NerdWallet's Smart Money Podcast
Impulse Spending Fixes and PSLF Choices When You’re in Grad School
02 Feb 2026
Chapter 1: What is the main topic discussed in this episode?
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Sometimes your money habits just need a hard reboot.
You know what, Sean? I find that that reboot tends to happen towards the beginning of the year, after the holidays, after I've just done too much.
As in, like, right now? Yes, right now. Let's do 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.
And I'm Elizabeth Ayola. On this episode, we're going to answer a listener's question about whether to keep making student loan payments while in grad school or put that cash towards a new house.
But first, Elizabeth and I are going to mix things up with our money habits, at least. February is a popular month for no spend challenges where you either don't spend on non-essentials or maybe just choose a specific category to not spend money on. And this year we're taking that idea, but we're taking it in a slightly different direction.
And friend of the pod, personal finance nerd Amanda Barroso is here for the conversation. Hey, Amanda.
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Chapter 2: How can a month-long spending challenge reset your money habits?
And then you have this month of abstinence where you're not spending money on things. And then afterwards, you feel like you've done such a great job. So you end up buying a bunch of stuff that you didn't need, and it ends up actually not really helping you at all. I think it can actually make you worse off after all of that. My issue is that some of these changes aren't sustainable.
As you're talking, Sean, I'm thinking around money values and even maybe like money trauma that you have and how a no spend challenge can be counterproductive to helping those things. You know, so if you fundamentally have an issue with your spending and it's rooted to, I don't know, maybe you didn't have enough things when you were growing up.
I was talking to someone the other day and she was like part of her trauma around buying or eating out is that when she was younger, they didn't have enough money to get all the foods that she wanted to eat. So now that she's an adult, she just wants to buy any food she wants and she wants to when she wants to eat it.
But anyway, so my point is like doing a no-spend challenge and saying, I'm gonna stop Uber Eats altogether doesn't necessarily address maybe that trauma that you're dealing with, right? So how can people get more from one of these month-long challenges?
Well, for me, I think it helps to know what you want from a challenge that you're setting up for yourself. Is it to break a bad spending habit or build maybe a good spending habit, maybe jumpstart a specific goal? Also, again, know the limitations. If you want this to be a long term change, this could be a month to set the groundwork for that.
But set yourself up with a plan to continue this beyond the span of February.
For me, at least, it's super important to know what I want to get out of this. you might just want to see if you can do it, sort of like a test of willpower.
And I think there is a little bit of that for me, but if your short-term challenge is tied to a longer-term goal, you should get clear on that ahead of time, like have a plan for how to transition from the challenge piece, like back to real life, how to make this sustainable,
I also think it's important to figure out what you want to do with the money that you're saving during the challenge, because that can be really motivating. So don't just let it sit in your savings, collecting like a penny of interest per month in those pitiful checking accounts.
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Chapter 3: What strategies can help you avoid impulse spending?
I never. I was like, that's too much management. But hey, girl, maybe you need a bit more management.
Direct deposit. Easy peasy.
Exactly. So I'm like, I'm actually going to save towards my birthday this year versus being like, oh, surprise. I don't know how much I'm spending. So it's I know I'm 37 now and I know that I like to spend on my birthday. That's enough years to know that. So, you know. having a fund for it will help me kind of avoid this January. Oh no, I have to pull back my spending. Yeah.
Listen, how good will you feel January, 2027, knowing that you cash flowed your birthday, that you absolutely good December, you open up that sinking fund and you have X amount of dollars and you know, You treat yourself heavily. Exactly. I think that that's wonderful.
I would love to see that challenge for you, Elizabeth. Maybe this coming December, just don't spend any more than you have already allocated as you've been saving up over the course of this year.
I love that. I love that. So y'all going to have to check in with me. Hold me accountable.
We will hold you accountable. You know, I will. So, Amanda, what about you? How are you going to mix things up this month?
OK, so I got a brick for Christmas and I've been to build a house. Okay, for those of you who don't know, a brick is like this little small like physical device that helps you block the apps on your phone by adding a little friction to how you access apps on your phone. So it's like a little, it has a magnet. So I have it like up on my fridge and you tap your phone to the brick
And it locks certain apps and it's like fully customizable. You can set up different times, like a workday time, family time, weekend time, whatever that is. And the only way that you can unlock those apps is to physically tap the brick again. The idea is that by making you get up and go to the brick, you have to touch your phone to it.
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Chapter 4: How does student loan deferment affect Public Service Loan Forgiveness (PSLF)?
I'm tempted to get one, but we use scrolling and spending as a way to self-soothe a lot of the time. And this actually gets me to what I'm doing in February, which is creating more friction in my life, especially around spending. I read this article in The Cut that is titled, in 2026, we are friction maxing. Did you guys see this?
Yeah, actually, I did.
Very good read. It was a great piece. So for those who didn't read it, the gist is that we as a society have really let ourselves become kind of overly coddled by technology, much to our detriment. We're offloading our thinking and our creativity to AI chatbots.
And we're so desperate for entertainment at all times that we're scrolling social media while we're watching a Netflix show while we have an iPad up and we're like playing with our kids at the same time. And, you know, the article does talk about parenting, too.
I'm sure you guys could relate to this and how it can be tempting to just shove that iPad in front of your kid just to get them to kind of calm down. And I realized that we are doing the same thing to ourselves. Like we are iPad kids without even realizing it.
We are. What an analogy. It's very true. Convicting. Yeah.
So the idea with friction maxing is that you are intentionally rebuilding some of the friction in day to day life to actually enjoy what it means to be a person learning and growing and sometimes struggling as we're alive, because that helps you grow over time. I'm taking this principle and applying it to my money in February. I'm doing it in a kind of chaotic way just so I don't get bored.
This week, the first week of the month, I'm not going to buy anything online, even books. I have this bad habit of if I see a book I want, I will just go to the Powell's website. Powell's is the local bookstore in Portland where I go to all the time. And I instead of just going into the store, I will preorder it and then just go in to pick it up.
And I realize it probably takes me just as long to just like do that versus going into the store. So why not enjoy perusing the shelves, which is one of the joys of going to a bookstore.
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Chapter 5: What should you consider when deciding between paying student loans and saving for a home?
And I have not done that maybe ever in my life, actually. So I'm going to see how that goes. The third week of February, I am not going to use my phone to buy anything, not even tapping Apple Pay at a register. I'll be pulling out my wallet and we'll see how that goes.
And then the final week of the month, I'm just going to forego takeout on my phone, which is a bad habit of mine, especially on the weekends. I want to order food and it gets really expensive because it's so easy to do. I just keep buying more than I maybe would otherwise. So those are how I'm going to be adding friction to my spending in February.
Okay, I have to ask about week two, about the using cash thing.
Yes.
I'm just thinking about like filling up your car at the pump. You're going to have to walk into the gas station and pay somebody.
Man.
I mean, and how do you know how much you're gonna take out? Do you have a set number in your mind? Are you looking at average weekly expenses and like, okay, I'm gonna take out around that much? Or are you gonna force yourself to go back to the ATM over and over?
You're asking questions I have not asked myself. So I will let you know when I have answers to them, but I imagine I'll take out maybe a couple hundred dollars in CFR that gets me. I'm fortunate that I don't drive a ton, so I actually might be able to get away without filling up my gas tank for a week because, yeah, I don't like going into a gas station to get there.
cash because how do you know how much is going to fill up your tank, right? This will be part of the learning of this experience over the month. And I'll see how I like it. And I honestly don't even know what lessons I might learn from it. But I'm excited to not have spending money be as easy as, you know, opening my fridge for a LaCroix.
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Chapter 6: What are the implications of the One Big Beautiful Bill Act on student loans?
There are really serious concerns that existing shortages that we already have in medical fields, including nurses, are just going to be exacerbated if people feel like, well, you know, how can I go into this? How am I going to, you know, pay for it?
There are, you know, very valid concerns that these limits could dissuade people who are from groups that have historically been underrepresented in these fields. So that could be people from underrepresented minority groups, first generation college students, students from rural areas,
Those groups are already underrepresented in medical fields and that this could dissuade people even further from going into them. So then you're ending up with medical practitioners who don't reflect the diversity of the actual population.
I will say just as I'm hearing all these numbers thrown around, these mortgage numbers for education, it just makes me think back to my undergraduate degree. I did mine in the UK and I at the time didn't pay more than $10,000 for three years of schooling. Sorry, 10,000 pounds, correct me, 10,000 pounds, which is still way cheaper.
I am so jealous that was less than half of a year for me.
And my post-grad was like, and I know the type of degree that you choose, you know, influences the price as well, but it was around five or six thousand pounds. So I'm like, people are paying a hundred thousand, two hundred, three hundred thousand dollars for school. Yeah, that's wow. It's a lot.
Yeah. Yikes. Well, moving on. The one big, beautiful bill act didn't directly impact PSLF. But that said, the Trump administration has taken steps to tighten the program's eligibility. And many with the opportunity to take advantage of this program probably feel anxious about whether this loan forgiveness program is actually going to pan out for them.
It seems like our listener is in that camp too. So I feel for you, Sydney. So Kate, can you outline these recent changes and maybe what's the best course of action for those who are hoping to have their loans forgiven, but are just really anxious that this program might cease to exist?
As you mentioned, One Big Beautiful Bill Act didn't directly affect PSLF, but PSLF had already been tinkered with a little bit. So at this point, it sounds like a long time ago, but way back in March 2025, President Trump issued an executive order that said that employers who otherwise would qualify for PSLF, but who engaged in quote unquote illegal activities would lose that PSLF eligibility.
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Chapter 7: How can you track your progress towards PSLF eligibility?
That's a whole other thing to consider. There is so much to think about. And I'm sorry for throwing out so many numbers.
I mean, we appreciate you doing it because it's a complex topic. But you talking about how important it is for people who are in this program to track their qualified payments and their employment history, that makes me wonder about the actual forgiveness itself. Is it automatic or are people in this situation going to have to maybe make the case of, hey, here are all of my payments.
Here's where I was working when I was making these payments. They are qualified and kind of have to fight for themselves to get this forgiveness.
So forgiveness is meant to be automatic. So basically servicers are going through at the education department's direction, are going through records saying, okay, these are the people who've met this goal at this time. That said, things have been moving incredibly slowly.
And we have seen a lot of issues with forgiveness being dispersed, not necessarily in terms of PSLF forgiveness specifically, but just overall. So we've been in a situation for several months now where we were in a situation previously where forgiveness was not being processed at all.
So one of the ongoing lawsuits against the education department was brought by the American Federation of Teachers. They have been really strong advocates because in particular, PSLF is something that very much affects their membership, right? Teachers are heavy users of the PSLF program.
And so they have really strongly advocated for making sure that we're holding the education department accountable and that things are moving forward, that borrowers are getting what they were promised when they took out these loans. So as part of that lawsuit, they were like, So we noticed that you guys are not processing forgiveness and you need to start doing this.
That was the exact legalese that was used for that. So they were able to get income-based repayments. So IBR borrowers are starting to see forgiveness being processed. We started to see that like right actually, it was right around the shutdown. So it was like October that we started to kind of see that happening. People who are on PAYE, Pay As You Earn plan,
people who are on ICR, income contingent repayment, we are still trying to get the wheels moving again so that forgiveness is processed for people on those plans. So there are currently...
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