How To Have a Better Relationship With Money and Maximize Every Dollar

Summary

NerdWallet's Smart Money Podcast
Episode Title: How To Have a Better Relationship With Money and Maximize Every Dollar
Release Date: April 14, 2025
Hosts: Sean Pyles, CFP® & Elizabeth Ayoola
Guest: Shauna Game, Host of "Everyone's Talking Money" Podcast & Author of Unraveling Your Relationship with Money

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Introduction: Understanding Our Financial Selves

The episode kicks off with Hosts Sean Pyles and Elizabeth Ayoola delving into the complexities of personal relationships with money. Sean reflects on his early financial decisions, admitting, “I'm sometimes left wondering what I was thinking or if I was thinking at all” (00:00). Elizabeth shares her own struggles, stating, “I was too ashamed to explore why I was spending money like it was printable” (00:10). This candid conversation sets the stage for the episode's exploration of financial self-awareness.

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Exploring Your Relationship with Money

Guest Introduction: Shauna Game
Sean introduces Shauna Game, the author of Unraveling Your Relationship with Money, who discusses the importance of dissecting one’s relationship with money to achieve financial goals.

Key Insights:

• Beyond the Numbers: Shauna emphasizes that money isn't just about math but encompasses emotions, behaviors, habits, and upbringing. She states, “It's about emotions and behaviors and habits and story and how we were raised” (01:44).

• Emotional Investment: Understanding one’s feelings towards money is crucial. Elizabeth describes her relationship with money as shifting from “toxic” to a “partnership” (00:51), illustrating personal progress.

• Inner and Outer Work: Shauna defines inner work as understanding one's money stories and beliefs formed in childhood, and outer work as practical financial actions. She explains, “If we were creating the equation for financial success, I would say the inner work comes first” (04:28).

• Somatic Awareness: Recognizing bodily reactions to financial situations helps uncover underlying beliefs. Shauna advises, “Is your heart racing? Are your palms getting sweaty?” (06:28) to identify stressors related to money.

Practical Exercise:

• Money Journaling: Shauna suggests writing letters to money to explore and confront feelings, whether positive or negative.

• Weekly Money Dates: Sean and Shauna advocate for setting aside 15 minutes weekly to review spending and align it with financial goals, promoting consistent financial awareness (11:14).

Notable Quotes:

• Shauna Game: “We live in this vacuum where we think that money is only about math. It is about so much more” (01:44).

• Elizabeth Ayoola: “Making subconscious behavior into something you're aware of can be really hard” (06:28).

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Listener Segment: Maximizing Savings and Investments on a Tight Budget

Listener Introduction: Katie
Katie shares her journey of transitioning from low-paying, seasonal jobs to a more stable position at a museum, and her upcoming move to New Hampshire with her partner. She grapples with saving and investing despite a reduced income.

Financial Snapshot:

• Current Income: Increasing from $45,000 to $52,000 annually at the museum.
• Savings: Approximately $9,000 in a high-yield savings account and additional funds spread across checking and other savings accounts.
• Retirement Funds: Nearly $9,000 combined in two 403(b) accounts.

Challenges:

• Career Transition: Moving to a plant nursery with an hourly wage of $16, marking a significant pay cut.
• Budgeting: Navigating new expenses and figuring out her emergency fund needs.
• Retirement Planning: Deciding between contributing to a Roth IRA versus building her emergency fund.

Advice from Hosts:

• Budget Framework: Sean introduces the 50/30/20 budgeting rule—50% needs, 30% wants, and 20% savings/debt repayment—as a starting point (20:37). Adjustments can be made to fit personal circumstances.

• Retirement Contributions: Elizabeth emphasizes the importance of even small contributions, highlighting the power of compound interest: “Investing $25 over investing $0 is definitely worthwhile” (24:37).

• Multitasking Savings Goals: Sean suggests balancing emergency fund growth with retirement savings, potentially setting aside small amounts for both to avoid prioritizing one over the other entirely (27:04).

• Emphasizing Small Wins: Celebrating incremental progress, such as a weekly money date or paying off small debts, reinforces positive financial habits (12:02).

Notable Quotes:

• Sean Pyles: “Time is your friend and your enemy when it comes to saving for retirement” (28:09).

• Elizabeth Ayoola: “Every little bit counts” (29:45).

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Navigating Financial Transitions and Goals

Career Reevaluation:
Katie contemplates shifting to nursing, a field that aligns with her interpersonal skills but requires returning to school and incurring potential debt. She balances this against sticking with her current career path in science and education.

Financial Independence:
Katie strives to maintain financial independence within her relationship, aiming to split expenses 50/50 with her partner to avoid dependency (32:21).

Hosts' Encouragement:

• Open Dialogue: Encouraging open and ongoing conversations with her partner about finances to set shared goals and align values.

• Future Planning: Mapping out future aspirations and adjusting financial plans accordingly to stay aligned with long-term goals (33:15).

Notable Quotes:

• Shauna Game: “Keep coming back to, what is the story that I learned about money when I was little?” (12:48).

• Sean Pyles: “Building in those rewards, making a little moment to celebrate every time you do make some progress” (12:35).

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Conclusion: Maintaining an Unraveled Relationship with Money

Shauna wraps up by reiterating the importance of continually reassessing one's money stories and behaviors to foster a healthy financial relationship. Her final advice encourages listeners to remain curious and proactive in understanding their financial emotions and actions.

Final Takeaways:

• Self-Awareness: Continuously explore and understand your relationship with money to remove psychological barriers.

• Consistent Habits: Implement small, manageable financial practices like weekly money dates and celebrating small wins to build lasting financial health.

• Balanced Saving: Strive to balance emergency savings with retirement contributions, ensuring both immediate security and long-term growth.

• Open Communication: Maintain open financial dialogues with partners to align on goals and foster mutual financial support.

Notable Final Quote:

• Shauna Game: “If you just do that piece, you will be shocked at what you discover and how that can help you move forward with a different story” (13:15).

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Listener Engagement and Resources

The episode concludes with hosts encouraging listeners to submit their own money questions via voicemail or text and to engage with the podcast community for personalized financial advice. They also promote Shauna Game's book and resources provided in the show notes for further exploration of financial relationships.

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Key Resources Mentioned:

• Unraveling Your Relationship with Money by Shauna Game
• NerdWallet's 50/30/20 Budgeting Framework
• NerdWallet’s Retirement Calculator

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By intertwining personal anecdotes, expert advice, and practical strategies, this episode equips listeners with the tools to understand and enhance their financial relationships, ultimately leading to smarter money decisions and greater financial well-being.

Transcript

[Sean Pyles]

Knowing why you do what you do with money isn't always easy. Looking back on some of my early financial decisions, I'm sometimes left wondering what I was thinking or if I was thinking at all.

[Elizabeth Ayola]

For the longest time, I was too ashamed to explore why I was spending money like it was printable. But I'm glad I finally did.

[Sean Pyles]

Well, this episode will help you get better acquainted with your financial self. 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 Pyles.

[Elizabeth Ayola]

And I'm Elizabeth Ayola. This episode, we talk with a listener about how to make progress on savings and investing goals, even when money is tight.

[Sean Pyles]

But first, we're going deep into your relationship with money. Elizabeth, if you could use one word to describe your relationship with money, what would that be?

[Elizabeth Ayola]

I would say it varies depending on the month and what I have going on. So in December, it would have been toxic, but today it is partnership. We are working as a team to get me closer to my dream life.

[Sean Pyles]

And you know what? That is Progress, Elizabeth. For many people, I'm guessing that word might be tense or maybe even unhealthy. But exploring your relationship with money is an important investment, one that can pay all sorts of dividends in big and small ways. And to help us explore our relationships with money, we are joined by Shauna Game, host of the podcast everyone's talking money and author of the new book unraveling your relationship with ditch your money trauma so you can live an abundant life. Shauna, welcome back to Smart Money.

[Shauna Game]

Hey, thanks so much for having me.

[Elizabeth Ayola]

So, Shauna, your book is called unraveling your relationship with money. Tell me, why do you think people need to dissect their money relationship, and what is the goal?

[Shauna Game]

That's such a good question, Elizabeth. I think that we live in this vacuum where we think that money is only about math. And it's really unfortunate because it is about so much more. It's about emotions and behaviors and habits and story and how we were raised. And all of that plays into how we save, spend, and even earn our money. So I think it's so critical that we bring this idea of relationship with money into the conversation about goals, and particularly for most of us. You know, you described your relationship in December as toxic, right? A lot of people would probably borrow that word as well because they just feel stuck. There's something that you want to do or achieve, and you cannot figure out why in the world can I not make this happen. And so usually when people get to that spot, I say, okay, this is the time where we need to explore this thing called relationship with money and figure out, you know, what's going on behind the scenes that's stopping your progress towards these goals.

[Sean Pyles]

I imagine that a lot of people might be scared of what they would maybe find under the layers they built around their relationships with money. And I'm wondering how you think people can work through that fear that might even turn them off from probing their relationship with money in the first place.

[Shauna Game]

That's a very real scary feeling that a lot of people have because, let's be honest, most of us do not like looking at our bank account. I often say, like, we need to tiptoe into this, this really exploration around relationship with money. And there's lots of different ideas and exercises and kind of tactics I can give you. But I think the first place is thinking about one word to describe your relationship with money. But then we gotta dig deeper. So if it's toxic, I'm gonna ask you, okay, Elizabeth, like, why? Why is it toxic? And I don't know, maybe you would say, well, December's the holidays and oh my gosh, we, we all overspend. Okay, so tell me about that. Right? And so it's this exploration of just digging deeper and deeper with yourself until you get to some sort of foundation of like, okay, this is really what it is about. I work with so many people and their biggest fear is that there's just never enough money. And so my follow up is, okay, well what is enough and why are we not in that place? And this just requires this, this kind of asking of ourselves. So I tell you that just to say, don't take it like I'm going to fix my whole relationship with money in one day. Let's just take it bite by bite.

[Sean Pyles]

Yeah. In your book, you describe how getting to know your money involves inner work and outer work. Can you explain what you mean by this and how we can productively do both of these types of work?

[Shauna Game]

I think it's really important that if we were creating the equation for financial success, I would say the inner work comes first. Inner work is a lot of what we're talking about here. It's, you know, thinking about the, the words that describe your relationship with money. But something else that is really important is this idea of money story. And a lot of people might have heard that before, but not quite understand the context. I talk about this in the book that by age 7, we've really developed our sort of viewpoint on money, our habits, our behaviors, our beliefs. And it's kind of scary to think about that because I don't remember a lot from my childhood, like, three, seven years old, but to think that that time period was that impactful. So really going back and thinking about, okay, what was the. My childhood like around money? What did my parents talk about, not talk about? Were they fighting? Were they not? Were we having to go without? Was there excess? Like all of those messages and beliefs? And if it helps, you just go back to your earliest memories around money and kind of explore those and see if there's any patterns between those memories and those messages and how you're interacting with money today.

[Elizabeth Ayola]

I love that you mentioned money beliefs and money stories. It's actually one of my favorite introductions, I think, to my personal finance journey. So I remember having setting down and journaled what my money stories were and what my money beliefs were. And I found one of the core things for me was that I didn't think I deserved to have a lot of money. So it limited the way that I negotiated my salary. Would negotiate with clients. Making subconscious behavior into something you're aware of can be really hard, right? So how can people get more familiar with their money beliefs and stories that they're embodying?

[Shauna Game]

Thank you for your. Your transparency there. I wish that we all could have, like, more conversations like this because I'm sure there's a listener that's, oh, my gosh, I have the same version of story that Elizabeth does. But I think that we really need to look at what's happening in our body. So whenever you're looking at your bank account, right, or you're transferring money, or you're looking at your paycheck, or let's say that you're having a money discussion with your partner or your family members, I want you to become aware of what's happening in your body. So is your heart racing? Are your palms getting sweaty? Do you feel like you would rather just run out of the room than deal with the situation? All of those are somatic bodily cues that something is going on with your relationship with money. And when you notice one of those things happening, don't judge yourself. Just pause and say, okay, where is this coming from? Is this coming from a belief from my childhood? Is this coming from something real where maybe there just isn't enough money? And that's bringing me back to this place of just this extreme fear around money? Maybe you grew up where money was really tight. So I think the body Gives us so many clues when it comes to money, but we just don't tune into that. We're just purely looking at the numbers piece. So use your body as an indicator. A moment to pause and say, okay, what's going on? And where does this come from?

[Elizabeth Ayola]

But I find some people get stuck with sometimes knowing, okay, I'm aware of what is inhibiting me, but they don't know what to do with that. So, okay, I know that I don't think I deserve money. How do you work past that? So it translate into changes in your finances?

[Shauna Game]

There's so many different exercises you can use. It depends if you're somebody who loves to journal. I have an exercise called, hey, money. And I literally write money a letter. Sometimes it's a couple of words and it's not a very nice letter. Sometimes it's, oh, this great thing happened. But the process of doing something like that is. Is helping me move past these places of fear that are stopping my ability to move forward with money. There's also financial therapy. But, you know, I think that what we need to do is when we notice the feeling, we need to acknowledge it, go, okay, it's there. And then we need to think about, what action step can I pair with this that might help this? So if it's a feeling of there's never enough money, maybe I might look at like, okay, have I. Have I set up an emergency fund? Am I contributing to my 401k? Like, am I actually taking actions to help counteract this belief that I have?

[Elizabeth Ayola]

So you talk in your book about how one of the antidotes of being scared of your money is knowing what you want in life. That resonates with something. We talk about a lot on smart money, how money is just a tool to get you what you want out of life. But knowing what you want and actually getting there, I think can be two different things. And you call this in between space, the goal gap. So how can people bridge this gap and actually get what they want from their money and their lives?

[Shauna Game]

The first piece that you have to start is obviously, what do I want? And I know this feels like a really big question, and some people don't even allow themselves to go there with money because it feels like, oh, this isn't possible, or, I've never seen this happen in my family. How do I, like, how dare I think about building, I don't know, generational wealth or a business that I could sell or. Or anything like that? So I think whether you'd like to brainstorm or draw or whatever. Allow yourself some space where you can just have fun and think about, what do I want this future to look like? Then we've got to go down into your numbers. And one of the best ways to do this is by something I call a weekly money date. I literally set my timer on my phone for 15 minutes and I'm looking at my spending from the week previous and I'm thinking about what's coming up and what I'm doing is I'm looking at my spending and am I saying, okay, is my spending aligning with that vision I have for my future? I think we tend to think that in order to reach our money goals, we need to get rid of everything excess. And I don't think that's the right way to approach this. If it's, you know, I love going out to eat once a week on a date night or I love going to that gym workout class. Build that into your spending plan because that's part of this vision that you are creating.

[Sean Pyles]

I like the idea of having that weekly money date with yourself where you are just setting aside a quick 15 minute allotment of time. Doing it bit by bit will help you make tremendous progress over a month or a year.

[Shauna Game]

I would say like another piece of that is celebrating small wins. Having a weekly money date is a win. Looking at how you're spending your money is a win. Thinking about your, your future is a win. But also, for instance, if we're going to pay off debt, let's say every hundred dollars that we pay off, let's go give ourselves a small little reward. I'm talking about something super tiny. But let's celebrate this along the way because that's an important piece of this too in, in the building the trust with ourselves and our relationship with money.

[Sean Pyles]

That is so key because we know from behavioral psychology that the more you like to do something, the more fun it is for you, the more likely you are to keep doing it. And a lot of what we've been talking about can seem so heavy and fraught and maybe even painful to dig into or frankly even boring just looking at your numbers. People don't like to do that all the time. So how can you make it something that is actually something you want to engage with, something fun. So building in those rewards, making a little moment to celebrate every time you do make some progress, will really help you see these things through over the long term.

[Elizabeth Ayola]

So you wrap up your book by talking about how we can keep our money relationships unraveled if you could give our listeners one piece of advice to keep their dialogue with their money open. Long term, what would it be?

[Shauna Game]

The important thing to keep your relationship with money unraveled is to keep coming back to, what is the story that I learned about money when I was little? How is that influencing the decisions, the behaviors, the actions I'm making now? If you just do that piece, you will be shocked at what you discover and how that can help you move forward with a different story.

[Sean Pyles]

I love that. Okay, well, one last thing before we let you go, Shauna. Throughout your book, you have these money truth or dare prompts for readers, which I found really fun. As I was reading your book, I thought about asking you a truth or dare question, but I thought that a dare might be a little hard to do on a podcast. So I want to ask you a money truth, Shauna. What was the first dollar you ever spent and what did it teach you?

[Shauna Game]

Ooh, yeah, I love the truth.

[Sean Pyles]

Putting you on the spot here.

[Shauna Game]

I love the truth or dares. That was actually my most fun part to write in this book. The first dollar I ever earned that actually came from the tooth fairy. I lost my first tooth on a milk dud watching a movie. And I remember waking up in the morning and I was like, oh, my gosh, there's money under my pillow. And I think what I learned from that is that it doesn't have to be as difficult as you might believe. I remember watching my dad kind of struggle with money, and I thought, this is crazy. Like, I lost a tooth and I got a dollar. Like, this doesn't have to be that difficult. Of course it is. And it's been a giant.

[Sean Pyles]

You had to grow that tooth.

[Shauna Game]

I had to grow that tooth, which I was not accounting for.

[Sean Pyles]

Do you remember how you spent that dollar?

[Shauna Game]

You know, there was a kind of like a 7 11ish type store down the street from my house. I probably went down there and bought some version of an icee.

[Sean Pyles]

So that maybe taught you to enjoy the money that you earn.

[Shauna Game]

Yes. But again, it took me many years to actually cement that lesson.

[Sean Pyles]

Yeah. Great. Well, Shauna game, thank you so for coming on and sharing your thoughts with us.

[Shauna Game]

Thanks for having me.

[Elizabeth Ayola]

We're about to get to this episode's money question segment where we help a listener on a tight income balance, saving, and investing.

[Sean Pyles]

But before we get into that listener, I've got a question for you. What is your money question? The financial thing that keeps you up at night or that goal you just can't seem to make progress on maybe.

[Elizabeth Ayola]

You need to buy a new car but aren't sure the best way to pay for it. Or you're finally going to get yourself a high yield savings account and need help vetting different companies. Or you're trying to break yourself out of a bad financial habit but just can't seem to do it. Whatever your money question, we nerds are here to help. Leave us a voicemail or text us on the Nerd hotline at 901-730-6373. That's 901-730-Nerd.

[Sean Pyles]

And a reminder that one of our goals on Smart Money this year is to talk with more of you live on the podcast to help you with your money question questions. So if you want to hang with Elizabeth and me for a bit and get some nerdy wisdom, let us know one more time. Leave us a voicemail or text us on the Nerd hotline at 901-730-6373. That's 901-730-Nerd.

[Elizabeth Ayola]

Let's get to this episode's money question segment. That's up next. Stay with us. Hey, guess what? Smart Money is a finalist in the 2025 Webby Awards and you can help us win. Just head to vote.webbyawards.com register real quick and vote for us in the best Individual Podcast Episode Business category. It's free, it's fast, and unlike borrowing your neighbor's wifi, totally guilt free. You've got until April 17th to cash your vote one more time. That's vote.webbyawards.com we're back and answering your.

[Sean Pyles]

Money questions to help you make smarter financial decisions. This episode, we're joined by Katie, a listener with some questions about how to save and invest when money is tight. Katie, welcome to Smart Money.

[Katie]

Hi. Thank you for having me.

[Sean Pyles]

Katie, I'd love to start by hearing about your financial life generally right now. Where are you feeling good? Where do you think you might have some room to grow?

[Katie]

Right now I'm kind of finishing up a job at a museum where I'm paid pretty average. I'm able to kind of save some money. I direct deposit some money straight into my savings account. I'm able to put a little bit into retirement and that was something that I've like very recently started doing. So I'm kind of proud of myself for that.

[Sean Pyles]

You should be.

[Katie]

Yeah. So much of my twenties was working like really seasonal, low paying work where I just didn't even have the capacity to like save even remotely. Now That I was, like, getting a salary. I was feeling really good about saving that.

[Sean Pyles]

And so you said you're making an average amount. What does that mean?

[Katie]

When I started my position at the museum about two years ago, I was making like 45,000. And then I, you know, was able to work up and kind of ending. I'm making about 52,000. So, all right, I don't spend tons of money, so I'm able to save a little bit, able to treat myself to some things here and there, but, you know, not taking in a bunch.

[Sean Pyles]

So you said that in your 20s you weren't super mindful about your finances. How old are you now?

[Katie]

I'm 34. I'm about to be 35.

[Sean Pyles]

So now you're thinking, clock is ticking, better get serious.

[Katie]

Oh, yeah. I really was working, like, seasonal jobs, low pay, and I was moving a lot. I kind of blame it on that. Like, I wasn't in a position where I could save anything. But I can't help but think, like, I'm very late to the game in terms of trying to save money, trying to put money into, investment money into retirement and kind of navigating that whole financial world.

[Elizabeth Ayola]

Katie, I understand and empathize with that feeling of starting late because I also started late. So you're not alone in that. I started saving for retirement, I think around 33 or 34.

[Katie]

Oh, that makes me feel better.

[Sean Pyles]

Your experience is not uncommon. Katie, you mentioned that you have been saving, doing direct deposits, which we call paying yourself first. That's a really smart way to save money. How much do you have in savings?

[Katie]

Most of it's in a high yield savings account, and that's about 9 to 10,000 somewhere in between there. And then I have, like, a little bit of money in my regular bank savings because that's just where the direct deposit goes. And then I have just whatever is left in my paychecks goes right into my checking account. And I use that to pay off, like, any credit card debts or things like that.

[Sean Pyles]

So for that 9 to 10,000. Do you know how many months of expenses that would cover? I'm thinking about your emergency fund here.

[Katie]

No. And that's something that I've, like, really been trying to figure out. What would that emergency fund need to be? I know, like, you know, if I get hurt, I need something, some money for that, but, you know, costs out the wazoo, probably.

[Sean Pyles]

Well, think about what expenses you might need to cover if you were unable to work. So in an ideal world, you would have between three to six Months of what we call a bare bones budget covered in your emergency fund. So that would be things like housing, any medicine that you need regularly, utilities, groceries. You're not going to be going out to eat a lot if you don't have money coming in. So what is the bare minimum you would need to get by for a few months? That's really how you can help determine what your emergency fund amount might need to be.

[Elizabeth Ayola]

Katie, you wrote to us and you mentioned that you have a big life change coming up. So can you talk to us about that change and then maybe how that might also change your expenses and how much you need saved for your emergency fund?

[Katie]

I am leaving the job that I have right now at the museum and which is in Maine, and I'm moving in with my partner in New Hampshire. We live in a mountain town where there's not a lot of industry. So a lot of the jobs are within the trades, within the service industry, kind of hospitality, the tourism industry, which is not really what my background is in. My background is in science and informal education. And so I've had to switch gears a little bit in terms of careers. And as I rethink what my career future would look like, I'm taking a job at a plant nursery. But it's an hourly wage of $16 an hour, which is a significant cut than what I was making at the museum. And so my whole what am I spending money on? How much am I taking in? Essentially all the finances that I've been tracking is completely changing. So while I'm going to be making significant less amount of money, I'm also not going to be driving as much because me and my partner were long distance and so I was spending a lot on gas just trying to go see him. And then we're going to be sharing a food budget. So all of those finances are definitely going to be different. It's just I haven't been living here long enough to gauge what exactly that is. Luckily he's in a position where if I lost my job, I able to rely on him financially for a little bit. But I don't like to put that on someone else. I like to be financially independent as much as I can. And so thinking about like that emergency fund, I believe I have saved up enough to withstand my new life from what I think it's going to be for the next six months. But it would probably wipe me out.

[Sean Pyles]

This is a pretty exciting opportunity for you, Katie, because you have a nearby blank slate with your budget, you have a different income, you have different expenses. And so right now you have a chance to actively track this in a way that maybe you didn't before. So as a way to get a gauge for where your income and expenses are falling, we Recommend Using the 50, 30, 20 budget template as a place to start. And this is where 50% of your income would go to covering your needs. That would be like your housing and groceries. 30% goes to wants and then 20 goes to additional debt payments and savings and investing. So you might not fit perfectly into that 50, 30, 20 framework. A lot of people don't, given how expensive things are. Some people like 60, 20, 20, where 60 is going towards needs. But this is a way where you can kind of get your arms around your budget a little more, which I think is important considering your savings goals.

[Katie]

And I've definitely started looking into that budget framework. I that was not anything that I've ever like, heard of or considered because, you know, financial literacy was not necessarily part of my informal, informal education growing up. So I've. This is a lot of like self discovery recently. So I've been looking more into kind of that framework, you know, and I feel like I could fit within the 15, 20. But in terms of the saving aspect, I think that's where I most like am. Like, how am I going to handle this in terms of if I'm not bringing in a lot of money, how do I break down money, like to go into a retirement versus money going into just my savings cushioning either my emergency fund or anything like that. I don't have a lot left over to actually play with. Like is it worth putting $25 in my retirement or $50 in my savings?

[Elizabeth Ayola]

All really good questions, Katie. And I will say before we go into that, it's it is worth it because compound interest is working in your favor. And that's essentially when your money makes money, assuming that you're investing it. So investing $25 over investing $0, I think is definitely worthwhile. I do want to rewind and ask you, how much do you have saved for retirement already and how much are you saving on a regular basis?

[Katie]

I have just under $7,000 in my retirement. I kind of set my limit, like how much I was putting in the retirement when I started at the much lower pay scale. So I was only putting in, I think like 2.5% of my income and I didn't scale that up as my pay increased. But then I also have just over $1,000 in another retirement account from a job that I had before this Museum. And I thought I had rolled it over into this retirement account, but I just found out I didn't. So I have these two retirement accounts with, I would say, just under $9,000 combined.

[Elizabeth Ayola]

And then why are you thinking about rolling your money from a 403 into an IRA?

[Katie]

I guess this is where I have a lot of questions about of like, what is that correct thing to do? Because if I only have roughly $9,000 in an account, my understanding is that I can't contribute to a 403B unless I'm in one of the institutions that you can't. Like, I can't just contribute to it on my own. So the plant nursery doesn't have retirement. And so if I want to contribute to a retirement account, I would have to open a retirement account.

[Sean Pyles]

Folks who may not know a 403B is essentially like a 401K that is offered by typically places like public schools and some nonprofits like the museum that you worked at. And since it's like a 401k or another workplace retirement plan, if you're not currently employed by that organization, you can't contribute to that account. To your point. But in that case, you could contribute to an individual retirement account, an ira, either a Roth or a traditional. And that's the one that you have about $1,000 in, is that correct?

[Katie]

No, that one is also a 403. I was working at a specialized private school for two years, so that's also. So I have two 403 BS that I thought I had combined, but it turns out I didn't.

[Sean Pyles]

You can handle them kind of however you feel you could leave the two 403Bs with the institutions that have them, or you could roll them both into a new IRA account and you can shop around for an ira. A lot of financial institutions offer them. We have roundups at NerdWallet that I recommend you read through to see which one might be a good fit for you. But what you might want to consider is going into your 403bs, seeing the investment setter and then the fees that you might be paying, and then comparing that to what options you have in an ira. Because you might be able to take more control over your retirement savings if you do have these two 403B account funds in a new IRA. That way you actually might be able to be more proactive with your savings.

[Elizabeth Ayola]

If you do decide to open a Roth ira, there can be an advantage with you having lower income than you likely will have in the future, because finance professionals sometimes recommend contributing to a Roth during your lower income years since you'll pay less in taxes. So there can be some benefit there too.

[Sean Pyles]

And to your question around which to prioritize or what to do, Katie, the good news is that you don't have to choose one or the other. You have lots of options ahead of you. You could roll the amount in your 403s into an IRA and you can contribute regularly to this IRA as well. So you are gradually making progress on your retirement goals. Because here's the thing, time is your friend and your enemy when it comes to saving for retirement. You want to make the most of the time that you have ahead of you, but the clock is ticking. So Elizabeth mentioned compound interest earlier. The more you're able to contribute, even if it is just $25 a month, the more you'll have later on. And I know you're kind of considering which is the priority. Should you save more for your emergency fund or should you contribute to your ira? And I think you might want to consider multitasking here. A lot of financial planners will recommend first building a small emergency fund, maybe even just $1,000 or so, and then shifting more toward your retirement savings. Since money is pretty tight, just look through the numbers and figure out a way you can divide up your income and your savings so that you are able to make progress on these multiple goals simultaneously. But longer term, increasing your income is going to be really what makes the difference so you can accelerate your retirement savings if you haven't already. I would recommend playing with nerdwallet's retirement calculator. We'll have a link to the Show Notes and we can send you a link after this conversation so that you can get a feel for the numbers again. Think about how much you might need in your retirement and how you can save enough today to get there.

[Elizabeth Ayola]

And I also want to add, I know it can feel sometimes discouraging or pointless when you're saving small amounts. I personally am someone who likes to save in big chunks. But it's just one, building the discipline of saving towards those multiple goals and then also two, every little bit counts. And your financial situation is of course going to change as you progress in your career. So you can increase your contributions then. So don't be discouraged maybe because you don't have so much to contribute at the moment.

[Katie]

That's definitely how I feel.

[Sean Pyles]

You mentioned maybe going into the medical field. What are your aspirations and goals over the next five, ten years?

[Katie]

This is definitely a time where I've been Reevaluating my career. One direction that I've been, I've kind of always gone back to in times when I'm in between jobs or I'm like in this really low paying seasonal job and I am feeling like I just need to make a change is nursing. You know, I'm someone who just naturally likes to interact with people and work with people. It does mean going back to school, which is its own financial conversation. But then I also kind of weigh it against maybe if I just kind of stick with my career path I've been on and trying to find something remote within that I can just get back to the financial stability that I had prior to the move without having to put in a lot of money, go into debt for schooling, even though in the long run I can make back that money from nursing pay.

[Sean Pyles]

And that's tough because there's no right answer to that question. Katie, it seems like you have some homework cut out for you.

[Katie]

Oh, I have so much.

[Sean Pyles]

Dig into your budget. Understand the essentials that you have to pay for what that emergency fund might look like. Like the three to six months that you should probably have in there. Think about what career path you want to pursue and how you can accelerate your retirement savings. How are you thinking about all that's on your plate? We don't want to overwhelm you, but it can be nice to kind of.

[Katie]

List everything out like that. Don't worry, I overwhelm myself. I think where I'm at right now is I have all this information and I need to figure out how to organize it. And then honestly, I just need to make decisions and just do things.

[Sean Pyles]

But you still can dream a bit and talk with your partner too, and maybe map out what the future might look like. We haven't really talked about how you and your partner manage your finances. You're moving in together. That's a big change for both of you. It seems like you're able to rely on him for some financial support, is that right?

[Katie]

I'm very fortunate that he owns the house that we live in. And so that has been helpful as I transition into this position of much lower income. He's letting me not pay any of the big expenses right off the bat as I stabilize myself. We haven't had that full financial conversation yet, but just kind of based off of how we have over the last four years done things in terms of financially, we tend to split things 50, 50, because that's kind of what I feel more comfortable with. Again, as I said, I don't like to be financially dependent I on someone. I like to be able to kind of hold my own financially. And so that makes me comfortable to try to split things as evenly as possible. I guess that's my financial goal for our relationship.

[Sean Pyles]

Well, like we talked about earlier, with you having this great opportunity ahead of you to reevaluate your budget, your goals, your saving plan, you moving in with your partner is a big moment where you can begin to have this dialogue in more depth and set shared goals and align on your values around how you want to manage your money together. I'm really excited for you. I think that you have a great few months ahead of you. You have a lot to sort out like we talked about, but there's a lot of fun in that, too, because you can dream and play around a bit.

[Katie]

I'm excited, too. And every now and then I'm like, oh, yeah, this is kind of fun and exciting. And then the next day I wake up and I'm like, oh, my gosh.

[Sean Pyles]

Overwhelming.

[Katie]

So much to think about.

[Sean Pyles]

Yeah. Yeah. Well, Katie, thank you so much for coming on and sharing your story with us. I hope that we've been able to provide some insights to help you map out what you want to do with your savings and investing and finances in general as you're at this pivot point in your life right now.

[Katie]

Yes, it's been very helpful. Thank you, guys.

[Sean Pyles]

Well, keep us updated. We really want to hear from you.

[Katie]

I will.

[Elizabeth Ayola]

And that's all we have for this episode. Remember, listener, that we're here to answer your money questions. So turn to the Nerds and call or text us your questions at 901-730-6373. That's 901730, nerd. You can also email [e-mail] you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

[Sean Pyles]

Here's our brief disclaimer. We are not your financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. This episode was produced by Tess Vigland. Hilary Georgie helped with editing. Nick Karisimi mixed our audio. And big thank you to NerdWallet's editors for all their help.

[Elizabeth Ayola]

And with that said, until next time, turn to the nerds.

[Sean Pyles]

Guess what, listener? Smart Money is a finalist in the 2025 Webby Awards, and we need your vote to win. Go to vote.webbyawards.com register real quick and vote for us in the best individual podcast episode business category. It takes a minute, makes our day and lets you say, yeah, I helped pick that winner. Voting ends April 17th. One more time. That's vote.webbyawards.com.