← So Money with Farnoosh Torabi
So Money with Farnoosh Torabi
1833: Mastering the 50/30/20 Budget, Earning More Money and Medical Debt Advice
00:22:12
Loading summary
Transcript28 lines
- [00:00]
Happy Mammoth Representative
Aging is a natural process as we all know and I for one don't mind embracing it. But I will tell you one part of aging that I don't care for. It's the symptoms that stem from changing hormones, especially as you get older to perimenopause and menopause. That's why we want to tell you about Happy Mammoth's Hormone Harmony. Happy Mammoth, the company that created Hormone Harmony, is dedicated to making women's lives easier and that means using only science backed ingredients that have been proven to work for women. They make no compromise when it comes to quality and it shows. For a limited time you can get 15% off on your entire first order at happy Mammoth. Just use the code happyme at checkout.
- [00:35]
Monday.com Representative
Work today moves fast, but Monday.com is.
- [00:39]
Earnin Representative
Here to help with their work management product.
- [00:41]
Happy Mammoth Representative
It's built for more than just marketing teams.
- [00:44]
Monday.com Representative
It connects entire organizations to bridge the gap between strategy and execution. Plus, with built in AI capabilities, your.
- [00:53]
Happy Mammoth Representative
Team can work smarter, not harder.
- [00:56]
Monday.com Representative
Maximize your marketing impact with the fast first work product you and your team will love to use. Visit us@Monday.com to learn more.
- [01:08]
Farnoosh Tarabi
So Money Episode 1833 Ask Farnoosh.
- [01:13]
Monday.com Representative
You're listening to so Money with award winning money guru Farnoosh Tarabi. Each day get a 30 minute dose of financial inspiration from the world's top business minds, authors, influencers and from Farnoosh yourself. Looking for ways to save on gas or double your double coupons. Sorry, you're in the wrong place. Seeking profound ways to live a richer, happier life. Welcome to SO Money.
- [01:39]
Farnoosh Tarabi
Welcome to SO Money everybody. I'm Farnoosh Tarabi. May 30, 2025 this episode's arriving a little bit late on a Friday because we had some Internet outage in our town. Some things are not in your control and that's one of them. But we got her done. We got her done. Today we're going to be answering questions about budgeting. This actually came up in the so Many Members Club office hour today. People are not sure what the best budgeting platforms are. While there seems to be many options out there, a lot of times it.
- [02:07]
Monday.com Representative
Comes down to your personality, your life.
- [02:09]
Farnoosh Tarabi
Stage, your level of financial proficiency. There's not a one size fits all for this, but we're going to offer some help. Also, how to earn money feasibly outside of a 9 to 5 dealing with high annual credit card fees and a pro tip for handling medical debt. But first, let's talk about what I've been up to this week. I'VE been buried in a good way, exploring how the economy, the big macroeconomic factors like tariffs and inflation and just general unemployment concerns and general recession concerns are weighing on small businesses and therefore consumers too, because the small businesses, in reaction to concerns about the economy and the tariffs, have started to raise their prices. Now, you may know that here in Montclair, I've started a little hyper local podcast called the Montclair Podcast. It's been an education for me, really, on how to launch a podcast in 2025, having not done it for about 10 years. How do you do it? Well, my short answer to that is you have to do it all. What I've learned so far, and I think what would be interesting to you in this particular episode that we aired this week about the economic pressures on small businesses is that they are real and they are hitting them fast and furiously. So we spoke to owners of, for example, a toy store in town, a really lovely toy shop, that, yes, they have higher prices in general just because they're not Target and they're not Amazon. And I learned that it's not just because of their rent, but it's because when they buy, say, Legos, they're not buying it from LEGO Inc. They're not buying it from the corporation and negotiating a good wholesale price. They are not buying in bulk. They're buying maybe 10 or 20 boxes of Legos at a time. And so they have to go through a middle person and then that costs more. So that was interesting. But they are very concerned about tariffs because a 90% of their toys come from overseas, largely China and Indonesia and Thailand, some Germany, some France. But I asked them, would it be possible to source your toys exclusively from the US and they just started laughing. Uh, so I take that as a no. So how are they going to deal with this? Well, one, they're going to just not work with some vendors because some vendors, some toy makers are raising their prices by two or three times. This is important stuff for us to know. If you're a parent out there or anybody who buys toys, this is going to be an issue come Christmas, come holidays, come birthdays. This is not sustainable.
- [04:40]
Monday.com Representative
Right.
- [04:41]
Farnoosh Tarabi
Who's going to make these toys in America? That's not going to happen. I went to the farmers market as well, talked to farmers in general. You know, farmers that have large plots of land that are selling their goods overseas. Yeah, they might have more of an issue with the tariffs. The New Jersey farmers here, they do most of their trade here in the state, so they haven't been affected too much by tariffs, perhaps if they have to replace a tractor part that's only available in Canada. But for the most part, their biggest headwind as far as money goes, is the climate. Climate change, the fact that we've had colder seasons, that has impacted their bounty. It's impacted what can grow, how much grows. And so one farmer was telling me, for example, he has a shortage of rhubarb. So he has to actually buy the rhubarb from another farm and then sell it to his customers at a higher price because it's more expensive for him to do it this way. So rhubarb's now $8 a pound, if you're curious, at the Montclair Farmer's Market. But I just love doing this. It kind of reminds me of where I started in all of this, in this entire career of mine, starting out at New York 1 NEWS, covering the local New York City economy and now even smaller economy here in Montclair. We're 40,000 people strong. But it does give us insights into, I think, how many of us across the country may be feeling the pinch of tariffs. We will be seeing prices go up across a variety of categories. Food, clothing, toys, rhubarb. You might be interested in listening to this episode. I'll drop it in Our show Notes may have nothing to do with your town, but you can extrapolate what's going on here to where you live potentially.
- [06:22]
Monday.com Representative
In case you missed any of our.
- [06:23]
Farnoosh Tarabi
Episodes this week, we sat down with Katie Gatti Tassen on Wednesday. I'll work backwards. She's got a very important book out. It's coming out next week. It's called Rich Girl Nation. You may know Katie as the host of Money With Katie. It's a platform that has a podcast, there's a newsletter, and she is back on the show. She has been on the show before, talking about navigating the beauty tax to the motherhood penalty, to things like workplace politics and how that affects our bottom and, you know, honestly navigating money as a woman where the financial systems weren't exactly built with us in mind. That was episode 1832, the financial advice every woman needs to hear right now.
- [07:04]
Monday.com Representative
And on Monday, what to do when.
- [07:06]
Farnoosh Tarabi
Your friends are richer than you. Have you ever felt uncomfortable splitting a dinner bill with friends or hesitated to join a group vacation because of the cost? Maybe you've wondered if your friends view money the way that you do or they don't. Friendships are one of the most rewarding parts of life, yes. And they come with a lot of challenges, especially if there are disparate financial realities that you're living versus your friends. And Kristin Wong, she's an award winning journalist and author. She explores this, she wrote a New York Times article about it, the nuances of these situations and brings advice to the show on how to navigate these dynamics that can create some financial friction in your friendships. A reminder to all of us who want to join a financial community this year we want to hang out with Farnooche and her friends and her audience. I have got the so many Members club. You can go to so many members.com we do monthly workshops that are live and recorded monthly office hours where you can come and hang out with me and ask questions, helping you work through maybe a sticky money situation in your life. Which we had a couple today during our office hour and I love doing it. You can go to somoneymembers.com all right.
- [08:17]
Monday.com Representative
Let'S move now to the mailbag. We're going to start with our friend in the audience who wants to learn more about how to simplify her budgeting process. So Lauren writes in and she wants to know how I recommend moving away from budgeting every dollar because it gets really cumbersome and tiring. Lauren and her husband have continued to earn more over the years and so at this point it seems, she says more and more tedious to track every dollar. However, we can't figure out how to move away from it without sacrificing our 20 to 30% savings rate and risking way overspending. She's heard people say just pay your fixed costs and then your savings investments at the beginning of the month, then spend what's left over. But it seems like we need a huge amount of cushion sitting in our checking account for that to work. All right, Lauren, so I would love some context behind this 30% savings rate. Is this including investing? If it is, then maybe that makes a little bit more sense. But this is pretty aggressive, I have to say. Like, are you guys planning to retire early? Maybe follow up with me there, Maybe we can talk about it. But that was just the first thing that jumped out. I thought, whoa, 30% savings rate? Yeah, that would make budgeting a little bit difficult. That would make spending on some wands a little bit challenging because so much of your money is going to saving and investing. I'm not saying that's a bad thing. I'm just saying, you know, I guess I want to just understand what the mindset is behind that savings rate. I like what people are saying I like people saying, you know, pay your fixed costs and your savings, investments first of the month. I call that eating your vegetables and then have some desserts. Spend what's left over on things that you want. I'm sure you've heard of the 50, 30, 20 budgeting approach. It's a rule where you put 50% towards your needs, 30% towards wants, and then 20% towards savings. In your case, maybe it's 45% on your needs, 25% on your wants, and 30% on savings and investing. If you want a pie chart to follow, I also think there's a little bit of this question that's saying to me, we have a fear of spending because you have been so regimented, because you've been so committed to saving so much over the years. And kudos to you as your incomes have increased. You haven't had lifestyle creep, which is typically what happens the more we make. We don't save more, we spend more. So my advice to you is that if and when you decide to spend that you really identify what those important areas are for you. So maybe there's a little bit of the money that just goes to discretionary things. You don't need to have a lot of rationale or reasoning behind these little expenses. You know, movie tickets, an Uber ride, whatever. But if there are big things that you want to spend on, things like travel, a hobby that you may have, these require a little bit more money or a lot more money. So planning for these spending spends and having maybe even a sinking fund for these spends, where every month you're automatically just putting fifty or a hundred dollars towards this one spending area. And maybe you're not spending on this every month, but the money is there and you pull from it on the go. Budgeting essentially for these things and resting better at night, sleeping better at night, knowing that you're not sacrificing savings to spend. In summary, the 50, 30, 20 rule could be a good benchmark for the two of you. Although maybe you adjust that based on the fact doing more than 20% for saving, you're doing 30%. So adjust the other two needs and want categories accordingly. I like the idea of automating your savings and your investments and your fixed costs and paying that stuff in the beginning of the month and then with whatever's left over, being very conscious and deliberate about how you spend it. Maybe a little bit of it is just whatever, like we're just going to spend and it's going to be discretionary, but 80% of that we are identifying the spends because we want to be very intentional and we also want to know what things are going to cost. So we don't to your fear, speak to your fear go over or runneth over.
- [12:25]
Earnin Representative
Life doesn't happen bi weekly, so why should Payday the money you earn can be in your hands today with Earn in. Earnin is an app that gives you access to your pay as you work up to $150 per day and a max of $750 between paydays. It's simple. Just download the Earn in app, verify your paycheck and start accessing your money. Any money you access, plus optional tips, is automatically repaid from your next paycheck. I love Earn in because it provides that extra cushion exactly when you need it. Whether it's for a last minute gift, an unexpected trip to the vet, or just a spontaneous night out with friends, it's real peace of mind. Join over 4 million customers who rely on Earn in to maintain their financial stability. Download Earn in today. It's spelled E A R N I N in the Google Play or Apple App Store. When you download the earnin app, type in so Money Under Podcast when you sign up. It'll really help the show so Money under Podcast. Earn in is a financial technology company, not a bank. Cashouts are based on your available earnings. Standard cash outs take one to two business days with no mandatory fees. Option to expedite your transfer for a fee. Tips are voluntary and don't affect the service. See the Cash Out User Agreement for details. Services not available in all states. It's not what you say, it's how you say it. And when you show up in a Range Rover Sport, you don't have to say much at all. This is the vehicle for those who lead with quiet confidence, where power, poise and performance speak louder than words. The Range Rover Sport combines a dynamic sporting personality with refined elegance and agility, delivering an instinctive drive that feels as purposeful as it looks. Its distinctly British design doesn't shout for attention, but it gets it. And when the road changes, the Terrain Response 2 system with seven drive modes adapts like a seasoned traveler. Inside, luxury is not an add on, it's a standard Breathe easy with the cabin air purification system, enjoy serenity with active noise cancellation and explore in comfort, whether you're gliding through city streets or carving through winding country roads. There's even a plug in hybrid engine option with an estimated electric range of 53 miles, because even raw power can be smart. Explore Range Rover Sport at range rover.com us that's rangerover.com us/sport hey, so many friends. I know so many of you are dreaming of starting something of your own, or you're already building a business and trying to make the smartest moves possible with your time, energy, and of course, your money. If that's you, I want to recommend a podcast that's really aligned with the way we think here on Sew Money. It's called this Is Small Business, and this new season is all about something I talk about often, Risk. Every episode dives into real founder stories. People who've taken calculated risks, faced major financial decisions, and stayed grounded through the ups and downs of building something from scratch. Host Andrea Marquez thoughtfully unpacks how these entrepreneurs made bold moves and what we can all learn from their choices. This Is Small Business is full of financial and entrepreneurial insights that can help you take the next step with confidence. Whether you're wondering how to fund your idea, price your product, or know when the risk is worth it, these episodes give you that clarity. So go check it out. Follow this Is Small Business on Apple Podcasts, Spotify, or wherever you listen. It's the kind of inspiration you don't want to miss.
- [15:55]
Grainger Representative
If you're alignment in charge of keeping the lights on. Grainger understands that you go to great lengths and sometimes heights to ensure the power is always flowing. Which is why you can count on Grainger for professional grade products and next day delivery so you have everything you need to get the job done. Call 1-800-GRAINGER clickgrainger.com or just stop by Granger for the ones who get it done.
- [16:27]
Monday.com Representative
All right, next up is our friend Kelly, a regular listener of this podcast who feels behind in her financial journey. She's in her mid-30s and recently secured a job. It offers great benefits, two months off annually. Wow. What? Where is this job? She lives in a high oh, it's in Canada, of course. In a high cost Canadian city earning around $70,000 a year that nets every month to about $3,900 because taxes and pension contributions. She's got a lot of expenses, including rent, utilities.
- [17:02]
Farnoosh Tarabi
She's got a pet.
- [17:03]
Monday.com Representative
She pays for transportation, groceries, therapy. Additionally, there are costs of course for clothing and haircuts and skincare. So Kelly's wondering, should I use these two months that I have off from work to find additional income and if so, where do I begin? I've been thinking about creating online courses, but I'm worried about potential conflicts with my current job and the uncertain success of an online course. All right, Kelly, I love where your head's at. Having two months off every year is invaluable and I hope you'll use some of that time to relax and rest. It's a great opportunity to also focus on bringing in extra income. Your concerns about doing things that may compete with your full time job and things that your employer might not like is a valid concern. So of course, if you think that there is even a chance where this could potentially backfire, I find that early on, transparency is the best approach. I have many clients who are working with me in my mentorship program who are still in corporate and want to start something entrepreneurial on the side. That sort of dovetails their profession. And not only that, their concern too is that the employer might think that this is like a distraction. Oh, what is she doing now starting this business on the side? Is she ever going to be accountable for the work that we are tasking her with? A lot of this is presumptuous. So ahead of that, you want to just talk to your employer and say, I'm thinking about creating my own thing on the side. And once you have a little bit of an idea of what that may be and what that could look like and where you're going to show up, share that with your employer. Don't be afraid. The worst they'll say is, no, we'd fire you.
- [18:41]
Farnoosh Tarabi
Which I don't think is going to happen.
- [18:43]
Monday.com Representative
But at least you know, right, you don't want to be on the other side of that, being surprised by the fact that your employer is not too happy. And I think that employers really appreciate when you come to them ahead of time with this, it shows that you are not trying to hide, you are hoping for a collaborative relationship. And what I've heard, the feedback from companies when they find out that their employees want to start something on the side, they're really supportive. They're like, that's great. Because you know what? You having your own thing outside of your 9 to 5, what does that do? It creates financial security. And one of the most important factors for retention and happiness and a decrease in burnout on the job, the 9 to 5 that you have is having financial security at home. So employers, the smart ones, understand that when you are able to make more money and it doesn't cost them anything for you to make more money, that it does actually benefit their bottom line as well because you're more likely to stay on board and you're happier. So all this say, don't worry about talking to your employer about what Your ambitions are where that ambition would le will lead you. That's for you to figure out. You know, it's hard for me to give you any specific direction on what to create, but if you are interested in thought leadership and teaching, you could start by finding a few clients using your network, posting wherever it makes sense to find these folks, whether it's on your LinkedIn, through email, Word of mouth, and start small. You might be able to even find clients online through sites like upwork. Com, Freelancer. Com, even on LinkedIn. Again, there might be some ways to find people who are looking to hire someone like you to either train them on a topic, teach them about something, come in and give a workshop, start your search before this two month break. Start planting the seeds before your two month break so that once that break arrives, you can hit the ground running. This may be a bit of a slow financial buildup. You may not make a ton of money the first try and you may not have a ton of clients the first attempt. So if your goal is to just bring in more money, you might want to look at jobs that are more transactional, where you can go online and find side gigs, virtual jobs that are project oriented, short term oriented, part time virtual that you can do to supplement your income and bring some more breathing room into your monthly budget. And our last question is about credit cards. You know those credit cards that carry really high annual fees because they promise you can earn back cash or points and maybe you've had this card for a while and you're just not reaping the benefits. It is more of a cost than a reward to you. So a friend in the audience says that she's tired of paying the annual fee for one of her platinum cards, which is almost $700 a year. She was told when she called the credit card company that she could downgr to a different version of the card which had a has a smaller annual fee, but she doesn't want cards with annual fees, period. What's also true is that she's worried about closing this account which could impact her credit score. So what should she do? First thing I just want to say is that if you're experiencing the same thing and you've been told that hey, you can just downgrade to a different version of this card. Maybe it's the gold version, the green version, there is an annual fee, but it's much less. You might want to consider that. Know that when you downgrade within the the same credit card company to a different kind of card, it's not going to hurt your credit score. It's called a product conversion. It's not affect your credit score. It's basically the same account that you have. It's just routing to a different card number and card type. And I'from experian.com A downgrade is a product change to a card that has fewer benefits and might have fewer fees. And it can be a good option because there's no impact on your credit score. You're switching cards without closing your account. There generally won't be any changes that could affect your credit score. So that hopefully resolves that concern. Now, another idea is that if you are okay with paying the six 95 a year, you could ask for a retention offer instead of a product conversion. This idea I got from one of our SO Money listeners, Dan Rodriguez. He's a points expert. This is just his passion. And he talked about how he recently got 25,000 points for keeping his account open and spending an additional $3,000 in three months on his card. And so if you're planning a trip and that 25 and those extra points could really help you pay for that trip, it may be worth it for now to do that. See what you can get out of this relationship to make that 6.95 that you're paying every year more worth it. But you're right, if you close this card entirely and you've had this card for a while, it's a trade off. Is it going to damage your credit score? You're not going to see a 100 point drop. You probably will see a little bit of a dip. But know that that's also temporary. Not going to stain your credit report forever. It's not going to drag your credit score down forever. If you're not in the market for a loan, a mortgage, a car loan, whatever, it's okay. Sometimes our credit scores, we take the hit because on the other side it means saving a lot of money or sleeping better at night. We don't have an immediate need to leverage that credit score. Then save your money and open up a card that makes more sense for you. And before we wrap, I just want to end on a financial tip that I've been practicing lately and I want to share that with you if it may be helpful. I shared this on Instagram. A lot of people weighed in. I think this is an issue kind of right now. And it's about healthcare bills. Not to open up a can of worms before the weekend, but you may recall I had some hospital visits earlier this spring. I pinched A nerve in the back of my my neck. And long story short, it led to a couple hospital visits, CT scan, etc, etc. I got the bill, it was $15,000 all right. But it said in little print that this is still in review by your insurance company. But the hospital wanted me to pay it. I was like, that's not happening. So I went on to live my life and they kept calling me and leaving texts and emailing me this bill. And finally today, insurance reviewed it and insurance paid almost all of it with the exception of $2,000, which is, which is not great. I don't want to pay $2,000. It should have been nothing. So all this to say, if you get a health bill from a medical examiner, from a hospital, from a doctor's office, and it has not yet been reviewed by your insurance, don't pay it. Why give this company a loan? Then you have to chase them down to get your money back. And we have had conversations on this podcast about the financial chall challenges within the healthcare industry. Not our financial challenges, but hospitals and medical practitioners and medical offices. They have financial problems. I get it. It's not fun to chase down an insurance company to get paid. Join the club. As a contractor, I have to wait 90 days sometimes to get paid. Everyone's hurting. But I'm speaking now as the consumer advocate. I'm just saying that when you get a health bill, you can give it a pause, you can give it a minute and fun fact. Unpaid medical debt is handled a little differently than other types of consumer debt. Even your bill goes to collections. The account is not going to show up on your credit report right away or possibly ever. And there was a recent headline, it was last year where the three major credit reporting agencies, Equifax, Experian, TransUnion, removed medical collection debt that was under $500 from credit reports. And this is as of April 2023. And Experian, TransUnion, Equifax, they give you a 365 day waiting period to resolve any medical debt before the collect appears in your credit, if it appears in your credit history. So all this to say, don't let your health bills stress you out immediately. There could be errors on your health bills, by the way. That happens a lot and your insurance company obviously needs to review it, Keep tabs on the bills, but don't feel like you have to pay it immediately. It's not an immediate priority. Enjoy the weekend everybody. Thanks so much for tuning in. I hope your weekend is so money.
- [27:24]
Earnin Representative
When it comes to your business every second counts. From mega factories to mom and pop shops, Ericsson helps tens of thousands of companies around the world build powerful connections every day. Power your business with our connectivity and communication education solutions. The invisible advantage driving your growth. Visit us@erickson.com Power that's E-R-I C-S-S O-N.com.
- [27:53]
Grainger Representative
Power Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you still think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide, and every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nielsen report.