How to Create a Budget and Stick to It

Maintaining a budget so you can build up your savings takes more than just ditching your daily latte addiction. Brunch and Budget founder Pam Capalad chats with hosts Ryan and Sandy about how to devise a spending and saving strategy that works for you. Plus: Learn why everybody should have a Roth IRA.

Ryan: Despite what you've heard from Suze Orman, establishing good financial habits isn't just about cutting out your daily coffee. Brunch and Budget founder, Pam Capalad, joins Sandy and me for a main segment interview on how you can build and stick with a budget that works for you.

Ryan: On today's show we tell you why you need a Roth IRA, and talk debit cards and rap verses in the new edition of Wild Pitches. That's all ahead on this episode of Your Money's Worth. Stick around.

Ryan: Welcome to Your Money's Worth. I'm Kiplinger's Associate Editor, Ryan Ermey joined as always, by Senior Editor, Sandy Block. And Sandy, a topic of discussion that comes up here all the time at Kiplinger's, recently came up in real life.

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Sandy: I-R-L.

Ryan: Yes. Occasionally-

Sandy: I-R-L

Ryan: These financial topics come up in real life. So my roommate has this new sort of freelance side gig that's going to net him a bunch of money, and he told me that unlike his usual modus operandi, he's not going to spend all of this, at least not at once, and plans to put it away. And he said, “Where should I put it?” And I said, “Do you have a Roth IRA?” And he said, “No.” And we've covered it many times, that we think, both of us, and everyone here at Kiplinger's that you need a Roth IRA.

Sandy: Right. You need a Roth IRA, and if you're young, you really should open a Roth IRA because the big advantage of the Roth IRA is that as long as you leave that money alone until you retire, the earnings grow tax free, and you can take it out tax free. I cover taxes and there are so many things that are so complex about different types of investments and IRAs and 401(k)s. The Roth IRA is just like refreshingly simple because if you don't touch it, you can take all the money out, you can take a little bit of the money out, you can leave it to your kids, it's just once you retire, it's just this great tool for either meeting emergencies, or just continuing to save, that is so unfettered by, I mean the IRS just can't touch you.

Ryan: Right. So let's talk about a couple of the major advantages here, and you mentioned a couple of them. One is that you can withdraw, it's an account that you fund with money that you've already paid taxes on. That's the whole conceit of the Roth, so you can withdraw your contributions, not your earnings, but your contributions, whenever you want.

Sandy: Right.

Ryan: Before you retire, whenever without having to pay a penalty. The other one-

Sandy: Or taxes. Because you've already paid taxes.

Ryan: Right. You've already paid your taxes. The other thing is that you can actually withdraw $10,000.00 worth of earnings, per person, so if you're married it's $20,000 if you both have an IRA. I in IRA does stand for individual. And as a listener noted, A doesn't technically stand for account. Individual Retirement Arrangement, however, when you gave account as an answer on our Jeopardy round, I accepted it because Alex Trebek accepted it.

Sandy: That's right.

Ryan: And who am to argue with Alex Trebek?

Sandy: You are not.

Ryan: Anyway, you can withdraw $10,000.00 worth of the earnings per person to put toward your first home. So, as a young person, already we're seeing a lot of versatility. And speaking of young people, you can fund these at any age, as long as you have earned income.

Sandy: Right. And that makes them a great tool for, say, college kids, or even high school kids who have a summer job. And one thing we've recommended is the kids' going to say, “Aw, c'mon, I need that money, I'm going to school, what am I going to do for beer and pizza?” And if you are a benevolent parent, you want to get your child on the right track to saving, you could offer to match contributions to a Roth IRA. In 2019, you can contribute up to $6,000.00 to a Roth IRA. So if you're going to make the maximum contribution, you would need to have at least that much in earned income. But it doesn't have to be your earned income. Say a kid made $4,000.00 during the summer. Your parent could give you $4,000.00 to put in a Roth IRA. IRS isn't going to track down that check, and you've set the child off to a good start for saving for retirement.

Ryan: Right. You can contribute only to the extent that you earn.

Sandy: Right.

Ryan: For most of us who have a-

Sandy: Day jobs-

Ryan: -salary. That's no big deal. But for a kid who has a summer job, you know I used to make like, two, three thousand dollars in a summer life guarding. That would mean that I or my parents could contribute up to two or three thousand dollars.

Ryan: Now we talked a little bit about why it's so advantageous to get started early in this and the conceit that you hear a lot is that you're likely contributing at a lower tax bracket as a younger person, than when you're eventually going to have to take it out. Talk a little bit about that.

Sandy: Yeah. The traditional individual retirement account is deductible, unless you have a plan at work. But let's assume that you're deciding between a Roth IRA and a regular IRA. If you're in a low income tax bracket, which most young people are, the advantages of being able to deduct those contributions are fairly modest. Because you're not paying that much in taxes to begin with.

Ryan: Correct.

Sandy: There's a good chance that over your lifetime your tax rate's going to go up and given the amount of the federal debt right now, I don't see much chance that tax rates are going to go down. They dropped two years ago. It's unlikely they're going to go down any more. By the time you retire you could be in a much higher tax bracket, and the advantage of the Roth is that it doesn't matter what your tax bracket is when you take that money out. You won't be taxed on it. So it's kind of a smart arbitrage to put that money away when your tax rates are low, because then you're not paying taxes when your tax rates are high.

Ryan: And I mean, someone like my roommate, is going to have a big lump of money, and he's going to go ahead and open a Roth. But even for people who have had a regular IRA for a long time, you can convert it to a Roth if you want.

Sandy: Right. You can convert it to a Roth. Now, you have to take some care with this because any money that you put in an IRA or 401(k), or anything that hasn't been taxed, you will have to pay taxes on it before you convert.

Ryan: Right.

Sandy: So it's not free. But once you convert, future earnings are tax free. So, if you have ... a lot of us have money in IRA's because we've worked for different employers and rolled our 401(k)s into ...

Ryan: And you rolled.

Sandy: And you know, think about converting some of that money to a Roth. Maybe do it gradually. Figure out how much you're going to owe in taxes and gradually convert it so you give yourself some diversification. We talk so much about diversifying your investments, but it's also important to diversify on a tax basis. You don't want to retire with a hundred percent of your savings in money that you're going to have to pay taxes on when you take it out. Because I write a lot, and talk to a lot to retired people, and that can be a real pain. And very expensive. If you've got this pot of money that's tax free, it just gives you all kinds of flexibility that you wouldn't otherwise have.

Ryan: So there you have it. Gabe, if you're listening, I think for the first time ever, but not all roommates are ... actually I don't think either of my roommates was a budgeter. I should be bad mouthing them more. That should be me outlet to trash my roommates, but no, Gabe if you're listening, there you have it. You need a Roth. Go get one and we'll talk about what investments to put in it over dinner or something. You're buying.

Sandy: You're paying man.

Ryan: After the break, millennial budgeting comes down to more than just cutting out that avocado toast. Pam Capalad tells us how.

Ryan: We are back and we're here with Pam Capalad, who is a certified financial planner, who's website is Pam, thank you so much for coming on.

Pam: Thank you so much for having me guys.

Ryan: So, we're talking a little bit of millennial budgeting today. And as a millennial myself, I'm getting sick and tired of reading stories about how I need to cut back on my avocado toast, or my daily lattes and that's the only way to get my budget in order. So, what's realistic advice when it comes to millennials getting their budget in order?

Pam: Oh my gosh. I'm totally with you. I don't know if you've been ... in the last week, but Suze Orman was just like, if you keep buying those coffees, you're pissing a million dollars down the drain. I was like-

Ryan: Amazing.

Pam: Please, we need to hear that again? Thank you.

Sandy: What kind of coffee is she talking about?

Pam: I know. Right. I'll also stop eating food because we know what happens to food when you're done eating it right? ... talking about?

Pam: Oh my gosh. I'm with you. I'm totally sick of hearing this advice and I feel like that a lot of budgeting advice is about restricting. It's about taking away the things that actually give us joy on a daily basis or a weekly basis or whatever it is, right?

Ryan: Right.

Pam: And so the way that I think of budgeting, with my clients in particular, is to budget something that's supposed to work for you, and not the other way around. I think that's why people think that they're bad at budgeting. Because there's all these shoulds that are going on. And there's all of these, oh you need to stop drinking coffee, you need to stop going to ... you need to stop taking vacations, when it's like, okay then, what am I really doing here? Right?

Ryan: Right.

Ryan: Alright.

Pam: Right?

Ryan: Yes.

Pam: The nothings that really gets us because we don't remember spending that money.

Sandy: Uh-huh (affirmative).

Pam: And so that's the money where we're like, oh, I don't even remember buying that. I don't remember seeing it come out of my account. I barely remember it happening, right? And those are the things, for me it was actually buying lunch every day at work. I had no idea that buying $10.00 salads every day was adding up that quickly for me. When I realized that, the next thing that happened was Uber and Lyft with the nothing spending. It's so easy right? And that's the thing, the spending of the nothing is usually done out of convenience for being worn down.

Sandy: Right.

Pam: The reason why we need to acknowledge our detail spending, is because that's the kind of spending that replenishes our willpower and helps us recharge. And if we don't spend money on the details, I know I'm not taking the $5.00 that I saved not buying coffee, and actually putting it in my savings account right? I'm just restricting myself, right?

Ryan: Right.

Pam: I'm just restricting myself and then I end up spending that money anyway on something that I didn't really want or remember.

Ryan: Right. You're not going to wake up in time because you're not going to have your coffee. Then you're going to have to take an Uber to work instead of the bus.

Sandy: Yeah and I guess the way that I-

Pam: Exactly.

Sandy: The way I think about that is in the nothing category, when you do add that up, you realize that's money I could have spent on something I really care about. I think the point you're making is to be very intentional, which doesn't mean denying things, it just means being very intentional about how you spend your money and what your priorities are.

Pam: Absolutely. And I think we're not asked to examine our spending and that way, one of the best pieces of financial advice I ever got is, where you spend your money is a representation of what you value. And we're not told to think about our spending and our expenses in the context of things that we personally value. Because everyone's details is going to be completely different. There are some people who will look at your budget, and look at where your money is going, and say, why do you waste money on that? Right. And it's none of their business.

Ryan: Right.

Pam: To you it's not a waste. So yeah, the nothing is really where you can find those cuts. And usually it ends up being habits of convenience right? Like imagine the Uber is going ... at work. You maybe do it once, and then you do it once a week and then all of a sudden you got used to doing it every day. And it sneaks up on you, and it's not even something that you thought mattered to you. And then all of a sudden you were spending a ton of money on it. And you had no idea. And those are the kinds of things that you really need to watch out for when it comes to budgeting.

Pam: And looking at those specific categories and line items where you look at that and you say, I really don't remember enjoying doing that. Or that didn't actually enhance my life in the way that I wanted it to. Because the thing is, when you figure out how much money you're spending on your nothing, not only can you maybe save some of that money, you can also give yourself more money to spend on your details. Like when I first did this myself personally, and ... in this way, one of my details was being able to eat out at restaurants with friends. I love food if you can't tell from my business. So being able to eat out with friends and trying restaurants is something that was really important to me. But I found that I was spending a third of my paycheck on ... and I had no idea that was happening. And so what I did was, I looked at what the transactions were and I realized $250.00 of my food spending was going to buying those salads at work.

Sandy: Yeah. Right. Right.

Pam: And buying those lunches every day. And so when I saw how much money was going out, I adjusted a habit. I said, alright, I did an experiment where I said, let me just buy a loaf of bread and buy a pound of turkey and make a sandwich every day for work, and see if I notice a difference. And maybe I'll take a walk outside if I'm feeling stir crazy. And I did notice a difference and so all of a sudden I was able to put more money towards eating out with friends and was able to save an additional $200 in savings, that I didn't think I had. So, it can be that easy in terms of looking at things and changing habits that were not helping you in the first place.

Sandy: Right. Well let's talk about prioritizing things because a lot of millennials have multiple obligations. They might have student loans, credit card payments, they're told to contribute to retirement. They need an emergency fund. There is a limited amount of money for all of these things so how do you recommend that people who are living on a budget prioritize these things that really are kind of non-negotiable?

Pam: Yeah. Absolutely. So the thing that I usually recommend is if you do not have any sort of savings cushion, then I would prioritize that first. I would prioritize that above paying down debt, above looking at your student loans, above everything else, and above paying down credit cards. Because here's what happens is, what I see happen all the time, a lot of people, because we're told that credit card debt is bad right?

Sandy: Right.

Pam: And when we're told something's bad, we want to get rid of it right away. But people get caught up in the debt cycle because they use all of their monetary resources to pay down this debt and then when an emergency happens, they don't have the cash in their savings account, so guess what that emergency is going back on, right? And so all of a sudden you have all of this credit card debt again that you just spent all this time paying down. And it's psychologically demoralizing, this ... financially you'll never get out of it if you constantly go through the life cycle of paying it down and trying to pay it down as fast as possible.

Sandy: Yeah.

Pam: So I actually tell people to prioritize building up a savings cushion first. The average cost of an emergency in America is $400.00, and one of two Americans cannot pay for that emergency out of the savings that exist in their account. People don't have $400.00 in emergency savings. So I like to say, come up with a floor for your savings. Whatever that is for you that makes you feel comfortable. Is it I'll always have $500.00 in my savings account no matter what? Is it I'll always have $1,000.00 in my savings account? Two out of three Americans don't have $1,000.00 of savings in their savings account. So whatever that floor is for you, get to that floor and think of it as a floor. Your new floor is not zero. It's $1,000.00. So one month's worth of rent, or whatever it is.

Ryan: Right.

Pam: And make it a priority to replenish that floor if you ever have to dip into it before paying all of your other debt obligations. Because that is really the first step to getting out of a debt cycle, is repaying...a debt cycle.

Sandy: Right. Right.

Pam: And then it's credit cards right? Credit cards are usually the things that have the highest interest rate. So then it's a matter of figuring out a pay down plan that's affordable for you to pay down the debt. I think going back again to the fact that we're told that we have to get rid of this debt immediately, as fast as possible, whatever it is, we also feel like, oh I should be putting like $1,000.00 a month towards my credit cards, or whatever insane amount. That's actually not affordable, right?

Sandy: Mm-hmm (affirmative). Mm-hmm (affirmative).

Ryan: Yep.

Pam: So I think that if you can come up with a debt pay down plan that is manageable for you on a regular basis, that fits into your budget, it may theoretically take a little bit longer to pay down the debt, but because it's manageable and something that's systematized, one, you don't have to think about it as much every single month. And two, that debt will get paid down eventually and you understand what the deadline is.

Sandy: Right.

Pam: And so the pressure to put all your extra resources towards it goes away as well.

Sandy: Okay.

Pam: If you do have extra resources and you have that savings cushion, then maybe consider paying down extra. But the reality is, if the pay down of the debt is systematized, then, as long as you know when the pay down date is, then just forget about and move on.

Sandy: Okay.

Pam: Because I also think we tend to dwell on debt, and to look at it ... the thing with debt is you look at it and you're like, these are all the mistakes that I've made in the past, and I ... acknowledging that, right? But remembering it.

Pam: And it's just a thing that happens. You don't have to be in debt. It doesn't have to be part of your character. People have debt. But I think when debt becomes damaging is when it becomes part of your character in your head. I feel like that words are really powerful. And there's a difference between being in debt, and having debt.

Sandy: Uh-huh (affirmative).

Ryan: Yes.

Pam: As you think of yourself as someone who has debt, versus someone who's in debt, then you can get out of having debt. Versus try to use that, first it's thinking of debt as an identifier of yourself.

Sandy: Right. Right.

Pam: So that's what we want to get you the point of.

Ryan: So if you're creating a budget, or you're trying to implement some of the things that we've talked about, how can you create a plan that you are going to stick with?

Pam: Yeah. That I feel like is the hardest part of it, right? I feel like one is create a plan knowing that you're going to have set backs. Knowing that it's not going to be perfect, and knowing that these are guidelines and not rules.

Ryan: Okay.

Pam: So that's the first thing going into a plan. If we think of this as, oh I have to follow the plan, and if I fail on the plan then the plan is a failure.

Ryan: Right.

Pam: And that's not how life works, right?

Ryan: Yeah.

Pam: We're going to have setbacks. We're going to have unexpected things that come up every single month. So I think going into it with that frame of mind is super important.

Pam: And then the next thing is, we go through those four categories, right? We think about, one, what are our basics? How much of our paycheck is going to our basics? Are there any of our basics that don't need to be basics? So start with that and figure out what that number is, and then look at what's left and that's going to be going to details and nothings.

Pam: And I didn't even talk about sports category, which is the yes category.

Ryan: Oh.

Pam: And the yes category is, it practically translates into a savings account, but I like to think of a savings account is your ability to say yes, and not have to worry about the financial details of it, right?

Ryan: Right.

Pam: And so you have money going to the basics, so that's probably going to be your checking account. And then you have money going to the yes box, which is your savings account. And I think it's really important for you to look at what's left over after your basics, look at the number, and say, you know what, I think I can commit to putting $100.00 into my savings account every single month. Or $50.00 into my savings account every month. Whatever that amount is, I'm a big believer in this very old school financial saying of pay yourself first. And it sounds a little weird, and it sounds a little stupid, but, the reality is that you giving money to yourself, and putting money into your savings account is something that you should consider a bill. Right? Your savings contribution is a bill, just like your rent is. Just like your cell phone bill is. And so if you can set aside $50.00 or $100.00 every single month, the thing about savings is, it's not about the amount, it's about the action. Saving is an action verb. And so if you can get into a habit of regularly saving a certain amount every single month, and build that into your plan before you let yourself spend money on discretionary savings, or discretionary expenses, then you'll really be able to build up that savings and make it a habit.

Pam: So, once you figure out your bills, you figure out how much you're going to save, the rest is kind of yourself to spend. And it's up to, depending on what your tendencies are, if you want to track it closely, or if you're like, hey, maybe this is just something I just know I have to spend, right? So, let's say your paycheck is $2000.00 a month. Your bills are let's say $1000.00 a month, right?

Ryan: Yeah.

Pam: All of your bills, including rent and everything like that. Let's say you decide to put $100.00 towards savings. That leaves you with $900.00 for everything else.

Sandy: Mm-hmm (affirmative).

Pam: And so that means you can spend it on the details and the nothings, whatever you want, but just know in your head that that's the number that you have left to have free rein on essentially. It covers your groceries. It covers your shopping. It covers your entertainment expenses, things like that.

Pam: And so when you structure it in those three buckets, then it becomes easier to get an idea of how much you have to spend, and also, there's a little bit of weigh room in there, right.

Sandy: Right.

Pam: There's a little bit of wiggle rooms to cover any ... cover anything unexpected. You're setting aside money in savings on the regulars, so instead of having to dip into your credit card, you can dip into your savings.

Sandy: Mm-hmm (affirmative).

Pam: And so getting used to that, and seeing what that feels like, is going to take a couple months to figure out what works. And also, I think the other important thing to remember is when you set up a plan, it can take three to six months for it to feel like it's working.

Sandy: Right.

Pam: And it's your job to adjust along the way and make it work for you, and not to look at it and say the first month that it doesn't work, say, oh, this doesn't work.

Ryan: Yes.

Pam: And I think that's the thing that we're kind of told to do, is to come up with a budget and stick to it faithfully when the reality is, that's not how it works.

Sandy: You might have to adjust it in other words. Okay. Great.

Pam: Yeah. Yeah. Exactly.

Ryan: Well listen, Pam it's been really wonderful having you on. Very quickly, where can our wonderful listeners find you?

Pam: Yeah. Absolutely. So you mentioned at the beginning, I literally meet with people from ... and talk about their finances with them. It's super fun. We have a Podcast. So it's a Podcast of the same name. And you can search it anywhere you listen to podcasts at Brunch and Budget. And I also am on Twitter at Brunchandbudget, and Instagram at also Brunchandbudget, if you want to see all the things I'm eating, ... you'll be ... follow me there.

Ryan: Alright well perfect.

Pam: But yeah, thanks so much for having me.

Ryan: Yeah. It was really fantastic. Thanks again.

Ryan: Would you stay at your job for $350.00 in prepaid debit cards? Yeah, us neither. Wild Pitches is next.

Ryan: We're back, and before we go, one of our favorite segments, it's Wild Pitches, more tales from our wackiest PR pitches. Sandy, why don't you go first?

Sandy: Okay. Let me preface this by, this is going to be another one of my rants about the bad surveys, where often times I think companies design the questions to get the answers that they want.

Ryan: Yes.

Sandy: And I tried to find out how they designed-

Ryan: Surveys of dubious programs-

Sandy: Yes, and I tried to find this survey that I actually had to sign up for something and so I didn't do it. But is a survey that says ... the press release starts out by pointing out that the unemployment rate at 3.6% is the lowest in 50 years, and that Gala reports that 70% of employees are disengaged or unmotivated at work. Which means keeping them on staff is challenging.

Ryan: Right.

Sandy: Now this survey suggests that the way that you can keep these unmotivated, unhappy employees working for at least another year is by giving them three $50.00 prepaid cards over a one year period.

Ryan: Sure.

Sandy: In other words, 150 bucks and you know, I hate my job, someone give me a $50.00 prepaid job and all of a sudden I'm loving. I like my job here, so nobody has to give me any prepaid cards, but I have had jobs that I didn't like, and even when I was poor, I can't imagine saying, yes I'm going to turn down a possible ... I'm not going to look for a job that pays me more because I got a $50.00 prepaid cards...

Sandy: It kind of gets worse. They also say in this survey, that 68% would prefer a $750 prepaid card over a four day all inclusive vacation package.

Ryan: What?

Sandy: They don't say ... again, so many questions. They don't say where this vacation is to.

Ryan: Right, and how much the flight is worth.

Sandy: But I find that very hard to believe. And I'm not going to call out this company, but not surprisingly, oh yeah, and 78% would use three or fewer sick days in exchange for a $75.00 prepaid cards.

Ryan: What?

Sandy: Yeah. Needless to say, the company that puts out this survey-

Ryan: Pedals in prepaid card.

Sandy: Yes. Exactly. It's got an interest in prepaid cards. And again, going back to my suspicion of surveys, this is a big one. We talked a few weeks ago about what people should be looking for when they're looking for a job, and what you should be looking for either your current job, or if you're considering leaving, is not just salary, but benefits. How much healthcare costs? Do they match the 401(k) plan? Don't be diverted by little incentives that might buy you brunch, but not much else.

Sandy: So what you got?

Ryan: So, mine is a pitch I actually find kind of delightful. So I will name the company. It's called, in typical sort of young person targeted fashion, it's called Investor but with all of the internal vowels missing so it's Invstr. So it's launching an investing themed rap competition called Stock Market Tracks, to inspire young people to learn personal investing through music. And it's a $1,000.00 cash first prize, for the best one minute song, using investment terms.

Sandy: Oh boy.

Ryan: Which, you know, I'm kind of all about. If you want to rhyme Roth IRA with ..., then I think by all means. I think it's really important to educate young people about personal finance and about investing. However, I will say that I find a couple of Invstr's other things a little bit problematic. One of them, I mean they have a sort of mobile brokerage offering fractional shares of stock. There's plenty of those out there. They charge $2.99 a trade if you buy whole shares of stock, which is competitive, although there are some, like Robinhood that offer commission free trades. And they charge $.99 per fractional trade, which, depending on the price of the stock or ETF that you're buying, could be steep. My bigger problem is with something on their site that they're calling an investing fantasy league.

Sandy: Uh oh.

Ryan: Now, I'm all for funny money investing. Figuring out how to do this stuff without risking actual money, that I like. And it's that they advertise it as learn to manage risk, diversify, trade, strategize and stay informed, all while having fun. Fantasy finance is the perfect way to start your investing future. And I 100% agree to an extent. The problem is, that it awards prizes and you get tokens and all this status-

Sandy: Prepaid cards.

Ryan: It's gamified.

Sandy: Uh-huh (affirmative)

Ryan: Which I also like. The problem is that it rewards investors who win on a monthly basis.

Sandy: Uh oh.

Ryan: Now, if you're measuring someone's 30 day return every month, that is not going to encourage good investing practices from-

Sandy: Kids don't do this in your Roth IRA. No.

Ryan: -most young people. So I think I would just remind anyone who wants to educate their kids about investing, it doesn't make sense to try to gamify this on a 30 day basis. What we need to be explaining to beginner investors, is that you need a long time horizon with your investments. That you're into buying and holding investments for a long time. That is how you manage risk. You should be broadly diversified. These are things ... a broadly diversified portfolio isn't what's going to win you a prize over a 30 day return period.

Sandy: No. Day trading.

Ryan: You're going to have to make steep speculative bets. So, I think that the general gist behind Invstr is really good and commendable, and I think that we should be teaching kids about financial literacy. It's super important. But, if you're going to have your kid play fantasy investing, they should understand that this for funny money. It's to earn tokens and badges and prizes, but it's not how actual grown up investing is done.

Sandy: That's right.

Ryan: That's it for this episode of Your Money's Worth. For show notes and more great Kiplinger content on the topics we discussed on today's show, visit You can stay connected with us on Twitter Facebook or by emailing us at And if you like the show, please remember to rate, review and subscribe to Your Money's Worth, wherever you get your podcasts. Thanks for listening.

Sandra Block
Senior Editor, Kiplinger's Personal Finance

Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.