Speaker 1: Welcome to How the Money. I'm Joel and I am
Speaker 1: that Today we're talking crappy credit unions, contractor scams, and
Speaker 1: aldi everywhere.
Speaker 2: Yeah, buddy, this is our Friday flight. I'm excited to
Speaker 2: talk about the most important personal finance story from this
Speaker 2: past week. And I know you've got a little note
Speaker 2: here about maybe buying a tesla. I don't'm not totally
Speaker 2: sure what this note means, but we First, Oh, I
Speaker 2: wanted to give a quick shout out to Todd R
Speaker 2: because he was out there referring our newsletter out to friends.
Speaker 2: So not only does he donate beer to the show,
Speaker 2: he's also spreading the good HTM word out there to
Speaker 2: all of his friends. Appreciate you, Todd, Yeah, thank you, Todd.
Speaker 2: And of course, the ultimate prizes, How Money, socks and
Speaker 2: a beer hang with us. So hopefully more folks will
Speaker 2: get after some of those higher referral numbers.
Speaker 1: So sign up for the newsletter if you haven't, and
Speaker 1: then tell your friends about it through the referral link
Speaker 1: inside of the newsletter when you get it. That's the
Speaker 1: way you kind of earn earned the shout out and
Speaker 1: then eventually earned the socks. Matt just a couple of
Speaker 1: things I wanted to discuss real quick before we get
Speaker 1: to the Friday flight and all the stories. I mean,
Speaker 1: I guess it is kind of newsworthy. Rivian announced they're
Speaker 1: two different less expensive vehicles.
Speaker 2: Yeah, they did.
Speaker 1: If anybody listens to the show, they know I'm kind
Speaker 1: of obsessed with Rivian that that. I think their vehicles
Speaker 1: are the best looking basically ever made.
Speaker 2: Easily.
Speaker 1: Yeah, they've got that kind of classic style but also modernized.
Speaker 1: But man, the first two vehicles they put out, they're
Speaker 1: only for rich people, right, Let's be honest.
Speaker 2: They're really expensive. And so the news like seventy eighty
Speaker 2: thousand dollars for the R one and the T one.
Speaker 1: Oh, well, the R one's gone down in price, but
Speaker 1: it was, I mean it was it was like basically
Speaker 1: six figures if you wanted it at the very beginning.
Speaker 2: Yeah, it was.
Speaker 1: I think it was like ninety five plus. So, oh,
Speaker 1: I think it's gone down in price a little bit.
Speaker 1: But the RW is going to be more like forty five,
Speaker 1: which is a heck of a lot less expensive, and
Speaker 1: the R three is going to be like thirty eight,
Speaker 1: I think is where it's going to start. And that's
Speaker 1: before the tax credit. So I put down because I've
Speaker 1: been talking about this for years and I do. I
Speaker 1: hate spending money on cars, but the one car consider
Speaker 1: spending more money on is like a Ribbean suv if
Speaker 1: the price is right. And so I was like forty
Speaker 1: five grand with the federal tax credit after on top
Speaker 1: of that, I don't know, man, I could see myself
Speaker 1: doing it. So I put one hundred dollars refundable deposit down.
Speaker 2: So that's what's so great. I'm like I might even
Speaker 2: do it too. The fact that it's refundable, like there's
Speaker 2: nothing to lose. Yeah, I mean literally, until I was
Speaker 2: reading the fine printks, I'm like, all right, what is
Speaker 2: because you mentioned it and I kind of dug into
Speaker 2: it a little bit more, and yeah, like until you
Speaker 2: place the order for your car, you can get your
Speaker 2: hundred bucks back and with the credit thirty seven to
Speaker 2: five after the federal rebate to potentially get your hands
Speaker 2: on dude. Like I've been talking big about the Toyota,
Speaker 2: Toyota RAV four and some of those, and they're like
Speaker 2: three four years old. They're like thirty thirty, two thousand dollars,
Speaker 2: so like a few more thousand dollars and all of
Speaker 2: a sudden, you've got a brand new full like full
Speaker 2: EV that can go with three hundred plus miles. We
Speaker 2: might be uh Rivian twinsies.
Speaker 1: We'll see they're super cool. I'm really excited to see
Speaker 1: with the future holds, because there's the electric car market
Speaker 1: seems to have seized up a little bit of slowing down.
Speaker 1: I know, Ford to stopping production of the of the
Speaker 1: electric f one point fifty demand. It's just not quite
Speaker 1: quite there. And part of it just because pricing is
Speaker 1: still so high, especially on some of the bigger electric
Speaker 1: electric cars. And so I'm glad to see Rivian hitting
Speaker 1: this price point that's gonna be a little more accessible
Speaker 1: to a lot of people. There just aren't that many
Speaker 1: cheap EV's out there, and this still still not cheap.
Speaker 1: And I don't know if I'm actually gonna go through
Speaker 1: with it or not, but at least I have reserved
Speaker 1: the right to get one if I want to. Something
Speaker 1: else on the EV front, there was an article in
Speaker 1: the Wall Street Journal about this guy who said he
Speaker 1: paid for a Tesla with subscriptions he canceled. We talk
Speaker 1: about subscription stuff so much.
Speaker 2: I don't really want to dial into that.
Speaker 1: But it was just really really cool to see he
Speaker 1: like fleshed out all the subscriptions he cut and it
Speaker 1: really did come pretty close to equaling his.
Speaker 2: Monthly car payment.
Speaker 1: Which yeah, first off, that means he had a lot
Speaker 1: of subscriptions.
Speaker 2: But basically it's a way for him to offset that.
Speaker 2: I mean sounds like he's financed it unfortunately. Yeah, but
Speaker 2: to minimize some of the expenses that you don't care
Speaker 2: about as much to get get us a sweet ride. Yeah,
Speaker 2: I'm all for that, man.
Speaker 1: So they're called to look and see what you're spending.
Speaker 2: Yeah, all right, Well, speaking of cars, we talked a
Speaker 2: while back about the some of the different privacy policies
Speaker 2: of the car manufacturers. They're pretty crazy. And the Mozilla
Speaker 2: Foundation they found this out. This is some research that
Speaker 2: they did. It was like follow last year, right, yeah, yeah,
Speaker 2: sometime last year. But buying that new car, it gives
Speaker 2: the manufacturer the right to gather information on you, and
Speaker 2: not just information about how it is that you drive,
Speaker 2: Like there are very personal pieces of information that they're collecting.
Speaker 2: Like I don't know how they do this, but like
Speaker 2: your genetics, your sexual.
Speaker 1: Activity as well, if you're the kind of person to
Speaker 1: you know, procreate in the back of the back of
Speaker 1: your car.
Speaker 2: I guess, which I've Joel's been known to do.
Speaker 1: I guess, I guess don't.
Speaker 2: Give out my personal infodog. Enough of that. But now
Speaker 2: we know, and this is thanks to reporting from the
Speaker 2: New York Times, that they're not just actually collecting the data,
Speaker 2: but no surprise, they're also selling that information to the
Speaker 2: different insurance companies out there without your knowledge. And that's
Speaker 2: the crux of the reporting here, which means that rate
Speaker 2: increases could be coming, and not just because the insurance
Speaker 2: market isn't turnoil, but because your insurance company now has
Speaker 2: knowledge to the tune of something like one hundred plus
Speaker 2: pages of documentation of your potentially subpar driving habits and
Speaker 2: other activities. Yeah.
Speaker 1: I mean, it's freaky stuff, right when you dig in
Speaker 1: the fact that one the car companies know when they're
Speaker 1: collecting intentionally all this data on you, they're selling stuff.
Speaker 1: And then not only are they just selling this like
Speaker 1: anonymized data, they're also selling your personalized data to these
Speaker 1: insurance companies and people are finding out about it the
Speaker 1: hard way when they get one of those rate increases. Basically,
Speaker 1: it's like if you break hard, or you speed regularly,
Speaker 1: you know you're going over eighty miles an hour, or
Speaker 1: you accelerate quickly. Those are the kind of things they're
Speaker 1: looking for. And then they're telling the insurance companies they're
Speaker 1: tatling on you behind your back, like your brother or
Speaker 1: sister did when you were a kid, and like the
Speaker 1: for instance they mentioned in the Chevy Bolt, which is
Speaker 1: actually speaking of vv's the cheapest v out there on
Speaker 1: the market, one of the ones we've said take a
Speaker 1: look at well, GM seems to be at the forefront
Speaker 1: of this trend. So your insurance company is going to
Speaker 1: hear about how you're using that Chevy Bolt via the
Speaker 1: third party website lexus Nexus. So Chevy sells the data
Speaker 1: to lexis Nexus and they sell it to whoever wants it.
Speaker 1: It's a crime system. And so we've talked Matt about
Speaker 1: before saving money on your insurance by allowing your insurance
Speaker 1: company to monitor you. I'm doing that on purpose right now,
Speaker 1: but it's a direct relationship with my insurance company where
Speaker 1: I stand the benefit where my rates could potentially go
Speaker 1: down if they see that my driving habits are decent.
Speaker 2: Could they potentially go up?
Speaker 1: No, they can't. That's specifically along the they outline that.
Speaker 1: They outline that specifically. What if they do go up?
Speaker 1: I mean, and they're like, oh no, no, it's not
Speaker 1: because you're driving. It's because that's just what's going on.
Speaker 1: That's when I sue, all right, I've done the same thing.
Speaker 1: I mean, let me say that your rates will drop
Speaker 1: somewhere between zero and thirty percent based on your driving.
Speaker 2: Okay, how you drive, and you can.
Speaker 1: Follow along and they've got like a little score and
Speaker 1: trophies and stuff.
Speaker 2: So you can it.
Speaker 1: Can they kind of incentivize you to be a good
Speaker 1: driver too, dude?
Speaker 2: No, totally. Like a couple of years when I allowed this.
Speaker 2: Yeah that you like, download the app on your phone.
Speaker 2: It knows when you're driving, and it changes the way
Speaker 2: that you drive. Like when you have incentives like that,
Speaker 2: when you stand to benefit to financially gain from driving safer,
Speaker 2: well not only do you end up winning from an
Speaker 2: insurance standpoint, but like, Okay, this is kind of great
Speaker 2: because I'm also less likely to get into an accident
Speaker 2: because I'm driving like a granny. I am less likely
Speaker 2: to have to pay a speeding ticket because I ain't speed. No, more.
Speaker 2: That's right, I kind of dig it. Yep, all the above,
Speaker 2: I agree, But again I'm we're willing consent exactly.
Speaker 1: Yeah, we're doing it proactively on purpose, with a tangible
Speaker 1: reward at the end. But the fact that this is
Speaker 1: happening without our knowledge because of something very deep in
Speaker 1: the terms and services, because you basically said they're doing
Speaker 1: it without your knowledge, and that's essentially true because nobody
Speaker 1: reads and maybe we should, but we wouldn't ever get
Speaker 1: to do anything fun with our lives the terms and services, right,
Speaker 1: and so in our mind, I would say, it's another
Speaker 1: reason not.
Speaker 2: To get a new car. Oh my gosh.
Speaker 1: Yeah, you know, I need to check the terms and
Speaker 1: services of Rivian before in twenty twenty six when that
Speaker 1: comes out.
Speaker 2: They send you like a blood sample kit and they
Speaker 2: like pick your thumb and then that's how they get
Speaker 2: the DNA genetics. Maybe maybe it really does make me
Speaker 2: think twice about like it does make me think back
Speaker 2: to getting like an eighties land cruiser or something like that,
Speaker 2: to where you don't have to worry about any of
Speaker 2: that stuff and.
Speaker 1: Then you just have to worry about it breaking down
Speaker 1: all the time.
Speaker 2: Well, you gotta take care of it. But do you
Speaker 2: ever think about that, the fact that all of our
Speaker 2: cars today it's nothing but computers and electronics.
Speaker 1: Oh yeah, And you know this is making me think
Speaker 1: about that even more. It's just, hey, maybe I'm even
Speaker 1: more worried about upgrading to a newer ride because there
Speaker 1: are all these other downside potentials Like.
Speaker 2: What if there's a nuclear attack on our country and
Speaker 2: there's an EMP that's the electromagnetic pulse, Yeah, fries all
Speaker 2: of our cars and then we can't high tail it
Speaker 2: for the hills. Well everything about it.
Speaker 1: Dude, That to all cars, because even not just modern ones.
Speaker 2: I think, like the older cars, they don't have actual likes.
Speaker 2: It's all physical, like a carburetor that's a mechanical device
Speaker 2: as opposed to a computer that I don't know. I'm like,
Speaker 2: I'm not a car guy, then that's smart enough to
Speaker 2: know that me neither.
Speaker 1: But I am smart enough to know that this is
Speaker 1: ridiculous and car manufacturers need to change their tune on
Speaker 1: this cause it makes everybody uncomfortable. And if we find
Speaker 1: out as consumers that hey, this the brain in particular
Speaker 1: is the one selling our information behind our backs, causing
Speaker 1: us costing us money and down the line within our
Speaker 1: insurance companies. Then we're not going to buy your herds.
Speaker 1: I mean, it is as simple as that.
Speaker 2: Hopefully that is not the case with Rivian, Yeah, our
Speaker 2: beloved Rivian. But okay, So there's actually a website where
Speaker 2: you can input your your vin and you can see
Speaker 2: what you're making models security risks are and so the
Speaker 2: website is Vehicle Privacy Report dot com. We'll make sure
Speaker 2: to link to that in the show notes. So in
Speaker 2: news that bums two best buds out Joel, the average
Speaker 2: personal savings rate continues to go down. It's now shy
Speaker 2: of four percent. That is certainly worse than the historical
Speaker 2: savings rate, which is around six ish percent. It's not
Speaker 2: all that great either, to be honest, but it's gotten worse,
Speaker 2: far short of some of the Asian countries like Japan,
Speaker 2: right or yeah or yeah, Sweden. I think it's like
Speaker 2: in the twenties or something there. Okay, I feel like
Speaker 2: they do everything right over there. The consumers are spending,
Speaker 2: they're propping up the economy, but it also harms individuals'
Speaker 2: ability to then deal with potential money emergencies that might arise.
Speaker 2: It prioritizes buying stuff today unfortunately over the freedom that
Speaker 2: they could be purchasing for themselves tomorrow. And it's our
Speaker 2: belief that the minimum savings rate for most folks should
Speaker 2: be around fifteen percent. That's our gold standard. And it's
Speaker 2: no wonder that Americans are they're living on the financial edge.
Speaker 2: They're on the precipice when they dedicate so few of
Speaker 2: their money to future planning, allows them that luxury to
Speaker 2: not have to worry about living on the edge.
Speaker 1: Sorry, three point six percent, it's not going to cut
Speaker 1: it right. It's you're not going to gain much ground
Speaker 1: that way. And obviously that's the average matt some people
Speaker 1: are living. They're spending more than they make, and that's
Speaker 1: where credit card Deck gives it. But having a three
Speaker 1: percent to four percent savings rate, you're gonna get nowhere quick.
Speaker 1: You're gonna be spending your tires. Those money goals that
Speaker 1: you have for your future, you're not gonna be reaching them.
Speaker 1: And I'm not saying it's it's easy, especially in an
Speaker 1: era of high inflation that we're coming off of.
Speaker 2: Literally, saving threety four percent is just keeping you above
Speaker 2: above water. That's just keeping you afloat.
Speaker 1: That's right, So we got to do more, and this
Speaker 1: show is dedicated to helping you do that. And by
Speaker 1: the way, if you've been listening to How To Money
Speaker 1: for a while, hopefully hopefully you're not in that boat.
Speaker 1: And we also believe that basically every American can tighten
Speaker 1: their belt to increase that all important financial breathing room.
Speaker 1: And Matt, on that note, we talk regularly about earning
Speaker 1: more on your savings, so hopefully you have enough in
Speaker 1: your savings to make it worthwhile. But we consistently mentioned
Speaker 1: some of our favorite online banks that pay competitive rates.
Speaker 1: But and I've just noticed this recently, small banks and
Speaker 1: credit unions are offering solid rates that are incredibly competitive
Speaker 1: with some of these online products. And I saw one
Speaker 1: of my local credit unions paying five point twenty five
Speaker 1: percent on a CD, which is essentially that's better than
Speaker 1: anything I'm seeing from any of the online banks, which
Speaker 1: are now in the upper fours. So it's worth of
Speaker 1: at least looking into community banks and credit unions to
Speaker 1: see what they're paying. So yeah, like, do a quick
Speaker 1: search for a few credit unions in your area, hop
Speaker 1: onto their website. Typically they post their rates publicly and
Speaker 1: that way you don't have to go driving around talking
Speaker 1: to people in person or anything like that, because who
Speaker 1: wants to do that?
Speaker 2: But like, what wants to do that? Yeah, so hop
Speaker 2: online check it out.
Speaker 1: You might find that actually, wait a second, the local
Speaker 1: small bank or credit union is actually offering better perks
Speaker 1: maybe than just some of the national players.
Speaker 2: Yeah, but all the note of credit unions, some really
Speaker 2: discouraging information came out recently about the high cost of
Speaker 2: junk fees at many local credit unions. We're shocked to
Speaker 2: see this, to say the least. Yeah. So typically, I mean,
Speaker 2: credit unions are nonprofits and they're supposed to be a
Speaker 2: respite for customers to avoid fee laden tactics of the
Speaker 2: biggest banks that we rail on pretty regularly. But unfortunately
Speaker 2: it's not as much as we had hoped the benefits
Speaker 2: of the credit unions. So there's data, and this comes
Speaker 2: from the state of California, which is actually the only
Speaker 2: state that requires credit unions to disclose how much revenue
Speaker 2: that they generate from fees, and it's actually quite a lot.
Speaker 2: The worst offenders are earning around ten percent of their
Speaker 2: overall revenue from overdraft and late fees. Banks, on the
Speaker 2: other hand, of the average less than half of a percent.
Speaker 2: This is a massive, stinking gap, and part of it
Speaker 2: I think is in part due to the fact that
Speaker 2: big banks they're under the magnifying glass, right, Like, I
Speaker 2: think there's more scrutiny that's being paid to them and
Speaker 2: so they've had to kind of straighten up a little bit,
Speaker 2: whereas I think credit unions are slowly. The article is great.
Speaker 2: They talk about mission drift and how they're sort of
Speaker 2: getting away from sort of their original mission and like
Speaker 2: they're starting to name stadiums after these credit unions. There's
Speaker 2: like private jets that the different credit unions have purchased,
Speaker 2: which sounds more like bank behavior to me.
Speaker 1: Now, no local credit uniting to read about and to
Speaker 1: see how bad it's gotten and fee You would think
Speaker 1: fee reduction would be one of the main goals at
Speaker 1: a credit union would have for their members. And the
Speaker 1: thing is too, some of the proposed rules from the
Speaker 1: CFPB wouldn't apply to a lot of these credit unions
Speaker 1: because they're just so small. Typically it's a like, oh,
Speaker 1: banks with over one hundred branches or something like that,
Speaker 1: So most credit unions would skate underneath that and still
Speaker 1: be charging customers ridiculous fees.
Speaker 2: Sure well, so obviously credit unions they've got perks right,
Speaker 2: like lower rates on credit cards. Often you can get
Speaker 2: a better car loan mortgage rates their helock rates. But now,
Speaker 2: joining a credit union does come with a warning, and
Speaker 2: honestly it's always been a good idea. You still need
Speaker 2: to make sure you are aware of what you're getting into,
Speaker 2: and I do think it's still a good idea to
Speaker 2: have a relationship with a local credit union for those
Speaker 2: different products. But when it comes to the majority of
Speaker 2: your banking, we have always recommended going with an online
Speaker 2: bank that's paying a higher rate on your high yield
Speaker 2: savings accounts, the ability to earn more on your emergency
Speaker 2: fund while being able to avoid some of these fees
Speaker 2: that you're going to get hit with were you to
Speaker 2: overdraw your account. Yeah, that seems like the best path forward.
Speaker 1: Capital one ally discover CI Those are the the ones
Speaker 1: we mentioned most consistently as some of the best online
Speaker 1: online banks to be with. It just goes to show
Speaker 1: too that not all credit unions are credit equal, Matt.
Speaker 1: Some of these credit unions are taking advantage of people
Speaker 1: even though they have this rate.
Speaker 2: Yeah, like that's the other part of it. I don't
Speaker 2: want to. I don't. I hate for folks out there
Speaker 2: who love their local credit union or folks who even
Speaker 2: work for their local and they're saying, dudes, that's not us.
Speaker 2: Yeah we know, yeah, we totally understand.
Speaker 1: But there are some bad players out there, and they're
Speaker 1: given the whole industry of black eye sadly because of
Speaker 1: the ridiculous number and amount of fees they're charging to
Speaker 1: a lot of their customers. So credit unions that are
Speaker 1: doing that, we call for you to shape up, all right,
Speaker 1: and Matt if you're if you're trying to up your
Speaker 1: savings rate, we're just talking about savings rates a second ago,
Speaker 1: maybe don't take this tactic. There was a there was
Speaker 1: a couple posted something on TikTok the other day that
Speaker 1: they split a cup of coffee when they got to breakfast.
Speaker 2: Did you see this one? I did?
Speaker 1: Okay it, I don't know it. Just I'm all about
Speaker 1: increasing your savings rate. What are you going to go
Speaker 1: from three point six to three point sixty five percent?
Speaker 1: Like when you're doing that? Come on, that's just that's
Speaker 1: definitely the definition of cheap, not frugal. Oh, unlimited refills
Speaker 1: on the one cup and just keep drinking out of
Speaker 1: the sand.
Speaker 2: That's just sorry. Guys.
Speaker 1: If you can't afford two cups of coffee of drip
Speaker 1: coffee at two dollars and fifty cents, probably better to
Speaker 1: make your coffee at home.
Speaker 2: Yeah, here's the question. Though, This is all not all
Speaker 2: that different than was it last year that I talked
Speaker 2: about how oh your whitewater thing went six Flags? Yeah?
Speaker 2: When we took we took the kids to six Flags.
Speaker 2: We were there all day, the whole family, and we
Speaker 2: bought one of those refillable plastic cups with a little
Speaker 2: lanyard like a handle on it and stuff like that.
Speaker 2: Which the reason we got one, and the reason we
Speaker 2: were willing to pay twenty four dollars for the thing
Speaker 2: was because the free refills. And so the question is,
Speaker 2: how is that do you feel? And what about when
Speaker 2: y'all went to Disney you got the popcorn bucket, and
Speaker 2: your whole family's split in this popcorn bucket free refills
Speaker 2: as much as you want.
Speaker 1: It's not free, you pay for every revell, but it's
Speaker 1: just cheaper refills.
Speaker 2: Oh that's right. Yah, Yeah, it's like three dollars as
Speaker 2: opposed to twenty five. Yeah, So I guess the question
Speaker 2: is is there a difference between something like that. I
Speaker 2: think there is, versus is when someone's waiting on you.
Speaker 2: I like, you're actually different sit down service expectations around that.
Speaker 2: I think I think it's different. I do.
Speaker 1: I think it's different. So and maybe I'm not. Maybe
Speaker 1: someone will write in and say, no, you gots, they're both,
Speaker 1: they're both terrible, or actually they're both Okay. Everyone's probably
Speaker 1: gonna come down in a different place on this. But
Speaker 1: I just don't think that's a saving hack. I just
Speaker 1: think that's being that's being cheap.
Speaker 2: You're definitely saving money, like by definition, you are saving money.
Speaker 2: But I agree though, because I think there is something
Speaker 2: different about walking around, like it's a more communal kind
Speaker 2: of activity. I guess, like if you're at a theme
Speaker 2: park doing doing something like that, as opposed to sitting
Speaker 2: down at a restaurant, like at a breakfast place, and
Speaker 2: it's expected that, oh, you get a meal, I get
Speaker 2: a meal, you get a drink, I get a drink.
Speaker 2: It's not like it's I mean one of the thing that,
Speaker 2: yeah that if you.
Speaker 1: Were sitting down to eat and you ordered waters for
Speaker 1: all your kids, but you pour the waters out in
Speaker 1: the plants or whatever, and then I order a soft
Speaker 1: drink and I fill up all their cups with my
Speaker 1: soft drink.
Speaker 2: That that's cheap.
Speaker 1: That's exactly what this is, right, And so I think
Speaker 1: it's I just think it's different.
Speaker 2: I guess I'm thinking about I don't know for somebody,
Speaker 2: because it just depends on the situation. Because like I picture, like,
Speaker 2: obviously a nice coffee shop like the one we go to,
Speaker 2: they don't offer free refills on the coffee because you know,
Speaker 2: it's like nice coffees. But I think the kind of
Speaker 2: place that offers a free refill, it's not a huge deal.
Speaker 2: It's like, you know, like even waffle House, a lot
Speaker 2: of times they'll top you. They'll come by, they'll top
Speaker 2: you off, of course, and it's not like it's a
Speaker 2: huge infringement upon their overall profit. They're at the waffle House,
Speaker 2: don't know. So you're with this TikTok couple. I think
Speaker 2: if they want to do that, that's it's up to
Speaker 2: them to decide whether or not that that's gonna fly,
Speaker 2: because I think all situations are a little bit different. Personally,
Speaker 2: I'm not doing that, Yeah, I will split the thermost
Speaker 2: thing at the at the six Flags that will fill
Speaker 2: up with lemonade and let all the kids.
Speaker 1: Yeah, I think those are different because nobody cares how
Speaker 1: you're consuming that.
Speaker 2: But when you're at a restaurant, they often do. They're different.
Speaker 2: More's different expectations around sit down't service, skip the coffee,
Speaker 2: make it at home.
Speaker 1: All right, we got more to get to, including we're
Speaker 1: talking about kind of food a little bit. We'll talk
Speaker 1: about groceries and some good news that could lead to
Speaker 1: you saving a lot of money on groceries. We'll get
Speaker 1: to that and more right after this.
Speaker 2: All right, Joel got more personal finance stories to get
Speaker 2: to today. But first we have our ludicrous headline of
Speaker 2: the week and Gary, Yes, what are you angry about
Speaker 2: this week? Matt? I'm not that angry ever about anything,
Speaker 2: but listener, Gary, he emailed this one to us. This
Speaker 2: was from a local TV station WTC. That's I assume
Speaker 2: how they say their their handle or announcement. But the
Speaker 2: title reads, or the headline reads, a couple's home dreams
Speaker 2: crushed after losing four hundred thousand dollars in alleged contractors
Speaker 2: scam and to summon up. This was a honestly it
Speaker 2: was a sad story of a couple who wanted to
Speaker 2: build their dream home, but then they ended up with
Speaker 2: a project that was barely started. It was basically installed
Speaker 2: out in like the framing part of construction. But this
Speaker 2: isn't something that just happens locally there in Arizona, I think,
Speaker 2: is where this house was.
Speaker 1: And let's say that it was stalled out, but largely
Speaker 1: because not because the contractor was having tough time subcontractors
Speaker 1: or because they were they were stealing the money.
Speaker 2: Yeah, it was a scam. But the key lesson from
Speaker 2: the story though, is to only do business with trusted contractors,
Speaker 2: and by trusted contractors, how do they become trusted contractors?
Speaker 2: Will you talk to actual clients who have actually used them,
Speaker 2: get to see their actual work in person. This is
Speaker 2: something that Kate and I at the beginning of the
Speaker 2: year do we talk about maybe we're thinking about doing
Speaker 2: something to the house, but we're sort of vetting this
Speaker 2: contractor and guess what he's doing work literally across the streets.
Speaker 2: So the ability to we're not only seeing his work,
Speaker 2: but we're seeing like the why behind his work, like
Speaker 2: some of the background stuff and how he's his pace,
Speaker 2: his progress. Yeah, yeah, and just having like more casual
Speaker 2: conversations when he's when he's stopping by as well. I
Speaker 2: feel like that's a massive benefit for us to get
Speaker 2: to know that one in particular. But on top of
Speaker 2: getting to know a contractor and making sure that you're
Speaker 2: vetting them properly, the other piece of advice here is
Speaker 2: to not pay contractors exorbitant sums of money up front.
Speaker 2: This is certainly what they did where they were requiring
Speaker 2: like hundreds of thousands of dollars. And then it's like, oh,
Speaker 2: you want to you want to build a guest house
Speaker 2: as well, Well, you know what if you just go
Speaker 2: ahead and pay for that upfront as well, we'll give
Speaker 2: you a.
Speaker 1: Discount, yes, And that feels so you're like, oh great, great, Yeah,
Speaker 1: this is we'll pay them up front and that way
Speaker 1: we're gonna have to pay less overall. But in the end,
Speaker 1: you've lost a ton of money, yes, and you've got
Speaker 1: like almost no progress to show for it. On a
Speaker 1: major project like that, like, you'll likely want to pay
Speaker 1: as you see progress. You pay in installments. What do
Speaker 1: they call it, like a release schedue, not a release
Speaker 1: I forget what they call it, but basically this person whatever, Yeah,
Speaker 1: different dispersiments as the work is being performed in percentages
Speaker 1: along the way. Typically you pay something, yes, upfront when
Speaker 1: you sign the contract, but hopefully then, like like you said, Matt,
Speaker 1: you've seen their work, you've actually like talked to people
Speaker 1: who have worked with that contractor you feel very comfortable
Speaker 1: now because you've seen the work in person. Also, and
Speaker 1: you don't mind paying them ten percent at the signing.
Speaker 2: And ten percent's fine, but not like half of it
Speaker 2: or a ton of money upfront before any work gets done, right,
Speaker 2: And that's what was happening in this case.
Speaker 1: Yep, And that should be written out in the contract
Speaker 1: when those dispersements happen at different periodic processes along the way,
Speaker 1: So make sure you're doing that. Don't pay with cash either.
Speaker 1: That's something else it's important to mention. It's it's pretty hard,
Speaker 1: if not impossible, to get money back after a scam
Speaker 1: like this occurs, which is why you need to do
Speaker 1: your due diligence on the front end.
Speaker 2: Paying cash is a bad move. Well, it's not that
Speaker 2: like paying using a credit card is going to allow
Speaker 2: you to flag it as a fraudulent charge because likely,
Speaker 2: just like the time windows that it takes for work
Speaker 2: to get done out of property, you're oftentimes you're out
Speaker 2: of that window to be able to flag, like, you know,
Speaker 2: a charge or let's see an expense that wasn't delivered upon.
Speaker 2: But it's the fact of what that's more indicative of,
Speaker 2: which is like shady business. Right.
Speaker 1: There's no paper trail either, which is just nice to
Speaker 1: have a paper trail, especially for legal matter.
Speaker 2: Yeah, if you've got to pick care of that, who
Speaker 2: comes by and they're like, oh, yeah, you know, we're
Speaker 2: gonna unclog the drain and do some toilet work or
Speaker 2: something like that, four hundred bucks, great, Okay, if you
Speaker 2: want to ven mail them, that's fine. But when we're
Speaker 2: talking about large sums of money like this, this isn't
Speaker 2: something that you should be It should be like wiring
Speaker 2: money over as opposed to, like you said, something that's
Speaker 2: really that's spelled out. That's where the terms are made
Speaker 2: clear in a legit contract agreed all right.
Speaker 1: On the housing note, new data finds that houses are
Speaker 1: being built smaller these days, which is something I cheer.
Speaker 1: They're being built by smaller by about three hundred square feet.
Speaker 1: So town homes are being built in larger numbers as well,
Speaker 1: and we're even seeing matt I think this is in
Speaker 1: San Antonio, tiny home subdivisions popping up.
Speaker 2: I love like.
Speaker 1: They get more like six to seven hundred square feet
Speaker 1: sorts of homes, but like a whole subdivision of those things.
Speaker 1: And I don't know if you've ever seen like that.
Speaker 1: There's some YouTube channel tiny Houses. This guy takes tours
Speaker 1: of tiny houses and they're all just so cool, so unique.
Speaker 1: I love the way that people use space. It's so creative.
Speaker 2: Guessing they utilize the white angle a whole lot. I'm
Speaker 2: sure they do.
Speaker 1: I think the host is from New Zealand, so he
Speaker 1: just seems genial and cool. But yeah, this really is
Speaker 1: changing a decades long trend of bigger is better. That
Speaker 1: felt like kind of the American new home builders Mantra.
Speaker 1: Smaller homes we think are great for a lot of reasons.
Speaker 1: They bring down the price point obviously because not as
Speaker 1: many materials, they're just smaller footprint, but they're also more
Speaker 1: affordable to maintain, right to heat, to cool, to furnish.
Speaker 1: And then, of course, when homes are smaller and they
Speaker 1: aren't massive, mansions right on giant tracks of land. You
Speaker 1: can build even more houses, increasing supply to meet the demand.
Speaker 1: Isn't that what we need in this country right now?
Speaker 1: So the housing market, it obviously doesn't change on a dime,
Speaker 1: it doesn't change super quickly. But these shifts are a
Speaker 1: good sign for the American housing market in the future.
Speaker 1: I love I love to see this trend and hope
Speaker 1: it continues.
Speaker 2: Yeah, like you're kind of touching on density there as well.
Speaker 2: And so add to that zoning changes that are happening
Speaker 2: in many cities across the country, and I think we
Speaker 2: have a more of a recipe for success and more
Speaker 2: affordable homes in the future. N PR they highlighted that recently,
Speaker 2: and we've been talking about that for years, the fact
Speaker 2: that zoning changes are in our future. If we're looking
Speaker 2: to increase density.
Speaker 1: They're in necessity, and we've made it too onerous to
Speaker 1: build multifamily to build more density in a lot of
Speaker 1: cities across the country, and that is starting to shift.
Speaker 2: Yeah, there's a reason that housing prices are consistently higher
Speaker 2: in California, while they've fallen by something like seven percent
Speaker 2: year over year in cities like Austin, Texas. And it's
Speaker 2: all about the rules. It's all about the regulations for building,
Speaker 2: especially multi family homes, in order to boost that density.
Speaker 2: We have seen construction of ADUs accessory dwelling units for instance,
Speaker 2: like those are booming in California, But other construction of
Speaker 2: new housing is it's more arduous and it's slow because
Speaker 2: of all the red tape. So what we're saying here
Speaker 2: is that more supply, which is often hampered by zoning
Speaker 2: ordinances and regulation, we think that that is the answer
Speaker 2: to the expensive housing situation that we found find ourselves in.
Speaker 1: Yeah, it is that little first day of high school
Speaker 1: econ one oh one, Right, the supply and demand, and
Speaker 1: if we are making it incredibly hard to build new
Speaker 1: homes and to create more density, then that supply is
Speaker 1: going to remain low and that's going to keep cost high.
Speaker 1: That's going to keep prices up, which meanwhile.
Speaker 2: Domain is reaching all time highs. As there's an entire generation, right,
Speaker 2: a massive generation of millennials that want to own a place.
Speaker 2: I was gonna say millennial families to raise and kids.
Speaker 1: The older folks in the gen Z, in the gen
Speaker 1: Z demographic, they're wanting to buy homes too. It's pretty hard.
Speaker 1: And so man, we should all be pushing for changes
Speaker 1: where we live to make it possible to build more
Speaker 1: and even just more rental units too. More apartments coming
Speaker 1: online too, is going to help solve the crisis that
Speaker 1: we're facing as well. One more story that's worth discussing
Speaker 1: in the housing space is that bans are increasingly happening
Speaker 1: on short term rentals and cities across the country with
Speaker 1: the assumption that it's going to help reduce the high
Speaker 1: cost of housing. And so, Matt, you and I were
Speaker 1: talking about a bunch of different ways to reduce the
Speaker 1: high cost of housing. Well, maybe wouldn't we be in
Speaker 1: favor of these things too?
Speaker 2: Not quite right.
Speaker 1: Research from the Harvard Business Review finds that these bands
Speaker 1: on short term rentals aren't really doing anything or they're
Speaker 1: doing very very little to change the price that people
Speaker 1: pay in rent. And so here's a line from their
Speaker 1: findings from this recent article they published. They said, put simply,
Speaker 1: restricting Airbnb is not going to be an effective tool
Speaker 1: for solving the housing affordability problems in many US cities. Unquote,
Speaker 1: and so, yeah, does banning Airbnb's increase the supply of
Speaker 1: single family homes for rent. Yes, it does, and more
Speaker 1: supply drives down costs, but it's such a small percentage
Speaker 1: that the impact on long term renters is minimal, and
Speaker 1: so the other stuff we just talked about is way
Speaker 1: more impactful. I guess that when people focus on the
Speaker 1: one percent problem over the like ten twenty fifty percent problems.
Speaker 1: I get why you're you're thinking about that, but let's
Speaker 1: not make the short term rental market be the scapegoat
Speaker 1: for the bigger problems that we face, that are actually
Speaker 1: that are leading to the real affordability problems we face.
Speaker 2: That's right, all right, jil. Let's get to my favorite
Speaker 2: story from this entire Friday flight. Let's talk about Aldi
Speaker 2: and the good news is that they are opening eight
Speaker 2: hundred stores over the next few years. Many of those
Speaker 2: are going to be brand new locations, but others are
Speaker 2: going to be converted when dixies. Now that they've finalized
Speaker 2: that acquisition.
Speaker 1: We talked about that when that happened, we weren't sure
Speaker 1: how they were going to proceed with them.
Speaker 2: Yeah, I'm plutely less optistic about those because I feel
Speaker 2: like a big part of the advantage of all days
Speaker 2: is how they're constructed, smaller footprint. Yeah, yeah, exactly, they're smaller,
Speaker 2: but hopefully there is an Aldi coming to a town
Speaker 2: or to a location near you, and the great news
Speaker 2: is that Aldi's expansion. What's fascinating about them is that
Speaker 2: they put downward pressure on pricing at other grocery stores
Speaker 2: as well, where it forces them to be more competitive.
Speaker 1: They have to free market harder work matt I love it.
Speaker 2: They have to cater more to customers who are priced sensitive.
Speaker 2: Even though you yourself may not want to be visiting
Speaker 2: or shopping at an Aldi, you're likely to see lower
Speaker 2: prices at your favorite local growth.
Speaker 1: So basically, all the other grocery stores, the publixa is
Speaker 1: the Ralph, the Kroger's whatever, they're shaking in their boots
Speaker 1: when it Aldi comes near and they are forced to
Speaker 1: lower prices pretty quickly.
Speaker 2: It's just like when the discoun airline comes to a
Speaker 2: new market like Southwest or Frontier or Spirit. When they
Speaker 2: show up the major is United Delta American, they're all like, ugh, okay.
Speaker 1: Parties over guys, that's right, Yeah exactly. They have to
Speaker 1: continue push those fairs downwards to compete, and the grocery
Speaker 1: stores have to do the same when it aldi comes
Speaker 1: in the neighborhood, and so they Yeah, they are a
Speaker 1: massive disruptor. And I think I read somewhere that ninety
Speaker 1: percent of all these offerings are private label, which is
Speaker 1: a huge I mean, there's so many different things they
Speaker 1: do to cut costs. We could probably talk about that
Speaker 1: for like fifteen minutes. It's the quarter and the cart
Speaker 1: reduced number of workers, and those workers work really hard,
Speaker 1: and they pay those workers more than I think the
Speaker 1: average grocery store associate make. So all they does all
Speaker 1: these things to make sure that costs are low for
Speaker 1: their customers, and so more, all these across the country
Speaker 1: can only be a good thing. I think Walmart, by
Speaker 1: the way, they might start on the opposite end of
Speaker 1: of the spectrum. They might start charging folks to use
Speaker 1: their self checkout lanes, which sounds kind of annoying, right,
Speaker 1: It sounds pretty dumb. Yeah, at least in some of
Speaker 1: their stores. Starting at the end of last month, Walmart
Speaker 1: Plus customers are the only ones who are going to
Speaker 1: be allowed to use those self checkout lanes at certain stores.
Speaker 2: And tart vip self checkout lane, right, Yeah, and so
Speaker 2: Target it seems like an oxymoron.
Speaker 1: Target's doing something similar. Yeah, you think it's all just
Speaker 1: about speed and helping customers, but I want to help
Speaker 1: certain customers. But again, the main reason it seems to
Speaker 1: be that a high enough percentage of folks are stealing
Speaker 1: or ringing up cheap items and putting a more expensive
Speaker 1: item in their cart. And so I guess I understand that,
Speaker 1: Like I do think that maybe self checkout hasn't been
Speaker 1: as great of an experiment. I know some people love it,
Speaker 1: and it's nice when you're only checking out for a
Speaker 1: thing or two so you can blitz out of the
Speaker 1: store faster. But I think that era of ubiquitous self
Speaker 1: checkout might be coming to an end.
Speaker 2: We'll see.
Speaker 1: It's gonna be interesting to see how that shakes out well.
Speaker 2: And Plus, if you want to self checkout so you
Speaker 2: can get out of their faster, the real solution is
Speaker 2: just to go to Aldi. I've talked about this before,
Speaker 2: the ability I'm gonna time myself one to these days,
Speaker 2: next time we go to the store, we go to Aldi.
Speaker 2: You maybe we'll time it. But the ability for me
Speaker 2: to go and grab milk and eggs, I feel like
Speaker 2: that's always when I'm running out to get milk and eggs.
Speaker 2: I swear I can do that in like less than
Speaker 2: ninety seven right.
Speaker 1: We'll do like a supermarket sweep style video.
Speaker 2: Gone in sixty seconds style, like if Nick Cage can
Speaker 2: do it, I think I can do it, all right.
Speaker 2: I want to see this something else that's happening. When
Speaker 2: you check out at the grocery store donation solicitations, you're
Speaker 2: often asked if you want to make a one dollar donation, right,
Speaker 2: or five dollars donation to the charity of choice that
Speaker 2: the store is partnering with, or even just to kind
Speaker 2: of round up your purchase. They kind of are jumping
Speaker 2: on the Acorns model there, And I think there's nothing
Speaker 2: wrong with giving money away in that fashion, in that style,
Speaker 2: if that's your jam. But the story here it highlights
Speaker 2: that the reason, of course that many give at the
Speaker 2: checkout is because of guilt. So we're here to let
Speaker 2: you know that we don't want that to be the
Speaker 2: driving force behind why it is that you give. We
Speaker 2: want you to proactively give, make a plan to be
Speaker 2: charitable to the different causes that you care about.
Speaker 1: We'll link to some different reasons which as something is
Speaker 1: put right in front of your face at that time.
Speaker 2: Yeah, we don't want you to be reactive as opposed
Speaker 2: to just being a little more thoughtful with your money.
Speaker 2: But in the show notes for this episode, we'll link
Speaker 2: to some different resources on how does it you can
Speaker 2: vet charities and how you can give more effectively. Yeah,
Speaker 2: that'll be in the show notes up on the website
Speaker 2: at howtomoney dot com. Yeah.
Speaker 1: I know some people nitpick or say who cares, dude,
Speaker 1: give twenty cents the round up to me? And I
Speaker 1: know it's not that big of a deal, but I
Speaker 1: just want to be incredibly proactive in my giving. I
Speaker 1: want to have and I don't feel any guilt when
Speaker 1: I say no because I know that I'm giving in
Speaker 1: other ways, in incredibly pre planned ways. And I think
Speaker 1: you can alleviate that guilt by having a giving plan.
Speaker 1: If you don't have the giving plan, though, you might
Speaker 1: feel guilty and be like, well, I guess this is
Speaker 1: my one good deed for today. I'll round up the
Speaker 1: purchase price. Ll Yeah, sure, here's five bucks, even if
Speaker 1: it's not a charity you care much about or aligned
Speaker 1: with your mission.
Speaker 2: Yeah. I think the other thing, too, is that you
Speaker 2: could potentially be a more generous giver if you did
Speaker 2: make a plan, because I think there's also like the
Speaker 2: psychological element of okay, I've check that box. Even if
Speaker 2: it's just a round up, you think you almost see
Speaker 2: yourself as like better than you actually are, perhaps where
Speaker 2: you're like, oh, I'm always so charitable, I'm always rounding up.
Speaker 2: But in reality, you're just letting yourself off the hook
Speaker 2: as opposed to giving it in a more significant way. If
Speaker 2: you are in a position that you've seen financial success
Speaker 2: where you do have the freedom and ability to maybe
Speaker 2: give a little more generously, that's all all right.
Speaker 1: Just by the way, quick heads up, Matt and I
Speaker 1: are going to have a giving competition pretty soon that
Speaker 1: you guys can participate in. More to come on that
Speaker 1: next month. All right, thanks as always for listening. We
Speaker 1: appreciate it. We hope you have a great weekend. Don't
Speaker 1: forget to sign up for the how to Money newsletter
Speaker 1: at how to money dot com slash newsletter of course.
Speaker 1: But Matt, that's going to do it for this one
Speaker 1: until next time. Best Friends album Best Friends Out