Money Girl

1058. With 10-year U.S. Treasury yields above 5.3%, many investors are asking if they should ditch stocks and play it safe with fixed income. Host Laura Adams answers a listener’s question about investing when retirement is ten years away. You’ll learn the basics of bonds and how to use a three-bucket strategy to lower risk without giving up long-term growth.

Key Takeaways

• A bond is a loan an investor gives an entity (like the federal government, a local municipality, or a corporation) in exchange for interest payments over a period.
• 10-year U.S. Treasury bond yields have climbed above 5.3%, their highest rate in decades, providing an inflation-adjusted return of about 2%.
• The longer the maturity of a bond, the higher its interest rate will be.
• You can buy individual bonds or bond funds, which are diversified and an easy way to buy a preset portfolio of bonds from brokerages and investment platforms.
• Owning individual bonds to maturity eliminates price fluctuation risk, where a bond’s price shifts based on interest rates.
• Retirees can benefit from structuring their portfolio into three buckets: cash, bonds, and stocks, to protect against potential market losses.

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1057. Few things are more frustrating than learning your flight has been canceled. But do you know what you’re legally entitled to when an airline grounds your plane? Host Laura Adams breaks down your rights as an air traveler and explains how to protect your wallet when flights get disrupted.

Key Takeaways

• If an airline cancels your flight or changes your schedule by more than three hours domestically or six hours internationally, you’re entitled to a full refund if you choose not to rebook.
• Research your options using airline apps, by calling their domestic or international customer service, or by messaging their social media.
• Airlines are not required to issue vouchers for delays caused by factors they can’t control, such as severe weather, air traffic control shutdowns, cyberattacks, or unscheduled safety maintenance.
• Paying for your flight or award ticket taxes with a card that offers travel protections can help offset unexpected hotels, ground transportation, meals, and toiletries when your flight is canceled or significantly delayed.
• To claim credit card travel protections, request a "Statement of Delay" from the airline and keep itemized receipts for every expense.

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1056. Should you buy your next home before selling your current one, or is it safer to sell first? How does an existing mortgage impact your ability to qualify for a new loan, and where should your down payment actually come from? Host Laura Adams answers a listener’s questions about navigating the tricky logistics of moving and whether to convert her current house into a rental property.

Key Takeaways

• You can source your down payment from savings, home sale proceeds, a pre-arranged home equity line of credit (HELOC), or a short-term bridge loan.
• Carrying two mortgages at once counts toward a lender’s debt-to-income (DTI) ratio for underwriting.
• If you convert your primary home into a rental property, most lenders allow you to use 75% of rental income (backed by a signed lease) to offset your existing mortgage when qualifying for a new loan.
• A leaseback agreement allows you to sell your home, receive cash proceeds on closing day, and remain in the home as a tenant for up to 60 days.
• Holding two properties simultaneously usually requires higher credit scores and cash reserves.
• Consult a mortgage expert to calculate your exact borrowing limits under different scenarios before placing offers or listing your property on the market.

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1055. Host Laura Adams interviews Natasha Madan, CMO and consumer advocate at Credit Karma, about the financial habits of Gen Z, credit myths, and wise ways to use AI tools. You’ll learn practical strategies to optimize your credit, get the best interest rates, and build wealth faster.

Key Takeaways

• Taking small, consistent actions, such as reducing your credit utilization or consolidating high-interest debt, adds up to slowly improve your finances.
• Paying bills on time and paying off credit card balances in full every month are ways to build credit without accruing interest charges.
• Beyond getting loans at lower interest rates, credit scores affect other parts of your finances, like your insurance rates (in most states) and whether you can rent a home or apartment.
• Always check and optimize your credit months ahead of applying for a major loan (like a mortgage or auto loan) so you can get approved for a competitive interest rate and cut interest.
• Younger generations, like Gen Z, want to enjoy life and plan wisely for the future, instead of sacrificing too much in the present moment.

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1054. Are you comfortable in your career but longing for change? Or maybe you want the freedom to move anywhere in the country without taking a financial step backward? Host Laura Adams answers a listener’s question about safe ways to pivot to a new career with a high earning potential and geographic flexibility.

Key Takeaways:

• Break down your existing career expertise into hard skills (core work functions), soft skills (interpersonal abilities), and system skills (software tools and digital platforms) that you can use in a new career.
• Consider high-demand sectors that exist throughout the US for maximum flexibility, such as healthcare, financial services, insurance, real estate, cybersecurity, and information technology, or fully remote roles.
• Validate your interest in a new field by conducting informational interviews, shadowing professionals, and taking introductory online coursework before resigning from your current position.
• Never judge a relocation offer solely on the gross salary figure; always account for the region’s cost-of-living, housing affordability, and state income taxes to understand your net take-home pay.
• Keep a separate cash cushion outside of your emergency savings to cover upskilling courses, licensing fees, income gaps, and relocation costs.

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1053. Host Laura Adams walks you through seven ways to lower your taxes, maximize savings, and protect your hard-earned cash before midnight on December 31. Don’t let holiday chaos cause you to miss this critical deadline.

Key Takeaways

• Employer-sponsored retirement plans like 401(k)s, 403(b)s, and 457s require employers to deduct contributions from paychecks by December 31.
• Zero out your flexible spending account (FSA) before year-end or confirm your employer’s specific rules, such as a limited carryover or grace period.
• If you’ve met your annual health insurance deductible, schedule remaining doctor visits, recommended tests, or prescription fills in December before your coverage limits reset on January 1.
• Those over 73 must make required minimum distributions (RMDs) from traditional retirement accounts by December 31 to avoid steep penalties.
• If you can move certain expenses (such as a mortgage payment or property taxes) into December, they may help you deduct more by itemizing.
• Check card portals before holiday shopping to activate quarterly bonus categories and redeem annual travel credits or expiring reward points to offset end-of-year expenses.

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1052. Thinking about helping your kids buy a home decades from now? Host Laura Adams answers a listener’s question about the best ways to grow savings. You’ll learn how inflation impacts long-term savings and which growth-oriented accounts offer the best return for long-term goals.

Key Takeaways:

• For long-term goals, low-yield options like CDs carry risk due to inflation. Broad-market index funds (like an S&P 500 fund) offer higher returns that can keep pace with inflation.
• Opening a standard brokerage account in the parent's name allows money to grow in low-cost index funds without contribution caps or early withdrawal penalties. Parents are in complete control of when, how, or if the money is gifted.
• UGMA or UTMA accounts allow parents to invest on a child’s behalf, and ownership legally transfers to the child when they reach adulthood.
• Families with children under 18 can utilize Trump Accounts, which allow up to $5,000 in annual tax-deferred contributions. Plus, those born from 2025 to 2028 are eligible for a $1,000 federal deposit. 
• After age 18, a child’s Trump Account converts to a traditional IRA. It can be converted into a Roth IRA by paying taxes on account earnings, which then allows more options for penalty-free withdrawals.
• Once a child has earned income, parents can match their earnings in a Roth IRA up to the annual limit ($7,500 in 2026). Contributions can be withdrawn anytime tax- and penalty-free for any use. 
• After five years of account ownership, a Roth IRA allows up to $10,000 of earnings to be used penalty-free (but not tax-free) for a qualified first-time home purchase.

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1051. Are you worried about the rising cost of college? In celebration of College Savings Month, Laura compares the two main types of education accounts: 529 savings plans and 529 prepaid tuition plans. You’ll learn their key differences and how to choose the right plan.

Key Takeaways

• Both 529 savings and prepaid plans offer tax-free account growth and tax-free withdrawals when used for qualified education expenses.
• 529 savings plans invest in market portfolios (like index funds) for higher growth potential, while prepaid plans lock in current tuition rates at state universities to hedge against rising costs.
• 529 savings plans cover tuition, room, board, books, computers, trade schools, and up to $20,000 per year for K–12 tuition. 
• Prepaid plans only cover tuition and mandatory fees at a preset in-state university.
• Unused funds in a 529 savings account open for at least 15 years can be rolled over tax-free into a Roth IRA for the beneficiary (up to a $35,000 lifetime cap).
• You can use both accounts to lock in prepaid tuition rates and a savings plan to cover many other qualified education expenses.

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1050. Buying a car can feel like a financial landmine. Host Laura Adams answers a listener’s question about buying a car before starting his first job. You’ll learn how to evaluate your current car, set a budget, secure financing, and find a great deal that doesn’t wreck your financial goals!

Key Takeaways:

• Compare a car’s repair bill against months of new car payments and a potentially higher insurance premium before giving up on an older vehicle.
• To keep transportation costs affordable, follow the 20/4/10 rule to put 20% down, finance for no more than four years, and cap total expenses at 10% of income.
• Get an auto loan pre-approval before you start car shopping so you have an interest rate benchmark if a dealer offers financing.
• Request auto insurance quotes for different cars you’re considering so you understand the cost before buying a vehicle.
• Focus negotiation on a vehicle’s total purchase price rather than the monthly payments, which can be adjusted to include fees or longer loan terms.
• Leasing a car may make financial sense if you need a lower monthly payment, drive lower annual miles, prefer a new vehicle every few years, and don’t care about building long-term equity.

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1049. Think building wealth requires a six-figure salary? Think again. Host Laura Adams breaks down five small, high-impact habits that lead to serious long-term wealth, regardless of your current income. You’ll learn how to turn quiet daily routines into big financial freedom!

Key Takeaways

• Wealth is built on consistency. Setting up automatic transfers to high-yield savings and retirement accounts eliminates the temptation to spend.
• Taking advantage of tax-advantaged accounts creates opportunities for growth and short- and long-term tax savings.
• Low-cost index funds combined with dollar-cost averaging offer a proven, stress-free path to long-term market growth.
• Using the debt avalanche method to target high-interest debt first yields a guaranteed return equal to the interest rate avoided.
• Income is what comes in; net worth is what stays. Regular updates to a net worth dashboard provide the truest measure of your financial progress.

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