WEBVTT - Ask HTM - Renovating While Paying Off Student Loans, 529 Strategy For Immediate Use, & Popular Banks Get Downgraded #718 0:00:00.120 --> 0:00:02.759 Welcome to Out of Money. I'm Joel, I'm Matt. 0:00:02.920 --> 0:00:17.640 Today we're answering your listener questions. 0:00:24.520 --> 0:00:27.880 That's right, We've got a listener question episode lined up 0:00:27.920 --> 0:00:31.600 for you on this beautiful Monday, and we've got five. 0:00:31.720 --> 0:00:33.839 Like always, we've got five listener questions to get to 0:00:33.880 --> 0:00:34.479 a letten. 0:00:34.360 --> 0:00:36.280 Me terrible weather, by the way, where our listeners are. Matt, 0:00:36.320 --> 0:00:38.639 you have no idea that is true. It's nice here, 0:00:38.680 --> 0:00:41.680 it's beautiful here though so a little little hot still, 0:00:41.720 --> 0:00:42.440 it's a little warm. 0:00:42.520 --> 0:00:44.839 She's got student loans and she's trying to figure out 0:00:44.840 --> 0:00:47.400 how much money to keep on hand, how much liquidity 0:00:47.920 --> 0:00:50.440 while also paying down those student loans. We'll get to 0:00:50.440 --> 0:00:52.840 her question. We're going to cover a five twenty nine 0:00:52.880 --> 0:00:57.360 strategy for adults for adult learners. All adults should be learners, 0:00:57.360 --> 0:00:59.240 but if you're looking to go back to school, and 0:00:59.240 --> 0:01:01.480 we're going to talk about that lifelong learning is important. 0:01:01.920 --> 0:01:06.399 And another listener he's worried about the He's wondering maybe 0:01:06.440 --> 0:01:08.600 if he should be worried about some of the bank 0:01:08.880 --> 0:01:11.760 downgrades that have been making their way through the news. 0:01:11.760 --> 0:01:14.400 We'll get to those three questions, plus a couple others 0:01:14.480 --> 0:01:16.480 throughout today's episode. All right, I look forward to it. 0:01:16.520 --> 0:01:18.160 But before we get to that, Matt, I wanted to 0:01:18.440 --> 0:01:20.440 ask you kind of a frugal or cheap I've got 0:01:20.440 --> 0:01:24.160 a couple pairs of headphones. As a dude who listens 0:01:24.160 --> 0:01:26.160 to a lot of tunes, who listens to podcasts, but 0:01:26.200 --> 0:01:29.640 who also creates audio for a living, I wear headphones 0:01:29.720 --> 0:01:32.600 a lot of the day, and over time those headphones 0:01:32.640 --> 0:01:35.720 they wear out, right, but one I actually have two 0:01:35.720 --> 0:01:37.479 pairs that this is happening to right now. The ear 0:01:37.680 --> 0:01:39.640 muff thingies that go on the outside. 0:01:39.440 --> 0:01:42.280 Are like the base. They're basically disintegrating. I'm pretty sure 0:01:42.280 --> 0:01:46.360 that's the technical term for the muff. So the other 0:01:46.440 --> 0:01:49.800 none of your most the pads, right the question that 0:01:49.840 --> 0:01:51.040 creates the nice seal. 0:01:51.240 --> 0:01:53.880 Yes, but these pads are wearing out, they're molting whatever, 0:01:53.960 --> 0:01:56.080 and actually I like a little flecks of black all 0:01:56.080 --> 0:01:57.120 over me from these pads. 0:01:57.880 --> 0:01:59.760 Is often look over at you and you've got something 0:02:00.320 --> 0:02:01.080 yes on your face. 0:02:01.160 --> 0:02:03.160 I know, like right there, buddy, So is it frugal 0:02:03.240 --> 0:02:05.960 or cheap that I'm replacing the pads not the headphones? 0:02:08.160 --> 0:02:11.080 Uh? It is the earth conscious thing. It's the green 0:02:11.120 --> 0:02:14.760 thing to do, most likely because I'm sure that you 0:02:14.760 --> 0:02:17.520 could just easily toss those and buy a pair for 0:02:17.639 --> 0:02:20.560 like another cheap pair for like ten bucks. 0:02:20.600 --> 0:02:23.519 They're not super cheap headphones. They're probably like fifty five 0:02:23.600 --> 0:02:24.919 sixty really yeah. 0:02:25.280 --> 0:02:27.240 I mean you watch all the slick deals and all. 0:02:27.200 --> 0:02:28.919 That, because I'm honure you could get a fifty dollars 0:02:28.919 --> 0:02:31.519 pair for ten When you're wearing headphones all day every day, 0:02:31.560 --> 0:02:33.440 you don't want the ten dollars pairs. So there's a 0:02:33.440 --> 0:02:35.079 difference in like ergonomics and sound quall. 0:02:35.120 --> 0:02:36.799 That's why I don't like the over the ear because 0:02:36.840 --> 0:02:38.880 it presses on I think it has to do with 0:02:38.919 --> 0:02:41.600 the fact that I wear glasses, and so I've got glasses, 0:02:41.680 --> 0:02:43.560 and when you do the over the ear, even though 0:02:43.560 --> 0:02:45.160 they're not really supposed to push on your ear, they 0:02:45.160 --> 0:02:47.760 still push on your ear a little bit. And we 0:02:47.919 --> 0:02:51.320 got glasses. It smushes the car your ear up against 0:02:51.360 --> 0:02:55.760 your head and it sandwiches the acetate the arm of 0:02:55.840 --> 0:02:59.160 the glass glasses there, and it hurts. That's why I 0:02:59.280 --> 0:03:01.400 like the in ear. Even while I'm sitting here at 0:03:01.400 --> 0:03:03.880 the desk, I don't like doing plug in. I like 0:03:03.880 --> 0:03:04.320 to do the blue. 0:03:04.400 --> 0:03:05.959 I think we can both agree that the worst of 0:03:06.000 --> 0:03:09.080 both worlds is the on ear headphones. Yep, only psychos 0:03:09.080 --> 0:03:12.800 where those my parents included. I don't know, it's headphones. 0:03:12.840 --> 0:03:13.600 I'm like, who would get these? 0:03:13.600 --> 0:03:17.600 They're the default cheap headphone, Like they look like they're 0:03:17.639 --> 0:03:20.360 the nicer ones, but in reality. 0:03:19.960 --> 0:03:22.480 They just yeah, they don't quite cut it, all right, 0:03:22.520 --> 0:03:24.120 So I think I play paid like eight or nine 0:03:24.160 --> 0:03:26.000 dollars for a replacement for the muffs. 0:03:26.040 --> 0:03:27.880 I'm like a fifty to sixty dollars pair headphones. Yeah 0:03:27.880 --> 0:03:30.200 all right, Well if that's the case, then I think 0:03:30.200 --> 0:03:32.240 you probably made the right move. I was thinking those 0:03:32.240 --> 0:03:34.440 were like a ten dollars, just a cheap pair, But 0:03:34.720 --> 0:03:36.360 I just rocked my beats. Yeah there go. 0:03:36.520 --> 0:03:38.200 If I see a great sale at some point, maybe 0:03:38.240 --> 0:03:41.080 I'll upgrade. But these things are still working. They're just 0:03:41.160 --> 0:03:43.120 I don't I don't want all the molting, you know, 0:03:43.200 --> 0:03:44.440 the plastic stuff all over. 0:03:44.440 --> 0:03:49.000 I don't want extinct dinosaur particles on you, you know, right, petroleum, 0:03:49.000 --> 0:03:50.040 that's where plastic stalk's from. 0:03:50.040 --> 0:03:50.120 With. 0:03:50.200 --> 0:03:54.040 Yeah, let's introduce the beer that we're going to enjoy 0:03:54.040 --> 0:03:56.000 it today. So this is a beer. This is a 0:03:56.000 --> 0:03:59.440 collaboration actually between Burial and the Eighth State, which is 0:03:59.440 --> 0:04:02.520 a brewery in Greenville, South Carolina. This beer is called 0:04:03.040 --> 0:04:07.400 These are depictions of yet another revolutionary absence. This is 0:04:07.520 --> 0:04:10.480 an Imperial Stouts. We were just joking about how you 0:04:10.520 --> 0:04:14.160 shouldn't drink big stouts in the summer, in the summer heat, 0:04:14.280 --> 0:04:16.160 and here we go. So this is what we're gonna 0:04:16.240 --> 0:04:18.240 enjoy it today. We'll share our thoughts at the end 0:04:18.240 --> 0:04:18.880 of the episode. 0:04:18.960 --> 0:04:21.640 And you always have to laugh at any burial naming 0:04:21.680 --> 0:04:23.960 convention because they're all ridiculous and over the top, and 0:04:24.080 --> 0:04:25.400 a state evidently allows it. 0:04:25.800 --> 0:04:28.120 Like, fine, you guys want to name it your ridiculous name. 0:04:28.160 --> 0:04:29.800 You guys do your things, all right. 0:04:29.800 --> 0:04:32.760 But we take listener questions every single week now on 0:04:32.800 --> 0:04:35.040 the show, and we would love to take yours. So 0:04:35.080 --> 0:04:37.599 if you have a money question, please feel free to 0:04:37.640 --> 0:04:40.200 reach out. You can submit yours at howdomoney dot com, 0:04:40.200 --> 0:04:42.800 slash ask, or simple Instructions. It's really just recording a 0:04:42.839 --> 0:04:45.480 quick voice memo into your phone and emailing it our way. 0:04:45.720 --> 0:04:48.720 But yeah, hopefully we can take yours next Monday. All right, 0:04:48.760 --> 0:04:50.720 But let's get to our first question for this episode. 0:04:50.760 --> 0:04:53.560 This one is from a listener who's got a bunch 0:04:53.560 --> 0:04:56.560 of young kids and has multiple money goals. 0:04:57.040 --> 0:04:59.680 Hey Matt and Joel. I'm Rachel from Crystal Lake, a 0:04:59.760 --> 0:05:02.760 sub of Chicago. You don't know this, but you come 0:05:02.800 --> 0:05:06.200 with me on several walks and I love it. Thank 0:05:06.240 --> 0:05:10.039 you so much. I'm a consultant with variable income and 0:05:10.120 --> 0:05:13.960 my husband is in sales. Together we bring in approximately 0:05:14.080 --> 0:05:17.520 two hundred K a year. We have three kids, ages 0:05:17.640 --> 0:05:22.240 five at under and boy are the expensive. Together we 0:05:22.320 --> 0:05:25.120 have about one hundred K and student loans with interest 0:05:25.200 --> 0:05:28.919 rates that vary from five to seven point twenty five percent. 0:05:29.320 --> 0:05:32.080 We've maxed out contribution for my husband's work, and I 0:05:32.120 --> 0:05:36.119 save a minimum of two K a month that doesn't 0:05:36.120 --> 0:05:39.440 go to taxes. Combined, we have about two hundred and 0:05:39.480 --> 0:05:42.320 sixteen K left on a mortgage with a rate under 0:05:42.360 --> 0:05:45.400 four point five percent, on which we make two hundred 0:05:45.480 --> 0:05:49.920 dollars principal payments extra per month. At present, we have 0:05:50.200 --> 0:05:53.760 forty K all together in the various CDs and high 0:05:53.839 --> 0:05:57.120 yield savings accounts, keeping money aside. I'll need to pay 0:05:57.120 --> 0:05:59.640 taxes should I pay off the stuit loans for us, 0:05:59.720 --> 0:06:03.839 keeping certain percentage above the emergency fund as liquid. Pay 0:06:04.000 --> 0:06:08.080 less and have more liquid and how do we decide 0:06:08.080 --> 0:06:11.160 how much to put into home upgrades with excellent ROI. 0:06:11.960 --> 0:06:14.400 I've paid off the only car we have this year 0:06:14.760 --> 0:06:16.680 and we don't have any credit cards that have a 0:06:16.720 --> 0:06:20.000 balance with interest applied. Thank you so much for your 0:06:20.000 --> 0:06:21.080 insight and your help. 0:06:21.440 --> 0:06:23.960 You guys rock all right, Rachel. So going back to 0:06:23.960 --> 0:06:25.840 what you were saying there at the beginning, we are 0:06:25.920 --> 0:06:28.640 happy to hear that we are your walking buddies. It's 0:06:28.680 --> 0:06:31.880 like the yeah, two buds that gets to walk along 0:06:31.880 --> 0:06:33.400 with you and you don't need to have a schedule 0:06:33.440 --> 0:06:34.680 and figure out where it is that you're going to 0:06:34.760 --> 0:06:38.320 meet up for where you're gonna reconnoiter meet up with somebody. 0:06:38.560 --> 0:06:41.520 But yeah, we love that. Thank you for bringing us along. 0:06:42.040 --> 0:06:45.920 And also another note too, man, kids, it is true 0:06:45.960 --> 0:06:49.680 they are expensive. They're not quite as expensive as some 0:06:49.680 --> 0:06:52.839 of the different headlines out there would lead you to believe. 0:06:53.160 --> 0:06:55.320 You know, I think is it like seven hundred and 0:06:55.320 --> 0:06:56.280 fifty thousand dollars. 0:06:56.120 --> 0:06:57.840 Now like the I think it's like three hundred and 0:06:57.880 --> 0:06:59.840 eight thousand something like that was last time. 0:06:59.839 --> 0:07:01.000 He thought was a lot more. It used to be 0:07:01.000 --> 0:07:03.320 in the upper twos. Now as there's not that much, 0:07:03.440 --> 0:07:06.920 that's a lot money over twenty years. Still a lot. 0:07:07.160 --> 0:07:08.440 But I think for some people that can scare you 0:07:08.440 --> 0:07:09.840 off and you'll be like, I thought I was gonna 0:07:09.840 --> 0:07:12.120 have kids, but not if it costs that much. There's 0:07:12.120 --> 0:07:13.360 a lot of there are a lot of ways to 0:07:13.360 --> 0:07:15.160 make sure that your kids don't cost quite. They're only 0:07:15.160 --> 0:07:17.400 cost three, I'm gonna have like five more kids. Right, 0:07:17.960 --> 0:07:20.400 it gets overwhelming, and yeah, I realized, like, yeah, it's 0:07:20.440 --> 0:07:23.520 not easy, but of course it is worth it even 0:07:23.560 --> 0:07:26.680 though it's costly. Right, But Matt, let's let's talk about 0:07:26.800 --> 0:07:28.320 kind of gets a racil's question. There's kind of a 0:07:28.360 --> 0:07:29.680 lot going on in this one, so we'll try to 0:07:29.680 --> 0:07:32.760 get to a bunch of the points or the questions 0:07:32.800 --> 0:07:34.480 that you had. And it sounds like y'all are doing 0:07:34.520 --> 0:07:37.120 really well from an income standpoint, which is great, and 0:07:37.200 --> 0:07:38.760 on top of that, you're saving and investing in a 0:07:38.800 --> 0:07:40.560 solid clip. You don't have any debts that are out 0:07:40.560 --> 0:07:42.880 of control, and you've got that paid off car and 0:07:42.920 --> 0:07:45.080 that's something we dig like, we oh, yeah, we don't 0:07:45.120 --> 0:07:46.840 like cardbt that's one of our least favorite things. 0:07:46.880 --> 0:07:49.080 And I think she said that they paid off the 0:07:49.080 --> 0:07:51.640 only car that they have, which makes it sound like 0:07:51.640 --> 0:07:53.680 that there are a one car family that they're rocking 0:07:53.720 --> 0:07:56.440 that with three kids. That is awesome. Hang on to 0:07:56.520 --> 0:07:58.600 that as long as you can. Yeah, the longer you 0:07:58.600 --> 0:08:01.760 can stick with that. Yeah, I'm like salivating this beer 0:08:01.840 --> 0:08:04.200 so it's so good. I just took a sip. But 0:08:04.320 --> 0:08:06.080 it's just easier than I think a lot of people, 0:08:06.360 --> 0:08:07.960 like in their minds, are like, oh, we've got okay, 0:08:07.960 --> 0:08:09.760 we've got kids. Now, we definitely have to get the 0:08:09.880 --> 0:08:11.400 be the two car family thing. But with so many 0:08:11.440 --> 0:08:14.840 people working remotely and the ability it takes a little 0:08:14.840 --> 0:08:18.000 more work to schedule, but the ability to bike. I literally, 0:08:18.080 --> 0:08:20.679 I mean I bike my dude to preschool this morning 0:08:20.720 --> 0:08:24.080 on the cargo bike. I'm gonna and with ride sharing too, 0:08:24.160 --> 0:08:25.800 we're gonna we're gonna take the van in to get 0:08:25.800 --> 0:08:28.400 some repair work done later this week, Gonna take it 0:08:28.400 --> 0:08:30.800 there and then I'm gonna uber home because guess what, 0:08:30.840 --> 0:08:33.480 all right, fifteen twenty bucks with tip and all of 0:08:33.520 --> 0:08:35.719 a sudden, that means I don't need that second car. 0:08:35.840 --> 0:08:38.000 Yeah, it's definitely a line item in the budget that 0:08:38.160 --> 0:08:41.000 more and more people can and should question, especially especially 0:08:41.040 --> 0:08:44.120 given how many more people are working hybrid or fully 0:08:44.160 --> 0:08:46.520 remote these days. On the student loan front, by the way, 0:08:46.840 --> 0:08:48.880 whether or not it's a priority to pay off those 0:08:49.120 --> 0:08:52.120 that student loan debt, it depends largely on this new 0:08:52.200 --> 0:08:54.640 save plan, right, which is changing the game for anybody 0:08:54.640 --> 0:08:58.320 who has outstanding student loan debt. It's this save plan 0:08:58.400 --> 0:09:00.280 is likely going to change your payment amount. It is 0:09:00.280 --> 0:09:02.679 for a whole lot of people. And there's this helpful 0:09:02.679 --> 0:09:04.960 calculator on student Loan planner that will link to in 0:09:04.960 --> 0:09:07.960 the show notes. But if this new save plan is 0:09:07.960 --> 0:09:10.679 going to reduce your payment substantially and your balance still 0:09:10.679 --> 0:09:12.800 won't be growing, which is part of the benefit of 0:09:12.840 --> 0:09:15.800 this new save plan, your student loans likely shouldn't be 0:09:15.840 --> 0:09:19.079 a top priority. The biggest benefits come to low and 0:09:19.120 --> 0:09:22.360 middle class income earners though, which isn't you guys, Rachel. 0:09:22.400 --> 0:09:24.319 It sounds like you guys are making more than that 0:09:24.679 --> 0:09:27.679 and you have three kids, though, so much depends on 0:09:27.840 --> 0:09:30.400 the specifics of what sort of subsidy you're going to 0:09:30.480 --> 0:09:33.960 qualify for under the new safe guidelines. How long have 0:09:34.040 --> 0:09:35.880 you been paying on those student loans, right, how much? 0:09:35.920 --> 0:09:37.840 There's a lot of different fact balance is left, and 0:09:37.880 --> 0:09:42.040 so yeah, take that into consideration. Plug your numbers into 0:09:42.240 --> 0:09:44.520 that calculator and kind of see, well, oh, it looks 0:09:44.559 --> 0:09:46.640 like my payment is not going to be changed. If 0:09:46.640 --> 0:09:49.480 that's the case, then that higher rate student loan debt 0:09:49.559 --> 0:09:51.880 is probably a bigger priority for you than it is 0:09:51.880 --> 0:09:52.520 for other people. 0:09:52.640 --> 0:09:55.280 Sure, yeah, yeah, normally this would be honestly, just a 0:09:55.320 --> 0:09:55.920 really tough one. 0:09:56.000 --> 0:09:56.160 Right. 0:09:56.200 --> 0:09:58.800 So she specifically said that her student loan interest rates 0:09:59.640 --> 0:10:01.280 are a little bit I don't know if they're a 0:10:01.280 --> 0:10:03.160 little bit higher relative to most other folks, but they're 0:10:03.200 --> 0:10:05.920 on the line, right, So typically any loans that are 0:10:06.000 --> 0:10:09.320 higher than seven percent, like I would want those gone 0:10:09.320 --> 0:10:12.880 if that was me, And anything lower than seven percent, like, 0:10:12.960 --> 0:10:15.080 in my mind, that wouldn't be the worst debt in 0:10:15.080 --> 0:10:17.040 the world to keep her around if you have other goals, 0:10:17.080 --> 0:10:20.760 if you are investing solidly, But if your payments Rachel, 0:10:20.840 --> 0:10:23.640 if they get reduced with this new safe plan, and 0:10:23.920 --> 0:10:26.080 you know, like let's say you hit that max twenty 0:10:26.160 --> 0:10:28.960 or twenty five years of repayments and then you end 0:10:29.040 --> 0:10:31.559 up coming out ahead, then I see no reason to 0:10:31.640 --> 0:10:34.440 pay down on them early, even though that might be 0:10:34.920 --> 0:10:39.000 your natural tendency. Especially, I mean you mentioned her her 0:10:39.000 --> 0:10:41.480 mortgage making ex additional payments to that. I get the 0:10:41.480 --> 0:10:44.439 impression that they don't like having debt around and that's 0:10:44.440 --> 0:10:46.559 something that they might want to eliminate. 0:10:46.160 --> 0:10:48.559 Which, let's be honest, is a really good way to 0:10:48.600 --> 0:10:50.760 think about debt. But at the same time, when you 0:10:50.800 --> 0:10:53.400 have low interest rate, debt and savings rates are higher 0:10:53.440 --> 0:10:55.679 and other financial goals, so other things you do, you've 0:10:55.679 --> 0:10:58.760 got to moderate maybe your approach to debt and investing. 0:10:58.400 --> 0:11:01.720 Exactly so with that forgiveness of mind, and after you 0:11:01.760 --> 0:11:04.240 crunch your own numbers, if it's likely that this new 0:11:04.280 --> 0:11:07.400 plan could basically tip those higher student loans, especially the 0:11:07.480 --> 0:11:11.120 ones that are around seven and a quarter to a 0:11:11.160 --> 0:11:13.360 lower effective rate essentially at the end of the day, 0:11:13.400 --> 0:11:16.520 then it certainly makes even more sense to not prioritize 0:11:16.520 --> 0:11:17.520 paying down the student loans. 0:11:17.600 --> 0:11:19.760 Yeah, and one of the heart at the heart of 0:11:19.800 --> 0:11:22.400 Rachel's question, it comes down to liquidity, which is such 0:11:22.440 --> 0:11:26.560 an important question map for people because having more cash 0:11:26.720 --> 0:11:29.600 on hand gives you options, gives you flexibility, and can 0:11:29.640 --> 0:11:32.320 give you peace of mind. And fortunately you're not hammered 0:11:32.360 --> 0:11:35.360 as hard now having money in savings as you were 0:11:35.880 --> 0:11:38.040 just a few years ago. And so how much money 0:11:38.040 --> 0:11:39.720 do you keep on hand? Rachel, that's a good question, 0:11:39.840 --> 0:11:43.480 And it seems like we're not prioritizing student loans, which 0:11:43.600 --> 0:11:46.320 because of this new saved plan, they're not as highber 0:11:46.320 --> 0:11:49.400 a priority as they would have been in years past. 0:11:49.640 --> 0:11:51.920 But it often comes down to what you're gonna do 0:11:51.960 --> 0:11:54.520 with the money instead. That is really the crux of everything, 0:11:54.800 --> 0:11:57.920 Like what are your alternative options? Because if you're just 0:11:57.960 --> 0:11:59.840 gonna blow that money, which I don't think you are, 0:12:00.000 --> 0:12:01.400 It doesn't sound like you're that kind of person who's like 0:12:01.440 --> 0:12:03.840 going to go on a self control Yeah, shopping's free 0:12:03.880 --> 0:12:05.079 with it, like you just want to know the best 0:12:05.080 --> 0:12:07.199 place to funnel it. Well, if you were going to 0:12:07.240 --> 0:12:09.520 spend it in a silly way, it would make sense 0:12:09.520 --> 0:12:10.920 to go ahead and be done with those student loans 0:12:10.960 --> 0:12:14.600 as opposed to buying more stuff. But you're already investing 0:12:14.640 --> 0:12:16.319 it sounds like you're maxing out your husband's four O 0:12:16.320 --> 0:12:18.400 one k at work. It might make sense to go 0:12:18.400 --> 0:12:20.560 ahead and at least open up roth iras though for 0:12:20.640 --> 0:12:22.720 the both of you. Yeah, maybe max those out to 0:12:22.720 --> 0:12:26.160 the total of thirteen grand a year for both of you. 0:12:26.360 --> 0:12:28.280 And if you did that, if you got the money invested, 0:12:28.520 --> 0:12:30.280 I think Matt, you and I would both feel better 0:12:30.559 --> 0:12:33.800 about them missing out on the guaranteed return on their 0:12:33.800 --> 0:12:36.840 money by paying off the student loans because they're putting 0:12:36.840 --> 0:12:40.120 it in a tax advantaged account to grow and compound 0:12:40.160 --> 0:12:40.760 for their future. 0:12:40.880 --> 0:12:43.400 Sure, yeah, if you wanted to do it by the book, 0:12:43.559 --> 0:12:46.160 you would say the equivalent amount that you have outstanding 0:12:46.200 --> 0:12:48.480 on your student loans, invest that money. So once you 0:12:48.520 --> 0:12:52.200 have that much additional money set aside and is either 0:12:52.200 --> 0:12:54.520 invested or even in a savings account where you're earning 0:12:54.559 --> 0:12:57.920 a higher rate. But again knowing that when you do 0:12:57.960 --> 0:13:00.640 invest that money is going to compound, it kind of 0:13:00.640 --> 0:13:02.319 makes sense that you don't. It doesn't need to be 0:13:02.400 --> 0:13:05.520 dollar for dollar per se. I think if it was me, 0:13:05.960 --> 0:13:08.360 I would not only use some of the additional money 0:13:08.360 --> 0:13:10.600 to make sure that they've maxed out their rothy race 0:13:10.679 --> 0:13:13.560 for this year, but also set aside money for next year. 0:13:14.200 --> 0:13:16.360 That way, you have that money ready to like it's 0:13:16.360 --> 0:13:18.760 sitting there on the sidelines, ready to go. January first 0:13:18.840 --> 0:13:21.559 hits you're able to lump some invest and next year 0:13:21.720 --> 0:13:25.800 it's fourteen thousand dollars because they're upping the contribution limits 0:13:25.800 --> 0:13:28.760 from sixty five to seven thousand, which is we love 0:13:28.760 --> 0:13:31.839 to see, which is awesome. And so if I were 0:13:31.840 --> 0:13:34.120 in your shoes and I was able to max out 0:13:34.160 --> 0:13:37.000 not only this year but also next year's, I think 0:13:37.080 --> 0:13:40.760 I would feel much much more comfortable about saying, Okay, 0:13:40.880 --> 0:13:42.520 let's just see kind of how this plays out with 0:13:42.520 --> 0:13:44.880 the student loans. We don't necessarily need to pay those 0:13:44.880 --> 0:13:48.880 off ahead of time. But let's also get to home renovations, Rachel, 0:13:48.920 --> 0:13:50.920 because first of all, it sounds like you've got the 0:13:50.960 --> 0:13:54.120 ability to use that additional two thousand dollars a month 0:13:54.440 --> 0:13:57.280 that you're setting aside, and you've got the potential just 0:13:57.280 --> 0:13:59.600 to straight up pay cash for any projects that you've 0:13:59.600 --> 0:14:01.080 gotten mind, which is awesome. 0:14:00.840 --> 0:14:02.439 Not to mention the two hundred bucks a month they're 0:14:02.440 --> 0:14:04.600 prepaying towards the mortgage, like funnel that back into home 0:14:04.640 --> 0:14:05.240 rental project. 0:14:05.320 --> 0:14:08.160 There you go twenty two hundred dollars and this is 0:14:08.200 --> 0:14:10.960 gonna be way better than taking out a heelock at 0:14:10.960 --> 0:14:14.040 today's rates. But then you asked about how much to 0:14:14.080 --> 0:14:16.520 put towards renovating, and this is going to have to 0:14:16.559 --> 0:14:19.120 be a judgment call on your part. You know, you 0:14:19.160 --> 0:14:21.440 and your husband y'all need to talk about this. You'll 0:14:21.480 --> 0:14:24.920 need to think through what aspects of your home that 0:14:24.960 --> 0:14:28.040 you'd like to change the most, and what will honestly 0:14:28.080 --> 0:14:30.040 have the most impact for y'all is a family. You know, 0:14:30.160 --> 0:14:33.560 like with something as simple as adding some cubbies in 0:14:33.640 --> 0:14:36.880 a mudroom, would that drastically improve the quality of life there. 0:14:36.920 --> 0:14:39.200 That's literally something that Kate and I did when we 0:14:39.200 --> 0:14:42.120 moved into our house last summer. Did not cost a 0:14:42.160 --> 0:14:44.320 lot of money, but it subs I mean, I don't 0:14:44.360 --> 0:14:47.080 know what we would do with all the shoes, the backpacks, 0:14:47.240 --> 0:14:50.560 the jackets in the winter, the bicycle helmets. Just adding 0:14:50.640 --> 0:14:53.600 these cubbies where each person we got six of them 0:14:53.600 --> 0:14:56.400 there where they have their own space, dramatically increased the 0:14:56.680 --> 0:15:00.000 usability of our little entry were there but with her 0:15:00.120 --> 0:15:02.000 or maybe like she's got three kids, so maybe she's 0:15:02.040 --> 0:15:05.160 realizing that what they need is another bathroom or something 0:15:05.240 --> 0:15:08.080 right but way those needs while at the same time 0:15:08.200 --> 0:15:10.120 keeping in mind that you may not be in this 0:15:10.160 --> 0:15:12.760 house forever, and so you don't want to necessarily overbuild 0:15:12.760 --> 0:15:15.840 your street or your neighborhood. It's difficult because you, on 0:15:15.840 --> 0:15:17.240 one hand, you want to keep that in mind, but 0:15:17.280 --> 0:15:20.320 you also don't want to make these improvements with return 0:15:20.400 --> 0:15:22.880 on investment. As the only consideration, because I think the 0:15:22.960 --> 0:15:26.280 last I read a new garage door is actually what 0:15:26.440 --> 0:15:29.320 ranks the highest as far as what improves the resale. 0:15:29.760 --> 0:15:32.160 And you just never know with who it is that's 0:15:32.160 --> 0:15:33.480 going to buy your house whether or not they're going to 0:15:33.560 --> 0:15:35.440 value the improvements that you made. And so what I 0:15:35.440 --> 0:15:38.160 would say is make sure that you're adding utility for 0:15:38.240 --> 0:15:40.400 the way it is that you and your family live there, 0:15:40.960 --> 0:15:44.360 without getting crazy with it. But instead of ROI, make 0:15:44.400 --> 0:15:48.680 it rou return of utility or something like that. Have 0:15:48.800 --> 0:15:51.120 that be the filter to which you think through some 0:15:51.160 --> 0:15:51.880 of these improvements. 0:15:51.920 --> 0:15:54.480 And so much of it comes down to how long 0:15:54.560 --> 0:15:55.960 you think you're going to be in the house. If 0:15:56.000 --> 0:15:58.160 you're like, hey, listen, we're on two acres out here, 0:15:58.280 --> 0:16:00.400 and this is the perfect spot for our family, it's 0:16:00.440 --> 0:16:02.760 just the house that's insufficient, and so if we do this, 0:16:02.760 --> 0:16:04.360 this and this, then hey, we're going to be here 0:16:04.400 --> 0:16:06.720 for the next thirty And granted I think some people 0:16:06.720 --> 0:16:08.920 think that and maybe that doesn't end up being the case. 0:16:09.000 --> 0:16:11.640 But if if you think you're gonna be there long term, 0:16:11.680 --> 0:16:14.080 it makes even more sense. I think the funnel money 0:16:14.120 --> 0:16:15.600 into the house and make it the way you want 0:16:15.640 --> 0:16:19.520 it to be as opposed to thinking about pure resale value, 0:16:19.920 --> 0:16:21.720 because if you're only going to be there for a 0:16:21.760 --> 0:16:24.200 year or two and you're gonna need like bigger bones 0:16:24.320 --> 0:16:26.320 essentially at some point you need a bigger, better house 0:16:26.360 --> 0:16:28.360 something like that, then you probably don't want to sink 0:16:28.360 --> 0:16:29.640 too much in you want to be saving up for 0:16:29.760 --> 0:16:30.520 the next time payments. 0:16:30.600 --> 0:16:32.400 They Yeah, that's when you go to Ikea and just 0:16:32.400 --> 0:16:37.080 get yourself some organization pieces the temporary fix. Yes, it's 0:16:37.080 --> 0:16:39.840 a band aid, which is very much the temporary fix. Right, Actually, 0:16:39.880 --> 0:16:43.240 scratch that. Scratch Ikea. Instead, go to your local Salvation 0:16:43.360 --> 0:16:46.480 Army or Goodwill and find you a quality piece furniture 0:16:46.520 --> 0:16:50.240 that might also solve some organizational needs. If that's what 0:16:50.280 --> 0:16:51.600 you got going, it's even better. Yeah. 0:16:51.760 --> 0:16:54.680 And I think the period matt of your life with 0:16:54.720 --> 0:16:56.640 young kids, it can be financially daunting. It feels like 0:16:56.680 --> 0:16:58.840 you're trying to do a bunch of different things at once. 0:16:59.320 --> 0:17:00.480 Three kids under. 0:17:00.280 --> 0:17:00.880 The age of five. 0:17:01.080 --> 0:17:02.880 That's about as tough as it gets from a financial 0:17:02.880 --> 0:17:06.000 and a mental perspective. It can be very trying. Childcare 0:17:06.080 --> 0:17:09.280 is expensive if you depending on whether or not you 0:17:09.280 --> 0:17:11.439 have help or something from family members, you're trying to 0:17:11.440 --> 0:17:13.360 excel in your career, you're trying to save for retirement, 0:17:13.359 --> 0:17:15.520 you're trying to buy or fix up a house. It 0:17:15.560 --> 0:17:18.159 feels like a lot and Matt, you and I we 0:17:18.560 --> 0:17:21.480 know that feeling very well because you know, we're not 0:17:21.680 --> 0:17:24.080 too far away from those years, those years. Our youngest 0:17:24.240 --> 0:17:27.800 boys they're still three and so in our oldest are 0:17:27.840 --> 0:17:30.080 ten now, so we still know, we still remember. It's 0:17:30.119 --> 0:17:33.080