WEBVTT - The BA Q and A: Keeping That Debt Down 0:00:05.640 --> 0:00:09.159 Hey, ba Fam, I am back. It's Nandy. I am 0:00:09.200 --> 0:00:12.360 here with another episode of Brown Ambition and this week 0:00:12.480 --> 0:00:15.560 is all about your questions. Yes, the BAQ and A 0:00:15.600 --> 0:00:18.479 is back. Thank you so much for sending your questions y'all. 0:00:18.480 --> 0:00:20.000 If you want to get a question on the air, 0:00:20.160 --> 0:00:23.520 go to Brannibisson podcast dot com. That is our homepage 0:00:23.560 --> 0:00:26.440 and from there you can submit a question through our website. Also, 0:00:26.480 --> 0:00:29.000 you can hit us up on Instagram. We are at 0:00:29.000 --> 0:00:32.320 Brand Ambition Podcast. Just slide into our DM send us 0:00:32.360 --> 0:00:35.960 your question. Make sure that you are clear and concise, 0:00:36.360 --> 0:00:38.120 and if you want to be anonymous, just let me 0:00:38.200 --> 0:00:40.320 know otherwise I'm gonna put your entire name out here 0:00:40.360 --> 0:00:42.280 and I don't want to get anyone in trouble. Okay, 0:00:42.840 --> 0:00:44.680 And while you're at it, if y'all want to be 0:00:44.760 --> 0:00:47.880 featured in our new series on Instagram, we are doing 0:00:47.920 --> 0:00:51.479 a ba Fam Fans spotlight on Fridays where we actually 0:00:51.800 --> 0:00:53.960 go to iTunes see who's left us a review, and 0:00:54.000 --> 0:00:56.639 then spotlight one of y'all. Head to iTunes right now 0:00:56.720 --> 0:00:58.640 leave us a five star review. If you've been rocking 0:00:58.680 --> 0:01:01.080 with our show for all these years and you haven't 0:01:01.120 --> 0:01:03.800 left us review yet, come on now Like you don't 0:01:03.840 --> 0:01:05.280 pay for this, go leave. 0:01:05.200 --> 0:01:05.920 Us a review. 0:01:06.560 --> 0:01:09.600 It is so helpful and having other people find our show. 0:01:10.080 --> 0:01:13.240 It also helps us move up the rankings on iTunes 0:01:13.720 --> 0:01:17.400 and listen numbers are important, okay, and I would love 0:01:17.480 --> 0:01:20.440 to hit the top ten again for top ten business podcasts. 0:01:20.480 --> 0:01:23.640 So send us a review, take a screenshot of the 0:01:23.680 --> 0:01:26.360 show and share it on social media. Tag us at 0:01:26.360 --> 0:01:29.479 Branda Mission podcast. On ig you can tag me at 0:01:29.480 --> 0:01:32.080 Mandy Money and just let everyone know that you are 0:01:32.120 --> 0:01:34.200 a part of the BA Fam. Okay, So that's my 0:01:34.240 --> 0:01:36.839 sales pitch over. Let me get into this mail bag 0:01:37.000 --> 0:01:38.920 and thank y'all again for your patience. As I have 0:01:39.000 --> 0:01:41.040 been learning how to just sit here and talk to myself. 0:01:41.319 --> 0:01:42.320 I'm having a good time. 0:01:42.640 --> 0:01:45.039 We still send our love and virtual hugs to our 0:01:45.040 --> 0:01:49.760 girl Tiffany and wish her lots of happy, healing and 0:01:50.040 --> 0:01:53.000 good health as she, yeah, is just taking her time 0:01:53.120 --> 0:01:54.920 until she feels ready to come back to the show. 0:01:55.000 --> 0:01:57.440 So I love you, TIF, we all love you, and 0:01:57.520 --> 0:02:01.800 the BA fam sends you lots and lots of love. Okay. 0:02:02.000 --> 0:02:06.400 First question is from Anonymous. Anonymous wants to know Mandy 0:02:06.440 --> 0:02:08.920 when does it make sense to use credit unions. I 0:02:09.000 --> 0:02:11.760 combined finances with my spouse this year, and I'm more 0:02:11.840 --> 0:02:15.520 bothered when it comes to debt. I'm only comfortable carrying 0:02:15.560 --> 0:02:18.240 my student loan debt, which I've got about sixteen thousand 0:02:18.280 --> 0:02:21.239 dollars of. My partner is also trying to pay off 0:02:21.280 --> 0:02:25.000 about nine thousand dollars of personal consumer debt that has 0:02:25.040 --> 0:02:29.480 skyrocketed since he's been unemployed through the pandemic. This year, 0:02:29.520 --> 0:02:33.040 we've managed to also rack up an additional four thousand 0:02:33.120 --> 0:02:36.920 dollars in credit card debt low interest to no interest 0:02:37.080 --> 0:02:41.040 because we've taken advantage of a zero percent financing offer 0:02:42.080 --> 0:02:45.639 pre tax. This year, will have made about eighty five K, 0:02:45.840 --> 0:02:49.560 and my credit score is seven twenty. Okay, So you 0:02:49.600 --> 0:02:51.680 want to know when it makes sense to use credit unions, 0:02:51.720 --> 0:02:53.320 I'm going to have to do a little bit of 0:02:53.360 --> 0:02:56.800 mental gymnastics to figure out specifically what you're wanting to 0:02:56.800 --> 0:02:58.840 do with a credit union. So I'm thinking based on 0:02:58.880 --> 0:03:00.440 the fact that you guys have got let me see 0:03:00.480 --> 0:03:03.640 da DA Math is easy, Math is fun nine thousand 0:03:03.680 --> 0:03:06.400 dollars plus four. So you got about thirteen thousand dollars 0:03:06.480 --> 0:03:11.560 of credit card and personal loan debt and you're probably wondering, 0:03:11.680 --> 0:03:13.680 you know, should we go to a credit union and 0:03:13.720 --> 0:03:17.240 potentially take out like a debt consolidation loan that we 0:03:17.240 --> 0:03:21.160 could use to pay down this consumer high interest consumer 0:03:21.200 --> 0:03:24.240 debt and then you're just left with one loan payment 0:03:24.280 --> 0:03:28.120 after that. With your credit score seven to twenty, you know, 0:03:28.200 --> 0:03:31.160 you're probably really likely to get a pretty decent rate 0:03:31.360 --> 0:03:34.440 on a debt consolidation loan, and a credit union is 0:03:34.440 --> 0:03:37.480 a perfectly fine place to go for that kind of loan. 0:03:37.760 --> 0:03:40.920 You can also use online lenders too, you know, online lenders, 0:03:40.960 --> 0:03:43.840 because they don't have all the expenses of brick and 0:03:43.880 --> 0:03:48.080 mortar banks, they tend to offer lower fees. But my 0:03:48.200 --> 0:03:50.920 best advice when it comes to shopping for debt consolidation 0:03:51.040 --> 0:03:54.560 loans is to get quotes, you know, actually run your numbers, 0:03:54.640 --> 0:03:56.720 get a quote for how much you need, and see 0:03:56.720 --> 0:03:58.920 who's going to offer you the best terms. So your 0:03:58.960 --> 0:04:02.280 interest rate obviously is number one, but are they going 0:04:02.320 --> 0:04:04.240 to attack on any other fees on top of that? 0:04:04.480 --> 0:04:07.600 You know, are they gonna are they going to give 0:04:07.600 --> 0:04:09.920 you a penalty if you prepay your loan, which means 0:04:09.920 --> 0:04:12.680 you pay it off sooner than what your term dictates. 0:04:13.080 --> 0:04:16.200 So definitely get some loan options and lay them out 0:04:16.400 --> 0:04:19.200 next to each other and just make the best decision 0:04:19.240 --> 0:04:22.839 based on the options that you get. Now, listen, what's 0:04:22.920 --> 0:04:25.240 interesting about your question is, you know, so I hear 0:04:25.640 --> 0:04:28.919 you're married, your partner's got some debt, you've racked up 0:04:28.960 --> 0:04:32.080 some debt together, but you're talking about your credit score, 0:04:32.600 --> 0:04:34.960 and that tells me that you're looking to take on 0:04:35.120 --> 0:04:38.839 this debt consolidation loan potentially on your own. Just be 0:04:38.880 --> 0:04:42.640 aware that, you know, whatever happens in your relationship, that 0:04:42.720 --> 0:04:44.599 loan is going to be in your name, so it's 0:04:44.600 --> 0:04:48.480 going to be your responsibility to pay it down. Obviously, 0:04:48.480 --> 0:04:51.160 your partner can help. I hope that he's been able 0:04:51.200 --> 0:04:53.800 to get work. I know you said he was unemployed 0:04:53.880 --> 0:04:54.799 during the pandemic. 0:04:55.520 --> 0:04:57.400 I hope that. I'm hoping that he's working. 0:04:57.160 --> 0:04:59.560 Again and he can help contribute to that consumer debt. 0:05:00.040 --> 0:05:03.039 But yeah, it is going to be ultimately your name 0:05:03.080 --> 0:05:05.000 on the paperwork, so you want to be sure that 0:05:05.120 --> 0:05:08.360 you can handle those payments independently. And I would just 0:05:08.440 --> 0:05:11.880 aggressively go after that credit card debt. You know, you 0:05:11.920 --> 0:05:13.800 say that you've got student loan debt, which is about 0:05:13.839 --> 0:05:17.400 sixteen K it's not that bad, right. Plus, I think 0:05:17.480 --> 0:05:19.800 at least until the spring, you won't have to make 0:05:19.839 --> 0:05:22.560 any more payments or make any payments on federal student 0:05:22.640 --> 0:05:26.120 loan debt thanks to the relief that was given during 0:05:26.120 --> 0:05:29.719 the pandemic to federal student loan borrowers. So hopefully that 0:05:29.760 --> 0:05:32.880 gives y'all some time where you could really attack this 0:05:33.000 --> 0:05:37.120 personal consumer debt that you've got, especially the high interest debt. 0:05:37.360 --> 0:05:39.600 So that four thousand dollars of debt that you guys 0:05:39.640 --> 0:05:41.320 have accrued, you said that was on like a zero 0:05:41.400 --> 0:05:46.719 percent financing plan. That's maybe not your top priority right now. 0:05:47.040 --> 0:05:49.680 Maybe you want to tackle that nine thousand dollars that 0:05:50.080 --> 0:05:53.720 you said has skyrocketed because your partner's been out out 0:05:53.800 --> 0:05:56.160 of work for so long, you know, So tackle the 0:05:56.240 --> 0:05:59.719 high interest debt first, but really be aware again of 0:05:59.760 --> 0:06:03.640 take on that responsibility with your credit score. You know, 0:06:03.680 --> 0:06:06.640 if you're not able to make those payments, obviously, that 0:06:06.680 --> 0:06:10.200 would hurt your credit score, and that's who the banks 0:06:10.200 --> 0:06:13.440 would be coming to for payment if you guys can't pay. 0:06:13.960 --> 0:06:16.279 When it comes to managing debt, well, actually I don't 0:06:16.279 --> 0:06:17.479 know if I say this yet, but when it comes 0:06:17.480 --> 0:06:19.920 to managing debt as a couple, I think teamwork makes 0:06:19.920 --> 0:06:23.360 a dream work. I think, at least in my relationship, 0:06:23.920 --> 0:06:26.280 it helped me to start thinking of his debt as 0:06:26.320 --> 0:06:29.240 my debt from an early time in our relationship, and 0:06:29.400 --> 0:06:30.680 not that he had a lot of debt, just as 0:06:30.680 --> 0:06:33.640 an example. And the same thing with my savings, my income, 0:06:33.680 --> 0:06:35.760 you know, just thinking of it as one pot. It 0:06:35.880 --> 0:06:38.440 just made it easier to kind of tackle those goals together. 0:06:40.240 --> 0:06:42.200 So as long as your partner is working and you 0:06:42.279 --> 0:06:44.440 guys are bringing an extra income and you feel like 0:06:44.480 --> 0:06:48.200 you are capable of making a debt consolidation loan payment, 0:06:48.720 --> 0:06:51.440 you know, month after month and making that a consistent 0:06:52.360 --> 0:06:55.000 part of your budget, then I think it could work 0:06:55.000 --> 0:06:57.240 for you guys to go to a credit union or 0:06:57.279 --> 0:07:00.840 any other lender and get a debt consolidation loan as 0:07:00.920 --> 0:07:03.159 long as it's a lower rate than the cost of 0:07:03.200 --> 0:07:07.080 your consumer debt right now and just paying that down aggressively, 0:07:07.480 --> 0:07:09.400 and then once that's paid off, then you can move 0:07:09.440 --> 0:07:14.040 on to that zero percent financing debt. As we've said 0:07:14.040 --> 0:07:16.200 on the show before, when it comes to those zero 0:07:16.200 --> 0:07:18.840 percent you know, credit card offers or any kind of 0:07:18.880 --> 0:07:23.960 like zero percent financing, which is an introductory rate. Really 0:07:24.000 --> 0:07:26.040 pay attention to the fine print because what you don't 0:07:26.080 --> 0:07:29.960 want to happen is that you're left after that promotional. 0:07:29.400 --> 0:07:30.239 Period is over. 0:07:30.760 --> 0:07:34.440 If you've even got one dollar of money or one 0:07:34.480 --> 0:07:36.920 dollar of debt still on that line of credit or 0:07:36.920 --> 0:07:40.680 that loan, they may have something called the deferred interest clause, 0:07:40.720 --> 0:07:43.280 which basically says, even if you've got one dollar left, 0:07:43.320 --> 0:07:44.920 we're actually going to go back to the beginning of 0:07:44.920 --> 0:07:47.160 this loan and we're going to pretend like you were 0:07:47.160 --> 0:07:49.840 paying interest this entire time, and they're going to tack 0:07:49.880 --> 0:07:51.880 all that interest back onto your balance. So it could 0:07:51.920 --> 0:07:54.960 actually increase how much you owe, which really sucks, right, 0:07:55.960 --> 0:07:58.920 So just be conscious of that. But I think together 0:07:58.960 --> 0:08:01.840 you guys can definitely tackle this. It's definitely not the 0:08:01.880 --> 0:08:04.680 worst debt story that we've gotten here on Brown Ambition. 0:08:05.200 --> 0:08:08.760 That I hope that helped. And good luck as you 0:08:08.800 --> 0:08:11.960 guys get back and you know, get back on your feet, 0:08:12.040 --> 0:08:15.480 you know, financially, and I mean, honestly, don't beat yourself 0:08:15.520 --> 0:08:19.240 up too bad, because the pandemic is is and was 0:08:20.320 --> 0:08:22.880 a huge burden too, so many households and the fact 0:08:22.920 --> 0:08:24.680 that you had to rack up some consumer debt does 0:08:24.720 --> 0:08:26.720 not mean that you are bad with money. It just 0:08:26.760 --> 0:08:28.600 means you did what you had to do to survive 0:08:29.120 --> 0:08:31.520 during unprecedented times, right, and now you just kind of 0:08:31.520 --> 0:08:33.160 got to pick yourself back up and get on the 0:08:33.200 --> 0:08:35.920 right track, which I feel really confident that you guys 0:08:35.920 --> 0:08:38.079 will be able to do. All right. 0:08:38.120 --> 0:08:39.080 I hope that helped. 0:08:39.400 --> 0:08:42.600 Thank you again for your question, and let me see 0:08:42.760 --> 0:08:45.520 what's next. All right, So we've got a question this week. 0:08:45.520 --> 0:08:47.720 Oh, repeat a repeat. 0:08:47.360 --> 0:08:51.600 Be a questioner, Amelia. Amelia's got an interesting question. She says, 0:08:51.960 --> 0:08:55.640 I'm currently in the process of adopting a family member's child. 0:08:56.040 --> 0:08:59.400 I was previously child free at almost thirty years old, 0:08:59.440 --> 0:09:02.400 and now I'm thirty two with a three year old. 0:09:02.760 --> 0:09:05.640 I've now become a government employee and a single parent 0:09:05.720 --> 0:09:07.920 all at once, and I'm trying to pay down debt. 0:09:08.480 --> 0:09:11.600 I recently enrolled in school and I'm using my military 0:09:11.640 --> 0:09:14.000 GI bill to pay for it. So now I have 0:09:14.040 --> 0:09:17.240 an additional twelve thousand dollars tax free coming in over 0:09:17.240 --> 0:09:21.040 the next six months. My question is this, considering I 0:09:21.080 --> 0:09:23.720 don't have much saved after the pandemic wiped us out, 0:09:24.240 --> 0:09:27.360 and I'm planning a move from southern California to make 0:09:27.400 --> 0:09:30.560 in Georgia. Should I pay all my credit card debt 0:09:30.640 --> 0:09:33.240 off or pay it down to about the thirty percent 0:09:33.360 --> 0:09:37.120 mark and save the rest? Also some additional info, my 0:09:37.280 --> 0:09:41.640 dad is helping me pay for my cross country move. Okay, 0:09:42.240 --> 0:09:44.560 it's a lot to unpack here. First of all, I mean, 0:09:44.600 --> 0:09:49.959 it's amazing that you are taking on responsibility for a child, 0:09:50.200 --> 0:09:52.320 you know, at the goodness of your heart. And I 0:09:52.320 --> 0:09:55.600 think that is just a really selfless and amazing thing 0:09:55.600 --> 0:09:58.560 that you've done. And it sounds like, you know, you've 0:09:58.600 --> 0:10:02.000 got your you've got a go job, you're enrolling in school, 0:10:02.440 --> 0:10:04.559 you're using your military GI bill to pay for it, 0:10:04.600 --> 0:10:07.960 which is amazing, and you've got that income coming in 0:10:08.000 --> 0:10:08.719 to pay for it. 0:10:08.920 --> 0:10:10.160 But like a lot of. 0:10:10.080 --> 0:10:12.600 Families, you know, you don't have a lot saved after 0:10:12.640 --> 0:10:15.800 the pandemic, and you're wondering, you know, before I make 0:10:15.840 --> 0:10:18.959 this move, should I pay all my credit card debt off? 0:10:19.200 --> 0:10:22.520 Potentially I'm wondering if you're thinking about using that twelve 0:10:22.559 --> 0:10:25.280 thousand dollars you've got from your GI bill to pay 0:10:25.280 --> 0:10:29.160 it off and then save the rest. Okay, a couple things, 0:10:29.760 --> 0:10:32.800 think thing, thing, thing, Think I wouldn't want you to 0:10:32.800 --> 0:10:38.560 blow your GI bill on debt. I mean, technically that 0:10:38.679 --> 0:10:40.560 money is earmark for school, and you're supposed to use 0:10:40.559 --> 0:10:43.040 it for school. Now, anyone who knows who's ever gotten 0:10:43.040 --> 0:10:46.320 a student loan refund check knows that you could use 0:10:46.360 --> 0:10:48.720 that money for just about anything once you get that 0:10:48.720 --> 0:10:52.840 refund check in the mill, right, But look, I wouldn't 0:10:52.840 --> 0:10:56.360 want you to miss out and on this great benefit 0:10:56.360 --> 0:10:59.040 that you've earned, you know, being a service member, to 0:10:59.200 --> 0:11:01.400 be able to pay for your school and be student 0:11:01.440 --> 0:11:05.920 loan debt free. Now, I would actually ask can your 0:11:06.040 --> 0:11:08.800 dad help you with your credit card debt instead of 0:11:08.840 --> 0:11:10.880 the cross country move, so that you can feel like 0:11:10.920 --> 0:11:13.520 you're getting you know, a good chunk of that debt 0:11:13.559 --> 0:11:16.600 paid down before you're making that move, and then just 0:11:16.679 --> 0:11:19.520 try to do the move as cost consciously as possible. 0:11:21.240 --> 0:11:23.760 I'm not entirely sure where it is that you're working, 0:11:23.800 --> 0:11:26.839 but they may offer some sort of relocation benefit. That's 0:11:26.880 --> 0:11:30.760 something that's worth asking for. If you've got credit card debt, 0:11:30.800 --> 0:11:32.840 you don't tell me how much you've got, so it's 0:11:32.840 --> 0:11:35.160 hard for me to tell. You know, is this something 0:11:35.200 --> 0:11:39.079 that is really weighing down on you? That you have 0:11:39.120 --> 0:11:42.600 to pay off right away. You know, why not just 0:11:42.679 --> 0:11:45.199 pay it off slow and steady after you guys move 0:11:45.280 --> 0:11:47.800 down there and you get settled, and then just make 0:11:48.000 --> 0:11:51.160 a goal to pay that down slow and steady, you know, 0:11:51.280 --> 0:11:53.560 as you get settled in your new job and you 0:11:53.600 --> 0:11:54.960 guys make your. 0:11:54.920 --> 0:11:56.679 New home down and make in Georgia. 0:11:57.160 --> 0:11:59.520 I mean, it may feel like it's weighing on you 0:11:59.559 --> 0:12:01.280 and like you've to pay it off right away, but 0:12:01.960 --> 0:12:03.640 take the time that you need. I mean, I wouldn't 0:12:03.640 --> 0:12:06.720 want to put you in a precarious financial situation and 0:12:06.800 --> 0:12:09.080 you blow the money that should be going towards your 0:12:09.120 --> 0:12:12.280 school on debt that you could potentially just be paying 0:12:12.360 --> 0:12:16.240 down slow and steady. So before you use that GI 0:12:16.280 --> 0:12:19.200 bill on credit card debt, I would say, you know, 0:12:20.000 --> 0:12:22.640 get in school, use a bill to pay for that tuition, 0:12:23.520 --> 0:12:27.439 get settled, and then start to budget or start to 0:12:27.440 --> 0:12:29.720 look at your budget and your cash flow and say, 0:12:29.760 --> 0:12:32.240 how much will I actually have leftover that I could 0:12:32.320 --> 0:12:34.520 use to pay down this credit card debt? And is 0:12:34.520 --> 0:12:37.640 there anything that potentially your dad, for example, could help 0:12:37.679 --> 0:12:40.760 you subsidized by like giving you a little bit extra 0:12:40.800 --> 0:12:44.600 to make that card payment, or is there another lever 0:12:44.679 --> 0:12:48.320 that you could pull. For example, could you take out 0:12:48.360 --> 0:12:52.200 a zero percent interest balance transfer, you know, credit card 0:12:52.280 --> 0:12:56.080 and transfer that balance onto another credit card that has 0:12:56.160 --> 0:12:58.920 zero percent interest, just to buy yourself some time. We 0:12:58.960 --> 0:13:00.800 were just talking about that in the last question, and 0:13:01.080 --> 0:13:03.680 it's an option, you know, especially if you've got decent credit. 0:13:03.800 --> 0:13:06.400 And I don't know anything else about your financial history 0:13:06.400 --> 0:13:08.240 than what you've said here, so I'm just going to 0:13:08.280 --> 0:13:11.400 assume that you've got decent credit, you may qualify for 0:13:11.480 --> 0:13:13.800 a good zero percent offer and be able to move 0:13:13.840 --> 0:13:16.880 that over. Maybe there's even an option if you're a 0:13:16.960 --> 0:13:20.480 military member, you may have They have great they have 0:13:20.559 --> 0:13:23.200 some financial institutions, like one of the banks that comes 0:13:23.200 --> 0:13:26.160 to mind is USAA, But I know there's others that, 0:13:26.480 --> 0:13:29.599 you know, work with military service members and may be 0:13:29.679 --> 0:13:32.840 able to give you a low interest debt consolidation loan 0:13:32.840 --> 0:13:37.679 that you can use to pay down that debt. But yeah, 0:13:37.960 --> 0:13:41.600 that's where I'm going. I'm not feeling so good about using, 0:13:42.040 --> 0:13:44.839 you know, school funds to pay off debt. But at 0:13:44.840 --> 0:13:47.320 the same time, I see what you're saying. You know, 0:13:47.320 --> 0:13:50.320 you're wanting to pay down debt and start saving. You 0:13:50.480 --> 0:13:52.600 just may be feeling like you have to do everything 0:13:53.200 --> 0:13:55.760 you know all at the same time. Just break it 0:13:55.840 --> 0:14:01.760 down into small measurable, you know, doable, and it won't 0:14:01.800 --> 0:14:06.560 feel quite as overwhelming, I hope. All Right, Amelia, thank 0:14:06.559 --> 0:14:09.199 you again for your question. I'm going to take a 0:14:09.280 --> 0:14:10.959 quick little break. It's some more of this coffee, and 0:14:11.000 --> 0:14:16.319 I'll be right back with another of your questions. All right, y'all, 0:14:16.360 --> 0:14:18.719 I am back. It's Bandy with Brown Ambition, and I'm 0:14:18.760 --> 0:14:21.320 here for our third and final question from listener Cherish. 0:14:21.360 --> 0:14:22.160 What a beautiful name. 0:14:22.280 --> 0:14:26.200 Cherish says, I enrolled in a high deductible insurance plan 0:14:26.280 --> 0:14:28.800 so that I could get an HSA and invest the 0:14:28.840 --> 0:14:32.800 money after hearing about the benefits on your interview with 0:14:32.880 --> 0:14:33.720 the Journey. 0:14:33.360 --> 0:14:34.160 To Launch couple. 0:14:34.200 --> 0:14:36.240 Oh you guys, if you haven't listened to our interview 0:14:36.240 --> 0:14:38.840 with Journey to Launch Christina and Aman, go back and 0:14:38.880 --> 0:14:41.520 listen to it. It's so good. All right. Back to 0:14:41.600 --> 0:14:45.760 Cherish's question, Cherish says, but I try to limit going 0:14:45.800 --> 0:14:48.560 to the doctor unless it's covered, because I worry my 0:14:48.640 --> 0:14:50.960 cost will be really high since I don't have a 0:14:51.000 --> 0:14:55.160 copey and I'm young, twenty eight years old and healthy. 0:14:55.280 --> 0:14:57.000 If I want to start going to the doctor more, 0:14:57.040 --> 0:14:58.600 but I don't want to pay a lot. Should I 0:14:58.640 --> 0:15:02.280 switch to a healthcare plan, a new healthcare plan? Or 0:15:02.320 --> 0:15:05.400 am I being overly cautious? I think I'm still anxious 0:15:05.400 --> 0:15:07.600 from a time when I got two thousand dollars bill 0:15:07.680 --> 0:15:10.320 for a simple lab test because they sent it to 0:15:10.360 --> 0:15:12.920 an out of network lab. It happened to me too before, 0:15:13.000 --> 0:15:15.760 so I get it. Chaer says, how can I know 0:15:15.920 --> 0:15:18.960 how much more I'll pay for a high deductible health 0:15:18.960 --> 0:15:21.960 plan versus a health plan that has a copay And 0:15:21.960 --> 0:15:24.520 if I do switch to a copay plan, will my 0:15:24.760 --> 0:15:27.520 HSA continue to grow? And if I switch to a 0:15:27.560 --> 0:15:30.840 high deductible plan in the future, can I continue contributing 0:15:30.920 --> 0:15:34.040 to it again? Alrighty, this is a really cool question. 0:15:34.080 --> 0:15:37.040 I love it why because it sort of brings the 0:15:37.080 --> 0:15:40.360 real world into a situation. It brings the real world 0:15:40.440 --> 0:15:43.200 to like one of these pieces of financial advice that's 0:15:43.240 --> 0:15:46.440 becoming more and more common. So Christina and Ammon, they 0:15:46.440 --> 0:15:49.800 are part of this financial independence retire early movement. So 0:15:50.080 --> 0:15:52.480 they were able to retire at thirty nine, I believe, 0:15:52.520 --> 0:15:54.280 and they moved to Portugal and it was all amazing 0:15:54.760 --> 0:15:57.480 and one of the strategies they talk about where they 0:15:57.520 --> 0:15:59.840 were able to invest and save enough to retire that 0:16:00.080 --> 0:16:03.880 early was they invested heavily in index funds, but they 0:16:03.920 --> 0:16:08.840 also opened a high an HSA, a health savings account. 0:16:09.200 --> 0:16:11.960 And in order to get access to an HSA, you 0:16:12.080 --> 0:16:15.280 have to enroll in a high deductible health care plan. 0:16:16.280 --> 0:16:18.480 So you have to have a high deductible in order 0:16:18.560 --> 0:16:20.800 to get this HSA. And the whole point of the 0:16:20.960 --> 0:16:24.320 HSA is that you were putting pre tax dollars into 0:16:24.320 --> 0:16:28.320 an account to set aside for your health care expenses. Because, 0:16:28.320 --> 0:16:30.800 as we all may know, with a high deductible plan, 0:16:30.880 --> 0:16:32.960 it means you've got to come out of pocket before 0:16:33.040 --> 0:16:35.040 your insurance are going to pick up the tab. So, 0:16:35.080 --> 0:16:36.840 if you've got a high deductible health care plan, and 0:16:36.920 --> 0:16:40.480 let's say the deductible is like five thousand dollars, you'll 0:16:40.560 --> 0:16:43.240 want to have money set aside because you will be 0:16:43.280 --> 0:16:45.640 on the hook for making any payments toward health care 0:16:45.720 --> 0:16:48.720 needs before that deductible is met. So there's a bit 0:16:48.760 --> 0:16:51.280 of risk there, right. I mean, they were young and healthy, 0:16:51.320 --> 0:16:53.640 the same as you cherish when they when they decided 0:16:53.640 --> 0:16:56.120 to opt in to the high deductible health care plan. 0:16:56.160 --> 0:16:58.600 So they said, eh, probably you were not going to 0:16:58.720 --> 0:17:00.600 have to go the doctor that often, and if we do, 0:17:00.960 --> 0:17:03.120 we'll have money set aside to actually pay for that. 0:17:04.240 --> 0:17:08.760 And when you have an HSA, what helps supercharge your 0:17:09.520 --> 0:17:13.080 retirement savings is that you can actually invest through your HSA, 0:17:13.600 --> 0:17:16.560 which is a cool benefit because you're putting money in 0:17:16.600 --> 0:17:19.119 it before taxes, and then the money is growing tax 0:17:19.160 --> 0:17:23.240 free while you're investing. And then the third and why 0:17:23.280 --> 0:17:25.520 they call it a triple tax benefit, is that you 0:17:25.520 --> 0:17:28.160 can withdraw that money tax free so long as you're 0:17:28.240 --> 0:17:30.680 using it for medical expenses. So it is a great 0:17:31.080 --> 0:17:34.440 tool that you potentially could use to invest for retirement, 0:17:34.840 --> 0:17:36.480 especially because when we retire, you know we're going to 0:17:36.560 --> 0:17:39.359 be older, you may have more health care concerns, and 0:17:39.400 --> 0:17:42.400 then you'll actually have a pot of money through HSA 0:17:42.560 --> 0:17:45.040 that you can withdraw and use for those those healthcare 0:17:45.080 --> 0:17:49.080 expenses in retirement. So it sounds like a good idea, right, 0:17:49.160 --> 0:17:52.760 sounds solid. But here's where Cherish's questions interesting because the 0:17:52.760 --> 0:17:54.879 fact of the matter is that when you enroll in 0:17:54.880 --> 0:17:57.400 a high deductible insurance plan, you have to pay more 0:17:57.400 --> 0:18:00.000 out of pocket along the way, and you may act 0:18:00.000 --> 0:18:03.560 actually not have the funds to cover those kinds of expenses. 0:18:04.440 --> 0:18:06.880 And if you anticipate that you're going to have more 0:18:06.920 --> 0:18:10.520 medical expenses, you will have to think carefully about whether 0:18:10.520 --> 0:18:13.399 a high deductible plan makes sense for you. It still 0:18:13.440 --> 0:18:16.160 can make sense, you know, it can make sense if 0:18:16.160 --> 0:18:18.960 you've got money set aside. You know that you're setting 0:18:18.960 --> 0:18:22.239 aside through your HSA or other ways so that you 0:18:22.280 --> 0:18:25.400 can pay for those copays out of pocket or pay 0:18:25.440 --> 0:18:29.240 for any expenses out of pocket. And I think everyone 0:18:29.359 --> 0:18:32.639 when you're on a medical plan like cherish this nightmare 0:18:32.640 --> 0:18:34.440 where you've got a two thousand dollars bill for a 0:18:34.520 --> 0:18:36.439 lab test because they send it to an out of 0:18:36.480 --> 0:18:39.640 network lab. Those types of things happen all the time, 0:18:39.680 --> 0:18:42.720 and you have to be really diligent and reading all 0:18:42.760 --> 0:18:46.359 of your bills really carefully and triple triple quadruple checking 0:18:47.040 --> 0:18:50.160 where they are sending certain lab work, or you know, 0:18:50.200 --> 0:18:52.040 making sure if they're going to refer you to a 0:18:52.040 --> 0:18:55.439 physician that you have done your due diligence and triple 0:18:55.520 --> 0:18:59.240 dipple quadruple checked yourself to make sure they're in network. 0:18:59.520 --> 0:19:01.239 Because I mean, at the end of the day, like 0:19:01.280 --> 0:19:02.920 you're going to be the one who cares most about 0:19:02.960 --> 0:19:06.719 your money, right and in a rush at the medical office, 0:19:06.760 --> 0:19:08.520 they may just send you to a doctor that they 0:19:08.520 --> 0:19:10.960 think is in your network, but come to find out 0:19:10.960 --> 0:19:13.680 they've left your network last week, you know. So you've 0:19:13.680 --> 0:19:17.720 got to be really diligent, and it takes it takes 0:19:17.720 --> 0:19:22.600 some babysitting, I feel like, of your medical your medical 0:19:22.600 --> 0:19:24.640 bills and all that kind of stuff to be sure 0:19:24.680 --> 0:19:27.160 that you're not going to find yourself in that situation. 0:19:27.240 --> 0:19:32.200 But yeah, HSA can be a good tool to use 0:19:32.280 --> 0:19:36.760 for retirement, but it does come with that reality that 0:19:36.800 --> 0:19:38.480 you will have to pay a little bit more out 0:19:38.520 --> 0:19:41.840 of pocket then you might have liked to. And if 0:19:41.840 --> 0:19:45.440 you're not feeling financially capable of doing that, then yes, 0:19:45.560 --> 0:19:48.959 it could make more sense to enroll in a different 0:19:49.040 --> 0:19:51.639 health care plan, a healthcare plan that is probably going 0:19:51.680 --> 0:19:53.920 to cost you a little bit more out of. 0:19:53.840 --> 0:19:55.360 Your paycheck each pay period. 0:19:56.600 --> 0:19:58.680 But at least you'll have the peace of mind knowing 0:19:58.720 --> 0:20:00.400 if I do need to go to the doctor, I'm 0:20:00.400 --> 0:20:02.800