Welcome to BW’s Smart Money podcast, where we answer your real-world money questions. In this episode:
A certified financial planner offers a listener actionable advice to help him save for a big move while maintaining financial stability.
How much should you save before you move to a new city? How can you reach your savings goals while also spending on your lifestyle? Recording in-person from a studio in Chicago, host Sean Pyles sits down with Magda Doemeny, a certified financial planner with BW Advisors, to host an actual financial planning session with a listener. Jim, a 36-year-old nonprofit worker, joins them to share his aspirations of moving to a higher cost-of-living area without a job lined up. Magda advises him on how much money in living expenses he should consider saving before making the move, the practicality of high-yield savings accounts, and the benefits and limitations of using a Roth IRA for a down payment, among other practical strategies for reaching his goals while maintaining financial stability.
BW Advisory LLC, dba BW Advisors, is an SEC-registered investment advisor and wholly owned subsidiary of BW Inc. The advice provided in this episode of Smart Money was for illustrative purposes only and not intended as financial or investment advice specific to your personal facts or circumstances.
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Hurling is similar to Irish lacrosse, and I absolutely adore kayaking during the few weeks when it’s enjoyable and the weather is nice. I would say my approach to managing finances is extremely active. I meticulously track my expenses, regularly rebalance my accounts, and always ensure my money is being utilized to its fullest potential. My finances can be described as stable but possibly precarious, as I earn enough to sustain my current lifestyle but not enough to pursue larger goals. I am contemplating a move from Milwaukee to San Diego, which may involve using my retirement savings. I am seeking advice on whether taking such a risk is wise. There are individuals who seek guidance on their current financial situation and the decisions they need to make, such as relocating, buying a home, or determining how much they can afford. It is important to consider all aspects before making a major financial move. It is crucial to plan ahead and ensure that your retirement funds remain untouched, as once they are withdrawn, they cannot be easily replaced.
When contemplating a significant change, it is necessary to assess your income, expenses, and potential ways to increase your income. Having a detailed plan in place will help you achieve your goals without jeopardizing your financial stability. Building an emergency savings fund is essential, especially if you are considering a move without a job lined up. It is recommended to have at least a year’s worth of expenses saved up to avoid accumulating high-interest debt.
In terms of increasing your emergency savings, setting aside a certain amount each month can help you reach your goal. Despite facing occasional large expenses, prioritizing your savings will provide you with a financial safety net. If you are thinking about purchasing a new car, consider the impact it may have on your overall financial situation, especially if you are planning a major move. Taking on additional debt should be carefully considered to avoid further financial strain.
Ultimately, it is important to weigh all your options and plan accordingly to ensure a smooth transition and financial stability during major life changes. So it seems like having a car will be necessary for you. Finding time to do that while working night shifts can be quite challenging.
I am aiming for a salary range in the 110s, but I am open to roles starting from 95 and up.
I have experience in nonprofits but am open to exploring other industries. I have been looking mostly at government jobs.
I am considering stepping into an industry that could significantly increase my income, even if it means starting at a lower level.
I have reservations about pursuing further education due to student loan debt.
I have been using my Roth IRA as a savings vehicle for a future home purchase.
I do not plan to buy property until I determine if living in a place like San Diego is worth it. I think my savings are in the Roth IRA, which is why I want to talk today. Buying a home isn’t a priority for me right now, and I don’t think it will be until I make some other changes first. It wouldn’t feel right to use my retirement savings for something like that, as it’s not a guaranteed investment. I’d rather save separately for living expenses and emergencies.
I save about $880 a month, and if I can cut back on expenses even more, I could save even more towards moving to San Diego. Making more money is music to my ears, and I’m open to adjusting my timeline if needed.
I have a high-yield savings account that I chose based on BW’s recommendations, currently at 4.6%. As for cutting expenses, going out with friends is important to me, but I could potentially save a couple hundred dollars a month by being more disciplined. However, I also need to save for future expenses like a new car.
Increasing income is a priority, and I want to wait until I know where my income will be before moving to San Diego. I currently spend $1,000 a month on housing, and I think I could find a cheaper option with roommates in San Diego. I may need to adjust my retirement contributions if my income changes, but I want to continue saving for the future. There may be penalties associated with making money on certain investments, but not penalties, just taxes. We could reallocate funds towards future goals like building a home. It’s important to figure out your next job to achieve your financial goals. Researching the cost of living in San Diego, budgeting for expenses like groceries and transportation, and securing healthcare coverage are crucial steps. Making proactive changes to your income and expenses, and being open to taking risks can help you achieve your goals. It’s important to have a plan in place when taking risks with your finances. When we see someone without a plan, it often leads to a conversation about how they ended up where they are. They might explain that they were tired of a situation, made a move, and now find themselves in a new place. However, having a plan not only helps you navigate your journey but also allows you to recognize when things are not working. It gives you a clear exit strategy if you realize you can’t sustain your current path financially. Planning ahead helps you understand your entry and exit points, preventing you from veering off course unknowingly. While this may seem like a negative approach, it also empowers you to make positive changes in your life.
Empowerment is key when making a decision to change your circumstances. Whether it’s going back to school or taking a risk to improve your future, having a plan in place gives you the confidence to pursue your goals. Money should not be a constant source of worry in the background, questioning your choices. By thinking ahead and strategizing, you can enjoy the journey without financial constraints holding you back. This mindset is beneficial for anyone looking to take risks and make significant life changes.
In conclusion, having a plan is essential for achieving your goals and ensuring financial stability. By proactively considering your options and setting clear objectives, you can navigate through life’s challenges with confidence. Remember, planning is key to success, and it’s never too late to start. sentence: Rewrite the following sentence:
Original sentence: The cat sat on the windowsill, watching the birds outside.
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The cat lounged lazily in the sunbeam.
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