Speaker 1: Welcome to How the Money. I'm Joel and I am Matt,
Speaker 1: and today we are answering your listener questions. That's right, Joel.
Speaker 1: This is our ask how them on the episode where
Speaker 1: every other Monday we answer five listener questions, and this
Speaker 1: week we've got five great ones, including a question about
Speaker 1: tuition reimbursement, the best way to go about that, a
Speaker 1: question about some different new bank account bonuses, and also
Speaker 1: when paying off your mortgage early does not make sense. Yeah,
Speaker 1: we've got those three plus a couple others here on
Speaker 1: this episode. Yeah, so looking forward to it. I think
Speaker 1: we've got some good ones and just one that are
Speaker 1: ones that are highly applicable to most of us. So
Speaker 1: a lot of good questions that we're gonna get to
Speaker 1: on this episode, plus a couple others that may not
Speaker 1: be as applicable but are still very good. Yeah, still
Speaker 1: interesting for sure. I think sometimes I'm fascinated by the
Speaker 1: variety of questions that come in because even if the
Speaker 1: spice of life, even if it's not something that I
Speaker 1: have dealt with personally, like I know that someone someone
Speaker 1: who has, and I can, like I don't know, just
Speaker 1: kind of think of it as building a robust amount
Speaker 1: of financial knowledge. And I'm just curious, and I think
Speaker 1: a lot of our listeners are too. They're just curious
Speaker 1: about money in general. And hopefully the stuff we covered
Speaker 1: here just leads to you being like smarter when it
Speaker 1: comes to money in general. But Matt, before we get
Speaker 1: to that, you you don't like to go to the doctor.
Speaker 1: You don't like to go to the dentist. That is true,
Speaker 1: although I'm trying to fix all of these things. I know, yeah,
Speaker 1: you actually have gone recently, and you actually went to
Speaker 1: the eye doctor recently, which I was surprised to hear
Speaker 1: that you decided to make that move. Yeah, I'm gonna
Speaker 1: share this story with folks. And so I've been sent
Speaker 1: to not go to the eye doctor and you know this,
Speaker 1: but I know I've needed to go because my girls
Speaker 1: will point out that I can't read the clock that's
Speaker 1: on the stove. And here's the thing. It's in blue lettering.
Speaker 1: It's not very bright. It is hard to see. But
Speaker 1: they still make fun of me and they're like, you
Speaker 1: can't read that when we're sitting at the table here.
Speaker 1: It has made me realize, though that I think my
Speaker 1: eyes have gotten worse over the years. It has been
Speaker 1: twelve solid years since I had gone and got my
Speaker 1: eyes checked. But I was tempted to instead of actually
Speaker 1: go to the eye doctor, to just hop on zinny
Speaker 1: and slightly tweak my prescription and making it a little
Speaker 1: bit uh stronger, because basically they're like a frugal or
Speaker 1: cheap kin undrum. You're like, yeah, yeah, do I pay
Speaker 1: the money to go to an eye doctor or do
Speaker 1: I just assume that my vision has deteriorated a little bit,
Speaker 1: just like pad the numbers right exactly. And so I
Speaker 1: was like, Okay, I'm just gonna make a little bit stronger.
Speaker 1: I'm gonna order those I can avoid the you know,
Speaker 1: going to the eye doctor altogether. But in the end
Speaker 1: I decided, okay, I think that would be cheap, Like
Speaker 1: that would be an instance of me, uh maybe doing
Speaker 1: what I should be doing, which is actually going in
Speaker 1: and seeing the eye doctor, because they, you know, they
Speaker 1: check for other things in your eye while you're in
Speaker 1: there as well, making sure. I don't know what they
Speaker 1: look for, but they you gotta fly in there, man,
Speaker 1: like you gotta pick that out. Does make sure that
Speaker 1: there's not other weird stuff going on. So that was
Speaker 1: the decision that I make. And here's the thing. I
Speaker 1: am so glad that I did because I went in
Speaker 1: and I don't have like eye cancer or anything like that,
Speaker 1: like not nothing terrible, which I was actually a little
Speaker 1: bit worried as I was sitting down, I was like,
Speaker 1: oh man, it's been over a decade, like I might
Speaker 1: have some screw top eyes, but it's are another healthy
Speaker 1: but they have gotten worse. But specifically, we discovered that
Speaker 1: I have an a stigmatism and both of my eyes.
Speaker 1: And what that means is that there is something different
Speaker 1: that you have to do to your eyeglass prescription. You
Speaker 1: can't just make it stronger. You have to do something
Speaker 1: you know there, it's like another set of numbers that
Speaker 1: you have to make an adjustment for. Uh. And I'm
Speaker 1: so glad that I actually went in because had I
Speaker 1: not gone in and had I just made my prescription stronger,
Speaker 1: I would have a not improved my vision because it
Speaker 1: wouldn't have been the right correction. B There's a good
Speaker 1: chance my eyes would hurt because I would be constantly
Speaker 1: straining because I hadn't corrected my eyes. You know, I
Speaker 1: hadn't corrected my prescription in the correct way. And I
Speaker 1: would have been out the money, like the thirty bucks
Speaker 1: or whatever that I would have spent on Zinny, because
Speaker 1: that's where I'm gonna Actually I ordered some earlier this
Speaker 1: morning before we started working. All there. You got me
Speaker 1: a new set of eyeglasses on the way from Zenny
Speaker 1: optical right ones that are gonna yeah, and they help
Speaker 1: your eyes, and so I'm so looking forward to not
Speaker 1: only being able to see properly. But I'm just glad
Speaker 1: I made the right decision in this case, because, like
Speaker 1: you said, I can be a cheap buddy and avoid
Speaker 1: doing the thing I think I need to do in
Speaker 1: order to save a couple of bucks, and in this case,
Speaker 1: I'm glad I mean the right decision. So the lesson here,
Speaker 1: don't self diagnose any ailments you might have, instead actually
Speaker 1: going and spend the In my case, I spent like
Speaker 1: eighty bucks getting my eyes checked and she gave me
Speaker 1: the prescription and Nana, I'm set for another twelve years. Yeah.
Speaker 1: That's the thing. It's not terribly expensive. Hopeully not twelve.
Speaker 1: But that's the thing is is it's not terribly expensive
Speaker 1: to go to see an eye doctor. Usually you can
Speaker 1: get that appointment for seventy eight bucks. Not not not much.
Speaker 1: It's really not too bad. And then yeah, save on
Speaker 1: the back end when it comes to the glasses that
Speaker 1: you're getting, because that is where most people fork over
Speaker 1: the most money. They'll drop three fo on you know,
Speaker 1: prescription lenses as opposed to going to a place like
Speaker 1: Zenny where you went, which is dirt cheap, but you
Speaker 1: still just as good a quality. And they've got some
Speaker 1: cool sis. So I love their glasses. I'm actually really excited.
Speaker 1: I've got these kind of gray, clear ish colored ones.
Speaker 1: So the frames are kind of a little more transparent. Uh,
Speaker 1: And yeah, I'm looking forward to train out some new frames.
Speaker 1: I thought about getting someone like the hip wire frame.
Speaker 1: I don't think I can pull this off. My dad
Speaker 1: he went and got his at Warby Parker. That's another
Speaker 1: good choices are a little more expensive, but they're still
Speaker 1: cheaper than going to a lot of the traditional eyeglass shops.
Speaker 1: And so once you get that prescription once and once
Speaker 1: you've had that eye exam, once you've not cheaped out
Speaker 1: on that, and then you can like kind of sort
Speaker 1: of cheap out on the glasses. Like that's get the
Speaker 1: right prescriptions, right, But don't just necessarily like overdo it
Speaker 1: and spend buckoos a bucks for the frames. Yeah, so,
Speaker 1: especially with younger kids too, were wrestling around. I don't
Speaker 1: know how many times I've gotten smacked in the side
Speaker 1: of the face or had had them kind of wrenched off.
Speaker 1: That's me though, when we're wrestling that that is true.
Speaker 1: I mean, you know, before we podcast every time, I
Speaker 1: gotta get that heart it up to that target heart rate,
Speaker 1: make sure that we are podcasting at the optimal levels. Uh, Joe,
Speaker 1: Let's go ahead to introduce our beer this episode. This
Speaker 1: is one by Burial, uh and it is called Beneath
Speaker 1: the Tides of Relative and Permanence. I don't really have
Speaker 1: anything else to say. We'll talk about this beer and
Speaker 1: our thoughts on it at the end of the episode.
Speaker 1: Maybe we should let the folks at Burial name our
Speaker 1: podcast episode like that'll be kind of fun to see
Speaker 1: what they come up with. We don't want folks to
Speaker 1: get depressed though, just by reading the name of our
Speaker 1: episodes right to actually click it and listen to. They
Speaker 1: have the most interesting beer names and sometimes depressing, but
Speaker 1: they go deep. Let's move on. Let's get to some
Speaker 1: listener questions. And if you have a question you want
Speaker 1: to submit for Matt and I to take on an
Speaker 1: upcoming ask TM episode, we would love to hear it.
Speaker 1: Just go to how to money dot com slash ask
Speaker 1: simple instructions. There is basically recording a voice membo on
Speaker 1: your phone and then emailing it over to us and
Speaker 1: hopefully we'll get it on the next one. So Matt,
Speaker 1: let's get to our first question of this episode. This
Speaker 1: one is about banking bonuses, how to score money by
Speaker 1: moving your dollars around. Hi, man Joel. I'm a longtime
Speaker 1: listener and I really enjoyed your podcast on my runs
Speaker 1: during the pandemic. I'm retiring next week at fifty two,
Speaker 1: and I plan to spend a certain amount of time
Speaker 1: shuffling our cash reserve around to various high yield savings
Speaker 1: accounts just to try to squeeze out a bit of
Speaker 1: extra interest without taking on additional risk. I found though,
Speaker 1: that many online banks have a direct deposit requirement. Since
Speaker 1: I'll be retired and it don't have an employer giving
Speaker 1: me a wage anymore, I don't have any way to
Speaker 1: meet this. What do you suggest? Is there some way
Speaker 1: for me to get around this direct deposit requirement, maybe
Speaker 1: by setting up some kind of deposit from my brokerage
Speaker 1: account or something like that. I would love to hear
Speaker 1: any solutions you might have for this issue. Thanks again.
Speaker 1: All right man, I like Jeff's question. I personally am
Speaker 1: not much of a runner, but yeah, when I am
Speaker 1: going on a bike ride, I sometimes listen to podcasts,
Speaker 1: sometimes listen to music, depending on kind of what I'm
Speaker 1: going for. I'm a little more leisurely, it's usually a podcast.
Speaker 1: But what about you? Do you run to podcast you
Speaker 1: run to music? Do we actually pump people up enough
Speaker 1: for their workout? I hope we do actually, so yeah,
Speaker 1: big thanks to all of our runners and workouters us
Speaker 1: the right tory probably not out there here, I'll say this.
Speaker 1: I actually I've had some issues listening to audiobooks and
Speaker 1: listening to podcasts while I run, because for my entire
Speaker 1: life I've always used that as a time to kind
Speaker 1: of decompress, unplug, But lately I'm if I'm wanting to
Speaker 1: catch up on something, I'll you know, popping in the
Speaker 1: earbud one year take off running. But here's the problem
Speaker 1: with that is I get so engrossed into the story
Speaker 1: or the podcast that the narrative essentially that I won't
Speaker 1: always pay attention. I pay attention to traffic, there's no
Speaker 1: danger there. But I have an issue with not listening
Speaker 1: to my body as much, and so I'll start running
Speaker 1: and I realized, like halfway through the rung, I'm like, crap,
Speaker 1: my my knee has been really hurting, and I don't
Speaker 1: really pay attention to it because I'm not because I'm
Speaker 1: completely too into what I'm listening to. I'm not really
Speaker 1: listening to my body as much. But the Jeff and
Speaker 1: all the other folks out there who can do two
Speaker 1: things at once, good as to you, and we appreciate
Speaker 1: you all listening. But Jeff, let's ahead and answer your question.
Speaker 1: You're talking about basically trying to get around some of
Speaker 1: these direct deposit requirements, and we we feel that this
Speaker 1: is a great approach. Uh. You know, if you can
Speaker 1: snag those bonuses in order to get a higher rate
Speaker 1: of return, we feel that that's probably the best method
Speaker 1: we know of to increase returns on your money that
Speaker 1: you aren't willing to risk in the market for money
Speaker 1: that you want to keep on hand, that you want
Speaker 1: to keep liquid. Uh. And the thing is is Not
Speaker 1: all banks require you to have a number of direct
Speaker 1: deposits in order to snag the bonus, but some of
Speaker 1: them definitely do. Uh. It's kind of annoying, but we
Speaker 1: understand why they do it. You know, they know it's
Speaker 1: sort of like this, it's a bit of a hassle. Uh.
Speaker 1: And so once you do get that direct deposit up
Speaker 1: and running, you've got that money going into that account,
Speaker 1: you're far more likely to stick around as a customer, sticky.
Speaker 1: It's like a web they've fun for you. Yeah, and
Speaker 1: of course, you know, if if you bank with them,
Speaker 1: you know for the long term, there's a higher likelihood
Speaker 1: that you're gonna maybe use their other products like a helock,
Speaker 1: or maybe you'll go to them for a car loan,
Speaker 1: that sort of thing. So we understand why they do it,
Speaker 1: but it makes it annoying for us as consumers when
Speaker 1: we're trying to maximize our return. Yeah. But let's let's
Speaker 1: talk about yes specific situation, and he wants to get
Speaker 1: around these direct deposit requirements when he doesn't have a paycheck,
Speaker 1: and that's it's tricky, right. So it's even tricky for
Speaker 1: freelancers Matt right, who don't have a steady paycheck coming
Speaker 1: in and they just get paid willy nilly here and
Speaker 1: there by different clients at different times. But for everyone
Speaker 1: who out there who it does have W two employment,
Speaker 1: all you gotta do is set up your direct deposit
Speaker 1: to go to this new bank and boom you've done.
Speaker 1: It was super easy. But yeah, Jeff, you said you're
Speaker 1: retiring next week at the age of fifty two, which,
Speaker 1: by the way, congrats, cheers very early retirement. We're very
Speaker 1: happy for you. But this this doesn't apply to you
Speaker 1: since you're too young. But for our more mature listeners
Speaker 1: who are receiving show social Security benefits, that check actually
Speaker 1: from Social Security, it usually counts for or requirements or
Speaker 1: promotions like this, that counts as a direct deposit. So yeah,
Speaker 1: if you're in that boat, then you simply switch the
Speaker 1: account that your monthly check goes into, if that's the case.
Speaker 1: But again, Jeff's kind of in no man's land. He's
Speaker 1: stuck in this direct deposit purgatory essentially, So Matt, you
Speaker 1: have kind of one way though that he can get
Speaker 1: around these direct deposit requirements. Sign up for a new
Speaker 1: account and still get the bonus, right Yeah, So yeah, Jeff,
Speaker 1: kind of in limbo. But for Jeff and other listeners
Speaker 1: out there who you know, don't want to change what
Speaker 1: account their paycheck is getting deposited in, the next best
Speaker 1: method is to try using a c H transfers and
Speaker 1: so a c H transfers that stands for Automated clearinghouse UH.
Speaker 1: And these are just the standard push or pull transfers
Speaker 1: that you should be able to initiate with any bank account.
Speaker 1: And here's the thing too, This is going to be
Speaker 1: completely dependent on what bank you're attempting to open an
Speaker 1: account with and what their specific requirements are. But a
Speaker 1: lot of banks say that a c H transfers from
Speaker 1: a bank UH, and just from regular banks like ally
Speaker 1: Capital One discover that they're completely legit and that they'll
Speaker 1: count as those direct deposits. UH. There are some banks
Speaker 1: out there that will even count transfers from PayPal and Venmo,
Speaker 1: so it doesn't necessarily have to be this super official
Speaker 1: direct deposit from an employer like you're used to. That
Speaker 1: being said, it is worth reaching out to someone at
Speaker 1: the bank to see if that counts as a direct
Speaker 1: deposit ahead of time. You want to make sure that
Speaker 1: you're not wasting your time but quite a few banks
Speaker 1: will count these A c H transfers similarly to a
Speaker 1: direct deposit, allowing you to still get that sign up
Speaker 1: bonus or that higher interest rate from that account. Yeah,
Speaker 1: and it's so easy to initiate an A c H
Speaker 1: transfer from one bank to another. You just have to
Speaker 1: make sure you link those accounts and once you do,
Speaker 1: like I'm always transferring money back and forth from one
Speaker 1: account to another, and so it's as simple as that. Really,
Speaker 1: for most banks, they accept that as a direct deposit,
Speaker 1: and then you know, Jeff will be qualified, he'll be
Speaker 1: able to get that bonus, which in effect equates to
Speaker 1: a massive return on his money, especially in the environment
Speaker 1: we're in with just incredibly low rates of savings. It's
Speaker 1: like those bank account bonuses are gold. It's a it's
Speaker 1: a big deal. And and speaking of that, Doctor of
Speaker 1: Credit is our favorite site for bank sign up bonuses. Uh,
Speaker 1: they aren't usually as rich as sign up bonuses for
Speaker 1: credit cards, but they can still be meaningful, you know,
Speaker 1: to three potentially for opening a new bank account and
Speaker 1: keeping it around for sixty to ninety days. The great
Speaker 1: thing is that opening a bank account it's not as
Speaker 1: painful as it used to be. I specifically remember Matt
Speaker 1: actually doing one of these with one of the big
Speaker 1: banks back in the day, and uh, that was a
Speaker 1: mistake for so many reasons. One, just going into the
Speaker 1: branch was a big pain. Trying to close that account
Speaker 1: at the end was frustrating, and to make it super hard.
Speaker 1: And of course it's they don't want you to leave
Speaker 1: one of the big banks exactly. They're trying to make
Speaker 1: your life miserable as usual. But yeah, but yeah, that's
Speaker 1: not the case. You're opening up an account online these days,
Speaker 1: and so uh, for for Jeff, it should be pretty
Speaker 1: simple to kind of bounce around to some of these
Speaker 1: different accounts, open up, open one up, get the bonus,
Speaker 1: and kind of see whether he likes the product or not,
Speaker 1: whether he wants to stick around. But I think this is, yeah,
Speaker 1: is a great strategy, very reasonable to increase your earnings
Speaker 1: on savings without taking on any additional risk. It just
Speaker 1: takes really a little bit of record keeping, right, make
Speaker 1: sure you're keeping track of where your money is going.
Speaker 1: But other than that, it's, uh, it's usually just ten
Speaker 1: fifteen minutes to open that new account, making a couple
Speaker 1: of those transfers and Jeff's gonna be golden. That's rights.
Speaker 1: We've got several other questions that we're gonna get to
Speaker 1: during this episode, like the ones we mentioned about tuition
Speaker 1: reimbursements when paying off for mortgage when that doesn't make sense,
Speaker 1: plus a couple others. We'll get to all of that
Speaker 1: right after this break. Alright, we're back from break. We're
Speaker 1: still taking listener questions. This next one comes from a
Speaker 1: listener who's trying to find the right credit card for
Speaker 1: his daughter. Hey, Matt and Joel, my name is Jason.
Speaker 1: I am forty five. My life is forty four. We
Speaker 1: have good income paying jobs, and we have three kiddos.
Speaker 1: Our otis kiddo just started college, and we're thinking about
Speaker 1: getting her a credit card just so she can start
Speaker 1: building some credit score as well, just so that she
Speaker 1: is has something to put her gas money on and
Speaker 1: expenses other than her debit card right now, and so
Speaker 1: that she's a little bit more protected. Of course, mom
Speaker 1: and dad would be watching it, but she is very
Speaker 1: responsible for an eighteen year old. But we also don't
Speaker 1: want to allow the leash out too much on just
Speaker 1: opening the window for spending everything on a credit card.
Speaker 1: So I'm curious, do you have a credit card you
Speaker 1: would recommend for a young new credit card holder. Thanks,
Speaker 1: and have a great day. Look forward to hearing from you,
Speaker 1: all right, and thanks so much for that question. And
Speaker 1: we are so glad to hear that this is something
Speaker 1: that is on your mind. We feel that now is
Speaker 1: absolutely the time to be doing this. We want you
Speaker 1: to get your daughter used to credit cards while she's
Speaker 1: you know, relatively young, because here's the thing, She's likely
Speaker 1: going to make some mistakes. But since it sounds like
Speaker 1: that you're still maybe financially responsible for her, maybe she's
Speaker 1: still under your roof. You'll be able to help her
Speaker 1: learn those lessons on a on a much smaller scale,
Speaker 1: instead of her learning them the hard way later in
Speaker 1: life when maybe she's less likely to have someone looking
Speaker 1: out for her. Basically, you want are learning those lessons
Speaker 1: with like tens and hundreds rather than with like thousands
Speaker 1: and ten thousands of dollars. Essentially, this is why Joel,
Speaker 1: not like you and I, we both use go Henry,
Speaker 1: which is an app for kids. Uh, we use them
Speaker 1: right now with our oldest daughters because like our kids,
Speaker 1: they're gonna use plastic to make purchases eventually in their life.
Speaker 1: And so our philosophy is, you know, why not get
Speaker 1: them used to to using it while they're young and
Speaker 1: while we have the ability to to guide them. But
Speaker 1: of course, go Henry, it's a debit card system, but
Speaker 1: we feel that the same principles apply when it comes
Speaker 1: to them swiping that card and understanding that money is
Speaker 1: leaving their possession, right, Yeah, for sure. And I do
Speaker 1: think Matt, like what you said that there's no better
Speaker 1: time than the present, because, yeah, as your kids get older,
Speaker 1: you have less and less influence. And Jason still has
Speaker 1: a lot of influence over his daughter right now, Like
Speaker 1: he can help help her figure out which credit card
Speaker 1: is best, and he can then you know, they can
Speaker 1: look at her spending together and they can figure out
Speaker 1: where she's making mistakes, kind of help her own how
Speaker 1: she uses it. So yeah, I love the idea of
Speaker 1: not waiting and hoping that eventually, when she's got her
Speaker 1: own place and her own job, that she's going to
Speaker 1: figure it out and use it. Well, Like, let's make
Speaker 1: sure we impart those values and the knowledge. Now, I
Speaker 1: think you know, one reason to to move forward with
Speaker 1: this is because credit cards are great tools, Like we
Speaker 1: talked about that all the time, but like all tools
Speaker 1: out there, you run the risk of using them poorly
Speaker 1: and hurting yourself. Like you can misuse a tool, right,
Speaker 1: You can use a hammer to us through a painting
Speaker 1: glass and it's like, dang it, I didn't did the
Speaker 1: wrong thing with that, and you cause a lot of trouble.
Speaker 1: But it's effective in the wrong way, and in this case, right,
Speaker 1: your credit score and your personal finances could be hurt
Speaker 1: in a big way if you don't use credit cards. Well,
Speaker 1: like you mentioned your daughter, she sounds like a responsible
Speaker 1: young woman, but you want to make sure that she
Speaker 1: understands that the credit card it's not offering free money.
Speaker 1: I think oftentimes for college students that's how they've gotten
Speaker 1: in trouble is they were like, wait, how much is
Speaker 1: my limit? Cool, guess that's how much I can spend
Speaker 1: two thousand free dollars just sitting there, right, And it's like,
Speaker 1: that's not how that works. But really, it is so
Speaker 1: important for her to understand that she's spending her own money, uh,
Speaker 1: not free money that someone's given her. And it's a
Speaker 1: shift in mindset that's important to foster, especially for young
Speaker 1: folks who are getting to that age where they're gonna
Speaker 1: fly the coupe, those are like really important developmental years
Speaker 1: and we still need the input of our parents in
Speaker 1: those years to kind of help us with some of
Speaker 1: those bigger life changes. And really, of course that the
Speaker 1: most iportant rule for anyone using a credit card that
Speaker 1: you need to impart to your daughter is that she
Speaker 1: must pay the balance in full at the end of
Speaker 1: every month and to never buy anything put anything on
Speaker 1: that credit card that she where she won't be able
Speaker 1: to actually make that happen exactly, But you know, once
Speaker 1: you get that straight, like, there are so many different
Speaker 1: reasons that we are fans of credit cards, Jason, you
Speaker 1: mentioned two of the biggest ones. You know, the ability
Speaker 1: to start growing your credit score like that is huge,
Speaker 1: and the additional consumer protections they offer are great as well.
Speaker 1: There's a lot of peace of mind because that you know,
Speaker 1: liability for fraudulent transactions is capped when you use credit cards.
Speaker 1: If you get scammed out of your cash, you know,
Speaker 1: regardless of it's physical cash or even you know from
Speaker 1: a debit card, you're out of luck. But if you
Speaker 1: get ripped off the credit card transaction you've got immediate
Speaker 1: protections built in that card acts as a buffer. And
Speaker 1: of course, you know, there are so many other credit
Speaker 1: card benefits like sign up bonuses that we won't get into.
Speaker 1: We've talked about those enough here on the show, but
Speaker 1: if you want to listen back to episode three six,
Speaker 1: we actually do a deep dive on the different credit
Speaker 1: card benefits that you aren't using. And so, you know, Jason,
Speaker 1: in your case, you know that this is something you
Speaker 1: want to get your daughter doing. But for everyone else
Speaker 1: out there who's thinking, maybe I don't know, you've come
Speaker 1: from some other personal finance guys who advocate against using
Speaker 1: credit cards, we are all for it, assuming just like
Speaker 1: Joel said, that you pay your balance off at the
Speaker 1: end of every single month in full and on time.
Speaker 1: That's right, and let's talk about something else, Matt. Another
Speaker 1: option to boost Jason's daughter's credit score is to make
Speaker 1: her an authorized user on your credit cards. Jason, and
Speaker 1: that's assuming you've got great credit. But we're assuming that
Speaker 1: you do, because it sounds like you've got your money
Speaker 1: game together and you're listening to this podcast and you're
Speaker 1: asking a question, So I'm sure things are good with
Speaker 1: your credit score. But go ahead and check, and then
Speaker 1: you can sign your daughter up as an authorized user.
Speaker 1: You can list her as an authorized user on one
Speaker 1: or two of your credit cards, and that will really
Speaker 1: quickly benefit her credit score. It'll make it look like
Speaker 1: she's been responsible as responsible as you have to the
Speaker 1: credit bureaus, which is pretty cool. How you can kind
Speaker 1: of do that and grandfather your daughter into your good
Speaker 1: credit standing in that way. So yeah, consider that and
Speaker 1: then work towards getting a card of her own too,
Speaker 1: and then kind of well, what's the best credit card
Speaker 1: to get that That question is the next one that
Speaker 1: pops up, Well, that really depends. And actually before two
Speaker 1: thousand nine and the introduction of the Card Act, the
Speaker 1: world was kind of the college kids oyster. Uh. You know,
Speaker 1: banks were offering credit cards like candy on campuses. We've
Speaker 1: heard stories, Matt remember back in the day, we had J. D.
Speaker 1: Roth On and he talked about what was a free pizza?
Speaker 1: Is that what he got? Or did you get a
Speaker 1: free pizza? I got a free pizza. What did he get?
Speaker 1: He had a frisbee at Frisbee. Yeah, And so that
Speaker 1: was kind of like the way things went down is
Speaker 1: banks were on college campuses offering credit cards to kids
Speaker 1: when they had to be able to prove zero about
Speaker 1: their financial responsibility, their income, any of that stuff. Well
Speaker 1: even before that, I mean my first credit card I
Speaker 1: got when I was a teenager living at home in
Speaker 1: high school, and at the point when I applied for
Speaker 1: the card and received it, I had to have a job. Yeah. So, uh,
Speaker 1: the laws have changed a lot since then. You know what,
Speaker 1: we're podcasters. We still barely have jobs. But uh, I
Speaker 1: think that that was one of those things that it
Speaker 1: led to severe long term debt problems for so many people.
Speaker 1: And so now because of that, you know, legislation twelve
Speaker 1: years ago, if you're under twenty one with no credit score,
Speaker 1: you have to have proof of income or a willing
Speaker 1: co signer, And we suggest that you go in the
Speaker 1: student credit card direction for the time being until her
Speaker 1: her credit score gets boosted to where she can get
Speaker 1: some of the better cards that Matt and I talked
Speaker 1: about that we prefer. Discover is probably the best in
Speaker 1: this area with their IT cards. Capital One Quicksilver Student
Speaker 1: is another great one with no annual fee and it
Speaker 1: gets you one and a half percent cash back. Uh.
Speaker 1: And then yeah, once you've established, you can upgrade that
Speaker 1: credit card with one of those credit card companies, or
Speaker 1: you can just sign up for another credit card that
Speaker 1: is going to be better, better fit for her and
Speaker 1: for how she spends. But well, we'll link to both
Speaker 1: those cards in the Charlottes. We think they're two of
Speaker 1: the best for anybody in her position. One of the
Speaker 1: benefits of those student cards is the fact that oftentimes
Speaker 1: their limits are lower, and sort of, like we said
Speaker 1: at the beginning of the episode, if she can make
Speaker 1: mistakes with just maybe hundreds instead of thousands and tens
Speaker 1: of thousands, I think what that's one of the things
Speaker 1: to keep in mind is that, regardless of the card,
Speaker 1: it probably would be better for her to have a
Speaker 1: card with a lower limit. That way keeps her out
Speaker 1: of trouble. I think another interer from going in the
Speaker 1: Maserati leadership, you know, yeah, but uh, and then the
Speaker 1: co signing option, maybe think of the fact too, it
Speaker 1: might be worth you proactively co signing that card with her.
Speaker 1: That way you can I don't know, maybe it's meeting
Speaker 1: once a month or just talking on the phone once
Speaker 1: a month to kind of go over some of her transactions,
Speaker 1: seeing where her balances are, and I think that could
Speaker 1: allow you to have a more active role in sort
Speaker 1: of the day to day operations of that specific credit card.
Speaker 1: And I don't know, like this doesn't have to continue,
Speaker 1: and definitely, but after like six to eight months, if
Speaker 1: she's doing a great job and just like you said,
Speaker 1: she's being incredibly responsible, it's something where maybe you check
Speaker 1: in like once a quarter, like once every few months,
Speaker 1: or like only at holidays. You're like, hey, how you
Speaker 1: doing with credit card? By the way, we will make
Speaker 1: sure you're being you know, you're paying out your balance
Speaker 1: every month, and hopefully you'll hear the great news that
Speaker 1: like yep, you know, paying it off every single month,
Speaker 1: where she's almost treating it like a debit card, but
Speaker 1: getting all of those sweet credit card benefits, no doubt. Jason,
Speaker 1: best of luck to you and your daughter. And I mean, yeah,
Speaker 1: it's a big time leaving the nest like that, So
Speaker 1: congrats to to you and her. I get you thinking
Speaker 1: like ten years from now, I'm just gonna like purposefully
Speaker 1: make sure my kids fail at school so they have
Speaker 1: to continue to stay home with me because I like
Speaker 1: hanging out with him. Let him fly, all right, let's
Speaker 1: I'm sure I'll feel that way at some point, but
Speaker 1: let's let's get to the next question. This one is
Speaker 1: about rebuilding your finances after filing for bankruptcy. Hi, Matt,
Speaker 1: and Jeel. I'm generally a financially smart person and I
Speaker 1: have a strong financial history, but I made the horrible
Speaker 1: mistake of allowing my former husband to have complete control
Speaker 1: over our finances, and as a result, we went through
Speaker 1: a bankruptcy. We are now divorced, and our bankruptcy is
Speaker 1: finally discharging. My credit score has taken a major hit,
Speaker 1: of course, what steps would you recommend begin to rebuild
Speaker 1: my credit as efficiently as possible? Thanks for everything, all right, Matt.
Speaker 1: By the way, that question was from Becky, And uh,
Speaker 1: really tough question, Becky. I'm so sorry to hear about
Speaker 1: the financial, the relational, and the emotional turmoil that you've
Speaker 1: gone through recently. That sounds like a lot, and I
Speaker 1: think it's important. I'll just want to speak from personal
Speaker 1: history for a minute, Like I want you to know
Speaker 1: that bankruptcy it's not the end all be all. It
Speaker 1: doesn't define who you are, and it doesn't say anything
Speaker 1: about you as a person. And when I was a kid,
Speaker 1: my parents went through bankruptcy. I was about twelve years old.
Speaker 1: It was really really tough on them. It was tough
Speaker 1: on my whole family, my siblings, but they made it
Speaker 1: out on the other side, and they're in a better
Speaker 1: financial situation than ever. Like they're both just about on
Speaker 1: the precipice of retiring and they're gonna be able to
Speaker 1: do that in their late sixties, which I think in
Speaker 1: their forties they were like, we're gonna work until we die,
Speaker 1: Like that's what they assumed at that at that point
Speaker 1: in time. And so yeah, I just want you to
Speaker 1: know that these things happen and to not beat yourself
Speaker 1: up over it, because it's easy to do that and
Speaker 1: get into like that self flagellation mindset. But really, let's
Speaker 1: talk about like what you can do moving forward, and
Speaker 1: let's not dwell on like the negative past mistakes, you know, Becky.
Speaker 1: For you, I think one silver lining is that it
Speaker 1: sounds like you know your stuff when it comes to
Speaker 1: personal finance, and so it's it's not like you're you're
Speaker 1: starting from, you know, complete scratch on the knowledge side,
Speaker 1: and I feel like that's incredibly helpful. So yeah, let's
Speaker 1: let's kind of talk about rebuilding here. That bankruptcy is
Speaker 1: gonna stay on your credit report for seven years most likely,
Speaker 1: and that is going to impact your credit score. Although
Speaker 1: the further away that you get, the more that your
Speaker 1: score is going to start to improve even before it
Speaker 1: is completely removed from your credit report altogether. So that's
Speaker 1: some additional good news. But in the meantime, there are
Speaker 1: some of the things that you can do now to
Speaker 1: improve that credit score. Yeah, it's important to do what
Speaker 1: you can to handle credit responsibly now, but getting that
Speaker 1: credit is tough when you have a bankruptcy on your
Speaker 1: credit report. So how do you get a credit card
Speaker 1: and actually start to do the hard work, uh, towards
Speaker 1: improving that score. Well, you might have to initially settle
Speaker 1: for a secured card. And the way that these secured
Speaker 1: credit cards work is that you essentially you put down
Speaker 1: a deposit at the bank. In that deposit essentially acts
Speaker 1: as your credit limit. There's no risk to the financial
Speaker 1: institution because if someone doesn't pay, they have the deposit
Speaker 1: to cover it. So let's say you open up a
Speaker 1: thousand dollar secured credit card. You have to come to
Speaker 1: the table with a thousand dollars, but then at the
Speaker 1: end of the day, you have this reporting to the
Speaker 1: credit bureaus that you have a thousand dollar credit limit
Speaker 1: on this card, and then you want to at the
Speaker 1: same time make sure you're not using too much of
Speaker 1: that available credit at most using charging three on that
Speaker 1: credit card each month, because you want to keep that
Speaker 1: what's known as the credit utilization rate low on that
Speaker 1: secured card. So it puts you in a tight spot.
Speaker 1: Like you you don't want to be using those credit
Speaker 1: cards necessarily at this point in time to fund all
Speaker 1: your purchases. While it's a secured card, you want to
Speaker 1: keep the amount that you're using on it low. Yeah,
Speaker 1: it's somebody keep them into when it comes to these
Speaker 1: specific cards, UH is that of course, you know, like
Speaker 1: the typical credit card benefits that we talk about that
Speaker 1: you will often see with normal credit cards, they're gonna
Speaker 1: be pretty pretty meager with the secured cards. But there
Speaker 1: are some great options out there with no annual fees,
Speaker 1: like the Capital One Platinum secured card, and we can
Speaker 1: link to that one in our show notes. Amazon they
Speaker 1: actually offer a similar credit Builder credit card that will
Speaker 1: link to UH And and here's the other thing too.
Speaker 1: You know, Joel mentioned coming to the table with a
Speaker 1: thousand dollars in order to provide that backstop in order
Speaker 1: to essentially put down a deposit for your card. But
Speaker 1: for folks out there who can't spare the money, you know,
Speaker 1: to put down that money towards a secured card, we
Speaker 1: would recommend Self, who actually used to be called self Lender,
Speaker 1: and so we'll link to to their site in the
Speaker 1: show notes as well. But they offer something that is
Speaker 1: known as a credit builder account, where you essentially take
Speaker 1: out a small loan from self and then you pay
Speaker 1: yourself back. That's why they call it self uh. And
Speaker 1: so it's just about the easiest and it's like, I mean,
Speaker 1: the safest way to build your credit score back up
Speaker 1: from scratch without having money up front. And then at
Speaker 1: the end of that period of time which you've paid
Speaker 1: that money back, you've kind of got this nice amount
Speaker 1: of money sitting there in a c D waiting for you. Yeah. Self,
Speaker 1: the product that came up with this genius is pretty great. Yeah,
Speaker 1: and it's it helps a ton of people out who
Speaker 1: have little to no credit score. And so I think
Speaker 1: it's a perfect Becky gan. If you can do both,
Speaker 1: do both. Have the installment loan with self, have the
Speaker 1: credit card, the secured credit card, and you know, having
Speaker 1: both of those things and making sure you handle both
Speaker 1: of those products well is going to help increase your
Speaker 1: credit score in a big way over time. Uh. And
Speaker 1: I just want to say a note to all the
Speaker 1: other had the money listeners as well. It's so crucial,
Speaker 1: you know, Becky, it paid me to hear you say
Speaker 1: that you knew, you know a lot about personal finances,
Speaker 1: but you kind of gave the reins completely over to
Speaker 1: your partner. And I'm sure looking back you regret that.
Speaker 1: That's like, that's you feel like that was a mistake.
Speaker 1: And I totally understand that in hindsight, your X was
Speaker 1: an idiot. So we empathize with you because that's incredibly
Speaker 1: difficult to have happened, to trust somebody and then to
Speaker 1: see them ruin that trust by and and you know,
Speaker 1: dissolving the marriage and then hurting your finances at the
Speaker 1: same time. But you know, we want to just say
Speaker 1: that it's crucial to have both partners involved, at least
Speaker 1: to some degree in financial decisions, in budgeting, and even
Speaker 1: if you trust your partner completely, which you know most
Speaker 1: of us feel like we do. Um, and even if
Speaker 1: they're brilliant with money, Like if even though my wife
Speaker 1: like knows I've got a money podcast and we really
Speaker 1: three episodes a week, like, she still has some si
Speaker 1: jol he's brilliant with money, she still has a healthy
Speaker 1: amount of skepticism towards my you know, some of my
Speaker 1: nuttier financial ventures. And so yeah, she trust me a lot,
Speaker 1: and I do handle most of the investment decisions, but
Speaker 1: I always run them by her first, And she asked
Speaker 1: good questions that actually kind of helped prode me in
Speaker 1: the right direction, maybe from away from doing something that's
Speaker 1: a little spur of the moment, because I'm kind of
Speaker 1: a go with the gut kind of guy. And so yeah,
Speaker 1: her involvement is really really crucial. She might not know
Speaker 1: all the questions to ask, she might not have as
Speaker 1: robust of when it comes to a personal financial knowledge
Speaker 1: as I do, but that interplay, the way we help
Speaker 1: each other and the way we run things by each other,
Speaker 1: is really important. So I just suggest that, like, it
Speaker 1: doesn't have to be an exact fifty fifty split in couples,
Speaker 1: and it rarely will it be that. Rarely will you
Speaker 1: both be as passionate or interested or gifted when it
Speaker 1: comes to handling your personal finances. But I suggest a
Speaker 1: minimum split of ten to so uh, and it's better
Speaker 1: if it's at least in that twenty eight range. So
Speaker 1: hopefully other listeners can hear that and apply that to
Speaker 1: their own marriages or partnerships. But Becky, you're gonna rebuild.
Speaker 1: You've got the knowledge, and now you're gonna take some
Speaker 1: of these steps hopefully when it comes to rebuilding your credit,
Speaker 1: rebuilding your financial situation, and we wish you the best
Speaker 1: of luck. Yeah, and Becky's you know. One last thing too,
Speaker 1: is we want to make sure that you don't have
Speaker 1: your credit score set on this pedical as like this
Speaker 1: be all end all of your worth. Um. It's important
Speaker 1: certainly to build that back up, especially if you want
Speaker 1: to purchase a home in the future. But other than that,
Speaker 1: I mean, there aren't a a ton of different reasons
Speaker 1: why you want to immediately rush as quickly as possible
Speaker 1: back into having a you know, sky high, beautiful, perfect
Speaker 1: credit score. Uh. And so we don't want you just
Speaker 1: to completely go out of your way pay lots of
Speaker 1: extra money uh in an attempt to rebound your credit
Speaker 1: score as quickly as possible. It's definitely something that we
Speaker 1: want you working towards. But at the same time, it
Speaker 1: is not that important and not oftentimes we can focus
Speaker 1: on these small technical things when instead maybe there are
Speaker 1: larger things like our career are overall financial health that
Speaker 1: we should be focusing on. So it's important, but it
Speaker 1: is not the most important thing. Yeah, and the great
Speaker 1: thing is time heals always really time heals credit score wounds,
Speaker 1: time heals the emotional pain that's been inflicted. The damage
Speaker 1: has been done. And you know, I don't think some
Speaker 1: of these things, like especially emotional stuff and never completely
Speaker 1: goes away. But it's amazing how you as humans were
Speaker 1: resilient we can move forward, and so we we wish
Speaker 1: that for you. Becky. All right, well, let's get to
Speaker 1: a couple more questions, Matt, including one about paying off
Speaker 1: a mortgage. Does it make sense? We'll get to that
Speaker 1: and more right up of this break. Alright, we are back.
Speaker 1: We've got a couple more listener questions, and first we've
Speaker 1: got one about this sweet little perk that an employer
Speaker 1: is offering. Hi, Joel and Matt, this is Jen from Wichita.
Speaker 1: I have a question about how best to use my
Speaker 1: tuition reimbursement. I just started a two years master's degree program.
Speaker 1: I paid cash for the first semester this past summer,
Speaker 1: and I plan to pay cash for the final summer semester,
Speaker 1: but I'm borrowing for the spring and fall semesters. All told,
Speaker 1: it will be about fourteen thousand dollars that I borrow.
Speaker 1: My employer offers tuition reimbursement, that is about per fiscal year.
Speaker 1: When I get the reimbursement from this past summer semester,
Speaker 1: how's the best way to use this? Should I go
Speaker 1: ahead and pay against the first loan that I've already
Speaker 1: taken out, or should I sit on it until next
Speaker 1: year and borrow a lesser amount or doesn't matter, visit
Speaker 1: six and one half a dozen of the other And
Speaker 1: then during my second year, when I get tuition reimbursement,
Speaker 1: should I pay that towards the first loan or the
Speaker 1: second loan, or split it in half and pay it
Speaker 1: towards both. Thanks all right, Jenn, great question. What a
Speaker 1: great employer perk. By the way, Matt, that yeah, and
Speaker 1: I love that we're seeing more and more of this,
Speaker 1: like employers are realizing, Hey, student loans are a big
Speaker 1: problem for our workforce, and we're gonna find ways to
Speaker 1: meet that problem with my paying people money if they
Speaker 1: have student loan storts are getting a higher education, even
Speaker 1: covering the cost of books. That's solid. Those books. We
Speaker 1: know they're not cheap, and I know they're not cheap
Speaker 1: because I just bought some for Emily. But there were
Speaker 1: some ways, there are some ways around that. We've talked
Speaker 1: about that before. But yeah, I do love seeing employers
Speaker 1: investing in their workforce. And Jen, good luck with your schooling. Obviously,
Speaker 1: we love that you're able to pay cash for a
Speaker 1: lot of it, and that you're keeping your borrowing to
Speaker 1: a minimum. This is gonna serve you well in the
Speaker 1: future when you're able to, hopefully after post graduation, have
Speaker 1: a high rate of pay and have very little money
Speaker 1: that you owe in student loans. That's the place to be,
Speaker 1: that's right. So let's talk about what to do with
Speaker 1: this tuition reimbursement money. And we think that the best
Speaker 1: choice is to use that money to pay off any
Speaker 1: loans that you currently have right now. Uh, And that's
Speaker 1: because your your grad school loans, they are accruing interest
Speaker 1: like literally as we speak of the interest clock. It
Speaker 1: starts sticking right when that loan gets made, uh, compared
Speaker 1: to UH subsidized undergrad loans, right, because that's not the
Speaker 1: case oftentimes that interest is paid by the governments until
Speaker 1: you're out of school for a certain amount of time.
Speaker 1: And so for you, though you are currently racking up interest,
Speaker 1: and so it's a whole lot more financially savvy to
Speaker 1: pay that lumps some directly against the loan that you
Speaker 1: currently have, So you can slash some of those interest
Speaker 1: costs immediately instead of keeping it and savings were you'll
Speaker 1: be earning next to nothing. Uh. We can't think of
Speaker 1: any benefit that would come from sitting on that money
Speaker 1: as opposed to putting it towards your loan. Now, yeah, man,
Speaker 1: I completely agree. And then the next tuition reimbursement, the
Speaker 1: gen asked about, well, we would say that should go
Speaker 1: towards paying off whichever loan has the highest interest rate.
Speaker 1: It's likely that it will be the most recent one too,
Speaker 1: because rates on federal student loans they actually recently went up. Right,
Speaker 1: there's something by about a point, So I think graduate
Speaker 1: student loans are like five and a quarter. That used
Speaker 1: to be four in a quarter. So when it comes
Speaker 1: to paying off of that debt, this would be considered
Speaker 1: the debt avalanche. Since you're ranking them by interest rate,
Speaker 1: you're looking at the numbers exactly, specifically the interest rate,
Speaker 1: and they're probably you know, similarly sized loans. But if
Speaker 1: there's a big enough difference in the two loan amounts,
Speaker 1: you could also take the size of the balance into
Speaker 1: account and you could pay down the smaller loan, which
Speaker 1: is the debt snowball approach. But yeah, the the balances
Speaker 1: are probably close, and the you know, interest rates aren't
Speaker 1: too dissimilar, but focus on the one with the higher
Speaker 1: interest you know, get after that one and make sure
Speaker 1: that one is all the way gone before you move
Speaker 1: on to the next one. That's the way we prefer
Speaker 1: you to go after it, by mathematically paying the least
Speaker 1: amount of interest possible. And one other thing to consider too,
Speaker 1: if if your balance is manageable, maybe you should refinance
Speaker 1: that federal loan into a private loan. Since you are
Speaker 1: it sounds like you're really intentional with your money, and
Speaker 1: it sounds like your balance is relatively small jen for you,
Speaker 1: it can make a ton of sense to refi with
Speaker 1: a private lender. You can score lower rate, and then
Speaker 1: you can pay that loan off more quickly. So much
Speaker 1: harder to do if you have a hundred thousand dollar balance,
Speaker 1: But if you've got twelve tho dollars and student loans
Speaker 1: then and you feel like that's manageable within your budget,
Speaker 1: refining getting a lower interest rate can make a whole
Speaker 1: lot of sense, a bit more feasible. You know that
Speaker 1: you're going to be paying that entire balance off, and
Speaker 1: so it's a matter of how quickly can you pay
Speaker 1: the balance off. Yeah, we've actually gotten an article up
Speaker 1: on the site on refinancing student loans, and we'll make
Speaker 1: sure to link to that in our show notes. Former
Speaker 1: guests to the show, Megan Landers. She isn't a CSLP
Speaker 1: certified Student Loan Professional, and that means she's an expert.
Speaker 1: So she wrote a great article up there and will
Speaker 1: link to that in the show notes, just about when
Speaker 1: it makes sense to refinance and where it makes sense
Speaker 1: to go when you're considering refinancing, shopping the rates, just
Speaker 1: a little teaser out there is the best way to go.
Speaker 1: There's it's so easy to do now on the interwebs.
Speaker 1: But let's let's get to the next question for this episode, Matt.
Speaker 1: This one is from listener John, and he's kind of
Speaker 1: ready to be done with mortgage parents. Hey guys, this
Speaker 1: is John and Ashville. I love the show and the
Speaker 1: beer recommendations. If you guys are Moo town, I would
Speaker 1: love to buy a beer three at my favorite crafty spot,
Speaker 1: jack Alo Brewery. I wanted to get your thoughts about
Speaker 1: using my emergency fund and a helock to pay off
Speaker 1: my mortgage and then keeping the helock around. It's my
Speaker 1: emergency fund until I'm able to replenish that fund. About
Speaker 1: fifty thousand remaining on my mortgage with four percent rate
Speaker 1: with ASCAR, we pay about month about thirty forty payments left.
Speaker 1: I have thirty thousand in my emergency Slash savings account
Speaker 1: and again barely earning any interest. The only other dead
Speaker 1: is a Costco viason I pay off monthly. I got
Speaker 1: to get those rewards and I maxed out my four
Speaker 1: in one K and both my wife and my I
Speaker 1: ra each year. Um. The heatlock is prime plus point
Speaker 1: to five and today's primes three point to five, but
Speaker 1: it does have a floor four percent, so it's as
Speaker 1: equal as my as my mortgage. I just want to
Speaker 1: get your thoughts at the risk there. If no emergencies come,
Speaker 1: it will be great. It will work out just fine
Speaker 1: unless the Fed moves that prime above three point seven five.
Speaker 1: So it's love to get your thoughts. Thanks Matt. John's
Speaker 1: rolling with one of my favorite credit cards. So I've
Speaker 1: got to get that Costco Visa because I mean, you
Speaker 1: can't really beat the four percent on gasoline purchases, and
Speaker 1: like what is the cash back also in Costco stores?
Speaker 1: And now that I've officially um brought you into the
Speaker 1: cult that is Costco, I think you have to go
Speaker 1: all the way and now get the credit card. Well,
Speaker 1: I probably will. I feel like I've gotten more targeted
Speaker 1: with my my different credit cards, and so we might
Speaker 1: have to make an update to the different credit cards
Speaker 1: that we use. Hopefully it's not overlap between you and me.
Speaker 1: But John, first of all, I gotta say I appreciate
Speaker 1: your your dislike for debts, the desire to get rid
Speaker 1: of your mortgage and to do so more quickly. It's
Speaker 1: a really good desire. In a recent episode, we actually
Speaker 1: talked about using a helock as a backup to an
Speaker 1: emergency fund, and we do think that that is a
Speaker 1: reasonable and not too risky of a move that can
Speaker 1: help people to accelerate their ability to invest a little
Speaker 1: bit more, especially with the you know, the meager returns
Speaker 1: that folks are seeing on their savings accounts right now,
Speaker 1: and so we're cool with that. But one thing that
Speaker 1: we didn't hear much about in your specific question actually
Speaker 1: was how your investments are doing, because it's probably better,
Speaker 1: at least from a financial return standpoint, to invest more
Speaker 1: than it's going to be to accelerate that mortgage payoff.
Speaker 1: You know, we don't know how his investments are performing,
Speaker 1: but my guests, it sounds like John is doing a
Speaker 1: good job when it comes to putting money aside in
Speaker 1: his investments, at least maxing out his retirement account. And
Speaker 1: to me, that says a lot. But let's talk about
Speaker 1: why investing more makes sense. It's for a few reasons. First,
Speaker 1: your mortgage rate it's relatively low four percent. It doesn't
Speaker 1: look as good as it used to with rates continuing
Speaker 1: to slide, but it's still really solid. Secondly, your balance
Speaker 1: is incredibly low, John, and since you're so far along
Speaker 1: in that loan, you're not paying all that much an
Speaker 1: interest because you got most of that all out of
Speaker 1: the way already. Like when you look at what how
Speaker 1: much money is going to the interest versus the principle,
Speaker 1: it's a lot of money towards the interest at the
Speaker 1: beginning of your loan, and it's way way less. It's
Speaker 1: so much going towards principle at the end, and you're
Speaker 1: on the tail end, which means that most of your
Speaker 1: money is not going towards those interest payments, right, and
Speaker 1: that makes it less helpful to actually rush to pay
Speaker 1: it off. So going through these steps in an attempt
Speaker 1: to technically be mortgage free, while it might make sense
Speaker 1: from an emotional standpoint, it's not necessarily the best move
Speaker 1: when you're looking at the numbers. We'd rather see you
Speaker 1: pay that mortgage off over the next thirty nine months
Speaker 1: as agreed and increase the money that you're investing instead,
Speaker 1: because of how favorable the terms are at this point
Speaker 1: for you. Yeah, the way the amateurization schedule works, John,
Speaker 1: basically you're paying like pennies on the dollar right now?
Speaker 1: Right do you say amorgization three times fast? Pat amateurization, amateurization, amateurization.
Speaker 1: It did some different when I said it through testation,
Speaker 1: But John, I mean seriously, so little money right now
Speaker 1: is going towards interest that even though technically you do
Speaker 1: have a four percent mortgage, you are effectively paying way
Speaker 1: less than four percent currently for these last thirty nine payments.
Speaker 1: Like you know, for a thirty year mortgage. Actually there's
Speaker 1: like this tipping point and it's not until about year
Speaker 1: seven where the money that you're putting down that's going
Speaker 1: towards your balance is actually more than the amount that's
Speaker 1: going towards interest. And obviously you are well past that
Speaker 1: seven year mark well, assuming that you have a thirty
Speaker 1: year mortgage. But John, this is definitely something important to
Speaker 1: keep in mind for you. And the other thing too
Speaker 1: is that, I mean basically John is in money here
Speaker 1: seven right like he and his wife like that. They
Speaker 1: are maxing out the retirement of ounce. They've got a
Speaker 1: great emergency funding place. Their mortgage is not going to
Speaker 1: be around for much longer. Really, they could probably go
Speaker 1: in any direction that they want from here. All the
Speaker 1: options are great. The world is the oyster, And said John,
Speaker 1: if you have a desire to invest more of that money,
Speaker 1: we'd say to open up a brokerage account and start
Speaker 1: investing more. If you want to pay off your mortgage
Speaker 1: instead you want to go hard in that direction, that's
Speaker 1: fine too, if you want to kind of feel some
Speaker 1: of those emotional wins, But going the heelock route to
Speaker 1: do so, it just doesn't make sense mathematically based on
Speaker 1: where you are within the life of your loan. For
Speaker 1: your case specifically, we would say that you just air
Speaker 1: on the slide of simplicity rather than going down the
Speaker 1: path of opening that helock. Yeah, no doubt. But John, seriously,
Speaker 1: there are so many options available to you. Thirty nine
Speaker 1: months left on your mortgage is incredible, and the fact
Speaker 1: that you're gonna be able to pay it off in
Speaker 1: a whole lot less than that if you want to,
Speaker 1: is really cool, and that's a big financial win. But
Speaker 1: jump at the roofs and potentially paying more to the
Speaker 1: banks by opening a helock just doesn't make sense for you,
Speaker 1: we don't think. But the cool thing about being in
Speaker 1: money gear seven, Matt. We've talked about this is that
Speaker 1: you can start to spend more, you can start to
Speaker 1: give more money away. There's so many options when you
Speaker 1: get to this point, and so I want John to
Speaker 1: think a little bit bigger than just like paying off
Speaker 1: the mortgage in as rapid of fashion as possible. Like,
Speaker 1: start thinking, John about what you want your life to
Speaker 1: look like and how you want to funnel the vast
Speaker 1: amount of money you've been able to save over time,
Speaker 1: especially without having a mortgage, You're gonna have more room
Speaker 1: in your budget. Where do you want that money to go?
Speaker 1: Those are good questions to start asking. Now. Yeah, over
Speaker 1: the next three years, that's gonna be hopefully plenty of
Speaker 1: time for you to kind of start thinking about what
Speaker 1: your life is gonna look like, right for sure? All right, Matt,
Speaker 1: let's get back to the beer that we had on
Speaker 1: this episode. This one, of course, had a weird name
Speaker 1: because it was brewed by Burial Brewing, and this one
Speaker 1: is called Beneath the Tides of Relative Impermanence. It's a
Speaker 1: double I p A. What are your thoughts on this one? Well,
Speaker 1: I've got to say that I feel like this is
Speaker 1: just as delicious now here in a can as it
Speaker 1: was in person on draft. Kate and I we picked
Speaker 1: up this beer back when we took a little anniversary
Speaker 1: trip up to Asheville, North Carolina, one of our favorite
Speaker 1: little kind of getaway cities to head off to. But dude,
Speaker 1: this was such a good New England style double dry
Speaker 1: hopped I p A. It had so much of that sharp,
Speaker 1: hoppy funkiness going on that we so often look for
Speaker 1: when it comes to these different New England style I
Speaker 1: p A s. And so, yeah, I'm not gonna talk
Speaker 1: about the tasting notes as much, but it's just definitely
Speaker 1: there's a good reason why this is a go to
Speaker 1: style for both you and I. And instead I kind
Speaker 1: of want to focus on the can art because their
Speaker 1: art is always pretty awesome, right, This one was like
Speaker 1: Salvador Dolly, Yes, Yes, And I was gonna say, actually,
Speaker 1: speaking of art, Matt, this beer was almost like a
Speaker 1: work of art. It was that good. And you know
Speaker 1: how when you see something that's like amazing hanging up
Speaker 1: on the wall and you're kind of speechless. I think
Speaker 1: that's why you didn't have a lot of tasting notes.
Speaker 1: Why in same here, I'm like, it was just that good,
Speaker 1: like when you experience something that's close to Nirvanic. Yeah,
Speaker 1: this beer was that. So I don't have much else
Speaker 1: to share either on the way it tasted, like, the
Speaker 1: art looks amazing. I love what the Salvador Dolly piece,
Speaker 1: the persistence of memory or whatever and this this one
Speaker 1: definitely had that vibe and get the melting clock actually
Speaker 1: going on there on the label and the beer just
Speaker 1: kind of melted this phenomenal. Basically, we should just quit
Speaker 1: while we're ahead, right right, Yeah, all right, so we
Speaker 1: will quit for today. Uh And if you have a
Speaker 1: question that you want to, yeah for a Matt and
Speaker 1: I to take on an upcoming ask kind of money episode,
Speaker 1: we would love to hear it, just go to how
Speaker 1: to Money dot com slash ask submit it there and yeah,
Speaker 1: hopefully we'll take it. Two weeks from today, we'll go
Speaker 1: ahead and wrap this one up so you can get
Speaker 1: to the next podcast episode that you're gonna listen to.
Speaker 1: You but look us up on Instagram if you haven't recently.
Speaker 1: We're gonna try to share some more personal stuff like
Speaker 1: we've been doing over the last couple of weeks. You
Speaker 1: can find us there under the user name of how
Speaker 1: to Money Pod Joel. That's gonna be a buddy until
Speaker 1: next time. Best Friends Out, Best Friends Out.