Magda Doemeny
Appearances
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
Like you have to mentally go in there and kind of categorize it and make sure it's accurate, which is what you're starting to do. For you though, depending on how this goes, I also want to talk about some behavioral changes that you can do that actually wouldn't
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
require the app and it would be supplemental to that process so one thing that came to mind when you were talking about shopping is that it sounds like right after right after you do it or shortly after you do it you almost say why did i do that and so something that i would challenge you to do is create one day a week that's your return day every sunday you sit down you look at what you bought and you return as much of whatever it is that you just bought that you said after you bought it do i really need this
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
Right there, you could save maybe hundreds of dollars by actually taking action on what your internal body had already said, like, why did I do this? Most of the things you purchase can be returned. If I had a dollar for every time I'm there handing that thing back to them, I'd be a lot wealthier. So that's one thing that you could try to implement is pick a day that you do returns.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
Thanks, Sean.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
Sure. So I'm an advisor with NerdWallet Advisors. And what we offer is affordable financial planning memberships where you get access to a certified financial planner like me. And that's for a low monthly fee. And what we do is we'll do a review of your finances and we'll create a financial plan with some bite-sized action items that you can really start to take action on quickly.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
Well, I want to ask you one question about what you said, which is that I need it all. That word is something that I think sometimes we say to ourselves so loosely, but we all know that. And you would say you don't need it. Right. What is the word that we actually are saying? We don't. Wanted. Right.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
And so I do think if there is time at all during any exercise of purchasing, a funny story I tell a lot of clients is that when I was in high school, which tells you a lot about me, I would go to a store with my girlfriends, usually Target, and everyone would be ready to check out. And I would make everyone stop before we checked out and take one thing out of their cart.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
Because I said, there's no way you made it through this whole store without putting in something in there that either A, you didn't come for, or B, you don't actually need. So the exercise of just pausing for one minute before you purchase anything to ask really need versus want.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
I need it all, you know? The one last thing that I'll say in this context, these are all just... know ideas of things for you to think about and what you think will ultimately help you potentially change some of these habits but you know if we decide that your goal is to go abroad and that's really something that you're committed to we can create a separate savings account for that and
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
And the exercise every time you buy something could be, do I want to fund my trip or do I want to buy X? And what you could do if you can catch yourself is say, oh, $50 item or $50. I'll just transfer it from my bank account into my fund. And it sits there and you can slowly, hopefully see it growing.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
And you can really in real time, see the trade-off between, you know, $50, $100 X and your growth, your fund growing to go study abroad. Yeah. That, that makes sense. Yeah. Yeah.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
And you'll get unlimited access to myself or your planner with calls or a chat function in any capacity.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
And I definitely think, you know, there's, you may have heard there's two different ways to kind of think about your debt. The avalanche and snowball method are the two pretty common ways. One of them being where you could tackle some of these smaller issues. debts, the $28, $59, and just get rid of them so that you just feel a little bit of weight.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
It consolidates it a little bit for you artificially. And then the other one would be to tackle just your highest interest rate debt, regardless of its size. I think for you, I would definitely want to prioritize some of these smaller debts first. I think it would be a weight off your shoulders. And Frankly, this seems attainable to me based on your income.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
With just some tweaks to your lifestyle, I think there would be no problem in tackling maybe five of these in two months. Because I know that if we're talking about behaviors of shopping, I mean, we could probably return five of the items you bought over the last two weeks and pay down three of these cards. You would be correct.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
I've been in this industry for about 15 years now. I got my CFP certification back in 2016, but I've been advising clients for about 12 years now. And I've kind of considered myself a finance nerd since I can remember.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
Almost two cards right there. And so I think that's really encouraging to me and should be really encouraging to you is that we could tackle a lot of these. My matter of fact here would be that if you even have access to these cards, those go bye-bye. It doesn't necessarily mean you have to close them per se, but just... throw them in the door and lock in, right?
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
We just don't want to use them anymore. And then we would slowly start to tackle some of these higher balance ones after that.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
I think one strategy, at least for returning the items, would be a dedicated time. And it would be really exciting to have a spreadsheet and be delete, delete, right? So motivation to pick a day, do some refunds or returns. And then the other one that's a big one for a lot of people is Uber Eats and or Uber.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
For Uber Eats especially, one suggestion I would have is that we can talk about how many times a week you usually get Uber Eats. How many times do you go out to eat or order in?
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
So for an Uber, you know, maybe we could come up with a number of rides per week and you get I don't we'd have to figure out what works for you, but three rides a week. You can decide when you want to use that, whether that's going out for fun, whether that's getting to the office, whatever it is. And when you hit your three,
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
We got to figure out public transportation or walking for the remainder of the week. And it's fairly easy to track. Maybe three is not the right one, but the number we want to pick is less, much less than what you're doing regularly.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
And then you can, you know, if you use your first two by Tuesday, it's a conscious decision you're making and you know, all right, I only get one more for the rest of the week. So I have to plan. And that's really what this boils down to is making conversations.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
conscious decisions, even just on a weekly basis of how do we think through what I'm doing so that I can make the right financial decision. And that's like using less of your brain to try and do it. Yeah, that makes sense.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
I have never done that, but I am very grateful to be here and excited that we can talk finance and folks might learn a thing or two.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
I do think one, we should write them down. So I think the start would be a budgeting app and we can see how that goes. Some people find them overwhelming and then they just turn it down and say like, all right, forget it. This isn't working for me. That is some people. Some people thrive off of that stuff. You get super excited.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
They'll send you a note like you're about to overspend and you say, oh great, this notified me. So I would say I would want to start there. The second one would be we would come up with your set goals and track them for a month. Just like, you know, you said you had a personal trainer that takes a lot of commitment, right?
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
You going in there and you doing, putting in that hard work, you got to get your butt up and you got to go there. You got to work out and all that. It's not any dissimilar from this is that you got to create a plan and start executing on it. Yeah. Makes sense.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
So I think we touched on a little bit of it, but the very first thing that I would want to tackle is to do a deep dive as you've done with your budgeting app and actually confirm exactly how much you are spending on average per month, figure out your top spending categories and come up with the right strategy for you on how to bring that down.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
The second one would be any dollars that we save after that first month would be make sure we chip away at a handful of those small credit cards and just get rid of them. And at the same time, I would want to set up at minimum an auto payment from your checking account into a high yield savings account. that goes in at maybe $25 a month is what we would start with.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
The point is to build a habit because while we have debt, We're never going to get out of the cycle if we also don't start saving some of our money. So getting a separate savings account so we can start to build an emergency fund.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
I do not. Okay.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
Yeah, I think initially your situation, I've heard before in bits and pieces, and it is so hard to come from a upbringing of not having a lot and being surrounded by people that do because it's always the, well, how did they do that? Why can't I have that? And that really can be really motivating.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
And it sounds like it was for you and your career to be like, I want to get that because, you know, looking at some of them, we'll get into it. But, you know, your your income is actually pretty good. And it's great that you have a motivation to excel your career and earn a high income because that's going to really help your finances.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
But ultimately, I think what also happens with that is what's called lifestyle creep. Right. And that is the first thing that I noticed that I think you even you're saying in different words. Right. You are making money and you deserve to spend it. And that is absolutely true. You do deserve to spend it. It's all about taking into considerations what you're trying to accomplish. Right.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
in conjunction with what you want to spend. So if you have goals like saving for a trip or one that will impose on everyone, which is retiring, we just need to figure out how we can still enjoy life. I don't ever want to be somebody who sits and says, you just can't spend any of your money. That's no fun.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
It's just about figuring out how we can fit that lifestyle in and still accomplish your goals. And so I think we can talk about ways to do that.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
$1,895.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
Yeah. First, when I just do a basic calculation, you're about $500 away from already spending your paycheck right now. That's spot on. Okay. Which is something that you're saying. There's two things that we would want to think about with kind of what you're describing. There's the debt and how do we handle it and what do we do with it?
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
But I, for the beginning parts of this stage of really deciding, like, I want to make a change. I want to do something different. I actually want to prioritize your spending because. Focusing on getting rid of your debt quickly or having a quick fix tends to not solve your long-term problem if we don't fix the habits that created the debt, right?
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
And I find that if folks will get rid of, cut out the debt for, you know, three or four of their 10 cards, then they go, oh. I have $5,000 I can spend. And we go right there. So it's not as though I don't want to tackle that. And I want to talk about that in a moment. But the first thing I want to tackle is your spending and what's happening here.
NerdWallet's Smart Money Podcast
Live Financial Planning Session: Expert Budgeting and Spending Tips
So I'm super excited that you signed up for an app and that you can actually do the work and look at it. Because the first part of this process is actually understanding that dollars in and dollars out. And it is work. People think, oh, I'll just plug in my stuff and everything shows up and I can see everything. And that's not always true.