WEBVTT - Ask HTM - Birth Now Pay Later, Forcing Home Equity with a Basement Build, & Saving vs Paying Credit Cards #946 0:00:00.200 --> 0:00:03.120 Welcome to Head of Money. I'm Joel, I'm Matt. 0:00:03.279 --> 0:00:12.360 Today we're answering your listener questions. 0:00:24.440 --> 0:00:26.599 That's right, buddy, so let's get to it. We're gonna 0:00:26.640 --> 0:00:30.400 hear from a listener who's asking about BNPL and we're 0:00:30.400 --> 0:00:33.040 not talking about buy now, pay later. We're talking about 0:00:33.080 --> 0:00:36.680 baby now, pay later. He snap new acronym. What could 0:00:36.720 --> 0:00:40.000 go wrong? Why not? If that's something that they're offering. 0:00:40.000 --> 0:00:42.720 That's what this listener is asking. We'll get to another 0:00:42.800 --> 0:00:46.240 listener who's thinking about forcing some equity into his home 0:00:46.720 --> 0:00:50.200 via a basement build out. We'll give our thoughts there. 0:00:50.600 --> 0:00:53.560 And another listener she's in a tough spot. She's trying 0:00:53.600 --> 0:00:57.240 to choose between saving some money versus paying off some 0:00:57.600 --> 0:01:00.200 high interest rate credit cards. We'll share our thoughts there. 0:01:00.440 --> 0:01:03.320 Plus we've got plenty more to get to today as well, buddy. Yeah, 0:01:03.360 --> 0:01:05.200 all right, quick frugal or cheap for you? Though, before 0:01:05.240 --> 0:01:07.320 we dive in, you know I love frugler cheap. 0:01:07.360 --> 0:01:09.080 I know you do so, and I think I know 0:01:09.120 --> 0:01:11.200 where you stand on this actually, because I was trying 0:01:11.200 --> 0:01:13.720 to convince my wife that she wants some new tennis 0:01:13.720 --> 0:01:17.120 shoes at but uh, the tin isshues are expensive, and 0:01:17.200 --> 0:01:18.840 occasionally I'll wait for a sale to pop up, but 0:01:18.880 --> 0:01:19.720 she was like, I need them soon. 0:01:19.800 --> 0:01:21.680 Can you help me find a good deal. We're any 0:01:21.720 --> 0:01:23.959 good deals to be had on the new version? Yeah? 0:01:24.080 --> 0:01:24.920 Is that what she was saying? 0:01:25.240 --> 0:01:28.040 Whereas me typically I load up when there's a sale. 0:01:28.080 --> 0:01:31.960 I literally have like three boxes in my closet really 0:01:32.080 --> 0:01:33.640 for the next pair of shoes to come down the pike. 0:01:33.640 --> 0:01:35.199 When they're on sale. I get them and they're fresh, 0:01:35.200 --> 0:01:37.360 and they've you've never worn, ever worn? Oh my god, yes, 0:01:37.640 --> 0:01:42.160 just ready. You're like a borderline tissue order. So are 0:01:42.200 --> 0:01:43.400 you talking about this? When I get a pair of 0:01:43.440 --> 0:01:45.520 running shoes for like twenty five bucks that it's pretty 0:01:45.560 --> 0:01:47.200 solid that they're. 0:01:47.000 --> 0:01:49.040 Normally one hundred bucks or wh whatever. I'm going to 0:01:49.080 --> 0:01:51.640 load up and twenty five dollars really yeah? Cheap? Yeah? 0:01:51.720 --> 0:01:53.760 We kind of like I can log into my what 0:01:53.800 --> 0:01:56.000 kind of heads are you running around it? I can 0:01:56.040 --> 0:01:58.160 log into the back end of the site and show 0:01:58.200 --> 0:02:00.840 you mighty cow recent orders. That's the affordable shoes. Are 0:02:00.840 --> 0:02:03.600 you referring to the conversation we had at pizza movie night? Yeah? 0:02:03.720 --> 0:02:04.080 Last week? 0:02:04.120 --> 0:02:09.120 Okay, So okay, so you actually think helps convince Emily 0:02:09.200 --> 0:02:11.600 that used pair of shoes I gently use pair of 0:02:11.600 --> 0:02:13.120 shoes on eBay was the cause? 0:02:13.440 --> 0:02:15.600 Did she say yes, yeah, oh that's great. So what 0:02:15.639 --> 0:02:17.160 do you think, Well, she was so she was pushing 0:02:17.200 --> 0:02:20.919 back against the idea of getting a pair of used shoes. 0:02:21.440 --> 0:02:24.959 And this is something I've done multiple times. Kate's done 0:02:24.960 --> 0:02:26.440 it as well. And I wonder if it was more 0:02:26.480 --> 0:02:29.120 Kate being able to sort of sway her opinion, because 0:02:29.120 --> 0:02:30.760 as opposed she looks at me and she sees you 0:02:31.160 --> 0:02:33.760 to a certain extent when it comes to cheapness, but 0:02:33.919 --> 0:02:36.960 like far less attractive version of me, a little bit shorter, 0:02:37.080 --> 0:02:40.480 half Asian as opposed to half Norwegian. But no, I 0:02:40.480 --> 0:02:42.440 think it's a fair question worth asking, you know, like 0:02:42.560 --> 0:02:45.280 why is it that we feel so comfortable with buying 0:02:45.360 --> 0:02:47.920 used homes or use cars. Of course, we're all about 0:02:47.919 --> 0:02:50.600 buying used cars, but when it comes to clothing or 0:02:51.120 --> 0:02:53.720 you know, let alone shoes, there's a little bit of 0:02:53.720 --> 0:02:56.160 a negative connotation there. Folks are less willing to go 0:02:56.240 --> 0:02:59.320 to the thrift store. Personally, I love you love used underwear, 0:03:01.360 --> 0:03:03.720 definitely wouldn't do that. Of course. Well, I think that's 0:03:03.720 --> 0:03:05.600 on the line somewhere this might be a helpful framework, 0:03:05.600 --> 0:03:07.919 and so maybe that's it. I think there, let's introduce 0:03:08.520 --> 0:03:13.400 an intimate scale, like there's this gradient, and the less 0:03:13.440 --> 0:03:15.960 intimate an item is, I think, the more willing we 0:03:16.040 --> 0:03:18.760 are to buy used for it to have been something 0:03:18.800 --> 0:03:20.239 that someone else, because like you go into your home, 0:03:20.680 --> 0:03:22.639 lots of people come through your house, you have guests over, 0:03:22.680 --> 0:03:24.720 you have friends over. There's no part of your house 0:03:24.720 --> 0:03:28.360 that's like up against your body, right, They're not like 0:03:28.400 --> 0:03:31.560 coming into my bed right exactly. But when it comes 0:03:31.600 --> 0:03:35.200 to clothing, and especially something like shoes or you know, 0:03:35.240 --> 0:03:39.680 the more extreme case that's literally called intimates is underwear. 0:03:40.040 --> 0:03:42.720 So I understand the pushback on that, but man the 0:03:42.760 --> 0:03:44.040 ability to snag a deal. 0:03:44.200 --> 0:03:46.520 I think the one question that's really important to ask 0:03:46.600 --> 0:03:48.640 is how much usable life is left in this product, 0:03:48.680 --> 0:03:52.080 Because if it is incredibly gently used and you're getting 0:03:52.120 --> 0:03:55.000 a fifty percent discount essentially because someone worred a few 0:03:55.040 --> 0:03:57.440 times and didn't love it or didn't fit quite right 0:03:57.440 --> 0:03:59.240 and that's why they're selling it, then you're getting a 0:03:59.240 --> 0:04:03.200 great deal. But if it has been let's say, through 0:04:03.360 --> 0:04:05.560 half of its usable life, and you're getting a sixty 0:04:05.560 --> 0:04:07.960 five percent discount, I'm probably not willing to make that 0:04:08.400 --> 0:04:10.920 trade off. I would rather get the new thing and 0:04:11.040 --> 0:04:12.920 get most of the us or all the usable life 0:04:13.000 --> 0:04:13.640 myself out of it. 0:04:13.760 --> 0:04:16.599 Totally agree there. Yeah, Like I'm not buying shoes that 0:04:16.760 --> 0:04:18.839 look like they've been used, Like these are quote unquote 0:04:18.880 --> 0:04:20.440 use shoes and maybe they were worn for like a 0:04:20.480 --> 0:04:22.800 week or something like that, or maybe they're I don't 0:04:22.839 --> 0:04:24.800 like a department store that unloads a whole lot of 0:04:24.960 --> 0:04:27.040 open box shoes and so they've been worn around the 0:04:27.440 --> 0:04:29.320 store as people have tried them on or something like that, 0:04:29.360 --> 0:04:31.360 so they can't sell them. I'm totally fine with those 0:04:31.440 --> 0:04:32.720 kind of shoes. I'm not looking for a pair of 0:04:32.760 --> 0:04:35.440 shoes that look like they've been through the ringer already 0:04:35.640 --> 0:04:37.520 and like the color is starting to fade, or there's 0:04:37.560 --> 0:04:40.280 like a lot of tread missing. Nah, that's like it 0:04:40.440 --> 0:04:42.640 was it last week. That's that's more along the lines 0:04:42.680 --> 0:04:44.640 of like you buying your used tires where it's just 0:04:44.640 --> 0:04:46.240 like where did you get these time? Yeah, that was 0:04:46.240 --> 0:04:50.520 a bad idea as opposed to like a mismatched set 0:04:50.520 --> 0:04:53.080 of tires that are brand new perhaps okay that feels 0:04:53.120 --> 0:04:55.080 a little bit different, or a pair that was out 0:04:55.400 --> 0:04:57.560 on the showroom maybe because of that has got like 0:04:57.680 --> 0:05:00.599 kid fingerprints all over it or I don't know, I'd 0:05:00.680 --> 0:05:03.200 be totally fine with but those tires on my car. 0:05:03.480 --> 0:05:06.040 In a similar way, when it comes to shoes, I'm 0:05:06.080 --> 0:05:08.359 not looking for a pair of shoes that are completely 0:05:08.400 --> 0:05:09.760 worn out or Yeah. 0:05:09.600 --> 0:05:11.920 This conversation is making me think that I need to 0:05:11.960 --> 0:05:13.600 go to the thirst store again soon. It's been it's 0:05:13.600 --> 0:05:14.159 been too long. 0:05:14.360 --> 0:05:16.839 The three was great. Yeah, especially with kids. Kay was 0:05:16.880 --> 0:05:19.200 just there, And especially when it comes to shoes for kids, 0:05:19.200 --> 0:05:21.599 Oh my gosh. 0:05:20.680 --> 0:05:22.560 They're not usually getting all the usable life out of 0:05:22.520 --> 0:05:24.479 it because there's so much. 0:05:24.680 --> 0:05:26.719 I mean, like, we buy almost what looks like brand 0:05:26.760 --> 0:05:28.640 new shoes, and in a lot of cases and a 0:05:28.680 --> 0:05:30.640 lot of instances, they are pretty much brand new, and 0:05:30.680 --> 0:05:33.400 they're just shoes that the kids never wore. That's how 0:05:33.480 --> 0:05:35.919 my five year old got a pair of Adidas Sambas, 0:05:35.960 --> 0:05:38.760 like the indoor soccer shoe that was super dope. Yeah, 0:05:38.839 --> 0:05:40.359 I'm not gonna go out and buy those, but I'll 0:05:40.440 --> 0:05:42.279 certainly pick up a pair for three bucks. Sure. 0:05:42.360 --> 0:05:43.960 Yeah, you know, that's a good point. I think all 0:05:43.960 --> 0:05:46.400 for it, in particular for kids, stuff used is gonna 0:05:46.400 --> 0:05:48.440 save you a lot of money. Those guys they grow 0:05:48.480 --> 0:05:50.520 like weeds, you know, when they're when you're young. It's true, 0:05:50.520 --> 0:05:52.120 all right, Matt, let's mention. The beer we're having on 0:05:52.160 --> 0:05:56.160 this episode. This a tequila barrel aged stout from Wicked 0:05:56.160 --> 0:05:57.960 Weed Brewing. It's a part of their Dark Art series. 0:05:58.000 --> 0:05:59.160 We'll give our thoughts on this at the end of 0:05:59.200 --> 0:06:02.360 the episode. And if you have a money question we'd 0:06:02.360 --> 0:06:03.760 love to hear from you, just go to how to 0:06:03.839 --> 0:06:06.160 money dot com slash ask for the instructions for how 0:06:06.200 --> 0:06:08.520 to submit it. But really it's just recorda voice memo 0:06:08.640 --> 0:06:11.800 emailing it over to us. Now, let's get to a question, 0:06:11.960 --> 0:06:14.720 and this one is specifically about optimizing debt payoff. 0:06:15.120 --> 0:06:18.000 I met in Jewel. I have two somewhat related questions. 0:06:18.640 --> 0:06:21.920 The first is a medical bill related question. My wife 0:06:22.000 --> 0:06:24.880 and I recently had our first baby and have about 0:06:24.880 --> 0:06:28.919 a twenty seven hundred dollars bill that we owe. We 0:06:29.000 --> 0:06:31.720 have the cash to pay it right away. However, the 0:06:31.720 --> 0:06:35.280 hospital gives us ten months of interest free payments, so 0:06:35.320 --> 0:06:38.279 at the end of those ten months or ten payments, 0:06:39.160 --> 0:06:41.520 the bill would be totally paid for without any interest, 0:06:42.760 --> 0:06:44.360 or I could pay it all on a lump sum 0:06:44.440 --> 0:06:48.360 right now. But my thought is, since I have a 0:06:48.440 --> 0:06:51.480 high yield savings account, I could just leave the emergency 0:06:51.600 --> 0:06:54.599 or leave my emergency fund there and make the payments 0:06:54.680 --> 0:06:57.520 and continue to gain interest on that money. Curious to 0:06:57.560 --> 0:07:00.960 hear your thoughts about that. The second question is somewhat 0:07:00.960 --> 0:07:03.720 related and has to do with HSA accounts. I have 0:07:03.760 --> 0:07:07.479 a pretty full HSA account, money is still going into it. 0:07:07.600 --> 0:07:09.760 I know you guys have explained the process of keeping 0:07:09.760 --> 0:07:13.440 track of those records of medical bills and getting the 0:07:13.480 --> 0:07:15.880 cash out later, but I was wondering if you could 0:07:15.880 --> 0:07:19.960 maybe explain that again or direct me to an episode 0:07:20.280 --> 0:07:24.480 that explains that in full details. Thanks love what you 0:07:24.520 --> 0:07:25.920 guys do. Thanks for all your help. 0:07:25.960 --> 0:07:29.080 That's yeah, this question actually was from Phil. He didn't 0:07:29.080 --> 0:07:31.000 say his name, but of course he emailed his voice 0:07:31.040 --> 0:07:34.240 memo over that's money faux pas, one fair Phil. And 0:07:34.280 --> 0:07:36.240 he didn't say where he lives, so let's just pretend 0:07:36.400 --> 0:07:38.640 this is Phil from Chicago. I don't know if that's 0:07:38.640 --> 0:07:41.680 actually think say Maui, but Mali? Yeah, all right, why not? 0:07:41.680 --> 0:07:43.440 I don't think we've ever heard from someone in Mali. 0:07:43.720 --> 0:07:47.680 But congrats on the new baby, Phil, It's great. News 0:07:47.680 --> 0:07:50.000 for you and your family. And I will say, twenty 0:07:50.000 --> 0:07:53.840 seven hundred dollars. This is almost exactly what the average 0:07:53.840 --> 0:07:57.240 cost of having a baby is today with insurance, which 0:07:57.320 --> 0:08:00.600 isn't jump change, I'll say, but it definitely it certainly 0:08:00.800 --> 0:08:04.240 could be worse because not being insured for that it 0:08:04.280 --> 0:08:06.120 makes it a lot more expensive. This is something I've 0:08:06.120 --> 0:08:10.160 had personal experience with having four kids. We have we 0:08:10.240 --> 0:08:11.680 explored all the variety. 0:08:11.360 --> 0:08:13.120 Of ways to pay for a baby because you have 0:08:13.200 --> 0:08:16.360 traditional insurance for zero of the birth one we did 0:08:16.400 --> 0:08:19.720 have traditional insurance for I think it was funny because 0:08:19.720 --> 0:08:22.360 it was actually our second we got Kate on healthcare 0:08:22.600 --> 0:08:25.720 dot gov plan, but the first one we're like, we're. 0:08:25.560 --> 0:08:27.960 Going to do this cash pay up front. We're going 0:08:28.040 --> 0:08:29.880 to get all the discounts. See how low we can 0:08:29.920 --> 0:08:32.000 get this bad boy. And it wasn't that low. It 0:08:32.040 --> 0:08:34.440 was around ten thousand dollars. Yeah, but it's. 0:08:34.320 --> 0:08:37.400 Actually still significantly better than what most people who don't 0:08:37.400 --> 0:08:40.280 have insurance pay for birth of a baby. But that's 0:08:40.280 --> 0:08:43.320 still a lot of money, even still much more than Yeah, 0:08:43.360 --> 0:08:45.760 exactly listenary that you just mentioned. But there are other ways, 0:08:45.840 --> 0:08:47.800 I will say, because we tried different pat like so 0:08:47.840 --> 0:08:48.600 we had health sharing. 0:08:48.880 --> 0:08:50.959 We thought that would help with the cost. That didn't. 0:08:51.000 --> 0:08:53.680 It doesn't. It does not. They don't cover that, and 0:08:53.720 --> 0:08:55.520 we knew that as well. But we're hoping that that 0:08:55.559 --> 0:08:57.360 with a different discounts that they offered, that we would 0:08:57.360 --> 0:08:59.120 have been able to chip it down. I will say 0:08:59.160 --> 0:09:02.880 our most affordable baby was the last one because we 0:09:02.920 --> 0:09:05.240 got better and better at it. And it's also because 0:09:05.600 --> 0:09:07.560 we didn't give birth in a hospital. We were at 0:09:07.600 --> 0:09:11.000 a birthing center. And so for us, at least where 0:09:11.040 --> 0:09:12.880 we live, there's a quote unquote, you know, a birthing 0:09:12.920 --> 0:09:15.880 center that's not technically a hospital. They're associated with a hospital. 0:09:16.160 --> 0:09:19.080 So if you are looking if there isn't an emergency, 0:09:19.080 --> 0:09:20.760 for instance, and you're looking for that peace of mind, 0:09:21.160 --> 0:09:24.720 it's they have the ability to get the birthing mother 0:09:24.760 --> 0:09:27.960 over there super fast. But by avoiding the facility charge 0:09:27.960 --> 0:09:31.680 of giving birth in a hospital our last kiddo, our son, 0:09:31.800 --> 0:09:33.360 we were able to I think we were out the 0:09:33.400 --> 0:09:36.480 door with like the prenatal care and everything. Total. Man, 0:09:36.559 --> 0:09:39.040 we're somewhere around like seven to eight thousand dollars, which 0:09:39.080 --> 0:09:41.600 is good a lot better than the other three, for sure. 0:09:42.080 --> 0:09:44.040 I think it's a good tip for maybe some folks 0:09:44.040 --> 0:09:46.280 out there, for everyone else out there who don't. 0:09:46.080 --> 0:09:49.959 Have insurance center looking appropriate. Well, let's talk about Phil's question, 0:09:50.120 --> 0:09:52.920 and let's first talk about the interest free payment question 0:09:53.000 --> 0:09:55.720 that he presented. You know, it's similar to one that 0:09:55.720 --> 0:09:57.840 we get about paying off a mortgage when you can 0:09:57.880 --> 0:09:58.960 make more in a savings account. 0:09:59.040 --> 0:10:00.320 Right, It's like kind of that ARB trash. 0:10:00.400 --> 0:10:04.160 Can I keep the money in savings because I'm going to, 0:10:04.200 --> 0:10:08.000 you know, necessarily exceed the return that I would get 0:10:08.040 --> 0:10:10.880 otherwise paying down that debt more quickly, and I'll we're 0:10:10.880 --> 0:10:13.160 talking about vastly bigger sums of money right when we're 0:10:13.160 --> 0:10:16.200 talking about the mortgage question. But we do indeed prefer 0:10:16.240 --> 0:10:19.079 folks to keep their savings intact along with their mortgage 0:10:19.200 --> 0:10:22.440 pay it down as agreed, all else being equal. But 0:10:22.559 --> 0:10:24.800 this question I think adds a little bit of nuance, right, 0:10:25.160 --> 0:10:28.199 And there might be more similarities maybe with the interest 0:10:28.240 --> 0:10:30.600 free loans that some furniture chains offer. 0:10:30.640 --> 0:10:31.800 Matt. You've seen those commercials. 0:10:31.840 --> 0:10:34.400 It's like no payment's no interest till twenty twenty nine, 0:10:34.760 --> 0:10:36.559 and people are like, all right, let me go get 0:10:36.559 --> 0:10:38.400 that couch, and why not I don't have to pay 0:10:38.400 --> 0:10:40.959 a dime on it for a long time, but the 0:10:41.080 --> 0:10:44.360 fine print will screw you over in a massive way 0:10:44.720 --> 0:10:47.479 if you don't jump through the proper hoops. The penalties 0:10:47.559 --> 0:10:50.920 are insanely steep. It's you know, essentially all the back 0:10:50.960 --> 0:10:54.320 interest that needs to be paid ballooning the cost of 0:10:54.400 --> 0:10:57.000 the couch you bot. And it's similar with some of 0:10:57.080 --> 0:10:59.079 these hospital loans. Right if you don't pay off your 0:10:59.120 --> 0:11:02.800 loan while promotional interest rate is in effect, you're gonna 0:11:02.800 --> 0:11:05.840 also owe a lot of backloaded interest, which just makes 0:11:05.840 --> 0:11:08.080 this much more of a risky maneuver. Whereas, like with 0:11:08.120 --> 0:11:10.240 the mortgage, less risky you can always say I'm not 0:11:10.240 --> 0:11:11.680 gonna pay it off now. Oh, but you know what, 0:11:11.800 --> 0:11:14.120 six months later, the facts on the ground change. I'm 0:11:14.120 --> 0:11:15.760 gonna choose to pay it off at this point in time. 0:11:15.960 --> 0:11:18.880 But with this loan, if you from the hospital, there 0:11:18.960 --> 0:11:20.719 is a chance that you screw it up and you 0:11:20.800 --> 0:11:22.360 end up paying a lot more than you thought, and 0:11:22.400 --> 0:11:24.320 it doesn't end up being kind of the zero percent 0:11:24.360 --> 0:11:27.560 interest loan that sounded so appetizing at the beginning, that's true. 0:11:27.679 --> 0:11:30.280 Yeah, So with that in mind, I'm not sure that 0:11:30.520 --> 0:11:33.520 all that effort is worth the squeeze I'm probably not 0:11:33.600 --> 0:11:36.480 gonna recommend for folks out there to do this. Because 0:11:36.520 --> 0:11:38.440 you've got the cash, just go ahead, pay the bill, 0:11:38.480 --> 0:11:40.440 be done with it. By doing that, you'll be able 0:11:40.440 --> 0:11:43.520 to declutter your mental space. And it's not like you're 0:11:43.520 --> 0:11:46.360 giving up much from a financial standpoint. If you so 0:11:46.480 --> 0:11:49.160 crunching the numbers, I think you'll be giving up around 0:11:49.200 --> 0:11:51.920 one hundred dollars in interest, which would have been taxable, 0:11:51.920 --> 0:11:54.720 by the way, So keep that in mind. It's not 0:11:54.760 --> 0:11:57.160 that I wouldn't reach down and pick up of eighty 0:11:57.200 --> 0:11:59.600 bucks off the ground. It's just that I wouldn't attempt 0:11:59.640 --> 0:12:03.120 to over optimize in this way. This decision that comes 0:12:03.120 --> 0:12:06.160 with just the downside risks that Joel just spelled out. 0:12:06.480 --> 0:12:09.000 If you find yourself not paying attention, and that might 0:12:09.000 --> 0:12:11.199 happen right like right now you're thinking, I'm a pretty 0:12:11.240 --> 0:12:13.840 buttoned up guy. Well like you might be having more 0:12:13.880 --> 0:12:17.000 sleepless nights, you might have more brain fog setting in 0:12:17.160 --> 0:12:19.080 than what you're typically used to. 0:12:19.120 --> 0:12:21.440 I'm pretty sure my a qu drop by about eighteen 0:12:21.440 --> 0:12:24.240 to twenty two points. Matt, Yeah, in those early days 0:12:24.240 --> 0:12:24.959 of having a baby. 0:12:25.120 --> 0:12:26.959 So I mean, and it comes down to the individual 0:12:26.960 --> 0:12:29.200 comes back. I will say that, oh sure, yeah, yeah, 0:12:29.240 --> 0:12:31.880 you're not as dumb as you used to do your babies. 0:12:32.320 --> 0:12:34.320 But I guess I'm saying like, I don't know if 0:12:34.360 --> 0:12:36.600 I would recommend this to most people if you are 0:12:36.640 --> 0:12:38.640 like a robot, because I'm trying to picture myself in 0:12:38.679 --> 0:12:41.280 this situation, and personally I think I would go through 0:12:41.280 --> 0:12:43.160 with it. But it's because I know that, like I 0:12:43.280 --> 0:12:46.000 set reminders on the calendar, I carve that money out 0:12:46.040 --> 0:12:48.960 of accounts I ear market. I am incredibly disciplined when 0:12:49.000 --> 0:12:51.760 it comes to maneuvers like this to ensure that I 0:12:51.760 --> 0:12:55.840 don't end up completely forgetting and then having it go 0:12:55.920 --> 0:12:59.560 into some sort of penalty interest territory. Yeah, certainly, if 0:12:59.600 --> 0:13:01.559 we were talking talking about a large amount of money, right, 0:13:01.600 --> 0:13:03.240 like let's say, if we were talking about eight hundred 0:13:03.240 --> 0:13:05.400 dollars an interest as opposed to like eighty dollars an interest, 0:13:05.880 --> 0:13:09.000 I think I would more widely recommend Hey, yeah, let's 0:13:09.040 --> 0:13:10.000 jump through some hoops here. 0:13:10.000 --> 0:13:13.000 The more hoops I'm willing. It makes me think of 0:13:13.040 --> 0:13:15.800 getting like a bank account bonus with an online bank 0:13:15.920 --> 0:13:18.920 versus one of kind of the big big banks. 0:13:19.040 --> 0:13:21.959 And I did this like probably ten years ago, signed 0:13:22.000 --> 0:13:24.400 up for a bank account with Chase, and man, you 0:13:24.440 --> 0:13:26.439 had to go into the branch and it just took 0:13:26.480 --> 0:13:28.920 a lot of time and old and I probably made, 0:13:28.960 --> 0:13:30.480 you know, three hundred bucks for signing up for the 0:13:30.520 --> 0:13:32.600 account for moving money around, but you have to make 0:13:32.640 --> 0:13:35.080 like five to ten minutes of small talk with them, yeah, 0:13:35.160 --> 0:13:37.480 to let them tell you on the other products, just 0:13:37.559 --> 0:13:40.480 the hoops I had to jump through the rigmarole of 0:13:40.720 --> 0:13:42.400 like eradicating that account. 0:13:42.400 --> 0:13:44.640 When I was done, just wasn't worth it. Like it 0:13:44.720 --> 0:13:47.880 was just such a frustrating experience. I was like, I'll 0:13:47.920 --> 0:13:50.520 never do this again. And my eyes would like, especially 0:13:50.559 --> 0:13:52.920 back in the day, Matt, like three hundred bucks when 0:13:52.920 --> 0:13:55.360 you're twenty six years old or something like that. I mean, 0:13:55.360 --> 0:13:57.920 that's a lot of money. And so I was I 0:13:57.960 --> 0:13:59.280 was more than willing to do it. And then I 0:13:59.320 --> 0:14:01.440 realized even if the end of it, it just wasn't 0:14:01.480 --> 0:14:04.520 worth the effort. So I would, you know, take that 0:14:04.559 --> 0:14:06.760 into account, maybe count the cost ahead of time. Phil 0:14:07.160 --> 0:14:10.040 This sounds like maybe it would be easier to pull 0:14:10.080 --> 0:14:13.320 off and you're not going to run into a giant 0:14:13.360 --> 0:14:17.200 bank bureaucracy, but still there are potential pitfalls that you 0:14:17.240 --> 0:14:20.320 have to be aware of onto his HSA question. Matt, 0:14:20.800 --> 0:14:23.080 I think that this is a two for question. Two 0:14:23.160 --> 0:14:26.920 questions to one. I think that actually the birth bill 0:14:27.120 --> 0:14:29.720 offers the perfect case study. Because you now have a 0:14:29.760 --> 0:14:32.480 medical bill of twenty seven hundred dollars that you mentioned. 0:14:32.640 --> 0:14:36.160 You could of course tap your HSA for those funds now. 0:14:36.560 --> 0:14:39.680 But because the HSA, the health Savings account is so 0:14:39.800 --> 0:14:42.600 dang flexible, and we'll link to some of the articles 0:14:42.600 --> 0:14:45.800 we've written about HSA's on howdomoney dot com in the 0:14:45.800 --> 0:14:48.200 show notes. You know, Phil, you could continue to leave 0:14:48.200 --> 0:14:50.640 that money invested so it grows for your future. You 0:14:50.640 --> 0:14:53.480 could use cash that you have in savings to cover 0:14:53.560 --> 0:14:56.640 this twenty seven hundred dollars an expense that you have. 0:14:57.200 --> 0:15:00.800 And when you think about it, logically, just randomly picked 0:15:00.800 --> 0:15:03.400 a number, okay, sixteen years, how much would twenty seven 0:15:03.520 --> 0:15:07.560 hundred dollars grow to in a sixteen year timeframe. On average, 0:15:07.640 --> 0:15:10.960 that money would quadruple. So, you know, a decade and 0:15:11.000 --> 0:15:13.200 a half from now, Phil could take the cash out 0:15:13.480 --> 0:15:17.200 based on his twenty twenty five expense. You could essentially 0:15:17.280 --> 0:15:20.880 leave the remaining eighty one hundred dollars for future healthcare 0:15:20.880 --> 0:15:23.160 expenses that would be the growth on the money you 0:15:23.240 --> 0:15:25.720 invested inside of your HSA. So you pull the twenty 0:15:25.760 --> 0:15:28.960 seven hundred bucks out then for whatever you needed for, 0:15:29.200 --> 0:15:31.160 and yet you've still got a big bundle of cash 0:15:31.200 --> 0:15:33.480 that's working for you, working for your future. And you 0:15:33.520 --> 0:15:36.040 could do the same with other prior healthcare expenses, right 0:15:36.080 --> 0:15:39.200 that you haven't tapped yet. I love the idea of 0:15:39.280 --> 0:15:41.280 leaving that money put if you have enough cash on 0:15:41.360 --> 0:15:44.880 hand to essentially foot the bill now, so that you 0:15:44.880 --> 0:15:47.520 can grow your investments tax free for the future, yes. 0:15:47.520 --> 0:15:50.360 Right, and that those remaining dollars you can tap for 0:15:50.400 --> 0:15:53.360 any reason because money is fungible of course, as long 0:15:53.400 --> 0:15:56.240 as you have the documentation proving you have other qualified 0:15:56.320 --> 0:15:59.320 medical expenses. So what that means is that you do 0:15:59.440 --> 0:16:02.360 need to keep up with your documentation, and so when 0:16:02.360 --> 0:16:04.080 it comes to record keeping, like you don't have to 0:16:04.080 --> 0:16:06.560 get fancy with it. This isn't some sort of super 0:16:06.640 --> 0:16:09.080 sophisticated thing like I would just take a picture of 0:16:09.080 --> 0:16:11.080 the bill to have a record, save it to like 0:16:11.120 --> 0:16:14.440 a Google drive file for maybe that year, and then 0:16:14.480 --> 0:16:18.400 just keep a running total in a Google sheet. You 0:16:18.400 --> 0:16:20.560 can make an HSA receipt sort of a spreadsheet like 0:16:20.600 --> 0:16:23.480 That's what I would do. But there are options using 0:16:23.480 --> 0:16:26.080 different budgeting software out there, like personal capital or why 0:16:26.120 --> 0:16:30.280 mapp where you can label healthcare transactions specifically and then 0:16:30.320 --> 0:16:32.440 you can go back to it look it up. But 0:16:32.560 --> 0:16:35.160 then within those proprietary sort of systems, there's still a 0:16:35.240 --> 0:16:37.920 risk because are those sites going to be around forever? 0:16:38.200 --> 0:16:40.760 Is this are these options or is this what do 0:16:40.800 --> 0:16:43.640 you call it, usability that they're no longer going to 0:16:43.680 --> 0:16:45.920 keep up with? Perhaps, So it's just something to keep 0:16:45.920 --> 0:16:47.840 in mind. If it was me, I would do exactly 0:16:47.840 --> 0:16:51.320 what I said, keeping up having that Google Drive folder 0:16:51.560 --> 0:16:54.400 with for your HSA receipts and keeping a running total 0:16:54.760 --> 0:16:58.480 of those of the date that expense was made, a 0:16:58.480 --> 0:17:00.880 little description of it, the total dollar amount, and the 0:17:00.920 --> 0:17:04.440 amount of that dollar amount that you have reimbursed to yourself, 0:17:04.720 --> 0:17:08.000 and hopefully for a long period of time it'll be 0:17:08.000 --> 0:17:11.040 none because you're allowing those dollars to continue to earn 0:17:11.160 --> 0:17:11.920 and compound. 0:17:12.000 --> 0:17:13.720 Yeah, Matt, even though you and I have never had 0:17:13.760 --> 0:17:17.360 access to an HSA, Sadly, it is something we talk 0:17:17.400 --> 0:17:21.119 about frequently on the show because it is this underrated 0:17:21.160 --> 0:17:23.880 investment account that people can take part in if they 0:17:24.080 --> 0:17:27.080 have a high deductible health care plan and they can 0:17:27.480 --> 0:17:30.159 grow money for their future tax free. Like it's not 0:17:30.320 --> 0:17:33.440 tax deferred, it's not a tax break in the here 0:17:33.480 --> 0:17:36.400 and now. It's no tax on that money. Ever, if 0:17:36.400 --> 0:17:39.480 you jump through the documentation hoops right, and if you're 0:17:39.680 --> 0:17:43.560 spending that money on qualified healthcare expenses. But again, what 0:17:43.640 --> 0:17:46.320 makes it so great is that you can incur the 0:17:46.359 --> 0:17:50.000 healthcare expense now and not take the disbursement until decades 0:17:50.000 --> 0:17:52.080 down the road. And this brings up another question like 0:17:52.119 --> 0:17:54.280 do you even need to keep receipts And some people 0:17:54.280 --> 0:17:56.840 would say, I don't even bother. And part of this 0:17:56.880 --> 0:17:59.000 depends on when you want to tap those funds. So 0:17:59.040 --> 0:18:01.399 if you don't need any HSA money, if you're like, 0:18:01.440 --> 0:18:03.199