And are there any potential drawbacks for newbies out there?

Yeah, so I think the big drawback here is for those that take this too far and just completely underconsume and use it as a tool to just simply build up their bank accounts or their accounts in general, just for the sake of having big accounts.

You know, there has to still be this fine line and, and, you know, your ability to underconsume in those areas that you don't necessarily need things, but at the same time, we still have to find joy in our lives.

So maybe instead of buying the new car or upgrading to the new phone, allocate that money to a vacation that you can take with your family, or allocate it to a dinner with friends.

You know, something meaningful and joyful rather than just stuff.

So you just don't wanna take this too far.

You wanna find that happy medium where you are not upgrading for the sake of upgrading, and you're having that joy, uh, still in your life today.

What's an easy way to do that?

Um, how do you break it down in terms of the differences financially in that situation?

Yeah, so I think the thing that we're seeing now is, you know, there is a cost of going at it alone, and there is this trend that you're, you know, referring to.

Nearly three in 10 US households are now one-person households, which is up 20% since 1975.

And in a lot of cases, one person may be carrying the housing, the utilities, the insurance, and the emergency savings that two people might otherwise share.

So, you know, you have to understand that there's added burden being on one person versus two perhaps.

Or if you're cohabitating, then that brings on other challenges in terms of, you know, who, who pays what.

If you buy a home together, you know, they should decide on who owns what, who pays what, and what happens if the relationship ends, because the CFPB specifically suggests actually considering a cohabitation agreement really to protect both parties just in case one bought one thing and one's funding the other, to make sure it's perfectly clear.

How's that impacted?

And what I'm seeing here is, in those choices, you're really building up your community, your relationships, if you're going to have an experience that you share with others, for example.

Yeah, I think relationships are super important and, you know, there's also evidence that shows that spending on other people can lift your own mood, right? And I think money sometimes can feel more meaningful when it helps someone else, especially when the gift feels personal or creates a real connection.

Because research has showed that, you know, pro-social spending has found people more often report more happiness from spending on others than spending only on themselves.

And that could be taking out a friend to dinner.

That could be making a donation to a charity that's more helpful.

And you would think that that's money that you're spending, but in reality, you're lifting your own spirit by making that purchase.

How do you recommend people take this information to build out their own unique life situations and preferences?

Yeah, so I think you have to find out what that medium or happy medium is for you.

So you're talking about work schedule as well as their own retirement savings plans, because now they have to shift maybe money around to infuse some cash into, you know, maybe making a home safe so that there's no falls in the home, things like this.

Yeah, I think two things that I would point out for the caregiver.

One is, like you said, now their responsibilities and their financial obligations may be steered to the caregiver.

They may not feel as comfortable putting towards their own retirement So they have that money available to help their family member and that's hindering them and their long term goals.

I think just as important and often overlooked is the mental strain on the person and the caregiver, because it's not the fact that they're taking care of their family member, the mental strain around that.

It's just that they're getting pulled in a lot of directions.

They're they're doing their job.

Maybe they've never discussed finances because the family, the elder had always cared for it on their own, but now finances become one of many things that need to be sort of discussed as that sort of patriarchal role or matriarchal role may be shifting to that sandwich child in that case.

yeah and in your role you're obviously sitting down with families as you address their short and long-term goals for financial planning what examples of you're talking about you know the out-of-pocket cost but all you know time is money so you're talking about work schedule as well as their own retirement savings plans because now they have to shift maybe money around to infuse some cash into maybe making a home safe so that there's no falls in the home, things like this.

Yeah, I think two things that I would point out for the caregiver.

One is, like you said, now their responsibilities and their financial obligations may be steered to the caregiver.

They may not feel as comfortable putting towards their own retirement so they have that money available to help their family member and that's hindering them and their long-term goals.

I think just as important and often overlooked is the mental strain on the person and the caregiver, because it's not the fact that they're taking care of their family member, the mental strain around that, It's just that they're getting pulled in a lot of directions.

They're doing their job.

They're working their nine to five in a lot of cases.

How do you suggest people... sort of manage that with elder parents because some some people might find it awkward maybe they've never discussed finances because the family the elder had always cared for it on their own but now finances become one of many things that need to be sort of discussed as that sort of uh patriarchal role or matriarchal role may be shifting to that sandwich you know uh child in that case

to infuse some cash into maybe making a home safe so that there's no falls in the home, things like this.

Yeah, I think two things that I would point out for the caregiver.

One is, like you said, now their responsibilities and their financial obligations may be steered to the caregiver.

They may not feel as comfortable putting towards their own retirement so they have that money available to help their family member and that's hindering them and their long-term goals.

I think just as important and often overlooked is the mental strain on the person and the caregiver, because it's not the fact that they're taking care of their family member, the mental strain around that, It's just that they're getting pulled in a lot of directions.

They're doing their job.

They're working their nine to five in a lot of cases.

How do you suggest people sort of manage that with elder parents because some some people might find it awkward maybe they've never discussed finances because the family the elder had always cared for it on their own but now finances become one of many things that need to be sort of discussed as that sort of uh patriarchal role or matriarchal role may be shifting to that sandwich you know uh child in that case

So where should folks look to then if they decide it may be worth it to let go of that family home? What then is the pivot?

Yeah, so I think what you have to think, you know, at the end of the day, the home, you know, could be rich on paper and stressful in real life.

And I think a lot of times we feel selling is a failure, but it's not.

It's a financial reset.

And for some retirees, downsizing, you know, might be an option, moving closer to family or renting.

or simply choosing a lower maintenance home, that can all help to protect cash flow and significantly reduce stress as we get older.

And the smartest decision is not always staying put.

What kinds of questions come up and what kind of adjustments might you suggest or people keep in mind at least if they choose to stay in place?

... necessarily do change, so taking that into account.

Yeah, I think they should be addressing it and reviewing it at least annually.

Just like when they were in pre-retirement, they're looking at their budget, making sure that they're saving, they should be looking at their budget and looking where they're spending and, and address that spending plan.

Because if you think about it, many retirees tend to spend more in the early, what we call the go-go years, right? They retire, they're healthy, they're active, you know.

And then what happens is less so in the middle years, spending s- you know, tends to dissipate a little bit.

And then later on, you know, they may not be able to spend as much on travel and things that are as joyful, but they may face higher costs later simply because of healthcare or care needs, and that means the plan should change with their life instead of just treating every single year in retirement exactly the same.

Um, how would you suggest people work that into their revised plan each year, or each time they go, go back to it?

Yeah, so one of the things that can be super helpful is if you look at your guaranteed income, 'cause guaranteed income's gonna be there regardless.

What should the families consider when planning how to pass down assets and savings in a way that can help maintain that wealth for the family long term?

Yeah, I think the important thing that you have to understand as you approach this planning process, because we are in this great wealth transfer from the baby boom generation down, and as we already know, we're an economy and a country of many different generations, and different generations may handle money very differently.

especially much differently than that older generation.

Younger heirs may not want to invest or spend or give or manage risk the same way their parents did.

And I think this is something that's very common and maybe they shouldn't be.

And that doesn't make them wrong, but it does mean that families need to talk about the important stuff.

What are the values of the family? What are the expectations and how to preserve this wealth instead of simply passing the assets and hoping for the best? There has to be a level of education so that the family who's going to be inheriting understands what those values, goals and ideals are of the generation passing it down.

And let's talk about how the transfer of wealth could potentially impact the tax bill.

How would you advise people start?

Yeah, so I mean, again, one of the issues is these variables that are inherently sitting in our lives today.

But the important thing is to figure out really where you are today and where you need to be and then look at your path.

And it doesn't have to be complicated, so complicated that you get paralysis by analysis, but you should have an overarching view of, hey, this is what my retirement looks like or what I want it to look like.

This is going to be the cost associated with it and how I'm making progress.

You know, really, the numbers matter, but the plan matters more because just having one big retirement number like I need X number of dollars may be useful, but it can also make you feel stuck.

And a better approach is to look at your expected spending social security, healthcare, debt, housing savings rate, and how long the money may need to last.

How do you suggest that people adapt along the way as those elements shift?

talking 10,000, 15,000, Lawrence?

in terms of the size of an emergency fund, you're saying? Yeah.

I mean, that depends on each family.

We usually recommend a minimum of three months of your monthly expenses saved up in an emergency fund.

And then depending upon your facts and situation, if you're self-employed, you may wanna keep more than that just in case you have a slowdown in business.

So if you have an emergency fund, that should be your first line of defense.

If you don't, then before you go taking withdrawal from your 401k, a loan may be less damaging than a withdrawal because you can take a 401k loan usually has to be paid back while a hardship withdrawal cannot be put back in the same way.

What do you make of that strategy?

What has changed? What kinds of costs can average earners expect to pay nowadays?

Yeah, so I think the thing that's really changed is technology, because now there's a middle ground between doing everything yourself and hiring a traditional advisor.

Digital tools can really help people build a portfolio, stay invested.

rebalance and track those goals at a much lower cost than ever.

Some major platforms now let people start with a far less like we're talking about today than a traditional advisor requires.

For example, Vanguard Digital Advisor, they list their advisory fees around 0.2 to 0.25%, while Fidelity Go says there are no advisory fees for balances under $25,000.

So these low fees are definitely providing significant access to people that don't necessarily have millions of dollars.

And beyond just portfolio growth, what kind of other metrics or when should people track to know if their wealth management plan is working for them?

Let's walk through those in a bit more detail.

yeah so i mean there are many different options and i've ran into it myself where i've gone in and going to fill a prescription and the price just didn't sound right to me it sounded too high and then you go and you look on the shelves and there's an over-the-counter option that's the exact same formulary and it's less expensive so actually your insurance is costing you more so If the total feels too high, ask the pharmacist to pause, look for alternatives.

There may be a coupon, a different quantity, a generic, or even something on the shelves that doesn't require a prescription.

And worst case, build a relationship with the pharmacist and ask them to call back the doctor.

The FTC has warned that pharmacy benefit managers have major influences over drug access and affordability, which is one reason why the price can be confusing even for people with insurance.

What about those moves will help there?

Well, I mean, hopefully they start driving down prices to put some controls on some of what the drug makers can or cannot charge.

But, you know, another thing that I would highly recommend, especially with higher priced drugs, check for drug makers assistance programs.

Well, how can people resolve the fees there?

Yeah.

So I mean, when medical bills come, you shouldn't just assume that they're right.

Assume that they're wrong and check them.

They should be checked before they're paid because medical bills are not always correct.

Somebody put in the wrong code, the wrong service, and it may be worth asking them for an itemized bill.

And then when you get the bill, check it against your insurance coverage.

Do you drop it or are there some more ways to up that mountain?

Let's look at some practical suggestions that you have, maybe your top three.

Yeah, so one, you know, don't give them a cushion.

I'll give them a cushion, not just cash, right? Cash is always useful, but it can disappear unless it has a purpose.

And, you know, framing the gift as a start of an emergency fund can really help a graduate handle car repairs, security deposits, or a surprise bill without putting it on a credit card.

Also educate them.

Help them make their savings work harder for them.

Show them a high yield savings account, how that is a good place to keep an emergency fund, for example, and where they keep their money matters.

Let's look at some practical suggestions that you have, maybe your top three.

Why would it benefit them to really take that step that may feel risky?

Yeah, well, I think what happens is these secrets, these secrets have a way of coming out.

So if it doesn't come out next week, next month, next year, maybe a couple of years.

And it's not about couples handling the money the exact same way.

It's about making sure one person's not making financial decisions in the dark that the other person will have to live with.

and you know assuming you're growing and and building this life you want to make sure that you have shared goals you also know what your individual goals are and you know what assets and liabilities are behind your ability to reach those goals and the only way you can do that is by having this shared vision together and this transparency so it is vitally important that if you don't have that today and there is an account or a debt or something there that you've been keeping from your partner, it's important to just sit down, have a conversation and ask to put everything on the table because you want to make sure that you're working to be the best couple emotionally and financially that you can be.

Why would it benefit them to really take that step that may feel risky?

Yeah, well, I think what happens is these secrets, these secrets have a way of coming out.

And how do you suggest people go about looking for a better deal once they decide they want to do that?

Yeah.

So, I mean, I think you have to look at, you know, is it just 100 percent rate driven for you or is it fees as well? Because you have to compare the online banks to the traditional banks because you don't have to settle anymore for accounts that for an account that charges more and pays you less because there's a branch nearby.

Because these online banks are really offering higher savings rates and fewer fees.

But really, the smart comparison is still in the full package.

You want to look at how much access do I have to my cash, the customer support, can I transfer money back and forth between institutions? And of course, very important is FDIC coverage.

are they just giving me the federal mandated minimum or is there additional FDIC coverage up and beyond that?

How can people know what's a good deal there?