NerdWallet’s Smart Money Podcast

Episode: Impulse Spending Fixes and PSLF Choices When You’re in Grad School
Release Date: February 2, 2026
Hosts: Sean Pyles, CFP®, Elizabeth Ayola
Guest Nerds: Amanda Barroso, Kate Wood

Episode Overview

This episode is a two-parter that dives deep into:

• How to “reset” money habits by giving yourself a “hard reboot” (No-Spend and Money Mix-Up Challenges), and
• Listener question: Should you keep making student loan payments while in grad school (with Public Service Loan Forgiveness, PSLF, in mind) or direct that money toward a new home?

Through research-backed guidance and candid conversation, the Nerds break down sustainable financial strategies post-holiday splurging, examine the psychological roots of impulse spending, and demystify the latest (and often convoluted) PSLF rules, especially with recent legislative changes.

Segment 1: Resetting Money Habits in the New Year – No-Spend and Money Mix-Up Challenges

Timestamps: 02:48–22:41

The Problem: Post-Holiday Spending Hangover

• Sean: "Sometimes your money habits just need a hard reboot." (02:48)
• The start of the year is when many realize they've spent too much and want to cut back (03:00, 03:22).

The Approach: No-Spend & Low-Spend Challenges

• Amanda Barroso (guest): Has done “low-spend challenges” and tried thrifting Christmas gifts. Finds financial challenges helpful for directing limited resources purposefully (04:07–04:49).
• Elizabeth: Doesn’t do formal challenges but naturally reins in spending when needed. Realizes impulse/binge spending can undermine these efforts (03:50, 06:15).
• Sean: While “no-spend” can help reset habits, it can also promote “binge and purge” cycles and miss addressing deeper issues, like money trauma (05:25, 06:15).

Notable Quote – On Deeper Money Issues:

• Elizabeth: “If you fundamentally have an issue with your spending and it’s rooted to … money trauma … just saying I’m going to stop Uber Eats altogether doesn’t necessarily address maybe that trauma.” (06:15–06:54)

How to Make No-Spend Challenges More Effective

• Get clear on your goal: “Is it to break a bad spending habit, or build maybe a good spending habit, maybe jumpstart a specific goal?” – Sean (06:57)
• Tie savings to meaningful, concrete targets (e.g., emergency fund), rather than letting it just sit. – Amanda (07:20–08:14)
• Focus on a single priority to avoid overwhelming yourself: “Maybe even just one … focus goal for your no-spend challenge can make it helpful to actually stick with it.” – Elizabeth (08:14)

The Nerds’ Personal Spending Challenges

Elizabeth’s Challenge:

• Saying no to expensive group vacations and building “sinking funds” for recurring anticipated expenses (birthday splurges). (09:08–10:43)
• Learning to pre-plan for “treat yo’ self” moments, e.g., birthdays, with a dedicated fund. "Instead of being like, oh, surprise, I don’t know how much I’m spending … having a fund for it will help me avoid this January/February pull-back." (10:43)

Amanda’s Challenge:

• Using a “brick” device to create friction and block distracting/shopping apps, tracking if this reduces impulse spending—especially during high-stress, after-work hours (11:37–13:22).
• Turning time away from the phone into more fulfilling activities with her daughter (journaling, scrapbooking), and using savings for: a Disney trip, emergency fund, and home maintenance (13:52–14:36).
• Elizabeth adds: Using her own brick reduced online shopping, specifically impulse-browsing Zara (16:20–17:14).

Notable Quote – On Technology and Money:

• Sean: “We use scrolling and spending as a way to self-soothe a lot of the time.” (17:18)

Sean’s Challenge:

• “Friction maxing” (inspired by a 2026 Cut article): Making spending less convenient by setting one new friction point each week—no online purchases, cash-only, no phone purchases, no takeout apps—hoping to “enjoy what it means to be a person learning and growing and sometimes struggling.” (17:38–19:49)
• Expecting to learn from real-world friction—human interactions and missed conveniences. “Let’s build some community and use our cash more.” (21:56)

Challenges of Using Cash & Avoiding Online Spending:

• Discussion about practicalities of cash-only living: “...there are some shops...that say we do not accept cash at all...” (20:55)
• Elizabeth: Excited for the increased human connection that comes with in-person transactions (21:27).

Segment 2: Listener Money Question – PSLF vs. New Home: Which to Prioritize?

Timestamps: 25:23–50:22

Listener’s Dilemma (Sydney):

• 34-year-old nurse, married, no children. $30,000 federal student loans ($500/month, 3 years left for PSLF), starting master’s degree. Husband: $50,000 in loans, excellent credit. Monthly car payment $600. Emergency fund (just under 3 months) in high-yield savings. Wanting to buy a new home closer to work.

Understanding PSLF in 2026 (Kate Wood, Lending Nerd)

• PSLF forgives the remainder of Direct Loans after 120 qualified monthly payments (10 years) in public service employment (26:39).
• Payments must be made while working for a qualifying employer; deferment periods do not count toward PSLF, even if voluntary payments are made. Declining deferment and continuing to work 30+ hours/week can keep payments qualifying (27:54).
• New grad loans taken after July 1, 2026 face stricter repayment plan options, may run on a separate 10-year PSLF timeline (28:43).

Notable Quote – On Rule Complexity:

• Kate: “If she takes out new loans for a new graduate program, that’s a whole, whole other thing. Those could … qualify for PSLF, but those new loans would be on a separate timeline from her existing loans.” (27:54–28:43)

New Repayment Landscape:

• For new grad loans after July 2026: Only two repayment plans (new standard and "Repayment Assistance Plan," a new IDR; no PAYE, ICR, or IBR).
• Borrowers in current programs get a “grace period” to stick with older plans up to three years or until program finish, whichever comes first (28:52).
• New loans bump all existing loans into the new plans (complexity alert!).

PSLF vs. Income-Driven Repayment Forgiveness

• PSLF = 10 years (not taxed).
• IDR Forgiveness = 20–30 years (subject to tax in some cases) (31:21–31:25).

On Student Loan “Tax Bomb” (IDR, not PSLF):

• “PSLF forgiveness is not going to be affected by that because PSLF is never taxed at the federal level.” (31:30)

Recent Changes & Surprises:

• Graduate Loan Caps:
  Professions not classified as “professional” (e.g., nursing) have significantly lower annual/total loan limits ($20,500/year, $100,000/lifetime), risking underfunding of degrees with high tuition (32:51–35:23).
• Controversy: Could push more students to private (pricier, less-protected) loans or out of high-cost professions altogether—posing risks to the healthcare workforce and diversity. (35:37–36:55)
• International Comparison:
  Elizabeth’s UK undergrad/grad costs were ~£10,000 and £5,000–£6,000 respectively—a stark contrast with US education costs. (37:15)

Risks to PSLF’s Existence

• Recent Trump administration changes: Employers found to have engaged in “illegal activities” (wide definition) could lose PSLF eligibility—creating anxiety among borrowers (38:13–39:19).
• Two major lawsuits challenging this, including from cities/unions. “Nothing is happening yet … at minimum, these could hold up implementations … for months or potentially years.” (41:05)

Notable Quote – On Anxiety and Long-term Perspective:

• Kate: “If PSLF forgiveness is your goal and you’re working toward it, keep working at your job, or again, any job with a qualifying organization … It doesn’t make sense to jump to conclusions based on this ‘it could happen’ worry.” (41:05–41:18)

• PSLF can’t be ended by executive order—requires Congressional action. The program is bipartisan and hard to argue against. (41:20)

Should Sydney Prioritize Student Loan Payments or Saving for a Home?

The Big Question:
Keep making PSLF-qualifying payments, or pause payments in grad school and redirect $500/month to a new home/emergency fund/etc.?

Factors to Consider:

• Level of emergency savings (Sydney’s 3-month cushion may be thin given major transitions)
• Retirement savings status (unknown for Sydney)
• Car and mortgage obligations create significant fixed-cost pressure (43:50)

Panel Opinions:

• Elizabeth: “I personally would pay off the PSLF loans. That would be my choice in this scenario ... would it be amazing for all my loans to be paid off after a period of time ... and I could use all of that bulk cash ... to do other things that are really fun.” (43:50–44:17)
• Kate: Would also stick with paying off loans, BUT emphasizes PSLF is highly likely to stay. Recommends:
  • Review paperwork to confirm payment count.
  • Find every way to minimize monthly payments (through old income-driven plans if possible), to have as much debt forgiven as possible. (44:21–45:55)
  • If taking out new grad loans, everything changes (new repayment plan, new PSLF clock).
• Sean: Emphasizes this is a matter of values/personal goals—ask where extra cash would have the most impact (emergency fund, retirement, emotional relief from less debt, etc.) (42:36)

Notable Quote – Be Your Own Advocate:

• Sean: “It seems like this is yet another situation where people have to be their best, most informed advocate.” (49:48)

The Forgiveness Process:

• Should be automatic, but slow in practice, and issues with servicers are common; being proactive and record-keeping is critical (46:32–49:46).
• Some borrowers have qualified but haven’t seen balances wiped clean yet; keep pushing your loan servicer and document everything.

Memorable Quotes & Human Moments

• Elizabeth: “Do you know, I don’t know if you guys know a worse feeling than coming back from vacation and looking at your bills and feeling broke. That’s not fun.” (09:44)
• Amanda: "Part of the human experience is not just being able to glide so seamlessly through life, right? Even if it’s a little thing like... a little bit of friction probably will do us all good, make us a little bit stronger." (21:59)
• Kate: “Nothing is happening yet ... at minimum, these [lawsuits] could hold up implementations of these changes for months or potentially even years.” (41:05)
• Sean: “We are iPad kids without even realizing it.” (18:23)

Key Takeaways

• No-Spend Challenges Can Work—If You Personalize Them:
  Build in reflection, sustainable habit change, and connect savings to concrete goals—rather than just temporary deprivation.
• Creating Friction Helps Reduce Impulse Spending:
  Structures (like “bricks” to block apps) and analog tools (cash) can curb both tech and financial autopilot.
• PSLF: Stay the Course, Track Your Progress:
  The program is complex but still robust; most risks are political and slow-moving. Make qualifying payments if you can, minimize your outlay with eligible plans, document everything, and keep an eye on political/legal changes.
• Big Financial Choices Are Personal—Consider Your Values:
  Whether to funnel extra cash into debt, a home, or savings depends on your sense of urgency, comfort, and future goals. Be honest about what outcome brings you peace.

For Listeners:

If you’re doing a no-spend or money-mix-up challenge, let the Nerds know! Leave a voicemail at 901-730-6373, email podcast@nerdwallet.com, or comment on Spotify/Apple. Questions, anxieties, or Nerdy victories—all are welcome.