Smart Money Podcast: What We Learned About Our Money in 2022
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Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.
In this week’s episode, Sean and Liz hear from listeners about the best thing that happened to them this year, what they struggled with and what they are most looking forward to in the new year.
Check out this episode on any of these platforms:
Financial wins come in many forms. Sometimes, getting a new job and earning more money can transform your life. Other times, getting through the slog of estate planning is more than enough to help you sleep better at night. No matter what you did with your money in 2022, it’s important to celebrate the progress you make on your financial goals.
At the same time, money trouble can be an unforgiving shapeshifter. Maybe your car breaks down and you have to buy a new one — just as interest rates are on the rise. Or you had to relocate for a new job and have to find an apartment in an expensive area, tanking your budget. It’s a matter of when, not if, an unexpected expense pops up. That’s why it’s important to save what you can in an emergency fund because even a few hundred dollars can mean the difference between covering the cost and charging it to a credit card.
Through the financial ups and downs of the year, exciting changes are always just around the corner. Maybe your family is going to grow in the new year or you have a big international vacation planned with your closest friends. Use the time you have to save for these expenses — and think about leveraging credit cards to earn points as you spend. That way, you’ll be able to savor the moments while you’re making smart money moves.
More about managing your money on NerdWallet:
Have a money question? Text or call us at 901-730-6373. Or you can email us at [email protected] To hear previous episodes, go to the podcast homepage.
Sean Pyles: Welcome to the NerdWallet Smart Money podcast, where you send us your money questions and we answer them with the help of our genius Nerds. I'm Sean Pyles.
Liz Weston: And I'm Liz Weston. To contact the Nerds, call or text us on the Nerd hotline at 901-730-6373. That's 901-730-NERD, or email us at [email protected]
Sean Pyles: 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 are going to hear all of the great rose, thorn and bud submissions that we received for our special end-of-year episode. As a quick explainer, we asked folks to submit the best thing that happened to them financially this year. That's the rose. Something they struggled with. That's the thorn. And what they're most looking forward to in the new year. That is the bud.
Liz Weston: We got some great submissions from you, our dear listeners, as well as from our fellow Nerds.
Sean Pyles: But before we get into our rose, thorn and bud submissions, I have one quick callout. We are trying something new in 2023. We want to talk with you, our listeners, live on the podcast to help you answer your money questions. This will be a chance for us to discuss what's really driving your money questions and pack a ton more Nerdy advice into each episode. Plus, we love connecting with our listeners, and this is just a great excuse to do that, too. So if you want to join us on the podcast, please let us know. Email us at [email protected] or call or text us on the Nerd hotline at 901-730-6373. Tell us what your money question is, and hopefully we can find a time to talk soon. All right. Well, now let's get into our first rose, thorn and bud.
Listener 1: Hey, Sean and Liz. This is Taylor from Tulsa. I love your podcast. I'm so excited to share my rose, thorn and bud for this year. My rose is that I graduated with my Ph.D. and finally left grad school and got into the workforce and actually started making real money. My thorn is that I had to move far away from my family, but I'm hoping and trying to travel smartly using points and miles to get back to see them. And my bud is that I'm really excited to finally be on solid financial footing, and I'm planning to max out my 401(k), HSA and Roth IRA in 2023. Thank you so much for your podcast and all you do. I've learned so much.
Sean Pyles: Taylor from Tulsa, thank you so much for your message, and congratulations on graduating. Getting out of school and into the job market can be a scary transition, but it's a great feeling to finally be making some real money. I remember when that happened to me after I graduated from undergrad. It's nice to have money coming in instead of only going out.
Liz Weston: So true.
Sean Pyles: On your thorn, though, I can completely relate to that. My family is scattered across the country, and getting together with them can be really hard. My mom lives in Florida and her birthday’s in February, so I go out to see her almost every year for that, and we have a little get-together. It's become a tradition for us, and a lot of folks aren't traveling to Florida in February, so it ends up being a pretty affordable time to go as well, so think about things like that that you can do.
Liz Weston: Yeah, and Taylor is so smart to make retirement savings a priority as soon as she starts working. It would be easy to put that off and let lifestyle creep happen and wind up spending everything she makes. But making sure to pay yourself first is really a great way to get a good start on your financial life. And living like a broke college student for a little bit longer, you're used to it. It shouldn't be that big a deal.
Sean Pyles: Yeah. It can be so great to do that when you're first starting out at a new job. Set up the automatic deposits into your various retirement accounts so you don't even see that money hit your checking account and you won't miss it, but you'll be glad that it's in those savings vehicles. All right. Well, now let's get to our next rose, thorn and bud, which comes from a content Nerd, Sheri Gordon. She actually helps us a lot on the podcast, so Sheri, thank you for all that you've done this year. Let's hear what she has to say.
Listener 2: Hi, Sean and Liz. This is content Nerd Sheri Gordon. My rose is that at the end of last year, my husband and I made a pledge that we would get our estate planning documents in order and update our will, and I'm happy to say that we've gathered all of our paperwork, we've done all of the lay work, we have an appointment with an estate planning attorney, and by the end of the year, we will have our estate plans in place. My thorn this year is that I've been dealing with issues with my in-laws in terms of becoming power of attorney and handling some of their estate issues and trying to figure out how to pay for memory care and assisted living, which is very expensive. So that's definitely been a thorn.
And my bud is that I am helping my son, who is 24 and in his first professional job, to sign up for his company's 401(k). It's been great talking with him about why it's important to start saving for retirement even though he's in his early 20s and it feels so far away, and how much he can save if he starts saving in his 20s as opposed to waiting — and why it's important to keep that money in his 401(k) and not to take it out. So I'm excited to see where that goes for him. Thanks. Bye.
Liz Weston: There is so much great stuff here, Sheri. The simple act of putting something on the calendar can be really helpful, especially when you're dealing with financial tasks that can be difficult or complicated like estate planning. So I'm really glad you got that process in motion. If you have a very simple estate, you could use online services like online legal services to put together a will, but once you have kids and a house and more complicated finances, it really helps to have an actual physical, live human being, an attorney to help with this. So again, kudos for doing that.
Sean Pyles: Yeah. What I'm hearing in Sheri’s message here is that she cares a lot about her family and her experience over the past 12 months exemplifies how complicated it can be to manage all of the various financial things that you have going on. Some are really exciting, like helping your son set up his retirement accounts. Other things can be more difficult like caring for loved ones that maybe need some memory care, but there are ways to do it. It does take some work and time, especially when you have a somewhat more complicated estate. One last thing I want to say about estate planning and setting up your advanced directive is that you don't have to have a traditional family or even be married to do that.
My partner, Garrett, and I are not married. We're long-term engaged is what I call it. We're going on almost three years of being engaged, but we have our power of attorneys set up, our advanced directive set up and our wills set up so that if something does happen, we are able to take care of each other. And like you were saying, Liz, our lives aren't super complicated, so we were able to use one of those online tools, and it has worked just fine for us.
Liz Weston: Yeah. And actually, those powers of attorney that you were talking about are even more important than a will or a living trust because powers of attorney determine the quality of life you're experiencing while you're alive. Somebody is making medical decisions for you or financial decisions for you, and the rest of this stuff is dealing with your stuff after death. So if nothing else, you want to get those powers of attorney squared away.
Sean Pyles: Absolutely. All right. Now let's hear the next rose, thorn and bud.
Listener 3: Hi, Nerds, it's Courtney here, and I wanted to share my rose, bud and thorn for the year. So my rose was finding out that my husband and I are expecting our first baby next year and we got her nursery all set up. My thorn would have to be inflation and higher gas prices. My husband commutes to work, so we could definitely tell that we were paying more per month in gas. And my bud would be looking forward to my daughter coming in April and getting our finances in order when it's not just the two of us anymore.
Sean Pyles: Courtney's another Nerd that has helped us a lot on the podcast, so it's so great to hear your rose, thorn and bud. And I'm so excited about your growing family. It's of course an expensive time to have a child, as you noted with inflation, but I have no doubt that you'll do every Nerdy thing you can to make it easier to manage the expense.
Liz Weston: You are on such an amazing journey, Courtney, and we are so happy for you. My husband has this saying, which is that everyone will tell you that with a kid, your life is going to change. What they forget to add is for the better.
Sean Pyles: OK, the next rose, thorn and bud comes from a Nerd, Jackie Perini, who sent me a Slack message, so I will read that for us now. Her rose is, "I paid off my student loans in March and finished my MBA in August debt-free. I was then able to refund my payments when [President Joe] Biden announced student loan forgiveness so I could end up with about $13,000 to keep." That's pretty sweet, Jackie. Here's Jackie's thorn. She said, "Lifestyle creep. I started at NerdWallet at the end of last year, and I had to be really diligent about not letting lifestyle creep keep me from wisely taking advantage of my salary increase." And here is Jackie's bud. She said, "Investing more. If student loans are forgiven, and I don't need to sink that $13,000 back into my loans, that basically checks off my emergency fund, so I'll be setting my eyes on building an investing plan. I'm also getting married next year, so it will be interesting and exciting to combine our finances in such a good position."
Liz Weston: Oh, that's great to hear, Jackie. Now unfortunately, Biden's student loan forgiveness plan is facing serious challenges in court, so it's not clear at all if any debt is going to be wiped out. But the presumption of payments has been put off again, so at least people have a little bit more breathing room.
Sean Pyles: Yeah, I'll say around Jackie's bud, it is so great to hear that you are getting serious about investing. One piece of advice might be to talk with a fee-only fiduciary financial advisor who can help you craft an investing plan that meets your money goals.
Liz Weston: And here at NerdWallet as employees, we actually have access to financial planners. So that's the first place that I would check is to see if your employer offers this as a perk. But there are a lot of other ways to find good fee-only fiduciary financial help if you're looking.
Sean Pyles: OK, and here is the next rose, thorn and bud from our listener, Danielle. Here it is.
Listener 4: Hi, my name is Danielle. I'm in my 50s, and in my 20s, I started saving for retirement. But what that meant is that I just spent everything else because I thought, well, I'm saving for retirement, who cares? So my rose is that to share I really started working on having a budget so I could track my actual spending because I was never really growing my savings account because I like to pay my credit cards off every month. And so if I overspent, then it meant my saving accounts went down. But at the same time, it's also my thorn because I'm not as good. It hasn't become a habit just yet. And so I still sometimes overspend, and so my savings accounts haven't grown as much as they could, but I am more aware of my spending habits, and it makes me think sometimes before I decide to buy something or not.
And my bud is that I did create a separate emergency savings account, and that one I haven't dipped into because it's a separate account from my regular banking account. And it's actually been growing, so I like the fact that my emergency fund is growing. So that is my rose, thorn and bud. Thank you, and have a good day.
Sean Pyles: Thank you, Danielle. I think your experience highlights the usefulness and importance of the savings bucket strategy that Liz and I talk about so much where you have specific purposes for different savings accounts, because if you have one that is your emergency savings, just psychologically there's a barrier where you're less likely to withdraw money from that because you know it's only for an emergency. I would say maybe you set up a couple other accounts like that if she's interested in doing that because then you're more likely to say, "OK, this is my going-out-to-eat money or this is my shopping money for clothes." And then if she does end up spending more on her credit card, she can pull it from those specific savings accounts versus her general savings account.
Liz Weston: Yes. A lot of people get discouraged when they don't hit their savings goals or they have an emergency expense that wipes out what they've saved, but that's just part of the journey. What matters most is building the habit of saving.
Sean Pyles: Right. And also, congratulations, Danielle, for saving for retirement for around 30 years. I bet you are seeing a pretty nice balance in that account despite all that we've seen in the stock market this past year, so that's something to really be proud of.
Liz Weston: Yes, absolutely.
Sean Pyles: All right. And now the next rose, thorn and bud comes from NerdWallet investing writer Andy Rosen, who has been on the podcast before. Let's hear what he has to say.
Listener 5: This is Andy Rosen, investing writer at NerdWallet. My financial rose this year is that my son is old enough now to be in public school full time, which means we have a lot more money to spend that we're not spending on child care anymore. The thorn is the other side of the same coin, and it is a personal thorn in that my babies are growing up. And my bud for next year is that at least financially, we were able to put some money aside and take advantage of the declining values of stocks and other investments as the bear market took hold. So hopefully if things recover, we'll benefit from that in the next few years.
Liz Weston: All right, Andy. And I can say it's not if things will recover, it's when, so it just takes time. The market always bounces back. But to Andy's point, child care can be so incredibly expensive, and guess what? So is college. So maybe tossing a few of those newly freed-up dollars into a 529 college savings plan could really help pay for that expense that's going to come up even sooner than you think.
Sean Pyles: Yeah, I echo your point, Liz, around investing in the past year because it can feel frustrating sometimes when you are putting money every single month into your 401(k) or other investing accounts, and the stock market isn't performing quite how you would hope it would, but you're right, it is a matter of when the stock market recovers. And then, once that happens, you actually will realize you've had many buds growing at once and you'll have perhaps a beautiful bouquet of money-yielding flowers for you to harvest at some point. I'm stretching this metaphor as far as I can go.
Liz Weston: It's going to snap any second now.
Sean Pyles: Yeah. OK, well now let's get to the next rose, thorn and bud from NerdWallet editor Karen Gaudette Brewer.
Liz Weston: And for her bud, she wrote, "This is the first year that I maxed out every retirement savings plan available to me. That includes 401(k), health savings account and a traditional IRA. The thorn is that I want to replace our aging minivan, but auto loan rates are rising and selection is still very limited due to the supply chain hangover. Finally, the bud. Looking forward to researching solar panels for our home as a way to ease pressure on the electric grid, help the environment and not lose our entire chest freezer full of food whenever we randomly lose power."
Sean Pyles: Karen, congratulations on maxing out not just one, but multiple retirement savings accounts. That's a great achievement. And thorn-wise, I'll say I can really relate to that. I've been having some car trouble myself recently, and I've been looking into cars and the market is not great, especially when you're looking at getting an auto loan. The rates have gone up in tandem with the Federal Reserve raising interest rates, and it's a lot more expensive to get a car loan than it was 12 months ago.
Liz Weston: Yeah, we keep saying if you possibly can wait, try to, but sometimes you just have to replace those cars. I will say we put solar panels on our house a few years ago, and I am so glad we did, but I learned that getting off the grid is a whole different thing. That requires batteries that are still pretty expensive. In our case, it's nearly $30,000. So, yeah, we're hoping to see those prices come down so that if the grid goes down, you can preserve your chest freezer full of food. But otherwise, you are still going to be subject to blackouts and brownouts, unfortunately.
Sean Pyles: I imagine it would take a while for freezers full of food lost to have the breakeven point of $30,000.
Liz Weston: Yeah. But hopefully the battery prices will come down so it'll be more cost-effective for most people.
Sean Pyles: That'd be nice. And now let's get to our next rose, thorn and bud, which comes from investing Nerd Alana Benson, who's also been on Smart Money many times before. Here we go.
Listener 6: Hi, Sean and Liz, this is your fellow Nerd, Alana Benson. I just wanted to share my rose, thorn and bud with you all. So my rose is something that I've talked about on the podcast already, maxing out my Roth IRA this year. It was the first year that I was able to do this, and I was just generally more on target with my saving and investing goals, which was really great. My thorn, unfortunately, was not being able to put as much into my emergency fund as I would've liked, but to me, putting that money into my Roth felt really important. My bud for entering the new year is to just get more on track and be generally more on track with my money, and I have a lot of hope for this this year.
I have that money for my Roth IRA saved, so that makes me feel like I'm a little bit ahead. I can drop the max amount into my Roth for 2023 on January 1st, 2023. I am all ready to do that, and then that way I can spend the rest of the year focusing on saving up for 2024 and focusing on other goals like my emergency fund and saving for vacations. So that's my rose, thorn and bud. Thank you so much, and I'll talk to you guys soon. Bye.
Liz Weston: Congratulations, Alana. I think funding your Roth is such a smart move. You don't get a tax break when you put the money in, but when you make withdrawals in retirement, that money is tax-free, and that is absolutely huge. You do hear people say that you should fully fund your emergency savings before you max out on retirement, but it can take people years to build up the recommended three to six months’ worth of expenses in an emergency fund. And in my view, that's way too long to pass up the opportunity to save in a Roth if you have access to one. So the good news is that if you do fund a Roth and you later need the money in an emergency, you can withdraw the amount you contributed at any time without taxes or penalties.
Sean Pyles: I think multitasking on big goals like saving for retirement and building up an emergency fund is the way to go for a lot of people, so you're making steady progress on multiple fronts at once. And whether you prioritize retirement or emergency savings, that can be a personal choice for some people, although retirement savings are likely to have the best ROI over the long term. So thank you so much for sharing, Alana. OK. And finally, we have a listener who did not share a rose, thorn and bud but something else about how the podcast has helped them, and I really wanted to share that with our other listeners, too, so let's hear what they had to say.
Listener 7: Hi, I'm just reporting that NerdWallet has really helped me out to make some good money choices and changes. I got into my first car lease about four months ago, and it started off really rough, but I started listening to the podcast, and I downloaded the NerdWallet app, and that app really allowed me to see where my money was going. And it turns out a lot of it was going to dates and eating out, but now I'm able to budget — means I can make my payments, and I'm living in a more minimalist lifestyle. And I'm actually happier because my stress is significantly lower. So, yeah, I just wanted to thank y'all and, yeah, y'all are amazing.
Sean Pyles: That is so sweet. Thank you for sharing those kind words and your experience about how you've been able to improve your finances. It's incredible how once you really get into understanding the best way to maybe cut some expenses and save more money, you can feel so much more confident with the way that you're managing your money and the stress of not having enough can really be mitigated. Also, I'll say I keenly remember the day in my mid-20s when I looked at my budget and I realized the terrifying amount of money that I was spending on eating out and on dates. And like this listener, having a wake-up call about how I was spending my money really helped me find easy ways to rework my spending habits and begin to actually save money.
Liz Weston: And we just love hearing about how Smart Money has helped people, so thank you for taking the time to send this to us.
Sean Pyles: Yeah, it's the reason we do what we do.
Liz Weston: Amen.
Sean Pyles: And now the time has come, Liz. It's time for us to share our rose, thorns and buds.
Liz Weston: All right, you first.
Sean Pyles: OK. So first, my rose is that I had some really truly wonderful trips with my loved ones this year. And even better, I saved up for them beforehand and earned a lot of credit card points while on my trips, so I was able to come out ahead financially while making some of those wonderful memories.
Liz Weston: Nice.
Sean Pyles: Yeah, it was great. My thorn is that, as I mentioned before, I've been having some ongoing issues with my car, and unfortunately, I think I might have to replace it, and that hurts. I'm hoping that I can use the trade-in value to put toward a down payment on a new car. If this does end up happening, I don't have to spend too much of my own cash. But yeah, it's not great to experience that. And then my bud is that I am putting together the pieces to finally make my financial team next year, which would be having a CFP and a CPA to help me manage my finances. I'm excited to see how that changes the way I manage my money, and I'm excited to really just up-level my financial management strategy.
Liz Weston: Oh, congratulations on that. That is great news.
Sean Pyles: Thank you. You've been telling me to do this for too long now. I've been procrastinating, and I'm actually doing it. I have appointments on the calendar, and I'm so excited.
Liz Weston: Oh, that is so great. DIY can take you only so far, and having people to ask questions of and help guide you can be so, so helpful. So really happy for you.
Sean Pyles: Thank you. It's like I feel like I hit a ceiling. I know how to manage my money pretty well. I've been working at NerdWallet for a while now, but I think I just want someone else to look at what I've been doing almost for a gut check and make sure that I'm set up to build wealth over the rest of my life.
Liz Weston: Yes, absolutely.
Sean Pyles: Well, Liz, it is time for your rose, thorn and bud.
Liz Weston: Well, for my rose, like you, I did a lot of travel this year, but mostly I used the points, the miles and the free hotel nights that built up during the pandemic lockdowns. So a lot of this was free, which felt really good.
Sean Pyles: Yeah, that's sweet.
Liz Weston: The thorn is that we had a few major credit card compromises that were a serious hassle to resolve. I learned some tips about preventing and resolving credit card fraud that I'll be sharing in an upcoming column, but I just wish it hadn't happened. And finally, the bud is more travel. I will be stepping away from the podcast for a couple of months, starting in February, while my husband teaches in Paris. So I'm looking forward to revisiting some of our favorite places there and taking a lot of weekend trips to visit the surrounding area.
Sean Pyles: We're going to miss you, but also we're going to be really happy and jealously watching from afar as you gallivant around Europe.
Liz Weston: Thank you.
Sean Pyles: OK. Well, that is all we have for this episode. To send the Nerds your money questions to be answered in the new year, 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 [email protected] Visit nerdwallet.com/podcast for more info on this episode, and remember to follow, rate and review us wherever you're getting this podcast.
Liz Weston: 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.
Sean Pyles: And with that said, until next time, turn to the Nerds.