For many, budgeting has never felt like more of a challenge, which might explain why it seems to be trendier than ever — with all the fads and judgment that attention implies. TikTok influencers offer financial trendbait like “loud budgeting” and the “100 envelope challenge,” which suggest that people can solve their financial problems by following strict rules that can be summed up in a single viral hashtag.

Dana Miranda is a personal finance journalist and educator based in central Wisconsin who runs the Healthy Rich newsletter and is the author of You Don’t Need a Budget. Jen Smith and Jill Sirianni are based in St. Petersburg, Florida, where they co-host the Frugal Friends Podcast and co-authored Buy What You Love Without Going Broke. These three financial educators believe that budgeting culture has gone to the kinds of extremes that make it difficult to think holistically about financial values — and that the best way to manage money might involve letting go of some of the so-called rules.

The following conversation has been lightly condensed and edited.

Jen Smith: I think that we’ve learned a lot of our budgeting, and our financial habits and consumption, from the way we consume food. We’ve taken something we’re already familiar with, extreme diets, and transitioned it to money. For women, it’s been this constant source of shame and struggle — and so we really want to get away from the language that causes this shame and struggle and create a new way to think about financial concepts that are a little more freeing and empowering.

Dana Miranda: I specifically thought it was important to name budget culture and to show the direct parallel to diet culture. The ways we talk about money are focused on that same restrictive mindset. It’s also a very individualistic mindset, when both our approach to food and our approach to money have so many systemic causes and implications that we often don’t talk about when we’re giving financial advice. 

Once we understand the ways we teach and talk about money in our culture, we can understand that even if we’re not specifically engaging in restrictive budgeting, that kind of culture underlies all of the ways we think about money. 

Jill Sirianni: I think a lot of us are not taught how to manage our resources well. We’re not taught how to spend, we’re not taught how to save, much less how to invest. It’s not usually overtly taught by our parents or caregivers, and it’s not taught in school — so we graduate and take on student loan debt, not really understanding what that means for us in the long term.

We also learn that spending is a personality trait. You’re either a spender or a saver. We should be learning that we all spend, and we all should be saving, and there shouldn’t be this guilt or shame attached to any of it. We can align our spending with the things that actually matter; our values, the things that are important and life-giving to us. This gives us a sense of confidence and freedom about the ways we spend our money — or ways we don’t spend our money, if we choose to consume less.

Jen: Spending was a hobby when I was growing up. It’s what we did on the weekend! We went to the mall. We went to Walmart. That was how I learned what to do with money. I didn’t learn how to spend it on investments. I didn’t learn how to spend it on vacations after saving up for them. I wasn’t taught any of that.

Now shopping isn’t just a hobby. It’s what you do when you’re stressed! It’s what you do when you’re bored! It’s the go-to thing to do with any free given second of time.   

Dana: That’s interesting, because I was raised just the opposite. I grew up in a culture that was anti-debt, anti-spending, pro-saving. Hold on to money as much as you can and work hard to earn it. That’s what I see in people as adults, too — sometimes they’re afraid to spend money, because they’ve been told their whole life that spending money leads to chaos. 

We’re never taught to question what’s going on outside of us, and we’re never taught to look inside of ourselves and ask ourselves what we want to do with our money. 

Jill: For our book, we really wanted to teach the skill of spending. It’s not a personality trait, it’s not a moral failing or a moral superiority, it’s a skill. That means it’s something you can learn and something you can get better at doing. 

Stopping all spending and doing something like a no-buy year, we don’t think that’s the answer. A short no-spend challenge can show us something about our spending habits and speed up the timeline of learning — but if you want to learn how to function in the world that we live in, you’re going to spend money. Let’s hone that skill and do it well!

Dana: Your book is such a complement to mine that I’m starting to recommend them together. My book focuses on the cultural relationship with money and the personal relationship with money. What I really want people to take away from my book is to start to question the traditional advice that they’re hearing, because I think that’s the big skill we’re not learning. We’re looking for a specific set of rules or a specific method, and we end up bouncing from method to method to try to find the right one instead of asking questions about why this person is describing this particular method. Why is this person giving this particular advice? What about their life made that method work for them, and how might that be different from what’s in my life — or how might it be the same? That’s how people can start piecing together something that works for them, and how they can start questioning what’s around them instead of asking someone else to tell them what to do next.

I use my book to shift people into that mindset, but I like to recommend your book because it gives people the practical tips that can help them take the next steps.

Jill: Our approach is similar to Dana’s approach: understanding ourselves first. We need to understand some of the reasoning behind what we’re doing so that we can have self-understanding, and a lot of that involves giving people tools that they can take with them throughout any season of life. 

When that happens, when we understand what our current spending habits are and learn the ways in which we want to shift them, how we can get more of what really matters, our values, our higher needs; then we can identify what we want to do with our resources. That’s all of our resources: our time, our physical space, our relationships, our mental and emotional energies, as well as our money.

So with something like investing — and of course that’s a whole large topic, there are plenty of books just on that topic — we believe that it requires these first steps in order to build a really solid foundation so that people can determine what the best investment strategy might be for them going forward.

For many people who are middle or average earners, the best strategy is probably going to be some kind of automation utilizing your Roth IRA and your 401(k), but a lot of times people in this space are still looking at debt payoff and fully funding an emergency fund. These are the types of things they can set on autopilot so they can begin saving for retirement, but first we need to understand the skill of spending. What do I even value? How can I get more of what I want without throwing money at my problems?

Jen: There are already plenty of great investment books out there. Rich AF by Vivian Tu, Grow Your Money by Bola Sokunbi, but it is very hard to take action on them if you are spending every dollar you make. The lowest barrier to entry to get started with investing is to spend less. Our book can help people increase their margin so they can start investing faster. They don’t have to wait to earn more.

Dana: In You Don’t Need a Budget, I try to speak to people who might be experiencing financial insecurity or some instability, but the issue with that is that most of the time if someone is experiencing something like food insecurity, it is usually the result of a systemic cultural problem and not something that we can offer personal advice to help them change. It’s something that needs to be addressed at a systemic level. 

What I try to do for readers in that situation is to reiterate that message over and over, because often in the personal finance space they’re getting messages written for people who are middle or average income. They’re getting tweaks on how to spend their money, which is just not enough — so the message I want to send is that this information is not for you. People are not speaking to your situation, and you should not feel ashamed of the things that you have to do to survive in this system that is not allowing you that kind of security. 

It’s hard as a financial educator and personal finance writer to speak to that situation, because there’s no answer for it. It’s a systemic thing and a political thing, and it’s important to say that.

Jen: We also believe that debt is neutral. Some people consider a mortgage “good debt,” and for other people their mortgage can be 50 percent of their income — which doesn’t make mortgages bad, but in this case it might not be the best decision for you. 

Credit card debt and high interest debt can be a bad decision, but not always. Sometimes you need those tools to keep you afloat. I often like to say that there’s a difference between being hungry and not knowing where your next meal is coming from. A person who is using credit cards to deal with food insecurity is different from a person who is maximizing every line of credit available to them and not dealing with their long-term financial goals.

That said, if you are in credit card debt, get rid of that debt first. That’s something I’m willing to take a stand on. For everything else, you have to honor your season and your capacity for what you can do financially. 

Dana: I really think that’s the approach we need to take to debt. It’s about your season. I take a radical approach in terms of allowing the use of debt, but I also want people to understand how debt products work.

I don’t think that anybody has a moral obligation to pay off debt as quickly as possible, the way that it is sometimes represented. I think that debt products are a resource to help you live a life that’s comfortable and have the experiences that you want and deserve. As long as you understand how debt works and how to deal with any debt you accrue, you can go ahead and use debt products in your life. 

It’s important to avoid actions such as maxing out your credit card or damaging your credit score — the kind of things that might reduce your access to debt as a resource — but you should also avoid thinking of debt in terms of rules, such as “it’s a rule that we should avoid debt” or “it’s a rule that we should pay off debt as quickly as possible.” 

Jill: One of the reframes we’ve used on debt is the idea of “beneficial” versus “not beneficial.” Rather than talking about moral and immoral or good and bad, try to individualize these decisions. Is this good for me and my family, or is this not beneficial for me and my family? That’s going to look different from person to person. 

Dana: When I say that you don’t need a budget, the most important thing I’m looking at is eliminating that reliance on restriction and the kinds of boundaries that require you to live a smaller life. You need to be aware of what’s happening with your money, but it’s not just an awareness of where your money’s going because that kind of exercise can lead to self-judgment. You should also be aware of what money is coming in and what resources you have access to. What goals are you trying to achieve, and how can you use money as a part of all of that? 

This doesn’t mean making a spending plan, and it doesn’t mean restricting your spending according to someone else’s rules — but it does mean being aware of money because it’s one of the things you’re dealing with in life. It’s one piece of your life that you’re being mindful about, the same way that you are about anything else.

Jill: It’s like asking whether you can have beneficial relationships and interactions in the future without looking at what your past relationships and interactions have been. You just can’t. That’s not to say that we’re going to look back with shame, but we won’t be able to make money decisions and choices if we don’t know what we’ve already been doing with our money.

Jen: The anticipation of finding that out is typically a lot more overwhelming than what you actually find out. It’s also a good idea to reframe some of the negative feelings that might come up. Instead of feeling guilty, for example, you can acknowledge that you regret some of your past decisions. That’s healthy. Regret helps you understand that you can change, and it helps you decide what to do next.

Jill: Writing this book has helped me manage some of my own financial regrets and reframe them as learning opportunities.

Jen: For me, writing the book has given me accountability to practice what I preach. When I spend, it’s on something that I truly value — and if it’s to meet a need, I want to make sure what I buy is meeting that need 100 percent, instead of trying to put money towards something that money can’t buy.

Dana: What I’ve learned from writing about personal finance is this empowerment of understanding how things work. How our financial systems work and how they interact with our culture and our political systems. 

So much of financial education is about telling people the right and wrong things to do, and that isn’t accurate for everyone. Once you understand how things work, you can find out what’s actually right for you — and you can understand why certain things don’t work for some people. Then you can take what works for you and do what’s going to work best in your life, instead of doing whatever someone else told you is the right thing.

On the Money is a monthly advice column. If you want advice on spending, saving, or investing — or any of the complicated emotions that may come up as you prepare to make big financial decisions — you can submit your question on this form. Here, we answer a question asked by a Vox reader, which has been edited and condensed.

This falls into the category of “complicated emotions that may come up as you prepare to make big financial decisions:” I am 65 and thinking of retiring. I am working with an investment adviser. We have tentatively set the end of 2025 as my retirement date, and I can see on paper that this would be workable, but my two kids (in their mid-20s) will still need a lot of help financially beyond that —  more help than I can give them once I’m no longer working. 

Knowing my own emotional tendencies, I would feel guilty and selfish to make my retirement a higher priority than continuing to help them as I am now doing, but I also think I’d feel increasingly resentful the longer I worked past 2025. Can personal finance even provide an answer to this dilemma, assuming that we’d all survive either way?

Dear Thinking of Retiring,

It’s good that you wrote me when you did because we’ve just turned the page on a new year — which means you can make a New Year’s resolution to solve this problem in a way that does not leave you feeling guilty and resentful. 

Start by talking to your investment adviser. When this person tells you that you can retire at the end of 2025, what do they specifically mean? You told me that you can give your children financial help while you’re working but that you do not anticipate being able to provide help after you retire. Does this mean you’ll be starting your retirement on a minimal budget with very little wiggle room? This could be a problem in the long term, and not just for your children. 

Look carefully at how much income you might have as a retiree, and then ask yourself what you hope to do in your retirement. A life in which you do not have extra money to help your children may also be a life in which you do not have extra money to take a vacation or move into a new home or cover a significant unexpected expense. 

On that note, you should think carefully about the types of expenses you can reasonably expect over the next few decades. Your children may get married, for example. You may have grandchildren whom you want to visit regularly. Even if you aren’t the type of parent who decides to help your children with educational expenses or down payments — and you don’t have to be — it’s reasonable to expect that you’ll put at least some money toward your continued relationship. Although you didn’t mention any responsibilities toward the generation above you, it’s also reasonable for a retiree to anticipate putting both money and time toward the care of parents or in-laws. 

With that in mind, take some time to talk to your children about their expectations and goals, both in terms of their own financial stability as well as any help they may be anticipating. If you have provided your children with large amounts of financial support in the past and/or bailed them out of various financial jams, they have a right to know that this support may change in the future. You may also feel better about your decision to retire if you know that your children have a plan that includes skill-building, career-building, and basic financial management. Can they make and stick to a budget? Can they save for the future? Do they have goals they’re working toward?

If your children aren’t taking money seriously right now, don’t worry — and don’t feel guilty. You all have a year to sort through this problem, which could include honest conversations about what each of you can afford and what types of expenses you might need to prepare for. A 20-something may need to be ready to move to a new city for a higher-paying job, for example — and a 60-something may need to be ready to cover airfare for the holidays. 

The more you talk about what each of you want and need, the more you can prepare for your own retirement. I do not suggest continuing to work solely for the benefit of your adult children, since you already have mixed emotions about this idea — and the last thing I want is for you to spend 2025 feeling miserable about the way you are earning and spending your money. But you’ve got a year to figure out whether you can actually retire on your current savings and investments and whether your children have enough knowledge and preparedness to handle the next phase of their lives without your immediate financial help. These conversations can give you a clearer picture of what the future might look like. Since everyone will “survive either way,” as you put it, there’s an opportunity to make positive, productive choices without the pressures associated with scarcity. Use that privilege wisely.

So that’s your assignment for 2025 — or, if you prefer, your New Year’s resolution. Get these issues resolved while you’re still working so you know when you can retire without guilt.

On the Money is a monthly advice column. If you want advice on spending, saving, or investing — or any of the complicated emotions that may come up as you prepare to make big financial decisions — you can submit your question on this form. Here, we answer a question asked by Vox readers, which have been edited and condensed.

Why is money so hard?

Dear Letter Writer,

You asked this question at the beginning of the year; now that we are coming to its end, I may have an appropriate framework through which to answer it.

The literal answer is that money is difficult because it is a representation of value. Unfortunately, we are often unable to earn and spend our money according to what we actually value. Various industries are motivated to pinpoint the exact minimum amount of money we’re willing to accept for various jobs and the exact maximum amount of money we are willing to pay for particular items, trusting that we’ll give them exactly what they ask for. Much of what is left over goes toward experiences we don’t actually value and expenses we can’t necessarily control.

The metaphorical answer is a little more complicated:

It is the holiday season for many of us, a time when we demonstrate our values to one another. The person who values frugality shops the sales, the person who values extravagance shops full price, the person who values their own skills handcrafts ornaments or puts calligraphed labels on jars of jam — but no matter what you choose, you generally end up spending an unusual amount of time or an unusual amount of money. 

Most of us pick the money route, and even the people who choose the DIY route have to purchase the Mason jars and calligraphy pens. So we set budgets — some of us, anyway — and divide our holiday shopping lists into affordable allotments. This much money for gifts, this much money for clothing, this much money for travel, and so on.

At this point, if we’re thinking practically, we book the travel first. Somehow it costs more than we were expecting, even if we set aside more money than we did last year. This is because the airlines, rental car companies, and hotels understand that reaching a particular destination for the holidays is a top-level value in nearly everybody’s minds — a value that is taught and reinforced by much of the media associated with the holiday season, as well as societal expectations — and these companies can charge precisely what the market will bear.

So we end up booking the flights or the rental cars or the hotel rooms, or we look at the cost of gas and estimate how much it might cost us to drive, and whether it would be possible to pack a cooler instead of stopping to eat along the way, and then we tell ourselves that we can always make our budget balance by spending a little less on the presents.

Except we don’t want to spend less on the presents. We want to let the people we love know how much we love them, and the amount we love them hasn’t changed since we booked our flights, so why should the amount we spend on their gifts have to decrease? We don’t want our families to have to bear the burden of an inadequate budget. We don’t want to face disappointed children or disapproving relatives. 

And so — because we value the people we love, and because we very much value the idea of ourselves as generous and holiday-spirited — we spend more than we can afford.

Sometimes this overspending comes from what might be considered a necessity. This is the year to give your child a bike, for example, because next year might be too late. However, many of us quickly get into the kind of overspending that is less useful. This would be the “well, we’re giving Nana three gifts, so I had better make sure Pop-Pop has three gifts too” thing, the kind of financial imprudence that leads to comically unnecessary novelty purchases or the dregs of drugstore sales bins. 

Nobody wants these gifts, and yet we feel as though they ought to be given, and so we exchange money we cannot afford or have not yet earned.

There’s another level of overspending that occurs when someone else tasks you with a holiday responsibility you weren’t expecting. This year, your team is doing Secret Santa. This year, you got invited to a themed party that requires you to buy an ugly sweater or a silly hat. This year, Nana and Pop-Pop want everyone to send in family photos so they can make a calendar. This year, your neighbor gave you a gift, and so you had better give them something too.

And so we spend, and spend, and spend, and tell ourselves we’ll sort it out later, maybe we’ll get a raise or pick up a side hustle or apply for a 0 percent intro APR balance transfer credit card — because that’s what we’re supposed to do at this time of year. Everything in us and around us tells us to book the travel and buy the presents and attend the parties and take the pictures, and if we don’t enjoy all of this as much as we ought to, or can’t afford to spend as much as we want to, we’ve failed.

That is why money is hard, dear Letter Writer: Because the way we spend the holidays is the way we spend our lives.

Fortunately, New Year’s resolutions are just around the corner. This year, consider resolving to understand both what you value and what value you have to offer. From there, you may be able to improve the rate at which you exchange your value for money and exchange your money for what you value. It’s the only way through this mess of personal finance, and it isn’t easy — but I’ve done it, and other people I know have done it, so I hope you can too.

On the Money is a monthly advice column. If you want advice on spending, saving, or investing — or any of the complicated emotions that may come up as you prepare to make big financial decisions — you can submit your question on this form. Here, we answer two questions asked by Vox readers, which have been edited and condensed.

I have a personal adviser that I pay to manage my investment portfolio — but I’m not sure whether I should continue paying this adviser. My investments are with Vanguard because of its low ETF fees. I have a total of four ETFs: VTI, VXUS, BND and BNDX. These ETFs are spread out between three accounts. My wife and I each have a Roth IRA, and we also have a taxable brokerage account. Two of the ETFs are in each account. Should I continue paying my Vanguard advisor to manage this portfolio? 

Dear Advised,

The portfolio your adviser created for you is extremely well balanced. It’s also extremely diversified, in the sense that it includes an enormous variety of individual investments within four larger categories. You and your wife are currently invested in four exchange-traded funds (ETFs) that are designed to track broad segments of the market:

• VTI: the Vanguard Total Stock Market Index Fund ETF
• VXUS: the Vanguard Total International Stock Index Fund ETF
• BND: the Vanguard Total Bond Market Index Fund ETF
• BNDX: the Vanguard Total International Bond Index Fund ETF

In other words, you are invested in four ETFs that are made up of many, many smaller investments within the indices listed above — total stock, total international stock, total bond, and total international bond. Since you’re effectively invested in everything, your portfolio is likely to increase in value as long as the market itself doesn’t crash.  

This kind of investment strategy is designed to get you through the ups and downs of the market without a lot of risk, especially because I’m assuming your adviser is gradually adjusting the ratio of stocks to bonds as you and your wife approach retirement. Stocks offer greater growth potential than bonds but come with greater volatility, so a good investment adviser will slowly shift more of your investments over to bonds as you age. (Since bonds are less volatile, a bond-heavy portfolio should lose less of its value if the market drops before or during your retirement years.)

That said, a target-date retirement fund does exactly the same thing, and you don’t need to pay an adviser for that. 

Vanguard personal advisers offer additional services beyond portfolio rebalancing, including guidance on how to withdraw money during retirement and strategies on how to manage the taxes associated with investments, so you may have the opportunity to get more out of your advisor than you would out of a target-date fund. 

It’s also worth noting that your typical target-date retirement fund is likely to come with a higher expense ratio than a Vanguard ETF, costing you more money over time. VFIFX, for example, which is Vanguard’s target-date retirement fund for people planning to retire between 2048 and 2052, has an expense ratio of 0.08 percent. Your VTI ETF only has an expense ratio of 0.03 percent, which means that less of your money goes towards administering the fund.

I’m not suggesting that you drop your adviser and transfer all of your investments into a target-date retirement fund. I’m not a professional investment advisor myself, which means I cannot provide specific investment advice — plus, I have an extremely limited knowledge of your situation. However, I can suggest that you talk to your adviser about the full range of services they offer and ask yourself whether you are interested in taking advantage of those services.

If you decide you’d rather manage your investments on your own, you could always keep your current portfolio as-is and rebalance it yourself, adjusting the percentage of stocks to bonds every few years. 

If you are planning to retire in 2050, for example, you can take a look at Vanguard’s VFIFX glidepath and literally replicate it with your own ETFs. At age 40, for example, VFIFX puts roughly 55 percent of your investments in stocks, 35 percent in international stocks, 8 percent in bonds, and 2 percent in international bonds. By the time you reach age 65, VFIFX has adjusted your investments to include 30 percent stocks, 20 percent international stocks, 25 percent bonds, 15 percent international bonds, and the remaining 10 percent in short-term TIPS, which are inflation-protected securities.

If that sounds too confusing, or if you aren’t sure whether you have enough time to schedule and track regular portfolio reallocations, you may want to just stick with your current adviser. 

It’s also worth noting that a good investment adviser may be able to keep you from making impulsive decisions, such as selling during a temporary downturn — and may also be able to advise you on other financial issues such as how much to withdraw during retirement. They may even be able to help you with estate planning, if that’s important to you and your wife. Feel free to ask your advisor what you can expect over the next few decades, and use that response to help you decide whether or not to maintain the relationship.

No matter what you decide to do next, your current portfolio puts you in a great place to get started.

On the Money is a monthly advice column. If you want advice on spending, saving, or investing — or any of the complicated emotions that may come up as you prepare to make big financial decisions — you can submit your question on this form. Here, we answer two questions asked by Vox readers, which have been edited and condensed.

I’m debating whether to pay off a personal loan with a savings account or keep the savings and keep paying the loan. I have no other debts but that personal loan of $25K. I’m 42 years old with two jobs in Hawai’i, and it’s been frustrating. My thought is to pay it off and start all over with no savings. Please help.

Dear Personal Loan,

I followed up with you to get some more information about your finances, including the interest rate on your loan, and here are the numbers worth considering:

• Personal loan interest: 5.75%
• Monthly minimum payment: $738
• Monthly income from both jobs: $1,500
• Monthly discretionary income: $200

The original balance on your 60-month loan was $35,000 when you took it out in August 2023. In a year, you’ve taken the balance down to $24,800, which you accomplished by pulling back on discretionary purchases and putting more money toward your loan. Well done, especially on a budget as tight as yours.

I also learned that your savings account has $5,000 in it and that you’re considering pulling $20,000 out of your life insurance mutual fund. This would leave you with no money in your savings account and no money in your life insurance account — but you’d have no debt.

Is the trade worth it? 

From my perspective, you’ve successfully paid off 30 percent of your personal loan in a single year. If you stick it out for the next two or three years, you could get the personal loan paid off entirely. Yes, that means a few more years of careful budgeting and limited discretionary purchases. It also means putting more than half of your monthly income toward your debt.

If you took the other option — paying off the loan with savings and life insurance — your first priority after paying off your personal loan would be to replenish your savings account. If you save every penny that would have gone toward personal loan payments, you should have the $5,000 taken care of in about six months. 

The trouble is that you won’t have much of an emergency fund if something should happen to you in those six months. Your budget doesn’t give you much extra cash at the end of the month, and the last thing you want to do is turn an unexpected expense into unexpected debt.

Yes, there are scenarios in which a family member could help out, or you could get a 0 percent APR credit card to cover the cost and pay it off before the regular interest rate kicks in. That said, I’d avoid dipping into your savings to pay your loan if at all possible.

The life insurance, on the other hand, has possibilities. If you have a permanent life policy that allows you to withdraw the cash value without any penalty, there’s an argument to be made for paying down $20,000 of your debt right away and paying off the remainder of your personal loan out of your carefully budgeted income. You’d save a lot of money in interest that way, and you’d get to keep your $5,000 emergency fund.

Which means the real question is whether you need the money in your life insurance policy. Do you have dependents who could benefit from the $20,000 if something were to happen to you? The budget you showed me didn’t appear to include expenses related to a partner or children, but I don’t want to assume.

The other question is why you took out the personal loan in the first place. The answer may be personal, but it’s worth considering. In 2023, you borrowed $30,000, and I’d hate to see you find yourself in a situation where you needed to take out another five-figure loan a year from now.

That’s why I’d still recommend paying off the loan the way you’ve been doing. At 5.75 percent APR and $800 in monthly payments, you’ll clear out your debt in two years and 10 months. It’ll cost you $2,112.11 in interest, which may seem like more than you want to pay, but during that time your $5,000 in savings could accumulate as much as $625 in interest (if you have a high-yield savings account with 4.25 percent APY, for example) and your life insurance mutual fund might be earning a 6 percent return.  

You get to decide what’s best for you, but at least you understand your options.

Is it prudent to have a variety of mutual funds, like a work-provided 401(k)/403(b) and a personal IRA, as well as one or two additional investment accounts? Or is it more efficient to have just one account like the work-provided 403(b)?

Dear Prudent,

Employer-sponsored retirement plans are great. I always recommend signing up for them, especially if you get a company match. These plans allow you to save pre-tax dollars, which allows you to put more of your earnings directly into your retirement fund while simultaneously reducing your tax burden. Yes, you will pay taxes on your withdrawals later on, but many people are in a lower tax bracket by then. More importantly, many employers automatically match your 401(k) or 403(b) contributions up to a certain percentage. As the financial advisers like to say, that’s “free money.” 

That said, these kinds of investment accounts are not at all what you’d consider “efficient.” 401(k) accounts, which are designed to help private-sector employees save for their own retirements, and 403(b) accounts, which are often available to nonprofit employees, teachers, and people who work for the government, can help you set aside money for the future — but in many cases, the types of investments you can make through employer-sponsored accounts are relatively limited. Not only are you tied to the investment provider associated with your employer’s plan, but you may only get to choose from a small number of investment options.

If I recall correctly, I didn’t even get to pick my investments the last time I had a 403(b). The onboarding program asked me to select my risk level — low, medium, or high — and then created a portfolio for me.  

Which is all fine and good, and I still recommend signing up for these kinds of things, but the odds are that you’re going to be invested in funds that may offer lower returns and higher expense ratios than what you might get if you opened your own IRA and created your own portfolio after comparing the options available at various top brokerages.

You can’t do anything about returns, of course — not even if you choose the extremely popular total-market funds that people tend to recommend on investing forums — but you can do something about expense ratios. Basically, investment providers determine in advance how much it’s going to cost you for them to manage the fund; they provide that number in the form of an expense ratio, and you can compare expense ratios before you make investments.

Lower expense ratios are generally better, since you get to keep more of the money you invest. 

However, employer-sponsored retirement plan providers don’t really have an incentive to keep expense ratios low because they know you don’t have any other choice. If your employer’s 403(b) is with a certain provider, you can’t just switch your 403(b) investments to a different provider, so you’re stuck paying whatever the provider decides to charge.

This isn’t to suggest that investing in an employer-sponsored account is a waste of money. Employer-sponsored accounts are great, especially for people who might not otherwise be incentivized to save for retirement. It’s just to hint that putting everything into the employer-sponsored retirement account may not be the most efficient use of your money.

I can’t give you investment advice because I’m not an investment adviser, but I can suggest that you contribute as much as is required into your 403(b) to get the tax break and the company match, and put the rest of your retirement savings into an IRA that you can control. Traditional IRAs allow you to contribute pre-tax dollars and reduce your taxable income during your prime earning years, and Roth IRAs allow you to contribute post-tax dollars and withdraw your contributions (but not your returns) ahead of schedule if you need to. Since IRAs max out at a certain dollar amount per year, you may also want to consider opening a brokerage account that isn’t necessarily tied to retirement and continue your investing journey that way.

It’ll take a little extra time to compare all of the possibilities and make the best choices for your financial situation, but it could be worth it.

On the Money is a monthly advice column. If you want advice on spending, saving, or investing — or any of the complicated emotions that may come up as you prepare to make big financial decisions — you can submit your question on this form. Here, we answer two questions asked by Vox readers, which have been edited and condensed.

I’m doing all the normal things to save for retirement (Roth IRA, employer 401(k), match, ETFs, etc) but it still feels like middle-class money (I’m just getting by and won’t have a surplus to pass down). I have excellent credit, so should I take out a low-interest personal loan and invest in ETFs to increase profit? I want to be the first in my family to build generational wealth.

Dear Middle Class,

Taking out a low-interest personal loan and using the money to purchase ETFs is a terrible idea. First of all, even the best personal loans have higher interest rates than they did a few years ago, with APRs of around 8 percent for people with excellent credit. Second of all, the stock market is currently experiencing both record highs and typical volatility — and although you can try to time your purchases to one of the tumbles (otherwise known as “buying the dip”) you may still end up buying in at a relatively high position.

But even if the stock market were at record lows, going into debt to purchase ETFs is still a bad move. I’m assuming you’ll want to hold on to the ETFs for a while, which means that you’ll need a way to pay off the debt while the money you borrowed is locked up in the market. If you have enough extra income to pull that off, why borrow the money in the first place? Why not just put the extra income directly into the market? 

If you were planning on buying and selling ETFs rapidly enough to make debt payments with the returns and have profit left over to reinvest and/or put into savings, well — good luck with that, I guess. Plenty of people have tried day trading, but only a rare few have come out with more money than they put in. 

I’m not saying that there aren’t instances in which going into debt right now in order to increase your net worth in the long term is a smart move — and if you’d like to learn more about that process, including how to use debt to fund long-term investments in housing, education and (in some cases) the market, I recommend reading Thomas J. Anderson’s The Value of Debt in Building Wealth. This book discusses how much debt you might want to take on at different stages of your life, which could serve as a good metric. Anderson’s book also looks at how much you could save and how you might want to manage your assets as you proceed through life — which brings me to the second, more important part of your question.

You want to know how to get out of your middle-class money situation. You want to end each month with a little extra in the bank, and you want to turn that surplus cash into the kind of wealth that can be passed along to the next generation. 

The truth is that this may not be achievable. Our current economic system is designed to keep as many of us living as close to paycheck-to-paycheck as possible. Since you’re in the middle class, your paycheck-to-paycheck life is probably fairly comfortable, all things considered (which is one of the reasons why the system works) and even Anderson’s book about debt and asset management acknowledges that for many of us, the goal isn’t wealth as much as it is equilibrium, which he defines as the ability to meet your financial needs, manage your debt and save enough money for retirement. 

There are ways for people in your situation to accumulate the kind of surplus, post-retirement cash that can be turned into generational wealth, many of which involve serious frugality combined with serious entrepreneurism. (I combined both of those tactics with a series of moves — first to a lower cost-of-living city and then, a few years later, back to the rural area where I grew up.) 

But let’s say that you like your job and you like where you live. Let’s even say that you like the way you spend your money. What else can you pass on to the next generation that could ensure they have a better shot of making it out of the middle-class paycheck-to-paycheck lifestyle?

You already know the answer — and it’s the same as it’s always been. Education. Socialization. The ability to make friends and influence people, combined with the skills required to not only navigate but also contribute to an increasingly complex world. This includes financial management skills, which might not extend to a literal inheritance but could help the next generation proceed through their own paycheck-to-paycheck life in a balanced, thoughtful way.

My wife and I are 65. We have retirement money with half getting interest of 5 percent, and the other half in index funds and big-name non-tech stocks. Is there a way to protect this half from large market drops without buying an annuity or putting it all in cash?

Dear Retirement Money,

If you really want to protect your money from large market drops, consider putting it all into cash as soon as you have what you need to fund your retirement. If you happen to have what you need right now, while the market is at an all-time high, you’re in a best-case scenario.

Keep in mind that “selling your investments” doesn’t mean the same thing as “taking distributions from your retirement accounts.” You may be able to put your retirement money into a HYSA or into CDs without taking distributions, and earn a guaranteed return that could keep pace with inflation. (It looks like you’re already doing something like that with a portion of your retirement savings, and I’m glad to see you’re getting 5 percent interest.) If you’re planning on rolling over a 401(k) to put your money in an IRA that gives you access to one of these low-risk options, you might want to talk to a financial advisor who can help you avoid any unexpected tax issues that sometimes show up when you move money from one kind of retirement account to another.

That said, some people prefer to keep their money in the market for as long as possible, aka “buy and hold,” and that strategy could still work for you as long as you have enough time on the horizon to handle market volatility. If you’re 65, you might have another 30 to 40 investing years ahead of you — which is plenty of time for the market to rise, then drop, then rise again (and then rise and drop a few more times for good measure).

It’s also worth doing the math on whether your investments are likely to ever yield the value you need to support you during retirement. If you aren’t going to earn enough money through investing, then you may need to start thinking about other ways to fund your golden years.

Since I gave the last letter-writer a book recommendation, I’ll give you one as well: Morgan Housel’s The Psychology of Money. Housel writes honestly and carefully about the risks and rewards offered by the stock market, including the risk of large market drops. He explains what people can do to manage those risks and earn as many rewards as possible. He also reminds us that the way we fund retirement today was developed during the 1980s, and we’re still figuring out how to make this new system of 401(k)s and IRAs work for the majority of retirees.

If you want it to work for you, start by assessing how much money you might need for the remainder of your retirement and how much time you have to generate that cash — and then ask yourself how much risk you’re willing to take on.