NerdWallet's Smart Money Podcast - Student Debt Cancellation News, and Money 101

Episode Date: September 12, 2022

The dust is settling after President Biden announced his student debt cancellation and repayment plan. But there are still a number of unknowns. This episode, Sean, Liz and Sara talk about the latest debt cancellation news, including new scams that are popping up.  Then they answer a listener’s question about the best way to set up their finances for long-term success. At the end of the episode, they give their tips for the best investments you can make in yourself.  To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [e-mail].

So you want to get your financial house in order, but you don't know where to start. While we are here to help, this episode we are talking about Personal Finance 101. Welcome to the NerdWallet Smart Money Podcast, a show where you send us your money questions and we answer them with the help of our brilliant nerds. I'm Sean Piles. And I'm Liz Weston. If you have a money question for the nerds, leave us a voicemail or text us on the nerd hotline at 901-730-6373. That's 901-730-NERD.

You can also send your voice memos to podcast at nerdwallet.com. 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, Sean and I are joined by our occasional Smart Money co-host, Sarah Rathner. We're going to give you an update on what's happening with student debt cancellation and then answer a listener's money question about how to set up their finances. Hey, Sarah. Hey, Sean and Liz. Great to be back. Welcome back as always, Sarah. So let's start by giving folks a quick reminder about what the Biden administration announced around student debt cancellation and repayment. So I can do a quick rundown of cancellation first. For those who meet the income

requirement, $10,000 in federal student loan debt will be canceled. And that number goes up to $20,000 for those who received Pell Grants. And one quick note about the income requirement. This cancellation is for individuals who earned less than $125,000 and married couples filing jointly who made less than $250,000 in the previous tax year. And this applies to federal loans for undergraduate and graduate education. This does not apply to private loans. It also applies to parent plus loans, by the way. Oh, that's true. Fun fact. So parents who've taken out loans for their kids, you could also be potentially eligible as well. Well, that is

absolutely good news. So can you give us some information about how to go about getting this debt canceled? Yeah. So right now, bits of information about this are starting to trickle in, but there's still a lot that we don't know. If the Department of Education has your income information, which they likely would if you are on some sort of income-driven repayment plan, then you could be eligible for cancellation automatically. This applies to around 8 million borrowers, I believe. But the vast majority of federal student loan borrowers will have to fill out an application,

which should be available in early October. So plan ahead if you aren't sure about your loan balance, whether you received Pell Grants in college. You can check all of this on the National Student Loan Data System or Federal Aid website using your FSA ID. And I'll chime in here with my experience as someone who's also trying to navigate this right now. I was not sure of what my student loan balance was or even whether I received Pell grants. So I logged into these websites, or I tried to rather, and I will say that the student aid website, which you can access by going to studentaid.gov, was much faster and easier to navigate than the national student loan data system, which didn't even load for me.

And I even had to reset my credentials because it had been years since I logged in and was able to access my account within five minutes. So it's pretty straightforward and easy to use and surprisingly well laid out for a government website. So Sarah, can you talk a little bit about who's really going to benefit from this cancellation? So 43 million Americans roughly have federal student loan debt. So that is the cohort of people who will benefit at least in some way from this loan forgiveness. If you have private student loans, those are not part of this program. For about 20 million of the $43 million, so nearly half, this will completely erase their student loan debt. That means that

they have $10,000 or less, or if they were eligible for Pell Grants, then they had $20,000 or less of debt, and the forgiveness would wipe it out completely, and they can move about their life debt-free, at least student loan-free, and proceed accordingly, which is really great. And then the other 23 million Americans who have federal student loan debts will see their debts partially wiped out. So obviously this is especially beneficial for low-income borrowers who qualified for Pell Grants because they tend to have more student debt. And that flies in the face of the idea that this is just benefiting upper income people. It's benefiting people who in some cases didn't complete college. They took out loans for the

courses that they did take, but they left college without a degree. So not only do they not have the career lifting benefit, the income earning benefit of a degree, but they are left with the debt from the course load they did take, that can leave some people in a pretty tough position, unfortunately. And that is the case for many people. And it's also the case for a lot of people. They have a degree, they went into career fields that don't pay a ton of money. And so it has been a challenge for them to be able to afford student loan payments and afford other financial obligations in their lives. I've also read that this could help close the racial wealth gap. That is true. Black borrowers owe $7,400 more than white borrowers on average. That's according to the Brookings Institution.

Interesting. Okay. Well, let's talk a little bit about repayment. The Biden administration extended the pause on federal student loan repayment through December 31st of this year. But there are also some changes to how income driven repayment plans work. Sarah, can you talk about what's going on there? bit too many to sort through in this one conversation, but the main takeaway is that all enrollees in income-driven repayment plans will pay less, especially those who have undergraduate debt, because beforehand, borrowers on income-driven repayment plans for undergraduate loans were required to pay 10% of their discretionary income toward their student loans. Now that's going down to 5%, so half as much. And there were also changes to how discretionary income is going to be calculated. So here's an example. So let's say there's a family with $75,000 in household income, and the difference in monthly payments before it was $278. Now it'll be $52. Wow. Huge change. That is a huge change when you've got

other bills to pay. And so that could be on top of some debt cancellation. And in conjunction with income-driven repayment plan changes, this could be very transformative to a lot of households' finances overall. Absolutely. Yes. Because student loan debt is something that has held a lot of people back, especially younger generations. People have delayed other life goals because they have this debt on their backs. And maybe this could free more people up to do the other things that they've been wanting to do. And get that money circulating in the economy. That is also a society-wide benefit of all of this. And you want more people buying houses. You want people having children, spending money. That is helpful to everyone. You want more people to feel empowered to enter into career fields that are not high paying, but are very important, like teaching, for example. There's still some open questions about how this is all going to work. One of the big ones is how long will it

take for people to get their debt canceled? That was my first question when I heard about this cancellation news. And a representative from the White House National Economic Council said that debt cancellation could happen within four to six weeks after folks submit their application. So if you submit the application in early October, when it's supposed to be available for folks, you could potentially have your debt canceled before Thanksgiving, which would certainly be something to be thankful for. But the White House is saying that folks should apply by November 15th to get cancellation before payments are scheduled to resume at the end of this year going into next year. All right. One last thing I want to talk about are scams, because the day after Biden announced this news,

I received a call from one of those spam likely numbers. And I get these multiple times a week. And as usual, I didn't answer it. But this number, this mysterious caller left me a voicemail saying that they were my student loan servicer, and they wanted to confirm my eligibility for debt cancellation. They gave me a phone number to call back in the voicemail. So I thought, I have time today. Let me see what's going on here. I called them back and they tried to get a lot of information from me. And when I asked a few questions about who they were really within my servicers company and what they were going to do with my info, they hung up on me. So I can't say for certain that they were scammers, but it seems very likely as my phone even told me scam likely. So it's almost guaranteed that there are going to be more scams

popping up around debt forgiveness. So be wary of calls, texts, emails from folks who ask for your sensitive information or ask for money to do things that you can do for free yourself, like apply for this debt cancellation. Yes. If you get any weird calls, any weird emails, don't answer the phone, screen your calls for one thing, let it go to voicemail. This is a tried and true tactic for not talking to people you don't want to talk to. It's been going on for generations. Keep doing it. Yes. You know, it's from the days of answering machines. Yes. And so let them leave the voicemail, let them leave their number, and then go to your loan service provider's website.

You might have more than one loan service provider and find out what their real contact information is. You might be able to see this on a recent student loan statement, for example, and the numbers might not match up. And if that's the case, then you'll want to call the real company and let them know that you've been receiving these scam calls. You can also report scams to the Federal Trade Commission if you wanted to take that extra step. But really just be careful. Scammers are going to take advantage of any instance they can where people are in some sort

of vulnerable financial state, especially since there still isn't a lot of information about how exactly this is going to be rolled out. And Sarah, that's excellent information and excellent advice. People can do this themselves. They don't need somebody else to help them typically. But there are those of us, including Sean, who like to play with these jerks. Returning the phone call,

keeping them on the line for as long as possible, that costs them money and I'm happy to do that. Yeah, hopefully that means that they are able to call fewer people and try to scam them out of their money. Yeah. I mean, it's not overall, it's not gonna stop scams from happening,

but whatever feels good, right? Exactly. My small blow. Okay, great. Well, I think that about covers student debt relief news for now. Listeners, we will keep you updated as the story develops. But if you have any questions for us about this topic, call or text us on the nerd hotline at 901-730-6373. That's 901-730-NERD or email us at podcast at nerdballot.com. And now let's move on to our money question segment. All right, this episode's money question comes from a listener's email.

Here it is. Hello, nerds. I was hoping that you could do an episode that is like a finance 101. I turned 18 just a few months ago and am now largely financially self-reliant and almost entirely responsible for myself and my own affairs. Now that I am in control of my own finances, I want to make smart decisions and start thinking ahead. But I don't even know where to start. I opened a secured credit card last month at the suggestion of a money smart friend so I could start establishing credit. Right now, I only charge my cell service bill to that card and pay for all other expenses with my debit card. What other things should I be thinking about? A bit more about my specific circumstance that might be helpful. My mother

died in 2020, so I'm currently receiving survivor's benefits from the Social Security Administration. I'm over 18 but will be in high school until May 2023. I also have some money saved up from summer jobs over the last five years. I have both the checking and savings account and try to put most of the social security money into the savings account. In the future, I would like to be able to afford college, be able to live independently and travel. It is important to me to live within my means because this is something that my parents did not really do, which created a lot of unnecessary stress. Oh boy, I really feel for this listener and all that they have gone through, but I'm proud of them for taking a proactive approach to doing what they need to to get their finances in order at a very young age, honestly. So let's talk about a few different areas where folks can begin to put their financial lives together. One that they pointed out in their question is the less likely to own a home, which involves maintenance costs, you're probably statistically less likely to have

had children yet, although some people have children quite young. And other things that happen, your health issues, things like that, that start to happen as you get older, that are recurring costs, the recurring costs of being on prescription medication, the recurring costs of keeping your home in good working order, the recurring costs of maintaining your car. Life just gets more complicated. So if you can get into the habit of living below your means when you're younger and your finances are simpler and easier to manage, you can keep that habit going as you add complexity to your life. So I really love that this listener is thinking about this stuff now. I think they're off to a great start, honestly. And we've talked in the past about lifestyle inflation. As you

earn more money, you seem to accumulate more expenses. So the idea that you'll be able to save more later when you're making more money doesn't work that way. So it's really important to get in that habit of what they call paying yourself first, putting aside money right off the top. Every dollar that comes in, you tuck a little bit of that aside for a rainy day, for retirement, for other things that you're saving. I think it can be really helpful whenever our listener gets a paycheck. It sounds like they're kind of doing this already with their social security money, putting that directly into a savings account, whether they

can automate direct deposit into a savings account or just have an automated transfer so that if they know they're getting paid on the 1st and the 15th, for example, they have a setup auto deposit from their standard checking account into their savings account that happens those days of the month, every time they don't have to think about it, but the money is being put away into that pot of savings. And I just wanted to add, if people aren't familiar with social security, survivor's benefits are a huge, huge deal. And there are millions of children that are getting these payments, but they do typically end when somebody turns 18, or as in the case of our questioners situation, you can continue receiving these benefits as long as you're still in high

school. But once you either graduate or turn 19, the money stops. It's not that long from now that they're not going to receive that money anymore. So it is important to plan ahead for what happens when you don't get that money anymore. And how do you afford your expenses when that's no longer a source of income for you? Well, speaking of understanding your money and where it's going, we should talk about budgeting a little bit and understanding needs versus wants, because this is an area that can be a little bit intimidating. And I think folks, when they think about a budget, they might think, okay, this is something that I'm going to do one time, I'm going to see how much money I have coming in what my expenses are. And then I'm going to continue to manage my money according

to this in perpetuity, when in reality, a budget is a living document, and it's going to change depending on their circumstances. Like if our listener goes off to college and gets a job, that's going to be a totally different financial situation. And they're going to have to understand how they can afford food on their own or any potential rent or whatever expenses they may have associated with college. It is helpful to think about needs versus wants when you're budgeting. Like you need food. It doesn't need to be filet mignon. But you do need to eat to live. So please do that. But it doesn't need to be ramen every single time, which can be tempting in college when you're pretty broke. I think my brother went to college with somebody

who tried to live on only ramen for several months and he got scurvy. So don't do that. At least put an egg in it. Yeah, yeah. You need vitamin C, guys. So thinking about needs versus wants, but also building your budget in such a way

that there is room for some wants. You don't want to deprive yourself 100% because you're just not going to stick to the budget. We are not want to deprive yourself 100% because you're just not going to stick to the budget. We are not built to deprive ourselves for very long and remain relatively happy. So it is important to have some money set aside for the listener mentioned travel as a goal, you don't have to wait until you're 40 to start traveling, maybe they want to start traveling younger. And so saving up for, you know, once a year trip, or, you know, just the ability to go out with your friends and have fun and get dinner with them once in a while. It's okay to do those things, even when you're trying to save aggressively for a specific goal. hostels. I did not care. I could take public transportation everywhere. I could squish myself in a coach seat for an international trip. I don't do any of those things anymore. You get

older and stiffer and yeah, it gets more expensive to travel. So absolutely, if travel is a desire, you can do it a lot more cheaply when you're young. So totally endorse that. I think the needs versus wants thing is really important to get stuck in your brain because we often say things like, well, I need this, I need that. And we don't think about alternatives. Maybe you do need a car. If you're in an area where there isn't good public transportation, it doesn't mean that has to be a new car. It can be a good used car. So the way we think about what we need and want is really important. Right. And a need doesn't have to be a physical item. You could say I need to

hang out with my friends. That's a need that we all have. We all are social creatures. What you don't need to do is run up a $75 bar tab every time you hang out with your friends. One thing we should also talk about is the idea of good debt versus bad debt. Our listener mentioned that they are probably going off to college, and that can often require you to take out some student loans, which we like to think about as a good debt within reason because it helps you increase your wealth or income over the long term. Whereas bad debt, on the other hand, if you are in college, it might be a little tempting to maybe use that secured credit card for something beyond your cell phone bill, and buy something that you perhaps don't need. And if you don't pay off that balance each month,

that can begin to erode your wealth over time. Yes, I don't like to think of debt as good and bad and the way that you might think of people as good and bad. It's really depends on how you use it. And that's what makes credit card debt so dangerous really is because you can continue to run up more debt while you still have the debt and they charge really high interest rates versus a student loan that typically charges lower interest rates. And it's a set amount of money that you borrow and you pay it off over time until it's done. You can't add to it necessarily unless you like go back to school. But it is important to think about the cost of your education. And I mean, my alma mater now costs $80,000 a year.

Yeah, I know. It didn't cost that much when I went. I won't tell you when that was. But college is very expensive right now. So it could be worth exploring all the different ways you can attain higher education, not just through finding any scholarship you possibly can, staying in state, maybe considering getting an associate's first before getting a bachelor's degree. There are so many different ways to go about completing your education. It doesn't have to be a straight line. And take advantage of all the financial assistance you can get, in addition to having to borrow money. Yeah, scholarships are your friend, even though they do take some work to try to get.

The one thing about scholarships is that they don't supplement need-based aid, typically. They're basically deducted from the need-based aid. So yeah, that's something a lot of people don't know. In the college situation, finding a school that's very generous is going to be important. The school that meets most or all of your financial need will be helpful. But I wanted to back up a little bit and talk more about the good debt versus bad debt, because some people think all debt is bad. And as you said, Sean, some debt is necessary. If our listener wants to get an education, it's going to be really hard to do that without at least some student loans.

So being anti-debt means you might not get an education at all, which means you give up a million dollars or more of earning power. So that's something to keep in mind while they're going through this process of trying to figure out how to get an education is the goal is worth it. It's just might take some doing. It comes down to what that debt will get you in the future. And so things that you need like a home or an education, obviously, I mean, I know people say like cars are depreciating assets, but the reality is who has $40,000 cash to buy a car right now,

and transportation is necessary to get to work. And in a lot of the United States, public transit is not an option. It's balancing the reality of life with this ideal that debt is bad. And if you stay out of debt, you're somehow this like righteous person. You're not most people at one point or another will end up in debt in their life. That's just reality. It's a matter of how thoughtfully you take on that debt and how thoughtfully you make a plan for getting out of it eventually and how you balance that debt with everything else that's going on in your life. I don't know if this helps anyone, but economists often think about smoothing consumption over your lifetime. And it's pretty much expected that when you're young, you will be in debt because you need

to borrow to get an education and borrow to get a home. And then in your middle years, you start paying back that debt. And in your older years, you're drawing down on your savings. So it's an actual economic cycle. So you don't need to feel bad if you are young and in debt. Yeah. You're in good company. Yes. Another thing I wanted to talk

about that our listener didn't really mention in their question is the topic of investing. And of course, quick caveat that we are not investment advisors, we're not going to tell you what to do with your money. But it's something that folks should be thinking about their investment plan and how they are strategizing to build their wealth over time. And one of the key concepts here is risk versus return. So does either of you want to give us a quick explainer of what this idea is? I wanted to talk. Take it away, other person. I will jump in because this is something that I've been dealing with recently. Because people

are getting so freaked out about inflation. And they're realizing that even though they might be getting a little bit more in their savings account, it's not nearly keeping up with how fast prices are rising. So it's just a way to say, yeah, inflation's a deal. And if you want to outpace inflation, the way to do that is by investing in typically in a diversified mix of stocks, because stocks have a good track record of beating inflation over time. But it can't be with your short term money, you need to be able to put the money in the market and leave it alone. So risk versus reward is really important to understand they are always connected, you can never find a high safe return.

We get asked about that all the time. Those two things don't go together. Yeah. Well, there's something to be said about how actually not investing isn't really a safe thing to do with your money because of the loss of spending power over time. That's exactly right. I've noticed to an extent some generational trauma when it comes to being willing to invest or not. I know for millennials who were early in their careers, or still in school during the Great Recession 2009. A lot of people I know tend to hold on to more cash, because they're afraid because the market dropped a lot. And maybe they got laid off, or were having trouble even finding their first job. And so even into their 30s, there was this

tendency to hold on to a lot of cash and in a checking or savings account and be a lot more conservative when it comes to investing, if they even invest at all. And I worry a little for the Gen Zs, because I think they're coming of age in another economically tumultuous time. And there could be that similar mindset of I want my money where I can see it. Yeah. But sometimes having the money where you can see it is in an investing app on your phone that is heavily gamified. Yes, I like that. Which kind of takes the seriousness out of the investing prospect, which is a good and a bad thing in a way. Because if folks aren't thinking about what it means to be invested for the long

term, when the stock market dips, it can be tempting to want to pull it out because you put it in just as easily as you're Venmoing a friend. And then once you see it begin to appreciate value, people can get a little bit scared, and then sell that stock potentially, and then now they have a tax bill. So things can get pretty complicated with that. Yeah, I mean, you mentioned the gamification of investing with these apps. I don't love that, because I think it makes people make decisions about their investing that don't have anything to do with the investments they've made. And it investing that don't have anything to do with the investments they've made. And it's more about I just need to do something I need to take action,

the app has pinged me, I heard a beep, I have to do something. It's not a great way to manage response. Yeah, have low V in response. It's not a good way to manage most things in your life. So yeah, especially not your money. But we did talk about automating savings a little bit earlier. And you can also automate investing. And so that's something to think about as a listener finishes school and begins working. Maybe they'll have access to a retirement account through their employer, like a 401k. And they can automate some portion of their paycheck into that account to be invested for retirement. And then you can also automate money from your checking account into a brokerage account if you want to invest for other purposes. And that is another way to grow your nest egg potentially, without really

thinking too much about it. It doesn't take more than a few minutes to set these automatic transfers up. And then you can just let them happen in the background while you live your life. Well, one thing that's so great about our listener is that they are so young that they have many years ahead of them to invest and take advantage of something called compound interest. And I think it also would be beneficial for our listener to look into a Roth IRA. That way they wouldn't have to be dependent upon an employer to provide a retirement account for them. As you're investing automatically and over time, you might not see big results at first. It just seems like you're just plodding along, but it's really toward retirement age when things really take off and your returns are earning returns and really see the buildup of your account. So

if anybody's in their teens or 20s or 30s and is like, well, where are those riches that I was promised? Hang on there, they will get there. And the way that I like to describe the miracle of compounding is to do a kind of simple but silly example. And it's take one penny and Sean,

I'm gonna double that penny for you every day for a month. So after the first day, it's going to be two cents and then two cents will be four cents. How much do you think though that will be in your account at the end of the month? I'm guessing more than a dollar. 10 million, 10 million bucks. So take a spreadsheet and do the math and set it up. So it will double every day and you'll see at 31 days you have 10 million dollars so thank you for that 10 million you're quite welcome you know i know i wanted to give you something for all the hard work that you do she's just given him 10 million dollars you heard it here first we got pledged one penny doubled every day to sean

we're gonna hold you to that okay and then suddenly Sean retires with like no notice. Yeah, right guys. It's been real, but I'm out of here. So obviously no investment is going to double your return every day, but it's just an illustration of how the big growth comes at the end. Yeah. Speaking of investing though, let's talk about this idea of investing in yourself. And we talked a little bit about going to college.

That is one big investment in yourself, basically making it so that you are in a better position to earn more money throughout your life. We always talk about cutting expenses, cutting out the things you don't need, cutting the streaming services and the dinners out and the avocado toast and all the other stuff that's apparently keeping you from buying a house one day,

which is not true. And the ability to be able to cut your budget to the bone is absolutely a skill set that will help you in life when things go belly up. But you can only budget so much. A big part of the piece of the puzzle is also increasing your income more and more as your career progresses. And that is going to help you propel into this phase of life where you can have a little bit of lifestyle inflation, where you can accomplish the goals that you want to accomplish, where you can set money aside into investment accounts and let your savings and investments grow over time. So you really want to think about as you pick your college major, maybe, or you're weighing

an internship offer or thinking about what sort of field you might want to enter. It is important to think about the earning potential. And also important to think about what sorts of skills are you learning that can translate into different kinds of careers that you can have with the same degree. I have a journalism degree. I mean, this is the first job I've had where I'm literally using the journalism degree. And I started this job at 35. That's actually a really good point about how it can take a while to get to the point where you are earning the money that you think you deserve to earn. And I ran into this issue in my early 20s,

where a lot of my friends were making progress in their careers. And I just wasn't at the rate that I had expected. And it was really hard to get past that and to think, why am I still folding shirts a gap when I have this degree, I have a great skill set. And I know I can do more. But it takes a while to meet the right people that can line up the right job for you or to find the right job hosting on the internet and just get something that is right for you. But there's no one set timeframe that everyone's going to be on. It is very individualized. And that can be hard to work through. But also just trust that if you keep putting in the work, something will pan out eventually. Yeah, that's a big adjustment to adulthood. Because when you're in school,

you're sort of at the same level as your peers in terms of where you are in life and how much you've accomplished. And then you get out of college, and you just head in all these different directions. And suddenly, you might be the same age as somebody, but you are in totally different places. And that's okay. I mean, even if you're not necessarily happy where you are, another person's happiness is not being performed at you. It's not taking away from your possible happiness. So don't think of it as this set of like finite success in the world. You will find your way. It just, you know, it's going to take some twists and turns. And some of them might lead to some pretty interesting places. So be open to that. Yeah. And don't assume that you have to know or will know what your major should be when you start out. There's probably going to be some shuffling around and figuring things out. The best advice I ever heard was find out who the best professors are and take a class from them, whether or not you're interested in the topic. And you might be

surprised. Go to office hours. If there's a professor whose lecture really speaks to you. There was a professor who did a guest lecture in one of my classes in college. And I was like, this is what I want to do. So I found out what her office hours were. And I went and spoke to her. And she was such a tremendous connection for me through the rest of my college career in terms of connecting me to internship opportunities, paid internship opportunities, by the way, so I could afford to support myself for those summers, and also connecting me to alumni, and getting me involved in professional organizations where I got to meet other people in the industry. And literally, it was because I was brave enough to go to her office hours, because it can be really intimidating, especially as a freshman to talk to professors, but that's what they're there for. And they can become such an ally for you as you build your career. Excellent idea. Well, part of what you're talking about there as well as finding someone who you can trust to guide you through really uncertain waters. And when it comes to managing your money, there are lots of people that can

help you that are great trusted resources. And there are also a lot of people that are working hard to swindle you out of your money. So it's important to find trustworthy financial advice, because there's so much that you don't know that you don't know. And you might as well find folks that can help you navigate this because it can be pretty intimidating when you're first doing it. The listener mentioned a money smart friend who recommended getting a secured credit card, that money smart friend gave you some pretty good advice that is a way to begin to build credit when you don't have an established credit history. And so maybe that friend is good for some other advice, because it sounds like they were pretty helpful in this regard. Definitely, if you've got some savvy friends who have found success in some of the

things you would like to find success in, ask them how they did it, ask them what their process was. But also take friend and family advice with a grain of salt, because not everybody who loves you is good with money. So and they might have a bit of a bias, they're they're putting too much of their own lived experience onto your situation. So in instances like that, it is helpful to turn to unbiased sources, third party sources that can help educate you about how these different financial products work and how they could potentially fit into your own life. And some of those sources are the Consumer Financial Protection Bureau, they have some great consumer education on their site, the Jumpstart Coalition, that's is a big one for financial literacy for younger people.

And of course, our own dear nerd wallet, we have tons and tons of information for you here. All right. Well, Sarah, do you have any final thoughts for folks who are just beginning to get a grip on their money and want to make the most of it? Yeah, I would just say that the younger you can begin thinking about these things, and learning how to manage your money in a way that's sustainable for you, the more you can do with your life over time earlier than you might think. It seems really hard at first. And then one day, it's like the stars align and you have the money saved up for everything you need and much of what you want. And you don't have to stress about it so much. Great. Well, thank you so much for talking with us, Sarah.

Thank you for having me back. And with that, let's get on to our takeaway tips. I will start us off. First, pay yourself first. Success with money depends upon spending less than you earn. Budgeting and making savings automatic will help. Next, invest early and often. The more time your investments have to grow, the greater your wealth will be over time.

And finally, invest in yourself. An affordable college education can pay off many times over in higher income. And 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. Visit nerdwallet.com slash podcast for more information on this episode.

And remember to follow, rate, and review us wherever you're getting this podcast. And here is our brief disclaimer, thoughtfully crafted by NerdWallet's legal team. Your questions are answered by knowledgeable and talented finance writers, but we are not financial or investment advisors. And with that said, until next time, turn to the nerds.