NerdWallet's Smart Money Podcast - What We Learned About Our Money in 2022

Episode Date: December 19, 2022

A lot can happen to your finances in a year. Raises, curveball expenses, luxurious vacations. Each step along your money journey in 2022 has its own lesson. And in this episode, Sean Pyles and Liz Weston look back at the year that was and celebrate what our listeners did with their money during the year — and what they’re most excited about in 2023.  To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [e-mail]. Like what you hear? Please leave us a review and tell a friend.

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 Piles. 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 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, 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.

We got some great submissions from you, our dear listeners, as well as from our fellow nerds. But before we get into our rose, thorn, and Bud submissions, I have one quick call out. 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 podcast at nerdballot.com 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. 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 the year. My Rose is that I graduated with my PhD 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 coping and trying to travel smartly using points and miles to get back to Jada. And my bud is that I'm really excited to finally be on solid financial footing. And I'm planning to max out my 401k, HSA and Roth IRA, and money in the industry. Thank you so much for your podcast. I love you. I've learned so much. 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 kind of 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. That's so true. 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. 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 know, you're used to it. It shouldn't be that big a deal. 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, Sherry Gordon. She actually helps us a lot on the podcast. So Sherry, thank you for all that

you've done this year. Let's hear what she has to say. Hi, Sean and Liz. This is content nerd Sherry 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 401k. 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 401k and not to take it out. So I'm excited to see where that goes for him. Thanks. Bye. There is so much great stuff here, Sherry. 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'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 and attorney to help with this. So again, kudos for doing that. Yeah. What I'm hearing in Sherry'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 like long-term engaged is what I call it. We're going on almost three years of being engaged, but we have our power of attorney 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. 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 the stuff is dealing with your stuff after death. So if nothing else, you want to get those powers of attorney squared away.

Absolutely. All right. Now let's hear the next rose, thorn and bud. Hi, nerds. It's Courtney here. And I wanted 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. 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 will do every nerdy thing you can to make it easier to manage the expense. 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. Okay, 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 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. 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. 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. 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. Okay, and here is the next rose, thorn, and bud from our listener, Danielle.

Here it is. 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. 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 this year 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 savings accounts went down but on 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 FUD 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.

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 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 set up a couple other accounts like that if she's interested in doing that, because then you're more likely to say, okay, 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. 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. 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. Yes, absolutely. 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. 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. 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 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. Yeah. I'll 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 401k 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 moneyielding flowers for you to harvest at some point. I'm stretching this metaphor as far as I can go.

It's going to snap any second now. Yeah. Okay, well, now let's get to the next rose thorn and bud from NerdWallet editor Karen Gaudette Brewer. And for her bud, she wrote, this is the first year that I maxed out every retirement savings plan available to me. That includes 401k, 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. 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.

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're still going to be subject to blackouts and brownouts, unfortunately. I imagine it would take a while for freezers full of food loss to have the break-even point of $30,000.

Yeah, yeah. But hopefully the battery prices will come down. So it'll be more cost effective for most people. That'd be nice. Okay, and now let's get to our next rose, thorn and bud, which comes from investing nerd Alana Benson, who's also been on 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 have 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 of 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. 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 you make withdraw 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. 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 a lot. Okay, 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. 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. 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. And we just love hearing about how smart money has helped people. So thank you for taking the time to send this to us.

Yeah, it's the reason we do what we do. Amen. And now the time has come, Liz. It's time for us to share our rose, thorns, and buds. All right, you first. Okay. 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 kind of come out ahead financially while making some of those wonderful memories. Nice. 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 like up level my financial management strategy. Oh, congratulations on that. That is great news. 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. Oh, that is so great. You know, 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.

Thank you. I feel like I kind of hit a ceiling. Like I know how to manage my money pretty well. I've been working under Wallet 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. Yes, absolutely. Well, Liz, it is time for your rose, thorn, and bud. 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 lockdown. So a lot of this was free, which felt really good. Yeah, that's sweet. 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.

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. Thank you. Okay. 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 podcast at nerdwallet.com. Visit nerdwallet.com slash podcast for more info on this episode. And remember to follow, rate, and review us wherever you're getting this podcast. 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. And with that said, until next time, turn to the nerds.