WEBVTT - Ask HTM - Avoiding Busted Budgets, Getting Declined with an 800+, & Financing Medical Expenses #604 0:00:00.080 --> 0:00:02.880 Welcome to How the Money. I'm Joel and I am Matt. 0:00:03.000 --> 0:00:25.240 Today we are answering your listener questions. That's right, buddy, 0:00:25.239 --> 0:00:28.000 Happy Monday to you. We've got a great listener questions 0:00:28.040 --> 0:00:31.360 episode lined up for listeners today, and we're gonna hear 0:00:31.360 --> 0:00:34.440 from five different listeners. One is asking about how he 0:00:34.479 --> 0:00:38.640 can avoid busting up his budget. Another listener is wondering 0:00:38.640 --> 0:00:41.000 why she got declined for a new credit card that 0:00:41.080 --> 0:00:45.479 she was looking to get. And yet another listener he 0:00:45.640 --> 0:00:48.440 is wanting to know the best way to pay for 0:00:48.520 --> 0:00:50.839 some surgery that he's got coming up. He wants to 0:00:50.880 --> 0:00:53.239 make sure that he is optimizing his money moves. So 0:00:53.400 --> 0:00:56.520 looking forward to those three questions plus two others today, 0:00:56.680 --> 0:00:59.240 We've got a good lineup of listener questions here today, Matt. 0:00:59.400 --> 0:01:01.920 Look forward to get to them. But before we start 0:01:01.960 --> 0:01:03.960 diving in, I wanted to mention this is something I 0:01:04.000 --> 0:01:06.080 just found out. I'm looking for looking for a new 0:01:06.120 --> 0:01:09.280 bike shop up here by where where we live. I 0:01:09.319 --> 0:01:11.520 haven't been to a bike shop yet, Yeah, I haven't. 0:01:11.520 --> 0:01:13.120 I found a guy. I think I mentioned this on 0:01:13.120 --> 0:01:15.400 the show. I found a mobile bike mobile guy. You don't, 0:01:15.440 --> 0:01:16.840 so you don't want to go with him. Well, so 0:01:17.120 --> 0:01:19.199 it was just I just need a flat repair, and 0:01:19.319 --> 0:01:21.200 I had the bike already in my car, and it 0:01:21.280 --> 0:01:24.040 was I was like, man, I just is there someplace 0:01:24.040 --> 0:01:25.880 I can take this and have it done quickly? Just 0:01:25.880 --> 0:01:29.160 want to get back on the road. And I realized, 0:01:29.280 --> 0:01:31.679 wait a second, there's an ari I like five minutes away. 0:01:31.920 --> 0:01:35.040 And do they do bike repairs? Oh? Wait, I looked 0:01:35.040 --> 0:01:37.960 it up online. Yes they do. And so it turns 0:01:38.000 --> 0:01:41.240 out as I was looking on their website that ari 0:01:41.440 --> 0:01:43.200 I had does want they do a lot of bike 0:01:43.240 --> 0:01:46.000 maintenance and too. If you're an ari I co Op member, 0:01:46.200 --> 0:01:48.040 which I believe cost thirty bucks you used to cost 0:01:48.040 --> 0:01:50.440 twenty bucks back in the day, you get a lot 0:01:50.480 --> 0:01:54.200 of discounted bike services and and some bike services you 0:01:54.240 --> 0:01:57.520 get for free flat repair included. Oh no way. Okay, 0:01:57.520 --> 0:02:00.880 So what if you purchased your bike from ari I, Well, 0:02:00.920 --> 0:02:03.120 I don't know that that has any area. Okay, you know, 0:02:03.440 --> 0:02:04.600 you just have to be a co op member. You 0:02:04.640 --> 0:02:07.440 can bring any bike purchased at our Okay, because I 0:02:07.520 --> 0:02:10.880 purchased my gravel bike from ari I, and that would 0:02:10.880 --> 0:02:12.840 be a killer perk if it's like a you know, 0:02:12.880 --> 0:02:15.320 like the costco tire thing where you can just constantly 0:02:15.320 --> 0:02:17.399 bring back your car for maintenance. If I could bring 0:02:17.400 --> 0:02:20.040 back my bike, I think the bit of maintenance would 0:02:20.080 --> 0:02:21.680 be all about that. Like the perk for people who 0:02:21.680 --> 0:02:23.720 bought their bike from ari I is that that you 0:02:23.720 --> 0:02:25.799 get free tune ups for the first year. I think 0:02:25.800 --> 0:02:27.960 that's how it works. But after that, basically all co 0:02:28.080 --> 0:02:29.640 op members, no matter if you bought the bike at 0:02:29.680 --> 0:02:32.600 A or not, you get the same free or discounted 0:02:32.720 --> 0:02:35.840 Mike perks. So um, not an ad for ari I, 0:02:35.919 --> 0:02:38.720 just a mentioned we like them, though we do like ARII, 0:02:39.240 --> 0:02:41.160 just to mention that that's a that's a cool benefit. 0:02:41.200 --> 0:02:43.480 And so I popped in there and I bought the tube, 0:02:43.840 --> 0:02:45.920 the new tube from mari I, but they put it 0:02:45.960 --> 0:02:47.440 on for me and I was in and out the 0:02:47.480 --> 0:02:49.840 door in no time. And I was like, man, aria 0:02:49.919 --> 0:02:52.320 I might be my new bike shop locally when I 0:02:52.360 --> 0:02:55.040 don't need a lot of work done. And if that's 0:02:55.040 --> 0:02:57.240 the case, I'll call my mobile bike repair guy. Sure. 0:02:57.440 --> 0:02:59.600 Or you could learn how to do some of this yourself. 0:02:59.600 --> 0:03:02.400 I could a buddy of mine who's really into bike 0:03:02.440 --> 0:03:04.919 and he's just like dude. The markup that they put 0:03:04.960 --> 0:03:07.280 on bicycle tubes in particular. You can buy like three 0:03:07.400 --> 0:03:10.520 to five of them online for crazy cheap, and it's 0:03:10.560 --> 0:03:13.360 just it's like one of them like two bucks, right yeah, um, 0:03:13.560 --> 0:03:18.080 and so yeah, maybe we'll bike Lever's nice Joe blow 0:03:18.120 --> 0:03:20.200 bike pump. Those are I feel like, some items that 0:03:20.200 --> 0:03:23.000 everybody needs to have in their garage. But yeah, good 0:03:23.000 --> 0:03:24.840 to know though that that exists for folks out there 0:03:24.840 --> 0:03:27.800 who are just wanting to have that knocked out. Which 0:03:28.280 --> 0:03:30.640 what bike did you have? My road bike? Flat on 0:03:30.639 --> 0:03:33.800 the road bike also ended up getting a new tire 0:03:33.800 --> 0:03:36.360 while I was in there, one that hopefully we'll prevent 0:03:36.400 --> 0:03:39.720 more flats from happening in the near future, but one 0:03:39.760 --> 0:03:42.000 of those gator skin tires or whatever it was. It 0:03:42.040 --> 0:03:45.200 really yeah, okay, I was like like a little stickler 0:03:45.600 --> 0:03:49.000 puncture proof. It's nice, which because flats still ruins on 0:03:49.120 --> 0:03:51.680 road bikes in particular, because it's like you're always riding 0:03:51.680 --> 0:03:55.040 on a like a razor's hedge literally what it feels 0:03:55.040 --> 0:03:56.840 like true, there's there's a little tread on them and 0:03:56.880 --> 0:04:00.320 all this as compared to a beefier tie or that 0:04:00.360 --> 0:04:02.120 can maybe handle some of the some of the shocks 0:04:02.120 --> 0:04:04.560 that can handle crossing over from road tracks for real, 0:04:04.640 --> 0:04:07.320 perhaps exactly so, all right, let let's let's move on. 0:04:07.360 --> 0:04:09.640 Matt uh and le mention the beer that we're having 0:04:09.640 --> 0:04:11.440 on this episode. This one is called two Turtle Doves. 0:04:11.480 --> 0:04:13.880 It's by the brewery. Of course. We're having a Christmas 0:04:13.880 --> 0:04:16.920 team beer right here in the middle of December. Holiday's Baby. 0:04:16.960 --> 0:04:18.800 That's right. We'll give our thoughts on this one at 0:04:18.800 --> 0:04:20.880 the end of the episode, but for now, let's get 0:04:20.880 --> 0:04:23.240 to the listener questions. And if you have a question 0:04:23.400 --> 0:04:26.679 you want us to tackle on an upcoming ask HTM episode, 0:04:26.680 --> 0:04:28.320 we would love to hear it. Just go to how 0:04:28.320 --> 0:04:31.040 to money dot com slash ask. There are simple instructions 0:04:31.080 --> 0:04:35.440 there for you to record your yourself asking that question 0:04:35.760 --> 0:04:38.480 and how to get it over to us. It's pretty easy. 0:04:38.640 --> 0:04:40.200 We would love to hear from you, and we'd like 0:04:40.240 --> 0:04:43.440 to take your question on the next ask HTM episode. 0:04:43.720 --> 0:04:46.480 And but Matt, let's get to our the first listener 0:04:46.760 --> 0:04:51.240 question of today. This one comes from a listener in Michigan. 0:04:51.920 --> 0:04:54.200 This is and he's about to retire and he wants 0:04:54.200 --> 0:04:57.040 to make sure that he's got his eyes dotted and 0:04:57.080 --> 0:05:00.680 his teeths crossed. Hi, Matt, Joel. This is from the 0:05:00.760 --> 0:05:05.760 Detroit area, and I just turned sixty this past August 0:05:06.000 --> 0:05:10.159 and need to figure out how to get a I guess, 0:05:10.160 --> 0:05:15.719 a fee based financial advisor fiduciary. I've got money all 0:05:15.720 --> 0:05:19.520 over the place, got a pension coming in that I 0:05:19.560 --> 0:05:24.479 didn't know about, and have some rath I ras in 0:05:24.520 --> 0:05:27.160 a couple of different places, a lot of savings accounts, 0:05:27.160 --> 0:05:31.440 Internet savings accounts, and just for I would really like 0:05:31.520 --> 0:05:33.200 to get this all in one place and have a 0:05:33.279 --> 0:05:37.360 nice plan going forward. Thank you very much. I've been 0:05:37.440 --> 0:05:39.720 enjoying your podcast now for the last year and a 0:05:39.760 --> 0:05:43.960 half and look forward to it every week. Thank you 0:05:44.800 --> 0:05:46.400 all right, Mike, thank you so much for that question. 0:05:46.480 --> 0:05:49.200 We appreciate you listening for the past year and a half. 0:05:49.360 --> 0:05:51.800 And by the way, he mentioned finding that pension that 0:05:51.839 --> 0:05:57.240 he didn't know about. That is an awesome, uh, you know, 0:05:57.240 --> 0:05:59.599 a little early Christmas present for you here in the 0:05:59.600 --> 0:06:01.719 middle of December. I mean, not many people are gonna 0:06:01.760 --> 0:06:05.400 find better things than that under their treat Yeah, for 0:06:05.440 --> 0:06:08.720 the rest of your life. You forgot about that. Absolutely, 0:06:08.960 --> 0:06:11.400 That's a nice shocked shock right there. Yeah, And so 0:06:11.640 --> 0:06:14.680 let's let's talk I guess generally about financial advisors here 0:06:14.680 --> 0:06:17.520 for a Second, because we've done an entire episodes about 0:06:17.600 --> 0:06:20.960 how financial advisors, how they're they're not quite as necessary 0:06:21.000 --> 0:06:22.960 as most folks think. You know, we actually believe that 0:06:22.960 --> 0:06:24.839 a lot of folks would be better served by hiring 0:06:24.880 --> 0:06:28.800 a money coach. Uh. Not only would that individual be 0:06:28.839 --> 0:06:30.479 able to help you to think through some of the 0:06:30.800 --> 0:06:33.599 some of the more of the financial fundamentals, but then 0:06:33.640 --> 0:06:36.240 they would also be able to help hold you accountable 0:06:36.480 --> 0:06:39.240 when it comes to the execution of the plans that 0:06:39.279 --> 0:06:41.880 you formulated. But you know, when we say that advisors 0:06:41.880 --> 0:06:45.000 are often overrated, which is sometimes what you'll hear us say, 0:06:45.080 --> 0:06:47.600 we're typically trying to help folks who are in their 0:06:47.640 --> 0:06:52.320 early investing years to avoid paying just basically unnecessary fees 0:06:52.360 --> 0:06:56.320 and money to a professional uh. And by saving that money, 0:06:56.320 --> 0:06:59.560 that would allow individuals to sock more money away into 0:06:59.560 --> 0:07:02.760 the retire and accounts. UH. And that's because financial advisors 0:07:02.760 --> 0:07:06.479 can be crazy expensive, especially relative to the amount of 0:07:06.480 --> 0:07:09.080 money that early investors, folks who are earlier on in 0:07:09.080 --> 0:07:11.880 their journey that they have set aside the higher percentage 0:07:11.960 --> 0:07:15.040 of their income of their network exactly. Yeah, and when 0:07:15.040 --> 0:07:17.720 you are younger, oftentimes you should honestly be more intentionally 0:07:17.760 --> 0:07:21.520 focused on just simply living on less money than you 0:07:21.560 --> 0:07:24.640 make and then just investing the rest. But Mike Key 0:07:24.720 --> 0:07:27.520 is in a different position. The wealth accumulation is actually 0:07:27.840 --> 0:07:30.800 easier in some respects, in many respects than the wealth 0:07:30.840 --> 0:07:34.240 draw down, And so I would say it's likely more 0:07:34.280 --> 0:07:37.680 important to have a financial advisor when you are getting 0:07:37.720 --> 0:07:40.280 to that point where, like Mike, you've got accounts all 0:07:40.320 --> 0:07:42.280 over the place and you're trying to figure out how 0:07:42.280 --> 0:07:44.560 and when access those things. Are a lot of tax 0:07:44.600 --> 0:07:47.040 consequences that could cost you big, big money, and that's 0:07:47.080 --> 0:07:49.560 when an advisor can actually come in. Uh. It can 0:07:49.560 --> 0:07:51.760 be a lot more helpful, way more helpful than when 0:07:51.760 --> 0:07:53.480 you're like should I put more in my four own k? 0:07:53.680 --> 0:07:57.200 Like when you're thirty two or eight? Uh, an advisors 0:07:57.240 --> 0:08:00.120 just less helpful and it's pretty simple and straightforward, or 0:08:00.240 --> 0:08:03.160 when you're just investing those dollars as opposed to the 0:08:03.200 --> 0:08:05.840 nuances that go with a draw down. Yes, exactly, And 0:08:05.840 --> 0:08:07.640 and I love that that Mikey's on the right path. 0:08:07.640 --> 0:08:10.680 He's looking for a fee only fiduciary advisor, which is 0:08:10.720 --> 0:08:13.000 which is what we recommend. Fee only means that you're 0:08:13.000 --> 0:08:16.160 paying a flat rate hopefully an hourly rate. That's our 0:08:16.240 --> 0:08:19.640 favorite method. It's it's just a straightforward will hate to 0:08:19.640 --> 0:08:22.240 pay someone for their time, and that's you're you're basically 0:08:22.240 --> 0:08:25.040 paying them three bucks an hour or something like that 0:08:25.360 --> 0:08:28.120 for their advice per hour you meet with them. And 0:08:28.160 --> 0:08:30.760 it may not initially seem like the most affordable advice 0:08:30.800 --> 0:08:33.720 because hundreds of dollars an hour, that that sounds prohibitive. 0:08:33.960 --> 0:08:36.000 Most people are like, wait a second, what am I 0:08:36.000 --> 0:08:37.560 paying you for? And and why do you get paid 0:08:37.559 --> 0:08:39.840 so much? Have I just hired the most expensive attorney 0:08:39.840 --> 0:08:43.560 of all? Right? But it's just there are so many 0:08:43.640 --> 0:08:47.040 worst pays, worst ways actually to to pay a financial 0:08:47.040 --> 0:08:50.720 advisor that when you break it down, this is the 0:08:50.760 --> 0:08:53.400 best method. This is the best way to pay someone 0:08:53.400 --> 0:08:55.319 for their advice because the alternative models you're going to 0:08:55.360 --> 0:08:58.000 see out there are commission only or at least commission based, 0:08:58.080 --> 0:09:00.760 right where the advisor received a kick back from a 0:09:00.760 --> 0:09:02.960 company when they're able to get their clients to sign 0:09:03.000 --> 0:09:05.160 up for a particular financial product. So they might be 0:09:05.200 --> 0:09:08.320 selling you something that comes with higher fees that's not 0:09:08.360 --> 0:09:10.520 in your best interest, and so this model it might 0:09:10.559 --> 0:09:12.719 seem like a bargain up front they're like, no, I 0:09:12.840 --> 0:09:15.240 do it for free, right, you don't have to pay 0:09:15.280 --> 0:09:18.240 me anything up front. But you're often getting saddled with 0:09:18.520 --> 0:09:22.560 the expensive annual fees or subpart investments that are gonna 0:09:22.679 --> 0:09:26.440 slowly harm your future earning potential. So having a fee 0:09:26.480 --> 0:09:30.120 only fiduciary planner is the best way to go. It's 0:09:30.160 --> 0:09:33.839 it's just the model that comes with the fewest conflicts 0:09:33.880 --> 0:09:36.160 of interest, that's right. And so how is it that 0:09:36.840 --> 0:09:40.520 might should find a fee only fiduciary advisor. There are 0:09:40.559 --> 0:09:44.640 actually networks that advisors can join for for younger folks 0:09:44.640 --> 0:09:47.480 out there, actually um x Y Planning Network. That's one 0:09:47.520 --> 0:09:50.040 of our favorites. The folks who participate in this network, 0:09:50.080 --> 0:09:54.600 they serve mostly, of course Gen X and millennial or 0:09:54.679 --> 0:09:58.080 gen Y clientele. That's why it's the x Y Planning Network. 0:09:58.520 --> 0:10:00.440 But I like that they allow you to find an 0:10:00.440 --> 0:10:04.439 advisor by specialty as well, not just by location, because 0:10:04.640 --> 0:10:06.800 you know, you don't necessarily need to find someone near 0:10:07.000 --> 0:10:09.640 where it is that you live, unless that's you know, 0:10:09.720 --> 0:10:11.760 something that you want to prioritize that's really important to 0:10:11.800 --> 0:10:14.679 you for some reason. Yeah, I remember when we interviewed 0:10:14.760 --> 0:10:19.560 Philip and Julia Olsen from the two cents PBS videos 0:10:19.559 --> 0:10:23.280 on YouTube that they make ago. Yeah, well they they're Philipsop. 0:10:23.720 --> 0:10:27.239 They run a financial advisory firm and they cater specifically 0:10:27.280 --> 0:10:30.480 to artists to create a creative Yeah. And so if 0:10:30.480 --> 0:10:32.480 you're in that field like those of you should be 0:10:32.520 --> 0:10:35.120 seeking them out right to help you with money management. 0:10:35.160 --> 0:10:37.880 And I think it's more helpful to work with somebody 0:10:38.080 --> 0:10:42.040 who serves your niche than to find somebody who has 0:10:42.080 --> 0:10:44.200 an office close to you. But what's important to point 0:10:44.200 --> 0:10:46.280 out here, though, is that all of the advisors that 0:10:46.320 --> 0:10:48.400 are on the x Y Planning Network they signed a 0:10:48.440 --> 0:10:52.400 fiduciary oath. Makes it sound way more official when something 0:10:52.480 --> 0:10:55.560 is an oath, like a blood oath. Uh. And so 0:10:55.760 --> 0:10:57.720 you know this isn't just a title that gets used. 0:10:58.120 --> 0:11:00.920 This is a literal promise. The other planners are are 0:11:00.920 --> 0:11:04.520 committed to always working in the best interests of their clients. 0:11:05.000 --> 0:11:08.520 But Mike, you are not gen X or why though 0:11:08.600 --> 0:11:11.680 you can certainly go to the x Y Planning Network 0:11:11.920 --> 0:11:13.800 so for you, you can also check out NAVA, which 0:11:13.840 --> 0:11:17.440 is the National Association of Personal Financial Advisors. That's another 0:11:17.840 --> 0:11:20.880 great place for for you to turn. NAVA dot Org 0:11:21.000 --> 0:11:23.760 is the website for that, and yeah, either one of those, 0:11:23.840 --> 0:11:26.040 um you can find. I don't think people at x 0:11:26.120 --> 0:11:28.120 Y are gonna turn you away because you're a few 0:11:28.160 --> 0:11:31.440 years outside of their demographic, but either one mean gen 0:11:31.559 --> 0:11:34.719 xers are getting older as well. When we whether you 0:11:34.720 --> 0:11:36.680 can be like fifty seven years old and still technically 0:11:36.720 --> 0:11:39.200 be considered a gen xers just crazy thing. So you 0:11:39.240 --> 0:11:41.480 and I'm are millennials and you're but we're turning ford 0:11:41.559 --> 0:11:43.680 here a couple of weeks barely millennials. So like we're 0:11:43.880 --> 0:11:46.160 I mean, I'm barely a millennial. I'm I'm almost almost 0:11:46.160 --> 0:11:48.240 a gen xer. I'm much younger than you. Like that 0:11:48.280 --> 0:11:52.760 should be pointed years, right, I wish not quite? Uh well, 0:11:52.800 --> 0:11:55.920 And so I'll say this to Mike, like put this 0:11:55.960 --> 0:11:57.880 on your to do list. You gotta get organized because 0:11:57.920 --> 0:12:00.280 either way, whether you're hiring a financial advisor or not, 0:12:00.720 --> 0:12:04.760 wrangling all those different account logins, making sure you've tracked 0:12:04.760 --> 0:12:07.640 down all all of the money that you have across 0:12:07.640 --> 0:12:11.760 those dispart accounts, and making sure you've taken into account 0:12:11.760 --> 0:12:14.080 all the pensions that you might have. Maybe there's another 0:12:14.120 --> 0:12:16.839 one hanging out there. He's got like two others hanging 0:12:16.840 --> 0:12:18.680 out in the wings, lift up every rock that you 0:12:18.679 --> 0:12:20.680 can and find all those accounts and find out where 0:12:20.720 --> 0:12:22.880 that money is coming from. Yeah. Also, okay, on that 0:12:22.960 --> 0:12:26.000 note missing money that well, that's another resource too that 0:12:26.040 --> 0:12:28.960 will link to. Because Mike, if you are somebody who 0:12:29.000 --> 0:12:31.680 may not be completely organized, and I'm going to just 0:12:31.720 --> 0:12:33.520 point this out, this is something that you admitted to 0:12:33.600 --> 0:12:34.920 the fact that you didn't know that you had a 0:12:34.920 --> 0:12:37.560 pension that existed. There's a chance that there are some 0:12:37.640 --> 0:12:40.280 states that have money that belongs to you, and so 0:12:40.520 --> 0:12:42.800 what will link to the missing money site where you 0:12:42.840 --> 0:12:45.520 can enter in your personal information and really every hind 0:12:45.559 --> 0:12:47.480 of money listener should go there once a year can 0:12:47.920 --> 0:12:50.800 and type in their their info. It will take you 0:12:50.960 --> 0:12:53.440 literally thirty seconds and you can see if if there 0:12:53.559 --> 0:12:56.000 is money hanging out. We've had tons of listeners when 0:12:56.000 --> 0:12:58.000 we mentioned that. Every time we mentioned that's like a 0:12:58.040 --> 0:12:59.600 dozen people reach out to us. And I've ever heard 0:12:59.640 --> 0:13:01.679 of this. I found thousands of dollars or hundreds of 0:13:01.720 --> 0:13:04.160 dollars that was that was owed to me that I 0:13:04.200 --> 0:13:06.320 didn't know. Especially this time of year, this is like 0:13:06.320 --> 0:13:09.719 a great time to up turn a rock. Then you're like, 0:13:09.760 --> 0:13:11.560 oh my god, there's money there. That's right, that's right, 0:13:11.640 --> 0:13:13.319 love it. So, yeah, go over those old statements, I 0:13:13.320 --> 0:13:15.040 would say, might get and dig up those accounts that 0:13:15.080 --> 0:13:17.559 might have slipped your mind. And yeah, you might even 0:13:17.640 --> 0:13:19.480 realize that you don't need to hire a professional. I 0:13:19.480 --> 0:13:21.199 don't know. It sounds like you have a complex enough 0:13:21.200 --> 0:13:23.640 situation that when it comes to the draw down and 0:13:23.679 --> 0:13:25.600 when it comes to the tax implications, it's gonna make 0:13:25.640 --> 0:13:27.920 sense to talk to a professional, pay for a couple 0:13:28.040 --> 0:13:30.520 to three or four hours of their time, and to 0:13:30.600 --> 0:13:33.000 get their input so that you are making the most 0:13:33.040 --> 0:13:36.240 tax efficient choices for you moving forward. This is um 0:13:36.440 --> 0:13:38.480 you know, these are important years to kind of come 0:13:38.559 --> 0:13:41.679 up with that draw down plan. Uh So, yeah, get 0:13:41.720 --> 0:13:44.120 your financial ducks in a row and then start reaching out. 0:13:44.160 --> 0:13:46.079 Interview a few I don't know, three or four for 0:13:46.120 --> 0:13:48.400 the only advisors to see maybe who's gonna be the 0:13:48.440 --> 0:13:51.680 best trip for you personality wise and specialty wise. And yeah, 0:13:51.720 --> 0:13:53.920 we we hope that they're able to to help you 0:13:54.000 --> 0:13:57.360 make the best decisions for you and for your financial future. 0:13:57.600 --> 0:13:59.679 But Matt, we've got more questions to get to, including 0:14:00.200 --> 0:14:02.160 you got a question from a listener who's like, man, 0:14:02.440 --> 0:14:05.960 there's always a budget buster every single month, i'n't feel 0:14:05.960 --> 0:14:08.040 like I'm encountering something, and I feel like that's not 0:14:08.160 --> 0:14:11.040 an uncommon thought we've heard from other How Money listeners. 0:14:11.080 --> 0:14:13.400 We'll get to that question and more right after this break. 0:14:22.680 --> 0:14:24.560 All right, we are back for the break take and 0:14:24.600 --> 0:14:27.040 listener questions, and Joe, we will get to that budgeting 0:14:27.160 --> 0:14:29.520 question here in a second, but first let's take a 0:14:29.600 --> 0:14:33.000 question about a credit card. Hi, Joela Matt, this is 0:14:33.040 --> 0:14:37.120 Lindsay from Sonoma County, California. I have a question today 0:14:37.160 --> 0:14:40.800 about credit cards. I was using your credit card matching 0:14:40.840 --> 0:14:44.000 tool a couple of days ago to find a new 0:14:44.040 --> 0:14:48.560 credit card offer. I use currently a couple of cards. 0:14:48.600 --> 0:14:52.280 One's a hotel one's a airline card. But I was 0:14:52.320 --> 0:14:54.880 really looking for a cash back card as I don't 0:14:54.920 --> 0:14:58.040 have that in my current wallet. So I found the 0:14:58.080 --> 0:15:01.040 City Premier card through your tool than you and it 0:15:01.080 --> 0:15:03.640 has a great bonus right now. I applied for the 0:15:03.720 --> 0:15:07.080 card and was really surprised to be declined for this 0:15:07.200 --> 0:15:11.240 credit card. Um with a credit score of over eight 0:15:11.320 --> 0:15:15.200 hundred and by the fact that I pay off my 0:15:15.320 --> 0:15:20.920 cards in full every month and have a long credit history. Um. Again, 0:15:20.960 --> 0:15:23.560 I was just really surprised. I got a letter from 0:15:23.800 --> 0:15:28.320 City Bank stating that the reasons for this was that 0:15:28.400 --> 0:15:31.680 my credit report shows a high amount of unused credit 0:15:31.800 --> 0:15:36.240 compared with available lines, and that my credit report shows 0:15:36.800 --> 0:15:41.320 too many open revolving accounts. So those two things I've 0:15:41.360 --> 0:15:46.000 always viewed as positive, having the low credit utilization and 0:15:46.080 --> 0:15:50.160 having the accounts stay open to show that long history. Um, 0:15:50.240 --> 0:15:52.160 Am I doing something wrong? Should I close some of 0:15:52.200 --> 0:15:56.040 these open accounts? Just looking for some advice? Thank you guys. 0:15:56.480 --> 0:15:58.640 All right, so real quick. So she mentioned Sonoma County. 0:15:58.920 --> 0:16:01.920 Is that where Lagunita? Is it depically? Yeah? I think so. 0:16:03.080 --> 0:16:05.880 Too bad. We didn't coordinate our beer with Lindsay's question, 0:16:06.200 --> 0:16:08.440 but I'm guessing yeah, maybe Lindsay knows a little bit 0:16:08.440 --> 0:16:10.880 more about wine than she does craft beer. But there's 0:16:10.880 --> 0:16:12.920 some good stuff out there. Yeah, no, there's I feel 0:16:12.920 --> 0:16:15.080 like there's good beer and and good wine out there, 0:16:15.080 --> 0:16:17.200 like can enjoy both. California, it's like an embarrassment of 0:16:17.280 --> 0:16:20.320 riches when it comes to you know, alcoholic beverages and taxes. 0:16:21.600 --> 0:16:24.520 Well maybe the oppisode of that front. Well, but Lindsay 0:16:24.560 --> 0:16:26.880 has got a great question here, and Matt, when when 0:16:26.880 --> 0:16:29.480 I first heard Lindsay's question. When it first came in, 0:16:29.520 --> 0:16:31.360 I was like a little shocked to hear that she 0:16:31.440 --> 0:16:34.200 was declined for those reasons. It does not these facts 0:16:34.200 --> 0:16:37.040 do not compute, like based on what she's what she experienced, 0:16:37.080 --> 0:16:39.560 that yeah, definitely doesn't make sense. Having too much credit 0:16:39.720 --> 0:16:42.480 is rarely a reason for a credit card issuer to 0:16:42.560 --> 0:16:46.040 deny your application, especially when somebody like Lindsay has shown 0:16:46.040 --> 0:16:47.920 that she handles it so well. Right, she's got that 0:16:48.320 --> 0:16:51.160 impeccable credit score. It seems like, based on everything we've 0:16:51.200 --> 0:16:53.240 ever talked about when it comes to the credit scoring models, 0:16:53.680 --> 0:16:58.000 that she, of all people, should be accepted for any 0:16:58.040 --> 0:17:01.320 credit card that she applied applies for. Well, one possibility 0:17:01.320 --> 0:17:03.200 will mention Lyncy, and there's a there's a couple thoughts 0:17:03.240 --> 0:17:05.240 that we have here on why this could have happened. 0:17:05.400 --> 0:17:07.760 But one possibility is if the bank that you apply 0:17:07.880 --> 0:17:10.200 for that card with thinks that you are what's known 0:17:10.240 --> 0:17:13.360 as a credit card churner, and that is kind of 0:17:13.400 --> 0:17:16.760 a derogatory label they might apply to you if you're 0:17:16.760 --> 0:17:18.359 the kind of person who opens up a lot of 0:17:18.400 --> 0:17:21.920 credit cards in order to score bonuses and so uh, 0:17:21.960 --> 0:17:24.600 it's a great idea to open credit cards on occasion 0:17:24.640 --> 0:17:27.520 and to get those bonuses, because they can be just 0:17:27.760 --> 0:17:32.680 incredibly beneficial for the layperson credit card user. But if 0:17:32.720 --> 0:17:34.840 if this credit card company sees that you've opened maybe 0:17:34.920 --> 0:17:37.000 four or five cards within the past twenty four months, 0:17:37.240 --> 0:17:40.560 they might want to avoid extending credit to you, thinking 0:17:40.640 --> 0:17:43.080 that you're just in it for the bonus and you're 0:17:43.080 --> 0:17:46.000 gonna ditch them at the first moment possible. And so 0:17:46.400 --> 0:17:48.840 Chase actually has the most well known version of this, 0:17:48.920 --> 0:17:52.800 which folks on the internet called the five rule, whereas 0:17:52.800 --> 0:17:55.719 if they they will not allow you to sign up 0:17:55.720 --> 0:17:57.640 for one of their credit cards if you've opened up 0:17:57.720 --> 0:17:59.760 five cards in the past twenty four months. And I'm 0:17:59.760 --> 0:18:02.439 not or if that's your scenario, but it could be 0:18:02.480 --> 0:18:04.760 an explanation if you have opened up a few other 0:18:04.760 --> 0:18:07.399 credit cards in the past year or the past two years, 0:18:07.600 --> 0:18:09.919 they might say, you know what, we don't think you 0:18:09.920 --> 0:18:13.000 actually want this card for for the long term, which 0:18:13.000 --> 0:18:14.760 what they want that we should be a long term customer. 0:18:15.040 --> 0:18:16.960 We think you're in it just for that bonus, and 0:18:17.000 --> 0:18:18.879 so because of that, that's why we're not going to 0:18:19.040 --> 0:18:21.680 accept your application. Yeah, and the different banks they've got 0:18:21.760 --> 0:18:24.240 different sort of like rules of thumb as well, Like 0:18:24.280 --> 0:18:26.560 I'm pretty sure the City has got like this six 0:18:26.920 --> 0:18:30.280 of six rules. So basically, if you had six hard 0:18:30.320 --> 0:18:32.720 inquiries to your credit within the past six months, you'll 0:18:32.720 --> 0:18:35.159 also get denied. So it's not even specific to credit 0:18:35.200 --> 0:18:37.840 cards if that's not what you were doing, Lindsay. And 0:18:37.880 --> 0:18:40.359 by the way, those rules are not hard like that 0:18:40.400 --> 0:18:42.480 you don't find you won't find them on City or 0:18:42.760 --> 0:18:44.359 oh yeah, you won't find them on their website, like 0:18:44.440 --> 0:18:46.760 they don't spell that out, but it's something that people have. 0:18:47.040 --> 0:18:50.240 It's become become kind of like a common understanding, um, 0:18:50.240 --> 0:18:52.480 like like you'll find it on the Reddit forums when 0:18:52.480 --> 0:18:54.359 you're reading about credit cards there. And the fact is too, 0:18:54.400 --> 0:18:57.160 I mean they're constantly changing, like these are different rules 0:18:57.240 --> 0:19:00.480 and guidelines that the different banks are are following, but 0:19:00.520 --> 0:19:03.359 that doesn't mean that they can't change their mind on dime. 0:19:03.760 --> 0:19:06.720 So yeah, Lindsay, we actually reached out to City. Joel, 0:19:06.760 --> 0:19:08.679 you kind of spearheaded this. This is kind of like 0:19:08.760 --> 0:19:10.720 a throwback to your your radio days where you're like 0:19:10.760 --> 0:19:12.199 reaching out to companies and be like, hey, I got 0:19:12.240 --> 0:19:14.040 a question for you. I was like I want the truth, 0:19:14.080 --> 0:19:16.000 and they were like you can't handle the truth. And 0:19:16.040 --> 0:19:19.040 I was like, oh man, give me something. Uh. And so, 0:19:19.200 --> 0:19:22.840 of course, with with City being a gargangean bank that 0:19:22.880 --> 0:19:26.480