WEBVTT - Ask HTM - Stashing an Extra $1k/month, Dropping Full Coverage to Save, & Avoiding Loans for Flight School #793 0:00:00.080 --> 0:00:01.400 Welcome to Hout of Money. 0:00:01.440 --> 0:00:04.640 I'm Joel and I am Mat and today we're answering 0:00:04.680 --> 0:00:13.880 your listener questions. 0:00:24.800 --> 0:00:26.799 Joe, you know, Monday episodes we might just be the 0:00:26.840 --> 0:00:30.319 best episodes because we get to listen. It's not just 0:00:30.360 --> 0:00:32.760 about us talking and for everybody out there to hear 0:00:32.760 --> 0:00:35.239 our voice. It's about us hearing from the people. That's 0:00:35.280 --> 0:00:35.880 what it's all about. 0:00:35.920 --> 0:00:37.479 Most of the time people hate Mondays, but I like 0:00:37.520 --> 0:00:38.800 how you're reframing it. 0:00:38.800 --> 0:00:41.440 It's a whole new spin on it. We are, in fact, 0:00:41.479 --> 0:00:42.839 we got a case of the Monday. It's not the 0:00:42.840 --> 0:00:46.120 Mondays today, can listener questions? During this episode, a listener 0:00:46.280 --> 0:00:49.320 is wondering where he should be stashing an extra one 0:00:49.360 --> 0:00:53.880 thousand dollars a month. Another listener is considering dropping full 0:00:53.920 --> 0:00:56.040 coverage in order to say she wants to know if 0:00:56.080 --> 0:01:00.680 that's something that's worth considering. And another listener, I guess, 0:01:00.720 --> 0:01:02.920 not her specifically, but a family member. I think her 0:01:02.920 --> 0:01:07.000 son is considering getting loans in order to attend flight school. 0:01:07.120 --> 0:01:09.800 She wants to know if if she's got our blessing, Joel, 0:01:09.880 --> 0:01:12.800 So yeah, be sure to put on your best what's 0:01:12.840 --> 0:01:17.600 your cardinal hat? Like the the pope. Is that the 0:01:17.600 --> 0:01:20.640 word anything that describes the office of the pope is people? 0:01:20.680 --> 0:01:22.400 I think so, yeah, it's like people office. 0:01:22.440 --> 0:01:25.679 You remember when those AI generated photos of him in 0:01:25.680 --> 0:01:26.800 some Balentiaga jacket. 0:01:26.800 --> 0:01:28.800 We're going around of the pope with like the big, 0:01:28.840 --> 0:01:30.279 the big fluffy fluffy jacket. 0:01:30.360 --> 0:01:31.800 Yeah, there have been a lot of other sense that 0:01:31.840 --> 0:01:33.520 went viral, but that was that was definitely one that 0:01:33.640 --> 0:01:36.000 kind of caught people by storm. But yeah, we got 0:01:36.000 --> 0:01:38.400 a lot of good questions to get to on this episode. 0:01:38.520 --> 0:01:40.560 But man, I just want to share one thing real quick. Uh, 0:01:41.240 --> 0:01:42.760 our four year old, we're starting to kind of teach 0:01:42.800 --> 0:01:45.119 him about money. We've got older, your four year old, 0:01:45.120 --> 0:01:47.040 not my four years I'm not teaching your four year old. Yeah, yeah, 0:01:47.040 --> 0:01:47.560 that's up to you. 0:01:47.640 --> 0:01:48.640 Well, you just said it in such a way it 0:01:48.640 --> 0:01:50.000 made it sound like we share a four year old. 0:01:50.400 --> 0:01:51.160 You've got your own four. 0:01:51.120 --> 0:01:53.960 Year old their best bunts, yes they are, but no, 0:01:54.040 --> 0:01:56.880 so I'm teaching my four year old. But and it's 0:01:56.920 --> 0:01:59.960 it's finally time to kind of start doing the beginning 0:02:00.320 --> 0:02:02.880 sort of steps. So much of what our kids pick 0:02:02.920 --> 0:02:05.160 up about personal finances is how we talk about it 0:02:05.200 --> 0:02:07.520 and how we act. But then there's also like intentional 0:02:07.880 --> 0:02:10.560 discussion and intentional kind of show and tell sort of 0:02:10.600 --> 0:02:12.280 stuff that has to happen along the way too, Right, 0:02:12.720 --> 0:02:16.000 And the ten and eight year old they've got allowance, 0:02:16.000 --> 0:02:17.760 they've got chores, Like we've got a system set up 0:02:17.760 --> 0:02:17.960 for that. 0:02:18.160 --> 0:02:20.600 But the four year old, do they do their chores? Yeah, 0:02:20.960 --> 0:02:21.680 and then they do. 0:02:21.639 --> 0:02:23.480 Their laundry, They pick up the room every single week 0:02:24.240 --> 0:02:26.359 on the weekend, same day, every it's every it's Sunday. 0:02:26.360 --> 0:02:27.760 So maybe we should tie it to more of the 0:02:27.919 --> 0:02:30.000 day to day stuff because when you say, like they 0:02:30.040 --> 0:02:32.400 do their jobs and they're getting their money, that's like 0:02:32.440 --> 0:02:34.280 that's the problem that we're running into is that like 0:02:34.320 --> 0:02:36.000 the kids, they don't really care, Like we make them 0:02:36.040 --> 0:02:38.120 do sort of the expected stuff around the house, but 0:02:38.120 --> 0:02:40.560 when it comes to getting them excited to earn money, 0:02:40.560 --> 0:02:44.080 they're just kind of like, eh, I guess there's no 0:02:44.360 --> 0:02:46.440 there's no like pot of gold in their mind at 0:02:46.440 --> 0:02:48.200 the at the end of the rainbow, so they're like 0:02:48.360 --> 0:02:51.200 not pursuing the thing, like the extra stuff. I guess yeah. 0:02:51.200 --> 0:02:53.200 I think with the youngest kid too, it can kind 0:02:53.200 --> 0:02:55.440 of be like, oh, well, they'll pick it up my 0:02:55.520 --> 0:02:57.760 osmosis and you forget to do that true kind of 0:02:57.760 --> 0:02:59.280 some of the teaching, you're you're hoping they see what 0:02:59.320 --> 0:03:02.160 they're what they're sis are up to. But we were like, okay, 0:03:02.200 --> 0:03:05.000 wait a second. We actually had this piggy bank, this 0:03:05.040 --> 0:03:09.080 digital piggybank that has like a counter on top, so 0:03:09.080 --> 0:03:10.760 when you put the money in, it's counting up how 0:03:10.840 --> 0:03:12.679 much money is going in there. And he doesn't have 0:03:12.720 --> 0:03:15.080 any jobs, he's not making any he's not making any 0:03:15.120 --> 0:03:18.760 recurring income via allowance every single week. But I gave 0:03:18.800 --> 0:03:21.320 him this piggy bank, and we've scraunched up some coins 0:03:21.360 --> 0:03:23.000 and he loves popping them in there. And I feel 0:03:23.000 --> 0:03:24.960 like that's like literally the most basic thing I can 0:03:25.000 --> 0:03:26.919 do right is to kind of at least get him 0:03:27.360 --> 0:03:29.720 hands on with some money. Yeah, and watching the number 0:03:29.760 --> 0:03:32.959 go up, just kind of getting an idea of playing 0:03:32.960 --> 0:03:33.640 with it a little bit. 0:03:33.760 --> 0:03:35.280 Number go up. Before you know, he's going to be 0:03:35.320 --> 0:03:38.720 investing in bitcoin and all the cryptocurrency. Yeah. No, I 0:03:38.760 --> 0:03:41.720 think that's that's true a what you're saying about being intentional, 0:03:41.800 --> 0:03:43.520 because I know that's the case for us man, Like 0:03:43.600 --> 0:03:45.880 I feel I know with our oldest we were so 0:03:46.080 --> 0:03:48.720 intentional and diligent and it's like, Okay, while we're going 0:03:48.760 --> 0:03:50.960 to teach you about how the money that you leave 0:03:51.240 --> 0:03:54.440 quote unquote invested with d that's going to earn interest 0:03:54.480 --> 0:03:58.320 and in fact it's going to compound weekly. We like 0:03:58.400 --> 0:04:00.640 that of all these systems, and maybe we a little 0:04:00.680 --> 0:04:03.440 overboard for let's say a six year old, because I 0:04:03.440 --> 0:04:05.840 think that's when we started doing that. But I yeah, 0:04:05.880 --> 0:04:08.200 I think the temptation might be to just fall off 0:04:08.200 --> 0:04:10.760 the horse completely. And we haven't done much of that 0:04:10.840 --> 0:04:13.240 at all with our four year old. I mean, we've 0:04:13.280 --> 0:04:14.640 got it. We do have a piggy bank that he 0:04:14.680 --> 0:04:16.440 got for Christmas that sits up on the shelf, but 0:04:16.760 --> 0:04:18.400 he doesn't earn anything yet. 0:04:18.480 --> 0:04:20.200 You always figure get what was the timeline like for 0:04:20.240 --> 0:04:21.640 the yeah, and so you just kind of I think 0:04:21.680 --> 0:04:23.520 the timeline just gets more and more delayed. And it's 0:04:23.520 --> 0:04:26.440 also the same thing where you're the youngest ends up 0:04:26.600 --> 0:04:30.800 watching like scarier movies at an earlier age their diet, 0:04:30.800 --> 0:04:32.880 like they're not restricted from sugar in the same way 0:04:32.920 --> 0:04:35.080 as like the firstborn was. You were so careful with 0:04:35.120 --> 0:04:37.040 the first one, and then the third one, everything just 0:04:37.160 --> 0:04:38.960 kind of goes to pot as he's he's already fan 0:04:39.000 --> 0:04:43.360 of IPAs so true. Yeah, just kidding, don't don't call 0:04:43.440 --> 0:04:44.080 defects on me. 0:04:44.839 --> 0:04:46.719 No, I think it's true, And I think for us 0:04:46.800 --> 0:04:49.440 it's a matter of I was thinking about this, actually 0:04:49.480 --> 0:04:50.440 does like coffee, does he? 0:04:50.640 --> 0:04:50.839 Yeah? 0:04:50.839 --> 0:04:52.680 So does my dude. Yeah we should. We'll share a 0:04:52.680 --> 0:04:54.920 picture of them both throwing down their little their little 0:04:55.000 --> 0:04:57.640 kid coffees when we get coffee on Wednesdays. But I 0:04:57.640 --> 0:04:59.640 was thinking about the other day how I almost want 0:04:59.680 --> 0:05:04.480 to introduce consumption and advertising to the kids, maybe a 0:05:04.520 --> 0:05:06.120 little bit more so, in order for them to have 0:05:06.240 --> 0:05:08.400 something to that they want to chase after that they're 0:05:08.400 --> 0:05:11.159 excited about, because I almost feel like our quasi minimalist 0:05:11.360 --> 0:05:14.640 lifestyle has led to them just being like, Okay, we're good, 0:05:14.920 --> 0:05:18.479 We're fine with whatever, whatever, mom and d whatever you 0:05:18.480 --> 0:05:20.560 get us, as opposed to them being like like, don't 0:05:20.560 --> 0:05:23.520 you want a Stanley cup or something? Maybe not that, 0:05:24.560 --> 0:05:26.880 maybe not have a pony. Let's go yeah, yeah, we'll 0:05:26.880 --> 0:05:29.320 go that way. But no, I think you being intentional 0:05:29.760 --> 0:05:32.000 finding a way to get the kids excited about personal finance. 0:05:32.040 --> 0:05:33.159 It's huge. It's important to do. 0:05:33.279 --> 0:05:35.840 Those little digital piggy banks are like four or five 0:05:35.839 --> 0:05:37.719 bucks at the dollar store. 0:05:37.880 --> 0:05:39.320 I mean, they're super cheap. 0:05:39.400 --> 0:05:41.359 And as for a four year old, it's to go 0:05:41.400 --> 0:05:43.000 a way to begin maybe like one of those how 0:05:43.000 --> 0:05:45.200 do we haven't done any money books either, Like I've 0:05:45.240 --> 0:05:47.200 yet to find like a great money book for kids, 0:05:47.279 --> 0:05:49.600 but especially for like really little kids. If someone out 0:05:49.640 --> 0:05:52.080 there listening knows the one, please reach out, let us know, 0:05:52.600 --> 0:05:54.760 and maybe I'll jump in that direction too. But I 0:05:54.760 --> 0:05:57.160 feel like the tangible, hands on thing is always kind 0:05:57.160 --> 0:05:58.679 of the most fun and the most rewarding. 0:05:58.800 --> 0:06:01.599 Yes, right, let's introduce our year is called Once Upon 0:06:01.720 --> 0:06:05.360 an Orchard. This is a sour red ale, and this 0:06:05.400 --> 0:06:08.440 one is by Aligash Brewing them already enjoying this one, 0:06:08.480 --> 0:06:10.800 but looking forward to sharing our thoughts at the end 0:06:10.839 --> 0:06:11.359 of the episode. 0:06:11.440 --> 0:06:13.360 One of the great American breweries, that's for sure. 0:06:13.360 --> 0:06:14.960 It's a good one. Yeah, we'll get our thoughts on. 0:06:14.920 --> 0:06:17.600 This one just a bit. But Matt, let's take listener questions. 0:06:17.640 --> 0:06:19.560 And if you are listening and you have a money 0:06:19.600 --> 0:06:21.560 question you want Matt and I to tackle, maybe on 0:06:21.560 --> 0:06:24.440 the next Ask htm episode, we'll just record a voice 0:06:24.440 --> 0:06:26.320 memo real quick, state your name at the beginning, and 0:06:26.320 --> 0:06:28.560 then send it our way. If you want more specific 0:06:28.560 --> 0:06:30.440 directions and the email address and stuff, just kind of 0:06:30.440 --> 0:06:33.280 how money dot com slash ask. But Matt, let's get 0:06:33.320 --> 0:06:35.560 to this first one. This question actually starts off with 0:06:35.680 --> 0:06:40.359 kind of a pitch for a saving strategy that you 0:06:40.400 --> 0:06:43.120 can find readily on YouTube, but does it actually work 0:06:43.160 --> 0:06:43.799 out in your favor? 0:06:44.040 --> 0:06:47.599 Hi, Matt Joel, This is Jen from Ohio. Been loving 0:06:47.640 --> 0:06:51.839 listening to your podcast and going back pretty far because 0:06:51.839 --> 0:06:55.040 I'm just devouring all the content, which is great. I 0:06:55.120 --> 0:06:58.720 had a comment and a question. So the comment that 0:06:58.760 --> 0:07:02.080 I was going to make was I haven't heard you 0:07:02.120 --> 0:07:06.560 guys talk about Velocity banking at all. So my husband 0:07:06.600 --> 0:07:08.799 and I we have three kids now, and we bought 0:07:08.800 --> 0:07:13.640 a van last year, and we actually opened a heelock 0:07:13.760 --> 0:07:16.720 for our house and we use the heelock to pay 0:07:16.760 --> 0:07:21.560 off the van loan, and then we dumped all of 0:07:21.560 --> 0:07:26.160 our income into the heelock and then pulled money out 0:07:26.400 --> 0:07:29.400 to like payer bills for the month, So essentially all 0:07:29.400 --> 0:07:33.080 of our overage for those months we're going to pay 0:07:33.120 --> 0:07:36.400 down the heelock. So we paid that off pretty quickly 0:07:36.760 --> 0:07:41.320 and we now are enjoying a van that's totally paid off. 0:07:41.680 --> 0:07:46.640 My second question is that my retirement is going to 0:07:46.680 --> 0:07:49.800 be a little bit different because my husband and I 0:07:49.840 --> 0:07:52.760 are both teachers, and my husband will have a pension plan, 0:07:53.440 --> 0:07:57.080 and with inflation and with him getting Masters plus forty 0:07:57.080 --> 0:07:59.680 five and all the things, and if he retires later, 0:07:59.720 --> 0:08:02.800 it would we think that the pension plan will be 0:08:03.640 --> 0:08:07.120 around one hundred to one hundred and fifty per year 0:08:07.360 --> 0:08:09.600 when we are retired, which is a lot of money. 0:08:09.640 --> 0:08:14.880 Our yearly senses are probably around sixty thousand right now. 0:08:15.360 --> 0:08:18.520 So for me, I stay home with kids part time 0:08:18.640 --> 0:08:21.200 and I have a roth ira with twenty thousand dollars 0:08:21.280 --> 0:08:24.680 in it. My question is with our overage right now, 0:08:25.560 --> 0:08:29.520 you know, since he has a very solid retirement plan, 0:08:30.200 --> 0:08:34.640 should I put money into our roth iray my roth iray? 0:08:35.080 --> 0:08:38.199 Should I put money into our five twenty nine plans? 0:08:38.720 --> 0:08:42.120 Should we try to pay off our house sooner? What 0:08:42.240 --> 0:08:45.000 kind of advice would you guys have for that? 0:08:45.720 --> 0:08:48.160 Thanks so much, all right, Jin, thank you so much 0:08:48.160 --> 0:08:50.320 for your question, and we are glad you kick things 0:08:50.360 --> 0:08:54.160 off with Velocity Banking. You know, there's a reason, Joe, 0:08:54.160 --> 0:08:56.120 that we don't talk about it very often, and the 0:08:56.160 --> 0:08:58.080 only times we do actually talk about it is in 0:08:58.080 --> 0:09:00.760 response to questions about it and that's because it's not 0:09:00.920 --> 0:09:03.800 what the influencers out there wants you to think it is. 0:09:04.920 --> 0:09:07.440 And so oftentimes, like you alluded to, Joel, you'll see 0:09:07.440 --> 0:09:11.000 it on YouTube, although I'm sure it's over on TikTok 0:09:11.120 --> 0:09:14.840 as well. It isn't. But velocity banking is it doesn't 0:09:14.840 --> 0:09:16.880 really help you to get ahead with your finances more quickly, 0:09:17.360 --> 0:09:19.760 and for many folks, what it does, in fact, is 0:09:19.800 --> 0:09:21.600 it muddies the water. It gets them in trouble, and 0:09:21.600 --> 0:09:24.640 it can cause your money priorities to get out of whack. 0:09:24.880 --> 0:09:26.800 It sounds like with Jen that maybe it was more 0:09:26.840 --> 0:09:29.320 of a one time thing where she used it to 0:09:30.120 --> 0:09:31.880 if you are using it in order in order to 0:09:31.880 --> 0:09:33.920 pay it on a debt or a loan that's got 0:09:34.040 --> 0:09:35.760 a much higher interest rate, So in this case, it 0:09:35.800 --> 0:09:37.480 sounds like a maybe it was a one time thing 0:09:38.040 --> 0:09:39.880 where she used the helock, she pay it off the 0:09:39.920 --> 0:09:43.000 car loan, and then then focused on paying off the helock. 0:09:43.520 --> 0:09:45.679 I can get behind that, like the principle behind that 0:09:45.800 --> 0:09:49.320 is not all that unlike like a zero percent transfer. Well, 0:09:49.400 --> 0:09:52.280 let's take advantage of this small period of time, a 0:09:52.280 --> 0:09:55.640 limited window where we can eliminate the most egregious debt. 0:09:56.000 --> 0:09:58.559 But that's not typically how velocity banking is pitched. It's 0:09:58.600 --> 0:10:02.440 this continual sort of trap that you find yourself in 0:10:02.520 --> 0:10:05.880 where you are continually paying interest. And that's why we 0:10:05.920 --> 0:10:09.640 are are not big big fans of velocity banking, because 0:10:09.640 --> 0:10:13.600 you're just constantly behind the eight ball, basically, like you 0:10:13.640 --> 0:10:15.520 are constantly on the back side of the wave, as 0:10:15.559 --> 0:10:18.000 opposed to in front of it, where you're just riding 0:10:18.520 --> 0:10:21.840 the interest and where you are accumulating the interest yourself. Instead, 0:10:22.120 --> 0:10:25.400 you're just constantly and basically by like a month or two, 0:10:25.440 --> 0:10:28.920 just constantly paying interest to somebody else, in this case 0:10:29.360 --> 0:10:31.000 the bank that holds your he lock. Yeah. 0:10:31.080 --> 0:10:33.880 Yeah, So if you're looking to basically swap one debt 0:10:33.880 --> 0:10:36.440 for another and take on a debt that has a 0:10:36.440 --> 0:10:38.960 lower interest rate in better terms so that you can 0:10:39.000 --> 0:10:41.080 pay off that debt more quickly, if you have that focus, 0:10:41.559 --> 0:10:43.599 then I think, like you said, Matt, that can be 0:10:43.679 --> 0:10:45.640 a good way to go. But that's not necessarily what 0:10:45.720 --> 0:10:49.760 velocity banking is kind of preaching. And some people use 0:10:49.840 --> 0:10:52.400 credit cards instead of helocks with velosity banking and they 0:10:52.440 --> 0:10:55.240 swear by that too. That's just seems even worse. That 0:10:55.640 --> 0:10:58.000 can get you in real, real financial trouble. See, you've 0:10:58.040 --> 0:11:00.720 got to be massively careful. So yeah, that's why we 0:11:00.720 --> 0:11:02.720 don't talk about it. We actually want people, for the 0:11:02.720 --> 0:11:05.960 most part, to stay away from the velocity banking thing 0:11:06.520 --> 0:11:08.400 and onto the heart of your question, Jen, Let's get there. 0:11:08.880 --> 0:11:11.760 It's amazing that you're going to have such a large, 0:11:11.840 --> 0:11:15.120 guaranteed pension in retirement. Not many folks have that, Matt, 0:11:15.200 --> 0:11:18.800 especially younger listeners. They're like, wait, pension, can you define 0:11:18.800 --> 0:11:20.520 that real quick? I'm not really I don't know what 0:11:20.559 --> 0:11:22.600 that is because I haven't been offered one. I think 0:11:22.640 --> 0:11:24.719 my grandma maybe had one. This is just one of 0:11:24.760 --> 0:11:27.000 those things that's going away. It's going the way of 0:11:27.000 --> 0:11:29.680 the Dodo bird. It's basically a fossil. It's a relic 0:11:29.720 --> 0:11:31.440 at this point. But it is one of the main 0:11:31.520 --> 0:11:34.640 perks of being a teacher, right, some of the public 0:11:34.679 --> 0:11:38.160 service professions they have more access to pensions, even though 0:11:38.280 --> 0:11:40.880 those are going away for a lot of public service 0:11:40.880 --> 0:11:44.080 pros too, But you often deal with, obviously as a teacher, 0:11:44.200 --> 0:11:47.800 a bunch of years of stress and being underpaid. You know, 0:11:48.000 --> 0:11:50.120 you can earn more in the private sector for the 0:11:50.200 --> 0:11:51.600 promise of that. 0:11:51.640 --> 0:11:52.960 Pot of gold at the end of the rainbow. 0:11:52.960 --> 0:11:55.040 That's kind of what you're hoping for is like, listen, 0:11:55.080 --> 0:11:57.160 I'm going to be underpaid for decades. Hopefully I'm going 0:11:57.240 --> 0:11:59.920 to enjoy my job. But at the end of the day, 0:12:00.080 --> 0:12:02.679 once I do hit retirement, I've got this pension and 0:12:02.720 --> 0:12:04.680 that kind of makes up maybe for some of those 0:12:05.320 --> 0:12:07.200 years where you weren't getting as paid as much as 0:12:07.240 --> 0:12:10.320 you could have. And I retire teachers I know who 0:12:10.320 --> 0:12:13.360 have saved and invested decently, well, they've got a lot 0:12:13.400 --> 0:12:16.439 of financial security because of the pension combined with what 0:12:16.480 --> 0:12:17.600 they've been able to sock away. 0:12:17.760 --> 0:12:19.720 That's right, And so Jen, you've got a lot of 0:12:19.720 --> 0:12:22.720 different options here for these extra funds in your life. 0:12:22.760 --> 0:12:25.400 Like you said, that pension might mean that you don't 0:12:25.440 --> 0:12:28.880 have to be quite as diligent of an investor. Let's say, 0:12:29.280 --> 0:12:33.000 instead of investing fifteen to twenty percent like we typically 0:12:33.080 --> 0:12:36.320 encourage folks to do, maybe you're early socking away ten percent. 0:12:36.800 --> 0:12:38.560 But if it's between the three options that you mentioned, 0:12:39.080 --> 0:12:42.720 the roth Ira it likely wins over the rest because 0:12:43.000 --> 0:12:47.319 that account offers just great future tax breaks, the ability 0:12:47.320 --> 0:12:49.440 to not have to pay any taxes on that money 0:12:49.600 --> 0:12:52.199 off in the future when you withdraw that money, and 0:12:52.240 --> 0:12:55.199 they're incredibly flexible as well. But on top of that, 0:12:55.480 --> 0:12:58.720 what if your husband doesn't work. As long as you 0:12:58.760 --> 0:13:01.520 are predicting, there are different road bumps that that might 0:13:01.880 --> 0:13:03.520 arrive in your future, and so it's best to be 0:13:03.559 --> 0:13:05.840 saving up in other ways just in case, and the 0:13:05.920 --> 0:13:09.079 roth ira it's the ideal vehicle for those additional savings. 0:13:09.200 --> 0:13:11.160 It sounds like at some point in your life you 0:13:12.200 --> 0:13:14.600 wise up to the roth iray and you said, okay, yeah, 0:13:14.679 --> 0:13:17.000 let's go ahead and start putting some money in here. Definitely, 0:13:17.440 --> 0:13:19.760 assuming you're with a low cost provider, definitely fire that 0:13:19.800 --> 0:13:22.920 thing back up and consider maxing nothing out. I think 0:13:22.960 --> 0:13:24.120 that's a good point too, Matt. Though. 0:13:24.240 --> 0:13:26.280 If a teacher, let's say, has been teaching for seven, eight, 0:13:26.360 --> 0:13:28.160 nine years in the same district and they're like, all right, 0:13:28.160 --> 0:13:30.080 if I hit thirty, that's when I get this full pension, 0:13:30.360 --> 0:13:32.160 So I'm just not going to invest as much because 0:13:32.160 --> 0:13:33.000 I'm banking on that. 0:13:33.360 --> 0:13:35.160 Well, what if you change your tune. 0:13:35.160 --> 0:13:37.960 What if at year twelve you say this is kind 0:13:37.960 --> 0:13:40.400 of unsustainable, or man, I got this job offer down 0:13:40.400 --> 0:13:42.000 the street, it's going to pay me more. But you 0:13:42.040 --> 0:13:45.600 have been chronically undersaving, and now that pension is either 0:13:45.640 --> 0:13:47.120 going to be non existent or it's going to be 0:13:47.440 --> 0:13:49.600 a fraction of what you assumed it would be. It's 0:13:49.640 --> 0:13:52.040 really important to save in a way that you're planning 0:13:52.080 --> 0:13:55.200 for that you're at least thinking about contingency plans and 0:13:55.280 --> 0:13:57.520 maybe not getting the full pension that you're hoping you're 0:13:57.559 --> 0:14:00.360 gonna get, because hey, life happens and that might not 0:14:00.400 --> 0:14:02.439 be the way it shakes out. And Jen mentioned five 0:14:02.480 --> 0:14:05.440 twenty nine plans. Let me mention a caveat about those plans. 0:14:05.800 --> 0:14:07.200 I would say it's a good idea to put at 0:14:07.240 --> 0:14:10.800 least a little bit of money in those, largely because 0:14:10.800 --> 0:14:14.080 it kicks off this timeline thanks to new rules about 0:14:14.160 --> 0:14:17.400 rolling five twenty nine dollars into a roth ira for 0:14:17.480 --> 0:14:18.600 your kids in the future. 0:14:19.120 --> 0:14:19.920 And while we still. 0:14:19.720 --> 0:14:22.640 Want you to prioritize your own financial future in the 0:14:22.640 --> 0:14:26.120 form of your wroth ira, first opening up an account 0:14:26.160 --> 0:14:27.880 and putting in like one hundred bucks for each kid. 0:14:28.200 --> 0:14:30.320 Now it makes a whole lot of sense. And Jen 0:14:30.440 --> 0:14:33.320 lives in Ohio, Ohio matt has one of the best 0:14:33.440 --> 0:14:35.840 five to twenty nine plans in the country because the 0:14:35.880 --> 0:14:39.160 fees are ridiculously low. The investment options are really solid, 0:14:39.240 --> 0:14:41.000 so Jen, I would just got. 0:14:40.800 --> 0:14:43.160 That state deduction yeah as well. 0:14:43.120 --> 0:14:45.840 So definitely check out the Ohio five twenty nine plan. 0:14:46.040 --> 0:14:48.200 You can read up on about it on a site 0:14:48.200 --> 0:14:50.320 like Saving for College dot com. And if you have 0:14:50.400 --> 0:14:53.120 more money down the line right beyond the roth IRA, 0:14:53.960 --> 0:14:55.920 maybe then you opt to stick more money into those 0:14:55.920 --> 0:14:57.680 five twenty nine accounts for their future. But I think 0:14:57.680 --> 0:15:01.280 for the time being, maxing out the wrath for you 0:15:01.320 --> 0:15:04.960 and for your husband takes precedence over sticking money into 0:15:04.960 --> 0:15:06.640 five twenty nine acounts beyond. Like I said, just that 0:15:06.760 --> 0:15:09.720 hundred bucks to get the timeline started, so open it up, 0:15:09.720 --> 0:15:11.080 but just don't prioritize funding it. 0:15:11.280 --> 0:15:14.480 Yeah, and definitely do that before you pay more down 0:15:14.480 --> 0:15:16.680 on your house as well, because we've been saying that 0:15:16.880 --> 0:15:19.960 mortgages are pretty far down the list of financial priorities 0:15:20.040 --> 0:15:23.200 for most folks if they have a locked in low rate. 0:15:23.760 --> 0:15:26.320 But maybe you took out a mortgage at seven percent 0:15:26.480 --> 0:15:28.920 or even higher, and if so, well that's going to 0:15:29.000 --> 0:15:31.560 change the calculus. But we would rather see you funding 0:15:31.880 --> 0:15:35.280 flexible retirement accounts first, even with the reality of that 0:15:35.320 --> 0:15:37.880 future pension, because it's going to offer you the most 0:15:37.920 --> 0:15:41.520 flexibility down the road. And these are all basically kind 0:15:41.520 --> 0:15:43.760 of like the smart, nerdy things to do with your money, 0:15:44.360 --> 0:15:46.640 assuming you don't have any additional debts. I think it's 0:15:46.680 --> 0:15:49.200 worth maybe zooming out a little bit, like looking at 0:15:49.200 --> 0:15:51.000 the big picture and what it is that you want 0:15:51.000 --> 0:15:53.400 to be doing, like in the more medium term, Like 0:15:53.400 --> 0:15:55.600 you are looking at all like long term goals, like 0:15:55.600 --> 0:15:58.360 long term retirement goals for you and your family. But 0:15:58.440 --> 0:16:00.440 I think it's worth like brainstorming with your with your 0:16:00.480 --> 0:16:02.840 husband and thinking through like what do we want our 0:16:02.880 --> 0:16:04.360 life to look like? Do we want the kids to 0:16:04.400 --> 0:16:06.880 be in more activities in the coming years? Are they 0:16:06.880 --> 0:16:10.160 playing expensive sports that are going to require more of us? 0:16:10.320 --> 0:16:12.880 Do we want to take a vacation abroad every single 0:16:12.920 --> 0:16:14.640 year that's going to cost us a lot of money? 0:16:14.880 --> 0:16:16.560 If so, these are all things that you want to 0:16:17.080 --> 0:16:20.280 start socking at least planning to set money aside for 0:16:20.320 --> 0:16:23.200 these things in the future. But if even after you 0:16:23.240 --> 0:16:25.000 go through all of that, let's say you're like, oh no, 0:16:25.400 --> 0:16:27.280 we don't want to do any of that, well that's fine. 0:16:27.960 --> 0:16:30.720 Just realize what you're prioritizing by doing that is you're 0:16:30.760 --> 0:16:34.200 prioritizing more flexibility and more options for yourself in the future, 0:16:34.200 --> 0:16:37.280 because you're not going to be as dependent on maintaining 0:16:37.320 --> 0:16:39.400 that job at the school or just continue to work 0:16:39.400 --> 0:16:41.840 in the future. So just realize, in one way or 0:16:41.880 --> 0:16:45.080 the other, you are prioritizing something, whether you are prioritizing 0:16:45.080 --> 0:16:48.160 it intentionally or if it's just something that you know 0:16:48.400 --> 0:16:50.880 is generally good, and that it becomes sort of a 0:16:51.080 --> 0:16:51.920 default option for you. 0:16:52.160 --> 0:16:54.000 And of course you want to prioritize your future, and 0:16:54.000 --> 0:16:56.280 you want to prioritize some of those investment accounts, but 0:16:56.400 --> 0:16:59.720 not going so hard in that direction that you you 0:17:00.000 --> 0:17:02.720 you're unable to use some of those dollars in the 0:17:02.720 --> 0:17:04.479 here and now to enjoy your life and to make 0:17:04.480 --> 0:17:07.600 sure you're funding the lifestyle you want for your family. So, Matt, 0:17:07.680 --> 0:17:09.840 we've got more questions to get to on this episode, 0:17:09.960 --> 0:17:12.160 including one about taking out a loan. 0:17:12.280 --> 0:17:14.239 To go to flight school. How do you do that? 0:17:14.359 --> 0:17:25.240 We'll talk about that and more right after this. All right, Jill, 0:17:25.320 --> 0:17:27.640 we are back from the break, and it's now time 0:17:27.680 --> 0:17:29.720 to hear from a listener who's trying to figure out 0:17:29.760 --> 0:17:33.280 where he should stash that extra thousand dollars. A month. 0:17:33.920 --> 0:17:36.280 Hey guys, what's going on? This is START Studio in 0:17:36.600 --> 0:17:40.439 San Antoonio, Texas. My question for today is I have 0:17:40.560 --> 0:17:43.760 about one thousand dollars a month extra that I want 0:17:43.760 --> 0:17:45.560 to pay forward to Pittsbell to the house, just to 0:17:45.600 --> 0:17:48.800 try to get a paid off sooner. The idea I 0:17:48.880 --> 0:17:51.720 was having is what if instead of the twelve thousand 0:17:51.760 --> 0:17:54.800 dollars annually that I was being going towards the principal, 0:17:54.920 --> 0:17:58.720 I was to stick it into SMP account and then 0:17:58.800 --> 0:18:02.240