Speaker 1: Welcome to How the Money. I'm Joel and I'm Matt.
Speaker 1: Today we're discussing student loan payment pause, the worst car loans,
Speaker 1: and avoiding this common hs A blunder. That's right, Joel.
Speaker 1: This is our Friday Flight episode where we are gonna
Speaker 1: take a look back on the stories that we came
Speaker 1: across this week, and we're gonna talk about how it
Speaker 1: affects our personal finances. I'm excited to get to the
Speaker 1: stories you mentioned, plus uh several others during this episode.
Speaker 1: But I know first you wanted to share a little
Speaker 1: bit about how much you love your credit union. Okay,
Speaker 1: so I have a love hate relationship with my credit
Speaker 1: union right now. We have talked about on the show
Speaker 1: many times about how much we love credit unions. There
Speaker 1: are a lot of reasons for that. I'm pretty sure
Speaker 1: we did a whole episode on that, like on a
Speaker 1: four or five months go. I think it was called
Speaker 1: why we Love Credit Union. It was like it was
Speaker 1: like it was worth than a year ago. I think, well,
Speaker 1: I still dig them, but I will say I have
Speaker 1: a pain point with my current credit union right now,
Speaker 1: and it is their website is awful. It's trash, and
Speaker 1: I was trying to transfer money recently from my credit
Speaker 1: union account to a savings account with another institution, and
Speaker 1: the way the way they limit your transfers, it's just painful.
Speaker 1: Uh it's like two thousand dollars a day max. But
Speaker 1: then you go back in like a week later, and
Speaker 1: it's like, we still haven't finished the transfer, so you
Speaker 1: can't transfer anymore. And so I just had never, Oh,
Speaker 1: you still want that to happen, and thanks for letting us.
Speaker 1: We'll get on it, um. I don't know, after we
Speaker 1: like take a nap or something, then we'll send you
Speaker 1: a fact with the confirmation. Right. So I just wanted
Speaker 1: to put that out there. Love credit unions. There's so
Speaker 1: many reasons to do business with the credit union. I
Speaker 1: just wish that my local credit union would get their
Speaker 1: act together when it comes to, you know, a little
Speaker 1: bit better customer service. UM from in particular that website standpoint. Yeah,
Speaker 1: I mean that was one of the downsides that we
Speaker 1: presented in that episode. I think it was one of
Speaker 1: the few downsides we gave. They don't pay great interest
Speaker 1: rates if you're a saver, and they also have poor
Speaker 1: interfaces when it comes to just the online support. The
Speaker 1: online interface. This is one area that I'm glad to
Speaker 1: see other kind of medium sized players step into mix, right,
Speaker 1: because we love credit unions because they offer great competitive
Speaker 1: rates if you're looking for a loan. But now there
Speaker 1: are folks like Rocket Mortgage or better dot Com, these
Speaker 1: players that I kind of see as like more middle
Speaker 1: of the pack kind of lenders, because before what I
Speaker 1: felt like like there were a bunch of massive banks. Yeah,
Speaker 1: there was this huge, big guys, and then there were
Speaker 1: like the credit unions, and because of that, we said, okay,
Speaker 1: if we got to pick one over the other, let's
Speaker 1: go with the credit unions. But now these other companies
Speaker 1: are stepping into the void essentially, and they're also offering
Speaker 1: really great rates, and then oftentimes they're selling those loans
Speaker 1: to other loan servicers who have great online portals that
Speaker 1: make it really easy to actually set up those automatic payments,
Speaker 1: the ability to transfer money in and out of those
Speaker 1: accounts very easy, even just like some basics like online statements.
Speaker 1: One of my credit unions, they don't issue you a
Speaker 1: mortgage statement every single month, seriously, like they choose like
Speaker 1: three random months of the year. But yeah, with you
Speaker 1: like credit unions, but there is definitely some room for improvements,
Speaker 1: and they leave a little to be desired, especially on
Speaker 1: that technological front. And so I'm just putting this out
Speaker 1: there to my local credit union. I would love to
Speaker 1: see you invest some uh, you know, a little bit
Speaker 1: of time, a little effort into making that website more
Speaker 1: user friendly and even just making a transfer. It shouldn't
Speaker 1: be as difficult as it was. Um. And yeah, I
Speaker 1: love you, I'll still I'll stick with you, but I
Speaker 1: just want you to know that you can improve, you
Speaker 1: can do better. But as long as they're still offering
Speaker 1: those free of Letty United tickets Rember, the one time
Speaker 1: we scored those free right little Instagram Instagram challenge or
Speaker 1: something from our local credit us, we wanted. That was
Speaker 1: a lot of fun. All right, let's gonna get to
Speaker 1: the our stories from this week. This is that quick
Speaker 1: sampling that we found interesting. And let's first pick it
Speaker 1: off with student loans. This is something that's run event
Speaker 1: too many. How do money listeners? Uh? And this was
Speaker 1: announced actually last Friday, but it was after our Friday
Speaker 1: flight was already out. It was like Friday five pm
Speaker 1: or something like. Yeah, one of those last minute things,
Speaker 1: and so it turns out that the student loan payment
Speaker 1: pause will continue. Uh, I know, yeah, if I if
Speaker 1: I had student loans, this would be pretty great news,
Speaker 1: be pretty pumped right now. But I'm more glad to
Speaker 1: not have anything student loans currently. But not having to
Speaker 1: pay on those loans if you do have them, while
Speaker 1: also not accruing interest, is going to allow you to
Speaker 1: prioritize other financial goals for the time being. Maybe that's
Speaker 1: saving up for that down payment for your new place,
Speaker 1: investing that money if that's not something you've already done,
Speaker 1: all that is great for you, right or just building
Speaker 1: up that emergency fund if you're not where you want
Speaker 1: to be at step one. Yeah, gear number one baby.
Speaker 1: And this is especially great news if you are on
Speaker 1: the ten year Public Service loan forgiveness plan, because that
Speaker 1: means twenty three months where payments weren't required in all.
Speaker 1: Twenty three of those months are actually going to count
Speaker 1: towards your decade long repayment period. That's incredibly good news
Speaker 1: for those that's I mean, that's a significant show. That's
Speaker 1: almost of the time allotted that you needed to pay
Speaker 1: on your loan to be able to qualify that you
Speaker 1: didn't have a payment and so that just means more
Speaker 1: forgiveness at the end of the road, which is great.
Speaker 1: And uh, yeah, payments should resume in February. The Education
Speaker 1: Department actually emphasized that this will be the last extension.
Speaker 1: So make sure you're you're setting yourself up financially to
Speaker 1: be ready for those payments to resume when the time comes.
Speaker 1: Be ready to make a student loan payment in February.
Speaker 1: Uh and so like seriously this time right, right? Yeah, no,
Speaker 1: we mean it, you're sure government, Okay, I would not
Speaker 1: count on getting another one, that's for sure. The one
Speaker 1: thing you don't want to do with the money that
Speaker 1: you should be paying in student loans is to increase
Speaker 1: your lifestyle with those funds, because you're taking money that
Speaker 1: needs to be in your budget, you know, in a
Speaker 1: few months time, and you're incorporating it into your spending,
Speaker 1: and then it becomes even harder, right to untangle and
Speaker 1: to start paying on those student loans again. Yeah, we
Speaker 1: would say set yourself up for success, don't absorb that
Speaker 1: extra money into Yeah, you're you're spending your outgoing funds.
Speaker 1: It's I mean, honestly, if you can continue making those payments,
Speaker 1: but just making to yourself, right, Like, don't just let
Speaker 1: all the different categories of your budget just swell. Instead,
Speaker 1: make sure you're you're marking that money, and like we said,
Speaker 1: make sure you're putting that towards something more meaningful, whether
Speaker 1: that's setting up your emergency fund, investing, saving that towards
Speaker 1: other financial goals. But I mean, yeah, the worst thing
Speaker 1: you want to do is to exit this period of
Speaker 1: time and then you're like, oh, man, like that was
Speaker 1: a lot of money. Actually when I total it all up,
Speaker 1: what was what was I actually able to do? And
Speaker 1: in reality you just maybe spend it on drinks out
Speaker 1: with friends or just spending more at the store or
Speaker 1: whatever it is. This is the perfect chance to get
Speaker 1: ahead financially and you take advantage of it, is what
Speaker 1: we would say. And we're actually you're gonna talk with
Speaker 1: a c s LP that's a certified Student Loan Professional
Speaker 1: and also a former Olympic gold medal winner, Lauren Williams
Speaker 1: on Monday Show about how to approach your student loans
Speaker 1: given the recent news. She is a fountain of knowledge.
Speaker 1: So we're looking forward to, yeah, sharing that conversation with you.
Speaker 1: That's right, And let's talk about inflation here for a minute.
Speaker 1: If you are a regular HTM Friday flight, let's in here,
Speaker 1: or maybe just as long as you're not living in
Speaker 1: a cave or something, you know that there have been
Speaker 1: some real inflation concerns recently. The New York Times they
Speaker 1: had an article this week detailing just how bad things
Speaker 1: have gotten recently for savers uh, and largely that's because
Speaker 1: of rising inflation. Basically, even though your savings account might
Speaker 1: be paying you close to point five percent assuming you're
Speaker 1: with one of the better online banks, if you're with
Speaker 1: one of the huge banks, they're probably paying you like
Speaker 1: point zero five percent at best. Best. Uh, the real
Speaker 1: rate of a turn on your savings is actually negative
Speaker 1: these days, despite the fact that you might be earning
Speaker 1: half a percent, because first of all, half percent that's
Speaker 1: pretty pidily in any environment. But it's actually going to
Speaker 1: look much worse as inflation gets worse. But the problem is,
Speaker 1: like there is just not much that savers can do
Speaker 1: investing savings that you want to have on hand for
Speaker 1: a near term purchase or putting your emergency fund money
Speaker 1: in the stock market that could leave you in a
Speaker 1: in a pickle if the market experiences turbulence and you
Speaker 1: might you know you might have actually less money than
Speaker 1: you started with, less money than just the impact of
Speaker 1: inflation on your dollars. Yeah, it's dispiriting. I think to
Speaker 1: read that headline as someone who enjoys saving, it's like,
Speaker 1: dang it, my savings is earning. Actually it's negative returns
Speaker 1: right now, especially you feel distancentivized to do something that
Speaker 1: you know you should be doing exactly, and especially with
Speaker 1: how well the market has been doing. I think people
Speaker 1: are like, well, I'm just gonna take a chance, um,
Speaker 1: but there is there's not much wisdom there in that decision.
Speaker 1: If you need that money in the short term, you
Speaker 1: basically have to roll with the punches. And a friend
Speaker 1: of the show, Ben Carlson, wrote this week that the
Speaker 1: current situation might be the worst ever for someone saving
Speaker 1: their money in a bank or a money market account.
Speaker 1: And yeah, we hate seeing that because saving money is
Speaker 1: a good thing. It just feels awful to be saving
Speaker 1: in this current environment. But if you are an oversaver
Speaker 1: in particular, and yes, that is a problem. There are
Speaker 1: some people that save too much money. You want to
Speaker 1: make sure that you are investing some of your money
Speaker 1: for the future. Obviously, like Matt said, don't invest money
Speaker 1: you're gonna need in the here and now or in
Speaker 1: the next year or two. But also don't assume that
Speaker 1: investing is risky, and the keeping your money in savings
Speaker 1: in the savings account isn't. There is a very known
Speaker 1: and quantifiable risk right now to having too much money
Speaker 1: in savings. It's getting it's getting eaten alive. Yeah, currently
Speaker 1: that risk is quantifiable because it is that five point
Speaker 1: four percent that's the Labor Department put out the consumer
Speaker 1: price Index this past week. That is the level inflation
Speaker 1: that we've seen, of course, over the past twelve months.
Speaker 1: But I will say I think we should maybe be
Speaker 1: encouraged by the it did down to it because in
Speaker 1: June it was point nine, and so July numbers have
Speaker 1: showed point five, so almost half of the increase that
Speaker 1: we saw in June. Uh, and so hopefully that might
Speaker 1: mean that we're actually kind of, you know, reaching the
Speaker 1: kind of the top of the hill. Hopefully we'll see
Speaker 1: things continue to settle down in the coming months. Yeah,
Speaker 1: I hope so, But yeah, I think you know, Matt,
Speaker 1: we talked a while back in episode sixty nine about
Speaker 1: investing and how investing involves risk, in not investing is
Speaker 1: signing yourself up for this other kind of risk, right,
Speaker 1: this guaranteed risk of baked in losses. And so yeah,
Speaker 1: inflation is going to steadily erode the spending powers of
Speaker 1: the dollars that you're saving. Savings has a place in
Speaker 1: personal finance for sure, But not investing and being too
Speaker 1: scared to put some of your money uh in the
Speaker 1: market is a recipe for like certain doom for those
Speaker 1: dollars over time. That's right, man, speaking of guaranteed losses.
Speaker 1: Turns out that the lack of competition is ensuring that
Speaker 1: more money is being parted from our wallets. There is
Speaker 1: this interesting article over in Bloomberg recently about how much
Speaker 1: money reduced levels of competition cost the average American family.
Speaker 1: The White Houses National Economic Council estimates our collective losses
Speaker 1: at roughly five thousand dollars a year. I want my
Speaker 1: money back, But where does it come from? Against it works? Uh,
Speaker 1: it comes from all the different companies that we pay
Speaker 1: because they are able to jack prices up raise prices
Speaker 1: when there is a lack of competition. Much of that
Speaker 1: loss is due to companies merging, which creates fewer competitors.
Speaker 1: In an industry. And they also point a finger at
Speaker 1: increased regulations as well. Apparently thirty percent of jobs require
Speaker 1: a license now, where as only five percent required one
Speaker 1: back in the fifties. Uh, non compete agreements, that's another
Speaker 1: factor that are keeping prices high. And you know, we
Speaker 1: believe that capitalism it's not full proof, it's not without
Speaker 1: its own issues. But you know this warning about the
Speaker 1: high price that we pay, that we all pay when
Speaker 1: competition is diminished, this is an important one to heed. Yeah,
Speaker 1: that's a big headline number. Like to think about the
Speaker 1: average family has five thousand dollars less every single year
Speaker 1: to spend or to say or do whatever they want
Speaker 1: with because there's not enough competition in certain sectors of
Speaker 1: our economy. That was that was eye opening to read.
Speaker 1: I mean that's almost a raw fire a right, I
Speaker 1: mean just think about that over the years, how much
Speaker 1: that could grow to if you invested that instead exactly
Speaker 1: So it made me think, Matt, like, I started thinking
Speaker 1: about the industries where competition is the stiffest, right, like
Speaker 1: grocery stores for example, price competition is alive and well
Speaker 1: it benefits consumers in society as a whole, that you
Speaker 1: have a lot of options of where you want to
Speaker 1: go in order to shop and get your groceries. Right.
Speaker 1: You know, each chain is attempting to heel to a
Speaker 1: different kind of customer with different budgets and different tastes. Uh.
Speaker 1: The airline industry is another perfect example. The Wall Street
Speaker 1: Journal actually reported this week that airfare prices have barely
Speaker 1: budged over the last twenty five years. Uh So, the
Speaker 1: price you would have paid for a ticket to Europe
Speaker 1: years ago, like a quarter of a century ago, is
Speaker 1: basically the same as what you pay now, in large
Speaker 1: part thanks to competition and innovation, right and so, yeah,
Speaker 1: that it should cost a lot more given inflation and
Speaker 1: the rising prices of everything else, but they haven't exactly
Speaker 1: And this was actually evidence to by Jet Blue. They
Speaker 1: announced this week that they're gonna uh start partaking in
Speaker 1: round trip service from New York to London, which is
Speaker 1: gonna lower prices in a big way. They're gonna be
Speaker 1: this new low cost competitor to some of the major
Speaker 1: airlines who are flying that route consistently, and it's gonna
Speaker 1: lower prices for every single person that wants to go
Speaker 1: from New York to London. Um and fancy folks, even
Speaker 1: some of those just general you know, European trips in
Speaker 1: general too. But uh yeah, then take an industry where
Speaker 1: competition is essentially not existent, like getting home internet service.
Speaker 1: Like all of our listeners can identify with how painful
Speaker 1: it is to get home internet service set up at
Speaker 1: their house and how expensive it is. Prices are high.
Speaker 1: They're often not even transparent. You don't even know what's
Speaker 1: your first months bill is going to be, what taxes
Speaker 1: and fees are going to be included in there. So
Speaker 1: at the same time, customer service is abysmal from those companies.
Speaker 1: There's just no incentive for companies like Comcast and and A,
Speaker 1: T and T to do better. So one of the
Speaker 1: fundamental truths of capitalism is that competition drives businesses to
Speaker 1: make things better, faster, and cheaper. Let's hope that the
Speaker 1: the NBC, the National Economic Council, is looking for ways
Speaker 1: to bring competition back, because too little of it seems
Speaker 1: to be costing all of us quite a bit of
Speaker 1: money every year. That's right, man, All right, we are
Speaker 1: only halfway through our Friday flight. We've got several other
Speaker 1: stories that we're gonna get to after the break. Including
Speaker 1: how there seems to be bidding wars taking place on
Speaker 1: rental units. Will get to that story, plus several others
Speaker 1: right after this break. All Right, we're back. We got
Speaker 1: some more stories to get to. But of course, sweet
Speaker 1: always have to get around to our ludicrous headline of
Speaker 1: the week. Alright, I'm I'm concerned, are you? That was
Speaker 1: my hagrid voice from Harry Potter. I thought I was
Speaker 1: gonna have to rush you to the hospital. Do you
Speaker 1: like that? One? That was good? That was good. We've
Speaker 1: talked about how are reading Harry Potter to the to
Speaker 1: the kids. We're getting pretty close to the end of
Speaker 1: book three, which so far, dude, book three is like
Speaker 1: easily one of the greatest. It's so good. I gotta say,
Speaker 1: I know that Pixar is not reaching out to us
Speaker 1: to do any voiceovers for any of their characters. That's
Speaker 1: not gonna happen. But let's let's get to this week's
Speaker 1: ludacrous headline, and it is from The New York the
Speaker 1: week You're a You're a wizard? Harry. That was better, though,
Speaker 1: that's because you can hear him saying that exactly exactly.
Speaker 1: But yeah, this week's headline is titled even your allergist
Speaker 1: is now investing in startups? This is a good one. Yeah,
Speaker 1: this was sent our way by listener Livy, And yeah,
Speaker 1: if you see a ludical US financial headline, please send
Speaker 1: it our way. We would love to check it out
Speaker 1: and maybe feature it on an upcoming episode. But yeah,
Speaker 1: this one was basically touting the fact that everyone can
Speaker 1: become an angel investor these days. But we would say
Speaker 1: that's actually a bad thing. I mean, you, should you
Speaker 1: be investing in companies with massive quote unquote potential? We
Speaker 1: would say no, Right, big time angel investors like Mark
Speaker 1: Entrees and Matt He's been one of the most successful
Speaker 1: angel investors of all time. He knows this very well.
Speaker 1: I've heard him say it that to be a successful
Speaker 1: angel investor, you need the best opportunities and you also
Speaker 1: need to get extremely lucky. Basically, you're investing in three
Speaker 1: companies hoping that three of them are lucky enough to
Speaker 1: just outperform the competition to an incredible degree, and that
Speaker 1: infinitesimally small success ratio makes up for the other investments
Speaker 1: that fall flat on their face. But yeah, risky forms
Speaker 1: of investing seem to be the normal these days. In
Speaker 1: our society, but for our listeners, you should opt out
Speaker 1: of the angel investing arena. This is not something you
Speaker 1: should pursue. The fees are also really high, so that
Speaker 1: you're gonna get eaten alive from that standpoint, and then
Speaker 1: you're also just like hoping on a wish and a prayer.
Speaker 1: And I guarantee you, if it's available to you, it
Speaker 1: is probably not one of the best angel investing possibilities
Speaker 1: out there, assuming you're just one of these casual angel investors,
Speaker 1: you know. I think shows like Shark Tank have put
Speaker 1: angel investor within the vernacular, right, like it's a it's
Speaker 1: part of folks vocabulary now and they think, oh well,
Speaker 1: and like when they're watching it on TV, they think,
Speaker 1: I knew that product was going to be a hit,
Speaker 1: Like you know that their armchair quarterback, and it's only
Speaker 1: had Mark Huban's money, it would be doing the same thing.
Speaker 1: But there's a huge difference between the billions of dollars
Speaker 1: that Mark Cuban has and like the thousands of dollars
Speaker 1: that you have, And just from a diversification standpoint, we
Speaker 1: don't want you to be an angel investor. The New
Speaker 1: York Times they also had this great in depth article
Speaker 1: about crypto and how easy it is now to make
Speaker 1: your own crappy crypto coin. You can launch a token
Speaker 1: for as little as eight bucks these days. I think
Speaker 1: they the writer launched one called Idiot. Just try to
Speaker 1: see who would bite. Yeah, I mean, just investing in
Speaker 1: most of these different crypto idiot coins or attempting to
Speaker 1: become an angel investor with some of your your spare
Speaker 1: cash is likely going to lead to you seeing that
Speaker 1: money disappear. And so if you do really want to
Speaker 1: go this route, just make sure that you aren't investing
Speaker 1: money that you can't afford to lose. UH. First, make
Speaker 1: sure that you're prioritizing socking away just a solid chunk
Speaker 1: into tax advantaged retirement accounts before you even consider these
Speaker 1: these other riskier forms of investing. And then also just
Speaker 1: remember that you can always support UH that startup company
Speaker 1: in other ways, like just buying their product, buying their service.
Speaker 1: Support them that way, and honestly, the amount of money
Speaker 1: that you would put towards that product or that service,
Speaker 1: it's going to be more likely to be in the
Speaker 1: like a healthy relationship to the amount of money that
Speaker 1: you have set aside as you would see somebody like
Speaker 1: Mark Cuban where he's setting aside thousands or hundreds of
Speaker 1: thousands of dollars because that much to him. It might
Speaker 1: be like you going out and you know, buying some
Speaker 1: fancy underwear that somebody's selling, uh through their new startup company.
Speaker 1: I've never bought fancy underwear, but maybe someday, maybe with
Speaker 1: like a special anti Microbia keeps the punk out out. Uh. Yeah.
Speaker 1: I think this sort of angel investing trend. It just
Speaker 1: makes me think just because you like Big Max doesn't
Speaker 1: mean you should invest your money in McDonald's. And just
Speaker 1: because I like shopping at Costco doesn't mean I need
Speaker 1: to go out and put a lot of money where
Speaker 1: my mouth is when it comes to buying Costco stock.
Speaker 1: You can enjoy something or enjoy a product without investing
Speaker 1: in that company. And granted I own a little bit
Speaker 1: of Costco because I own index funds, but it's one
Speaker 1: of those things where I think you want to People
Speaker 1: want to support a company they believe in or they
Speaker 1: think it has a good trajectory, but there are so
Speaker 1: many things you need to know about a company before
Speaker 1: you invest in it. That's why I avoid single stock investing.
Speaker 1: Or investing in you know, one particular company over to
Speaker 1: this one altogether. If you've dedicated your whole life to it,
Speaker 1: somebody like Mark Cuban, it's a different story, right. But
Speaker 1: for most of our listeners who have day jobs and
Speaker 1: stuff like that, let's hit the easy button, go the
Speaker 1: diversified route, and just stay away from this investing space altogether. Yes. Uh.
Speaker 1: In speaking of investing, while Americans collectively they have over
Speaker 1: eighty billion dollars in their hs A accounts, so their
Speaker 1: health savings accounts, they aren't taking full advantage of that benefit.
Speaker 1: And unfortunately, I think it's because it's called a health
Speaker 1: savings account. They make you think, like, mentally, what do
Speaker 1: you picture when you think of a health savings account?
Speaker 1: You think, Oh, I'm gonna put this money into that
Speaker 1: account and I'm gonna save it. It's just gonna sit there.
Speaker 1: But that is not what we want you to do.
Speaker 1: This is a case of bad branding, dude, Totally. It
Speaker 1: should be what HI account, health investing account because only
Speaker 1: seven percent of folks are actually investing the money that
Speaker 1: they put into an hs A that they have available
Speaker 1: to them. And this is according to the Employee Benefit
Speaker 1: Research Institute. And that's understandable because no one you know,
Speaker 1: talks about what a great investing vehicle hs as can be.
Speaker 1: I mean, we talk about it here, but it's not
Speaker 1: often something you hear about. We actually did a deep
Speaker 1: dive back in episode one oh five, So go back
Speaker 1: and check that one out. If you're putting money into
Speaker 1: an hs A and you're not in investing those funds,
Speaker 1: he wants you to use your hs A to its
Speaker 1: full potential. Uh. It really is the best stealth retirement
Speaker 1: account out there. And I've also heard some folks to say, well,
Speaker 1: make sure that you set aside enough in cash to
Speaker 1: be able to at least cover your health deductible but
Speaker 1: even still like you should have enough money in your
Speaker 1: emergency fund to cover any unforeseen health costs. In fact,
Speaker 1: is too you can count on the fact that you're
Speaker 1: probably going to go to the doctor at least once
Speaker 1: or twice during the year, So just set up another
Speaker 1: account within your savings buckets or however you have your
Speaker 1: budget set up, but have an out of pocket medical
Speaker 1: costs category that you can count on when it comes
Speaker 1: to things like deductibles or out of pocket costs. Yeah,
Speaker 1: and that's really because you want to maximize the H
Speaker 1: s A. You want to maximize that account because it
Speaker 1: has so many benefits that, like you said, Matt, kind
Speaker 1: of go unnoticed or they don't get talked about. And
Speaker 1: so yeah, if you do have an H s A
Speaker 1: and you haven't started investing inside of that, go listen
Speaker 1: to episode one oh five because it's gonna gonna be
Speaker 1: really eye opening. I think for how much power that
Speaker 1: HS say holds, it's almost like having a Lamborghini and
Speaker 1: then putting a governor on it to max it out
Speaker 1: the speed at like twenty um there. The H s
Speaker 1: A s are just so much more powerful than the
Speaker 1: way that they're being used by most people these days. Totally,
Speaker 1: all right, let's let's keep moving mat. There was an
Speaker 1: interesting article on Jelopni's website this week about how awful
Speaker 1: car Loans can be and uh sadly actually this article
Speaker 1: was in slideshow formats, which is is that the worst?
Speaker 1: The worst? It's like AutoPlay videos and slideshow format like
Speaker 1: get those out of my face? Please? Can we be
Speaker 1: doing those general pop ups honestly? Now, like the cookie
Speaker 1: pop ups kind of drive me crazy now, like I
Speaker 1: don't care, just like take my info, Like, I know
Speaker 1: that I'm giving up a certain amount of privacy by
Speaker 1: going to the site. Don't interrupt me, right, Yeah, So
Speaker 1: gelot Make detailed actually the gorgous details of the worst
Speaker 1: car loans that their readers have experienced or that they've
Speaker 1: seen friends take on. And it was kind of all
Speaker 1: inducing to see how bad car loans can get. And
Speaker 1: you might be asking, well, what was the worst element
Speaker 1: that many of these car loans had in common? Trading
Speaker 1: in another car that someone was upside down on in
Speaker 1: order to purchase another new vehicle. That was kind of
Speaker 1: the common denominator mat for a lot of these worst
Speaker 1: car loans. You know, some folks actually rolled multiple vehicles,
Speaker 1: like not just one, like two or three with negative
Speaker 1: equity into a new loan on another vehicle, which of
Speaker 1: course landed them not just like um greatly inflated loan amount,
Speaker 1: but also a much much higher interest rate because there's
Speaker 1: a lot more risk to the lender. We're really not
Speaker 1: fans of car loans at all. We'd prefer to see
Speaker 1: our listeners never ever have one, but definitely these kinds
Speaker 1: of loans where you still have a loan on the
Speaker 1: car that you currently own and you're trying to get
Speaker 1: another one and you're rolling it into another loan. That's
Speaker 1: like the worst case scenario. Yeah, that probably goes to
Speaker 1: explain why car loan debt has doubled over the past decade,
Speaker 1: which is an insane stat But one other big pitfall
Speaker 1: was folks buying their vehicle from a buy here, pay
Speaker 1: here a lot. Those are the absolute worst places on
Speaker 1: earth to purchase a vehicle you. Like you mentioned, ideally,
Speaker 1: listeners aren't going to finance their cars at all, and
Speaker 1: you can do that when you have a more affordable vehicle.
Speaker 1: It's it's not too difficult to find something that's reliable
Speaker 1: in the five to ten thousand dollar range, uh, if
Speaker 1: you're able to search diligently. But you know, if you
Speaker 1: are going to take out a loan in order to
Speaker 1: buy a vehicle, make sure that you do shop around
Speaker 1: for that loan with your local credit union kind of
Speaker 1: bring it full circle again. Like we said, oftentimes they
Speaker 1: offer the best rates, and it also might be worth
Speaker 1: checking online lenders as well because those rates are getting
Speaker 1: more competitive. The other thing too, don't extend the loan
Speaker 1: terms in order to buy a more expensive car. If
Speaker 1: you can't afford the monthly payments on a thirty six
Speaker 1: to you know, forty two months loan, then you can't
Speaker 1: afford that vehicle. Look at something a little more affordable.
Speaker 1: And the problem is when people take out an eight
Speaker 1: year loan and then four or five years into it,
Speaker 1: they're like, I want something new or this this this
Speaker 1: car is giving me issues. Now it's time to trade
Speaker 1: it in and get something else, But you still owe
Speaker 1: money on it. That put puts you like behind the
Speaker 1: eight ball in a big way when it comes to
Speaker 1: your finances and the monthly payment you're gonna have on
Speaker 1: that loan as well. By the it is important to
Speaker 1: note that cars are going back to becoming depreciating assets.
Speaker 1: For a hot minute, Matt, basically for the last year
Speaker 1: that the prices of used cars have been going up
Speaker 1: and up, and uh, it appears that that was a
Speaker 1: blip that is now kind of subsiding. The prices of
Speaker 1: used cars aren't going to go back to normal levels overnight,
Speaker 1: but it is a good sign that cars are back
Speaker 1: to being a depreciating asset. That was kind of one
Speaker 1: of those mind blowing things for I don't know, for us,
Speaker 1: I think, and for everybody out there, it's like, how
Speaker 1: in the world are used car prices skyrocketing to this level. Obviously,
Speaker 1: the supply chain issues, the chip issues that are put
Speaker 1: into new cars that are being built. There were so
Speaker 1: many different things impacting this market and driving prices higher.
Speaker 1: But it's good to see that correction kind of starting
Speaker 1: to happen. Yeah. So if you were maybe hanging onto
Speaker 1: a used car thinking that like, hey, if I hang
Speaker 1: onto it for like one more month, maybe I'll see
Speaker 1: its value increase, chances are that is not going to
Speaker 1: be the case. I feel like we're again like at
Speaker 1: the top of a roller coaster and you're we're only
Speaker 1: going to see the prices continue to drop from here. Yeah,
Speaker 1: we're always in favor of you getting rid of one
Speaker 1: of those extra cars that's in your life. So yeah,
Speaker 1: Matt's right, sell now if you if you've gotten next
Speaker 1: one you're hanging onto. Matt. Let's talk about bidding wars
Speaker 1: in the rental market. Is that a thing? It turns
Speaker 1: out it is. It's actually happening. We've seen obviously a
Speaker 1: lot of headlines about bidding wars when it comes to
Speaker 1: buying a house, but it's also happening now in the
Speaker 1: especially single family home rental market. An article in CNBC
Speaker 1: this week reflected exactly what I actually recently saw when
Speaker 1: I listed one of my rental properties for homes in
Speaker 1: some of the hotter areas of the country. Some landlords
Speaker 1: are receiving an abnormally high number of applications, Matt, I
Speaker 1: had nearly forty people reach out in less than forty
Speaker 1: eight hours when I listed my little tiny Atlanta in
Speaker 1: town house recently. And uh, yeah, it turns out that
Speaker 1: high demand is increasing the average price of rent to
Speaker 1: at a pace of almost seven were cent annually. First
Speaker 1: rent price increases last year, and it's even leading to
Speaker 1: bidding wars for some of these properties. Right, So if
Speaker 1: you're a renter, it's important to know that prices are
Speaker 1: going up, that it's a competitive environment in certain locations,
Speaker 1: and that could affect your ability to find affordable housing. Yeah,
Speaker 1: and hopefully you're several months away from having to find
Speaker 1: a new place, because that should give you enough time
Speaker 1: to turn your credit score around if maybe it's in
Speaker 1: the dumps. You want to make sure that your credit
Speaker 1: score is in a good spot, typically at least seven forty,
Speaker 1: if not a bit higher, because This is something that
Speaker 1: laylords are going to be looking at pretty closely. They're
Speaker 1: gonna want to see how responsible you are with your
Speaker 1: payments pretty closely. If there's a you know, such a
Speaker 1: large pool of applicants, and another sort of tactic, if
Speaker 1: you have enough cash on hand, even consider offering to
Speaker 1: put down a larger security deposit. Just essentially, anything you
Speaker 1: can do to stand out and make yourself a more
Speaker 1: attractive tenant can help good communication, that's always a plus,
Speaker 1: But you might even need to get a little more creative,
Speaker 1: like offering to take care of the lawn. If the
Speaker 1: laylord says, hey, you know, you know outside lawn maintenance
Speaker 1: that's included, just like, well, hey, what if I take
Speaker 1: care of that for you? You don't have to worry
Speaker 1: about it. Look ways to kind of sweeten the deal
Speaker 1: for the landlord to what to pick you over the
Speaker 1: other thirty nine people who are applying for that same house. Yeah,
Speaker 1: and depending on where you live, you're gonna know, you're
Speaker 1: gonna know, you're gonna see you can you can look
Speaker 1: on Zillo and see like how many hits some of
Speaker 1: these properties are getting, and it's like they've got the
Speaker 1: little yeah popularity chart built into it, so it's like, okay, cool,
Speaker 1: if this is a popular spot or you know if
Speaker 1: if the if it's priced, well you've gotta be ready
Speaker 1: to move. And it's funny, Matt like here, I always
Speaker 1: tell people this. I'm not trying to pressure them to
Speaker 1: to sign on the spot or anything like that, but
Speaker 1: I'm like, they're like, well, I'll get back to you
Speaker 1: in a couple of days, and I'm like, Okay, they're
Speaker 1: gonna be there, and I'm just letting you know, like
Speaker 1: somebody usually asks to apply, uh, and that process moves
Speaker 1: quickly and they're usually ready to sign by that day
Speaker 1: or the next day. So um, it's just one of
Speaker 1: those things too where you have to know what you
Speaker 1: want and you have to be willing to kind of
Speaker 1: jump on it, to pounce when the right you know,
Speaker 1: rental house comes along that you want to stay in.
Speaker 1: So all right, that's gonna do it for this episode
Speaker 1: for folks who want the show not for this episode
Speaker 1: links to some of the articles that we mentioned on
Speaker 1: this Friday flight, you can go to our website at
Speaker 1: how to money dot com. That's right. We hope everyone
Speaker 1: has a fantastic weekend. We will see you back here
Speaker 1: on Monday with that interview with Lauren Williams and Joel
Speaker 1: Until next time, Best friends Out, Best Friends Out,