How to 'Spring Clean' Your Finances

Summary

WSJ Your Money Briefing — "How to 'Spring Clean' Your Finances" (March 22, 2019)

Episode Overview

In this spring-themed episode, host JR Whalen (C) speaks with Emily Shalal (D), Senior Director of Customer Strategy at Ally Bank, about practical and effective ways to “spring clean” your personal finances. The discussion focuses on reviewing spending habits, maximizing savings, and taking thoughtful steps to ensure your money works harder for you throughout the year.

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Key Discussion Points & Insights

1. Rethinking Budgeting: "Pay Yourself First"

[02:33–03:33]

• Emily Shalal urges listeners to adopt a new savings mindset:
  • Instead of budgeting by subtracting expenses from income and saving what’s left, start by determining how much to save to meet your goals, then spend the remainder.
  • This "fundamental shift" can have a huge positive impact over a career.
• Quote:
  “A consumer should take their income, think about everything that they need to save to accomplish their goals, and then figure out how much is left to pay expenses ... something that could have huge impact for them over the course of their career.” — Emily Shalal [03:02]

2. The Power of Automating Savings

[03:33–03:59]

• Automate savings to remove willpower from the process and gain peace of mind.
• With recurring deposits, “you stop thinking about it and stop worrying about it and just know that you have this kind of peace of mind that you’re already allocating money towards your long term savings goals.” — Emily Shalal [03:40]

3. Tidy Up Subscriptions and Recurring Payments

[03:59–04:48]

• Review all automatic payments, especially subscription services like streaming, music, and apps.
• People often forget about "free trial" periods that begin charging after expiration.
• Conduct a quarterly review of recurring payments to identify and eliminate underused services.
• Quote:
  “It’s really important if you can’t do it monthly, to think about it at least once a quarter, to sit down and look at every recurring payment ... to see if it’s really driving the benefit that you had anticipated.” — Emily Shalal [04:23]

4. Avoiding Unnecessary Fees

[04:48–05:29]

• Regularly check for and eliminate bank fees (autopay fees, maintenance fees, low balance fees).
• Compounded fees, even small ones, can have a significant cost over time.
• Quote:
  “No one really sits down and thinks about how much compounded fees cost them over time ... whether it’s a small 50 cent, $1 fee, it adds up over time, and that can make big impacts over the course of a couple of years.” — Emily Shalal [05:05]

5. Maximizing Savings Account Interest Rates

[05:29–06:44]

• Shop around for competitive savings rates — many people overlook this step.
• Online savings rates can vary dramatically; taking a few minutes to compare can mean much better returns.
• Compound interest at higher rates “could be hundreds of thousands of dollars or years off of your retirement indifference, when you factor in compound interest over time.”
• Memorable Moment: Emily notes, “People will spend more time thinking about where they’re going for lunch ... and they won’t do the same thing for their online savings accounts.” [06:27]

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Notable Quotes

• On prioritizing saving:
  “A consumer should take their income, think about everything that they need to save to accomplish their goals, and then figure out how much is left to pay expenses.”
  — Emily Shalal [03:02]

• On automating savings:
  “The more you can automate kind of saving and create a recurring plan for yourself, the more you take willpower out of the conversation.”
  — Emily Shalal [03:40]

• On reviewing subscriptions:
  “It’s really important if you can’t do it monthly, to think about it at least once a quarter, to sit down and look at every recurring payment.”
  — Emily Shalal [04:23]

• On the cost of fees:
  “No one really sits down and thinks about how much compounded fees cost them over time.”
  — Emily Shalal [05:08]

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Key Timestamps for Important Segments

• [02:33] — Introduction to Emily Shalal and "paying yourself first"
• [03:40] — Automating savings for peace of mind
• [04:10] — The importance of auditing subscriptions
• [04:55] — Watching out for and limiting bank fees
• [05:29] — Shopping around for the best savings rates and maximizing compound interest
• [06:44] — Episode wrap

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Summary Flow (Listener's Guide)

If you haven’t listened to the episode, here’s what you’ll gain:

• A motivational push: The episode is upbeat and clear, emphasizing that small, regular tweaks — like automating savings or canceling unused subscriptions — can significantly improve long-term financial health.
• Concrete, actionable steps are offered for each area discussed, making even the less-exciting chores (like checking savings rates or sifting through subscriptions) feel worthwhile.
• The overall tone is pragmatic and accessible, encouraging listeners to proactively "clean house" financially the way they would at home in spring.

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Transcript

[A]

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[B]

With your money briefing. I'm Charlie Turner in New York for the Wall Street Journal. Spring is here, and so is Ally Bank's Emily Shalal with some tips on how to spring clean your finances. That's coming up first. Here are some money headlines. A bright spot for banks has dimmed the Wall Street Journal says high end home buyers are turning cautious, a blow to banks that refocused their mortgage businesses around wealthy borrowers in the years after the financial cris. Prices, according to Inside Mortgage Finance, Originations for jumbo mortgages, which are loans too big to be sold to Fannie Mae and Freddie Mac, dropped 12% last year by dollar volume, outpacing the 7% decline in mortgages that meet the standards for Fannie and Freddie's government backing. The $281 billion in jumbo originations was off 27% from its post crisis peak two years earlier. Biogen shares were crushed Thursday after the company and its Japanese partners said they were ending two late stage trials of a treatment for Alzheimer's disease. The trial failures represent the continuing difficulty drug makers have had trying to find a cure for the memory robbing disease. It's particularly bad news for Biogen investors, according to the Wall Street Journal, since the Alzheimer's drug Aducunumab was penciled in as a key source of growth for Biogen over the next few years. Biogen has also faced in drugs to treat multiple sclerosis and spinal muscular atrophy, two disease categories that generate the vast majority of Biogen's current sales. But the Wall Street Journal's hurt on the street says the silver lining could be that shares of smaller biotech companies could rise as Biogen finds itself challenged for growth and is forced to address its pipeline. Still ahead, J.R. whalen talks with Emily Shalal of Ally bank about financial spring cleaning.

[C]

Well, we made it. It's finally spring and after many of us got a lower tax refund than we were hoping for thanks to changes in withholding under the new tax law. This is as good a time as any to do some spring cleaning in our personal finances and maximize savings. Emily Shalal is Ally Bank's senior director of Customer strategy and she's here with some tips. So, Emily, let's start with taking care of number one. And that's you, the consumer. One of the things advocate is for people to be sure to pay themselves first.

[D]

Yeah. And we, we find that a lot of people think about budgeting and kind of the wrong way. A lot of people start with their income and then they take their expenses out of that and then they have, they look at what's left over and think about that in terms of what they can save. And really a consumer should take their income, think about everything that they need to save to accomplish their goals, and then figure out how much is left to pay expenses. And so, you know, it's a fundamental shift mindset for most consumers, but something that could have huge impact for them over the course of their career.

[C]

And an important thing for folks to do to be mindful of is to have money put aside on a regular basis for themselves.

[D]

That's right. So the more you can automate kind of saving and create a recurring plan for yourself, the more you take willpower out of the conversation and the more it just becomes a set it and forget it and you stop thinking about it and stop worrying about it and just know that you have this kind of peace of mind that you're already allocating money towards your long term savings goals.

[C]

Speaking of automation, lots of people have recurring payments as part of subscriptions. It's probably a good idea to make sure you're actually using all the services and the tiers of services that you're paying for.

[D]

That's right. So we live in a world in which every company is trying to get you to buy into some sort of subscription service, whether that's for, you know, your Netflix bills or your recurring music plan, or you know, an app that you've just tried out and downloaded that may offer you some sort of introductory trial period. And what we find is a lot of people will sign up for those and stop using them within days of starting it. But forget that they're going to be billed in the next 30 or 60 days for that. And so it's really important if you can't do it monthly, to think about it at least once a quarter, to sit down and look at every recurring payment that's coming out of your account to see if it's really driving the benefit that you had anticipated when you signed up for that service.

[C]

And if your bank is paying bills for you autopay on a regular basis, be sure you can get around fees.

[D]

That's right. And so, you know, you never want to pay a fee for anything, whether that's paying your bills or a monthly maintenance fee or a low balance fee from your bank account. You know, a lot of people have been taught about, you know, thinking about interest and this whole notion of compounding money over time, but no one really sits down and thinks about how much compounded fees cost them over time. And so it's really important just to sit down and every time you can look at a fee, whether It's a small 50 cent $1 fee, it adds up over time, and that can make big impacts over the course of a couple of years.

[C]

Another way to put some money in your pocket is to maybe search out an online savings account to put money away and you can shop around for a good interest rate and really try to work the system and work that to your advantage.

[D]

That's right. I mean, I think that the average, you know, online savings rate right now is less than, you know, 0.1% for most banks. And you can search around and find, you know, well north of 2% at this, which is a 2% difference for most consumers. And so, you know, when you think about 2% over the course of years, you know, there's a lot of calculators that you can look at, but that could be hundreds of thousands of dollars or years off of your retirement indifference, you know, when you factor in compound interest over time. So it's really important to always think about, you know, what rate means to you. And I think, you know, what we found at Ally through a lot of the studies that we've done is a lot of people will spend more time thinking about where they're going for lunch or, you know, spend time looking at product ratings and reviews for the next water bottle that they're going to buy. And they won't do the same thing for their online savings accounts. They'll just open an account without even looking at rate. Maybe it's where their checking account is. And you really want to be mindful of making a decision that's based on rate and fees when you think about your money and your savings products.

[C]

All right, very good advice. That's Emily Shalal, Ally Bank's senior director of customer strategy on the line with us. Emily, thanks for coming on the show.

[D]

Thanks so much for having me.

[C]

And that's your money briefing. I'm JR Whalen in New York for the Wall Street Journal.

[A]

This podcast is brought to you by reliaQuest. Cybercriminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now, and delivers insights to help them predict what's next. ReliaQuest agentic defense for the enterprise. Learn more at reliaquest.com that's R E L I A Q U E-S-T dot com.