Budget Rehab: Can a Family Rebuild Their Emergency Fund and Still Afford the Life They Want?

Today's episode is sponsored by Quince.

You know that moment when summer winds down and your closet suddenly feels like a mashup of beach leftovers and wishful thinking?

Yep, that's when you realize it's time for a reset, minus the luxury price tag.

Enter Quince.

What I love about Quince is the huge variety of products that they offer.

I picked up their organic Turkish waffle robe and now I'm living my white lotus fantasy every time I step out of the shower.

And Elizabeth, you know that I'm in the middle of planning my honeymoon to Japan, so I I also got their Napa leather RFID passport holder and luggage tag set.

So now I'm ready to travel in style.

Sounds very stylish to me, Sean, and you're going to have to send me pics of all of the items.

Oh, you know it.

So I personally have been lounging on their cotton velvet pillow covers.

When I saw that they were 100% cotton velvet and they were machine washable, I was sold.

I also got the pillows in my favorite color, which is yellow or marigold technically.

And I just love how soft the pillow covers are and it seems to be great quality for the price.

That's because Quince works directly with top artisans and skiffs the middleman markup.

Plus, they only partner with factories using safe, ethical practices, and premium fabric, so you can feel good about what you're wearing and where it came from.

I use this stuff, and you should too.

Elevate your fall wardrobe and home essentials with Quince.

Go to quince.com/slash smartmoney for free shipping on your order and 365-day returns.

That's q-u-i-n-ce-e.com/slash/smartmoney to get free shipping and

We talk about budgeting all the time on this show.

It's an activity that helps millions of people manage their finances every day.

But that doesn't mean it's always easy.

So today we're going to walk step by step through one of your budgets to show how it's done.

Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds.

I'm Sean Piles.

And I'm Elizabeth Ayola.

Later this episode, we'll be debuting the first of our budget rehab segments.

But before that, our weekly money news roundup where we break down the latest in the world of finance to help you be smarter with your money.

Our news colleague, Ana Hilhoski, is back with us to talk about car insurance, because in all likelihood, a lot of us with cars are going to be seeing some price increases that are beyond what we usually expect.

Hey, Ana.

Hey, Sean and Elizabeth.

So an Axias report, which is based on projections projections from the car insurance comparison site Insurify, found that if the 25% auto tariffs remain in place, then the national average full cover car insurance could go up by 7% in the second half of 2025.

Without tariffs, it would have been 4%.

So we brought in insurance nerd Andrew Hurst to give us the rundown.

Welcome to Smart Money, Andrew.

Hi, thanks for having me.

It's great to be here.

So to kick it off, can you start by walking us through how tariffs on imported auto parts directly impact repair costs and in turn, insurance premiums.

Basically, claims are going to get more expensive, which is going to drive up the cost of everyone's insurance, even if you don't make a claim yourself.

The way that this works, I like to think about a house's plumbing system or something.

If you have a blockage, let's say there's soap scum in one part of the house, you might not notice it till later, but eventually you'll start to notice that your faucet drains a little bit more slowly.

You start to have a slower flow, maybe.

That's sort of the way the economy works at that level.

Tariffs are basically a tax on imports.

What that means is when people bring stuff in, whether they're vendors or manufacturers, they're going to pay a little bit of an extra tax on those imports.

That might sound a little bit hard to wrap your head around, but stuff like auto parts are going to become more expensive.

That's bad news for insurers.

When you or I have to make a claim, they might have to replace your car.

In order to replace your car, they might have to purchase a new car entirely.

More expensive claims are bad news for us because it'll make our premiums go up.

The reason for this is that if you total your car, the mechanic is going to have to source the parts that they will need to repair your car, probably from another country, let's say, probably from a country that's been impacted by tariffs.

They will, in turn, pass that higher cost down to your insurer who reimburses you for your claim.

Your insurer, having paid more money for that repair, is going to pass that higher cost on to you.

You can imagine that you can return to that blockage picture again.

When something happens in one part of the economy, it trickles all the way down to the other roofs of your houses.

So earlier this year, insurers were anticipating stable or even somewhat lower rates in 2025.

What's changed in the economic picture to alter those expectations?

Tariffs have played a huge part in it.

And it's not only the tariffs themselves, but it's sort of the way that they're rolled out.

We've had a lot of going back and forth.

It doesn't really work well for companies who are in the business of planning in the long term.

Depending on what type of material we're talking about, the manufacturers in the United States might have to put in orders with an overseas plant months in advance.

When you have this sort of confusion on the planning side, it makes it very difficult to sort of have a sense of where your expenses are going to be in three months, in six months, and next year.

That really, really is not what you want from a stability standpoint.

In the last few years, how have auto coverage premiums behave?

And how's that compared to this year?

Generally speaking, the price of auto insurance has been going up for quite a while.

You can go back using the Bureau of Labor Statistics data, and it shows that prices have been rising steadily, albeit in the last, let's say, 10 years, that you've noticed a pretty different looking

slope upwards than the steady stream that consumers might have been used to for decades.

I would expect things to continue going up, even if tariffs weren't a matter.

It's not just tariffs that are causing this.

And we had already seen car prices in general, both used and new, increase pretty significantly in the days after the pandemic began.

So if tariffs stay in place over the long term, let's call it years instead of months, would you expect premiums to hit a crescendo or just keep on building?

My sense is that they will keep on building.

And I think that that's for a couple of different reasons.

One is that prices have gone up and will likely continue to go up.

That will in turn cause those insurers to continue raising rates.

I don't anticipate a crescendo.

Secondly,

a person's insurance company might not raise their rates one year, but might the next year.

So even if rates do go up for one person, they won't go up for every single person necessarily.

So while I don't imagine rates crescendoing, someone might not experience a rate increase one year.

They might be able to get cheaper insurance, in fact, the next year.

But there's not likely to be a market-wide drop in prices that suddenly happens and reverts back to what they were paying years and years ago.

The only time we've seen something like that happen recently was during the height of the pandemic when people weren't driving, accidents weren't happening, and prices were much cheaper.

So let's drill into some of the specific driving factors that do contribute to higher premiums.

So you and I are probably most familiar at the individual level.

A lot of people have an idea about how car insurance works.

If you hit something, your prices are probably going to go up the next time you apply for insurance.

But what about everybody else?

The thing I see all the time on like a Reddit or like any type of forum is, hey, what happened?

My rates went up tremendously and I didn't hit anything.

I'm a good driver.

I've been a good driver for years.

A lot of people don't understand that insurance pricing happens on a massive, massive scope.

So besides those individual factors, you have stuff like litigation becoming more prolonged.

You have problems from severe weather and the rising costs of paying for climate-related damage.

All this stuff, again, just compiles and compiles.

It gums up the pipes

and

makes stuff more expensive in the long run, even for people that are safe drivers.

Now, I understand that a lot of states have different regulations that might influence how insurers are setting their rates.

Is there anything keeping premium increases in check?

I guess the good news is that for the most part, insurers can't just raise rates without approval from a state's insurance governing body.

Usually it's like a department of insurance or a department of finance and insurance or something like that.

Besides that, there are maybe

a couple of things that states do to sort of make it more inconvenient.

for insurers to raise rates.

I know Washington recently announced a rule where consumers could

mail or ask their insurer why exactly they raised their rates.

And that doesn't mean they can't still do it, but maybe it's embarrassing.

In a way, it wasn't.

It really depends at the local level.

For the most part, insurance is governed somewhat regularly, but a lot of states have these weird rules that other states don't.

How are drivers responding to premium increases?

Are they switching policies more often?

Are they dropping coverage levels?

Yeah, we've seen drivers for a while become more sort of familiar with the idea of comparing rates.

That's just when you look at what insurance might cost you from a few different companies before buying a policy from the insurer you've been working with for 10 years or whatever.

That is generally what NerdWall recommends drivers do to help them save rates.

It's the easiest way to see right away, oh, this company is offering me a more affordable rate than this one, or this risk rate is far too expensive, right?

It's easy to see.

Besides that, we've found that people are a a little more open to lying to their insurer, actually.

So you have sort of unscrupulous and then more like straightforward types of behavior happening.

All right.

Well, thank you so much for helping us out today, Andrew.

Yeah, definitely.

Thank you for having me.

And thank you, Ana.

I will certainly be using some of the information I learned to help lower my own car insurance.

And at least now I know why my insurance is going up.

Up next, we're rehapping a listener's budget.

But before we get into that, a reminder listener to send us your money questions.

Maybe you're wondering about the best way to shop around so you can save on car insurance, or you want to change jobs but aren't sure how to negotiate the salary increase that you deserve.

Leave us a voicemail or text us on the nerd hotline at 901-730-6373.

That's 901-730-NERD.

Or email us at podcast at nerdwallet.com.

In a moment, this episode's money question.

Stay with us.

Are you looking for ways to make your everyday life happier, healthier, more productive, and more creative?

I'm Gretchen Rubin, the number one best-selling author of The Happiness Project, bringing you fresh insights and practical solutions in the Happier with Gretchen Rubin podcast.

My co-host and happiness guinea pig is my sister, Elizabeth Kraft.

That's me, Elizabeth Kraft, a TV writer and producer in Hollywood.

Join us as we explore ideas and hacks about cultivating happiness and good habits.

Check out Happier with Gretchen Rubin from Lemonada Media.

We're back and we're answering your money questions to help you make smarter financial decisions.

This episode is a special one.

What I'm excited about is the first for our budget rehab series where we look over your budget with a fine-tooth comb and give you our thoughts and tips.

Today we have a listener named Garrett here to talk through his budget with us.

Hey Garrett, welcome to Smart Money.

Hello.

All right, Garrett.

So on Smart Money, we like to do a little icebreaker.

Sometimes it's finance related, other times not, but today it is.

So since our podcast is called the Smart Money Podcast, I'm going to ask you, what do you feel is one smart thing that you have done with your money this year?

Finally started contributing to an IRA.

My parents have been telling me to do that for a long time.

So finally did it.

Congratulations.

I had one before and then I liquidated it all for college and it wasn't the most responsible.

But now I open a new one.

Well, sometimes it takes a not smart move to make smarter moves later on.

So.

Good job on that.

So now we want to know, Garrett, why you need help with your budget.

Why are you here today?

There's just some things that I'm not sure what I should do like currently and then in the near future planning and goals and I'm not quite sure how to meet them and if I should change up the way I allocate money to meet some of my goals.

Since you've been using your budget the way that you've been using it, has it helped you achieve any financial goals so far?

Yeah, I think so.

Like I said, It feels good to finally be like contributing to retirement.

Me and my wife bought a home last year, so that feels really cool.

I've never had like a strict budget, but I've always tracked my spending, and I feel like that kind of helps.

Not so much restricting myself to a certain amount each month, but just knowing where my money goes kind of subconsciously helps me be a little wiser with it.

You sent us information about your budget, which we'll dig into in a moment.

And I'm excited to talk with you about how you're allocating your money.

But do you have a current budgeting system that you practice or how do you manage it, if not just in your head?

Right now, I just use a Rocket Money app, and that's pretty good for tracking stuff.

Okay.

And then I would also like to know how you and your wife manage your finances.

So do you pull all your money together?

How do you guys approach budgeting?

We just have everything together.

My wife just doesn't want to deal with it.

It's just kind of annoying to her.

So I kind of manage a lot of it and try to do a good job at that.

So it's more me.

but it's both of our income and everything together.

And what would changing your budget allow you to do potentially?

What are the financial goals that you're hoping to accomplish?

Right now, me and my wife both work.

We have a 10-month-old and we're hoping to have more kids in the future.

And my wife wants to stay at home.

So that's something we want to work towards is her either working a lot less or not working at all.

And if we can make that happen.

And also, we just bought a car.

My wife was driving a tiny Honda Civic with two doors with our baby and it was really annoying getting the baby in and out of the two-door car.

So, we got a big Toyota Highlander, but that was expensive.

So, now our emergency fund is like nothing.

So, I want to rebuild the emergency fund.

Well, let's get into your current income and expenses.

So, how much are you bringing in with your wife?

What's your household monthly income?

It kind of fluctuates.

It's the thing that's tricky because I am self-employed.

So, I run like a remodeling business.

So, sometimes I make $4,000.

Sometimes I make five or six.

I say on average, it's around four or five for me.

And then my wife's around $2,500 to $3,000 a month.

Okay.

And so when you sent us your information, you mentioned that you make around $115,000 annually, which ends up being around $9,700 a month.

Does that seem right to you?

So that's with both of your incomes.

Okay.

That sounds a little high.

Maybe I did something wrong.

I feel like it's not that high.

So what would you say you are bringing home on a monthly basis between you and your wife?

I'd say $75.

$7,500.

Okay.

Well, for a little peek behind the curtain here, I made a fancy spreadsheet that maps out your income and your expenses.

So I'm just going to go in and tweak that.

real quick because what we like to do at NerdWall is we use the 50-30-20 budget framework because that allows people to have a balanced way of managing their finances, where half of your income is going towards covering your needs, 30% goes towards wants, and 20% goes towards savings and additional debt payments.

And so, depending on where your income falls in these different categories, based on the expenses that you shared with us and your income, we can see if maybe you are maybe spending more on wants than you should, or if you're not saving enough, or if your needs are taking up more than 50%, and that can help us make some decisions and talk with you about where you might want to allocate your income to best meet these goals.

All right.

So, looking at the income that you just shared with us, $7,500 a month, and the expenses that you shared.

Looking at the spreadsheet that I made, I'm seeing that you're spending a little over half of your income, around 55%,

on your needs.

And then looking at the savings that you shared with us as well, it looks like about 16% of your income is going towards savings and debt payments.

And then you have around 30%, I guess, 28% left over for wants.

So actually, fairly well balanced on the whole.

Does that feel right to you?

Yeah, that seems pretty close.

I feel like a lot of it goes towards needs.

Like, it doesn't feel like it's super flexible.

But when I think about, oh, maybe we could change stuff, I'm like, I don't know.

I feel like a lot of it is kind of non-negotiable.

Two things that stood out to me about the numbers that you sent us were that you spend quite a bit on both groceries and healthcare.

So can you talk to us about both of those items?

Maybe Trader Jones is the problem.

they always have these novelty food items that cost more than they should

so good though did you say healthcare was the other one yes because i'm self-employed we have like a there's like these christian health share things and ours isn't i don't think it's a christian organization it's called zion health so it's like people pool their money together and then spend on medical expenses so our monthly payment towards that is like $600,

but it covers a lot.

We have essentially a thousand dollar deductible.

So like when we had our baby, it was maybe $8,000 for everything,

but we only had to pay $1,000.

So it's not like bad coverage.

I want to talk a little bit more about your car and how much you're spending on that when that hit your budget.

What is your monthly car payment?

I just paid it off.

We bought a car a couple months ago for my wife, like I said.

Oh, so you no longer have a car payment?

Yeah, no, I just paid it off.

So looking at the needs that you sent us, Garrett, we have here a mortgage payment of almost $2,000.

We have utilities, which on the higher end is around $220,000, health insurance, life insurance, car insurance, groceries, gas, and furniture.

Now, before we get into your needs, because I know you just said it feels like there's nowhere to really cut expenses in terms of your needs bucket.

What is this furniture expense that you have here?

I don't know, just like decor stuff.

We really like.

our house and making it look nice.

And I think some of that is furniture and also like buying a new tree for the backyard or grass seed, just like random stuff to make the yard look nice.

So maybe we splurge a bit on that.

So Garrett, you're a family of three, correct?

You, your wife, and your baby.

Yeah.

Do you think there's any way to cut this grocery down so you could allocate funds somewhere else?

I don't know.

I guess probably.

Sometimes it's hard to go to multiple stores.

Like it's just a pain in the neck.

So like Trader Joe's isn't astronomically expensive for a lot of things, but it is expensive expensive for meat.

We get a lot of meat, and maybe it's best to go somewhere else for that.

So, I guess that's something we could do.

But also, I feel like sometimes that's just saving pennies in a way.

Maybe saving a dollar to a pound.

So, is it really worth the extra trip to another grocery store?

So, I guess the answer is maybe, but I'm not convinced that it's worth it.

I think if you're doing it at scale and you're buying meat on a regular basis, this is going to add up over time.

So you might want to think about how you can shave that expense, whether it is buying it in bulk or going to, you know, even like a wholesale store.

I'm also curious, Garrett, since you guys have a little baby, congratulations.

I don't see any expenses in what you sent us for the baby.

So are you spending much on baby clothes?

Does the baby have any other kind of, I don't know, expenses that you haven't included in here?

Oh, well, I kind of lumped those into the grocery budget.

Yeah, and like clothes, our parents and stuff give us so many clothes.

I feel like we never really spend money on some of those other things or toys.

Amazing.

Always a perk to have family and friendship in.

So, all right, now that we've looked at needs, Sean, do you see anything else in the needs bucket where Garrett could potentially cut some expenses?

Going back to the percentage, you're at 55, which I'm not mad about.

That's a decent amount to have going towards your needs based on how expensive the world is right now.

So, I think examining your food budget is going to be a good place to visit that.

Otherwise, a lot of your expenses seem pretty normal.

Congrats on having a less than $2,000 mortgage payment.

I'm seeing $19.95.

five is that right yeah but you are considering making a really big change to your budget which would be your wife not working have you talked about what that would mean for your finances have you mapped any of that out like i said i'm self-employed i don't work crazy hours i work maybe 30 to 40 hours a week so i could potentially work a little bit more i could potentially earn a little bit more per hour, depending on how I change things around with my business.

And so it would kind of help compensate with her either earning less or not earning at all.

Like right now, if she stopped working, we wouldn't save anything, and we might potentially be at a loss per month.

Right now, it couldn't happen, but I want to make it a goal for like a year or two from now where we could make that happen.

And one option is me earning more, but I'm also looking into the option of us spending less.

Those are basically the levers that you have, right?

Earn more, spend less, save more.

So

I think it's smart to focus on getting to a place where you can do this, where your wife might be able to pull back from work over the next couple of years.

But in the interim, I think focusing on the emergency fund would be a smart idea too.

You said that you kind of drained it to buy this car.

How much do you have in your emergency savings?

Right now, it's $1,500 in the account.

Okay.

And so that isn't even a month of your mortgage.

What's your strategy for building that back up?

Well, one question I had about that is I have like a Robinhood account of stocks that I bought like before we got married during COVID and they've just been sitting in there earning something.

But I think there's maybe $5,500 or $6,000 in there.

And part of me wants to just liquidate it and put it in the emergency fund because that would kind of feel nice to have a big sum in the emergency fund.

But also.

I kind of want to keep it in there to earn more because like the emergency fund isn't going to earn as much potentially as it could in Robinhood.

So, I don't know.

I was kind of curious what you guys would do with in the given that situation.

Like, would you just liquidate that, put it in the emergency fund?

Initially, what were those funds allocated for?

Was it just, hey, I need to invest and I'm just going to put some money in Robinhood?

Yeah, it was like gambling.

Yeah.

Okay, gotcha.

Personally, I would feel pretty nervous just having $1,500 in my emergency savings.

You don't have savings elsewhere, like in a checking account, right?

Yeah, maybe like $1,000.

Okay.

Again, I'm not your financial advisor or planner.

or telling you what to do with your money.

But what I would do if I were you is I would really strongly consider liquidating that stock to get more for your emergency fund, just to get a bit of a jumpstart on it.

But keep in mind that you're probably going to owe long-term capital gains on the stock that you have in there, which is likely going to be around 15%.

So earmark a certain amount of money for that because it's not going to be exactly what you see the balance in there coming into your account.

Do you have your savings in a high-end savings account?

Where are you storing it?

Yeah, it's just in a Vanguard account with treasury bonds.

Okay.

Well, yeah, a high-yield account is always preferable for emergency savings just because you're earning more on what you have saved.

So if you could get to, let's say, maybe $6,000, $7,000 with your emergency fund, that would be a nice place to start.

But I think you're going to want to find a way to carve out enough money in your savings each month to beef that up, especially if your wife is going to be pulling back from work.

For a household with two adults adults working, it's usually okay for folks to have closer to three months of emergency savings stashed away.

But once your wife starts working and you're going to be kind of more financially fragile because you'll only have that one income, you'll want to be closer to six months just to have that extra security.

Yeah, that would feel really good.

When you wrote to us, you said that you're saving, if I'm correct, $400 a month towards your emergency fund currently.

Yeah, yeah, about that, I guess on average.

Like I said, my income fluctuates.

So sometimes I put $1,000 in there.

Sometimes I put like $200.

Got you.

But I think it averages out to like $400.

Well, I think this is a good segue to, because the only place in your budget you could potentially take money from to fast track that emergency savings aside from selling the Robin Hood stock is from your wants bucket.

So you told us that.

At the moment, what you spend on wants is you're spending $355, I guess, on average on travel, about $180 on dining, and then you have a $310 miscellaneous.

So that totals to about $845.

Does that sound right?

Yeah, I think so.

Seems like kind of a lot, actually.

So based on whatever the number is, let's say between $600 and $800, just guesstimating for you, would you be willing to sacrifice any of your wants in order to fast track your goal of building an emergency savings, which would get you closer to being able to have your wife stay at home?

I feel like we do try to travel a lot.

Some of those just like weekend stuff that's really fun, but not like necessary.

So, we could probably maybe do less of those kind of trips.

And I use a lot of like credit card points on that too, so it's not as high as it might seem.

Well, I want to switch gears a little bit and talk about what your finances and your budget might really look like if your wife stops working today.

So, remind me, how much is she bringing in on a monthly basis?

Let's say three.

Okay, so that would take your monthly income from $7,500 to $4,500.

Looking at your current expenses right now and going to the breakdown of your needs, wants, and savings, things look very different.

Your needs are now taking up a little over 92% of your income.

Your savings are 26%, and you are negative wants.

So that's going to mean that you have a lot less flexibility.

And if you're feeling like you're having a hard time looking for areas to cut back on your needs right now, it's going to be even more difficult to do that at that point.

Obviously, you won't actually be saving 26% of your income if you have no money for wants, because that's just not how life works.

What would likely happen is that your savings ability would take a pretty serious hit, which again is going to be really important thinking about your life in the immediate term, having financial security with a robust emergency fund, but also long term, making sure that you are able to put more into your IRA.

So you're going to want to find a way to plug that gap that would really change your income quite a bit.

So do you think you'd be able to earn enough to make up the difference of your wife's income or cut back expenses enough to make this more feasible?

I think by like a year from now, realistically, I could earn six.

So I wonder what that would look like.

Well, let me plug it in.

If you're making $6,000 a month, your needs are now 70%,

just about of your income.

Monthly savings is 20% and wants is at 11%.

So it might make sense for your wife to work a little bit longer.

Elizabeth had asked you before we got on around your child care expenses.

And am I correct in knowing that a grandparent is watching the kids?

Is that right?

Yeah, so like we're lucky right now.

That's a zero.

We have our grandparents exclusively watching.

So I know that you said that you're a business owner and that you could potentially earn more, but have you thought about coming up with a strategy to, I know there's no guarantees with business, but to kind of reverse engineer and say, this is a way that I can maybe, like Sean said, even just maintain the amount that you guys are earning now so that you're not struggling so much.

Yeah, maybe I should focus more on that.

I feel like sometimes I get caught in the weeds of where can we cut, where we, maybe we should, maybe we should sell the house.

Oh, stuff like that.

And I'm like, well, maybe I could focus more on.

I want to be able to earn enough to where I'm making as much as my wife brings in.

Maybe you're right.

I should just focus on that as a goal because I think it could be achievable.

Absolutely.

Yeah, thanks.

Have you also considered maybe a hybrid solution where your wife just works less or maybe picks up a job that she can do at home part-time?

So that way it's not all on you to bring in the money?

Yeah, I think that's also realistic where she's making maybe $1,500 a month.

And even that doesn't sound like a lot, but that would still be really supplemental to us.

Oh, absolutely.

And imagine a place where you are bringing in more money like Elizabeth just described, and your wife is working at home, making maybe $1,500 a month.

You could be earning more than you are currently with the greater work-life balance flexibility that you want to have for your kids and your wife.

And I know currently you said you're putting $800 towards an IRA, correct?

Yeah, well, there's another question.

So, like I said, some months I make less, sometimes I make more.

Like, on a month where I make a lot, let's assume I'm going to move all the money from Robin Hood into my emergency fund.

So, that's now like $7,500.

So that's a decent amount in there.

If I make a lot more next month, where should I put those funds?

Say I have like $1,000 or $1,500 that I don't know what to do with.

Should I just throw it all in the retirement?

You'll want to think about contribution limits there.

It's a great idea to max out retirement savings.

I would encourage you to look at NerdWallet's retirement calculator to understand how much you have now, how much you're putting in on a regular basis, and where you might be when you hit your retirement goal age.

And that might put a bit of fire under your butt to save more.

So, that's going to be helpful.

Also, understand that since you're self-employed, you could look into setting up like a solo 401k.

Have you done that with your company?

No, I don't know what that means.

Okay, so a 401k, you know, it's like a workplace retirement plan.

You should be able to set one up with your own company.

And it's just a solo 401k, meaning that it's like just you, it's just your company because you didn't have any employees.

Is that correct?

Yeah, not really.

Okay.

So, with a solo 401k, you would be able to contribute a much greater amount to your retirement account each year.

And you would be able to have that lower your taxable income as well because it would be pre-tax if you set it up that way.

But based on your age and your goals, you might want to put a little bit more into retirement.

So what do you think based on the things we've discussed, you might do?

How might you adjust your budget or rehab your budget in order to meet these goals?

I want to build up the emergency fund right away by moving over those funds.

That would feel really good.

And then I think I am going to focus on just how do I earn more?

Maybe that I'm going to set that as a goal.

Maybe we could spend less on groceries.

Maybe we could spend less on travel, but also just focusing on how can I earn more in my business.

I love that.

And I do want to add, as a fellow parent, I know it can be really stressful having kids and working and managing a family.

So you definitely want to leave some room in your budget where you can to do things you enjoy like the travel.

So if there's a way you can cut from something else, obviously it's your budget and your choice, just to ensure that you still get some joy because your money should bring you joy from something that you like doing, then make sure you keep that there in place.

Well, Garrett, thank you for coming on and sharing your finances with us.

I hope this was helpful.

Thank you so much.

Thanks for the help.

If you'd like to be considered for our next budget rehab segment, then fill out the application form in today's show notes.

And if you'd like a financial strategy tailored specifically to your needs, then you may want to consider working with a financial planner, which you can actually do directly through NerdWallet.

Check out the links in today's episode description to learn more about NerdWallet Advisors and NerdWallet Wealth Partners.

All right, that's all we have for this episode.

Remember, listener, that we're here to answer your money questions.

So turn to the nerds, call or text us your questions at 901-730-6373.

That's 901-730-N-E-R-D.

Of course, we love your emails, so send them to us at podcast at nerdwallet.com.

Join us next time to hear about being blocked by banks and intro offers.

You can follow Smart Money on your favorite podcast app, and that includes Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

Here's our brief disclaimer: we are not your financial or investment advisors.

This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.

This episode was produced by Tess Viglund and Anna Hilhoski.

Hilary Georgie helped with editing.

Nick Garissimi mixed our audio.

And a big thank you to NerdWallet's editors for all their help.

And on that note, until next time, turn to the nerds.