Speaker 1: Welcome to How the Money. I'm Joel and I and
Speaker 1: Matt and today we're discussing open enrollment, creditors in your
Speaker 1: d m s, and falling rents. Yeah, buddy, this is
Speaker 1: our Friday flight episode where we look at the headlines,
Speaker 1: where we specifically look to the non political headlines and
Speaker 1: we figure out how it is that those stories are
Speaker 1: going to affect us and our money, because you know,
Speaker 1: I have to find any non political headlines this week,
Speaker 1: by the way, it was actually we have a lot.
Speaker 1: I was, I was gonna surprised we there there's a
Speaker 1: good amount that that that was going on this week.
Speaker 1: But yeah, I mean that means that there have been
Speaker 1: a ton of political news and they do have an
Speaker 1: impact here and there on our money. But dude, in
Speaker 1: the end, there is so much more that we can
Speaker 1: do ourselves. There are steps that we can take that
Speaker 1: that that have nothing to do with politics and policy.
Speaker 1: We actually have like a lot of great stories that
Speaker 1: are going to actually help people with their personal finances
Speaker 1: this week on today's episode. So, and that's what we
Speaker 1: do every Friday, every Friday. We look at the news
Speaker 1: and figure out how this has to do with your money.
Speaker 1: Before you get to that real quick. I want to
Speaker 1: let you know that I we had a tropical storm
Speaker 1: come through Atlanta. I know it just over a week ago,
Speaker 1: and I had a limb fall down off a tree
Speaker 1: and bust my rear window in the Nissan leaf. You're
Speaker 1: not sharing this with me, You're sharing this with the
Speaker 1: listeners because because I knew that sometimes we pretend that
Speaker 1: we don't know what the other ones about to say.
Speaker 1: But this is definitely an instance where you sent me
Speaker 1: that picture that morning and I was like, oh no, dude,
Speaker 1: I'm so sorry. Who would have thought that a category
Speaker 1: to hurricane coming ashore in like New Orleans or wherever
Speaker 1: it landed was going to equal us losing power for
Speaker 1: I mean basically like multiple days around Halloween and when
Speaker 1: you when you rode around town, the trees that were down,
Speaker 1: it was just insane. Yeah, I don't know what happened,
Speaker 1: but the amount of wind man that that, Yeah, it
Speaker 1: took down trees in particular, like in our neighborhoods where
Speaker 1: we've got these hundred year old oaks and branches down
Speaker 1: and yeah, all that action. But yeah, the funniest thing
Speaker 1: though about your your story, your windshield was the the
Speaker 1: insurance conversation that you had. Yeah, so with your wife. Well,
Speaker 1: like she asked me, why are you are we gonna
Speaker 1: file an insurance claim like most people probably think to do.
Speaker 1: I had multiple neighbors saying the same thing, Oh, I'm
Speaker 1: sorry about your window. Have you talked to insurance yet? Um?
Speaker 1: And my response, you know, trying to be the super nice,
Speaker 1: not to preachy financial guy, like no, I'm not going
Speaker 1: to talk to insurance. Crazy, it's it's literally. I called
Speaker 1: up a mobile glass repair guy. He came out within
Speaker 1: a couple of days, had to order order the new
Speaker 1: windshield and it was four fifteen dollars was the total
Speaker 1: out the door price to get my car back up
Speaker 1: to ye for fifteen that's nothing, not too bad. Yeah.
Speaker 1: So in a deductible, the minimum deductible on a car
Speaker 1: is typically either two fifty or five hundred, or it
Speaker 1: should be that much or should be more like you
Speaker 1: should have your deductible set even higher, which I'd be
Speaker 1: lower because some people have it set lower, right like
Speaker 1: a round a hunter bucks, because they think, well, I
Speaker 1: don't want to have to pay a you know, full
Speaker 1: four bucks. But the main reason that we do encourage
Speaker 1: folks to raise those deductibles and pay out a pocket
Speaker 1: is to avoid making claims with your insurance company in
Speaker 1: order to keep your premiums low, because the more often
Speaker 1: you use it, you have a higher likelihood of seeing
Speaker 1: your premiums go up. Uh, and those increased rates due
Speaker 1: to maybe higher risk that the insurer proceeds for you
Speaker 1: sticks around four years and years years, way more than
Speaker 1: just a few hundred bucks. Now that's right, that's right.
Speaker 1: So I would rather pay it out a pocket one
Speaker 1: because my deductible is higher than the cost of your
Speaker 1: replacing you got the windows. No, I think my inductible
Speaker 1: is at a thousand, So yeah, there you go. That's
Speaker 1: that's how you get that real saving. The highest amount
Speaker 1: that I can said in my deductible is that five
Speaker 1: thousand dollars. Sadly the interurance company won't let you go
Speaker 1: that high. Um, but but yeah, I just want to
Speaker 1: let let everybody know that that those minor things. Don't
Speaker 1: even call your insurance company about something that's just a
Speaker 1: minor accident. Get a quote first to see whether you
Speaker 1: can afford to replace it on your own, and at
Speaker 1: the same time, UH, call your insurer and see well
Speaker 1: if I do up my deductible, how much can I
Speaker 1: save over the next twelve months um and and then
Speaker 1: pocket that savings put it in a savings account so
Speaker 1: you can be prepared for the next possible accident to
Speaker 1: where you're essentially self insured and you can afford to
Speaker 1: take care of that, you know, busted window, um or
Speaker 1: minor scratch on your own. Yeah. Luckily we didn't have
Speaker 1: any big limbs come down and around our house, but
Speaker 1: if they had been, I think we maybe, hopefully we
Speaker 1: would have avoided a branch because when in the fall,
Speaker 1: I tend to park the van out on the street
Speaker 1: because all the leaves fall on top the car. Man,
Speaker 1: it gets so filthy, you know, like all the leaves
Speaker 1: that get down into like the air vents down into
Speaker 1: the little trim and you kind of hit it with
Speaker 1: a blower and then it like shoots it down further
Speaker 1: into it basically a part of the vehicle at that point.
Speaker 1: But yeah, man, sorry that that happened to you. But
Speaker 1: at the same time, I'm glad you're able to get
Speaker 1: that fixed pretty quickly and easily. Yeah, especially as you're
Speaker 1: riding around town. I'm riding around my bike checking things out,
Speaker 1: and just so many trees down, cars damaged severely. Um,
Speaker 1: some people had had homes damaged, of course, and and
Speaker 1: so yeah, I a bad for those people who have
Speaker 1: like a lot of damage. To take care of a
Speaker 1: busted windshield really not that big a deal in the
Speaker 1: scheme of things, Yeah, not that big of a deal. Man.
Speaker 1: Let's let's continue to talk about some of the stories
Speaker 1: that we came across this week, and let's talk about rent.
Speaker 1: The pandemic has had a pretty meaningful impact on where
Speaker 1: people want to live. There have been a lot of
Speaker 1: stories about people fleeing cities like New York and San Francisco.
Speaker 1: Maybe you've seen podcast episodes out there saying like our
Speaker 1: city is dead. I don't know, it's a it's a question,
Speaker 1: it's a debate for us. But rents are falling in
Speaker 1: many US cities right now because of this lack of demand. Uh,
Speaker 1: this makes sense, right, because you know, the things that
Speaker 1: people love about living in these cities has changed dramatically
Speaker 1: due to COVID. I don't know when there's been this
Speaker 1: kind of period of time where there weren't Broadway players
Speaker 1: going on in New York, I don't think ever. And
Speaker 1: we saw in Bloomberg that They noted that the average
Speaker 1: rents in thirty core cities have dropped more than five percent,
Speaker 1: while average rents in the suburbs of those cities have
Speaker 1: inched up half a percentage point. Again, in cities like
Speaker 1: San Francisco and New York, it's even more. I think
Speaker 1: maybe you know it's it's down more like fifteen percent.
Speaker 1: And these rent price dynamics have the big impact on
Speaker 1: on how you should proceed if you are a renter,
Speaker 1: in particular, if you're looking at maybe uh, resigning that lease,
Speaker 1: or maybe you're looking at a new place. Yeah, totally,
Speaker 1: if you're resigning a lease in the near future, chances
Speaker 1: are you should be paying a lot less and then
Speaker 1: you're paying last year, especially if you live in one
Speaker 1: of these core cities. Knowing, for example, that like in Manhattan,
Speaker 1: Brooklyn or Queens that that rents have plummeted um and
Speaker 1: that the new normal for monthly rent is quite a
Speaker 1: bit less than last year. When you sign your lease,
Speaker 1: that gives you an edge when you're negotiating with your
Speaker 1: current landlord or you're looking around shopping around to find
Speaker 1: another place to live. Um Inventory is way up in
Speaker 1: these locations, So just a couple of tips. Since rents
Speaker 1: are down, don't get married to a particular building or
Speaker 1: a unit. Don't get obsessed with one place and decide
Speaker 1: that you have to have it. The more flexible you
Speaker 1: can be about the place you're willing to live, the
Speaker 1: more you can potentially save. And also to be flexible
Speaker 1: about the terms. If a landlord wants, you know, a
Speaker 1: six month or one year or maybe even like a
Speaker 1: two year lease right now, maybe they're worried about the
Speaker 1: potential for m rents to to drop you in further
Speaker 1: in the coming months. Well, the more you can be flexible,
Speaker 1: the higher likelihood that you'll be able to save money
Speaker 1: on your rent every every month. So obviously we're in
Speaker 1: an odd time. But yeah, you use these falling rent
Speaker 1: prices to your advantage as a renter. Yeah, definitely, man.
Speaker 1: And it's also I think worth pointing out to kind
Speaker 1: of approach some of these stories with a level head,
Speaker 1: because I know when I see a story like this,
Speaker 1: it makes me think, oh, there's an opportunity here, like
Speaker 1: now is the time to live in New York City.
Speaker 1: But like the price, uh, you know, rent prices, it's
Speaker 1: it's only one factor, it's only one reason that you
Speaker 1: should consider moving if you are considered moving at all,
Speaker 1: and so it's it's again something you do want to
Speaker 1: keep in mind. But at the same time, that shouldn't
Speaker 1: be your only reason to you know, one maybe uproot
Speaker 1: yourself or even your family to someplace totally new. Let's
Speaker 1: keep moving man. It's uh, it's enrollment season when it
Speaker 1: comes to healthcare, and we want to specifically talk about
Speaker 1: h s A s, which our health savings accounts. And
Speaker 1: we saw recently that only six percent of people that
Speaker 1: contribute to an h s A actually invest inside of it.
Speaker 1: And this is according to the Employee Benefits Research Institute.
Speaker 1: That is not good, man. Yeah, I would much I
Speaker 1: would like to see a lot more people actually investing
Speaker 1: and not just having that money sitting there as cash.
Speaker 1: Because h A s are are pretty great as a
Speaker 1: vehicle for paying for current medical necessities while avoiding tax
Speaker 1: on that money. But hs A s are overwhelmingly excellent
Speaker 1: if you invest that money for decades instead. Back an
Speaker 1: episode one and five, we discussed hs A s in details,
Speaker 1: so check that out if you want all the details.
Speaker 1: But yeah, especially since we are in the open enrollment season.
Speaker 1: You know, if your health is in good condition. If
Speaker 1: you're enrolling in an hs A eligible healthcare plan. Uh.
Speaker 1: And if you want to invest more for the future,
Speaker 1: go the hs A route. And you know, don't just
Speaker 1: actually stick money, stick cash inside that HUSA where it
Speaker 1: sits there as cash. Make sure that you are actually
Speaker 1: investing the money within that account. That's right. And two
Speaker 1: of our favorite companies, by the way for opening an
Speaker 1: hs A with our fidelity and Lively, because of the
Speaker 1: low fees that they offer and the awesome access to
Speaker 1: investment options. So we'll link to both of those in
Speaker 1: our show notes. Last week, we actually talked about changing
Speaker 1: tax brackets Matt, and then a minor increase in the
Speaker 1: amount that people can save in a set bi A
Speaker 1: I think an additional thousand bucks uh coming up the
Speaker 1: next year the new I R S guidelines. Yeah, exactly.
Speaker 1: And you know what, the h s A actually got
Speaker 1: a little bit of a bump up to an extra
Speaker 1: fifty bucks I think it was so Yeah, and maybe
Speaker 1: in a hundred bucks for families. So the new hs
Speaker 1: A contribution limits are thirty six hundred for individuals and
Speaker 1: families and a little extra note two people over fifty five,
Speaker 1: but they can save an extra thousand dollars a year. Yeah,
Speaker 1: so don't neglect the h s A. You know, Matt
Speaker 1: and I, we really do think it's one of the
Speaker 1: best retirement plans out there if you use it correctly,
Speaker 1: because you're never ever taxed on any of that money,
Speaker 1: which is why it's so important to not be with
Speaker 1: the of people who aren't investing inside of it. Be
Speaker 1: like those six percent of people and start investing inside
Speaker 1: of your hs A because it's just one of the
Speaker 1: best ways to long term invest for your future. Yeah,
Speaker 1: that's right. Pay for those medical expenses out of pocket,
Speaker 1: and try not to touch that HSA money. Treat it
Speaker 1: more like a retirement account, all right. So there's an
Speaker 1: awful new debt collector rule jol via the Consumer Financial
Speaker 1: Protection Bureau also known as the CFPB. They just finalized
Speaker 1: a rule this week that will allow debt collectors to
Speaker 1: contact consumers by email, texts, and by social media like Facebook, Twitter,
Speaker 1: and Instagram. Like, seriously, what is up with that? This is?
Speaker 1: This is such bad news. Consumer reports that they say
Speaker 1: that each creditor will be able to have the ability
Speaker 1: to send an unlimited number of texts, emails, in social
Speaker 1: media messages to you. So that's where the sliding into
Speaker 1: the d m S title came from. That we mentioned
Speaker 1: like I'm not already getting enough spam like on social
Speaker 1: media and in my text message in box. It's it's
Speaker 1: terrible considering you know that this is an industry that
Speaker 1: is like already willing to stoop to some really low
Speaker 1: levels in order to get paid. This is bad news
Speaker 1: for those who owe money. Yeah, and Matt, As it
Speaker 1: turns out a lot of Americans do owe money right
Speaker 1: According to the National Consumer Law Center, one in four
Speaker 1: adults have a bill that is in collections at any
Speaker 1: given time, So this is going to have an impact
Speaker 1: on a whole lot of Americans. And the CFPV did
Speaker 1: say that consumers can opt out of these updated electronic
Speaker 1: communication methods, but they haven't explained how that's going to
Speaker 1: be implemented. So you know, hopefully we'll get an update
Speaker 1: on that and be able to relay that to everyone
Speaker 1: how to to avoid at debt collectors in your d
Speaker 1: m S because it sounds terrible. But even though this
Speaker 1: is the Consumer Financial Protection Bureau who issued this new rule,
Speaker 1: it certainly doesn't seem like this is a federal bureau
Speaker 1: that has at least currently the interests of Americans as
Speaker 1: a whole in mind, Matt, back in the day, you
Speaker 1: and I we get to interview Richard Cordray, who helped
Speaker 1: start and found the CFP was the first director. Yeah,
Speaker 1: and and his mission was a good one, and he
Speaker 1: actually did a great job at reining in some of
Speaker 1: the excesses of the financial services industry and protecting Americans.
Speaker 1: And right now the CFPV has lost sight of some
Speaker 1: of that mission and allowing debt collectors to contact you,
Speaker 1: you know, via d m s on Twitter or through
Speaker 1: Facebook Messenger or texting you at all hours of the day.
Speaker 1: That's just bad news for all of us. Yeah, Like,
Speaker 1: I understand the need to update communication methods right like
Speaker 1: because before this, like they could only make those phone calls.
Speaker 1: But at the same time, the fact that they have
Speaker 1: outlined how often, uh, you can be contacted via these
Speaker 1: you know, social media platforms, which is unlimited. The fact
Speaker 1: that they have that outline and they don't have outlined
Speaker 1: how it is that you can opt out of you know,
Speaker 1: some less electronic communication just kind of tells you where
Speaker 1: their priorities are. In my opinion, So the next steps,
Speaker 1: you know, for if you have debt in collections. First
Speaker 1: of all, luckily this rule doesn't go into effect for
Speaker 1: another year, so there's a chance maybe it can be
Speaker 1: changed before then. But regardless, if you're being contacted by
Speaker 1: a creditor today, you know, by the phone, or if
Speaker 1: it's by Instagram next year, you always want to make
Speaker 1: sure that you verify that the debt is actually yours.
Speaker 1: Because of the Fair Debt Collections Practices Act of nineteen
Speaker 1: seventy seven, you have the right to ask for the
Speaker 1: debt collector to provide you with details of how they
Speaker 1: calculated and arrived at the total debt uh that they're
Speaker 1: they're trying to collect from you, you know, as well
Speaker 1: as the name of the original creditor who you owed.
Speaker 1: And so this is an important step since collection agencies
Speaker 1: incompetence you know, or sometimes they just don't care. Uh.
Speaker 1: That means that they might be seeking a debt from
Speaker 1: someone maybe just with a similar name as as yours,
Speaker 1: or maybe they have the wrong person altogether, they're marking
Speaker 1: up the wrong tree. Yeah, And I just want to
Speaker 1: mention too that obviously debt collectors have a job to
Speaker 1: do and there's a lot of people that do ohe
Speaker 1: a legitimate debt and they should pay that debt. It's
Speaker 1: just that this is an industry that sometimes goes to
Speaker 1: excess when it comes to collecting debts, and sometimes they
Speaker 1: violate the law. Yeah, we're not against people paying their debts,
Speaker 1: but we're maybe against the harassment of individuals in particular. Yeah,
Speaker 1: when the laws being broken. Yeah, exactly that. I wanted
Speaker 1: to mention that, and and hopefully we get a little
Speaker 1: more information on how you can protect yourself from a
Speaker 1: social media harassment campaign from from debt collectors if you
Speaker 1: actually do owe a debt, all right, Matt. One other things,
Speaker 1: speaking of folks reaching out to you via text, there
Speaker 1: have been some reports of new stimulus check text message scams. Obviously,
Speaker 1: there isn't a new round of stimulus checks, not yet
Speaker 1: at least, And so if you receive a text or
Speaker 1: email saying otherwise, don't click on that link, it might
Speaker 1: be tempting because you're like, wait, money and coming towards
Speaker 1: coming my way. That sounds great, I can use it, right,
Speaker 1: but it's not legit. And and it just reminds me
Speaker 1: of our recent conversation with Carol Tario recently on cybersecurity.
Speaker 1: Listen back to that one if you haven't already, for
Speaker 1: some great tips to keep you and your money safe,
Speaker 1: because you know, these sorts of scams, this sort of
Speaker 1: this sort of intrusion into your email inbox and into
Speaker 1: where you hang out in social media, it's just becoming
Speaker 1: more of the norm. And she had some great thoughts
Speaker 1: on how you can protect yourself and your money. All Right, Matt,
Speaker 1: we got more to get to, including a new interesting
Speaker 1: survey on who owes the most when it comes to
Speaker 1: student loans. We'll get to that and more right after
Speaker 1: this break. Alright, we are back. We have a whole
Speaker 1: slew of additional stories that we're gonna get to. Joel,
Speaker 1: let's talk about working from home. We want to make
Speaker 1: sure the individuals out there that you're being careful, that
Speaker 1: you're not working too much. If you're one of the
Speaker 1: millions of folks who are now working from home. I
Speaker 1: don't worry about me, Matt, I'm not. I've got no
Speaker 1: worries at all that you're working too much. Talking to
Speaker 1: other people, they could fall prey to working too much,
Speaker 1: but some folks I know have somewhere between two and
Speaker 1: even three hours back in their day. Thanks to not
Speaker 1: having to get ready for work thanks to not having
Speaker 1: to commute. Yeah, and we live in the great city
Speaker 1: of Atlanta. Work commutes are off the wall, crazy real thing. Uh.
Speaker 1: And so for most folks it's you know, it's more
Speaker 1: like probably under an hour of found time. Even that's nice,
Speaker 1: but many workers are are now using a lot of
Speaker 1: that time that is now there's that they've reclaimed, right,
Speaker 1: but they're taking that and they're dedicating it to their
Speaker 1: employer blame. They're working more. Uh. The University of Chicago
Speaker 1: did a study recently to see where people's extra hours
Speaker 1: are going, and it looks like more than one third
Speaker 1: of the hours that people aren't spending on their commute
Speaker 1: or being spent working. And so this is something we
Speaker 1: want to point out because I think in some situations,
Speaker 1: if you want to work more, that's fine, right. I mean,
Speaker 1: in particular, if you build hourly like that means you're
Speaker 1: probably getting paid more, or if you want to maybe
Speaker 1: get ahead at work, working more is you know, that's
Speaker 1: a good thing to do. But it's about being aware
Speaker 1: of the fact that this might be happening to you
Speaker 1: and you may not even realize it, right, Like like
Speaker 1: it used to leave for work at seven. Uh. And
Speaker 1: maybe you didn't start working though until like seven, five
Speaker 1: or eight, but now you're still used to you know,
Speaker 1: leaving the house quote unquote leaving the house at seven,
Speaker 1: and so you start working at seven, and then you
Speaker 1: take that, you multiply that times too. That's a lot
Speaker 1: of time, a lot of additional time that's going towards work. Yeah. Yeah,
Speaker 1: And that same University of Chicago study revealed that childcare
Speaker 1: obviously makes that list as well. For a lot of people,
Speaker 1: they're spending a lot of time with their kids facilitating
Speaker 1: in home learning, or some of the kids maybe haven't
Speaker 1: been able to go back to daycare. And so yeah,
Speaker 1: you're you are spending a lot more time with your
Speaker 1: kids and it's become harder to work. But a lot
Speaker 1: of people are working more um and I think it
Speaker 1: made sense to Matt, particularly in the beginning of the lockdown,
Speaker 1: that people were working more. Right, We're all trying to
Speaker 1: kind of get our barings and figure out how working
Speaker 1: from home would actually work out in our lives. But
Speaker 1: most of us at this point have developed a bit
Speaker 1: of a rhythm. So it's important to make sure that
Speaker 1: you create some barriers between you and your work so
Speaker 1: that you're not overworking yourself just because your laptop is
Speaker 1: right there in your house. And I think that's what
Speaker 1: people can easily and have easily fallen prey to and
Speaker 1: Matt in episode one eighty two, we talked about you know,
Speaker 1: some tips to help people work from home effectively, and
Speaker 1: a couple of things we mentioned was having a dedicated workspace,
Speaker 1: which means not working from your bed right um, and
Speaker 1: and not working from the kitchen table and all likelihood.
Speaker 1: Either having a called out space in your house where
Speaker 1: you get work done and then having hard work hours.
Speaker 1: Making sure you know when you're on and off the
Speaker 1: clock and not deviating from that can really help you
Speaker 1: to create oppera barriers and avoid overworking just because your
Speaker 1: work is essentially in your house. Now, having a dedicated
Speaker 1: time to work as well as a dedicated space to
Speaker 1: work is ideal. Yeah, and take a couple of breaks
Speaker 1: too during the day. I think when people work from
Speaker 1: home sometimes they forget the rhythms of a normal work day,
Speaker 1: um when they were in the office and there were
Speaker 1: break times built in there too, right, A walk down
Speaker 1: the hall, uh, a visit to see a coworker and
Speaker 1: so take that break, step outside, whatever it takes to
Speaker 1: get yourself clear headed and refreshed to kind of get
Speaker 1: back at it. You miss that walk down to the
Speaker 1: break room where you're reaching there and grab grab yourself
Speaker 1: a Coca Cola every afternoon always. So we've talked about
Speaker 1: authorized user status before. Write with credit cards, how this
Speaker 1: can be a good way to to help lift your
Speaker 1: credit score. So, for example, maybe handled credit cards poorly
Speaker 1: in college, but now you're on the right track. Uh.
Speaker 1: In a family member add you to their card in
Speaker 1: order to extend their good credit to you. Well, we've
Speaker 1: never talked about this before, but you can add your
Speaker 1: very young children as authorized users in order to give them,
Speaker 1: you know, a bit of a jump starts on establishing
Speaker 1: great adit and by very young, I mean even babies.
Speaker 1: I just added our one year old to to one
Speaker 1: of my credit cards. Actually, like I added all four
Speaker 1: of the kids to that card in order to to
Speaker 1: kind of get them set up for you know, a
Speaker 1: nice long history of of good credit. Yeah, and I
Speaker 1: think if you handle credit incredibly well, you can set
Speaker 1: your kids up for you know, at least a good
Speaker 1: start in the credit realm. And that can be a
Speaker 1: good way to go. And obviously you're not planning on
Speaker 1: your kids, especially your one year old, using that card
Speaker 1: every time soon, right, But because they'll have that solid
Speaker 1: and long history of on time payments and low utilization
Speaker 1: when they are old enough to get a card in
Speaker 1: their own name as an adult, that means they'll be
Speaker 1: in a super solid position. And speaking of being old
Speaker 1: enough to Matt, different credit card issuers have different age
Speaker 1: requirements in order to be added as an authorized user.
Speaker 1: Some cards like the Blue Cash Preferred, which you've talked
Speaker 1: about a bunch, they've got a minimum age of thirteen,
Speaker 1: so you're one year old not going to qualify, but
Speaker 1: but obviously used a different card. Which one did you
Speaker 1: use so that your kids, who are all under thirteen
Speaker 1: were able to qualify? The Yes, so my Capital one
Speaker 1: Quick Sliver card, which is a card to use for
Speaker 1: all of my online purchases that happened on a recurring basis.
Speaker 1: So I've got one specific card that used for subscription
Speaker 1: online subscriptions basically, and that's all I use that card for.
Speaker 1: So they don't have any age limits, so you're good.
Speaker 1: Literally added a one through a seven year old got
Speaker 1: them added and those cards are on their way. But obviously, yeah,
Speaker 1: like those aren't cards that they're going to use, but
Speaker 1: they're gonna be able to kind of piggyback off of
Speaker 1: my proper usage of credit in order to get them
Speaker 1: set up. Can you imagine the thank you that you're
Speaker 1: going to receive in twenty years when they find out
Speaker 1: how you've set them up? Honestly, just how much you
Speaker 1: and I talk about money, They're just they're going to
Speaker 1: roll their eye. Of course you did that, don't currently malone,
Speaker 1: But yeah, I mean if you have younger kids, that's
Speaker 1: definitely something to consider, you know, if if you are
Speaker 1: going to handle your credit, well, that's something that you
Speaker 1: can extend to them as early as one year old.
Speaker 1: Yeah for sure. Alright, let's talk about planes too, ye,
Speaker 1: speaking of kids, let's keep the ball rolling, Let's do it.
Speaker 1: And yeah, planes are a great way to invest for
Speaker 1: were your child's future, for their schooling in a particular,
Speaker 1: five twenty nine plans are typically used for paying for
Speaker 1: college expenses, and morning Star recently made changes to their
Speaker 1: five nine plan ratings. Morning Stars this fantastic site that
Speaker 1: provides awesome financial reporting and content. They also rape funds
Speaker 1: that you can invest in. Also, they rate five nine
Speaker 1: plans from each state, and some are better than others. Right. Uh,
Speaker 1: the disparity in fees and investment choices vary from state
Speaker 1: to state, and it can be a meaningful difference between
Speaker 1: each one. And for this year, Morning Star has rated Utah, Illinois,
Speaker 1: and Michigan as having the top plans out there. Will
Speaker 1: link directly to those top rated plans in our show
Speaker 1: notes along with the full morning Star ratings. But we
Speaker 1: wanted you to know that because where you investor your kids,
Speaker 1: which states plan that you decide to partake in when
Speaker 1: you're saving for their college future, it matters. It's gonna
Speaker 1: have a big difference in the ultimate outcome of how
Speaker 1: much you're able to put away from them. Yeah, there's
Speaker 1: the states that do really well are or must be
Speaker 1: states that Sufi and Steven's likes. Not you, oh, I guess,
Speaker 1: but Illinois, Michigan. If you created a Utah, I would
Speaker 1: listen to it. Yeah, And most people interested in signing
Speaker 1: up for a five plan don't know a couple of
Speaker 1: important things right. First of all, you don't have to
Speaker 1: sign up with your state's plan with the state you
Speaker 1: know where you live. If the state you know you
Speaker 1: live and has a poorly rated plan, you can invest
Speaker 1: through one of the top rated ones instead. Also, how
Speaker 1: does that you go about signing up for one of
Speaker 1: these five twenty nine plans? That matters as well. Right,
Speaker 1: you could open that account up, you know, through your
Speaker 1: local bank, uh, but chances are that's gonna be a
Speaker 1: bad move because they typically have a lot of fees
Speaker 1: associated with those accounts. Instead, we would recommend for you
Speaker 1: to open up your plan online directly through the state's link,
Speaker 1: and that's gonna be the best way that you can
Speaker 1: make sure to avoid any of those additional fees that
Speaker 1: could easily be avoided. Also, too, you know, if your
Speaker 1: state has a state tax benefit, there's a good chance
Speaker 1: that you'll want to invest in your states plan maybe
Speaker 1: instead of the plans that you know ranked the highest. So,
Speaker 1: for example, our Georgia plan is rated new troll, which
Speaker 1: isn't super great. It's like gold, silver, and bronze, and
Speaker 1: then it's just kind of like the category. It's not
Speaker 1: negative at least, but it's just kind of neutral. But
Speaker 1: we've got some state tax benefits that they offer, and
Speaker 1: so that will more than make up for some of
Speaker 1: its minor inadequacies, you know, like we may not have
Speaker 1: the best investing options available through the Georgia Plan, but
Speaker 1: those additional state tax benefits are are going to easily
Speaker 1: be able to make up for that, you know, their shortcomings. Yeah,
Speaker 1: for sure. So again we'll link to all the stuff
Speaker 1: in the show notes, the morning Star ratings, and it's
Speaker 1: just helpful if you're thinking about starting to to save
Speaker 1: and invest for your kids future. Um, a five point
Speaker 1: nine plane is a great way to do this. You
Speaker 1: just want to make sure you're doing it the right way,
Speaker 1: and I think that God can be helpful. All right, Matt,
Speaker 1: let's talk about student loans on the note of paying
Speaker 1: for college. Who owes the most in student loans and
Speaker 1: doctors probably not? Yeah, that's a good point. They do,
Speaker 1: and they probably are not laughing while we're laughing. Is
Speaker 1: that what you're asking or are you specifically talking about
Speaker 1: like demographic demographics? So so Fidelity actually just came out
Speaker 1: with with the new survey. You might be surprised, but
Speaker 1: it's baby boomers that actually owe the most when it
Speaker 1: comes to student loans. So this new report gives that
Speaker 1: insight and this is primarily due to parent plus loans
Speaker 1: and parents of college age kids taking on a large
Speaker 1: chunk of their kids debt burden for them. This is
Speaker 1: bad news, I think, Matt, for so many reasons. One,
Speaker 1: many boomers can't afford the debt that they're taking on,
Speaker 1: especially as they get nearer to retirement. It's like this albatross,
Speaker 1: so they can't get out from under as their nearing
Speaker 1: their retirement years. And the average interest rate on these
Speaker 1: parent plus loans is higher too. So parents, whatever you do,
Speaker 1: if you've got kids going to college or nearing college,
Speaker 1: we suggest avoiding parent plus loans at all costs. They're bad,
Speaker 1: bad news, and there are other ways around it, in
Speaker 1: particular trying to help your kid find a cheaper place
Speaker 1: to go to school. If parent plus loans have to
Speaker 1: be part of the equation, it's just not worth it. Yeah,
Speaker 1: there are other alternatives as well, making sure that you
Speaker 1: apply for as many scholarships as possible, maybe scoring some grants,
Speaker 1: uh and even working through college or or all things
Speaker 1: that we would recommend over just signing on the dotted line,
Speaker 1: you know, and and saddling yourself you know your kids,
Speaker 1: but then also you're you know you as parents with
Speaker 1: sometimes some overwhelming debts and student loan debt. You know, like,
Speaker 1: this is obviously an issue in our country. Estimates are
Speaker 1: are that work nearing one point seven trillion dollars in
Speaker 1: overall debt for higher education, and everyone should be way
Speaker 1: more careful before they take out this kind of debt. Enjoy.
Speaker 1: Actually on Monday, we're publishing an episode that is going
Speaker 1: to be making an argument for avoiding higher education altogether
Speaker 1: and how instead a lot of folks should consider maybe
Speaker 1: the skilled trades. Uh, for a lot of individuals, I
Speaker 1: think college has kind of become the default option, but
Speaker 1: instead there are some legitimate alternate routes that people can take.
Speaker 1: I'm actually really excited about the interview that we've got
Speaker 1: slotted for Monday, So yeah, look forward to that. Yeah.
Speaker 1: I read the book. It's called Blue Collar Cash by
Speaker 1: Ken Rusk. Awesome book, so much good formation, and look
Speaker 1: forward to having that conversation with him because I do
Speaker 1: think it's something that people should think about more, especially
Speaker 1: when you look at the overall student loan debt burden
Speaker 1: of Americans as a whole, and then as you look
Speaker 1: to see that it's impacting just the baby boomer generation,
Speaker 1: the most people who are who just can least afford
Speaker 1: to bear these student loans. Taking on that kind of
Speaker 1: debt as you're looking to wind down your working career
Speaker 1: is just is a bad recipe. Um. Yeah, and I
Speaker 1: think that conversation is gonna be super enlightening. All right, Matt, Well,
Speaker 1: that's gonna be it for this episode. Then we'll have
Speaker 1: a link to the articles and the resources we mentioned
Speaker 1: in our show notes up on our website at how
Speaker 1: to money dot com. Yeah, and if you're listening and
Speaker 1: you found this episode, if you found this show overall
Speaker 1: very helpful to you and your money, we would be
Speaker 1: incredibly thankful if you head over to Apple podcasts uh
Speaker 1: and if you left us a solid review over there,
Speaker 1: and if you've already done that, you know what, let
Speaker 1: a friend know about our show, help us to get
Speaker 1: the word out and help others to start making smarter
Speaker 1: moves with their money. So Joel, that's gonna be it, buddy.
Speaker 1: Until next time, Best friends Out, Best Friends Out. M