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HerMoney Podcast: The Master Cleanse For Your Money (Episode 171)

Kathryn Tuggle  |  July 24, 2019

There’s something about summer that inspires us to be healthier.

Today, most of us are taking better care of our health. We’re more active, get more Vitamin D, and stress a little less. As for our finances, sometimes these feel-good vibes — including summer vacations — cause us to amp up our spending. If your wallet is starting to sweat (like ours), then Ashley Feinstein Gerstley, author of The 30-Day Money Cleanse, is here to whip your finances back into shape. We also have a candid discussion on the divisive latte — you don’t want to miss it. In Mailbag, is it smarter to pay additional money toward the principal on a home mortgage, or to invest that money in an index fund? Plus: In case you hadn’t heard, there’s lots of good news for borrowers on the horizon — fixed mortgage rates and interest on federal student loans are heading down. We discuss.

This podcast is proudly supported by Edelman Financial Engines. Let our modern wealth management advice raise your financial potential. Get the full story at Sponsored by Edelman Financial Engines – Modern wealth planning. All advisory services offered through Financial Engines Advisors L.L.C. (FEA), a federally registered investment advisor. Results are not guaranteed. AM1969416

Editor’s note: We maintain a strict editorial policy and a judgment-free zone for our community, and we also strive to remain transparent in everything we do. Posts may contain references and links to products from our partners. Learn more about how we make money.

The HerMoney podcast is supported by      Edelman
All advisory services offered through Financial Engines Advisors L.L.C. (FEA), a federally registered investment advisor. Results are not guaranteed. AM1969416


Jean Chatzky: (00:06)
HerMoney is supported by Fidelity Investments. We want you to demand more from your money, so start by knowing what you own and what you owe and we’ll help you take the next step at HerMoney comes to you through PRX. Hey everybody, it’s Jean Chatzky. Welcome to HerMoney. My team and I have decided there is just something about summer that inspires us to be healthier. I’m sure we’re not alone, but we’re more active, we get a little more vitamin D, although certainly not today, it is torrential, we stress a little less. But our finances, well sometimes those feel-good vibes, including our summer vacations, they come with extra spending, not saving. If you feel like your wallet is starting to sweat, we’ve got the perfect show for you with the perfect guest. Ashley Feinstein Gerstley is in the house. She is the author of The 30 Day Money Cleanse. She’s also the founder of Fiscal Femme and she’s here to help us get our finances back in shape. Ashley, Hey.


Ashley Feinstein Gerstley: (01:22)
Hey, thank you so much.

Jean Chatzky: (01:23)
Thanks for being here. Start with you. Where were you before you started your blog? Where were you before the 30 Day Money Cleanse was even an idea in your mind?

Ashley Feinstein Gerstley: (01:37)
I so, where I was needing the money cleanse, I started out as a finance major in college and then I worked as an investment banker in my first job. Yet I knew nothing about money.

Jean Chatzky: (01:48)
You know? Here’s why that doesn’t surprise me. I worked on Wall Street after I came out of college and I remember hearing stories of these brilliant stock analysts who had no idea what they were doing with their own checking accounts.

Ashley Feinstein Gerstley: (02:05)
And I feel there’s extra shame being someone who comes from a finance background and still not knowing about money.

Jean Chatzky: (02:12)
So what made you say “I am going to quit my job and focus on it?”

Ashley Feinstein Gerstley: (02:19)
I had switched jobs from my investment banking job to a corporate finance job where I had a lot more free time but also took a pay cut and I was bleeding through my money. I quit the day after my bonus, like many analysts do on Wall Street, and when I looked at my bank account a few months later, there was almost none of it left and I thought “if I want this new great lifestyle, I’m going to have to figure out how to make my, my spending much more sustainable.”

Jean Chatzky: (02:46)
What year was this?

Ashley Feinstein Gerstley: (02:48)
This was in, so I started in 2008 and then I left my investment banking job in 2010.

Jean Chatzky: (02:55)
So how much were you making at the time?

Ashley Feinstein Gerstley: (02:57)
I was making, I think the last year I cleared $140,000.

Jean Chatzky: (03:02)
And you were bleeding through all of it?

Ashley Feinstein Gerstley: (03:03)
Yes, I quit, I got a $70,000 bonus and then I left and after taxes that probably looks like $40,000 and it was almost gone in two months.

Jean Chatzky: (03:13)
Where did it go?

Ashley Feinstein Gerstley: (03:15)
The funny part is there was nothing to point to, and I hear this so many times from people I work with and in my course, and that there’s nothing to show for it. It was just, I was making up for all the time that I was working ’til midnight. So I was seeing friends and taking classes and doing workshops and going out to drinks and dinner and it whittled away very fast.

Jean Chatzky: (03:34)
It goes faster in New York City than other places, but it does go pretty fast everywhere.

Ashley Feinstein Gerstley: (03:38)
Yes, it totally does.

Jean Chatzky: (03:40)
So you started a blog?

Ashley Feinstein Gerstley: (03:42)
I did.

Jean Chatzky: (03:43)
How did you launch? What was the first step that you took toward making yourself more conscious of your money?

Ashley Feinstein Gerstley: (03:49)
So I tend to be a little bit type A, so I read a lot of things. I read books and articles and started just adapting the things that I was reading to see what would work. And I found that a lot of it was working and I felt there was so much power and freedom from understanding that. And I wanted to share it in a fun, accessible way. And I was terrified of, I’d never thought of myself as a writer or someone who would blog, and I actually worked with a coach to get over my fear of putting my voice out there and starting to share really for fun at first, just as a personal project.

Jean Chatzky: (04:26)
So like a blogging coach.

Ashley Feinstein Gerstley: (04:28)
She was actually a life coach and I was having, yes I was having, you know, a quarter life crisis. I’m not feeling that much meaning for my work. I want to share this, but I’m terrified of doing it. All of those. So really overall life coach.

Jean Chatzky: (04:43)
So you put this stuff out there, you started the site, you put up your first few blog posts. What happened?

Ashley Feinstein Gerstley: (04:50)
Then people started asking me for help and another site, Go Girl Finance, asked me to write for them and I thought, “Oh, this is a thing. I’m not the only one struggling with my money.”

Jean Chatzky: (05:02)
And then came the 30 Day Money Cleanse.

Ashley Feinstein Gerstley: (05:05)

Jean Chatzky: (05:06)
What’s the money cleanse? I know, I know what a carb cleanse is. I know what a gluten cleans is. I certainly know what an alcohol cleanse is. What’s the money cleanse?

Ashley Feinstein Gerstley: (05:17)
I need to know what an alcohol cleanse is. So actually where it came from is when I was working with people and helping people I found I was saying the same things over and over again and it didn’t really matter how much or how little, of course over a certain amount, people were earning, they were struggling with a lot of the same things and very similar to what I said, “I’m not doing that many crazy frivolous things, but where’s my money going?” And I actually, I knew I wanted to create a program and I invited a bunch of my friends, my entrepreneur friends over and I bribed them with food and said, “help me think of what this program is.” And one of my friends was on his phone over and over and I said, “Hey, you’re supposed to be helping me. What are you doing?” And he said, “Oh, I ate a, I have to confess this to my food cleanse group.” And I thought, “Oh, that’s really interesting” because food and money I believe are so similar. And so he introduced me to the creator of The Food Cleanse and we walked through the program and I found it was a really great framework for taking us through creating our spending plan.

Jean Chatzky: (06:16)
How does it work?

Ashley Feinstein Gerstley: (06:16)
We start off first by forgiving ourselves and understanding how much we have working against us when it comes to money. Because I find when we’re feeling bad about ourselves, beating ourselves up in shame, it’s really hard to move forward. And then we take a look at what’s happening. So we write down all of our expenses and we categorize them into one of three buckets. Frivolous, not sure — which ends up being one or the other once we drill down — and then needs. And in the first week of the money cleanse, I challenge everyone to let go of all frivolous spending as defined by them for 7 days.

Jean Chatzky: (06:51)
What do you mean let go of it? Don’t do it.

Ashley Feinstein Gerstley: (06:53)
Don’t do it. And so you’ll find, I’ve made a lot of my own language around money and I think that the way we talk about it is important because it really affects our mindset. So when I say “let go,” it sounds much more powerful than, like, cut out, give up, can’t have. Those types of switches I find to be helpful.

Jean Chatzky: (07:13)
As you have started working with more and more people, what do you find them letting go of most?

Ashley Feinstein Gerstley: (07:19)
That is such a great question. I think so, it’s very much in the money cleans there is no right answer because I find we value different things and so something that’s important to me might not be important to somebody else. And, but I find just by finding out where our money’s going and figuring out what that impact is, it makes it easy to let go of. A lot of things people let go of they didn’t even realize they were doing or how much it was.

Jean Chatzky: (07:43)
For example?

Ashley Feinstein Gerstley: (07:44)
I think lunch out is a big one or a lot of people complain about Target runs, like showing up to buy one thing and leaving with $100 bill every single time. Taxis, when they take a look, they’re realizing I’m actually getting there later. It’s taking longer. I’m car sick. I’m missing the appointment anyway and I’m having to spend all this extra money. What are some other good ones? I think that Amazon is a really big one for a lot of people, too.

Jean Chatzky: (08:11)
Well that one-click ordering makes it so easy that we spend mindlessly. Are you seeing a lot of Venmo? Are you seeing a lot of Starbucks apps? Are you seeing a lot of Uber? Is it things that we’re buying over and over again as opposed to big things that we’re buying?

Ashley Feinstein Gerstley: (08:31)
I think the big one that I see would be travel. That would be one that’s different than all the apps, but I think Uber is a really big one for people because you don’t even pay.

Jean Chatzky: (08:41)
Well, that’s the thing, right? I mean it’s gotten so much harder, I think, to manage our money because it’s gotten so invisible, you know? It’s not like we have, when I graduated from college, I would pull, you know, 40 bucks out of the ATM and I would try to make it last five days. And sometimes that happened and sometimes it didn’t happen. It was in the 80s and 40 bucks went further than it goes today and still, I’m still often a creature of cash. I still go to the ATM. I still pull money out. I still try to make it last a week without relying all that much on my cards. But I think with apps, with virtual wallets, with the coming new cryptocurrency from Facebook, like, it’s going to go faster and faster and faster and I would think that would make us less and less conscious.

Ashley Feinstein Gerstley: (09:31)
Yes, and one of the things I ask people to do in the Money Cleanse if it works for them, is spend in cash. There are a few people who feel like once the money’s out of their bank account, it’s almost monopoly money, but most of us spend less or more consciously when it’s cash and then also to keep a journal of what they’re spending to just, I think definitely the first week is all about reconnecting and knowing where our money’s going because as simple as it sounds, most of us don’t.

Jean Chatzky: (09:56)
Why do most diets and budgets fail? I mean it’s not like we don’t know what to do.

Ashley Feinstein Gerstley: (10:01)
Yes, I think, so one of the things I see in the most successful money cleansers is they have a mindset shift from making a budget or taking smart financial action as being this act of restriction, this thing they don’t want to do, but they have to do. And they have a shift into viewing it as an act of self love or a gift to themselves. Because at the end of the day, when we’re not spending on certain things in order to spend on the things that we really want, that’s a gift to ourselves. And so I think that shift is really important whether we’re trying to eat healthy or whether we’re trying to spend on the things that we want.

Jean Chatzky: (10:37)
Why 30 days?

Ashley Feinstein Gerstley: (10:38)
So 30 days, we build habits, I think the research shows, in that 28-day span. So the 30 day money cleanse goes over the course of 5 classes over 4 weeks. And what we do is the first week we’re spending the least amount. And then over the course of the different weeks, we’re adding things back in. And so by the end you have a lifestyle. It’s not a cleanse anymore. It’s something that one of the big differences between a money cleanse and a juice cleanse is when you’re on a juice cleanse, it doesn’t really fit with your life. It’s hard to go out to eat. It’s hard to vacation and the money cleanse is most successful when it is part of our lives already. So if we’re traveling for work, good, if we’re going on a vacation, we need to be able to go out to eat. So having it fit with our lifestyle.

Jean Chatzky: (11:21)
So it is, it’s like an elimination diet where then you slowly add things back in.

Ashley Feinstein Gerstley: (11:26)

Jean Chatzky: (11:27)
The first week we journal, the first week we use cash. I want to talk about what happens in the subsequent weeks, but before we do that, let me just remind everybody that conversations like these are proudly sponsored by Fidelity Investments. What if you could demand more from your money and make your savings work as hard as you do and what if that helped you reach your financial goals faster? It all starts with a financial checkup and an understanding of what you own and what you owe. From there the folks at Fidelity will work with you to evaluate your investment options and different ways to grow your savings. You can get started today at we are talking with Ashley Feinstein Gerstley, author of The 30 Day Money Cleanse. So take us through the subsequent weeks, what’s happening in 2, 3 and 4.

Ashley Feinstein Gerstley: (12:22)
So in the subsequent weeks we put together our happiness allocation, which is what I call a budget, because I think it’s a much more fitting term. It’s how we’re going to allocate our money in the way that will make us the happiest in the short and long term. And usually that doesn’t look very pretty. Once we put that together and we look at what type of spending we want to add back in. So one of the exercises that I love is we look at the opportunity cost of our spending, because we can unfortunately only spend each dollar once. And so sometimes it’s really helpful to see, “wow, I’m spending $1,700 on a lattes,” which I was, and that’s not what I want to be doing. But other times we’re like, “okay, is that normal? Is that what I want to be doing?” And sometimes looking at it in terms of what else we could be doing with that money makes it a lot more clear if that’s the choice we want to make with it.

Jean Chatzky: (13:13)
Can we just talk about the latte for a second because I, the latte has been getting an awful lot of flack lately. There are a lot of people out there who following the publication of our friend David Bach’s book, following Susie Orman saying “if you’re drinking coffee, you’re like peeing $1 million away” following um, Sallie Krawcheck launching these mugs saying “just buy the f**king latte.” There is a lot of latte discussion going on. And what I want people to understand is that the latte is a metaphor. Pick your poison essentially, right? I mean you have to decide where you want to spend your money and if you want to spend it in Starbucks, you will see me right there with you getting my misto with my inch and a half of 2% milk and my two sweet and lows. But maybe you want to choose something else. And that’s the point, right? We got to get conscious of where our money is going.

Ashley Feinstein Gerstley: (14:12)
And that’s the coolest part about this is there’s no right or wrong answer. It’s just consciously looking at where it’s going and deciding. So tons of people in the money cleanse choose the latte. They, I actually love mistos, too. And a lot of people say “no, it’s not worth it.” And only the person themselves can decide if they’d rather be using that money for something else.

Jean Chatzky: (14:32)
Do you know why we love mistos? Stows cause they’re a cheaper latte. Like let’s just get real about this, right? A misto is coffee with heated steamed milk in it. Right? And it’s like a dollar and a half less than a latte. So if you like the coffee as much as the espresso or more as I do, misto all the way.

Ashley Feinstein Gerstley: (14:53)
Yes. Essentially a cafe au lait.

Jean Chatzky: (14:55)
Exactly. Exactly. How do we get more honest with ourselves? I mean, we are so dishonest with ourselves when it comes to where our money’s going, we’re as dishonest as when we eat and drink.

Ashley Feinstein Gerstley: (15:08)
Definitely. So one of the reasons we’re so dishonest with ourselves is that when we make a mistake or when we do something that we don’t view as correct with our money, we view it as like a fatal flaw that we’ll never be good at it. So, “Oh, I ‘m never going to be good with money. This is never something I’ll be able to do.” But just like with most other skills, we can improve and grow and if we took more of that mindset looking at our mistakes, like, “Oh, how can I learn from this? What will I do? How can I do this better next time?” Versus telling ourselves things like, “Oh, there you go again. You’re never going to get this right. You’re never should be trusted with money.” I think it makes it a lot harder to look at it when we view it as something that’s really flawed about ourselves.

Jean Chatzky: (15:48)
Well, I think this exercise can really help a lot of people shift their mindset. Is that your experience?

Ashley Feinstein Gerstley: (15:54)
Yes. I think the mindset is, like you mentioned, so we definitely don’t learn about money, but once we do, we aren’t doing what we know we should be doing. And the mindset is the part of that that helps us get there.

Jean Chatzky: (16:06)
Ashley Feinstein Gerstley. The book is The 30 Day Money Cleanse. And just a heads up to our listeners. If they go to Fiscal Femme, will they find your fabulous video?

Ashley Feinstein Gerstley: (16:16)
Yes they will.

Jean Chatzky: (16:19)
Ashley did a music video. It has a lot of the friends that you’ve seen and heard on this podcast in supporting roles and it’s really fun. Kudos, I think everybody should go take a look at it.

Ashley Feinstein Gerstley: (16:35)
Thank you. Yes, one of the most fun projects really ever. And I think when I heard the song, Ariana Grande’s song Seven Rings, has like this badass woman vibe to it, but it’s definitely all around how spending money on ourselves and our friends makes us badass. And this is saying it’s probably even more about us to be saving our money.

Jean Chatzky: (16:55)
Absolutely. We believe that. That is absolutely true. I hope you’ll come back and visit us again.

Ashley Feinstein Gerstley: (17:01)
Would love to.

Jean Chatzky: (17:01)
To thank you so much. And Kelly Hultgren, our producer, has joined me in the studio.

Kelly Hultgren: (17:09)
Hi everyone.

Jean Chatzky: (17:10)
Hello. When’s the last time you went on a cleanse?

Kelly Hultgren: (17:13)
What kind of cleanse?

Jean Chatzky: (17:14)
Any kind of cleanse.

Kelly Hultgren: (17:15)
Uh, does not drinking for a week count?

Jean Chatzky: (17:20)
Yeah, I think it does. I just think this, look, I haven’t been on a cleanse in quite a while as we know, but I have been doing some money makeovers. You know, we do some employee benefits consulting for PepsiCo and I’m doing a couple of money makeovers for employees there and it’s been fun. And one of the people that I’m helping is a woman who was very much like Ashley and felt like she couldn’t save anything. So we’re three weeks in, she has been accountable to me on the phone. I had her track her spending old school, write it all down, and I talked to her last week and she’s like, “Oh my gosh, I have money.”

Kelly Hultgren: (18:03)
Yup. It’s amazing.

Jean Chatzky: (18:03)
You know, and that’s the magic. That’s really the magic. It’s becoming conscious about what you are doing with your money. So that you can make choices about what you want to do.

Kelly Hultgren: (18:14)
Yes. That is huge. And I’m so happy that you guys touched on how it just feels like we’re not spending money at all these days because it’s so automated. It’s all digital. It’s one click for buying a car, buying our groceries. I just ordered groceries before we were in the studio today and it was so seamless. I didn’t think about it. And there goes $60. And like if you do that in things that you don’t need, like maybe some of those cars, the money disappears.

Jean Chatzky: (18:42)

Kelly Hultgren: (18:42)
And so with the word cleanse though, going back to this idea of a cleanse, like I love the approach she takes and it when she explains the cleanse and when you see the cleanse, if you decide to do your money cleanse, it doesn’t feel so restrictive because that’s why I’ve always avoided cleanses. It’s because I’ve tried a number of them for a number of different things, whether it be food, drink, even spending some times. And I go all in and I go too hard. And it’s so restrictive that like I, what’s the word?

Jean Chatzky: (19:11)
Give up.

Kelly Hultgren: (19:12)
Give up. But I also, before giving up, I also rebel, that’s the word. And I go nuts and I actually undo all of the positive things that I just did for whether it be my waistline or my wallet and I splurge and I binge or whatever the opposite is of what you were just doing. So what I think this is supposed to do is just have you look in the mirror, have you tap into what you are or what you aren’t doing with your money and kind of give you this helpful push in the right direction. It’s not looking to just like completely revolutionize your money in a month because I think that, too, would be too quick of change. What we’ve learned from other guests on the show, too, for longterm habit change, we need more time.

Jean Chatzky: (19:54)
We absolutely need more time and particularly when it comes to money. So one of the really interesting things is when Biggest Loser came out, I got a slew of phone calls. Can’t we do this for money? Can we do this for money? Can we do this for money? And the problem is money, it takes a little longer. You know, even to see, you can’t save a little bit of money for six months and know that your financial future is totally set. You got to do it for years. That’s why automation is so helpful. But you have to stick with it long enough to see positive results. You’ve heard me say saving money isn’t fun. Having money saved is fun. It’s a lot of fun. But you got to give yourself enough time to actually save the money, move the credit score, see some sort of positive impact.

Kelly Hultgren: (20:44)
Yes. And I also love that you are so passionate about what lattes stand for and we haven’t had that moment on the show yet and it is so important because also what her cleanse aims to do and what I love about this approach is that when you are categorizing those expenses into those buckets, she’s giving you the option to define your own expenses as a need. So for me, lattes are a need. Like, I need coffee that I could make at home, sometimes I need it when I’m not at home and I buy it and I own it and I, I just need it.

Jean Chatzky: (21:18)
Right. And I don’t care if you spend your money on coffee.

Kelly Hultgren: (21:21)
Oh good.

Jean Chatzky: (21:21)
I really, I do not. I do not care if you spend your money on coffee. I care that you know that you’re spending your money on coffee. That’s the difference.

Kelly Hultgren: (21:31)
Yep. So I’m, I’m happy we’re having this now national dialogue around lattes in the personal finance community and even outside of it, too. So I appreciated that moment.

Jean Chatzky: (21:42)
Me too. All right what do we have?

Kelly Hultgren: (21:43)
First one from Sally from Colorado. Is it smarter to pay additional money toward the principal on a home mortgage or to invest that money in an index fund. For background, I’m 35 my husband and I were married in August of 2018 and were fortunate to purchase a home also at the same time, we have a 30 year fixed loan at 4.65% interest rate. The loan is under just my name as I have an excellent credit score, 792 and yes, I did freeze my credit recently after hearing your advice.

Jean Chatzky: (22:13)

Kelly Hultgren: (22:13)
Sally from Colorado. We have an emergency fund for one year that is in a CIT bank savings builder account earning 2.45% APY. I max out the federal limit on my 401(k) that is provided through work and has a company match at 6% and my husband contributes to his own retirement plan. We pay off our credit card each month and only use it for bills and home repairs that we know that we can afford. We have no other debt, thankfully. As well as saving up for home remodels, I just started an account with Acorns to begin robo investing and want to build up that amount to at least $5,000 after which I intend to open an account through a company such as Fidelity. She put in “sponsor shout out.”

Jean Chatzky: (22:48)
Aw, we like that, too.

Kelly Hultgren: (22:52)
So if I find some extra cash this year, enough to make two separate mortgage payments to put toward the principle and save longterm on interest costs, should I do that? Or should I invest that and hope for that money to earn 8% to 10% over the same 30 year period that we have a mortgage? Sally, I am blown away by how perfect you sound.

Jean Chatzky: (23:13)
Sally, You are a poster child for financial responsibility and so by the numbers you should probably invest the money. By the numbers, you will, over time, do better, historically, if you put the money into an index fund and let it grow. However, there is a school of thought that argues for diversification and owning your home outright would diversify your portfolio in a slightly different way. It’s something that you absolutely could look at doing. I mean, personally, I think looking at your age, with a 30 year fixed rate loan, you’ll be 65 when you get out. That may be okay for you, but if you’d like to get out a little earlier, one way to do it is just by making an extra mortgage payment each year, that’ll bring your clock down to about 23-24 years. I mean that might be attractive. You might in 6 or 7 years, earlier, decide you want to buy a second home and this may free you up to feel that you could do it. So I wouldn’t stress a whole bunch about this decision. I would think about 529 college savings plans. You don’t mention any kids, I’m not sure if you have them. If you do have them, that’s one place that you may want to look at putting some of this money. Otherwise by the numbers, by the index fund, and if you’re feeling like you want to give yourself a little wiggle room down the road with that 30 year clock, put it toward the mortgage.

Kelly Hultgren: (24:45)
Great. Now we’ll do one from Marjorie. I really enjoyed the episode with Erin Lowry. It got me thinking about my investments inside my Roth account. I have a portfolio of about 12 to 15 different low-cost index funds. I’m sure Aaron has a bit about this in her book, but I was wondering both of your thoughts on whether this is too much or does the amount of types of index funds matter. Ah, investing, she also adds.

Marjorie, I feel exactly the same way. Ah investing. So what you’re aiming for is overall diversification. You could do it with 2 to 3 different index funds. You could do it with a total stock market index fund, a total bond market index fund, and maybe an international fund that might do it. In my book, in Women With Money, I’ve got model portfolios of index funds that I’m Stacy Francis who is a financial advisor with Francis Financial here in New York, helped me come up with, they have about 8 index funds per portfolio in different percentages because as we get older we want to have more money in safer investments like bonds and less in stocks. And when we’re younger, we want to have the vast majority in stocks. So just as an example, if you are, say, in your 40s, this model portfolio has 18.5% percent in an intermediate term bond fund, 11% in a short term bond fund, 13.5% in an emerging markets equity fund, 16% in an international developed equity blend fund, 18% in a U.S. large cap growth fund, 18% in U.S. large cap value and 4.5% In a us small cap blend and you can get all of those things with index funds as well. I suspect that with those index funds you may be overlapping, you may be investing in the same things multiple times. I might call the place that’s holding those funds and ask if they do a sort of overlap analysis. That might be interesting. On the flip side, if it’s working for you, if you’re looking at your returns and you’re doing well each year, then you may want to let it ride. We invest in things for sometimes for reasons other than diversification. About 1 out of every $5 is going toward impact investing right now. Those are investments that we want to buy because we believe in the principles behind the way that these funds are being run or the companies in these funds are being run and we’re going to do a whole show on impact investing coming up. So my sense is it’s probably overkill, but it’s not necessarily something that you have to worry a lot about.

Kelly Hultgren: (27:45)
Great. Thank you Jean. And we’ll do one more from Nervous in Nashville. I was listening to episode 144 and during mailbag a retirement savings recommendation was presented. I’m 27 my husband is 31. We purchased a house in 2017 and I’m wondering if the equity we have in it would count towards our savings. We are invested in our 401(k)/57 accounts but are nowhere near one annual combined salary would just those. Thanks for your help and direction. So thankful for your podcast and your books. You are amazing.

Jean Chatzky: (28:15)
Thank you so much and I love that you named yourself Nervous in Nashville.

Kelly Hultgren: (28:20)
I know, we’re big fans of those fun names.

Jean Chatzky: (28:20)
We love that. No, your house doesn’t count. Sadly. I wish it would. I wish it would count but, no.

Kelly Hultgren: (28:28)
Love your name, but no.

Jean Chatzky: (28:28)
But no. But no, it doesn’t count. Your house, I think of a house as a supplemental savings account because the thing is if you get to retirement and you need that money out of the house to live on, where are you going to live? Right? That’s the reason that it doesn’t count. You could downsize substantially and you could use that money to supplement your retirement and that may be part of your plan. I would say to you and your husband, you’re still really young. Aim to try to get the amount that you are contributing to those retirement plans including matching dollars up into the 15% range and within a very short while you will see that you are doing just fine.

Kelly Hultgren: (29:13)
Great. Thank you Jean and thank you everyone for writing in. You can email us your questions and at you can sign up for our two free newsletters: This Week in Your Wallet and HerMoney, which comes out every Tuesday and Friday respectively.

Jean Chatzky: (29:27)
That’s right. up. And in Thrive we are picking up where we left off with Ashley. It’s never too late to start saving and it’s certainly never too early to start. If you’re like me and you recently watched your offspring walk across that graduation stage toward, gulp, the workforce, it’s time to start encouraging them to secure their own financial futures by saving for retirement. Already? Yep, already. Our friend Michelle Singletary writes in a recent Washington Post column, “young adults have at least one thing working in their financial favor: time. Older adults who are faced with delaying retirement longer than they wish, often confide in me that if they could tell their younger self one thing it would be to start saving for retirement as soon as possible.” She is so right. I hear that over and over and over again. But of course it is much easier said than done, particularly when recent grads may be facing a mountain of student debt and expensive housing costs. However, getting started early is a message that we have to hammer home even a few dollars every time you get paid is better than nothing, particularly if there is a company match. Walking away from that is just leaving money on the table. What may be most important for recent grads is that they have someone that they can talk through all of these financial concerns and questions with. Their heads may be swimming with advice on paying down debt, saving in an emergency fund, putting money into an HSA, health savings account, investing for retirement. That is where you come in. One day, your son, your daughter can absolutely wake up to be a 401(k) millionaire, but they’ve got to manage the fundamentals of money management first. Thanks so much for joining me today on HerMoney. Thank you to Ashley Feinstein Gerstley for the great conversation. If you like what you hear, we hope you’ll subscribe to our show at Apple Podcasts and leave us a review. We also want to thank our sponsor Fidelity. We record this podcast out of CDM Sound Studios. Our music is provided by Track Tribe, and our show comes to you through PRX. Join us next week when we’ll be back with another great guest and we’ll talk soon.

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