Q&A: Financial literacy month edition
Money questions keeping you up at night? You're not alone! In this special Financial Literacy Month episode, we open up our inbox to tackle your burning financial questions related to all things personal finance.
From the intimidating "how much do I actually need for retirement?" to the all-too-relatable "why do I feel so behind compared to my friends?", we’re answering your questions with our own experiences — without judgment or jargon.
Whether you're stressed about investing, puzzled about budgeting with inconsistent income, or simply too scared to even look at your bank account, listening to this episode is the perfect first step.
📌 Time Stamps:
[00:02:00] How to find a balance between retirement savings and enjoying life now
[00:09:00] How to create healthy financial relationships with a partner
[00:12:00] Investment strategies
[00:16:00] Whether or not to participate in your 401(k)
[00:19:00] How to budget with inconsistent income
[00:23:00] How to prioritize debt
[00:26:00] How to deal with financial comparison
[00:33:00] How to get over the fear of looking at your finances
[00:37:00] How to know whether you need to hire a financial advisor
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Transcript
Emily Batdorf: Are you drowning in money questions but too embarrassed to ask? Tired of scrolling endlessly through conflicting financial advice that leaves you more confused than when you started? Welcome to the Finance Girlies podcast, your cozy corner for all things finance. I'm your host Emily.
Cassidy Horton: And I'm your host, Cassidy. We're both finance writers for brands like Forbes Advisor, USA Today Blueprint, and Yahoo Finance. Throughout our careers and personal lives, we have come to one realization. When we keep our money worries to ourselves, we end up feeling alone. That's why each episode, we tackle those burning questions you've been afraid to ask with no judgment, no jargon, just real talk about real money. Ready to finally get answers? Let's dive in.
Welcome back to the Finance Girlies and happy Financial Literacy Month. We're all about making money feel more [00:01:00] approachable and what better way to celebrate than by doing a Q&A. We asked our Substack newsletter list and community for your real money questions. We said no questions were too small, too awkward, too niche, anything like that. And we're glad we did because the questions you sent in were so good.
Emily Batdorf: A few of them were questions we've definitely wrestled with in our own lives, too, so today we're going to answer them.
Cassidy Horton: And just to be clear, we are not financial advisors. We're just two girlies who write and think and talk about money for a living, and we love having these kinds of conversations.
Emily Batdorf: Yeah, and one just brief announcement before we get into the episode. We mentioned last week, but if you haven't heard, we are on Substack now, and our Substack is home base for the Finance Girlies. You can find our latest episodes, show notes, and even our email newsletter there. If you ever want to reply to an episode or just come hang out in the comments, that's the best place to do it. We're at thefinancegirlies.substack.com, or you can just search the Finance Girlies on Substack, and you'll find us. Okay, [00:02:00] let's get into the questions.
Cassidy Horton: Okay, so I'm going to read off two questions that we received because I think they're very similar. And then we can kind of discuss and answer those two questions kind of as one. So the first question says, how do I know if I am on track with my retirement savings? I feel like sometimes I just lean way too far into that, I must be maxing out my Roth IRA and SEP every year bucket. But then I wonder if I'm over-saving and could use that money elsewhere. And then the flip side of that question was question number two. How do you find a good balance between saving for the future and also having some fun today? I feel like a lot of times it's really hard to draw a line between what should go toward my future and what I can use today.
So first, I'm going to say that I have these thoughts with myself all of the time. So I'm going to share what really helps me work through, [00:03:00] like, am I doing okay or am I not? Because we talked about before, money is very emotional. And I think sometimes you can be actually really financially secure, but feel like you're not based on your money beliefs, your maybe like past money trauma, all sorts of things. And also the flip side can be true, right? Like you can feel like you're financially secure and doing okay, and then actually kind of not be once you look at everything.
So when I start to have these thoughts, I personally just like to look at the hard data. I'm like what does the math tell me and so this is what I usually do my first suggestion to you would be to figure out how much you need to retire and there are a lot of arbitrary numbers out there you should have a million dollars saved for retirement there are other people out there that say a million dollars isn't nearly enough to retire so it can leave you thinking well like how much should I actually have to retire?
So I like to lean on the rule of 25 for [00:04:00] this, and pretty much what you do is you take however much money you think you will spend per year in retirement, and you multiply it by 25, and that gives you your target retirement number. So if you think, I'm going to spend about $100,000 a year in retirement, that times 25 is 2.5 million. So now all of a sudden you know that you need $2.5 million to retire. That's probably going to be a really big number that makes you think, if you're anything like me, there's no way I'm going to have that much money saved by the time I'm 60, 65 or whatever.
So my next suggestion to you, and this is what I do, is to pull up a retirement calculator and to figure out based on your current age based on how much you already have saved based on how much the stock market returns on average based on the year you plan to retire how much money would you actually have at 65 based on everything that you're doing right now?
Because the truth is, even if you need $2.5 million to retire, [00:05:00] you don't have to save $2.5 million. If you start young enough, you will probably need to save just a tiny little fraction of that. And then compound interest will do all of the other work to get you there. So once you plug it into a retirement calculator, it will tell you, based on everything you're doing, if you keep saving X amount a month like you normally do, this is how much you will have by retirement age. And then if that number is way higher than the number that you need for retirement based on the rule of 25, you can tell yourself, okay, maybe I can pump off the gas a little bit, spend some more money on me. I can step back. I'm doing great. Or if it's the flip side and that number that says you're going to have is way smaller than the number that you need, then you can say, okay, now that I have this information, I can make a plan to save a little more aggressively. That is usually what I do. It's like a gut check for me to be like, you're doing good, or maybe you need to do a little more work.
Emily Batdorf: I think that's great advice. It [00:06:00] can be hard, I think if you, like, have a feeling that you're maybe not saving as much as you should be, it can be really hard to, like, figure out how much you need and see how well you're doing to be on track to get there. So we understand that. But I do think, like having the information sooner rather than later, like allows you to make those course corrections.
Cassidy Horton: And then if you find that it's helpful, there are retirement benchmarks out there. And a lot of these are articles that are just like, usually by age 30, you should have the equivalent of one times your salary saved. So we'll link this in the show notes below, but there's an article Fidelity put out that says you should usually have one times your salary saved by 30. So if your current salary is $100,000, you should have $100,000 saved by 30. And that doesn't mean you have $100,000 in your savings account, right? That includes retirement accounts, investment accounts, emergency fund, [00:07:00] like all of the money that you have.
It also says you should have three times your salary saved by 40, six times your salary saved by 50, eight times by 60, and 10 times by 67. But once again, these are just benchmarks to help you gauge. And if you currently spend a tiny little fraction of your salary every year, you may need far less than that saved or vice versa. So,
Emily Batdorf: Yeah. And also just like to get back to kind of the root of this question of finding a good balance between saving for the future and having fun today. Like that balance is going to shift throughout your life as you like, go through different phases. So for example, if you have like, young kids in daycare, you're probably spending a big chunk of your paycheck on that daycare and you're probably not going to be able to save as much as you had been able to up to that point. And that's okay if you're not hitting your ideal savings goals every single [00:08:00] year because like your kids are in daycare and like you want to go on a vacation once or twice a year like that's understandable maybe there's years in the future when you'll be able to save a little extra and kind of catch up so yeah things change every year and don't feel like you always have to be hitting these benchmarks all the time, because that's not really realistic with how life works.
Cassidy Horton: I also think if you're in a line of work like Emily and I, where you're freelance writing or you're self-employed or anything like that, your income will naturally fluctuate so much year to year. Yeah. That might be for reasons in your control, like you're intentionally scaling back because you just had a baby or because you're going through this other life transition. Or, you know, it may be for reasons outside of your control. You developed a medical condition that requires you to work less at this moment, whatever it is. But that's also a time where, you know, you may be in a position to save less when your income is smaller, but also save more when you're having those bigger months or those bigger years. [00:09:00] And there's nothing wrong with that. That's just life because life is always kind of in flux.
Emily Batdorf: Very true. All right, next question. How do you recommend folks have a healthy financial relationship with a partner? My partner and I are not married, but we've been together for nearly a decade. I think it's tricky to blend finances with a significant other, especially with different incomes. Obviously this will vary between relationships but any tips would be appreciated.
So we did an episode on this topic recently so be sure to check that out we did, I think it was around Valentine's day, we did an episode about merging finances with a partner but we'll do a bit of a recap here as well.
Cassidy Horton: It's episode 10 for anyone who wants to go back and listen.
Emily Batdorf: Perfect. So if you are at a point where you're trying to figure out how to blend money with a partner, you probably need to have some sort of initial conversation or more [00:10:00] likely a series of conversations to chat about things like, how you currently feel about splitting finances. So does it feel fair to both partners or do you feel resentment or guilt about any of the expenses and how you're splitting costs? How do you feel about the way your accounts are set up? Do they feel like they're merged to an appropriate extent, or do you want them to be merged more or less?
Do you think your current money management system is working? And then if your income is disproportionate, you might want to work out a way to split up expenses that feels more equitable. So for example, if one of you earns, let's say for easy math, $60,000 and the other person earns $40,000, it might make sense for that person who's earning $60,000 to pay for 60% of the expenses. So that's just one example.
Once you've [00:11:00] had these conversations and are on the same page about a system that works for the two of you it might be helpful especially at first to have some like regular money conversations so one thing that helped my husband and i shortly after merging finances was checking in with our budgeting app on like a weekly basis and we would look over our spending our current savings goals that we had and we would just run through those things together make sure we were on track, talk about any new goals we had coming up that we wanted to save for and things like that.
And I think one more tip before we move on to the next question is something I learned here we go again from Ramit Sethi and that's because he's just like the expert on money and relationships so that's I think why we're referencing him so much but he says that your first money conversation you have with your partner if like this is something you avoid, [00:12:00] make your first conversation as positive as possible. Like, don't get into your debt and the bills and like all these obligations and things you're stressed about like just have a positive conversation about like what do we want to be able to spend our money on in the future and like what would dream vacation look like for you? Something like that. But just try to start off on a positive note and work from there so that it doesn't feel quite so overwhelming.
Cassidy Horton: Yeah, that's a really, really great suggestion. Okay, the next question is, in terms of investing, do you have a specific strategy or do you stick with total stock ETFs? Those are the only things I know to buy. And I will start this out by saying that's all I buy as well. I have a joint investment account with my spouse, and then I have a solo 401k, a Roth IRA, and a traditional IRA. And for all of them, I just do ETFs. Some of my favorite ones are more of the total stock ETFs, so like [00:13:00] VOO, VTI, VUG. So far, I felt like all of those are enough. As I get older, I may start to weave in more bond-based ETFs like BND, which is a Vanguard total market bond fund, to be more conservative with my asset allocation. But so far, I just stick with the total stock ETFs for the most part, and I feel satisfied after doing it for years. So...
Emily Batdorf: Yeah and I just invest in target date funds. I think that was like the thing that allowed me to start investing when I did like I knew if I was going to it would have to be really really easy that's what I did and I think that works too so yeah.
Cassidy Horton: And if you're hearing this now and you're like this sounds confusing I don't really understand Emily's way of doing it with the target day fund is like by far the easiest it's as close to like setting and forgetting an investment portfolio like as you can get in investing in individual ETFs is like a little more [00:14:00] hands-on but still very much recommended if you want to like passively invest and just kind of grow your wealth over time and not really worry about it so.
Emily Batdorf: Next question, what kind of account should I hold my emergency fund in? A high-yield savings account is probably the best place for an emergency fund for several reasons. One, your money will grow at a faster rate than if you kept your emergency fund in a checking account or a traditional savings account. Some of those traditional savings accounts have interest rates of 0.01%. Whereas with a high yield savings account, you can earn, I don't know what rates are currently like, but at least 3%, which is just, it makes such a difference. So that's one reason.
Two, your savings account, high yield savings account, as long as it's at a bank that's insured by the FDIC or if you're using [00:15:00] a credit union, the NCUA, then your money is protected up to $250,000. So that's important too. If you are investing your emergency fund, that's not a great idea for a number of reasons, but one is that you're potentially liable to lose some of that money and that won't happen in a savings account. Another reason a high yield savings account is a good place for your emergency fund is that it's accessible and there when you need it. So you don't have to worry about your money being off limits during certain times. It's always there. But it's not as easy to access as a checking account is where, you know, you have like your debit card and you can make as many transactions as you want. If you keep that money in a savings account, you won't be as tempted to spend it because it'll just be a little bit harder to access.
Cassidy Horton: And if you're interested in learning more about how to choose the right bank account, check out episode number four. We did a Q&A episode [00:16:00] all about choosing bank accounts and which banks we use and all that good stuff. So all right, next question.
My 401(k) plan is awful. Should I still contribute to it? What if my employer doesn't match? and I will start by saying if you have an employer plan with no match I would not immediately discount it because it's still a tax advantaged account that allows you to contribute up to twenty three thousand five hundred dollars per year compared to an IRA which is capped at $7,000 so it's much less if you use an IRA.
Plus, the good thing about a 401k is that the contributions that you make are usually automatically taken out of your paycheck before that paycheck even hits your bank account. So it takes one less thing off of your plate. Like, you don't have to remember to save money for retirement every month. Your employer is taking that money out of your paycheck and doing it for you on your behalf. So the money is gone before you even know it's there, which can really help you save for retirement more consistently. And then, like I said, if you [00:17:00] don't have access to an employer-sponsored plan, you can use things like IRAs or potentially a health savings account if you have a high-deductible health insurance plan to save in a tax-advantaged way.
And then if you're self-employed, you do have access to solo 401ks, SEP IRAs, and simple IRAs too.
Emily Batdorf: Yeah. So obviously a match is great, but there are other options, I think is the moral of that story.
Cassidy Horton: Yeah. And also just that still contribute. Like even if the 401k plan is awful, you owe it to future you to save for retirement because no one else is going to do it for you. And even if you leave that employer, you can roll your 401k over into an IRA. So like that is still your money that you can take with you even after you leave that employer. So it's worth it.
Emily Batdorf: Yeah, that's a good point. Because I have heard people say, like, I'm not going to bother participating in my 401(k) plan because, like, I don't plan to be at this workplace for 10 years [00:18:00] and it doesn't seem worth it. Or, like, they don't offer a match until you're three years in or whatever. But you're so right that is still your money and you get to take it with you so why not.
Cassidy Horton: Yeah so just for a little side story here I was an academic advisor for a year and a half and I think over that year and a half with retirement contributions I had maybe $3,000 in the retirement account and my employer did match so whenever I left I did lose the match but I didn't care because I myself had saved around three thousand dollars in the account and because I got that job when I was like 22 I think that $3,000, I rolled it over to a traditional IRA even if i never put in another cent it would grow to at least thirty thousand dollars by the time i retired so just the fact that I'd saved $3,000 at age 22 and then let it sit there right like it was still worth it so even small amounts if you don't plan on being with an employer for a while it can grow into way more than [00:19:00] you think by the time you actually retire so it's worth it.
Emily Batdorf: Yeah, good little story. Next question. How do I create a consistent budget when my freelance income fluctuates dramatically from month to month? And we are perfectly able to answer this question because this is us. So I'll share what I do. I definitely don't make the same amount of money every month. Sometimes it really is like, dramatically different.
So I set myself like a base monthly salary that I am confident I'll earn every month. And I would say part of how I arrived at that number had to do with just like having a couple of years of freelancing under my belt and being able to see how much I'd earn month to month and throughout the year. That might take a little bit of practice, but I would say estimate like low if you're kind of on the fence. After paying myself my base salary, paying my business [00:20:00] expenses, and putting money toward other categories, I want to fund every month. So for example, travel, professional development courses, etc. I put anything else that I earned that month into what I call a cash cushion fund up to a certain amount. So I have decided, you know, in order for me to feel safe and secure, I want to have X number of dollars in my cash cushion account.
If I ever don't make enough during a month to pay for my base salary and my expenses I have that account that I can dip into to cover anything I need but if everything is paid for and that cash fund is fully funded then I may add like some extra income to a bonus category I have in my budget and that's something that like eventually as my income grows I'll probably want to adjust the base salary and the cash cushion but generally that's kind of how I structure [00:21:00] things. Do you want to chime in too?
Cassidy Horton: Yeah, I feel like you and I do almost the same exact thing. The only difference I will add, I 100% believe in a cash cushion in your business bank account. Like my strategy in the beginning too was to figure out how much money I needed to pay myself to keep my lights on, like to cover my living expenses. And then pay myself that much every month. And then anytime I earned more than that a month, keeping that in a cash cushion so I could use that money if there were ever months where I earned less than I needed to cover my living expenses. But one more thing for me specifically...
My business is set up as an LLC that's taxed as an S corp. So I am actually an employee of myself. Like I, I am on payroll, so to speak. And so I have a payroll payment that processes at the end of every month. So I, I actually do pay myself a paycheck that is the same exact amount. And then at the end of the year, I get a [00:22:00] W-2 form and that W-2 form says that my employer is my business.
But then if I ever want to spend or use more than what I pay myself through payroll, I will just similar to you, like pay myself a bonus for that month. And it's technically called a shareholder distribution if you're also taxed as an S Corp. But that's like a manual payment that I like go into my business bank account and transfer money to my personal one. And even if I wasn't taxed as an S-corp, I would try to pay myself the same amount at the end of every single month and just keep it as consistent to a W-2 job as I could and keep everything extra in the business bank account for harder times.
Emily Batdorf: Yeah. Yeah. I forgot that S-corps work that way, but I do think if you are taxed just as like a sole proprietor, same thing. Like it just, it makes everything so much easier to to manage when you are like earning a set paycheck in quotes every month so that would be my, my [00:23:00] suggestion.
Cassidy Horton: Yeah for sure okay question number eight should I be in a hurry to pay off low interest loans what rate is low enough to where i should just pay the minimum. This is a really great question and I'm going to have a not so great answer. And I'll say that it depends. But mathematically speaking, it usually makes sense to keep on paying the minimum payment on a low interest debt and use that extra money for other things. If you would like save more money in interest by doing all of those other things or earn more money in interest, I should say. So let me give you a few examples. For example, if you have a low interest debt that is 3%, But you could put that money in your retirement account where it could grow 7% or 8% per year until you retire. That is the bigger win because you will be earning more money in interest than you would save by paying off the debt.
Same with paying off another form of debt that you have with a higher interest [00:24:00] rate. You would save more money. If you use that extra money to pay off that debt instead of this low interest debt that you have. And I will say that with the caveat of I was the queen of paying off low interest debt back in the day. I had student loans and my max interest rate was probably 5.5%. I had a car loan with a 2.99% interest rate and I still paid them off as quickly as I could before I did other things. And if I really think about it, I think I paid them off because I wanted to be debt free, but also my income was really low at the time. And I hated the thought of like a quarter of my income going towards student loans and a car payment each month. So I also just wanted to have more money for living.
So I will say that to say it's also a very personal decision because it's easy to look at the math and be like, I really should keep paying the minimum payment on this debt and use that money to save or invest instead. But if you feel like the discretionary money that you have month to month is really tight because a lot of your income is [00:25:00] going to these minimum debt payments, it might still make sense to pay off that low interest debt early.
But it also doesn't have to be like an all or nothing kind of thing. So say, for example, you could tell yourself, I'm going to keep paying the minimum payment on this debt, but if I get a tax refund or a bonus, I'm, I'll put that toward the low interest debt because that's like extra money I wasn't expecting to have anyway. But if you decided you're comfortable hanging on to that debt for a little longer and sticking to monthly payments, you can invest that money for a higher return. You could also do that.
Emily Batdorf: Yeah. I think you've shared before another reason you were like, got to pay off all these loans is because you were like intimidated to start investing. And you were like, oh yeah, let me just do this first and then I'll be ready.
Cassidy Horton: It was a procrastination tool for me. I was like, I did not want to learn how to invest. I was like, oh, just make this my new goal. Yeah, which wasn't good.
Emily Batdorf:Yeah, but definitely run the numbers because that [00:26:00] will help inform your decision like if you see, oh my gosh I would miss out on this much money with compound interest if I started investing that might motivate you to actually start and just like be okay with those minimum payments.
Cassidy Horton: And I have not ran the numbers to figure out how much more I would have in investments if I would have kept making my minimum car payment and that's probably the reason why I'm sitting right here today being like I didn't run the numbers and it's okay. Like I did what I thought was best for me at the time, but I'm sure if I ran those numbers, I would be like, girl, what were you doing? Yeah. It's fine.
Emily Batdorf: Yeah. Okay. Question nine. And this is a big one. I feel behind compared to my friends. How do I deal with the comparison and stay focused on my money goals?
Honestly, this is probably something that most of us, if not everyone, will deal with at some point. Especially in your [00:27:00] 20s and 30s when everyone's life paths start looking really different. Some people are buying houses and maxing out retirement and others are just trying to figure out rent month to month. So it's really hard to not compare yourself. But we have a few tips that you can use when that feeling starts to creep in. So number one is paying attention to what is triggering the comparison. So if you're like most people, this might be social media, like seeing photos of your friend's cool vacations or new house. Notice what is triggering the comparison and then ask yourself, what about this is making me feel behind? Is it because it's something you actually want or is it just something that you feel like you've been conditioned to want?
So a great example is like, the whole story about you should grow up and buy a house. That is just a story that people have shared over [00:28:00] the years and not everyone needs to buy a house. Not everyone needs to buy a house as a young adult. It's just a very like other money decisions a very personal decision so these things that you're feeling behind about just try to like take a minute and figure out if those are actually things you want and like that's why you're feeling maybe a little bit jealous or maybe you don't even want them and then you can just kind of like release that release that feeling.
Another tip is to be honest about what you're working with because everyone starts from a different place. Maybe your friends didn't have student loans, maybe their parents gave them a down payment to buy a house, or maybe they just haven't hit the same roadblocks financially that you have. It doesn't mean that your path is any less valid, it just means that your goals are happening on different timelines, which is 100% normal.
And then try to take the focus off what your friends are doing and zoom in on what [00:29:00] you are working toward. So you could do this by making your goals more visible, writing them down, celebrating small wins. And when you're clear on why you're doing what you're doing, it's easier to stay in your lane, even if it feels like you're moving more slowly than everyone else. And then back to the social media point, if things are just too loud for you to focus on your own goals, try a digital detox and mute any accounts that make you feel bad about your money or stage in life, even if technically they're inspiring. Take a break from money TikTok and go for a walk. Sometimes the best thing you can do is just unplug it. And then the last tip is to find someone you can be real with, whether it's another friend or a sibling or your partner, and just talk openly about your financial fears with someone you trust.
And once you start hearing other people's kind of like behind the scenes issues that [00:30:00] they're also facing, you realize that no one actually has it figured out and you're not alone. I think that's hopefully, I mean, that is one of the reasons we wanted to do this podcast and hopefully something that people will learn from listening is that everyone has questions and challenges and yeah no one is doing things perfectly this question also made me think of a quote from a book I'm reading the let them theory by mel robbins she says that any world class card player will tell you it's not about the hand you've been dealt. It's about how you play the hand. Winning the game of life requires you to focus on the cards you have and choosing what to do with them. So yeah, I think that's just a good way to sum up the idea that comparing yourself in a way that makes you feel inferior or behind is counterproductive.
Cassidy Horton: I love the encouragement to kind of like, turn inward and whenever [00:31:00] you're playing that comparison game to be like, what's triggering this? Like, does this person have something that I want? Can I make this one of my own financial goals?
But then also just to turn inward and be like, let me focus on all the progress that I have made because you really don't know where someone else is starting and like what financial help they did or didn't have even behind the scenes. And so yeah, it can just be so encouraging to be like, let me celebrate my own wins and also make sure that I'm focused on making my life, like as safe, as cozy, as delightful, as enjoyable as I can based on the cards I've been given.
Emily Batdorf: Mm hmm. One more quick thing in that same book on the topic of comparison. There's a section on what we've been talking about being unhealthy comparison and then a section on healthy comparison. And kind of the message there is like, if [00:32:00] something does trigger you and you think about, like why that's happening, you might realize it's because maybe, like you've been putting something off or you didn't think something was possible for you. You just counted that possibility out for you because of some belief you have, whatever.
And you can think of that jealousy I’ll say as like you can kind of be grateful for it as like highlighting something that you now want for yourself and like almost seeing that as proof that you can get the same thing and like obviously as we've said a million times everyone's starting from somewhere different but we both i know have mentioned before how seeing other people start successful freelance businesses made us realize that that was a possibility for each of us. So I think it's similar to that idea.
Cassidy Horton: Okay, next question. I'm scared to even look at my finances. Where do I start? And first, we just want to say that you are so, so, [00:33:00] so not alone in this. I think a lot of people carry this fear, even if they never say it out loud. And honestly, the avoidance makes sense because it's a form of protection. Because somewhere along the way, we learn to associate money with shame, with failure, with not being good enough. So of course, when we open our bank account apps and we look at our credit card balances, we're afraid that once we see that number, it'll confirm every worst fear we've ever had about ourselves, that we're not good enough, that we are a failure, that we should be carrying this shame.
But what I have found, both with myself and with talking with other people who are also scared to look at their finances, is that not looking doesn't make the scary thing go away. If anything, it allows it to grow into this bigger monster that feels even more intimidating and harder to look at over time. So my encouragement to you would be to first ask yourself, what exactly are you afraid you'll find? Are you afraid that your credit card [00:34:00] balance is higher than you thought? That you've been spending more money than you realized? That you're farther behind on saving than you quote unquote should be? Whatever it is, naming that fear is the first step to shrinking it because once you name it, you can begin to work with it. And then we have a few tips for how to start looking at your finances even if you're scared to.
And the first step is to start with curiosity instead of shame. So instead of thinking, I'm so bad with money, I'm so afraid of what I'm going to find, just try being like, I wonder where my money's been going lately. And I'm just going to open my bank account app and just be a little investigator and not judge, but just be curious about where it's been going. And then the second thing is to choose one small step to start with. And I'm talking about small, small, small. Like this could be checking your checking account balance. [00:35:00] Just opening your latest credit card statement and scrolling through it. Just looking at last month's spending by category. And then you don't even have to do anything with the information. Like the win in this step is purely just looking.
And then the third thing would be to give yourself some credit because really like whenever you're so scared, even opening your bank app, even checking your balance like you are building a habit and you're proving to yourself that you can do the hard and scary things and that is how change happens it's not this single overhaul thing like we want it to be but it usually happens in tiny acts of courage that we take over and over again so give yourself credit like even for for opening the app or doing the thing whatever that small step is for you.
And then lastly, if you still feel frozen, phone a friend. Sometimes it just helps to say out loud, I am scared to look at my money. And this person that you tell this to can be a partner, a trusted friend. It can be [00:36:00] us. You can email us anytime and we will not judge you. You can even just journal it out. And I think just getting that fear out of your brain and into the world is also a form of release because and it also just helps you realize that you don't have to do this alone.
And there's one more thing. This will be my final thought on this. I think the reality of whatever your financial situation is, is probably less scary than what your brain is imagining it to be.
And even if it's not, you're still so capable of facing it. Just take it one decision at a time. Just take it one number at a time. And just keep reminding yourself that you're not bad. You're not behind. You're just beginning. And this act of beginning to look at your finances is really, really brave.
Emily Batdorf: This question reminds me of that scene from Parks and Rec where Andy and April, when they get bills in the mail, they just put them in the freezer. And [00:37:00] when Ben Wyatt becomes their roommate, he teaches them how to be adults and pay the bills. Yeah. Yeah. Just don't put the pills in the freezer. You have to open them.
Cassidy Horton: I love it. Yeah. Don't put the pills in the freezer. You have the best like, movie and TV show connections.
Emily Batdorf: It's funny because I don't watch that much TV or movies. I just, maybe I just watch the same ones over and over.
Cassidy Horton: And so I think it's quality over quantity. You're like, yeah, yeah. We'll say that.
Emily Batdorf: Okay. Last question. How do I know if I need a financial advisor?
Yeah. I think I want to start out by saying a lot of people don't need a financial advisor. They just need a better understanding of their own goals and finances. And that's easier said than done, I will say. But you're probably more capable than you think. So a financial advisor, it shouldn't be a substitute for you understanding your [00:38:00] finances and your goals. Instead, it's more about collaborating with an experienced professional who can help you make informed decisions. And I would say if you are an average person, most of those decisions you can make on your own or like with your partner or family.
But there are, like, some circumstances and life events that when these happen, it might be a good time to talk with a financial advisor. And these could be, like, say if you receive a large inheritance and you're not sure what to do with it. You're getting close to retirement and you want to make sure you're on track. You have a child and want to make sure you're planning for their future as well.
Or maybe when you get married or divorced and you need help, either combining assets or separating them. I will also say you can work with a financial advisor on, like a one-off basis. And I think that might be something not everyone [00:39:00] realizes or remembers. It's not, it doesn't have to be like a lifetime agreement. If one of these events happens and you just, like, want a bit of a checkup, you can just pay someone hourly for like a few hours of their time and like run through these things with them.
But if you're struggling with like, debt payoff, budgeting, money mindset, if you're having financial issues with your partner or you're just struggling to manage your daily money on your own, I wouldn't recommend a financial advisor. Instead, maybe a financial coach or financial therapist might be better suited to helping you with those issues in addition to like, exploring financial education resources on your own.
Cassidy Horton: That's such a good reminder. Yeah.
So to wrap up this episode, that is it for our Financial Literacy Month Q&A.
Emily Batdorf: If there's one thing we hope you take away, it's that being curious about your money is much more important than being perfect with it.
Cassidy Horton: Yeah, so keep asking questions, keep taking small steps, [00:40:00] because that is how you build financial confidence. Not all at once, but one decision at a time.
Emily Batdorf: And if you have more money questions you'd like us to answer, please email them to us at hello at thefinancegirlies.com. We usually do around one Q&A per month, and we'd love to answer your questions in a future episode. So we will see you next week, girlies, and happy Financial Literacy Month.
