In short
Episode topic: Two-part episode. (1) What older Americans (50+) miss when trying to reenter the workforce: demand exists, but age discrimination and underfunded training block opportunities amid AI-driven labor-market anxiety. (2) A couple’s transition to one income after a baby: budgeting, healthcare cost shock, cutting variable spending, retirement contributions, and life insurance.
Guests
Gary A. Officer, President and CEO of CWI Works (national nonprofit job training for primarily low-skilled, unemployed older Americans). Paige (new mom-to-be; staying home; husband remains employed).
Key claims
Older workers face long-term unemployment (27%) and low participation (37% for 54–70) despite 7.8M available jobs; age discrimination costs ~$850B/year (AARP). Workforce training for 55+ is <1% of DOL budget (CSEP is the main program). Paige’s biggest anxiety is healthcare tripling and unknown monthly expenses.
Notable examples
Lionel Messi as oldest player; LeBron at 41; truck driving threatened by driverless tech; older workers need reskilling plus time/income to access training. Paige uses Excel, tracks non-variable expenses, plans car purchase trade-in vs savings, and buys secondhand baby items (Facebook Marketplace).
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOIntroducing the Expert: Gary A. Officer
0:34 to 0:56
Meet Gary Officer and learn about CWI Works' mission.
“It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks.”
Introducing the Expert: Gary A. Officer
1:19 to 2:07
Meet Gary Officer and learn about CWI Works' mission.
“First, our weekly money news roundup, where we break down the latest in the world of finance to help you be smarter with your money.”
Trends Impacting Older Workers
2:07 to 3:19
Explore the key trends affecting older Americans in the workforce.
“So we are a national organization that provides workforce training to primarily low-skilled, unemployed, older Americans who are seeking to reenter the workforce.”
Challenges for Older Workers
3:19 to 4:35
Discuss the barriers older workers face in the job market.
“And candidly, many of us in the field just don't know the full extent of what's to come.”
Understanding Unretirement
4:35 to 6:01
Examine the phenomenon of unretirement and its implications.
“And none of those questions about needs extends to the experiences of older workers.”
The Need for Policy Change
6:01 to 7:06
Learn about policy gaps affecting older workers in the labor market.
“related to the return to the workforce because of lack of retirement income.”
Merits of Older Workers
7:06 to 8:19
Highlight the advantages older workers bring to the workforce.
“So we have a workforce that's prepared to work.”
Retraining Opportunities for Older Workers
8:19 to 9:48
Discuss the current state of retraining programs for older workers.
“So our good friend Liz is wearing an Argentinian soccer jersey.”
Occupational Segregation and Demands
9:48 to 11:15
Explore how occupational segregation affects job opportunities for older workers.
“We don't have the flexibility of time and or resource that's needed by this very population.”
Advice for Older Workers Facing Change
11:15 to 13:00
Gary Officer offers insights and encouragement for older workers.
“We're using platforms and tools coming out of the pandemic that were not in public use before the pandemic.”
Show all 26 chapters
Advice for Older Workers Facing Change
14:17 to 15:19
Gary Officer offers insights and encouragement for older workers.
“Comfortable, versatile, and somehow right for almost every occasion.”
Advice for Older Workers Facing Change
15:23 to 15:34
Gary Officer offers insights and encouragement for older workers.
“That's Q-U-I-N-C-E dot com slash smart money for free shipping and 365-day returns.”
Paige's Transition to One Income
16:51 to 18:09
Paige shares her decision to stay home and her financial concerns.
“I'm excited for this opportunity to chat.”
Budgeting for the Future
18:14 to 19:50
Discussion on budgeting strategies and tracking expenses effectively.
“I've always had some anxiety when it comes to finances.”
Identifying Cutback Areas
19:52 to 21:34
Paige explores potential areas to cut spending in her budget.
“So as an exercise, you and your husband might wanna look back at your last three months of expenses and get super clear on what those frivolous expenses were and where you might be able to cut back.”
Leveraging Subscription Benefits
21:34 to 22:36
Exploring ways to utilize existing subscriptions for savings.
“Because I've been guilty in the past of signing up for some and then using them for one month and then totally falling off and never touching them again.”
Retirement Savings Strategies
22:36 to 23:42
Discussing how to handle retirement contributions during the transition.
“What are your thoughts and questions there?”
Navigating Baby Expenses
23:45 to 25:11
Paige discusses budgeting for baby necessities and self-care.
“These are super important years to be able to save for retirement.”
Elizabeth's Experience with New Parenthood
25:11 to 26:30
Elizabeth shares her challenges and lessons from becoming a parent.
“He wants me to continue getting my nails done.”
Exploring Budgeting Tools
26:30 to 27:39
Discussing the NerdWallet budgeting tool and its benefits.
“And Paige, hopefully you have a little bit less of a hectic first year with your newborn.”
Planning for Big Purchases
27:40 to 28:00
Paige talks about planning for a new car and its financial implications.
“Because I think that might be where you can carve out some money from your budget to cover everything else that you're going to have to for your kids' expenses.”
Planning for a New Car Purchase
28:00 to 28:42
Learn how to budget for a new car while anticipating a growing family's needs.
“And then we are currently planning on buying a new car as well.”
Modeling Budget Scenarios
28:42 to 29:52
Explore how to model your budget by simulating different financial scenarios.
“This is where that modeling exercise I mentioned before, where you basically live a month as if your child is already here and your budget has changed accordingly would be really helpful.”
Managing Credit Card Expenses
29:52 to 30:28
Understand the importance of monitoring credit card expenses during life changes.
“scenarios, you'd be able to alleviate some of that anxiety, at least hopefully.”
Discussing Life Insurance Needs
30:28 to 32:38
Discover how expanding your family can impact your life insurance requirements.
“So that's also something I just want to monitor and make sure we're budgeting that we're not spending too much each month on just, again, kind of frivolous and variable expenses as well.”
Addressing Anxiety About Income Changes
32:38 to 34:44
Gain insights on managing anxiety when transitioning to a single income household.
“might make sense for your new needs, given that you have a baby on the way.”
Transcript
Automatic transcript. May contain errors.0:00Elizabeth Ayoola:This episode is brought to you by Accenture. When your advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together to reinvent the rhythm of ad sales, using automation, analytics, and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most. Learn more at Accenture.com slash Spotify. This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks.
0:45Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome.
0:51Elizabeth Ayoola:Check responses set up required, compatibility and availability varies 18+.
0:55Sean Pyles:The Labor Forest participation rate just hit a 50-year low. At the same time, a record number of Americans are turning 65, and many are unretiring instead of retiring. Today, we chat with an expert about what's actually happening to the 50-plus workforce. Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles.
1:20Elizabeth Ayoola:And I'm Elizabeth Ayola. First, our weekly money news roundup, where we break down the latest in the world of finance to help you be smarter with your money. Our news colleague Rick VanderKneif is here this week to talk about what's happening with older workers. Rick, tell us what's going on. Hey, it's good to be back, Elizabeth and Sean. Big demographic shifts have been reshaping the workforce in recent years, with lower birth rates at one end and a record number of Americans hitting age 65 at the other. And to talk about what's happening in the workforce, we've invited Gary A. Officer, President and CEO of CWI Works, a national nonprofit focused on job training and employment opportunities for older job seekers.
2:01Hey, Gary, welcome. Can you give us the elevator pitch on CWI Works and what it does? So thank you, Rick. Nice to see you again. So we are a national organization that provides workforce training to primarily low-skilled, unemployed, older Americans who are seeking to reenter the workforce. So we have a bird's eye view of what's happening for older workers as it relates to workforce opportunity and how they are faring day to day in the labor market. What are some of the long-term trends we're seeing in the workforce? What has changed and what's driving it? There's a massive amount of anxiety in the workforce around AI, right?
2:40So we're seeing that in the corporate earnings reports. We're seeing it in preemptive layoffs. We're seeing that in occupations that we know will be impacted by the AI transformation. So a massive amount of labor market and labor force anxiety. That anxiety is fed into the workforce training system. Because we all know in the training world that this future is uncertain. We all know that we are amidst a huge tsunami of change that's occurring within occupations. but we don't know the scale and how that's going to impact our current workforce. So this is an age of massive uncertainty. And candidly, many of us in the field just don't know the full extent of what's to come.
3:27In this moment, what does the workforce look like right now for Americans over 50? There's about 1.1 million older Americans, 54 and over, who are actively looking for work. Yet the long-term unemployment rate for older Americans is 27%. The labor force participation rate for older Americans 54 to 70 is 37%. So the data tells us that there's a massive need for skilled qualified individuals to enter into the workforce. But the data also tells us that older workers have been squeezed out. So that's sort of one. Two, the general policy environment around which we think about what our needs are going forward is informed by the experiences of younger workers.
4:13And we hear about the growing anxiety around the Gen Xs and more recently college graduates who are asking questions about, am I going to find a job? Because employers are not making those hiring decisions as we speak. So we're seeing more focus on younger people. We're seeing decline in labor force participation rate, higher long-term unemployment rates. And none of those questions about needs extends to the experiences of older workers. Let's talk about people who are working right now. We had a chance to talk a couple of years ago, and at the time you talked about three main groups among older workers, people who work by financial necessity, by cultural habit, their work is important to their identity, and people who continue working because health coverage is tied to the job.
4:59Is that still kind of the right way to look at it? Yeah. When we last spoke, we spoke as we were emerging out of the COVID economy, right? When millions of older workers left the workforce, and many were forced out of the workforce because of the relaxation and the pause in their participation on the job. Many left, weren't called back in. Many came back because they retired early and their retirement income couldn't sustain themselves, so they returned back to work, oftentimes working part-time. Some of those observations still hold, right? We are seeing more people, older people leave the workforce.
5:40What we also are seeing is about 65 % of those who have exited the workforce, their desire to return to the workforce is because of their inability to sustain themselves. And that feeds to another set of issues that's forcing the anxiety amount of older workers, which is retirement insecurity. A whole different subject, but it's related to the return to the workforce because of lack of retirement income. There's been a lot of reporting lately about unretirement, which I think specifically talks about people who have found work, but it sounds like there's a lot of unrealized demand for people who would like to reenter the workforce primarily for financial reasons, but something's holding them back.
6:21We have right now 7.8 million available jobs, 7.1 million job seekers, according to the Bureau of Labor Statistics. Then you have 1.1 million older Americans looking for work. Tells you there's a demand for labor. The fact is that older workers are not being given the opportunity that that demand for labor suggests exists. And that's a big challenge. And why is that? well we have a massive problem in this country around age discrimination. According to the AARP, age discrimination costs the US economy about$850 billion a year. By 2050 that number will jump to$3.9 trillion, equivalent to the current GDP of Germany.
7:06So age discrimination is real. So we have a workforce that's prepared to work. We have older workers with skills to work, but not getting the opportunity and or the attention other segments of our labor force are receiving when it comes to workforce opportunity and investment. We have a big wave of baby boomers retiring. We have lower birth rates at one end of the scale, so fewer younger workers. We're putting the lid on immigration. What does this point to longer term for the workforce? There's a report by the Special Committee on Aging Senate a few years ago that predicted that by the year 2030, one in four American workers will be 50 and over.
7:52Yet when you look at our investment in our nation's workforce system, federal and private, the overwhelming investment in our labor force is aimed at people who are much younger. So we're not investing in a population whose proportionate size in our labor market is increasing. Added to that is the failure to recognize the merits of what older workers bring to the workforce. And the merits are real. So our good friend Liz is wearing an Argentinian soccer jersey. The Argentinian Royal Cup team was led by 39-year-old Lionel Messi. He was the oldest player on the pitch. And if it weren't for him, Argentina would not have made it to the Royal Cup final.
8:33LeBron James is one of the top scorers in the NBA at 41 years old. So the virtues of intergenerational workforce and how it drives productivity is something that we often overlook, but it's real. So Americans are living longer now, and subsequently many of us need to work longer. Are there programs in place that help older workers retrain and retool for an evolving workforce? I know that's one of your big focuses. I think the level of investment, frankly, is insufficient. The only program that focuses on the workforce needs of older Americans is the Community Service Employment Program, otherwise known as CSEP.
9:10It's less than 1 % of a total budget within the Department of Labor, its workforce training unit. The need, when measured against resources, just rolls apart. That's a huge problem. And it's a huge problem because people will need to have two things that will be needed to go forward. Many people who are out of the workforce will need to be re-skilled. To be re-skilled, you need the resources and institutions that have the resources to provide that training. To re-skill, you have to have the resources to actually participate in training programs, perhaps, that provides credentialing. That requires income.
9:49And now we have an issue there. We don't have the flexibility of time and or resource that's needed by this very population. that's often ignored and marginalized, that they need to be successful in the workforce. And that's a huge blind spot for us. So we invest less than 1 % of a total U.S. Department of Labor's workforce budget is designated for workers who are 55 and over. So I definitely qualify as an older worker, but I mostly sit behind a desk. And I know that many people work in more physically demanding jobs that may be harder to sustain in your 50s or 60s. How does occupational segregation come into play?
10:33Are older minority and lower income workers, you know, they're concentrated in some of these more demanding roles, correct? Primarily older African-American Latino workers were concentrated in 10 occupational categories that had a high probability of being completely transformed, if not eliminated, over a decade because of machines. In 43 states in this country, the number one occupation is truck driving. We now see in many cities the driverless cars driving around, right? And one day, an Uber driver will be competing against a driverless car. We've seen the movement into the future, the fast tracking into the future as a result of COVID.
11:20We're using platforms and tools coming out of the pandemic that were not in public use before the pandemic. I had never heard of Teams or Zoom. I'm in an office with one employee. Most of my employees are at home. They're working remotely. So digital literacy, making sure our folks have the tools to work regardless of location, are things that all segments of our workforce will need to be skilled at because the future of VR is not in a physical location with your car being parked three levels down. That's the longer the case. So if you had one message for someone in their 50s or 60s who's worried that AI is coming for their job or changing their job, what would it be?
12:05I would say this. I think we've seen elements of this before. When I came on the scene in this organization 10 years ago, we were panicking about the gig economy. We were panicking about machines and somehow we survived through that. We're going through a workforce revolution filled with uncertainties. But I'm also optimistic that within that uncertainty phase, there will be opportunities. Occupations may change, roles may be adapted, but opportunities I think will still be needed. because the currency that drives our activity oftentimes is our interpersonal skills. It's what we communicate. It's the ability to problem solve.
12:50All those things occur on teams. And Claude can't help you with that. ChatGPT can't help you with that. So I'm optimistic, but the important piece here is to maintain your skill level and to seek ways to enhance your skills in real time. Gary, great talking to you again. And thanks a lot for joining us today. I always appreciate your perspective. Thank you very much indeed.
13:13Elizabeth Ayoola:And thank you, Rick. This topic really hit home. My dad is 76. He's still working, still looking for a better paid job and really struggling to find one. And it would be so awesome if he had access to those resources that Gary mentioned to help retrain them and uplevel his skills so that he could be eligible for better paid jobs. So thank you guys for doing this segment. Perhaps your parents are struggling to look for work or you're an older American who's struggling to make ends meet or wants to plan better for retirement. Whatever your money question is, you can send it to us on the nerd hotline and 901-730-6373.
13:48Elizabeth Ayoola:That's 901-730-NERD. I have been reading your Spotify comments and replying. If you see a reply from Cool Kid, that's I'll not me, but it's actually me. So keep commenting and you can leave questions on there, too. We're on YouTube in case you haven't seen our faces yet. And we'll leave a link in the episode description.
14:08Sean Pyles:More in a moment. Stay with us.
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16:34Elizabeth Ayoola:Paige has over a year of expenses saved and a baby on the way this fall, but she's still anxious about dropping to one income. Today we're giving her a game plan for her big transition.
16:45Sean Pyles:And Paige is here with us today to talk about her finances and everything that's going to change in her life once her baby comes. Paige, welcome to Smart Money. Thank you both for having me.
16:53Elizabeth Ayoola:I'm excited for this opportunity to chat. Okay, well, first of all, congratulations on the baby. I'm assuming this is your first one? Yes, correct. It is our first. We're very excited. And what are you most excited about? Most excited for selfishly having a girl. Specifically, honestly, the clothes are cuter and it's just I'm going with the whole girl theme. It's been wonderful. Yeah, that's a lot of fun. They are cuter. Coming from a boy mom, it's just sometimes so boring. So I'm going to live through you.
17:20Sean Pyles:And you decided to make the leap to staying at home with your kid, taking a step back from work. Talk with us about that decision. So my husband and I have talked about this as a possibility ever since we discussed, you know, having a family. And I'm very fortunate that, you know, it should be something that we'll be able to make work for a short time. It's very important for us, you know, especially me to feel like I'm really raising our daughter and having time with her instead of just having her in daycare. So I'm very fortunate that we'll be able to make this transition happen. And I'm sure you factored in the trade-off of not having to pay for daycare, which is incredibly expensive.
17:53Oh, absolutely. With what I make, you know, as a salary, too, and the cost of daycare in our area, it was a pretty easy decision as well to make.
Read the full transcript
18:01Elizabeth Ayoola:It's so expensive. I'm in the trenches of, or I just, you know, completed summer school payments. And I'm like, wow, when does this end? I don't know. Maybe never. Talk to us about the anxiousness that you're feeling about going down to a single income. I've always had some anxiety when it comes to finances. And I know sometimes I feel like I probably shouldn't. We're in a very good spot. We have, you know, a year's worth of expenses saved. However, my biggest anxiety, I think, really comes from changing our health care, from me being holder of our health care to my husband. And it's just probably over triple the current costs.
18:35So that plus the baby on the way and some additional expenses with that, in addition to the health care, I think is really where my anxiety is stemming from.
18:43Sean Pyles:First off, congrats on having a year's worth of expenses saved. That is not easy to do. So very well done for you and your husband. Is this a years of expenses pre or post baby slash, you know, your health care expenses tripling? Because that's going to be a big difference in expenses. It's factored off of what we currently spend each month. So our current expenses, it does factor in, I think, for the most part. like the premiums we'll be paying for the healthcare, it just doesn't factor in some of those out-of-pocket costs we might be spending with the new health plan. And talk with me about how you're currently budgeting and managing your finances with your husband.
19:17Sean Pyles:Do you have a tool that you use? Are you guys really into spreadsheets? What's your system? The accountant in my husband is definitely manual with that. So we use a lot of just manual Excel spreadsheets, no budgeting apps. However, I think that might be a good tool to utilize in this new transition. But we pretty much, for the most part, just track our non-variable expenses, I would say. So we're not as good about tracking some of those frivolous expenses that we have each month, which I think we'll need to start tracking kind of every little thing that we spend in this new journey of our life.
19:48So we could definitely be a little bit better in budgeting for the future.
19:51Sean Pyles:This really is a time to get super clear on all of your numbers. So as an exercise, you and your husband might wanna look back at your last three months of expenses and get super clear on what those frivolous expenses were and where you might be able to cut back. And then going forward, I think it would be really helpful for you and your husband to almost have a model month where you can think about what your expenses will look like after your baby is here. So maybe you could factor in maybe average cost of food or diapers or those health care expenses that you mentioned before just to see how far what you have saved might take you.
20:24Elizabeth Ayoola:Now, Paige, I know that you said that you guys can be frivolous spenders sometimes or not tracking those expenses. I can be the same. I recently got a little bit more nitty gritty with my budget because I personally realized, hey, I'm overspending and it's because I'm not tracking a lot of different kind of expenses, especially things like eating out or I don't know, taking my son to an extracurricular activity. You wrote to us and asked us about what expenses that maybe you could look at cutting in order to refine your budget and have more money when the baby gets here. So talk to us a bit about maybe any expenses you can think of off the top of your mind that you could start cutting out of your budget.
21:03Definitely some subscriptions. I will say that we I feel like I'm the subscription queen. We have many streaming services and fitness subscriptions and just so many things that we probably don't need. Truly, we also eat out a lot. That definitely is a huge chunk of our expenses, as well as just online shopping. I will say we're both guilty of making some of those Amazon purchases a little too much. So some of that is definitely stuff I know we could be better about and cut back on.
21:33Sean Pyles:Do you feel like you use your subscriptions? Because I've been guilty in the past of signing up for some and then using them for one month and then totally falling off and never touching them again. It's definitely hit or miss, I'll be honest, especially when it comes to streaming. We probably have at least like five different streaming. It's like you watch one show on one and then don't touch it again for three months. Yeah. It's all a trap.
21:53Elizabeth Ayoola:Actually, I want to give you a little hack. I don't know if you guys have any travel credit cards, but I recently was talking to a friend and she messaged me and she's like, hey, Elizabeth, do you have Peacock? And I'm like, I don't have Peacock. And then she says, never mind. I get it with my Walmart Plus subscription. And I'm like, wait a minute. I have Walmart Plus that comes with one of my travel credit cards. I get it for free. So I do have a Peacock subscription and I actually signed up for Peacock and I was supposed to end the subscription, but I didn't. And I get charged extra money. And all along I had the free Peacock access that I could have used.
22:25Elizabeth Ayoola:So I'm not utilizing that benefit. So maybe long story short, look through your different credit cards. If you have them, look through any benefits and see if you can get your streaming services for free so you don't have to use five.
22:36Sean Pyles:Paige, you also wrote to us asking about how you should handle retirement contributions when you are stepping back from work and how much your husband should contribute. What are your thoughts and questions there? We've talked about him maybe starting to contribute more to balance out the loss of retirement contributions on my behalf. However, I'm not sure if that'll be feasible with our expenses, at least for the first year, we'll have to see. But it does make me anxious to think of at least a year or more of not contributing whatsoever to my retirement because I don't think we've saved enough.
23:06I don't want to say to the benchmark that we should hit, but we definitely could be doing more for sure.
23:11Sean Pyles:And how much do you have saved? I think it's around like$100 ,000. So it's, you know, decent, but not probably where we should be.
23:19Elizabeth Ayoola:A lot of people don't have$100 ,000 save page if you didn't ask. Well, that makes me feel better.
23:23Sean Pyles:But again, this is an area where being super clear with all of your numbers is going to be really important. I mean, if you took what you're paying for all these subscriptions and put even half of that or hopefully even all of it towards retirement savings, you'd be able to get ahead just a little more than contributing nothing at all because we know that time is our greatest asset when it comes to being able to invest for retirement. You and your husband are still pretty young. These are super important years to be able to save for retirement. So try to put anything away if you can. At minimum, try to get an employee match if your husband's company offers one.
23:55Elizabeth Ayoola:Let's talk about some kind of fun things here. As you wrote your question in, I was thinking, I wonder if Paige has gone down the mommy-to-be rabbit hole and looked at ways that she can save when it comes to baby expenses. So is this something you've been thinking about? Oh, absolutely. So I will tell you, I've already taken advantage of Facebook Marketplace and been getting some free baby clothes, some free baby items, which has been amazing. So I will definitely continue to be doing that and saving any which way we can. Actually, it's something that I didn't think about until after I had my baby because you get all this pressure to buy all of these things.
24:31Elizabeth Ayoola:Some of the things, for example, a breast pump, depending on how long you breastfeed, if you want to, you only use for a couple of months. So it can be so helpful to get these things secondhand or for cheaper. Another thing I want to ask you whether you factored into your budget is I know things are really tight, but being a new mom can be exhausting. A lot of moms sometimes suffer from postpartum or feel like they lose their self in the process. So having a tiny little fund that can pay for you to go and grab a coffee or just do something nice for yourself can be extremely helpful. So is that something you've budgeted for?
25:03I wouldn't say that's something I've necessarily budgeted for, but I will say that my husband is also very supportive of making sure I still have some type of self-care. He wants me to continue getting my nails done. So he's definitely a good supportive husband there.
25:16Sean Pyles:And Elizabeth, I have a question for you, actually. How did you handle this topic of trying to save anything you can when you had your kid?
25:24Elizabeth Ayoola:Oh, my gosh. Wow. Taking me down memory lane. So Ayo is going to be nine in November. Cue the tears. But I was in a very different financial position than Paige when I was having Ayo. I was still trying to build my career. I did not have a very consistent income. I was actually freelancing at the time. So it put a fire under my butt because I was like, oh, my God, a baby's coming. My husband at the time didn't have much income and it was solely our income we were relying on and we ain't got much money and I didn't have any savings either. So I just went into panic mode. I was taking up as much contract work as I could.
25:58Elizabeth Ayoola:And kind of similar to Paige, just thinking about, OK, what are the new expenses going to be? And that was really my introduction to very loosey goosey budgeting. But, you know, what am I going to need to save for? How much do I need? And what is my timeline for saving? So I really, I worked about 10 hours a day, honestly, on the laptop with a newborn. With a newborn at home. Yes, yes. Just writing articles, churning away, trying to save enough money. So my first year was pretty rough, but I just did what I could as essentially a single income household to save enough for us to be comfortable.
26:29Sean Pyles:Well, I'm proud of you for doing all that and look at where you are now. And Paige, hopefully you have a little bit less of a hectic first year with your newborn. And I'm really glad that your husband is able to keep working and support you guys during this time because it's such an important moment for bonding and supporting your kid. And also, as you said earlier, saving on child care because daycare is so incredibly expensive. Absolutely. So I'm incredibly grateful. But proud of you, Elizabeth. That was incredible that you made it through that first tough year.
26:57Elizabeth Ayoola:Oh, thank you. And I'm proud of you, Paige, because you hopefully won't have to go through what I went through and you can enjoy the baby and relax and go get your nails done.
27:04Sean Pyles:So Paige, you mentioned that you weren't currently using any main budgeting tools besides the spreadsheet that your husband has made. Have you played around with NerdWallet's 50-30-20 budgeting tool at all? Because I found that to be pretty helpful. Is that something that you're familiar with? I am familiar with that concept, but I have not used that tool yet. So it's definitely something I can try out. We'll have a link in the episode description, so please check that out, or you can just search on the internet, NerdWallet 50-30-20 budgeting tool. That will really help you get a clear picture of where your needs, wants, and savings and debt payments stack up.
27:38Sean Pyles:And do you have any debts or big savings goals currently just for that 20 %? Because I think that might be where you can carve out some money from your budget to cover everything else that you're going to have to for your kids' expenses. Yeah. So our current debts are primarily our mortgage and then our credit cards, which we do pay off each month, but we do rack up those bills each month. And then we are currently planning on buying a new car as well. We both have small sedans. So we want to upgrade to an SUV with the baby. So that will be an additional expense as well. Got it. That's a big savings goal.
28:11Sean Pyles:How are you approaching that right now? I think we're going to trade in my car and we should be able to pay for like half of the new car right away with that, which is great. However, we're not used to having a car payment. So that would be an additional expense each month. So we're kind of trying to decide, do we pull out of our savings to pay for the car so that we don't accrue some additional expenses monthly and just kind of do that one hit to our savings at a time? Or do we do some type of car payment to adjust into our budget? So that's something we're also talking about currently. This is where that modeling exercise I mentioned before, where you basically live a month as if your child is already here and your budget has changed accordingly would be really helpful.
28:50Sean Pyles:So you could even add in what it would be like in one scenario where you do have a car payment. We know car payments are pretty high right now. So that could be$500 or more just for the car payment. So see what that might feel like in your budget or if it feels tight. And then you could do another scenario where you do actually pull from your savings to cover the rest of the car. And then just see how you might feel if that money was actually out of your savings. I think it might be hard to know which would be best for you until you actually experience it, even if it's just an experiment that you're playing with.
29:19Sean Pyles:Have you guys thought about doing anything like that? Or is that something that you think you and your husband would be willing to do? Oh, that would absolutely be something we'd be willing to do, I think that would be incredibly helpful as well. Because forecasting that, I think, to your point, not just with the car, but just to see what things would be like, how comfortable we would be on a month to month basis with some of those anticipated expenses would be very helpful. And maybe ease my anxiety or make it worse ahead of time. Yeah, be a good preparation. A lot of times anxiety, especially around money comes from the unknowns.
29:50Sean Pyles:And I think if you just really had a better grip on all of these numbers and how you'd really feel in different scenarios, you'd be able to alleviate some of that anxiety, at least hopefully.
29:59Elizabeth Ayoola:Paige, you mentioned that you guys sometimes have credit card debt. What's your situation with that? So do you pay it off in full every month? Are you paying the minimum? We do pay them off in full each month. We have primarily three credit cards that we use jointly for different purchases. And then my husband and I both have a personal card that we put some of our own expenses on. And we do pay them off all in full. However, I have noticed lately, maybe it's the baby prep, but there's been an uptick in expenses with that. So that's also something I just want to monitor and make sure we're budgeting that we're not spending too much each month on just, again, kind of frivolous and variable expenses as well.
30:37Elizabeth Ayoola:Well, you guys are in a great position because based on what you said, you don't have any debt. So I think as long as you keep it that way, then it'll be easier to do what Sean is suggesting and just kind of test that income with these new expenses. and hopefully that'll give you a bit more peace of mind. Paige, there is another thing I want to ask you about briefly. You guys are expending your family and this can be a wonderful time if you don't already to get life insurance or increase your life insurance because you have a little one who's going to be dependent on you. So what is your situation with that?
31:07We do both have life insurance. It's currently just enough to cover our mortgage if something were to happen to pay that off. However, with stepping back from work, I have been questioning whether we should up my husband's life insurance. God forbid if something were to happen since he'll be the primary income. So I would love your thoughts on that if you guys think that that's something that you think would be worth adding to our coverage as well.
31:30Sean Pyles:I'm really glad to hear you have enough to cover your mortgage because that's a great baseline to start from. If you're thinking of increasing how much your husband has, you should also think about increasing how much you have too because even though you aren't going to be bringing in a paycheck per se on a regular basis, You'll be providing tremendous value to the household just through all of the labor that you'll be doing caring for your newborn. So you might want to increase both of your policies just to cover the mortgage and then also cover any other life expenses that you would have in the event that one of you passes, which, you know, isn't going to happen.
32:05Sean Pyles:We know that. But just to have better to have extra coverage and not need it and then feel like you're just getting by and only having the mortgage paid off. Very true. Good to think about. What kind of policy do you have? Is it a term policy or a whole policy, permanent policy? It is a term life insurance policy that we started back in 2022. And I believe it was a 30-year policy. And that's when you bought your house in 2022? Yes, correct. Okay. Very smart move getting life insurance after you bought the house. Proud of you guys for that. But yeah, now might be time to talk with your insurance broker again and see what might make sense for your new needs, given that you have a baby on the way.
32:41Elizabeth Ayoola:Also, if you want to, I don't know if you're aware, we do have a calculator on NerdWallet that can help you calculate maybe how much you might need, especially with your new expenses and baby here. So maybe you can play around with that just to give you an idea of how much you might need to increase your life insurance. But we'll include a link to that in the show description. Well, Paige, we have talked about so many different things today. How is your anxiousness around moving to a single income feeling right now? I will definitely say you guys have put me a bit at ease and thank you for the vote of confidence and telling us that we've been doing a good job.
33:16I appreciate that. I think my anxiety really does stem from just moving into the unknown. It's a very new situation for us, something that we're both going to have to acclimate to. And I think that's where the anxiety really stems from. But after having conversations with you guys, there's definitely some tools that we can utilize to better prepare for this and to get, you know, a better estimation of like how our new month to month is going to look like. So I feel a lot more confident after discussing this with you guys. So thank you.
33:43Sean Pyles:That's great to hear. And can I ask, when is your baby due? Mid-October. It's actually a few days before my 30th birthday. So it'll be like a little present to me. What a treat. That's so exciting.
33:54Elizabeth Ayoola:And your husband will be buying double gifts every October. Wow. Yeah, lucky him, right?
33:59Sean Pyles:Well, we are so excited for you. Please keep us posted on how your life and your finances change as you enter this new, exciting chapter of your life with your family.
34:07Elizabeth Ayoola:I certainly will. Thank you. And just one last tip because I can't help myself, but because I can relate with you guys' budgeting style, in addition to testing the budget, maybe consider just for one month playing with a$0 budget. So accounting for every single dollar just for a month or even if it's just a couple of weeks. I know that when I did that, I was like, oh, so that's what I'm spending an extra$500 on. Just to give you insight without shaming yourself on where your money is going. So you can be more conscious when you're kind of spending. So you guys have more to put towards you, beautiful baby girl.
34:42That's a great idea. We'll definitely try that out. Thank you.
34:44Sean Pyles:Well, Paige, thank you so much for coming on and talking with us.
34:47Elizabeth Ayoola:Thank you so much for having me. It's been a pleasure. All right, Paige. Well, sometimes we do have guests do the wrap up for us. It would be an honor if you could. Would you be down? It would be my pleasure. Sure. All right. And that's all we have for this episode. Remember, listener, that we're here to answer your money questions. So turn to the nerds and call or text us your questions at 901-730-6373. You can also email us at podcast at nerdwallet.com. Join us next time to hear about choosing a travel credit card. Until then, you can follow Smart Money on your favorite podcast app that includes Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.
35:26Sean Pyles:And here's our brief disclaimer. We are not your financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. Some companies mentioned in this episode are NerdWallet partners, but that does not influence how we talk about them.
35:42Elizabeth Ayoola:And with that said, until next time, turn to the nerds.
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From the publisher
Learn how to budget for dropping to one income with a baby on the way. Plus: what's really happening to the 50+ workforce?
What's driving the labor force participation rate to a 50-year low — and what does it mean for the more than one million Americans aged 54 and up who are still looking for work? Sean Pyles, CFP®, and Elizabeth Ayoola are joined by news colleague Rick VanderKnyff and Gary A. Officer, president and CEO of CWI Works, to dig into the real challenges facing older workers today. They cover why age discrimination costs the U.S. economy an estimated $850 billion a year, how AI anxiety is hitting older workers in physically demanding jobs hardest, why the barriers to re-entering the workforce after retirement are steeper than most people realize, and what a 27% long-term unemployment rate among older Americans says about who the job market is actually built for.
When you're expecting your first baby and planning to leave the workforce, how do you know your finances are truly ready for the shift to one income? Sean and Elizabeth sit down with listener Paige, who has over a year of expenses saved and around $100,000 in retirement funds but is still anxious about the jump. They tackle the specific decisions she's wrestling with: what to do about retirement contributions when one partner stops working, which expenses could be safely cut before baby arrives, whether her current life insurance coverage is adequate for a growing family, and how to build a realistic picture of what her budget could look like once the paycheck disappears this fall.
Use NerdWallet's 50/30/20 budget calculator to see how your needs, wants, and savings stack up: https://www.nerdwallet.com/finance/learn/nerdwallet-budget-calculator
Estimate how much life insurance your family could need with NerdWallet's calculator: https://www.nerdwallet.com/insurance/life/learn/how-much-life-insurance-do-i-need
Subscribe to our podcast’s free email newsletter for bonus content and more from our hosts at https://smartmoney-nerdwallet.beehiiv.com/
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*The show notes were created with the assistance of AI. They have been reviewed by our editorial team for accuracy and quality.
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