Kim Palmer
Appearances
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
It's a great idea. And you can access your credit report for free through annualcreditreport.com. Many credit card issuers and apps like NerdWallet offer access to your credit score for free too. So you have a lot of options.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
If there's an error on your credit report, then you really want to try to fix it as soon as possible. And the way to do that is to let the credit bureaus know. Each credit bureau actually lists out the process for correcting an error on its website. Each one is slightly different, but basically you can do it online, by phone, by email, whatever works best for you.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Your credit score is a number that reflects your history with credit. And that history is what's contained in your credit report. I kind of like to think of it as your credit report is an exam that you turned in. The credit score is the grade that you get. We each actually have multiple credit scores that are given by the different credit bureaus.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Credit is something you really need to actively manage. And one excellent way to do that is... Budget. Budget, exactly. We're going to meld these two aspects together so listeners can really head into 2025 with a really solid financial foundation.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
And the formulas that make up those credit scores are proprietary. So they're a little mysterious. We don't know exactly how they're calculated, but we can draw some conclusions like the ones we've shared today.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
I think that's a really good point. And it also speaks to the fact that we're talking about numbers a lot and we're not just trying to get ahead just to improve these numbers, but we're trying to achieve some bigger life goals. So I think it always helps to step back and think, okay, what are those bigger goals that I want to achieve? It helps us stay motivated.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Congratulations. That's a big milestone.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
I think it can be helpful to have a plan for how and when you wanna pay it off and how much above the minimum payment that you wanna try to pay off each month. Personally, I think even just playing around with some of the debt payoff calculators that you can find online, including the ones we have at NerdWallet, it can just help you track and then set the goals.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
We are watching for so much because there is a lot of uncertainty right now. There's a new president coming in, questions around inflation, interest rates, tariffs, all of that we have to watch closely just to see how we can best manage our personal finances in response to those broader policies that are beyond our control.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
It's always a good idea to keep an eye on the news just to know how current events might impact your money and to adjust any of your budgeting and credit strategies accordingly.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Putting in some time now to review last year's spending and planning your 2025 budget can go such a long way to keeping your finances on track. So I think it's really worth making that investment. And I would argue it can even be fun because ultimately it's letting you reach your bigger life goals.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Thanks for having me.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
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
Simple Steps to Budget Better and Manage Credit With Confidence
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
Simple Steps to Budget Better and Manage Credit With Confidence
Yes, of course I do. I absolutely love doing spending reviews. So I do a big one at the end of every year, but I actually also do more frequent reviews. So every month I like to pull up my credit card statement, which is basically where it the bulk of my spending is. And then I just see what surprises me, what trends do I notice.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Sometimes I'll even notice some mistakes or errors that I have to fix. Sometimes there's a big expense that I want to kind of dig into and figure out why something went up so much that month, like takeout, for example. And from there, I can also just make decisions about where I might want to scale back or shifts I want to make. Sometimes there are irregular expenses.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
For example, right now, I'm going through a lot of deposits for summer camps, because now's the time to sign up.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Oh, so far in advance. Yes, we have to, you know, get those spots now to make sure we're set for the summer. It means putting up a lot of deposits. So I'm noticing that and just helps to plan for that. And then I can realize, okay, this month is a lot because of these certain reasons, but I know that won't repeat next month. Now you have to tell me, I would love to hear what you do.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
The main caution to watch out for with credit cards is overspending. Credit cards can just be really tricky because it doesn't necessarily feel like real money. And other than the credit limit on the card, there's really nothing stopping us to keep swiping away to buy what we want.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
So it sounds like we kind of have similar approaches, but we do it a little differently in terms of you like using an app. I do it more just logging into my account, but we're asking ourselves similar questions.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Yes, that is so expensive.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Well, I definitely think maybe keeping things a little bit simpler could be more appealing.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Before we even get into that question, I think it's helpful to take a step back and choose an overall method of budgeting. I am actually a really big fan of the 50-30-20 budget. It basically involves giving yourself some ballparks for where your money's going.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
You're aiming to spend 50% of your take-home pay on needs, 30% on wants, and 20% on savings and debt payments beyond the minimums, but you can make adjustments. For example, for a lot of people who are living in a really high cost city, it's really hard to keep your needs to that 50% figure. So you can adjust it. You might do more of like a 60, 20, 20 breakdown or something like that.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
I think this method is appealing just because it allows for that kind of personalization.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
That's exactly right. And I know there's a couple other methods that are appealing to people for different reasons. It's really all about finding the one that fits best for your preferences. But another one that stands out is the cash stuffing or envelope-based method, where basically... You're putting your expenses into different buckets or sometimes different envelopes each month.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
You're allotting it out that way. Another method that appeals to people is called the zero-based budgeting approach. Basically, you're accounting for every single dollar when you use that method.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
And I'm Kim Palmer.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
I really love your approach and how you break down your savings accounts like that. I've actually heard from quite a few financial planners that I've interviewed over the years that they use that approach too. So I think it definitely appeals to people that like that level of organization. So you're definitely not alone.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
There are actually so many helpful apps out there. You have a lot of options. And I think the key is to experiment and to see what works for you because you want to choose an app that you really enjoy opening up every day because that's what helps us stay on track. First of all, there's the wallet app, of course, you can pull up all your spending data, you can get offer recommendations.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
There's the YNAB, which stands for you need a budget app that uses a zero based budgeting approach. So it's tracking every dollar. And then there's also honeydew, which basically helps you coordinate if you have a partner that you're making spending decisions with, it can be a useful tool just so you're both on the same page. And that's honeydew, honey d u e.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Well, the goal is definitely to include all of your expenses because if you forget something, then you might just not have the money set aside for it. I think it's really helpful to look back on your spending over the entire last year. It's such a good predictor of what you might spend in the coming year. And that way you don't forget about costs that pop up less regularly.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
There might be a quarterly or an annual cost, like an insurance payment, some kind of emergency or an unexpected expense like a home repair. And then also it helps you remember once a year expenses like tips for caregivers or service providers, that kind of thing.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Personally, I think a year can be a little overwhelming. So taking it month by month can be a really good place to start as long as you're not forgetting about those less frequent costs. And then some people do prefer to break it down even more and go day by day, giving yourself a budget for each day.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Yes, income is definitely the fun side of the equation. You can calculate your expected income each month after taxes and other pre-tax deductions are made. And then you're allotting that over your other expense categories.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Yes, these are two aspects of our financial lives that are so common, but they're also really frequently misunderstood. We are going to walk people through some of the basics of setting up a budget. We'll actually go a bit beyond the basics. And then we're going to have some tips and tricks for layering credit onto that budget.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
To use the earlier example, if you are going to go with that 50-30-20 budgeting approach, you basically are just going to divide up that monthly take-home income into those buckets.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
That's exactly right. And then with that kind of tracking, we can make adjustments as we go until they're all in alignment.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
I think one of the most common challenges is just facing those unexpected expenses, ones that you forgot to account for. And then it can just feel like you're getting totally thrown off. You almost just want to throw your hands up because it feels so hard. So the goal is to leave enough wiggle room so we don't feel that frustration and we can handle those hiccups.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Budgets are not set in stone. They're constantly changing. Our needs are changing. Our income might change. It's really important to be checking in frequently, and that way you can make adjustments to help you stay on track.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
The main caution to watch out for with credit cards is overspending. Credit cards can just be really tricky because it doesn't necessarily feel like real money. And other than the credit limit on the card, there's really nothing stopping us to keep swiping away to buy what we want.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Credit cards, on one hand, they can be a really great tool because they give us flexibility to make purchases and to pay for them later. But in general, they come with a pretty high interest rate. If you are late to make a payment, you can get hit with a late fee and also interest charges.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
But if you pay off the balance in full each month, then you get to enjoy all of that convenience without a price. In many cases, you might even be earning rewards like cash back or points.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
It basically just means that you're using your credit card responsibly. You're tracking your spending. You're paying off the balance each month or at least making a plan to pay it off as soon as you can. And you're avoiding that risk of overspending.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
First of all, a really good approach is to just be constantly monitoring your transactions. That's not only helping you stay on top of your spending, but it's also letting you know if there's any error or fraud so you can get that fixed really quickly. Secondly, you really want to try to pay off the balance each month or at least make a plan to pay it off.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
Third, you want to try to keep your credit utilization below 30% of your total credit limit because that helps you protect your credit score. And if you're spending one month, it's especially high. You can always make payments early before the due date.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
One of the most common ways to get into trouble is to spend more than you can pay off at the end of the month. Once interest starts accruing on that balance, it's just really easy to get into a situation where it feels a little bit overwhelming.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
And some of the warning signs include missing payments, seeing your credit utilization rate inch higher and higher, and just struggling to pay that balance.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
The first step is really to get organized and to make a plan. You wanna list out all of your debts and then choose a method to pay them off. One method that's popular is called the snowball method. And that means you're starting with the smallest balance where you're paying that off before you move on to the next smallest balance. It helps you build up some momentum.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
There's also the avalanche method where you start with the highest interest rate debt. Either one, you basically wanna choose what you feel you can stick with best. You can use online calculators to help you figure out how much to pay each month beyond those minimum payments that can really help you stay on track too.
NerdWallet's Smart Money Podcast
Simple Steps to Budget Better and Manage Credit With Confidence
And if you're struggling, you can always turn to a resource like the Nonprofit Debt Counseling Association, the National Foundation for Credit Counseling. They can give you extra help with budgeting and other options too, like consolidating the debt.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
A high yield savings account is bank account where you're earning a relatively high yield on your savings. The APY or annual percentage yield, it can be as high as 4.5 or even 5%. The exact yield really varies depending on the current interest rate, but it's generally much higher than what you see from a traditional bank account or a checking account.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
And another plus is that the FDIC typically insures bank accounts up to $250,000.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Well, everyone's decision will look a little different, but the main choice really boils down to how much flexibility you want, with the high-yield savings account generally offering the most flexibility in terms of minimum balance requirements that you mentioned, Elizabeth.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
All of the options offer higher yields than a traditional bank account or checking account, so definitely something to consider.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
After renovation, when you're trying to build up savings, it's really more important than ever to make a budget and stick with it, looking for ways to eliminate all those extra expenses that really add up. That's what we did in our family. We tried to cut back on extras like subscriptions and ordering takeout to use that money to put towards rebuilding our savings.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Well, first of all, congratulations to our listener. It sounds like they are really excited to be on this journey, and they seem to really be excited about the home improvement process and to be ready to embrace it. And that's great because it can help you build the value of your home.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
But at the same time, it is important to think about your other financial priorities, too, and just to leave some room in your budget to handle the other unexpected expenses that can pop up. So even though home improvement has really taken center stage in your financial life, you're still leaving some space to think about some other goals.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Well, as someone who also recently purchased a home, I completely understand this impulse to spend all of your savings on home repairs, but you do want to make sure you're thinking about those other priorities too. So one thing I would recommend for our listener, Kim, is to write down all of your financial priorities.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
And that might include things like paying off debt, building up an emergency fund, maybe saving for retirement. Everyone's list will look a little different. And then you can assign a target percentage of your savings for each goal. And that's just based on your own prioritization of each one. So maybe right now, home repairs are really taking top priority.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
So you're going to put 50% of your savings toward that. But then you still have 50% left for other goals, like saving for emergencies, for example. I have also learned the hard way that home repairs really have no limit. I mean, there is always something more you can do for your home. So it can be a really slippery slope if you don't put up some boundaries as to what you're willing to spend.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
There is always more you can spend on your home.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
Yes, I am definitely in the process of rebuilding my savings right now because for me, it was last year when I had a lot of home improvement expenses. I did try to primarily use my savings, but for one project, window replacement, which as you all might know, is very expensive to replace your windows.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
I used a low interest financing option that was actually offered through the window replacement company. And that seemed like a really helpful way to spread out my costs so I didn't have to pay everything up front. I ended up being able to pay it off early and it worked out really well for me.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
But it's really all about looking at your financing options and making sure you're getting as low a rate as possible or even a 0% rate.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
I have, and I have done that in the past. I didn't use it for this most recent particular renovation, but previously I used a 0% APR credit card and I found it really helpful because it basically let me spread out my costs. So it wasn't such a shock to my budget, which I couldn't necessarily afford in one particular month.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
One thing I will note though, is that you have to make sure you're making those minimum payments on time every month, because that way you can maintain that 0% offer.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
I love the strategy of having multiple savings accounts because it really helps you stay organized and just stay motivated for that particular goal. So for example, you might have one savings account for home repairs or even a particular home renovation goal. You could have another account for a future vacation, a third for emergency savings.
NerdWallet's Smart Money Podcast
Is 'Made in the USA' Still Worth It with Tariffs? Plus: Best Accounts for Your Home Repair Savings
It's just a way of mental accounting that can just help you visualize your goals and stay on track.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
Thanks for having us. Thanks, Anna.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
We expect to see some categories really go up in price pretty much right away. And that includes our everyday essentials. So things like food, gas, clothing, and then some luxuries like consumer electronics, jewelry, cosmetics, and then more down the road, we expect to see the big ticket items like new cars, new homes, those will also be impacted.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
Within food, which is really the category that consumers will feel soonest right away and every day since we all have to go shopping at the grocery store, the items that economists say will really jump the soonest in price are things like fruit, fish, wine and beer, food oils like olive oil, dairy, nuts and sugar.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
There are. So what's interesting about the impact of tariffs on consumer prices is that it really depends how much of the price increase the retailers and manufacturers decide to pass on to consumers. So in some cases, the retailers and manufacturers, they have more flexibility to absorb some of that price increase themselves.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
We see that especially with things like household goods and consumer electronics. But then in other categories like food, there's just not that much flexibility because profit margins are already so tight. So that's where consumers will really see the biggest price hikes right away.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
That's right. And the prices of imported and domestic items are really so closely related. For example, if you look at a category like wine, where you have imported wine, if that price goes up, sellers of domestic wine can also raise their prices. All of the prices are related. So it's hard to expect one to stay stable while the other goes up.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
And at the same time, we have a lot of items made in the U.S. that rely on imported supplies. And so if those imported supplies go up in price, that will ultimately affect what consumers pay on the final product.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
Well, in theory that could happen, but it really shouldn't because when you agree on a purchase price with a seller, that's really essentially a contract. The seller after that point shouldn't be able to raise the price unless you are agreeing to that or you talk about it.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
If you do see a price go up after you have agreed to a different price, it's definitely worth pushing back, questioning any extra charges. But what we could see, which is more common, is that a company will go ahead and cancel any existing orders if they're suddenly facing new prices. And then you'd have to place a new order under the higher price.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
Well, unfortunately, there's really not too much consumers can do about the prices, but what we can do is change our behavior. So taking some steps like creating a budget for yourself, looking at your past spending, seeing what you might be able to cut back on just to accommodate the higher prices that we're facing in other areas, that can help alleviate some of the stress of these tariffs.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
and then also taking steps like building your emergency fund just so you have that cushion to help protect you from the extra costs paying off any high interest debt you have for example if you're carrying credit card debt trying to pay that down just to give yourself a little bit more wiggle room here
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
One thing we shouldn't do, which I think is a natural urge for a lot of us, is to go out and buy extra items, things we don't necessarily need now, but think we might need in the future. We want to buy them now to avoid the future higher prices. But this is something across the board economists really warn against.
NerdWallet's Smart Money Podcast
What to do When Groceries Cost More and Retirement Feels Out of Reach
Because basically that means we're spending more money than we would otherwise now. And we don't necessarily need that item or we might not know when we need that item. If we need it, we could change our mind. If we buy a lot of something now, then we have to store it. There's all kinds of reasons not to buy early. So it's definitely something to think about.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
is not an investment advisor or broker and does not provide personal financial advisory services. Today, we are excited to talk to you about the basics of investing and taxes, and we think we have some helpful info to share with you. You can always find more at nerdwallet.com or on the NerdWallet app. Our goal today is to kick off a helpful discussion about investing and tax information and tools.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
Alana Benson writes about investing topics including stocks, funds, and ethical investing. And now I will hand it over to Alana. Thanks, Kim. Hi, everyone.
NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
Welcome everyone. I am Kim Palmer. I'm a personal finance writer at NerdWallet, where we help people make smart decisions. One important note, 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 Inc.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
Well, not me. I don't have any.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
Yeah, just kidding. But we are going to hear from you about some of the ways we can all better manage those blind spots.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
I'm talking with Jen Smith and Jill Sirianni. They are the authors of the new book, Buy What You Love Without Going Broke. And they're also the hosts of the Frugal Friends podcast. And they have a lot of really interesting ideas about how we can all be smarter spenders.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
Great, thank you. Jen and Jill, welcome to our show. Thanks for having us. Yeah, lovely to be here. Let's start with why you wrote this book because your personal finance advice is a little different from what we hear every day. What gap in the money world were you trying to fill?
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
Well, that sounds great. One thing you talk about in the book is how badly a lot of people feel, similar to that hangover that you're describing, the debt hangover. I mean, people feel badly often when they hear traditional financial advice. So what do you think is the problem there? What is going on that so much financial advice does make people feel badly about themselves?
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
Absolutely. I think that's been such a positive trend in the personal finance world in recent years. You also encourage people to really dig into their values when it comes to deciding how to spend money. How can we start that? What does that look like?
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
I think when we talk about budgeting, that piece often gets left out. So I love that you highlight that so much and basically wrote a whole book about it.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
One number that really jumped out at me from a recent nerd wallet study that we did is that almost seven in 10 Americans said they had financial regrets in 2024. And actually younger Americans were even more likely to say they had financial regrets. Why do you think financial regrets are so common? And how can we just set ourselves up better to feel good about the spending choices we're making?
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
Yes, the convenience is great, but the ease of spending money is not so great.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
If someone is just feeling really overwhelmed with all the money tips coming at them, what would you say are three of the most important things they can do today to start feeling better about how they're spending and managing their money?
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
Jen Smith and Jill Sirianni, thank you so much for joining us on Smart Money. Thanks for having us, Kim. Yeah, thank you.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
Maybe you're feeling a little lost, like you don't even know what your financial goals should be, or you're trying to break yourself out of a bad financial habit, but you just can't seem to do it. Whatever your money question, we nerds are here to help. Leave us a voicemail or text us on the nerd hotline at 901-730-6373. That's 901-730-NERD.
NerdWallet's Smart Money Podcast
Why Traditional Budgeting Fails and What’s Missing from Your Money Plan
And I'm Kim Palmer. This episode, we're answering your money questions about financial blind spots. Do you have any of those, Sean?
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
Great.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
Thank you so much for having me, Kim. I'm so excited to chat. Me too. Well, let's start with a backdrop for your book. Why do so many of us feel badly about money?
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
I'm glad you brought up that taboo piece of it, because I thought that was so striking when you write about the taboo around money and how many of us and maybe especially the Black community in particular are taught growing up that we need to only talk with our immediate family about money. Can you explain more about how we can change that and how we can feel more comfortable talking about money?
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
Absolutely. I think you're right. That idea of practicing is so important. I always remember how my dad made me practice negotiating a salary before I actually had to do it. And just speaking those words out loud in advance, I think helped a lot.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
You describe the book as the reader's personal financial therapy session. I like that approach. So how can someone work through their previous financial stress or patterns that are holding it back? What can you share for someone who isn't going to get to talk to you directly how they can do that on their own?
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
So let's just stay on that for a minute. When you are really diving into those difficult things that someone has experienced in their past, how do you help them there? So I know you and I have talked before about financial trauma issues. And sometimes when people grow up in certain scenarios, it can impact how they deal with money today.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
So what is the best way to really work through that with someone when they have experienced something so hard? How do you help them talk about that?
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
Can you explain what is going on with why spending means so much to us and how we can spend smartly when it really can feel like so much is on the line?
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
I love how you explain that. You pack so much financial advice into this book from paying off debt. You also talk about savings. If people take away one or two action items from your book to really move them closer to feeling good about their money, what would you want it to be?
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
Well, thank you so much, Asia. Any closing thoughts to share with our listeners?
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
Asia Evans, thank you so much for joining us on Smart Money. Thank you for having me, Kim. And thank you for reading. It was such a pleasure. To share your thoughts on money, shoot us an email at podcast at nerdwallet.com.
NerdWallet's Smart Money Podcast
Start Feeling Better About Money Today and Learn How to Manage Finances After a Layoff
I'll be talking with Asia Evans, a financial therapist and author of Feel Good Finance. Untangle your relationship with money for better mental, emotional, and financial well-being. She has a lot of really helpful ideas about how we can improve the way we talk and how we handle money in our lives.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
I can, and I think you're right. It makes sense to let a budgeting app do some of this hard work for you. So there are a few different approaches to budgeting, and you can find an app based on what you like best.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
I think in this situation, what could work really well is what's called a zero-based budgeting system, because basically it means that you are accounting for every single dollar, and you're setting it toward a specific expense. And there are a handful of apps that use a zero-based budgeting system like YNAB, which stands for You Need a Budget, and the EveryDollar app.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
Those are some tools that could help you. Another approach that is appealing to a lot of people is known as the envelope system. It's also sometimes called the cash stuffing system. Basically, you are putting money into envelopes, and those envelopes are labeled for specific expenses. So one might say rent, Another could say utilities. And of course, they don't have to be actual envelopes.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
It can also be a digital system. And the Good Budget app is one that takes this envelope system approach. It's really all about finding the one that you like, whatever system or app works best for you. So you actually think it's fun to log in and check out where your money is going. And NerdWallet actually has an article on the best budget apps of 2024.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
So you can find that in today's show notes, or you can also just search for NerdWallet best budget apps.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
It's so fun, Sean, always. I don't know what you mean.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
I think this situation is where it can make a lot of sense to leverage multiple bank accounts. You did this yourself as you explained in your example. I think it could really apply well here. So you want to put that chunk of money when you get it, tuck it away almost immediately into a high yield savings account so it doesn't feel so accessible and easy to spend.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
And then you want to take each month's expenses into a checking account so you have access to that. I think using a tool like that can just help you leverage these different accounts to make sure you are not overspending for that month to keep you on track. I think that could really help a lot.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
And then just taking a step back and looking at your expenses that you tracked when we started all of this and just see, are there any expenses, especially the variable ones, that would be possible to trim? And the ones that can be easiest to trim are things like when you are ordering takeout, subscriptions, other food eaten outside the home, entertainment costs.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
So those can all be ways of looking for savings.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
I'm so glad you brought this up because I think you're right. Having extra savings when you don't have a steady paycheck and it comes in a more fluctuating way is so important because that way you can turn to it when suddenly you find yourself in a leaner month. The right size of an emergency savings account varies so much based on your expenses, your income.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
And at NerdWallet, we have a really helpful calculator so you can enter your own numbers and information and find the right amount for you. In general, it can be great to start with a goal of having $500 set aside, and then you can work on growing it from there.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
But starting wherever you can, even if it's a small amount, and then just making small steps each month toward growing it, that can be a really good place to start.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
That's a great idea. I think having separate accounts that you are managing in this way, and in some cases, you might be taking advantage of automatic payments. Between the accounts, you have them labeled so you know what the accounts are for. That can all be really helpful just so you can stay organized.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
Of course. Thanks for having me.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
This is really hard, so I think it does make sense to start with where your money is going, what your expenses are. First of all, you wanna see how much you need every month for your essentials, like your housing, your food, your transportation, but then also all of your variable costs too. So that's things like entertainment, restaurant meals, takeout, any kind of personal costs like that.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
And then you don't want to forget to also remember your less frequent costs that fall outside of the month. So that's things like insurance renewals, other kinds of annual subscriptions and other seasonable expenses. Once you have all of that in front of you, it makes it easier to create a budget for yourself based on all of that spending.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
And because the income is coming in in a big chunk every four to five months, you have to basically divide it up yourself over those months. It is more work for you. Just to make the math easy, let's say you have $10,000 of take-home pay and you need to spread that over five months. Then you'll have $2,000 a month to allocate to those expenses that you just listed out.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
And I think breaking it down like that, it just makes it a little bit more manageable so you know how much you have for this month and how much you have to save for the future.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
Well, it is so hard. And I think that your example is really perfect in this situation. So I'm going to describe kind of a similar version of what you did that I think could apply here. So basically, even though you are getting the money in one big chunk, you have to do the work yourself of breaking it up over the period of time that you need it. So you're doling it out yourself.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
It can be overwhelming to get it all at once. And so that's why we have to do this extra work, which you did on maternity leave.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
basically what can work really well is similar to your approach you want to keep the chunk of money in a high yield savings account over those months and that way it's earning interest which is great so it can be growing and then you can draw out the allotted income at the start of each month so put that into your checking account and then you know exactly how much you have to spend for that month
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
And I think it's also worth considering or remembering expenses that are going to fall out of that month. So we talked about this a little bit before when just collecting your expenses. So think back to what comes up only once a year or maybe twice a year. Maybe it's the holiday spending costs or you always need money for travel in the summertime.
NerdWallet's Smart Money Podcast
Stop Scrolling, Start Saving: Better Habits and Budgets for 2025
So you also want to set money aside for those as well. And then another big thing to consider here is taxes. So if taxes aren't being automatically withheld from this stipend, then you'll definitely want to set some money aside so you can pay your taxes when they come due.