In this episode of The Good Cents by Payactiv Podcast, host Eric Rosenberg welcomes Katie Brewer, CFP, to discuss practical tips for financial planning as we enter 2024. Whether you’re starting to plan or want to improve your current habits, this episode provides actionable advice to set you up for financial success in the new year. Here are the key takeaways: 

• Begin financial planning before the holiday season to reduce January stress.
• Set up dedicated accounts for specific goals like holidays or travel to stay organized.
• Start by gathering all your financial data to better understand where money is going.
• Use budgeting tools like Payactiv to categorize expenses and track your financial habits.
• Review your employee benefits and make sure you’re maximizing contributions (e.g., 401(k)).
• Check for unclaimed property through state websites and verify your credit report for errors.
• List your debts, their interest rates, and prioritize high-interest ones.
• Break down your debt repayment into manageable milestones to avoid feeling overwhelmed.

Eric Rosenberg:

This is a friendly reminder that today’s episode is intended for education and entertainment purposes only and should not be considered financial or legal advice.

Hello my friends. Welcome back to The Good Cents by Payactiv podcast. As always, I am your host, Eric Rosenberg, and it seems like the new year is just around the corner. I don’t know about you, but to me it seems like this last year has flown by and I can’t believe we’re getting ready to celebrate New Years. But before we do, we could take a moment to stop and look at our finances. Of course, a lot of people do New Year’s resolutions and I don’t think they’re always the best idea. A lot of people get a good idea, but then don’t follow through because they’re just picking New Year’s as a random date to start. Rather than wait for that date, we can get started early, maybe even today, with our new financial resolutions and our new financial plan. So today we bring on a CFP, that’s a certified financial planner, named Katie Brewer. She is a serious money expert and has awesome advice for us to start planning next year’s finances this year.

Let’s dive in. All right, everyone. I am so excited to be here with Katie Brewer. She is a CFP, that is a certified financial planner, which means she’s taken a really big test that proves she knows how to plan around money and get ready for what’s to come in the future. So Katie, welcome to the show.

Katie Brewer:

Hi, thanks for having me on.

Eric Rosenberg:

So as we were talking about before we hit the record button, a lot of people think about New Year’s as that time to make all these resolutions and start with financial planning, but there’s no reason you have to wait till New Year’s. I say we shouldn’t make a plan that we’re going to start in the future, we should just start right now. It’s not New Year’s yet, but that doesn’t mean you have to wait to get started managing your finances and planning for next year. So that’s what we want to talk about today is how can someone make good steps starting right now, to get themselves on the right foot so they can start next year confidently?

Katie Brewer:

So I actually really like this time of the year because sometimes I feel like the holiday stuff gets out of hand and then people start off New Year’s going, “Well, I got to recover from what I accidentally just did the last two months.” And so if you’re going into November being more intentional or you have a better plan about are you going to buy gifts for everybody or can you draw names, especially if there’s a whole bunch of family, then I feel like you start the year on an even footing versus trying to dig back out of what happened during November and December time period.

Eric Rosenberg:

Yeah, it’s so easy in November with Thanksgiving if you maybe have to travel for family or if you’re hosting dinner and you have to go buy a big Turkey and all the other things that go with Thanksgiving dinner. Funny little side note, once I dated a girl who their family tradition was, if somebody asked for something to be part of Thanksgiving dinner, they’d always say yes, but then it had to be part of their family Thanksgiving dinners forever. So they had these things that the kids asked for 15 years before, I want Froot Loops for Thanksgiving, so they had Froot Loops at their dinner. But all those little things, that adds up. That’s another $5, $6, $7 on your Thanksgiving budget.

Katie Brewer:

It’s all fun family tradition until you realize that you can’t stop having Froot Loops at Thanksgiving dinner.

Eric Rosenberg:

Many have spent $100 on Froot Loops over the last 10 Thanksgivings. So let’s get in that mindset of we want to make sure we’re making the right financial decisions. We’re planing ahead, we’re getting ready to have our finances work for us rather than always chasing the next bill or waiting with our breath held for the next paycheck. So if you’re trying to break that cycle and get more confident with your money, where would be the first place you would look? How would you start managing your finances and then planning ahead?

Katie Brewer:

Yeah, and I’m sure you guys have covered this, but I’m a really big fan of having different accounts for different things, and so I actually really like having a shorter term account that you’re throwing money into during the year if it’s for holiday travel or just general travel or things like that. And so I know we’re getting close and people are like, “Oh no, it’s too late.” It’s not too late. If you’ve got a little bit extra, instead of being like, let’s reward ourselves and all go out to dinner, take the 50 bucks that you were going to do and throw it into that short-term savings account. Personally, we keep morphing how we do holidays. We’ve gotten more and more laid back. So for example, for Thanksgiving, we always used to have a turkey that feeds 25 people when most of the time there’d only be six of us so everybody has all this turkey for another month.

So my husband’s gotten real into cooking gumbo, shout out to anybody from the Louisiana area, my dad is from there, and so he taught my husband gumbo. So now we have a gumbo Thanksgiving, which may I tell you it takes a while, but it is way cheaper and way less effort than getting the freaking huge turkey that you have to cook for eight hours and then 14 different sides. Apparently nobody really liked the dry turkey that I was attempting to cook anyways. So yeah, that’s just a fun thing that we tried out last year. We decided we liked it, so we thought we’ll just continue with this year.

Eric Rosenberg:

That makes sense. Yeah, I’m not the biggest Turkey fan either, so I get it. So we’ve talked about trying to find ways we could save in the coming months and ideally put that towards something that we see as an upcoming expense maybe for the holidays, but let’s look beyond the holidays. Let’s think about going into next year. What kind of steps can we take now to create a plan and start getting prepared so when January 1st comes around, we hit the ground running and we’re already moving the right direction with our budgeting and our savings plan and maybe even debt payoff?

Katie Brewer:

Yeah, I mean I’m a big fan of little steps for budgeting. So if somebody has never budgeted before, then give them three things. And one is pick a budgeting tool and the second one is to install it and set it up, and the third one is just to track for a week. Sometimes people get overwhelmed, “oh, I have to do this forever,” and this and that. And so if you’ve never used a budgeting tool, just know the budget’s going to look wonky usually in November and December. It’s okay because what you’re wanting to do is start gathering that information together. You don’t necessarily have to act on it immediately, but you’re gathering that information together and it’ll be helpful next year in, say April, you can look back and you have a whole six-month average of what it was, if you can keep it up that long.

Eric Rosenberg:

And for those who don’t know, Payactiv has a budgeting tool like that built in. So if you have your direct deposit come to Payactiv Visa® Card*, we automatically help you categorize your transaction so you know where your money is going. And as Katie said, after a week you actually get a lot of data, you get a lot of information. There’s a lot of blind spots in budgeting where people don’t really understand where their money’s going because either it’s willful, they just don’t want to know, or because they just haven’t taken the time to think about it. So I think that’s definitely an awesome place to start is getting an idea of where your money’s going and then taking small steps to tweak that budget to get more aligned with your values and your goals rather than just what your habits have been.

Katie Brewer:

Yeah, exactly.

Eric Rosenberg:

So let’s say someone has done that, they’ve got their budgeting tool set up, they’re planning to really start looking in January and tracking and making those little adjustments. Where’s the next place they should focus in their financial plan for next year?

Katie Brewer:

I mean, it’s that time of the year right now where you can decide on employee benefits. It’s coming and going real quick, but some people don’t know that you can actually, a lot of times once you’re eligible for a 401k or a 403B, that that’s something that you can turn on or off, usually all during the year. So I get some people that are like, “Well, I missed that timeframe, and so that was the only timeframe that I could set my 403B or my 401k.” It’s not. Once you’re eligible, you can usually start putting something in it, even if it’s teeny. 1% is better than 0%. Sometimes people that I work with will get real excited and they’ll be like, “Okay, so we’re doing zero right now, but we’re going to do 15.” And I’m like, “Why don’t we take that in smaller chunks because you’re going to think there’s a great idea until the paycheck comes, you’re going to go, oh my God, where did all my money go?” So.

I like being able to tune up. That could be setting a goal in January or doing a little bit of recovery, but in February that’s when you’re going to contribute to your retirement plan for the first time or something like that.

Eric Rosenberg:

That’s a great strategy. I remember earlier in my career I had a chance to, I could contribute up to 6% of my income or my paycheck to a 401k and my company would match that up to 50% of what I put in. So if I put in 6%, then they’d put in three more percent. So it was like 9% total, and it took me a few months to get used to it, but once I got used to that, I realized, “Oh, I can actually afford to put a little bit more,” adjusted my budget. You don’t always miss the money if it’s already going to future you, and you get used to living without it. So I set it up that every three months I would go up 1% and I kept doing that until I hit that 15% goal plus the match the company was giving me. So it was really like I was putting away 18%, which felt pretty good.

So you don’t have to start at those huge numbers like you were just saying, you don’t have to start at 15%. You could start a lot lower, whether it’s 1% or 2%. Doing something is definitely way better than doing nothing. And I have so many friends, even today, who don’t contribute anything to their retirement savings or their retirement plans. They help you save on taxes and hopefully we all want to retire someday, and that’s definitely an important step in getting there.

Katie Brewer:

Yeah, I feel like the January timeframe too is a good time for cleanup type stuff. So for example, if you haven’t run your credit report in quite a while, running that and you’ll see the things that you owe on, but every once in a while you see other things that were not on your radar. For example, if you went to the dentist a year ago and somehow their notices didn’t come to you, then they might’ve sent that to collections. And so those are good things just to know what is out there under your name and under your credit. And then that also allows you if there’s anything that’s being misreported or if somebody guessed your social security number and is now opening up store cards in your name. This is something where you’d be like, “I really have no earthly idea what this is,” and then you can look into it a little bit further.

So that’s on a boring side, but on a more exciting side, I also like to run something for unclaimed property in the state that you live in. And then I think there’s also now a national one where it supposedly will look across different states. So in case you’ve moved a couple of times, so the credit stuff is you might find things that it says that you owe that you didn’t owe, but on the other side you might be finding money that you didn’t know was owed back to you, that is owed back to you. So I like doing those two things sometime January, February, March timeframe before it gets too crazy with tax type stuff.

Eric Rosenberg:

That’s a great idea. And for those who don’t know, you can go to annualcreditreport.com. That is a government mandated website where all three, the big credit tracking companies will give you free copies of your credit report. And it used to be that they’d only do that once a year periodically. Now you can do it as often as you want they’ve all said. Basically since COVID and there was a big hack on one of the big credit companies a few years ago, they’ve all said more or less, you can have a free copy of your credit report anytime. So that’s a great resource and I like to check each one, once a year. I space them out every four months, so I’m checking them all periodically and yeah, if there’s any big surprises, I have found things on there that I didn’t recognize and I filed a dispute and they went away from my credit report.

If you have things on there that are inaccurate, which I don’t remember the number off the top of my head, but a huge surprising number of people have negative information on their credit report that’s inaccurate. Removing that could make things so much easier for you when you wanted to apply for any new type of credit in the future. It can get you a lower interest rate, easier approval. Now there’s lots of benefits.

Katie Brewer:

Exactly. It’s a boring chore, but it’s also something that it’s really important to know. It’s like your reputation. Check your credit reputation every once in a while so that you don’t get a surprise when you go to purchase a car and you are taking out a car loan and they’re like, “Well, the interest rate’s going to be a lot higher than it would’ve been because you’re in the 600 range,” and you’re like, “What?” This could help to avoid those kinds of surprises.

Eric Rosenberg:

Yeah, I don’t think credit reports are boring. I think they’re awesome. I like to look through mine. I use a green highlighter for good and I have a red highlighter if I ever need to, for bad Fortunately, I don’t have to use it for mine, but that’s a good way, I think, to go through your credit report and see what do I need to work on and what’s working for me. Speaking of debt, and you talked about maybe there’s collections you don’t know about, let’s talk about the debts we do know about, and I know there’s some debts that are worse than others. I’m not a big fan of being in debt for anything, but I know I have a mortgage, I have a home loan, we have a car loan, so some debts are necessary for our lives. But other loans might be really detrimental. They might really hurt us financially. How would you evaluate your loans to make a plan for next year?

Katie Brewer:

I’m a real big fan of collecting where you owe, how much you owe, and then what the interest rate is, and then also if it’s a fixed interest rate or if it’s variable. Because I’ve done this with some clients and we start paying on one loan and then apparently there’s one that jumps over, but you could just do that in a Word Excel, on a piece of paper if you wanted to, but that really helps you figure out there’s two snowball methods, the chip away at the highest interest rate, or if the highest interest rate is the biggest loan, then you might want to pick one of the smaller loans just so that you get the good vibes off of making some progress on it. But yeah, that’s helpful to do. It’s something that a lot of people are like, if I don’t look at it then it’s not happening, but that’s not really how it works. So it’s good to put it all in one place and see where you’re at and then prioritize based off of what they are.

There are also things that sometimes you can refinance. So for example, my husband took out a car loan, I think probably when he was 16 or 17. He had no credit. He had never borrowed anything in his entire life, and so his interest rate was like 16%.

Eric Rosenberg:

That’s even high now. That’s even high when interest rates are high.

Katie Brewer:

Yes, it was very, very high because the car loan place was probably like, “Hey kid, we have no idea if you could pay this loan or not.” So once he had been paying the car loan for a couple of years, like two or three years, he then had established credit, so he was actually able to refinance his car loan, which is something a lot of people don’t know because it’s not advertised all that well. But usually if you refinance a car loan, it’s not like a mortgage, you don’t have a huge closing cost for it, credit unions do it quite a bit. But if you get all of your debts together, then you can figure out a plan of action on if you’re just going to keep them as they are and start chipping away or if there’s anything that you can do like if you got a car loan when you had not the best credit score and it’s improved or maybe you have more credit under your belt, maybe you can refinance that loan at some point.

Eric Rosenberg:

Yeah, and if you do that, I actually have a story that came to mind. It’s really easy to feel overwhelmed, and this is something I could never conquer. It’s like this giant mountain of debt, and I had a friend one time, we sat down at lunch with someone I used to hang out with quite a bit, and she said, “Confidentially, Eric, I know you’re the money guy. I have five figure credit card debt. Here’s just one of my credit cards. I don’t know what to do.” She was talking about declaring bankruptcy right away. She was so overwhelmed. I said, “Well, let’s take a second. Let’s gather all that information,” Just like you were saying, “what are the balances? What are the interest rates? What are the monthly payments? Let’s compare that to your income and your budget and see if there’s room in there to start chipping away at that debt.” And she was able to pay it off much faster than she would’ve guessed in the beginning when she was so nervous.

So don’t get overwhelmed right away is my advice from that. Take a deep breath. Sometimes it’s okay to step away and come back the next day and look at it again, but don’t make any big decisions really, really fast. Instead, be thoughtful and plan ahead. That’s what we’re talking about today, is making a financial plan. And there’s some really cool free tools. We were talking about the snowball methods. There’s one called the Debt Snowball and one called the Debt Avalanche, and there’s free calculators. If you Google them, you’ll find, where you can plug in all of your debts and interest rates and payments and balances, and it’ll help you understand the math of how much you could pay to each debt every month and when they’ll be paid off. So you can find a way out of debt situations most of the time if you’re thoughtful about it.

We’ve talked about budgeting, we’ve talked about saving a little bit. We’ve talked about credit and debt. Is there any other big area you would recommend someone looks at when they’re getting ready to start planning now, for now and into the future?

Katie Brewer:

You’ve probably had people on the podcast talking about if there’s any kind of capacity or room to negotiate or to take on a small part-time job. There’s always different sides of the equation, and so when you’re figuring out your debts, you’re looking at what the interest rate is and then how much payments are, but increasing income, even if it’s temporary, even if somebody took on a holiday job and it’s only for a month and a half, that really sometimes can help be the little propel that you need to be able to get a little bit further ahead than you would when you’re not working another part-time job.

So some people are like “Hustle, you got to work three jobs.” I don’t know. I’m married and I have a kid. I can only work the once. But it is coming up on holiday season, so it might be a good time to even think about, can I just pick up something, hopefully at a store that you don’t love too much. Because I know, personally, if I went and worked at James Avery, there would be a $0 take home, which is earrings and rings in case people don’t know what that is. But if I were to go work at Walmart for example, or at men’s clothing store, then it would probably just be a straight bringing home, a little bit of extra income over a timeframe when you might have a little bit more expenses.

Eric Rosenberg:

Sure. Yeah. Actually, I worked at Target way back when as a cashier, and during the holidays we’d have a whole big group of people who came in and worked at the store for maybe six weeks. They’d worked from a little bit before Thanksgiving until a little bit after New Year’s, and I imagine that was a great way to earn a little extra money they wouldn’t have earned otherwise, and they could pick up some evening shifts and some weekend shifts. It wasn’t a long-term commitment, it was just for a couple of months. But that could be enough to pay off one credit card or to cover your family’s holiday gifts and holiday travels and a little bit more, you never know. That’s a great tip there. I like that. Well, thank you so much for taking the time to chat with us today. If anyone wants to learn more from you or about you, where’s the best place for them to go?

Katie Brewer:

So I’ve got a website, it’s yourrichestlifeplanning.com, and then yourrichestlifeplanning.com/blog is where we post some articles. The most recent one was actually a guide to a financially healthy holiday, so relevant as to what we’re talking about today.

Eric Rosenberg:

Awesome. Well, thank you so much, Katie. I really appreciate your time today, and thank you for sharing your wisdom with us.

Katie Brewer:

Yeah, well, thanks for having me on, Eric.

Eric Rosenberg:

Well, I hope you found that one enjoyable and helpful. Remember, we have a ton of free resources available in the Payactiv app. That includes the ability to get part of your paycheck up to 2 days early¹, automate your savings², automate your budget tracking, and even get free counseling sessions. That’s right, free no cost counseling sessions with a money professional to help you improve your financial plan. That is a great value. You’ll often pay hundreds of dollars to work with someone who has that level of financial expertise, but when you’re a Payactiv member, it’s totally free. With that, good luck improving your financial plan for next year, and until next time, keep living the life you’ve earned.

¹We give you access to your direct deposits from employer and government payers on the day we receive them, which is typically up to 2 days earlier than your scheduled pay date.

²Goal-based saving is a set-aside account, and you will not receive interest or other earnings on the funds within the goal-based account.

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