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Speaker 1: Right now, let's say good morning too, the host of

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Speaker 1: How to Money on KFI every Sunday from noon to two.

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Speaker 2: It's Joel Larsgard.

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Speaker 3: Morning, Joel, Morning Amy.

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Speaker 1: Okay, let's talk about filing taxes, because on January twenty sixth,

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Speaker 1: the IRS started accepting tax returns, and you're saying that

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Speaker 1: refunds are going to be bigger this year.

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Speaker 2: And people can get them quicker.

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Speaker 3: Well, refunds are going to be bigger, right, at least

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Speaker 3: on average. Right, that's not every single person is going

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Speaker 3: to get a bigger refund, but because of the big

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Speaker 3: beautiful bill and some of the kind of you know,

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Speaker 3: expanded salt deduction. If you bought a new car last

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Speaker 3: year and you took out a loan, you're going to

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Speaker 3: get a tax deduction for that. So there's all sorts

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Speaker 3: of like new you know, the no tax on tips

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Speaker 3: and overtime pay. There's just a bunch of new tax

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Speaker 3: policy that is likely going to lead to larger refunds

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Speaker 3: for a decent chunk of folks. And the average refund

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Speaker 3: last year was in the range of three thousand dollars,

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Speaker 3: and so this year, yeah, we might see a lot

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Speaker 3: more people, you know, in the upper three thousand dollars

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Speaker 3: range of a tax refund. And you know that this

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Speaker 3: is something that's widely debated in personal finance circles. It's

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Speaker 3: like should you or shouldn't you? You know, it's it's

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Speaker 3: a yes, it's an interest free loan to the government,

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Speaker 3: but at the same time it's a forced method of

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Speaker 3: savings for many people. And you can do it. It's

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Speaker 3: like the only time of year some people, a lot

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Speaker 3: of people get a big chunk of money to do

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Speaker 3: something awesome with. So whether that's you know, paying down

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Speaker 3: credit card debt, fully funding your wroth IRA, expanding your

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Speaker 3: your efund, whatever it is, I love to see people

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Speaker 3: use that lump some to do something like that with.

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Speaker 3: But you mentioned being able to get that loan earlier,

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Speaker 3: and you're right, like, there's I'm seeing the ads already

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Speaker 3: for tax tax refund advanced loans And essentially, if you

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Speaker 3: file your taxes with one of the major services you

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Speaker 3: you can get a loan. It's it's basically a loan

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Speaker 3: on the money that's coming your way. But hey, you

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Speaker 3: know you probably want it today instead of next week, right,

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Speaker 3: And of people are gonna be like yeah, I mean yeah,

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Speaker 3: it'd be nice to have that money today and not

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Speaker 3: next week, but there are often fees or you get

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Speaker 3: that money put on a preloaded debit card, and so

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Speaker 3: there are issues with those tax refund advanced loans that

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Speaker 3: I just want people to stay clear of them and

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Speaker 3: just realize, hey, you know what, actually the direct deposit

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Speaker 3: from the federal government comes fairly quickly. Don't fall. Don't

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Speaker 3: fall victim to those tax advanced loans.

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Speaker 1: That's what I was gonna say, because it seems like

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Speaker 1: like the California comes Well maybe it's the other way around.

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Speaker 1: I can't remember, but either way, they come pretty quickly.

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Speaker 1: It's a matter of two or three weeks at the most,

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Speaker 1: and I'm always surprised at how quick it is. So

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Speaker 1: if you know the money's coming, just hold your horse's kids,

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Speaker 1: it's coming.

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Speaker 3: Exactly, and it's it's It reminds me of the kind

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Speaker 3: of paycheck loans that people can get instead of And

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Speaker 3: there's there are these apps out there that say, oh, well,

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Speaker 3: why not get paid today instead of waiting until next Friday,

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Speaker 3: And then there's like a suggested tip, and most people

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Speaker 3: feel obligated to tip the app because hey, you know,

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Speaker 3: the app's doing them a solid. It's letting them get

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Speaker 3: their paycheck more quickly. You have access to the money

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Speaker 3: they've earned immediately. But when you factor in how much

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Speaker 3: the tip costs, the you know, the the actual interest

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Speaker 3: you're paying if you were to considered interest instead of

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Speaker 3: just like a tip, is astronomical. And so I really

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Speaker 3: dislike those apps significantly, And I think, hey, just wait

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Speaker 3: till Friday for payday. And the same is true for

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Speaker 3: these tax refund advanced loans. Just avoid them.

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Speaker 1: Okay, we're spending a lot of money on beauty products.

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Speaker 1: I know I invest a small fortune, But how is

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Speaker 1: this because of the what's called the lipstick effect?

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Speaker 3: Well, you and Kono both right, he's uh, he looks

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Speaker 3: he looks great today. Yeah, this is it is so interesting.

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Speaker 3: This is like a This is a way that economists

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Speaker 3: talk about when tough, When times get a little tougher economically,

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Speaker 3: people still want to be to splurge on luxury items.

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Speaker 3: And so maybe it's not a burke and handbag because

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Speaker 3: oh my gosh, well clearly that's far too expensive. But

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Speaker 3: it's it's smaller luxuries that people end up splurging on

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Speaker 3: here or there, and and beauty I don't know why

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Speaker 3: they call it the lipstick effect. I guess just because

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Speaker 3: that feels like a small luxury, right that, Oh yeah,

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Speaker 3: the twelve dollars lipstick just feels I'll grab that and

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Speaker 3: that'll you know, that's enough to kind of make me

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Speaker 3: make me feel good and move on with my day.

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Speaker 3: And I'm I'm I have no problem with lipstick, right,

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Speaker 3: my wife wears lipstick. I don't. But whether it's like

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Speaker 3: face cream or there's so many different things that might

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Speaker 3: in a moment of weakness just be like pull out

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Speaker 3: our wallet and I've got again no problem with you

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Speaker 3: budgeting and saying, listen, that's that's important to me. I'm

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Speaker 3: going to spend on that because that matters, especially the

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Speaker 3: ladies out there, right, That's something that typically matters more

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Speaker 3: to them than it matters to us dudes. But I

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Speaker 3: guess it just is another or reason when you fall

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Speaker 3: prey to that. Sometimes it can feel like little dribs

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Speaker 3: and drabs of spending, or like there was a study

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Speaker 3: I read about yesterday's essentially saying that we find ourselves

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Speaker 3: spending for emotional reasons something like three times a week, right,

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Speaker 3: and we end up regretting those emotional spends, because what

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Speaker 3: happens is we're spending for an emotional reason in the moment,

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Speaker 3: and we don't have the money then to spend towards

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Speaker 3: those bigger goals, those like maybe the trip we wanted

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Speaker 3: to take or the car we wanted to buy. Because

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Speaker 3: it's a bunch of small purchases along the way, it's

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Speaker 3: like penny wise, pound foolish. And this lipstick effect is

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Speaker 3: I think, just a good example. It highlights the reality

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Speaker 3: that most of us fall prey to at one point

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Speaker 3: or another, and it's good to at least be aware

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Speaker 3: of it.

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Speaker 1: And when it comes to make up, a highlighter is

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Speaker 1: very important. Joel Okay, Tipping fatigue steal a real thing

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Speaker 1: for people, and I can say that I agree.

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Speaker 2: I have tipping fatigue.

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Speaker 3: Yeah, I mean, I think we all do. And the

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Speaker 3: reason this is kind of on my radar right now

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Speaker 3: is that New York City has this new tipping prompt

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Speaker 3: so when you order on door Dash or uber ride

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Speaker 3: or something like that, there's a minimum suggested tip of

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Speaker 3: ten percent. And in some ways I'm totally fine with

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Speaker 3: that because there's something about like we should be generous tippers, right,

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Speaker 3: especially if it's I'm eitherfore avoiding the purchase altogether if

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Speaker 3: you can't tip generously, like eat in and cook your

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Speaker 3: own meal, if you can't tip the server right. But

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Speaker 3: at the same time, there was an analysis by The

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Speaker 3: New York Times and it showed that the number of

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Speaker 3: retailers accepting tips has roughly doubled since twenty nineteen. So

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Speaker 3: we're just being asked for to tip in more places,

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Speaker 3: places that we never used to be asked to tip.

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Speaker 3: And the average American spends almost five hundred dollars annually

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Speaker 3: on tips. And the suggestion tip this suggested tips. I

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Speaker 3: don't know if you've noticed this. Amy are all over

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Speaker 3: the place. It's like I can be at a counter

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Speaker 3: service restaurant and it's like, do you want to tip

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Speaker 3: twenty twenty five or thirty percent? And then I can

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Speaker 3: be at a sit down restaurant and it's like, do

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Speaker 3: you want to tip twelve, fifteen or eighteen percent? And

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Speaker 3: I'm like, that does not compute because at the counter

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Speaker 3: service I'm I'm personally gonna tip less than I am

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Speaker 3: when someone's actually waiting on me and bringing everything to

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Speaker 3: my table and taking my order. So for for consumers,

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Speaker 3: I think what you need to know is just have

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Speaker 3: an idea of what you feel comfortable tipping ahead of time.

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Speaker 3: I think when the person turns around the iPad, oftentimes

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Speaker 3: we feel guilt and we're like, I guess, I don't know.

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Speaker 3: I gotta choose words.

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Speaker 2: They're looking at you, that's.

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Speaker 1: Right, looking at your face, and it's annoying because they

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Speaker 1: didn't do anything.

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Speaker 3: To earn a tip, right, it's so uncomforon can tell.

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Speaker 2: The fatigue in my voice, can't you.

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Speaker 3: We're all feeling it. And again, I think it's really

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Speaker 3: hard to talk about this subject without sounding like a

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Speaker 3: curmudgeon who doesn't want to tip people for doing good work.

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Speaker 3: And that's not the case. The case is we're just

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Speaker 3: being asked to tip in so many more places, and

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Speaker 3: so we have to, like, hey, think ahead of time.

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Speaker 3: When you go to the coffee shop, how much do

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Speaker 3: you feel comfortable tipping?

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Speaker 1: What is it?

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Speaker 3: Is it fifty cents based on a three dollars drink?

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Speaker 3: Is it a dollar per drink? No matter what, just

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Speaker 3: know what you feel comfortable tipping. And that way, I

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Speaker 3: think when you have it decided ahead of time, you

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Speaker 3: feel less pressure in the moment when the iPad gets

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Speaker 3: turned around to just quickly click something that you otherwise

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Speaker 3: don't feel like the service was actually quite worth that.

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Speaker 1: Yeah, okay, well I'm going to go and do some

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Speaker 1: yoga or something or meditate to calm me down because

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Speaker 1: this tipping thing always gets me so riled up.

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Speaker 3: We can find out your yoga teacher is going to

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Speaker 3: ask you for a tip.

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Speaker 2: I know, right, oh god, notes all right.

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Speaker 1: We can find out more great financial advice from our

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Speaker 1: friend Joel Larsgard right here on KFI. The show is

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Speaker 1: called How to Money. It's Sundays from noon to two.

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Speaker 2: Thanks Joel. You can also follow Joel at how to Money.

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Speaker 2: Joel have a great day, are you too?

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Speaker 3: Thanks Amy,