WEBVTT - Ask HTM - Where a Minor Should Save and Invest, Security Concerns with Budgeting Apps, and Financing a Car to Boost Credit Score #144 0:00:00.080 --> 0:00:02.920 Welcome to How the Money. I'm Joel and I'm Matt, 0:00:03.000 --> 0:00:25.000 and today we're answering your listener questions. Joel, you know 0:00:25.040 --> 0:00:29.200 what I'm canceling listener questions? What no Christmas is canceled? 0:00:29.480 --> 0:00:32.320 Listener questions are canceled like the Grinch who stole listener questions. 0:00:32.560 --> 0:00:34.440 I am kidding me, and I'm excited that we we 0:00:34.479 --> 0:00:37.360 do have listener questions. We have a question regarding where 0:00:37.400 --> 0:00:39.960 to save and invest if you're a minor, so if 0:00:39.960 --> 0:00:42.159 you're under eighteen years old, where should you save and 0:00:42.240 --> 0:00:44.800 invest your money? Turn up the volume, twelve and thirteen 0:00:44.840 --> 0:00:47.000 year olds, get ready. We're also going to address the 0:00:47.000 --> 0:00:49.360 security of from the different budgeting apps law that you've 0:00:49.360 --> 0:00:52.440 heard of, like mint, why NAB as well, yes, should 0:00:52.479 --> 0:00:55.120 you be scared to use those apps? As well as 0:00:55.160 --> 0:00:58.880 some considerations when financing a used car. And that's not 0:00:58.920 --> 0:01:01.400 something we have answered before. So all these questions I 0:01:01.440 --> 0:01:03.880 am excited to tackle with you today. Man, let's do 0:01:03.880 --> 0:01:05.560 a buddy, all right. But before we get to the 0:01:05.640 --> 0:01:08.560 listener questions, I wanted to let you know I read 0:01:08.600 --> 0:01:12.959 an article about some economists created a report on how 0:01:13.040 --> 0:01:15.640 much of an emergency fund you should have as like 0:01:15.680 --> 0:01:18.800 a baseline. So I thought it was interesting because we've 0:01:18.800 --> 0:01:21.720 done episodes before about creating an emergency fund. They are 0:01:21.800 --> 0:01:24.960 incredibly important, very necessary, right, I have that margin in 0:01:25.000 --> 0:01:26.520 your life, But how much should you have? And and 0:01:26.600 --> 0:01:29.399 there's always three months or six months, and there's a 0:01:29.440 --> 0:01:33.240 lot of debate, right, But these economists kind of ran 0:01:33.319 --> 0:01:35.080 a bunch of numbers and decided that there was a 0:01:35.080 --> 0:01:38.520 baseline amount that people should strive for, and that they 0:01:38.520 --> 0:01:41.000 should eventually strive to have more than this. They should 0:01:41.000 --> 0:01:43.240 strive for that three or six month level. But they 0:01:43.280 --> 0:01:45.000 came up with a really specific numbers. I thought it 0:01:45.000 --> 0:01:48.240 was kind of interesting. Two thousand, four hundred and sixty 0:01:48.320 --> 0:01:51.440 seven dollars is the specific amount one should aim for 0:01:51.640 --> 0:01:54.919 when at least trying to kind of cover those baseline emergencies. 0:01:54.960 --> 0:01:56.760 What do you think about that number? Yeah, what I 0:01:56.800 --> 0:01:59.640 love about it is that it is a set dollar amount, right, 0:01:59.680 --> 0:02:01.080 And that part of what they were saying in the 0:02:01.120 --> 0:02:03.640 report is that three to six months, even though yes, 0:02:03.800 --> 0:02:06.600 like that is sound financial advice, that's what we've said before. 0:02:06.640 --> 0:02:10.480 Three to six months, However, it causes you to do math, 0:02:11.520 --> 0:02:13.520 and folks don't like doing math, right, You have to 0:02:13.520 --> 0:02:16.040 actually calculate how much that is, like how much with 0:02:16.080 --> 0:02:18.160 folks by the way, I don't like to myself. It 0:02:18.160 --> 0:02:20.440 causes you to have to actually figure out the cost 0:02:20.480 --> 0:02:22.680 of living for yourself, right for a month, then you've 0:02:22.680 --> 0:02:25.280 got to multiply that by I don't know, three, maybe six. 0:02:26.320 --> 0:02:28.440 But but it's a it's sort of a moving target, right, 0:02:28.480 --> 0:02:31.120 And that's one of the things they discussed how having 0:02:31.280 --> 0:02:34.120 a set dollar amount, how that's actually better because three 0:02:34.160 --> 0:02:36.560 or six months it can just seem like this overwhelming 0:02:36.600 --> 0:02:38.880 sort of goal for you to kind of pursue. Versus 0:02:39.440 --> 0:02:42.760 a very specific dollar amounts. It's very achievable and it's 0:02:42.760 --> 0:02:45.440 something that most people can do. And they were saying 0:02:45.480 --> 0:02:48.000 that every single dollar that leads up to that two thousand, 0:02:48.000 --> 0:02:51.520 four or sixty seven dollars had a dramatic impact on 0:02:51.680 --> 0:02:55.320 how that affected people financially, but every dollar above that, 0:02:55.800 --> 0:02:58.880 certainly it helped, but it certainly had a diminished benefit 0:02:58.960 --> 0:03:01.919 for any amount say above that. Yeah, yeah, it's interesting 0:03:02.040 --> 0:03:04.480 that that there's this number that one can aim for 0:03:04.720 --> 0:03:06.680 that puts you, at least, you know, not in the 0:03:06.760 --> 0:03:09.480 position to handle any emergency, but in the position to 0:03:09.560 --> 0:03:12.679 handle most emergencies. I would say, I think sometimes even 0:03:12.720 --> 0:03:15.680 when we think about an emergency fund, maybe we've fread 0:03:15.720 --> 0:03:18.280 over it a little too much, because when you think 0:03:18.280 --> 0:03:20.520 about it logically, what are the biggest emergencies that are 0:03:20.560 --> 0:03:23.160 likely to happen? If you own a home, there are 0:03:23.240 --> 0:03:25.000 some more that you might have, or or you own 0:03:25.000 --> 0:03:26.760 a car, there are more that you might have than 0:03:26.800 --> 0:03:29.600 than someone who's renting or someone who who doesn't own 0:03:29.600 --> 0:03:31.720 a car. Oh, I like that, don't own a car. 0:03:31.840 --> 0:03:33.679 You don't have to worry about speeding tickets. You don't 0:03:33.720 --> 0:03:35.040 have to worry about seeding tickets. You don't have to 0:03:35.080 --> 0:03:37.840 worry about transmissions going bad. You gotta worry about, you know, 0:03:37.880 --> 0:03:40.600 replacing a flat on your bike or whatever. But yeah, 0:03:40.640 --> 0:03:43.000 so depending on kind of what your lifestyle is, that 0:03:43.000 --> 0:03:46.160 that should influence how big your emergency fund is. But 0:03:46.600 --> 0:03:48.440 knowing that this is kind of a good baseline number 0:03:48.440 --> 0:03:49.920 to shoot for, that this will be able to carry 0:03:49.960 --> 0:03:52.880 you through you know, most emergencies in your life, and 0:03:52.880 --> 0:03:54.240 and you don't have to sweat it, and you don't 0:03:54.240 --> 0:03:56.160 have to put it on a credit card or ask 0:03:56.200 --> 0:03:58.960 a relative to to borrow some funds. This is just 0:03:59.000 --> 0:04:01.440 a nice kind of solid number to have as a 0:04:01.480 --> 0:04:03.640 baseline for any fund. So yeah, I thought it was 0:04:03.680 --> 0:04:06.680 an interesting report and kind of nice to give people 0:04:06.840 --> 0:04:09.320 a specific benchmark, right, as opposed to kind of that 0:04:09.400 --> 0:04:12.320 more nebulous three to six months of your budget, right 0:04:12.360 --> 0:04:14.760 if your monthly budget in savings instead of having to 0:04:14.760 --> 0:04:16.800 set aside all that money, you know what, at least 0:04:16.839 --> 0:04:18.880 give people something to shoot for that feels a little 0:04:18.880 --> 0:04:20.880 more within grasp. And you know what, we can even 0:04:20.880 --> 0:04:24.400 just round up. It's twenty four, what is it seven? 0:04:24.640 --> 0:04:27.799 Let's just say, you know, like that's a nice round number, 0:04:27.880 --> 0:04:31.000 just a little bit higher than the reported amount. But 0:04:31.040 --> 0:04:32.800 bottom line, what I love about it is it's sort 0:04:32.800 --> 0:04:35.320 of the psychological trick and if that's what it takes 0:04:35.360 --> 0:04:37.719 to get people to actually set that money aside versus 0:04:37.760 --> 0:04:40.719 them seeing six months of living expenses, like I'm I'm 0:04:40.760 --> 0:04:42.520 never gonna be able to do that, right, I'm a 0:04:42.560 --> 0:04:45.239 big fan of the different psychological tricks that might allow 0:04:45.320 --> 0:04:48.039 people who otherwise wouldn't set this money aside to actually 0:04:48.080 --> 0:04:50.880 start doing it. Completely agree, All right, another, let's talk 0:04:50.880 --> 0:04:54.120 about psychological tricks for a second, Matt. Another psychological trick 0:04:54.200 --> 0:04:56.200 we do on the show is drink a beer every 0:04:56.240 --> 0:04:58.760 week so that other people out there will drink beer 0:04:58.880 --> 0:05:01.640 more often. Good beer, right, good beer. Yeah, we're not 0:05:01.760 --> 0:05:06.080 about quantity over quality, quite the opposite. Right, always quality, right, 0:05:06.120 --> 0:05:08.480 I'll always quality first. So today on the show, we're 0:05:08.520 --> 0:05:11.240 drinking a beer called Chance I p a by Wildly 0:05:11.360 --> 0:05:14.239 Brewing Company. They're about an hour and a half south 0:05:14.360 --> 0:05:16.800 of where we are, and they've turning out some great beers. Man, 0:05:16.800 --> 0:05:18.560 So and you you pick this one up for us 0:05:18.839 --> 0:05:21.400 to drink on the show today, So thank you, my friend. Yeah, man, 0:05:21.440 --> 0:05:23.480 happy to And this is for me. This is one 0:05:23.520 --> 0:05:25.400 of my kind of go to favorite beers that I 0:05:25.440 --> 0:05:27.440 like just keeping in the fridge to be able to 0:05:27.520 --> 0:05:31.320 drink without having a special occasion to celebrate necessarily. Yeah. Well, 0:05:31.320 --> 0:05:32.839 we'll let folks know what we think of this beer 0:05:32.839 --> 0:05:34.760 at the end of the episode. But all right, Matt, 0:05:34.839 --> 0:05:37.359 Now it's on to the subject at hand. We're taking 0:05:37.400 --> 0:05:40.800 listener questions on the show today, and if anybody out 0:05:40.800 --> 0:05:42.760 there listening has a question they want to submit to 0:05:42.760 --> 0:05:44.920 be on the show, it's super easy. All you gotta 0:05:44.960 --> 0:05:47.599 do is go to how to money dot com slash 0:05:47.640 --> 0:05:50.200 ask and there are simple instructions there for you to 0:05:50.240 --> 0:05:52.080 be able to submit your question. Let's go ahead and 0:05:52.080 --> 0:05:54.560 take our first one. Now, Hey, Chel and Matte, this 0:05:54.640 --> 0:05:57.679 is Lauren from Ohio. I had a question about credit cards. 0:05:57.800 --> 0:06:01.120 So I've been on my financial journey and really researching 0:06:01.120 --> 0:06:03.000 all of the best credit cards and I'm really excited 0:06:03.040 --> 0:06:05.640 because I know which ones I want to open and 0:06:05.720 --> 0:06:09.200 how to maximize cash back, rewards and travel awards. Super 0:06:09.240 --> 0:06:11.760 excited to get started. The problem is, I have an 0:06:11.760 --> 0:06:14.600 old credit card that I've had for about ten years, 0:06:14.600 --> 0:06:17.560 recently high a pr but I was able to negotiate 0:06:17.600 --> 0:06:21.120 that down not carrying a balance. But I just realized 0:06:21.160 --> 0:06:24.320 that the card has an annual membership beat. There really 0:06:24.360 --> 0:06:27.599 aren't any rewards or any special perks that I could 0:06:27.600 --> 0:06:29.960 be getting from this card, and I'm just wondering, like, 0:06:30.000 --> 0:06:31.680 despite the day on my credit, should I just go 0:06:31.720 --> 0:06:34.440 ahead and close it versus sucking it up and spending 0:06:34.480 --> 0:06:38.200 the forty bucks figure. Lauren, thanks so much for the question, 0:06:38.680 --> 0:06:41.880 and congrats on getting a credit card or multiple credit 0:06:41.920 --> 0:06:44.600 cards that will work better for you. Anytime you can 0:06:44.640 --> 0:06:46.560 use your credit card like a tool to actually work 0:06:46.600 --> 0:06:49.479 for you, that's what we'd like to see. So let's 0:06:49.480 --> 0:06:52.000 go ahead and first answer the question why someone might 0:06:52.000 --> 0:06:54.479 want to close a credit card altogether. And a really 0:06:54.480 --> 0:06:56.720 good reason to close a credit card is if you 0:06:56.800 --> 0:06:59.800 are tempted to overspend on that card, but for you 0:07:00.000 --> 0:07:02.320 doesn't sound like what's going on since you are looking 0:07:02.320 --> 0:07:05.400 to maximize your credit card benefits. And so that kind 0:07:05.400 --> 0:07:06.880 of gets us to the only other reason that you 0:07:06.960 --> 0:07:08.520 might want to close a card, and that's if you're 0:07:08.520 --> 0:07:11.400 paying an annual fee where you're not receiving any additional 0:07:11.440 --> 0:07:14.320 benefits or perks like you mentioned. Yeah, and Lauren, when 0:07:14.360 --> 0:07:17.600 you're talking about closing this card, well, your history with 0:07:17.640 --> 0:07:20.160 that credit card, it'll still stick around, It'll still be 0:07:20.240 --> 0:07:22.920 in your credit mix. You've built up some nice history 0:07:23.080 --> 0:07:26.000 over these ten years with that card, but you're not 0:07:26.040 --> 0:07:28.640 losing it all by closing the card. The card just 0:07:28.800 --> 0:07:30.880 doesn't continue to age in your credit mix, so it's 0:07:30.880 --> 0:07:33.840 not going to continue to boost your score over the years, 0:07:34.040 --> 0:07:35.960 but it will still sit there and reflect nicely in 0:07:36.000 --> 0:07:38.440 your credit mix, So it's not going to be as 0:07:38.520 --> 0:07:40.679 large of a ding to your score as you think. 0:07:41.040 --> 0:07:43.800 And for someone who's handling their cards, well, like Matt said, 0:07:44.000 --> 0:07:47.559 closing a credit card for reasons of ditching an annual fee. 0:07:47.800 --> 0:07:50.560 I think it's a worthwhile reason to actually close a 0:07:50.600 --> 0:07:53.520 credit card, right because if you're not using it, if 0:07:53.560 --> 0:07:55.960 you're looking to find credit cards that work for your 0:07:56.000 --> 0:07:59.440 spending style a little bit better that maximize your rewards. Well, 0:07:59.520 --> 0:08:01.400 ditching a ard with an annual fee that just isn't 0:08:01.680 --> 0:08:04.840 working for how you spend your money, that isn't helping 0:08:04.840 --> 0:08:08.040 you maximize those rewards, that's a really good reason to 0:08:08.080 --> 0:08:10.760 close it, even with that minor ding you're going to 0:08:10.880 --> 0:08:13.440 receive to your credit score. And so Lauren, in regards 0:08:13.440 --> 0:08:16.320 to your credit report or credit score, even though it's 0:08:16.320 --> 0:08:18.680 sort of that bad history does roll off in either 0:08:18.840 --> 0:08:21.080 like seven to ten years, you know that that good 0:08:21.160 --> 0:08:24.680 history has the potential to stay on your credit report indefinitely. 0:08:25.040 --> 0:08:27.080 Man I actually check my credit report a few days 0:08:27.080 --> 0:08:30.280 ago at annual credit report dot com, which is the 0:08:30.320 --> 0:08:32.120 only website that you should be going to to get 0:08:32.120 --> 0:08:34.960 your free credit report, and Man, I had a card 0:08:35.160 --> 0:08:37.959 from two thousand and four that I had on time 0:08:38.000 --> 0:08:40.760 payments with that I had closed a long time ago 0:08:40.800 --> 0:08:42.840 that was still sitting there on my report. So that 0:08:42.960 --> 0:08:45.640 positive history, those on time payments and the benefit that 0:08:45.640 --> 0:08:48.440 that card provided, it's still sitting there. It's not dropping 0:08:48.440 --> 0:08:51.800 off nice. Yeah, it's it's nice to know that even 0:08:51.920 --> 0:08:55.280 closing that line isn't going to remove that all the 0:08:55.320 --> 0:08:57.280 way from your credit score, because then that would be 0:08:57.280 --> 0:08:59.320 a much bigger decision, right if you had to take 0:08:59.360 --> 0:09:03.000 those ten years of good payment history and completely remove 0:09:03.080 --> 0:09:05.240 them from your report, that would have a much different effect. 0:09:05.240 --> 0:09:08.000 But that's not what happens, which is good. Another thing 0:09:08.080 --> 0:09:10.600 that you can do, and Matt, I've done this before 0:09:10.640 --> 0:09:13.120 and it's worked. You can ask your credit card issue 0:09:13.200 --> 0:09:15.400 if they will waive the annual fee on that card. 0:09:15.760 --> 0:09:18.320 So I have the Southwest card, Matt, there was a 0:09:18.320 --> 0:09:20.760 great sign up bonus. I've got enough points now because 0:09:20.760 --> 0:09:23.319 of that to to take like a four or five 0:09:23.400 --> 0:09:26.640 round trip flights depending on where the world around the world. Yeah, 0:09:26.679 --> 0:09:28.800 it's gonna be an epic trip now, but probably just 0:09:28.880 --> 0:09:30.959 you know, some little domestic flights here and there. But 0:09:31.400 --> 0:09:33.600 I called and I asked if they would waive the 0:09:33.640 --> 0:09:36.240 annual fee. I still like having that card. As someone 0:09:36.280 --> 0:09:39.760 whose local airport has Southwest flying in and out a lot, 0:09:40.160 --> 0:09:41.720 I can get a lot of places on Southwest and 0:09:41.720 --> 0:09:44.160 they're a great airline with with great fares, and so 0:09:44.480 --> 0:09:46.480 that credit card is helpful, but I didn't want to 0:09:46.520 --> 0:09:48.560 pay the annual fee, and so you know what they did. 0:09:48.640 --> 0:09:51.000 They said, well, we can't wave it all together, but 0:09:51.040 --> 0:09:53.280 what we can do is offer you a statement credit 0:09:53.679 --> 0:09:56.120 in the same amount as the annual fee. And so 0:09:56.160 --> 0:09:58.400 I was like, well, that's like they waved it to me. Yeah, 0:09:58.440 --> 0:10:01.480 it's the exact same thing basically. So you can call 0:10:01.640 --> 0:10:03.960 your issuer and see if they'll waive the annual fee, 0:10:04.040 --> 0:10:05.760 and if they're willing to do that, well then it 0:10:05.880 --> 0:10:07.760 might make sense to to hold onto the card at 0:10:07.840 --> 0:10:10.200 least for a year or so until you kind of 0:10:10.200 --> 0:10:12.560 have to have that discussion with them again. But if 0:10:12.559 --> 0:10:15.080 they're not up for it, then ultimately, really it's not 0:10:15.120 --> 0:10:17.679 gonna have that much of a negative impact by just 0:10:17.679 --> 0:10:19.840 closing it. Yeah, so, Lauren, in the end, you want 0:10:19.840 --> 0:10:22.360 to be using credit cards, like likely maybe three to 0:10:22.440 --> 0:10:25.560 four of them in ways that do maximize rewards like 0:10:25.559 --> 0:10:27.480 you're planning to do, but just make sure that you 0:10:27.559 --> 0:10:30.280 are paying in full and that you are not carrying 0:10:30.280 --> 0:10:33.600 a balance, otherwise any of those potential benefits that you 0:10:33.600 --> 0:10:36.760 could be receiving will quickly erode. And you can see 0:10:36.760 --> 0:10:39.679 our favorite credit cards over on our website at how 0:10:39.679 --> 0:10:42.439 do money dot com slash credit cards. If you were 0:10:42.480 --> 0:10:45.080 to sign up for a card through that link, it 0:10:45.120 --> 0:10:47.439 actually supports the show, So we would appreciate if you 0:10:47.480 --> 0:10:50.800 consider doing that. Yeah, and ultimately, Lauren, congrats on finding 0:10:50.840 --> 0:10:54.080 cards that work best for how you spend. And that's 0:10:54.120 --> 0:10:56.160 what our article was about. That's what we want people 0:10:56.160 --> 0:10:58.800 to do if they are going to use credit cards, well, 0:10:58.920 --> 0:11:00.400 use them as a tool, pay them off in full 0:11:00.400 --> 0:11:02.120 at the end of every month. Well, we want you 0:11:02.200 --> 0:11:04.240 to find the credit cards that offer you the best 0:11:04.240 --> 0:11:07.560 rewards for how you spend. And I mean that's really important, right, 0:11:07.600 --> 0:11:10.199 That's an important piece in our financial tool belt, is 0:11:10.280 --> 0:11:12.680 using credit cards. Well, and actually, Matt soon on an 0:11:12.760 --> 0:11:15.280 upcoming show, we're going to talk about how we spend cash, 0:11:15.280 --> 0:11:18.000 credit and debit, and there are other benefits of credit 0:11:18.040 --> 0:11:21.440 cards besides just even those upfront rewards that we're going 0:11:21.520 --> 0:11:23.160 to cover two. So yeah, we'll get to that, I 0:11:23.160 --> 0:11:24.840 think in a couple of weeks. But at last, we 0:11:24.880 --> 0:11:26.880 have more listener questions to take. In a particular we're 0:11:26.880 --> 0:11:28.920 gonna get to that question about the security of budgeting 0:11:28.960 --> 0:11:40.240 apps right after the break. All right, Joel, we are 0:11:40.280 --> 0:11:43.160 back from the break taking listener questions, and we've got 0:11:43.160 --> 0:11:47.120 one here from potentially our youngest listener. Let's hear it, Hey, 0:11:47.160 --> 0:11:49.760 Matt and Joel. I'm Enrique from West Pond Beach, Florida. 0:11:49.920 --> 0:11:52.240 I'm currently a junior in high school and I'm working 0:11:52.320 --> 0:11:55.319 my first part time job delivering pieces. This makes me 0:11:55.360 --> 0:11:58.000 about two and fifty dollars a month. As I'm only 0:11:58.000 --> 0:12:01.040 working on weekends and I'm dedicating most of time towards schoolwork. 0:12:02.000 --> 0:12:04.400 I don't really have many expenses, so my current priority 0:12:04.480 --> 0:12:07.520 is to start saving and investing. I've already gotten started 0:12:07.520 --> 0:12:09.520 through my mom's robin Hood account, which I linked to 0:12:09.520 --> 0:12:12.280 my bank account, and I've invested in one share of 0:12:12.360 --> 0:12:14.960 vt I. But I'm not sure if i'd be better 0:12:15.000 --> 0:12:18.600 off asking for help opening a Vanguard account, and how 0:12:18.600 --> 0:12:20.960 that would work with me being a minor. Would it 0:12:20.960 --> 0:12:22.880 be under my name or would it have to be 0:12:22.920 --> 0:12:25.280 transferred to me when I turned eighteen? What do you 0:12:25.320 --> 0:12:28.240 guys think would be my best bet? And are there 0:12:28.280 --> 0:12:32.160 any options? I'm not considering anything I maybe don't know about. 0:12:32.800 --> 0:12:35.160 At any rate, I have most of my money in 0:12:35.400 --> 0:12:38.680 ordinary savings account, which has no fees. Really but a 0:12:38.760 --> 0:12:42.760 really low interest rate of point zero one. I'd love 0:12:42.800 --> 0:12:44.720 to hear what you guys have to say, as my 0:12:44.800 --> 0:12:48.040 options are probably pretty limited because I'm under eighteen. I 0:12:48.120 --> 0:12:50.280 love the podcast. Keep up the great work, and thanks 0:12:50.280 --> 0:12:53.480 for being so informative and entertaining on all my drives. 0:12:54.160 --> 0:12:57.560 Oh man, I love hearing questions like that from young 0:12:57.600 --> 0:13:00.800 folks that are being super intentional with their money, that 0:13:00.880 --> 0:13:04.560 want to get started investing and saving well early, because Matt, 0:13:04.600 --> 0:13:06.680 you and I both know that the time value of 0:13:06.720 --> 0:13:09.440 money is so important, and and someone who's in Rique's 0:13:09.480 --> 0:13:12.640 age beginning to prioritize saving and investing now is going 0:13:12.679 --> 0:13:15.480 to have these massive cumulative effects because of the power 0:13:15.480 --> 0:13:18.000 of compounding returns. It's it's just so so big. If 0:13:18.000 --> 0:13:20.240 you can get started saving at this young of an age. 0:13:20.280 --> 0:13:22.480 Oh yeah, Enrique, if you haven't played with compound interest 0:13:22.480 --> 0:13:26.120 calculators yet, just going there and enter your age to 0:13:26.440 --> 0:13:29.520 fifty right, and have a set amount of contributions every year, 0:13:29.559 --> 0:13:31.840 set the interest rate to seven eight percent, and then 0:13:31.880 --> 0:13:34.120 compared that too. If you didn't start saving until maybe 0:13:34.120 --> 0:13:36.440 you're twenty five, which is on the early side for 0:13:36.480 --> 0:13:38.840 most still early for mons out of college, getting their 0:13:38.840 --> 0:13:40.439 first job, they're paying down student loans. A lot of 0:13:40.480 --> 0:13:44.040 folks aren't putting money towards retirement. But Enrique, compare your 0:13:44.120 --> 0:13:46.400 number to the other number when you started saving when 0:13:46.400 --> 0:13:48.480 you're twenty five years old, and have that end date 0:13:48.520 --> 0:13:51.040 at fifty, and you will see a drastic difference in 0:13:51.080 --> 0:13:52.760 the total amount of money that's gonna be able to 0:13:52.880 --> 0:13:55.560 be saved for retirement. Yeah, even just a hundred bucks here, 0:13:55.600 --> 0:13:57.800 hundred bucks there, whatever you can stomach based on your 0:13:57.840 --> 0:14:01.000 part time job, that's huge. So I gotta say it's 0:14:01.000 --> 0:14:03.640 inspiring too. I love that you're focused on your school work, 0:14:03.640 --> 0:14:05.000 but you also have a part time job bile in 0:14:05.080 --> 0:14:07.880 high school. For me, working while I was in school, 0:14:07.920 --> 0:14:09.439 I taught me so much. I feel like, if I 0:14:09.480 --> 0:14:11.520 had to do it over, the sixteen year old me 0:14:11.679 --> 0:14:13.960 would have probably preferred not to work. I probably thought 0:14:13.960 --> 0:14:16.480 it was lame, but ultimately it just wanted to play 0:14:16.559 --> 0:14:20.520 NBA jam exactly. He's on fire. I totally would have 0:14:20.560 --> 0:14:23.000 just been content to play video games. But it taught 0:14:23.040 --> 0:14:25.320 me a lot. It taught me a lot about relating 0:14:25.360 --> 0:14:27.600 to you know, folks that were in charge of me, 0:14:27.840 --> 0:14:30.040 that were older than me, And it's so much different 0:14:30.080 --> 0:14:31.840 than how you relate to a teacher, and as a 0:14:31.840 --> 0:14:34.760 sixteen year old, it's so important to learn. So that's 0:14:34.880 --> 0:14:37.560 really valuable work experience. Not just the income that you're 0:14:37.560 --> 0:14:40.080 making now that you can actually used to save and invest, 0:14:40.120 --> 0:14:42.400 but this work experience that you're that you're gaining while 0:14:42.440 --> 0:14:44.600 you're in high school is huge, and it's gonna help 0:14:44.600 --> 0:14:47.160 you on future job interviews. It's gonna help you on 0:14:47.200 --> 0:14:49.560 the work history you're gonna be able to put on 0:14:49.760 --> 0:14:52.720 your resume. Also, by the way, I'm really interested in 0:14:52.720 --> 0:14:54.920 in what got you interested in saving and investing at 0:14:54.960 --> 0:14:57.440 such a young age. So shoot us an email or 0:14:57.440 --> 0:14:59.520 post in the Facebook group and let us know kind 0:14:59.560 --> 0:15:01.720 of what the if this was for you to actually 0:15:01.720 --> 0:15:05.280 start thinking about this and focusing on your financial future, 0:15:05.320 --> 0:15:08.160 your retirement age self at such an early age. Man, 0:15:08.200 --> 0:15:10.880 that's such a rare quality in someone your age, So 0:15:10.920 --> 0:15:13.320 I'm intrigued, all right, Enrique, Let's go ahead and get 0:15:13.320 --> 0:15:16.320 to it. Though, you mentioned saving and how you have 0:15:16.880 --> 0:15:19.320 your money in an account that is earning you point 0:15:19.440 --> 0:15:21.880 zero one percent, and yeah, it's true that that is 0:15:21.920 --> 0:15:24.160 basically nothing right now. So you want to open a 0:15:24.200 --> 0:15:26.960 new savings account and avoid those big banks and those 0:15:27.000 --> 0:15:29.720 are the ones that are typically paying those really meager 0:15:30.000 --> 0:15:33.160 interest rates. Find a new bank that prioritizes paying a 0:15:33.200 --> 0:15:36.800 decent interest rate. Currently that's somewhere in the two percent range, which, 0:15:36.840 --> 0:15:39.240 by the way, that is more than you are currently 0:15:39.280 --> 0:15:41.720 getting right now. But like you mentioned, the options are 0:15:41.720 --> 0:15:43.680 going to be scarce if you are under eighteen years old, 0:15:44.000 --> 0:15:46.680 So you want to ask your mom you mentioned her 0:15:46.720 --> 0:15:49.120 for help to get you started there. She can open 0:15:49.200 --> 0:15:52.320 a custodial savings account. That just means the account is 0:15:52.320 --> 0:15:55.000 in your name, it's your money, but she is the 0:15:55.040 --> 0:15:57.920 one that actually manages that account. You don't really have 0:15:58.000 --> 0:16:00.480 access to that money without her being one that kind 0:16:00.480 --> 0:16:02.720 of logs in, moves the money around, that sort of thing. 0:16:03.000 --> 0:16:05.360 Then once you actually turn eighteen years old, it's yours. 0:16:05.560 --> 0:16:07.880 You're the one who is then in charge of managing 0:16:07.960 --> 0:16:11.040 that account. Yeah, you can also check out Capital One 0:16:11.080 --> 0:16:13.040 has a kid saving these account which has no fees 0:16:13.080 --> 0:16:15.600 and no minimums and they pay one percent, which which 0:16:15.640 --> 0:16:17.560 isn't quite as good as you know the top banks 0:16:17.600 --> 0:16:19.600 on the market, but it's still a good product. The 0:16:19.600 --> 0:16:22.560 cool thing about the Capital one Kids Savings account though, 0:16:22.920 --> 0:16:25.960 the way it differs from a custodial account. It's a 0:16:26.080 --> 0:16:29.200 joint account, so you'll actually have more access to the 0:16:29.240 --> 0:16:32.880 funds and more access uh to online and app based 0:16:32.920 --> 0:16:36.360 banking by signing up for that account instead. Yeah. And also, 0:16:36.640 --> 0:16:39.320 I think one other banking note that we should discuss 0:16:39.680 --> 0:16:42.080 is that there are local credit unions and local banks 0:16:42.120 --> 0:16:45.520 that offer just really really killer rates on savings for 0:16:45.600 --> 0:16:47.880 young folks to to kind of entice them to put 0:16:47.920 --> 0:16:51.120 their money with that bank or credit union. I saw 0:16:51.360 --> 0:16:54.440 a billboard mat just this weekend for a local credit 0:16:54.520 --> 0:16:58.880 union paying five boom on cash savings for kids. And 0:16:58.960 --> 0:17:02.360 also they were offering fifty sign up bonus, so that's 0:17:02.360 --> 0:17:04.919 double boom dude. Yeah, the fifty bucks is huge. I 0:17:04.920 --> 0:17:06.959 mean it's huge for me. I want fifty bucks, right, 0:17:07.000 --> 0:17:09.119 I know, right, I'm thinking about, you know, faking an 0:17:09.160 --> 0:17:11.119 I d to to act younger so I can go 0:17:11.160 --> 0:17:13.760 get that bonus, right, But I mean, especially for a 0:17:13.760 --> 0:17:16.879 teenage part time worker, fifty bucks, man, I'd be all 0:17:16.920 --> 0:17:19.640 about that. Yeah. Typically with a rate that good, you're 0:17:19.720 --> 0:17:22.520 only earning that five percent on cash that you have 0:17:23.000 --> 0:17:25.320 saved with the institution up to five hundred or a 0:17:25.400 --> 0:17:27.359 thousand or fift nd bucks something like that there's a 0:17:27.400 --> 0:17:30.200 low limit where you're actually earning the highest rates of interest. 0:17:30.400 --> 0:17:33.520 But it's a great place to start. And so yeah, Enrique, 0:17:33.600 --> 0:17:35.520 if you see a billboard or if you do some 0:17:35.600 --> 0:17:38.440 online searching for a local credit union that might offer 0:17:38.600 --> 0:17:42.280 just some incredible deals for young savers, that's a great 0:17:42.280 --> 0:17:44.240 place to start. And honestly, it's not a bad idea 0:17:44.359 --> 0:17:47.000 to form a relationship with a local credit union early 0:17:47.040 --> 0:17:49.679 on in your life too. Local credit unions mayn there 0:17:49.720 --> 0:17:51.919 are always coming to the rescue, you know it. And 0:17:51.960 --> 0:17:54.600 then you mentioned investing as well, Enrique. You know, when 0:17:54.600 --> 0:17:56.920 it comes to actual investing, you mentioned van Guard, which 0:17:56.960 --> 0:17:58.920 is a great company. But for you, man, we would 0:17:58.960 --> 0:18:02.359 love Fidelity and Charles Schwab to be on your radar 0:18:02.480 --> 0:18:05.840 for actual custodial accounts and that's because of lower minimum 0:18:05.920 --> 0:18:09.000 requirements and in the case of Fidelity, you'll have access 0:18:09.040 --> 0:18:12.880 to their zero fee funds. But before you invest more 0:18:12.920 --> 0:18:15.200 money into the market, we want you to also consider 0:18:15.240 --> 0:18:18.280 what you're actually saving and investing for. Right. If you're 0:18:18.280 --> 0:18:21.560 looking at maybe a more long term goal like actual retirement, 0:18:21.880 --> 0:18:23.639