Smart Money Podcast – Refresh Your Finances with Money Cleansing, Investing, and Family Travel Tips

Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:

Get a breakdown of the hottest tips from Smart Money this year, including wealth-building strategies and managing money in relationships.

How can you make your money work for you?

What’s the best way to save on group travel?

Host Sean Pyles presents some of the most impactful conversations we’ve had on Smart Money in order to help you make better decisions about your finances.

30-Day Money Cleanse: NerdWallet’s Kim Palmer talks to Ashley Feinstein Gerstley, author of The 30-Day Money Cleanse, to help you understand how small changes can make a significant impact on your financial health. They begin with a discussion of the financial cleanse, with tips and tricks on aligning spending with personal values, creating lasting habits in 30 days by using a method that has saved others an average of $950 over 30 days — without feeling deprived.

Wealth Building Strategies: NerdWallet’s Kim Palmer and Alana Benson discuss investment strategies and tax planning to help you understand how to navigate your financial journey effectively. They discuss investment strategies, with tips and tricks on understanding different investment accounts like 401(k)s and IRAs, leveraging compound interest, and the importance of starting investments early.

Group Travel Deals: What are the best strategies for using travel points and credit cards to your advantage when planning group trips? NerdWallet’s Meghan Coyle and Erin Hurd discuss the nuances of booking flights for groups, including how to navigate seat selection fees and what it means to earn status with an airline as part of your credit card rewards.

Money and Relationships: Host Elizabeth Ayoola interviews Rianka Dorsonville, a self-employed certified financial planner, about critical questions to consider before embarking on your entrepreneurial journey.

Vivian Tu on Building Wealth: How do you talk about money with your romantic partner? Personal finance journalist and podcaster Nicole Lapin joins NerdWallet’s Sean Pyles to talk about the delicate balance of finance in friendships and romance.

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This transcript was generated from podcast audio by an AI tool.

It’s America’s birthday this week, and to celebrate, we have some of the firecracker segments from this year’s episodes. Welcome to NerdWallet’s Smart Money podcast. I’m Sean Pyles. Bring out the hot dogs and coleslaw, cue the Star-Spangled Banner and take a holiday, listen to some of our favorite segments from the last few months. Maybe listen with a lemonade in hand to make this financial advice go down easy and sweet, or shall we say even easier and sweeter than usual. And while you’re polishing off delectables in the barbecue this week, don’t forget, if you have a money question for the Nerds, call or text us on the Nerd hotline at 901-730-6373. That’s 901 730 N-E-R-D, or email us at [email protected]. Also, follow us on your favorite podcast platform like Apple Podcasts, Spotify and iHeart. And if you like what you hear, please leave us a review and tell a friend.

If you haven’t done your spring cleaning yet, well, it’s summer, so get to it. That includes your finances, as we learn from Ashley Feinstein, author of The 30-Day Money Cleanse.

So Ashley, let’s start with what is a financial cleanse? Does it involve lemons and vinegar?

Ashley Feinstein Gerstley:

You’d think, right? You’d think that it would have some interesting food items as well, but it is about letting go of the things that don’t bring value to our lives and realigning and rethinking how we spend our money so it can be more conscious and intentional.

What do you like about the financial cleanse concept? Because I think you’re right, we usually apply that to food. So what is it you like about applying that to money?

Ashley Feinstein Gerstley:

Originally when I created the program, it was actually created after a food cleanse in the same format because I think food and money are very similar. They are both emotionally charged. There’s so much more to them than just the numbers. And that’s what I was seeing over and over with clients is that sometimes we don’t have the education and we aren’t sure what we should be doing, but then even once we know what we should be doing, oftentimes we’re not doing it and that’s where our money mindset came in. And so The Money Cleanse definitely helps us shift that and put together that plan over the course of the 30 days.

And what is it about 30 days? Why did you choose that versus a week or six months?

Ashley Feinstein Gerstley:

30 days gives us enough time where it’s that first week when we do something, we can feel really excited and have a lot of momentum. And then in maybe week two, week three is where it can get challenging and where we might end up giving up. And so I think a lot of the transformation in The Money Cleanse happens in those two and three weeks. And also there’s just a perfect amount of content to cover over the course of four weeks because we don’t want to take on too much. We all have a lot going on. We have jobs and social lives, but there’s a lot to cover. So if we are able to break that down into more bite-sized weekly chunks, I thought that was a really great format for The Money Cleanse. And even though it is called a cleanse, the idea is at the end you have a new lifestyle that lives on far long after the cleanse.

We’re definitely going to get into all of those details in a minute, but first I wanted to ask you what you learned personally the first time you applied this to yourself. How did it go and what did you learn from it or change?

Ashley Feinstein Gerstley:

A lot of the concepts were concepts that I applied to my own life as I was learning and not in any given order, but what I found is that working with people across different goals and income levels, I was saying a lot of the same things over and over again and a lot of the lessons that I learned and provided me with a lot of transformation worked really well in this money cleanse format where we first focus on ourselves and then also on the environment around us. I think a lot of times we think of our own money lives, but so much of our lives are interacting with our family, our friends, our coworkers, and so how does that work with our finances as well?

The numbers you share in the book I thought were pretty shocking. You say that according to your research, the average participant saved $950 over 30 days, and that is more than 20% of their pretax income on average. That’s amazing. Where are these savings coming from?

Ashley Feinstein Gerstley:

Honestly, a lot of it is just from intentionality. The coolest part about that stat to me, I was very thrilled always at the end of The Money Cleanse program. I ran it live for five years before turning it into a book, I would ask people at the end about their results and really understand what their income is and how that savings kept going. I think a large portion of that savings was happening month after month after The Money Cleanse, but I think the best part was that they mostly didn’t feel deprived and that it wasn’t like, “Oh, I’m staying home and eating canned beans every night in order to save that $950.” It was a lot of shifts and a lot of things that actually didn’t feel bad to them, which makes something that you’re able to keep going and keep consistent.

Yeah, I think that goes back to what you were mentioning before in that you don’t want to just do this for 30 days, but it’s about setting up some new habits and some things that really stick with you.

Once you’re done with spring or summer cleaning your finances, it’s time to think about the best ways to build wealth. For that, we turn to some of our fellow Nerds who conducted a super useful webinar on the subject.

Welcome everyone. I am Kim Palmer. I’m a personal finance writer at NerdWallet where we help people make smart decisions. One important note, we are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. NerdWallet Inc is not an investment advisor or broker and does not provide personal financial advisory services. Today we are excited to talk to you about the basics of investing and taxes and we think we have some helpful info to share with you. You can always find more at nerdwallet.com or on the NerdWallet app. Our goal today is to kick off a helpful discussion about investing and tax information and tools. Alana Benson writes about investing topics including stocks, funds, and ethical investing. And now I will hand it over to Alana.

Thanks Kim. Hi everyone. Thank you for joining us today. So before we start, I just want to say a couple of things that often get forgotten when we’re talking about investing. So first, investing usually comes second to some other goals. If you’re having a hard time paying for necessities or you don’t have an emergency fund, it’s really important to focus on those things before we even start worrying about investing. Second, instead of scrimping, try to increase your income. So I didn’t start investing until I was in my late 20s, and that’s because one, I didn’t work at NerdWallet yet, so I literally didn’t know anything. And two, I was making around $25,000 a year, so I didn’t have much expendable income. And when you don’t have extra income, it’s really hard to prioritize investing and it just might not even be a good idea to do that.

When I started making more money, it was suddenly a lot more possible for me to invest for retirement. So if it’s possible for you and you want to be investing more, look for jobs that will pay you more or look into side hustles, but cutting back on your streaming services probably will not save you enough money for retirement. And finally, if you don’t have the money to invest now, that’s totally fine. Some people have serious money anxieties and others just don’t have the cash. Whatever your reason is, don’t stress too much about it. Just keep learning and when you’re able to, you can start investing. So why do we invest? What is the point of all this? And the answer is that it’s because we like money and that’s okay. There’s no shame in admitting it, I like money, most people like money. It’s because money isn’t just money. It’s not like Scrooge McDuck diving into pools of money and buying Maseratis. It’s not that.

It’s about not being stressed about your money all the time and it’s about being able to buy everything that you need and some stuff that you want comfortably without having money stress take up all of your energy. Money allows us to thrive instead of just survive and investing helps you make more money than you could ever possibly make just by working at a job. So okay, what actually is investing? This whole process is very strange. Okay. Investing is the process of money that you already have making additional money for you. And this works through what’s called compound interest. Compound interest means that your gains get a little bit bigger every year and that’s also why starting when you’re younger gives you a huge advantage and more money in the long run. So for example, you just start at that little number one in the box up there. Say you buy an investment for $100, if it goes up the average stock market return of 10%, it could then be worth $110, meaning that you’ve made $10.

Then that $10 that you earned also starts earning compound interest on top of the $100 you initially invested. That doesn’t sound like much of a profit, but imagine if you were doing it with way larger amounts of money over a way longer period of time. Now that 10% is an annualized rate, which means that you’re not going to get 10% every single year. In all likelihood, some years you’re going to finish up, some years you’ll finish down. But over the course of decades when you average all that out, you tend to get about 10%. The way you actually start investing is through an investing account. And there’s a couple of different types, but the type of investment account you have is actually really, really important because a lot of them have some pretty significant tax benefits that you want to take advantage of. So you’ve got your 401(k)s and these are offered through your employer. You add money to it and sometimes your employer matches it. So it’s basically free money. If you have a 401(k), you’ll likely choose your investments from a pre-selected list or a fund that will automatically adjust itself over time.

So this means 401(k)s are typically very hands off. IRAs on the other hand are investment accounts that you open up yourself. IRAs can be opened online through brokerages and actually at a lot of large banks, they also do that. So it’s likely you can open up an investment account just through your bank. Unlike with a 401(k), IRAs you’ll have to choose your own investments in those accounts. You may have heard about a thing called a Roth IRA or a Roth 401(k) and it’s good if you know the difference. So with a Roth, you pay taxes on your money now just like any other money that you earn and then the money you have invested inside that account grows tax-free and you can take it out tax-free in retirement. With a traditional IRA or 401(k), the money you contribute today is pre-tax.

So that is you get to deduct it from your income taxes this year. So it’s like a nice little treat this year, but then when you cash it out in retirement, you’ll owe income taxes on it. This is really, really important. I’ve seen a lot of people make this mistake. Your investment account is not an investment, so a Roth IRA, a 401(k), not an investment. So if you have a Roth IRA, that’s great, but that doesn’t mean you’re actually invested in anything. So you fund your investment account and then you buy investments from there. But I’ve heard of people opening a Roth IRA, putting in a bunch of money and then wondering why it didn’t grow over the last 10 years. So you have to purchase investments for your money to actually grow and if you don’t do it, you’ll miss out on all of those years of growth.

All right. So far, we’ve been taking you through a lot of information about how to save, save, save. How about we take a break and do some spending on travel? We did a nerdy deep dive series earlier this year about how to get deals for group travel. Here’s a part of the conversation between guest host Meghan Coyle and fellow nerd, Erin Hurd.

Erin, welcome back to the show.

Hey Meghan, thanks for having me.

I have a family of four and we like to travel, take lots of family trips together. That includes my husband and we have two kids who are under the age of 10.

Have you all been traveling together since the kids were young?

We have, yeah. We love to travel, and when we had kids, we made a commitment that we were going to keep traveling no matter how we could, no matter what that looked like. Our kids have been really good travelers.

I know one part of the trip is traveling on an airplane with kids or with your whole family, it doesn’t matter how old they are. How easy or hard is it to sit together on an airplane these days?

Well, if you have booked a basic economy ticket, it’s a little bit harder. You basically will not be able to sit together as a group or as a family with most airlines if you have purchased a basic economy ticket, so I would avoid them if possible.

So many reasons to avoid them.

I think it’s getting a little bit better. President Biden has targeted seat selection fees in part of his junk fee crusade, and as a result, several of the main airlines like United and American have kind of adjusted their policies to make it a little bit easier for families to sit together. But the bottom line is, a lot of times if you want to sit together, you’re going to have to pay for it, unfortunately. There are a few ways to get around those fees or to help cover those fees that I’ve found.

Yeah, tell us about them.

One of them is that many of the premium travel credit cards come with something called an airline incidental fee credit. They all work differently depending on which card you have. If you have a travel card, definitely check into this so you understand the rules for your particular card. But if you have a credit like this on your travel card, you may be able to charge the seat selection fee to the card and then have it wiped off as a credit as part of your annual fee. That’s a good way if you want to pick specific seats, if you want to pick exit row seats, all of that is usually allowed under the airline incidental fees. But it’s important to note that upgrades are usually not. If you want to select a seat and that seat happens to be in a more premium cabin, that fee will probably not be able to be wiped off with your airline incidental fee credit.

What are your options if you do want to have your whole group or family fly in one of those premium cabins? Is there an alternative?

Usually if you’re booking a premium cabin, you’re able to get seat selection as part of your ticket, and so that’s not usually a problem. Now, another hack to avoiding fees and being able to sit together is if you have status on an airline. Generally, most elite statuses with airlines will allow you to select seats at the time of booking for your entire party. You may be thinking, “Oh, well, only road warriors would have status in an airline,” but it may be easier to earn status than you think. There are several airline programs now that allow you to earn status just from spending on their co-branded credit cards. It might be something to look into if you’re flying a lot.

If you are able to earn status on one airline, there are generally opportunities where you could take that status and be able to use it on another airline. That’s through something called status match opportunities. Now, these kind of come and go and they differ by airline, so you definitely want to do your research and figure out what opportunities are available to you. But the general gist is that, if Delta knows that you have status on American, they know that that probably means that you fly on American a lot, and so they would like to have your business to fly on Delta. So a lot of these airlines will offer you the chance to enjoy status with their airline for free for a temporary amount of time. Usually, they’ll give you the chance to earn that status for a much longer period of time if you meet certain requirements like flying a certain amount of segments within a certain timeframe. That’s a cool backdoor way to make sure that you’re always getting the seat that you want.

Not to mention all of the alliance partners and other airline partners, you might not even need to status match. You could possibly get some of those same elite status benefits that you already have on one airline with some of their partners, so that seems really cool. Let’s

We’ve got a lot more of our best material from this year so far, coming up after a break. Stay with us.

Another Nerdy deep dive from earlier this year dealt with the vagaries of self-employment. Things work a bit differently when you’re your own boss. My co-host Elizabeth Ayoola brought us an interview with the certified financial planner, Rianka Dorsainvil, about how to budget when you’re self-employed, whether you need to separate your personal and business finances and much more.

Rianka, welcome to Smart Money.

Thank you, Elizabeth, for having me. I’m so excited to be joining you today.

I am a certified financial planner, and I have been a financial planner for almost 15 years, which sounds so wild to say that. Very quickly, I stumbled upon personal finance when I was in college. I actually first went for math, engineering, and trying to figure out what it is that I wanted to do, but I knew I loved helping people. I stumbled upon a personal finance 101 class, and literally, the rest was history. I was like, I need more of this. During that time, I learned about 401ks, disability insurance, student loans.

I saw right then and there that I could make a tangible impact right away in my friend’s life. So fast-forward, I graduate from college in the traditional wealth management space. And because I was starting off in my career and also known as a financial planner amongst my peers, a lot of people wanted to start working with me. And unfortunately, the firm I worked for, you had to have a million dollars of investable assets in order to work with me. And I’m like, listen, I’m 24 years old, unless you have an inheritance, what 25-year-old you know has a million dollars?

Okay, but listen, these 25-year-olds were yearning for the education and to get their money right. So I’m like, who am I to say I need to hold hostage this information that I have only to people who already have amassed a million dollars? So after five, six years working for a firm, I decided to leave and launch my own. And so that’s just the short end of it. I know that’s not the topic of conversation for today, so.

I appreciate that, and you sharing your story, that is so inspiring. So on that note, my next question for you is how can people decide whether entrepreneurship is for them? And when I say entrepreneurship, I’m talking about gig work, contracting, freelancing, or even starting a small business. So what are some things that people should consider before they dive into that?

Well, we are definitely in the gig economy right now. Everyone has a side hustle. So even my clients who have jobs that are paying them well, they are not necessarily living paycheck to paycheck. They are starting these “side hustles” or these passion projects because that’s what it is. It’s a passion. And who am I to say, or who is anyone to say, that you shouldn’t pursue your passion and also get paid for it? So I’m thinking about this in two different ways, Elizabeth. I’m thinking about this as a side hustle, and then I’m thinking about this as a 100% you are transitioning from employee to entrepreneur. So if this is your side hustle, there’s no risk associated with that. So I am all about multiple streams of income. Now, what you do with this money is very important because you have to figure out The Why. Why am I, one, going to start this business? Two, now it’s going to take my time. Time away from other things, time away from other goals, time away potentially from my family.

And so The Why definitely has to be great for you to start the business and also to see it follow through. And then, if we can, I want to lean into those who are transitioning from employee to entrepreneur. 100%, for me, the reason why I ultimately decided to transition from a very well-paying job, I was earning a W2, I had a retirement account, I had health benefits, I had everything. You want to know why?

My mental health. And so prior to me taking the leap, and this is guidance, not necessarily advice, but guidance for those who are thinking about transitioning from employee to entrepreneur, is you have to have a budget. This is something that I share even with those who have a 9 to 5. I have worked with hundreds of families, I’ve worked with millionaires and I’ve worked with thousandaires. And it does not matter how much you earn, it matters how much you keep. So you can be a millionaire or a thousandaire, everyone needs a budget because if you don’t know where your money is going, you’re going to wonder where it went. So before you start anything, you have to take stock of where you are.

So we know everyone needs a budget. As Rianka said, before you start anything, you have to take stock of where you are. That doesn’t just apply to starting your own business. It can also apply to relationships. Money can be a super tough topic to address in a relationship, but it’s oh, so important. Here’s part of my conversation with Nicole Lapin, personal finance journalist and host of the Money Rehab podcast.

What do you think are some ways that couples can live with financial differences of opinion and priority and not let it tear them apart?

Understanding where you personally rank in order of importance is a key to solving whatever disagreement that is. So if I say, “Hey Sean, this issue about buying a home is a 10 for me.” I like to rank it from 1 to 10, so I have couples say, “This is a 5 for me.” And maybe to some other person they had housing insecurity or they have a lot of trauma around that type of stuff and this is a 10 for them. I think in that situation then, the person with the 10 kind of wins. And you can’t use it recklessly and say that everything is a 10 of course, because hopefully you have a better foundation as a couple there, but I think it’s important to say like, “Hey, this is an 8 for me” or, “This issue of vacation or cars or whatever, that’s a 2 for me.” And so I would just go back and forth as a couple and rank the order of importance for you for whatever reason that is.

And a lot of these financial decisions, as you know Sean, are not about numbers and math and IRA statements and bank statements and things like that. They’re very emotional. For me, housing is really important because I saw my house get foreclosed on when I was a kid. Or some people might have gone through the housing crisis and had some issue there. Or I think that this unearths a lot of the reasons that people act the way they do when it comes to money, which can only bring you closer as a couple.

And I think there’s also room in that ranking to say, “Hey, you really care about this thing. I am never going to care that much about it, but I want to find the middle ground between supporting you and whether it’s going on more vacations or something more substantial like becoming a homeowner and letting you do your own thing. I realized I’m not going to be part of that as much.”

So with my partner and I, he really wanted to buy a house pretty early on in our relationship. And for me, I didn’t have the savings, I didn’t have the priority, but he had both of those things, and so he was able to buy a house. And that meant that when he was saving up money for that down payment, we didn’t go out to eat for dinner as often because I knew he wanted to save more money. So I made smaller changes that allowed him to meet his goals while I knew that it wasn’t something that I was personally going to be working on in the same way.

And finally today, we spoke recently with Vivian Tu, who you may know from her videos on social media, where she’s known as Your Rich BFF. She also hosts the Networth and Chill podcast, and is the author of the new book, Rich AF: The Winning Money Mindset That Will Change Your Life. Here’s part of our conversation from earlier this year.

Well, I want to talk about your book. Early in your book, you discuss how laziness can be a virtue when it comes to building wealth. Please explain what you mean by this, and can I and all of my listeners become millionaires by sitting on our sofas?

I think traditionally we’ve been taught “you work harder, you make more money.” We all know it’s like, you do more, you get more. Great. But our bodies and our brains can only feasibly work for, let’s call it, on average 16 hours a day before you’re kind of like, there’s diminishing marginal returns, you’re really starting to burn out. You’re exhausted, you’re physically and mentally doing badly. So your body and your mind is frankly not that good of a money making tool because it can’t work around the clock. And rich people know this, they know the thing that can work around the clock though is their money. Their money can work 24/7, doesn’t need a lunch break, doesn’t need anything to sit down and relax for a second. Your money can work all the time. And so what I say is investing and making your money work hard for you is the easiest way to be a two-income household, even if you’re single because you can sit back on your couch and eat potato chips while your money continues to work for you, even if you are not laboring for money.

And the ultimate quickie equation is at the beginning of your career and your adult life, you are working hard for your money. You have a job, you’re trading your time, your effort, your energy for money, and if you are mindful of that money coming in and you’re able to set some of it aside so that money can work hard for you by investing, then over time, if your total income and money is a pie chart, the amount you get through labor becomes smaller and smaller and smaller, and the amount you get through investing or through your money working hard is bigger and bigger and bigger, and proportionally, you’ll get to spend less time working, more time chilling, while still having just as much if not more money coming in the door.

And this is why we talk so much on Smart Money and the personal finance space about automating your finances. Even if you’re automating savings into a high-yield savings account or contributions to an investing account, it’s exactly what you’re talking about. You are putting the mental load of making sure your finances are doing what you need them to do so you can achieve your life goals on autopilot.

And that’s all for our special July 4th BBQ feast version of Smart Money. Go USA! Whether you’re getting ready to sell your first home or are excited about some creative ways that you’ll be saving money on summer activities this season, we want to hear about it. So that means texting us or leaving us a voicemail on the Nerd Hotline at 901-730-6373, or emailing us at [email protected]. Also, visit nerdwallet.com/podcasts for more info on this episode. And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts and iHeartRadio to automatically download new episodes.