-term for the health of their finances and their relationship.

NerdWallet's Smart Money Podcast

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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What are the specific rules guiding your no buy year, Amanda?

NerdWallet's Smart Money Podcast

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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Melissa, do you have any final thoughts for our listener or anyone else who might be struggling with spending habits that they know are not good for them?

NerdWallet's Smart Money Podcast

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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Melissa, thank you so much for sharing your insights with us.

NerdWallet's Smart Money Podcast

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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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. Visit nerdwallet.com slash podcast for more info on this episode.

NerdWallet's Smart Money Podcast

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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And 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

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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And with that said, until next time, turn to the nerds.

NerdWallet's Smart Money Podcast

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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NerdWallet's Smart Money Podcast

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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Yeah. I mean, I also feel like you just saying we have everything we need is such a good mantra in general. Anytime you want to buy something, look at what you have, realize that you probably have what you need already. Amanda, anything else for your no buy plan?

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The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free

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Or on your own bookshelves. Look at the books you've already purchased.

NerdWallet's Smart Money Podcast

The Price Isn’t Right: How to Stop Overspending and Stay Debt-Free